Real profit in a virtual world
- Article 6 of 7
- iSight, April 2006
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However, some services are peculiar to the game itself, ‘avatar’ design being one of the most popular: in graphics-intensive games, each player’s online persona or avatar is very much a representative of that player and many gamers spend considerable time on enhancing the look of their characters. Good avatar designers can therefore garner considerable custom and real-world profit through their work and it’s now almost impossible for a Second Life player to play the game without coming across virtual clothes designers, “hairdressers” and similar boutiques either in the “Marketplace” or throughout the game’s landscape.
Says one such developer, ‘Munchflower Zaius’, “I began selling avatar skins to make extra money and it’s become my sole income – and now, it’s more than enough money to support me and my two kids.”
Surprisingly, however, some companies are also offering their Second Life services to corporations as well as consumers. Rivers Run Red, a UK company, became the world’s first design and brand agency to establish a virtual presence. It now uses Second Life for content testing: CEO Justin Bovington, CEO of Rivers Run Red, uploads products (usually clothes) into stores in Second Life, and then monitors how people buy, accessorise and use them. He occasionally organises in-game focus groups around the designs, and claims that the reactions he gets from Second Life players are as useful as those for which he pays regular focus groups $30,000. The core attraction is instant market feedback at any time.
Bovington is also taking his company into the business of managing access for clients. Rivers has just opened a Second Life store for Mrs Jones, a designer who is interested in testing prospective designs by uploading them into her own virtual store and seeing how they sell. “I’m as excited about synthetic worlds as I was about the Internet,” Bovington says.
Linden Lab also gives other companies the opportunity to partner with it so they can present simulations of their real-world content and applications to players. The Electric Sheep Company puts together custom games for organisations that want to use Second Life for training and education. It now runs SLBoutique, an ecommerce site that sells the now-traditional avatar customisations, but more novelly sells real-world computer hardware for Linden Dollars. And it has helped host “mixed reality” events: simultaneous real-world and online events where players who attend the event can log on to meet online attendees.
It’s likely that opportunities for real-world profit from gaming is going to increase. This may be through the use of traditional business models adapted to the online world, with Phillip Torrone, associate editor of MAKE magazine, predicting that real-world credit cards will soon come personalised with owners’ online avatars and with Linden Dollars and other online currencies in place of loyalty schemes.
However, with all the main games console manufacturers offering Internet connectivity in their devices, online gaming is set to become a mainstream gaming activity. With that, virtual worlds are set only to become greater and more complex sources of income for real-world companies, whether they make the game or simply use it as a new venue for their services.
Are virtual economies the same as real economies?
Virtual economies have significant differences with real economies. For example,
- 1) Economics argues that no wise government will try to control prices. In a virtual economy, however, the government can effortlessly peg many prices at any value. Since the goods are digital, they can be created and destroyed without cost. Hence price ceilings create no excess demand, and price floors no excess supply. It may make sense to control some prices.
- 2) Economics assumes that work causes disutility. In a virtual economy, however, it is lack of work that causes disutility. Regardless of earnings and loot rates, people who play games must have something to do or they will be bored. If a game structure limits their ability to be meaningfully engaged in some mission, quest, or activity, they will be unhappy.
- 3) Economics believes that economic growth is always good. In a virtual economy, however, increases in per-capita wealth – which make it easier to accomplish various quests and missions – will lower the challenge level of the game, potentially making it a less interesting puzzle.
Source: Edward Castronova
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