Yes, if you know how -- literally -- to play the game. But, as in real life, only a few are really good at it.
By Christopher Solomon of MSN Real Estate
Photo courtesy Coldwell Banker
Perhaps you've heard of the land baroness named Anshe Chung. No? Maybe that's because Chung exists only in the virtual reality game Second Life. Chung, or rather, her real-life counterpart, Ailin Graef, has gained attention -- and a BusinessWeek cover -- as the first person to reportedly become a real-world millionaire from her virtual-world business.
How'd she do it? By buying, developing and selling virtual real estate. While much of her wealth is still tied up in Second Life's currency, Linden dollars, those can be sold for genuine U.S. dollars. Graef reportedly makes upward of $150,000 annually.
Such numbers -- along with success stories like Graef's -- show there's real scratch to be made from online dirt. But just how much depends on a number of factors, of which only a handful are under your control. Here's how the virtual real-estate game is played.
A Second Life land primer
In Second Life, users customize digital alter egos called "avatars" that can walk down streets, gamble in casinos, do distance learning for university degrees, cavort in strip clubs, fly over Second Life's varied landscapes, you name it. And when users want a place to roost, they often buy or rent virtual property.
In early May, 5,400 residents were selling 30,500 parcels. "Real-estate speculation offers such attractive opportunities that almost everyone dabbles in it, and many Second Life people make it a permanent side occupation that delivers a steady stream of profits," writes Catherine Winters in her new book, "Second Life: The Official Guide."
There are a few ways to acquire land in Second Life:
You can buy land from another resident.
You can buy land at an auction, using real or Linden dollars (the exchange rate hovers at about 270 to 1 U.S. dollar).
Or, if you want a big spread, either for yourself or to divide and later resell as smaller parcels, you can buy a customizable, 16-acre island of land known as a "sim" from Linden Lab, Second Life's creator. A sim costs $1,675 U.S., plus a $295 monthly fee, called a "tier." (Linden Lab makes most of its money off such land sales.)
Bane Darrow, who, like several people in Second Life, asked that his real name not be used, falls into this last group of buyers. Darrow co-owns and operates Darrow Estates, which offers residentially zoned properties in Second Life with community covenants.
"I started it about three or four months ago" as a part-time hobby, says Darrow, who is a Seattle-area computer programmer.
Darrow and his partner buy sims from Linden Lab, choose some basic topography and then customize the new land before dividing it into 16 parcels for resale.
"We spend a week or two just getting the sim ready -- adjusting the land heights where we want them, putting in trees; we have a lake in both of our sims, streams, waterfalls, rocks, particle effects that kind of look like splashing."
The parcels are advertised on Darrow's Web site, where people can buy a parcel and pay for it with PayPal. Darrow Estates even advertises on Google.
The bottom line
If you want to buy a 4,096-square-meter parcel in Darrow Estates' first development, "Blueberry," a lush region with a lake and waterfall, it costs $20 to set up, and $26 per month ever after. "We are sitting at 90% to 95% capacity," Darrow says proudly.
At that occupancy rate, he's bringing in about $390 per month from the monthly fees on each sim; the initial $20 fee per parcel adds a one-time bump of about $300 per sim, which Darrow says helps pay for his Google ads. He sees the $1,675 as a capital investment since he can resell the entire sim. But it's clear this is not a huge moneymaker for Darrow. The monthly fees from his buyers leave him just about $95 per month, meaning it takes at least 17 months to recoup the initial $1,675 investment. Even ignoring advertising costs and including the initial $20 fees, it would still take a good 14 months before he would be in the black.
The number of users making smallish amounts -- just $10 to $50 monthly -- with a Second Life virtual business was about 9,500 in April, or nearly triple that of November. "There's a lot of people with a self-sustaining hobby that generates drinks money on the side," says Adam Frisby, a 22-year-old computer-science student and entrepreneur from Perth, Australia, who's co-founder of Second Life's Azure Islands. Meanwhile, the number of "in-world" business owners who are making more than $5,000 per month was only 139 as of April, estimates Linden Lab. Though that's up from an estimated 58 in November, it's still a tiny fraction of the more than 7 million users. No one can say for sure how many of those are in virtual real estate. But several Second Life pros agree that big-time real-estate players number maybe a half-dozen.
Hitting online pay dirt
Those who are doing well in Second Life real estate aren't just selling land; they've figured out how to provide some value or a service that users want to buy into, says author Winters. "It's all about coming up with a reason to be in this community versus that community," Winters says.
Alliez Mysterio (again, her Second Life name), seems to have excelled at this. Mysterio, a woman in the Lake George area of New York, runs dAlliez Private Estates with a partner. With 53 estates, each a sim in size, and well over 200 renters, dAlliez is one of the largest real-estate developers in Second Life.
"We have a few themed estates and also just plain land for the people to use," Mysterio says. One of the themed estates is "the Rue d'Alliez," a French marketplace-type milieu complete with a cabaret.
With people often renting one-quarter sim from dAlliez and paying $75 to $100 each, Mysterio and her partner likely bring in somewhere north of $17,000 a month. "We have reinvested our money in setting up more estates from Linden Lab. So (we) actually don't take out much money yet," she says, though she acknowledges she makes enough in Second Life that she doesn't have to leave her home to work elsewhere.
"There is money to be made if people are not greedy," Mysterio adds. "I have seen too many people come in, buy estates and not have one up and paying for itself before they buy another. This is a way of life, and as such, I put my customers first and they know that."
How virtual land is -- and isn't -- like real-world real estate
Whether you have your sights set on Second Life as a source of fun or profit -- or both -- there are some basic things to keep in mind about how the virtual real-estate world differs from real real estate.
Realtors undercutting FSBOs. There's not such an obvious role for real-estate agents in Second Life, users say, in large part because the users have free access to all the search tools. Yet that hasn't stopped real world real-estate behemoth Coldwell Banker from getting into the act -- part of a larger influx of real companies into the virtual world. In March, the company put up for sale more than 500 homes in Second Life, at about $20 each including the land -- and they'll toss in home furnishings as a closing gift. "My understanding -- and it's just my understanding -- is the average land baron would sell the average plot of land for $60 U.S.," says Charlie Young, senior vice president for marketing.
Coldwell Banker also opened a virtual real-estate office that's staffed with a few agents. This isn't a way for Coldwell Banker to cash in on virtual real estate, says Young, but to find new ways to reach some of the estimated 80 million echo boomers and make them familiar with the Coldwell Banker brand. If more real-world brokers begin using Second Life to extend their brand, this could bring added pressure on Second Life land prices.
No housing bubble. In contrast to real-world real estate, prices in Second Life have been relatively stable for the past nine months or so, a long time in Second Life's short life span, says a Linden Lab spokesman. But when price jumps come, they are more abrupt and, at least with sims, are generally at the whim of Linden Lab. Linden increased the price for a sim several months ago from $1,600 to $1,675 -- almost 5% -- and the monthly tier for new purchasers rose a much steeper 51%, from $195 per month to $295 per month.
Land is virtually in endless supply: As Second Life's popularity increases (today, it has 7.2 million registered users), Linden Lab simply grows the land size of its virtual world. Were it laid out in real life, Second Life would cover nearly 600 square kilometers -- a tripling in the past six months. That's nearly seven times the size of Manhattan.
The eternal mortgage. In Second Life, you never actually own a piece of land, free and clear. Though you may pay an initial fee to gain control of a piece of land, you forever have to pay that monthly bill. As one virtual landowner put it, "You never don't pay rent."
Virtual lending. As yet, there don't seem to be virtual banks in Second Life to fund real-estate purchases, so you'll need all the money up front (or enough credit available on your real-world credit card).
You can't escape real-world taxes. Real-world money made in the virtual world is taxable. And now the U.S. government is even mulling whether online money made, and kept, in online currency like Linden dollars is also taxable. A U.S. congressional committee is starting to look at the issue.
The future may be bright -- but it's also hazy
Finally, you need to ask yourself: Is it wise for you to sink a lot of time and money into a relatively untested virtual world, where the odds of making a mint aren't with you? And then there's the other big question: What if Second Life's popularity wanes? Many with dreams of becoming that next Anshe Chung could come away empty-handed.
Players like Darrow don't seem particularly worried. He says there are other, nonmonetary reasons to invest in online real estate. "It's kind of like the game within the game," he says. "I'm running a business. That's how I play the game."
That mirrors author Winters' advice to prospective players. It's better to come to Second Life to socialize and create, rather than expecting to make a fortune, she says. You'll enjoy yourself much more. "Most people are going there not to make money," she says. "Virtually nobody."
5 tips for real success in virtual real estate
People come to virtual reality to explore possibilities. Ask yourself, "What can I offer that's unique, that Second Life users couldn't build or haven't dreamed up themselves?" Winters advises.
Make your first sim stand on its own and pay for itself before you buy another, Darrow advises.
Some things never change: Customer service must be No. 1, Mysterio says.
As with gambling, don't invest more than you can afford to lose, Frisby cautions.
It's easy to be just a blip in the ever-growing Second Life world. Market yourself, in both worlds, by advertising online in the real world, and with a listing on Second Life, when people search for "land."
I would like to say my Second Life experience left me with thousands of virtual friends, but I would be lying if I didn't say I had a rather frustrating and secluded second life experience. Like the previous posts point out, a game that is designed to build community and connect people from around the world was hard to navigate and hostile. But before I get ahead of myself let's start at the beginning.
I first began Second Life by creating my avatar, Frances Serenity, who wore a pink dress and "girl next door underpants." Users can alter their avatars in every way shape and form - everything from eyebrow shape to undergarments. This is where I probably spent the most time playing around with different avatars, names, clothes and hairstyles. Once I had committed to Frances we traveled through a tutorial teaching us how to navigate inside second life. Walking, siting, talking, even flying was covered. Feeling confident in Frances' newly acquired skills, I was eager to teleport to my first destination. Before doing so, I first had to agree to a terms and services warning. I was shocked not only with the length of this agreement, but also the content. For once, in my entire life, I read every single word of one of those agreements. In my opinion the most shocking agreement I engaged in was an agreement not to bite or attack anyone in order to prevent vampire clan recruitment. Additional agreements included adherence to a dress code, along with refraining from swearing, harassing, and enslaving other Second Life members. My game setting was set to moderate, so perhaps that was why I had this agreement. Yet, I cannot imagine what else the adult setting could have possibly included.
Once I had agreed I wouldn't bite anyone in Second Life, I was off to my first destination. I traveled to Inspire Space Park which was a galactic environment full of stars and planets. I couldn't see any of this however until I changed my environmental setting to midnight, which in turn made the sky black and highlighted my surroundings. I was so excited to see so many other avatars, although none of them seemed to be doing much except wandering around. Numerous times I tried to speak to other members by saying things like, "I am new to this, can someone help me?" Out of the five or six people I spoke at, only one replied with, "Go away, I am waiting for Eric." With that I decided I was probably doing something wrong, so I clicked on a "find friends" link and traveled to a new location, which claimed to have lots of members waiting who also wanted to make friends.
After arriving at this supposedly friendly destination, I clicked on one of the names of another avatar near to me. Leanna Moralls was the first pick, but I had to chase her for a while until I got caught behind a billboard and couldn't figure out how to move. Getting frustrated, I tried a cathedral church for my next destination and continued traveling to different locations each time I played. Whenever I logged back into play it was usually the same experience, a lot of strange looking avatars who occasionally yelled at me, although I didn't experience the level of vulgarity as other classmates did, it wasn't necessarily a welcoming environment. I tried to change outfits a few times or go shopping, but quickly realized you ACTUALLY had to use REAL money. As much as I wanted to fit in my second life, as a college student, I couldn't drop any dough on the "latest virtual boots."
The Second Life lifestyle went on like this for more than a week and sadly didn't get any better. My experience could have been part of my mediocre gaming skills, but my fellow classmates' experiences would attest to the fact that navigating Second Life is challenging for non-users. There are not any tasks to be completed, such as in WoW, which left me unsure of what exactly I was supposed to do in my Second life. Second Life is undoubtably intriguing, but after playing I found it hard to imagine how players willingly and frequently return to this virtual world. I found an explanation for this virtual behavior in an unexpected place.
During another class, a guest speaker advised us all to watch www.ted.com instead of watching television. After taking his advice, I was pleasantly surprised when I found this talk about the effects virtual gaming has on our brains and why millions of people are motivated to participate.
I think many non-gamers, myself included, often scoff at the money and time gamers pour into these virtual worlds, thinking it's wasteful or damaging to "real" relationships and human or societal development. This talk identifies what it is people are so attracted to in virtual games and how that attractiveness can be harnessed and implemented in our "real" world to motivate people to produce positive outcomes beyond the computer screen. While I am not dying to get back to Second Life in the near future, this concept is ingriguing enough for me to take a second look.
So to not be repetitive with my classmates, but I also did not enjoy my secondlife experience as much as I thought I would. After seeing the Worlds of Warcraft presentation I was bummed that I didn't get to do that assignment but excited about my upcoming interactions with secondlife because it sounded just as cool.
As everyone else said after downloading the program I was given a name "Becca Jouvenat," who I chose to be blonde with a red sweater and skirt. I followed their tutorial which I must say was cool. It was a series of rooms you had to walk through that told you how to chat, move, fly, etc and you just walked through the room and saw big billboards with keyboard instructions. This made the original tedious instruction manual much more interesting.
After learning how to chat I got really excited to start meeting some people! There was another newby in the room with me his name was bobbie raxri (or some last name like that). I typed to him, "hi do you want to be my friend," and I was immediately shut down with a big "NO." Dissapointed, I decided to venture to a realm where I could meet different people and get some conversations going. I had a hard time figuring out the rules of the game and how to switch locations but eventually I kinda got it.
I have to say I did enjoy the graphics and wandering around, and flying, but I got bored real fast. Most of the time I didnt see anyone else in the areas I was in, and I spent most of my time trying to figure out what to actually do in the game. I dont know if this is because I wasn't in the right place or didnt really know how to play the game, but regardless I had a difficult time. After logging on a few more times, I found some people to talk to. As a follow up with Carly's post, I also found that the ones that knew how to play were rude. When I asked simple questions such as how to purchase land I got short obvious answers such as, "with money." They were not very helpful or willing to help me. I tried to develop relationships with people but failed.
I dont really understand how this game works as a community since I found people to be very unfriendly. At least in worlds of warcraft you go on missions together and kill animals together. Here it was just like an alternate reality and place you can pay money to build fake things. I was also so sad to find that I actually had to pay real money to purchase anything for the game. I thought this was extremely stupid to pay real money for a shirt for my avatar or to buy fake land. I dont really understand the appeal here. Does anyone think making these kinds of purchases with real money are worth it? I would much rather play a video game that I know is fake than try to pretend this second life is real and use real money to make a world for myself on the computer. I am all for trying to get communities together online, but dont think it is healthy for people to live their lives in a game on the computer.
Login-Check Pick a Username-Check Be directed to a clustered and confusing "virtual site"-Check
These are my initial interactions after first joining Second Life over a week ago. When I was assigned this topic of playing Second Life and blogging about my experience I was looking forward to it; I thought I could build a virtual "dream life" including my perfect job, wardrobe, husband, etc. My experience with Second Life couldn't be further from this.
The first thing you have to do when registering on Second Life is create a user name....they give you several bizarre suggestions, from those I chose my name to be "Annabelle Voix." I was very confused when I was directed to the site. The first thing I tried to do was buy clothes in their shopping center. When I went there I noticed that everything was priced in L$ (which I later discovered were called Linden dollars). I searched the shopping pages for something that cost L$0 and only found one pair of shoes, so I purchased them. I couldn't figure out how to make money with nothing to start off with.
Next, I tried to buy land. I found a place called "pinkland" and wanted to buy it. When I went to purchase it in my Second Life account, they translated the Linden dollars into US dollars and asked for my credit card information. When the land that I was trying to purchase translated into 20 US dollars, I decided against the purchase. This was not only a confusing experience but I also question who would actually pay money to buy virtual land.
After playing around on the site for a while, I was still very confused so I watched several tutorials they have posted on their site, which I all found to be very unhelpful. I found a tab on the top of the Second Life site that said "Launch Second Life" which I assumed took me to interact with other Second Life users. When I tried launching Second Life in Firefox it said "Firefox doesn't know how to open this address, because the protocol (secondlife) isn't associated with any program." I tried launching it in Safari and the same message appeared.
Overall, I had a pretty frustrating experience with Second Life. I found the site to be very confusing and clustered. It was not at all what I was expecting and I didn't get much of anything out of my virtual avatar experience.
I think the concept of having a "second life" is very creative and I can see why it would be appealing to a lot of people. I think the idea of experiencing a second life online could attract a wide range of people from high schoolers to moms, but I think the site definitely needs to be made more user-friendly.
I also question the community this creates. I think the Second Life experience is a similar community to that of World of Warcraft. Individuals can create a new life for themselves and find comfort in an online community. For some, this is very appealing, but I would personally rather stick to real life interactions and relationships.
Much like Oren’s experiences with Second Life, I didn’t particularly enjoy my time spent in “the grid” of Second Life. My experience began when I created my resident, their name for the avatars, Belle Arsenault. She was your average punk girl with the coolest outfit I could find. Then I entered the beginner’s realm and attempted to figure out what exactly this game was all about it…little did I know that later I would learn from a mean fellow resident that “THIS WAS NOT A F*CKING GAME.”
Anyway, so Belle and I were off to discover what as here. We journeyed from room to room trying to figure it out. Quickly we learned how to speak, gesture, dance, hula and even fly. But after an hour or so, we were both still lost in this second life. The following few times, we ventured into the game were probably just as confusing as the first. Each time, we found ourselves confused in a new place. It wasn’t until one of our final times playing that we found our selves in a chatty realm where many of the characters were actually willing to talk to us. So Belle joined in on a chat with Purity and some other people with some ridiculous name. Even one of our friends was on Second Life for a class, too! So we began asking questions about Second Life and learned how much of a dork we looked like…so much for my cool clothes. Apparently, this avid player could recognize any new person: “you all look like dorks, just walking around and gesturing.” Needless to say he wasn’t nice but did give me a lot of insight into Second Life. He explained that Second Life was not a game. Instead it was a way for people to connect with one another. I found this ironic as he went on to tell me that you rarely see the same person more than once. I know I never did.
Second Life was created in 2003. It was created for its residents to explore, meet other people, socialize, participate in activities and create and trade virtual property with its own currency. Today, there are two Second Lifes, one for ages 18+ and Teen Second Life for children ages 13 to 17. By January of 2010, 18 million users were registered. However, it is unknown how often these users actually use Second Life. I’d sooner believe more of the users were like me, who just attempted to try out Second Life.
My overall experience with Second Life was a big disappointment. I went into playing it thinking that it would be similar to the Sims, my favorite childhood game. However, it really bared no resemblance to the game. There was no house to be built or friends or relationships to be made. Instead, I found myself dancing in the corner being told how much of an idiot I looked like. In addition, there seemed to be no real point to Second Life. There is no objective or goals, no rules and no winners or losers, except me apparently according to Purity.
Leading up to the 2010 Midterm Elections, I followed the activity on Russ Feingold's Facebook page. Early in the week, prior to the election, most of the activity on the Facebook page was posting links to either positive articles about Feingold (endorsements, op-eds, etc.) or links to videos and campaign ads that were pro-Feingold. Of note is that there were not links to any of the negative ads against Ron Johnson. There were also a few links to help voters find their polling location.
Every story/video published received a lot of feedback in the form of "likes" and comments. The minimum was about 200 "feedbacks" with some receiving as many as 800.
On election day, the campaign made a push for people to change their profile pictures on Facebook and Twitter to the above image, "I Voted for Russ Feingold". The page also continued to offer help in finding polling locations. There was even a post inviting people to a election night party in Middleton.
Overall, I thought Feingold's Facebook page was run pretty well and it definitely seemed like a lot of people were interacting with the page. I even saw a few friends on my newsfeed that had added made the Feingold photo their profile picture so I think that was a good idea to help rally support on election day.
Personally, I got involved with some voter mobilization efforts in the Greek Community. I organized for someone from Organizing for America to come to the weekly Interfraternity Council meeting and explain voting procedures, how to register, where to go, etc. Additionally, I helped promote and invited people to the Facebook Event "Greeks Vote". The event set up 3 different times for Greeks to meet up on Langdon street and walk to the polls together, since voting alone is never any fun. The group was pretty successful, 290 people "attended" the event on facebook.