May 30, 2005
Markets in nothing
In Philip K. Dick’s 1964 novel “The Three Stigmata of Palmer Eldritch,” humans sent to colonize other planets use legalized drugs to transmigrate into glamorous virtual worlds. Their imaginary lives—complete with relationships, homes and possessions—help ease the boredom of space-age colonization.
Today’s massively multiplayer online games, played by some 10 million people worldwide, offer similar escapism. And it turns out you can now make a living from buying virtual land and possessions with virtual cash and selling them to virtual buyers:
[Jason] Ainsworth, 36, was not a fan of online games until his 10-year-old daughter became interested in The Sims Online. He then noticed that a large number of simoleans [the game’s virtual currency] were for sale on eBay. “I started hearing about players leaving the game who were selling their assets,” he said, “so I figured, buy low, sell high.”
But Mr. Ainsworth found his moneymaking options in The Sims “very limited”; he switched to Second Life, a virtual world that is less a game than a three-dimensional environment in which players can do whatever they choose. There, he has leveraged his real-life experience - he is a developer and contractor - into an online business. In 14 locations in Second Life’s virtual world, he owns enough “land” to rent space to nearly 50 retailers, who in turn earn virtual money selling everything from jewelry to clothing to art (all nonexistent, of course). Mr. Ainsworth converts his game profits into real money on sites like eBay, Ige and gamingopenmarket, which charge a small fee, and he includes that income on his tax returns.
…Who buys this stuff? One Second Life resident, who asked to be identified only by her screen name, Diamond Hope, said she spent $10 to $15 a month on clothing and other accessories in Second Life, but would spend more if she could afford it. “With all the things you can buy in Second Life,” she said, “it’s hard not to want them, just like real-life stuff.”
Mr. Ainsworth reckons he earns about $1,800 a month, enough to pay his mortgage. But others earn much more:
Ailin Graef, who goes by the screen name Anshe Chung in Second Life, said she was on track to earn about $100,000 in real money in her first year in the game’s real estate business.
Virtual marketplaces have many of the pitfalls of real-world economics. If game creators make it easier, say, to build virtual castles, their prices fall. Fraud is a challenge, because identities are hard to verify. And establishing the ownership of virtual goods is a challenge, although some games companies are making it easier:
Linden Lab, based in San Francisco, has taken an even more open approach on the question of intellectual property rights. In November 2003, the company said it would permit Second Life subscribers “to retain full intellectual property protection for the digital content they create.”
An Australian programmer, Nathan Keir, took advantage of this when he created a game within Second Life called Tringo, a hybrid of Tetris and Bingo, that has proved wildly popular. Mr. Keir has earned more than $5,000 selling virtual copies of the game, and he was able to license its real-world development rights to a software company in California for an amount “in the low five figures” plus royalties, he said.
Dick, who died in 1982, wouldn’t be at all surprised.
Posted by Stephen at 2:10 PM in Economics | Permalink | Comments (1) | TrackBack (0)
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Hee hee! Let's play capitalism!
Posted by: Jacqueline at May 30, 2005 5:48 PM
