Down the Road: Will the L$ = USD$ end up being trouble for LL?

I just got done reading Robin's interview to ypulse.com (http://ypulse.com/archives/2005/12/virtual_teen_en.php) about the Teen Grid and was really interested to see that Robin mentioned some of the teens are making US$200 a month selling their stuff.

I was surprised actually, to see that LL has chosen to even promote the Teen Grid as a potential money maker.

Not because I don't mind people making money -- I paid for almost all of my family's Christmas and travel expenses this year through my own Second Life endeavors.

But I'm concerned about the outlook down the road. Sooner or later the numbers are going to get big enough for some pencil pusher at the IRS or the SEC or elswhere to notice.

I'm concerned because I think LL might be shooting itself in the foot by practically always -- and yes, it IS almost every interview, news release, etc. -- talking about all the money to be made. I personally think LL would be better to stop pushing this so much and focus on the creativity and possibilities. Let people figure the money part out when they get here, so they can enjoy the place before signing up with big dollar signs before their eyes. Why? Because I hate to say this, but the majority of people who join SL will not have the technical knowledge, time or education to create a profit in SL.

WHICH WOULD BE FINE, if LL wasn't promoting SL (Adult & Teen Grids) to be a place to make real, hard cash.

These people come with the expectations that all they have to do is log in, create something and they'll make money. They're not aware that they need to login, learn LSL, Photoshop, Poser & THEN create something, THEN market it, THEN support it and THEN *MAYBE* make enough to cover your land tier.

These people leave SL disappointed and their land sits around stagnant and unused. LL has lost a customer, but the biggest loss is to Second Life, who lost someone who came for the wrong reason -- if they had come with different expectations, maybe they would have taken the time to really get to know Second Life, the people, the platform and maybe, in that process, learn enough to find their niche and start creating, not to make a ton of money, though that possibility is there, but to contribute to the SL society as a whole.

edit: Sorry for the run-on sentences. It's late and I'm too tired to edit. Hope you get my point.

It's a problem already.

I think that 'cashing out' game money so easily is a really, really bad move, and gives people even more of a reason to cheat and scam their way to a fortune.

Sure, if the 'official' way didn't exist people would probably still sell on Ebay and suchlike, but it would be much less of a problem anyway.

Just looking at that figure of one individual making $200 a month.... that means that he is taking out of game the monthly fee of 20 paid accounts minus any land tier fees.

As we all know, there's a huge majority of the 100,000 accounts which are freebies and pay nothing.... I'd actually be very interested to see LL's balance sheet to see how this is all being paid for - I am paying to receive a service by playing the game, I don't want to be funding some spotty teenagers lifestyle - much of which I probably disagree with anyway.

I know LL can make as much L$ as they want at no cost whatsoever... but sooner or later the about of $ out will exceed the $ in ... then where do they go? Raising monthly fees to compensate will go down like a round of ham sandwiches at a barmitzvah I'm sure.

Lewis

Well, Lewis, I kinda see what you're are saying, but I'm not talking about "taking money out" of Second Life. Even when someone sells their L$ they are not "taking it out". It just changes hands to someone who later sells it someone else. The only L$ going "out" of the economy, like out of circulation, are Parcel Find Listing Fees, Classified Ads, Marriage/Divorces, and... I think that's it?

I'm talking about cheapening the Second Life experience by always pushing the money. I was a member of Second Life for almost four months before I even began selling my stuff because I had always just made them for myself. It was a tiny T-Shirt stand in Rose, rented from Aaron Perkins. Took me two hours to decorate a little round rental space. I took at least a dozen pictures of it when I was done because I was proud to create something that I wasn't ashamed to say "Hey, do you want to buy one of these?" about.

So it has less to do with the money, really, I'm talking about the overal picture and the lure of new users. Are they coming here with the wrong picture of Second Life in their head, before they even log in for the first time?

I totally understand what you're saying. Reminds me of a new Resident I met and friended two months ago or so - everytime we would IM, his incessant question was "So how can I make money?". I tried explaining this would take time and he'd be better off learning the tools and exploring the world to get a feel for SL, but apparently that wasn't interesting. I sent him to someone that was looking for employees at the time, but even that didn't keep him - I haven't seen this guy log on for 6 weeks now. It was a frustrating experience for me, and for him too, I believe. And yes, I blame LL's marketing on that.

Most definitely. There is a lot of fun to be had with creativity in the game, without spending any money. Last night I was out shopping looking for fish for my new pond. Prices put me off, so I found a picture of a goldfish from Google, photoshopped it, made a hollow cylinder, added a free 'rotate' script, and now I have goldfish in my pond that cost me L$10 to upload the texture.

I have never, ever been 'rich' in any online game that I play, because I spend more time enjoying myself than to worry about having money to waste.

It's sad that the invent of 'camping chairs' has only reinforced the thought that money is important in game.

Apart from uploading textures, it's possible for the skilled person to create the most wonderful build in SL without spending another L$ on anything else. I know that would make many of the shops - which contribute much to the game in many cases - redundant... but if only people would move away from those dreadful laggy blingfest sexball-cluttered monstrosities that pass themselves as 'popular nightclubs' and look at what appeals, rather than which has the highest traffic, they might just find themselves discovering a whole side of the game they hadn't realised existed.

Which is precisely what I do in my 'mystery tours'.

Lewis

The fact is that SL is not going to entertain you (er, one).

You make your own fun, your own friends. That's WHY so few people stay here. It is not the marketing, really, it is the fact of what SL is -- whatever it is. SL is learning this whole other program and finding out that you need to get OTHER programs and learn them too if you want to create stuff and make money. If you're not naturally inclined to create stuff, then you're kind of stuck. Sure you can hold Tringo events or something. That's if you stick around long enough to care.

I totally love SL because I could create stuff and other people could see it and I was lucky enough to meet other people I love. I can understand though why it wouldn't be right for people who just want to shoot something, or ... whatever it is people want to do. And therein lies the inherent problem and strength of SL -- it's an ever-changing world, it is a "second life" -- and saying "Some people get it and others don't" is such a weak statement. I can't think of a better one though.

Money has definitely become the focus of many here and it's a shame. I never thought I'd say this but $$sigh

Question: In other "games" I've played, the in-game currency is not officially convertible to dollars. Yet we observe several things over and over:

1) People do it anyway. A busy trade in "gold" or "platinum pieces" and in-game weapons or magical items goes on in eBay and other trading sites. People accept real dollars through PayPal, then their avi delivers the in-game item in game. Or the reverse, for "gold miners" who earn and sell out for real money. Game owners who have tried to stop this have found it virtually impossible. The smarter ones have given up and embraced reality and provide an honest, efficient market, like LL has done.

2) People focus on levelling up. Avis may not ask "how do I make money," but ask "How do I earn (gold/plat/xp/furniture) so that I can level up." The pursuit of whatever it takes to "level up" in the game becomes the focus. My experience in other MMPORPGs is that such focus detracts from the social life. People are too busy whacking monsters or mining whatever to socialize.

My experience in SL is that most sentient avis are not focused solely on making money, but instead take time for developing relationships and exploring the good stuff made possible by the freedom to create things independently of the game owners, and to get some reward or satisfaction by selling or giving it away.

Like in the so-called "Real Life," different people reach different points of equilibrium at different points in their life trajectory, balancing work, play and socialization. And, like in the so-called "Real Life," many come to the big city to make their fortune and find the streets are not paved with gold, the money does not grow on trees fast enough to feed themselves, and making money involves compromises and hard work and talent.

Unlike in the so-called "Real Life," those who find the balance not to their taste can stop working without starving, and find that there are other things in life than work and money.

As I see it, there is room in SL for all the reasons people come here. Some come for money and some come for fun. Why does it have to be one way or the other? There is room for everyone here! So you bump into some one who is focused on finding places to make money...so what? You can either help them or say you can't. It is your choice and it is their choice to be here for their own reasons.

Maybe they want to make some money sitting in a "camping chairs" so they can buy those T-shirts you are making, or save up to buy their own property...or yes, even cash out and put it in their Real Bank Accounts. I would rather see SL stay varied and open for all to seek what ever it is they can get from it instead of gearing it in one direction or another.

Yes, I think the LL's should not be too quick to market SL as a second income just to get subsribers...especially since it can draw attention and make this whole thing more complicated than it has to be. But, I don't think making money here should be discouraged by not talking about in the confines of the the game itself or here on the forums...it's one of the aspects of the game.

Hence all the people trying to make L$ for zero effort, and getting dissappointed when they only make US$2 a week.

Now. I did recently cash out, and it did make a little money. I might use to pay for teir down the road... when the asset server and real estate is more stable.... and I can afford to buy an entire semisolated sim.

OTOH, with people recently saying 'dood, you should really jack up the prices on your gear, you'd make mad cash'. I'm doing precisely that. There will be a couple store locations by the end of the week.

I didn't bother until now because there wasn't an easy, trustable exchange mechanism. (3rd party exchanges not withstanding.)

But yeah, they keep playing up You Can Make Real Money aspect. I'd be pushing the Freedom To Create a little more.

Excellent post with some great points. I too wish that LL would rethink their marketing strategy so that new people's expectations were more in line with reality.

Well, OK, I did cash some money out. I cashed out enough money to get me something that piqued my interest while hunting for inspiration for my mecha avatars. Granted, It's not the grand scale of $200US a month, but it's enough to get a little something for myself.

I've always tried to maintain a balance. If I see something that looks really cool, I have no compunction about buying it in SL because it is in-game money. With the few who did save up their money to buy my avatars, I felt that I should at least contribute back to the SL community that made me that money to begin with.

But money isn't the issue, I pride myself in making my works that look damn kickass. It may not be as cool looking if I had designed it using a higher end 3D program like 3D Studio MAX, or Lightwave, but it does give me the pride that I made something artistic and good.

Cashing out and buying in through IGE was almost as easy as doing it through LindeX. Linden Labs has no way to control whether it happens, all they can do is cash in on it by taking a percentage of the gross. And none of the US$ that are going out are comingfrom Linden Labs, they're coming from people like me who are buying L$ with US$ on LindeX.

What I don't yet understand, is why would anyone BUY L$?

Wait... land sales..... furni.... clothes.... bling.... nevermind. I'll rest my case. Or something...

Long before LindeX existed, LL was pushing SL primarily as a "place to make money". Now that they have taken the currency exchange in-house, they will undoubtedly have larger issues than simply new users' expectations of instant riches. Before long the IRS or California's Attorney General will likely take notice and start asking questions about things like gambling (fair and rigged alike), and services exchanged in local currency (net income in L$ is potentially taxable, by the way, even if you don't convert to US$).

Money sold on Lindex doesn't go in or out of the game - it goes from one player selling to another player buying - likewise the USD doesn't go in or out of LL apart from their 'handling fees'... it goes from one player buying to another player selling.

If anything LL profits from it from their handling commision.

SIggy.

*Desmond Shang puts on his best 1931 Berliner tux, a la Joel Grey*

*In a dark, exclusive Klub in NeuAltenburg, he begins his performance*


[Desmond]
Mon-ey makes the vorld go around
The vorld go around
The vorld go around
Mon-ey makes the vorld go around
It makes the vorld go round!

A mark, an $L, a buck, or a pound
A buck or a pound,
A buck or a pound,
Is all that makes the vorld go around,
That clinking clanking sound
Can make the vorld go round!

[NeuAltenburg Klub Girls]
Money money money money money money
Money money money money money money
Money money money money money money
Money money

[Desmond]
If you happen
To be rich,

[GIRLS]
.......Ooooh

[Desmond]
And you feel like a
Night's entertainment -

[GIRLS]
...Money

[Desmond]
You can pay for a
Gay escapade.

[GIRLS]
Money money
Money money
Money money
Money money

[Desmond]
If you happen to
To be rich,

[GIRLS]
.......Ooooh

[Desmond]
And alone, and you
Need a companion

[GIRLS]
...Money

[Desmond]
You can ring-ting-
A-ling for the maid.

[Desmond]
If you happen
To be rich

[GIRLS]
.....Ooooh

[Desmond]
And you find you are
Left by your lover,

[GIRLS]
...Money

[Desmond]
Though you moan
And you groan
Quite a lot,

[GIRLS]
Money money
Money money
Money money
Money money

[Desmond]
You can take it
On the chin,

[GIRLS]
.....Ooooh

[Desmond]
Call a cab,
And begin

[GIRLS]
...Money

[Desmond]
To recover
On your fourteen-
Carat yacht.

[Desmond]
Mon-ey makes the vorld go around,
The vorld go around,
The vorld go around,
Mon-ey makes the vorld go around,
Of that we can be sure!
**** on being poor!

[ALL]
Money money money
money money money
Money money money
money money money
Money money money
money money money
Money money money
money money money
Money money money
money money money


[Desmond and GIRLS]
If you haven't any coal in the stove
And you freeze in the winter
And you curse on the wind
At your fate
When you haven't any shoes
On your feet
And your coat's thin as paper
And you look thirty pounds
Underweight.
When you go to get a word of advice
From the fat little pastor
He will tell you to love evermore.
But when hunger comes a rap,
Rat-a-tat, rat-a-tat at the window...

[GIRLS]
At the window...

[Desmond]
Who's there?

[GIRLS]
Hunger!

[Desmond]
Ooh, hunger!
See how love flies out the door...
For...

[Desmond]
Money makes
The vorld...

[GIRLS]
...Go around

[Desmond]
The vorld...

[GIRLS]
...Go around

[Desmond]
The vorld...

[GIRLS]
...Go around

[Desmond]
Mon-ey makes the
.... Go around

[GIRLS]
...Go around

That clinking
Clanking sound of
Money money money money money money
Money money money money money money

[Desmond]
Get a little,

[GIRLS]
Money money

[Desmond]
Get a little,

[GIRLS]
Money money

[Desmond]
Money money

[GIRLS]
Money money

[Desmond]
Money money

[GIRLS]
Money money

[Desmond]
Mark, an $L, a buck

[GIRLS]
Get a little

[Desmond]
Or a pound

[GIRLS]
Get a little

[Desmond]
That clinking clanking

[GIRLS]
Get a little
Get a little

[Desmond]
Clinking sound

[GIRLS]
Money money
Money money...

[Desmond]
Is all that makes
The vorld go round...

[GIRLS]
Money money
Money money

[Desmond]
It makes the vorld go round!

Barkeep, Desmond is cut off, except for black coffee and a cab home.

Because running a business isn't fun for me, and I can make more money doing un-fun things in RL than in SL.

I've always thought that too, Aaron. People should be creating or doing things in SL because they enjoy the creativity. Making money off of it is a nice secondary bonus. People who come here with making money as their main goal are likely to end up frustrated, or even misled. It's a double edged sword though because that aspect is what the press finds most interesting and novel about SL, and it still gets a hell of a lot of free press for a VW that's over two years old now. The more press, the wider the net being cast for new users even if the focus of the press is narrow.

I think it says something (often negative) about a person's character if they come into SL with the singular objective of making money, and little or nothing else at all. Money can certainly be part of the equation, but while a stool may have one "leg", most chairs certainly do not. It creates a vicious cycle too, with all sorts of contradictions thrown in the path of someone who doesn't expect them, and isn't patient enough to learn and acclimate.

Sometimes, I see it like a big corporation coming into the natural habitat and destroying the homes of aboriginal peoples because they believe there is some great profit to be made—perhaps someone thinks the land is especially valuable, or there are great minineral resources to be mined.

In the overwhelming majority of those cases, such a view is myopic and shortsighted. Frustration builds up quickly, cries of "LL FIX THE DAMN GAME!" ring out, more pseudoblood spills out than Braindead and Kill Bill's bastard child to the nth power, and what is left is a very hollow shell of what could have been a firm foundation.

However, I cannot generalize any blame, as each person has their own perception of the world. I only have mine, and when I saw "Your world. Your imagination." I interpreted that artistically as I wanted to.

Once again, it is such an apparent paradox that on one hand, we have such a fast-paced online society (which in itself can stress a great deal), while on the other, these human traits still continue to be around and are slow to change. And it says at least as much, if not more, about someone's character by how they approach Second Life. Subtle differences in wording make a great difference, I've noticed.

Before I came to Second Life, I wanted to learn more, as much as I could, as I would respectfully do for any world culture. Those who come brashly in, barging past the join page and not informing themselves of risks vs. reward can proceed at their own caution.

True. I keep forgetting I'm about to set up a small shop in Tortuga when I get back in later.

Ok, I just envisioned a press release for two year old VW Jetta, before I unraveled the meaning... I'll take that black coffee and the check now, please!

I agree that the marketing for LL could be a little more rounded, but there's nothing wrong with advertising moneymaking in SL. In fact, to me it's a very appealing feature of SL - it's not a guarantee that you'll get rich if you join, but it's a much more realistic reward mechanism than, say, points or leader boards.

Assuming that the major draw for SL is from MMOs and other games, (because really, where are people spending their time online?) the real-valued money is part of the major differentiating factors. You can socialize and form groups/guilds in any game, but while the whole MMORPG genre has you spending all your time trying to acquire imaginary items (gold, swords, etc.), SL encourages you to make things of actual worth to others, and it rewards you with money you can put in your RL bank.

So for me, the challenge of making money is to get in-world, figure out why SL is fun, how I could make it more fun, and then capitalize on that insight. It isn't easy, but if it was easy it wouldn't be worth doing. A n00b who is complaining about how difficult it is to make money probably doesn't belong in SL, he probably belongs in WoW where he can go to the next NPC who will tell him what to do to earn imaginary money.

The problem is when somebody leaves out the fun aspect, does pure money business for a few months drudging themselves on SL for hours, then something changes and they scream at LL for having disrupted the business model they worked on for months.

It's a strange thing to say, but this isn't actually true.

If you enjoy creativity, you can make things in Blender, GIMP, Poser, etc. without needing to pay tier fees, worry about lag, and with more options and flexibility. And once you've done, you can save them on your local disk. Sure nobody else will see them, but if what you were enjoying was creating them, you've still done that, right?

The usual reason to do these things in SL as opposed to anywhere else is not just for the joy of creating them, but because you enjoy having an audience. And that's a big deal. Because if SL gets big enough that not everyone can have an audience - and it's starting to do that - then the motivation for those extra people to create drops. Likewise, if SL gets big enough that getting an audience in SL is as hard as getting one in RL then there's no motivation to create in SL. After all, there are free sites for hosting art and similar things IRL, which costs money to do in SL!