Second Life Virtual Property Boom 242
The Guardian Gamesblog has an interview with Philip Rosedale, Second Life's CEO and Founder. In the wake of last week's virtual property slaying, they discuss the realities of owning something intangible. From the article: "We launched Second Life without out of world trade and after a few months we looked at it and thought, 'We're not doing this right, we're doing this wrong.' We started selling land free and clear, and we sold the title, and we made it extremely clear that we were not the owner of the virtual property. USD$.4m a month is traded directly to world markets in Linden Bucks on Gaming Open Market. That's USD$.4m redeemed, or Linden Bucks turned into US dollars. In May 2005, the total amount traded in-world was USD$1.47 million. There were 1.3 million transactions between 19,500 unique users."
so.. (Score:4, Insightful)
This is one huge ass scam type deal, yet totally legal and ingenius. Even if someone goes "No thanks, I'd like to sell you the land back, can I have my money please" they still get the intrest in the long turn and make a profit.
It's like selling magic beans, either way they win..
Look son, I've developed it! (Score:4, Insightful)
character who played Woody Allen's father in Love and Death and his
"valuable piece of land".
What's next? Virtual commodities trading?
Yes, I understand it's primarily for entertaihnment value, but somewhere
in Marketing (insert preferred afterlife here), a large group is laughing
themselves silly.
Re:so.. (Score:5, Insightful)
Now, your land could be in a highly marketable area, and be worth MUCH more than normal. Just like real land, location makes it more valuable. Waterfront, Adult areas, private location, no wierd neighbors. Of course, nobody is stopping you from buying your own server for a giant piece of land, setting up a community and leasing it out to people. Its done all the time, private clubs, etc.
I picked up a lot near a major building area, and had water front on 2 sides. Now, when I switched my account to free, I gave the land away to a friend, instead of defaulting it back to Liden.
Liden's cant give away the land, servers cost money, someone has to pay. They just figured out how to make it self sustaining by the customers, and then spin off the technology into other markets. They have developers to pay also.
I'm not seeing the sinister plot here....
Re:In other news... (Score:1, Insightful)
Ditch the fucking "second life" and work on the first one, that is, the real one. People piss their lives away in their digital... phantasmagorias.
Western vs. Eastern (Score:5, Insightful)
To them, the notion that land "exists" in the virtual world connects to their ideas of self-worth in a very tangible way.
Re:so.. (Score:5, Insightful)
Game players have been trading the rights to pixels on eBay for as long as there have been persistent-state worlds. Sony is in an endless fight to keep EverQuest items off eBay so they can create their own service that does the same thing, while EA pretty much ignores Ultima Online real money trade. Now, Second Life has merely chosen to cut itself in on the action.
This isn't even a new business model. Magic: The Gathering Online does a brisk trade in completely virtual playing cards. There was a game before them called Star Trek ConQuest Online or something like that, which did the same thing and didn't even give you the option to convert a complete virtual set of cards into a complete real set of cards.
And, how's this really different from buying the rights to use a bunch of bits that make a song come out of your computer's speakers?
Re:Sure, until they try to shut down second life.. (Score:5, Insightful)
If the webhost goes under, files bankruptcy, shuts down tomorrow... do you have any legal basis for a lawsuit? Just because they're not hosting you anymore?
Re:Sure, until they try to shut down second life.. (Score:3, Insightful)
Dutch Tulip Bulbs (Score:4, Insightful)
What is particularly scary about virtual property in a massive multiplayer is that the good is so completely unlinked to reality that virtually anything could burst the bubble. An executive in the company hosting is accused of embezzlement -- *pow*. The hosting company enters Chapter 11 -- *pow*. A new fad massive multiplayer starts up -- *pow*.
This is why the comparisons against derivatives are misguided. True derivatives are not physical things, but still, an option to buy pork bellies at a certian price in the future will not become worthless without pork bellies themselves becoming worthless. Whereas property on Second Life can become worthless for an infinite set of reasons.
I believe that the idea of objectively valuable virtual property, as explored by Neal Stephenson in Snow Crash (The Street), will someday become a reality. But not until: (1) hosting the massive multiplayer is distributed among organizations that can't go bankrupt; (2)the massive multiplayer is either continuously upgraded or technology independent (perhaps a standard forum that will be interpreted in different ways depending upon the users client; (3) the massive multiplayer somehow guarantees scarcity, at least of more and less desirability property (perhaps by having a hotspot located near the hubs where avatars log on as seen in Snow Crash); (4) accounts are protected by really, really, really good user authentification programs (or else victims of a dictionary attack could lose 20k over night); (5) at least some of the user base is able to access the universe of the massive multiplayer in a thorougly immersive way.
I think it's just a matter of time before these conditions are met, and spending real money on virutal property starts to make sense. But I don't think we are there yet, and those who are looking at virtual property less as a game and more as an investment are playing with tulip bulbs.
Moiche
What happens when game goes away in a few years? (Score:3, Insightful)
I guess consumerism has reached it's logical conclusion. How long before companies start selling us our own thoughts and emotions? I guess they already have, in indirect forms (entertainment/media). Meanwhile in the real world, millions of people die every year of starvation and disease.
Re:so.. (Score:1, Insightful)
Re:Western vs. Eastern (Score:3, Insightful)
Where you got the idea that these countries are characterized by an inability to fathom land ownership is difficult for me to fathom. Perhaps you are perpetuating absurdly out of date stereotypes about attitudes toward material possessions among adherents to Buddhism, Shintoism, Communism in South-East Asia? If that is the case, please read up. Buddhism is officially suppressed in China, Shinto is on the wane in Japan, both religions have a vast majority of adherents who do not find accumulating material possessions to conflict with their religious beliefs, and the Phillipines is a majority Catholic country! Also -- as I already pointed out, the communist government in China has permitted private transactions such as real estate sales since Deng Xiaping's reforms -- which began 30 years ago.
Finally, your contention that virtual land, through appealing to the self-worth of the peoples you've pigeonholed as not being able to understand land ownership, borders on the absurd. Why would ownership at all contribute to self-worth among people who supposedly can't contemplate it in the first place? Wouldn't feelings of self-worth just be derived from accumulation of material possessions -- which in turn would require virtual land to be worth something?
Your entire line of reasoning smacks of the "Mysteries of the Orient" trope which was (barely) excusable in the 1870's, but is no longer. Spend some time in China, Japan, or the Phillipines, and you will find millions of savvy, throughougly capitalistic and materialistic businesspeople more than willing to buy and trade things worth money. Sure they may extract feelings of worth from accumulating an ass load of land -- but then again so does Donald Trump, and last I looked he lives in the East.
Come on people, we are better than this.
Moiche
Re:Look son, I've developed it! (Score:3, Insightful)
Virtual eminent domain?
You find that your exclusive townhouse and neighbourhood only 5 minutes from the market has within hours, been moved 5 clicks North to make way for a new plaza, condos and hypermarket.
Re:Sure, until they try to shut down second life.. (Score:4, Insightful)
Re:I don't get it. . . (Score:3, Insightful)
When you buy virtual property you are paying for a real service. The ability for you to use such property (acording to the rules/T&Cs).
While I do not get paid in physical bills, the number which represents how much money I can spend on physical goods increases.
Money is just a representation of a value unit. Real or electronic it only has value because it is rare and is accepted by others in exchange for other goods and services.
Think that money in your bank account really exists? The reserve rate dictates how much actual money the bank must keep. If everybody went to get their money at once, they'd find most of it isn't there.
In the case of so-called "virtual items" there is no tie-in with the real world
The tie-in with the real world is that virtual goods are in demand, considered sufficiently rare, and can be exchanged for money, or other goods and services. Just like money, virtual goods rely on general acceptance and trust.
Re:take your 'magick healing powder' and walk (Score:1, Insightful)
Is "web developer" not an acceptable job?
Why should a $30,000 government contract that uses Second Life as its development platform be any less real?
SL is not an MMORPG... there are no experience points, mages, fighters or clerics... the skills you need and the skills you gain are very real. Like Photoshop, Poser, and programming.
If you have ever used a game engine like Torque, it's more or less the same, except you have an instant audience who's more than willing to throw money at you for the content you produce.
Theory of Labor (Score:3, Insightful)
There actually is a tangible aspect to virtual property...the time and effort used to produce the property. The theory of labor pretty much sees the amount of labor needed to produce a good as the major component of the price. The price of gold is largely determined by the amount of effort it takes to get find and get more gold.
The reason virtual property is a bad investment is that the people who define the virtual world can change the rules and change the time needed to create goods. People in power changing the rules happens all the time in the real world too.
BTW, I doubt you will find any investment tool that does not have legions of people telling stories of how they were burned by their investment.
Re:What happens when game goes away in a few years (Score:3, Insightful)
Virtual property is like anything else that can be traded; its value can increase or decrease relative to something else. It has a set of 'what ifs' attached to it like any piece of real property. Its value can be affected by the segment of the economy it's in (for example, the game developer can't just decide to make infinite land as a way of printing money, because if it's infinite it'll be worthless thanks to the laws of supply and demand).
Personally, I'm not interested - but that doesn't mean that I can't see that other people might find value in property within an online game. They can make up their own minds.