Making real money in the virtual world

It's not all about making money: A Second Life avatar stares at the World Wildlife Fund sign on Conservation Island. The conservation group set up the virtual island and its friendly wild animal population in Second Life to encourage human residents to live in harmony with nature.

TEXT OF INTERVIEW

Scott Jagow: Personally, I think living one life is hard enough, but millions of people are now living second lives. Second Life is an online virtual world where people interact, play and do business. Some predict most real-life businesses will eventually have a presence in Second Life. This weekend, there's a conference in Chicago where people can learn more about Second Life. Joining us now is Edward Castronova. He's an Indiana University professor who studies online games. Edward, I don't know much about this; how can companies benefit from Second Life?

Edward Castronova: Well for a business who wanted to make an impact in Second Life, you should really think of it as a 3-D Web page. So people are navigating the space through a character, a thing called an avatar, it's 3-D and so instead of making a Web page you might make a building that their character can sort of walk around in. They can look certainly at posters on the walls of this building, but what's neat about Second Life is you can also make 3-D images of, let's say, your products and they can even be functioning 3-D images. So you could make a car if you're a car company and people can get in the car and drive it around.

Jagow: Now besides real companies marketing in the virtual world, are people creating their own businesses within Second Life?

Castronova: Yeah to some extent. The biggest companies do things like sell land. The most transaction in Second Life come from people selling things that modify appearances and those businesses are primarily built and grown from within Second Life. In other words, they're not imports from the outside.

Jagow: And do they make real money?

Castronova: Yes they do. I wouldn't recommend that as a lucrative career for someone at this point because the sheer size of the Second Life economy is not the level of the Czech Republic or something at this point, but it is possible to make real money.

Jagow: And how does that work? How do people make real money?

Castronova: Well the currency of that country is called Linden dollars, so first you make Linden dollars and then you sell the Linden dollars for real dollars.

Jagow: Obviously there's a lot of opportunity here for business, but it also seems a little scary to me. Is it scary to you?

Castronova: Yeah, I think virtual worlds, as in any new frontier is a little bit scary, and there are two dangers. The first danger is to miss out on something that's wonderful, and the second danger is to sort of over-hype what's actually there. And the only way you can not succumb to both dangers is to go and experience it. Just, you know, buy The Lord of the Rings Online or World of Warcraft, one of these fantasy games and go experience it just as fun and then you'll have a sense of what to do.

Jagow: All right Edward, thanks for joining us.

Castronova: OK thanks a lot.

Jagow: Edward Castrovova is a professor at Indiana University. His book is called Synthetic Worlds: The Business and Culture of Online Games. In Los Angeles, I'm Scott Jagow. Thanks for listening and have a great weekend.

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