Philip Rosedale: Welcome to Second Life

I’m at the GSD&M Digital America Conference today. One of the featured speakers is Philip Rosedale, founder and CEO of Linden Lab, maker of the MMOG Second Life. Here’s the talk recap:

There are 100k users of Second Life, spending approximately two million hours per month in-game. Unlike most games, everything in Second Life was built by the game’s users. Linden Lab just provides “the virtual dirt.” Users can do anything in Second Life that they can do in the real world: learn to dance, play games that other users have made, drive cars… anything. 43% of users are female, the average age is 32, and 25% of users are international.

There are thousands of people creating goods and services within Second Life. The linden dollar (an in-game currency) can be traded for real US dollars in an exchange supported by Linden Lab, and vice versa. There are currently $50M US dollars worth of annual transacations within Second Life. Users spend, on average, almost a dollar an hour. There is even a b2b component (i.e. there are actually virtual businesses supplying other virtual business with product in-game.)

Second Life works because of two technological milestones: common access to broadband and a certain level of 3d processing capability. People you need to give people a meaningful level of creative capability before they’ll make a time investment in something like Second Life.

Kasi Nafus, one Second Life player, is probably making approximately $60k per year by selling virtual clothing in-game. Anshe Chung, “the most powerful person in Second Life”, is a virtual real estate developer. She buys and develops real estate, then turns it around to other users for a profit. Anshe’s probably making between $150K – $200K per year. She owns approximately 5-6% of all the acreage in Second Life. There’s a $1k cost associated with the purchase of a new 16 acre plot of land, since that much land requires another server to support it. Linden Lab also charges all virtual land owners a recurring land tax.

Charitable events are very popular in Second Life. With a single event, the American Cancer Society raised the same amount of money (per person) in one day in Second Life than they would have over several months in a small US city.

Philip begins a real-time, live demo of Second Life. He takes a screen shot of a fellow player, builds a giant poster in a few seconds, and pastes the picture onto the poster for all to see. Next, he begins chatting with two users who are virtually cuddling nearby. One of them is dressed in an outfit covered with kittens; the other seems to have a virtual bluetooth headset in his ear. The wearer of the headset gives Philip a notecard explaining what it does (all sorts of in-game communication functions!) He says that he paid 250 linden dollars for the device. Philip tells the audience: “The only precious resource in Second Life is your intelligence.”

Philip decides to “change clothes.” He turns into a robot, then starts flying around (anyone can fly in Second Life). He soars off into the distance, surrounded by a seemingly endless quantity of content…

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