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Tech Thrust
The reality of virtual reality
By Shana Ting Lipton
Published: Dec 13, 2007
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YAHOO “Get a First Life.” So goes the snarky tech-era t-shirt maxim targeted at those asocial socialites who spend all their time (and money) in online virtual worlds like Second Life (SL) and Entropia Universe. It’s alluring: you create your own avatar (v-world persona), party and fly around with other avatars, purchase in-world currency with your credit card, and spend it on property, clothes, vehicles, etc. “Live” the life of your dreams—perfect body, ideal house, great clothing—at zero risk and a fraction of the real life (RL) cost. The guy with the mid-life crisis need not settle for a Trans-Am; he can buy a cyber-Lamborghini or yacht and look 25.
According to AJ Peralta, a v-world consultant, the total market for the exchange of virtual goods is worth about $1 billion. That’s real people spending money on homes they will never actually live in, and cars and clothing they can never wear or touch. Some see this as the extension of our new “experience economy”— valuing experience over a tangible item. Call it the lure of capitalism, but people seem to want more “stuff” even when it’s just pixilated. RL brand status also penetrates into virtual life. Owning those new Nike’s is cool in RL. But virtual Nike’s could feasibly, as their mythological name implies, make your avatar fly. That’s worth its weight in Lindens (SL’s currency). If you build it, they will pay. In September, Entropia made it into 2008’s Guinness World Records when one a player purchased a space resort for $100,000.
In the case of real estate, anyone can be a cyber-Donald (and with good hair, to boot). SL’s creator and CEO, Philip Rosedale told USA Today, "The idea of land ownership and the ease with which you can own land and do something with it... is intoxicating.” I gave it a shot. I purchased a tiny fixer in one of the v-world’s coveted beach communities. A week later, a nearby nightclub promoter—French fellow in a purple leisure suit—offered me a trade-up for a beachfront property four times the size of mine. I made the “sweet deal,” and flipped it, turning a 50% profit that earned my avatar Natascha Van Sant 10,000 Lindens (a mere $40.00 after cashing out with PayPal).
There are always the v-world stories of some literal and figurative ‘little guy’ hitting the jackpot with an upstart online business. Take, for example, the SL avatar who bought an island (often priced in the thousands) and set up a subscription-based BDSM living community—yes, cyberites are, well, sybarites—roughly 2,000 members-strong, all paying about $4 a month to get their spank on. After her land tax and SL subscription fees she was raking in 7K a month, tax-free. For now, the v-world goods and services community is like The Bahamas, but the government may soon end up taxing those cashing in by cashing out.
So who are these participants? Many sites began as geek domain. A lot of v-world participants are tech-savvy, and usually white and middle class, but that’s a demo that’s shifting. NPR reported that virtual gaming communities are just as much the domain of housewives in their 30’s as 18-year-old boys. There.com, approximately 1 million members strong, caters to the twentysomething market; Second Life’s average age is 33, with a population of 10 million-plus.
Understandably, these numbers are attracting interest from corporate titans. In October, Virtual Worlds Management, a company that tracks the industry, announced that technology, venture capital and media firms had invested over $1 billion in 35 v-world companies in the past year. HBO, CBS, Microsoft, Viacom, Warner Bros. and Cisco have piled on, employing tech agencies to create their own virtual worlds for them. If Pepto Bismol, for example, wanted to extend their brand online, they might hire someone to develop Pepto Planet (a territory challenged by a waning supply of natural gasses, no doubt).
As more people sign on to virtual worlds, the marketplace could grow beyond our wildest dreams. But just like in RL, some people have business vision, and others—as I can attest to personally—don’t. Perhaps real estate isn’t my forte. Getting back to those “Get a First Life” t-shirts, maybe I should set up shop. Also on sale: “My parents went to Second Life and all I got was this lousy virtual t-shirt.”
Born in London, Shana Ting Lipton is a pop culture journalist and consultant, who lives and works in her native Los Angeles. Her writing has appeared in the Los Angeles Times, Salon.com, Radar online, BlackBook, Wired and Variety, among others. She has lectured and consulted on pop culture for Media Bistro, as well as global marketing firms and advertising agencies. www.shanatinglipton.com.
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