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The Big Business of Second Life: Brands Take Up 5 Percent of Real Estate

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Reuters joined CNET in opening a Second Life newsroom this week. Technology correspondent Adam Pasick and his terrifying avatar are now patrolling the space for news stories based in the “Reuters Atrium” that looks like a mix of the London and New York bases. Pasick will cover wars, real estate, business and perhaps, the digital sex industry but, besides the gimmick, there is real big business in Second Life. Last month $7.1 million was spent and 850,000 people are part of the virtual world where they can build homes and businesses, using real-life money to build their online lives. CEO Tom Glocer gets some geek kudos in this NYTimes story – he says he’s been playing the game since it was a relatively small community: “This is a very serious, old brand that stands for things and has principles, but that doesn’t take itself so seriously that it wouldn’t play in a gaming space. Even for people who don’t go in and play in Second Life, it shows Reuters has a certain with-it-ness.”
For brands, Second Life is appealing because it’s a place where people ‘immerse themselves in their products’, making it ideal for getting feedback as well as promoting products directly. Sun Microsystems, Adidas, Reebok and American Apparel all have retail spaces and IBM held a global alumni reunion. Starwood Hotels this week opens Aloft, its prototype hotel; Ben Folds will play at the opening and later at Sony BMG’s building on Media Island. The building has dedicated rooms for Sony BMG artists and sells music downloads. MTV has built its own Virtual Laguna Beach as an extension of the TV show Laguna Beach: The Real OC bringing in advertisers as partners. And Nissan spent $1,250 and a monthly $195 fee buying a virtual ‘Nissan Island’ to promote its Sentra car. It cost far more than that to hire the developers to build the digital cars, driving course and drivers, as well as billboards and ads within Second Life – not to mention a giant vending machine to dispense cars to “people.”
Second Life operator Linden Labs is doing very nicely, thank you very much, earning most of its revenues from land rentals: rates are $20 per acre and $195 per month. Land mass is growing at 8 percent a month and currently stands at 60,000 acres, and brands account for five percent of real estate sales. Linden Labs doesn’t release revenues figures but Second Life’s parallel economy is estimated to be worth around $500,000 each day and to be growing by 15 percent monthly. A Congressional committee is investigating whether virtual assets and incomes should be taxed.
If it’s all giving you a bit of a headache, you might find some light relief in the Second Life Liberation Army, or SLLA, which is fighting for the rights of avatars and has staged ‘attacks’ on Reebok and American Apparel stores – [Insert pun here].
Related: Keeping Up With Social Media
BBC To Webcast Music Festival Within Second Life
Publisher Of Virtual World Second Life Gets Real $11 Million In Second Round Funding

This article originally appeared in MediaGuardian.

One Response to “The Big Business of Second Life: Brands Take Up 5 Percent of Real Estate”

  1. Well, i like the idea of second life…. but it would have been more realistic if distance mean distnace in SL …. curretly we can go instantly anywhere …. that makes kinda no necessity for Automobiles. I think it would be more fun and interesting if we have to take a bus,train or car to go somewhere .. or even airplane for long distances… As in future Linden LAb is adding more languages, i assume we will have a replica of real-world where we have different countries and communities with similar Languages…. it will make it even more interested… this could be a Experimental Lab for policies laws and to analyze behavior or people o certain things….but its a Great Idea with Great work and effort!!