Second Life ventures just as pointless as you'd thought
Filed under: Entrepreneurship, Shopping, Technology, Wealth
Gartner, Inc. just came out with a study showing that 90% of business ventures into virtual worlds -- such as Second Life --fail with in 18 months. That means the get-rich-quick scheme of selling imaginary goods for imaginary Linden Dollars (L$) to convert back to real dollars (the current exchange rate is about $1 to 265 L$) may not work out so well after all.As if regular business stories weren't tedious enough, the media love to cover stories about business in the fake world. American Apparel and Armani have Second Life stores. Someone set up a fake Apple store--one that seems to be missing its characteristic long lines of disillusioned Apple acolytes at the genius bar. The government of Sweden is one of many countries with an embassy. (I wonder if that's the kind of lame perk that could be offered to all the e-volunteers in this presidential election.) eHow has a how to primer on how to start your business in the other world. And, of course, Second Life encourages that kind of entrepreneurship.
According to Gartner, the enterprises usually fail because companies did them just to be cool. And they never figured out what the objective was supposed to be. How do they know they're failures then? My guess is the old-fashioned real world method: they lost money. Gartner says it takes $5,000 to $50,000 (L$1.3 to L$13 million) to set up a Second Life store. That's a whole lot of avatar clothes to sell.
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Reader Comments (Page 1 of 1)
5-21-2008 @ 7:48AM
Mark Freedman said...
Obviously the blog writer in blindly quoting this Gartner source, has never stepped foot in Second Life. To say that it take $5000 to $50000 to set up a Second Life store is beyond absurd. You can setup a small store for $5 to 9$ per month - the running cost of the land. If you make your own content as opposed to selling other people's products on commission, you'll be far more likely to pull in a profit but the objective for the average 'resident' is to make enough to cover the cost of the game. Even if a large corporation like Mercedes or IBM goes and spends 50 grand to have a professionally developed and maintained presence, it's a pittance of their advertising budget.
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5-21-2008 @ 9:46AM
Ari Blackthorne said...
Not only is this OLD news, but I concur with Mark. And it's actually less than that, Mark.
For a one-time investment of about $20, I was able to to create a 'furniture' business that now not only fully supports itsef on its own private island (server simulator for the uninitiated) - but pulls-in about an additional $400 to $600 every couple of weeks and I'm not even trying.
I've done all the work, not I just sit back while everything just keeps selling.
There are those who take it far more seriously than I do and actually make a living off this stuff.
It's okay to bash Second Life, but at least do a little research, actually go in there and look around for more than five-minutes, and at least have a vague idea of what you are talking about.
At first it was funny to see how badly off-target journalists and blogger keep getting this stuff.
Now it's just plain laughable and socially disgraceful. But that's okay. It's your credibility to lose. Not mine.
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5-22-2008 @ 6:04AM
Hiro M said...
Yes to second what Ari Blackthorne says, I have a fantasy clothing business in SL which I set up in my spare time (time that would normally be spent playing games or the like) and that regularly pulls in USD$200 net a week.
It very much depends what you go into SL for, if you take the time to understand the world and it's many subcultures with a bit of work it's quite possible to set up a self-sustaining business which generates real-life amounts of cash at real-life rates (my clothing sells for maybe $3 or £4 a pop, but over time that adds up). There's probably a couple of hundred or so designers making full time real-world livings off it, and a few thousand making worthwhile amounts like myself.
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5-31-2008 @ 8:06PM
Kosso said...
I managed to generate the seed capital to launch a real life entity called Phreadz with the proceeds of a blogging system for Second Life which crossposts to your blog which I built and sell called blogHUD :)
Making money in SL *can* work. All depends on what you want to do. Some people make a lot of money in (un)real estate and clothing. Sure, it's not as 'hot' as it once felt like in SL, but it still works for some. And really made a difference to me.
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