Anshe's Newest Venture

http://www.3pointd.com/20070519/anshe-to-launch-inter-world-financial-market/
http://secondlife.reuters.com/stories/2007/05/21/anshe-chung-to-open-cross-platform-financial-exchange

What do you think?

Edit: added Reuters link

thanks for the news

i certainly enjoy reading www.3pointd.com, as it bring other news such as IMVU, entropia and SL,, many thanks for sharing

Wonder how it will affect WSE volume?

One nice thing is that it's a vote of confidence for a virtual world that's been on shaky ground lately.

And I would trust my money to her before a no-name...

As long as we cannot export products to other virtual worlds, I see little use in a financial coupling. Besides that: We already have a financial link. It is called the US Dollar.

lol...i agreed

Wow, I think that is a far-reaching vision. I don't know anything at all about Entropia or IMVU, but I think that in general this is a good first step towards setting things up so that avatars can walk from one virtual world to another.

Anshe is definately going to make an interesting subject for a "Movie of the Week" one day. Virtual call-girl to Financial Magnate. I think they should try to get Lucy Lui.

My thoughts exactly.

Great news.. thank u, Rockwell..

It's interesting, but I feel the same way as some earlier posters - real money already serves as a financial link between these places.

Anshe's business basis has always been that she provides services at relatively bad financial value in exchange for high speed, for the cases where this overall is a good deal for the buyer - the most common being, Anshe will buy your land for less than the market rate, but not so much less that you won't end up better off overall by avoiding paying for another month's tier. The problem is I just can't really see the need to really quickly transfer Lindens into IMVU credits or PEDs, especially since most of the big Linden makers have to spend their time in Second Life (and thus not IMVU or Entropia) in order to be big Linden makers.

Thinking of uses, the only thing that comes to mind is that will be great news for anyone looking to get rid of illgotten virtual currency.

I'm not sure what other widespread use it would have?

Well being someone who particpates in both universes of SL and EU I would say that it is quite a big thing. One of the things to note is that to withdraw your PEDs out of EU can take up to three months. So a speedy form of withdrawal from PEDs to L$ and vice versa would benefit my ventures a lot.

For example if I wanted to deposit L$ into EU as PEDs, then I would have to first withdraw it to Paypal, withdraw that to my bank account, then deposit it onto my credit card and then use my credit card to deposit into EU. That makes a lot of links in the chain, each with their own set of fees and also expands the time it takes to move capital. If I need to act quickly on some venture in EU or SL by the time I'm able to do it, it will be a bit late.

Of more interest would be is in Second Life citizens could also invest in EU ventures via L$ through purchasing shares and also vice versa. Would raise a few interesting possibilities.

LL should be fools to let their Linden dollars getting transfered to be used in other worlds. They are market leader so their interest is to protect their market. It would be like pushing clients to the competition.

My understanding is that EU is a "game", and as such a "venture" is along the lines of paying to outfit people to hunt monsters and then sell the loot obtained. If that is true, and I acknowledge I might be wrong, then I would be a bit afraid of connecting L$ with a non-neutral universe in that way (by "non-neutral universe" I mean that the owners of PE can manipulate profits by deciding how difficult the monsters are)

Seems to me like someone's getting a bit greedy and wanting too many fingers in too many pies, with too much profit the desire.

This might be good... but I get a funny feeling it might just come and bite her in the butt.

Pardon me for being underwhelmed, but isn't this another step of reality crossing too far into the virtual... don't people play games for fun any more without thinking of how much money they can make?

Broccoli

It sounds interesting but from my understanding, L$ can never actually leave SL. If someone in SL wants to trade their L$ for PED then Anshe takes the L$ into her SL account in 'this world', and the transfer of PED happens in another world entirely.

I can see that it might affect the value of the L$ if this kind of trading had enough volume, i.e. enough people wanted to trade their L$ for PEDs or whatever, then the value of the L$ might drop (although Supply Linden can always stop printing them, to stabilize the value). Likewise, if enough people wanted to sell their other-worldly currency in exchange for L$, that could increase the value of the L$ (unless Supply Linden started printing more of them, to stabilize the value again).

I've never looked at any virtual worlds other than SL so I am likely biased, but I am interested to see how it ends up working, and if it will show any trends in or out of SL (assuming AC posts the numbers). On the whole though I don't see it having a great impact either way.

-Atashi

Maybe three or four years ago that could be argued but its certainly has expanded beyond just being a shoot-them-up in MMO clothing.

A lot of ventures within EU are now based around land ownership where you tax people who use the land through owning shops, hunting and mining etc... It is still a somewhat primitive economy to say something like SL, partly because it is highly regulated, especially as the currency is fixed by the company that runs to the US$ (eg 10PEDs to the US$).

However, Anshe's involvement has been through the purchase of one of the five banking licenses that enables the owner to start providing some financial services. So it opens up a bit more of the possibilities even though I would certainly say is a high risk move and is proving controversial The EU community don't really want SL players involved in their game it seems, so Anshe's got a lot of work cut out to make it work.

I suspect that in the end we may see some kind of siloing of the services initially. So the link between SL and EU will be less prominent.

Reality is theres very fewer people like myself who participate in both SL and EU, so the crossover of capital will be slim.

I'ts a brilliant move on her part.

She will be able to shift her assets to the most advantageous world much more easily this way.

Also, since it's so hard to cash out PED, but she can because she's got a big enough biz to reasonably wait it out, she'll make money on the liquidity convenience she provides.

Well done, Anshe &c.

* * * * *

And also, for some, this would be a rather sly service.

Think about it. Most people declare their virtual wealth when it can be seen: upon cashout to USD.

If you are moving significant amounts of money through USD, and you are a US citizen, the 'income' will be noticed by the IRS.

And without a business to record legitimate business expenses, your spending is simply that: nondeductible spending, instead of expenses you can write off.

So using USD to move assets from one world to another has a significant tax disadvantage unless you've properly set up a business (implying, of course, that you are in fact running a legitimate business that the US IRS would recognise as such).

See, that's what bothers me. Only five banks? Who says? Apparantly the owners of EU, not consumer demand.

Why is this a worry? Well.. if EU is still handing out what are effectively state protected monopolies, then what happens when someone gets one, makes lots of PED, and then can convert them to Lindens? The Lindens used to do similar things with monopolies but many people fought hard against the idea of the "FIC" and this has been reduced a lot. But it seems EU are still doing it and encouraging it - so what happens when the best way to get rich in SL is to become part of the FIC on EU?

Looks like Adam Reuters picked it up:

http://secondlife.reuters.com/stories/2007/05/21/anshe-chung-to-open-cross-platform-financial-exchange

If you've played Entropia then you'd know they aren't competition for LL. It's basically SWG without any missions. All there is is grinding and talking with other people using a harder to control avatar in a prettier world (since there's no user created content).

I played Entropia for a full day and uninstalled it. Unless you want to sink a ton of money into the game it's not worth it. I've already sunk a ton of money into SL for my own building purposes, why give more $$ out??

I wonder if this also means she is opening Venture Capitol investments for the virtual world? Buying into a package and gaining a return on various In world business ventures in the Named Virtual environments?

One thing i think is certain, If it CAN work, Anshe is the one to MAKE it work, she's one smart lady.

Angel.

Well the reality is that to be part of the FIC in EU requires some serious capital, these days an investment of about US$100,000 would be a requirement if you want to be part of the EU FIC.

The Bank Licenses themselves went for between US$60,000 - US$100,000 each. Two of them are owned by real life financial services companies that were able to outbid the the main players in EU by just having access to substantial cash.

EU is certainly an example of what happens when you have "state" control coupled with an economy that is based on speculation. Its perhaps why I participate because its an interesting experiment in how a different form of economy functions compared the free market that exists in SL.

EU is also a more traditional MMO, everything has to be created or built by Mindark who runs it. It only recently got some element of player content in the form of the ability to upload your own imagery.

In that sense I don't see it as a threat to SL or vice versa because I think both are very different. If there are EU players wanting to particpate in SL because of this, then I think its a very good thing, because in the end it expands diversity. And vice versa. At the end of the day theres nothing really wrong in a big EU player cashing out into L$, its just another flow of capital as in real life international trade and banking. And some of that will stick in Second Life.

Yes, but that's exactly my point. I mean, I remember the news stories about the player there who bought the space station for US$100,000. But they were already saying in those same news stories that the player was pretty much guaranteed to make a profit, and I'm sure that when it made the news, Mindark popped open their editor and moved a slider and suddenly the space station became prime hunting and mining land.

Again, what happens with that sort of thing if the economies merge? Some people spend US$200,000 buying sims in SL in the hope of making a profit on them, which is by no means guaranteed. Are they being suckered compared to the lucky person who is around on EU when they have a land sale of a major area, buys it, then Mindark arrange things so that they profit - and they use that profit to finance their SL land business, so that others without that advantage have to compete with them?

The thing about "it's just another flow of capital", well, capital flows can be bad too. There have been RL cases where firms in one country have complained about having to compete against firms in other, often smaller, countries - where the corrupt government will basically work for the firm. How would you like to compete against a firm that can order the goverment to print as much money as the company needs to win a bid? (Yes, this causes massive inflation, but only once the money is in circulation - ie, after the bid is won.)

This is exactly why linking to EU is so dangerous.. because it's an economy that can contain these huge investments and yet is designed in a way that makes it easily manipulable.