Virtual Ponzi Schemes
Every Massively Multiplayer Online Game - once it reaches a certain level of popularity - starts inspiring a certain kind of news article. You know the one I mean, the one where the game’s economy is compared to the Gross Domestic Product of some small country that you wouldn’t be able to point to on a map. (e.g: the all-devouring World of Warcraft.)
The thing is, most of this economy consists of players selling virtual goods that they’ve acquired in-game via online auction sites. Not only is this behaviour expressly forbidden in the terms of service that must be agreed to before you’re given an account to play the game, it’s also a very wobbly legal area, with no one quite sure of what all of the ramifications are. It’s scaring people to the extent that eBay has recently banned all auctions for virtual property.
Here’s where Second Life comes in. Allegedly rivalling the GDP of Guinea-Bissau, SL is becoming the new darling of games-crossover media. Sweden is apparently planning to set up an embassy there. Reuters has the writer, futurist and noted lunatic Warren Ellis writing a regular column about the emerging culture of the place.
In this game, the theory is that you can buy and sell in-game currency for real-world money, and then use that virtual cash to buy and sell land and buildings in the game. Since this is sort of a new economic frontier, you’d expect a gold-rush atmosphere around the place, with numerous stories of people making their fortune from the accompanying land-grab.
Those stories exist, but don’t pop up as frequently as you might imagine. So, rather than theorising and pontificating about what it all means for the world, financial consultant Randolf Harrison plunged in to do some good old-fashioned prospecting. His conclusion? Trying to make money in Second Life is like participating in a giant pyramid scheme.
(Really, go and read the whole article. It’s fascinating, if only to see that SL isn’t just about virtual nightclubs, prostitution and persistent penis-swarm attacks.)