10 Popular Ways Entrepreneurs Can Make Money in Second Life

Monday, September 10, 2007 at 1:51pm by Site Administrator

While the idea of owning and operating a successful business in a purely virtual world might sound extremely futuristic, the reality is that virtual worlds are a growing market full of possibilities for entrepreneurs who know how to take advantage. Artists, designers, landowners and even currency speculators are turning the virtual environment of Second Life into a real-world profit center.

Second Life has become so profitable that it has an annual GDP of $64 million, with over 3,000 business owners earning more than $20,000 a year on their virtual wares. There are many ways that you can become part of this growing trend. Here are a few ideas for starting your own business in Second Life.

  1. Design avatars. As an absolute essential in the Second Life world, there is no shortage of demand for avatars. Because of this demand, selling avatars can be an extremely profitable business for entrepreneurs with a little technical know-how and creativity. Some businesses cater to the general crowd, while others profit from focusing on specific sub groups or parts of the body. Whatever you decide to do, no matter how bizarre, you’re bound to find customers as long as your products are well-designed.
  2. Be a real estate mogul. In Second Life, land is bought and sold just like it is in real life. Entrepreneurs can purchase it from Second Life or from other businesspeople in the game. It can then be developed with businesses, rented out, or sold off in smaller parcels at a markup. Don’t see how you could become the Donald Trump of the virtual world? It can be done, just ask Anshe Chung. Chung is a real estate tycoon in the game, just last year becoming the first virtual world millionaire. While it might take you a while to match that kind of earning power, there is definitely money to be made in the virtual real estate industry.
  3. Make virtual objects for real businesses. The line between real-world businesses and virtual world businesses is getting thinner by the moment. Many Second Life entrepreneurs make their money creating in-game objects that can help out real-life businesses. Some are used for medical and emergency training, others for builders and universities. It’s an area where there is a lot of room to grow as well. The next version of Second Life will be directly integrated with the web, making it easier for business owners to bring their tangible goods into the virtual world.
  4. Set up a currency exchange. Second Life has its own currency, Linden Dollars, and as such, residents must exchange dollars for in-game cash. The official exchange site for the game, LindeX, charges a small fee for the transactions, much like if you were to exchange dollars for any other currency. Of course, entrepreneurs who are good with economics could stand to make a tidy profit off setting up their own currency exchange, buying and selling as the market fluctuates. Some business owners have even gone so far as to add investments like stocks to their banking empire. With the constant evolution of the in-game economy, the idea may not be that far-fetched.
  5. Embrace fashion design. If you’ve always wanted to design clothes but lack the necessary sewing skills, you might be able to live out your dream through Second Life. Entrepreneurs adept with texture design and 3-D modeling can design clothing and accessories. Designer Jennifer Grinnell was able to quit her day job and live solely off the profits from her cyber clothing store, Mischief. And with a little business savvy you could do the same. Put your clothes on the right residents, and you could start a trend, earning you a handsome profit and a cyber celebrity status to boot.
  6. Be an architect. Real estate is a big market in Second Life, and it’s not just about the land. Well-designed buildings are in demand, but the customers aren’t just residents who want help developing beachfront property. Businesses are increasingly using the game as a means of keeping in touch with far flung employees, and need appropriately designed office space for meetings and work with these employees, often requesting replicas of their real-life conference rooms. As Second Life grows in popularity with businesses and casual users, opportunities for making money from designing buildings will only increase.
  7. Teach classes. Second Life isn’t all just fun and games, you can also use it to bring together residents to teach classes and provide learning opportunities. Several universities already use the program for teaching classes online. While the medium might be better suited for conceptual rather than hands-on topics, it is possible to offer classes that would be of interest to users. Provided you have the expertise, you could turn you a profit without ever having to leave your home.
  8. Design games. There are many interactive games available for Second Life residents to play, and because at heart it is a game, these can be a good way to make money. The most successful of these games, Tringo, sells within the virtual universe at $50 bucks a pop, but has also scored a much more valuable deal: a contract with a real-life video game company to market the game for Nintendo. Come up with the next big thing and you could find yourself in a similar situation.
  9. Create animations. Every interaction between Second Life characters has to be programmed, and many residents are willing to pony up hard-earned Linden Dollars for specialized interactions. While they may be time-consuming to create, they can be a very profitable business. Interaction designer Chris Mead sells about 300 of his custom interactions a day. Even at only $1 each, that figure is nothing to scoff at. Program your own interactions, and you could see a similar return on your time investment.
  10. Open a retail shop. Just like the real world, Second Life residents need more than clothes and a place to live to be happy– they need stuff and lots of it. That’s where you can come in. You can set up a shop specializing in selling everything from toasters to sports cars. Or if you’re especially design-savvy, open your own line of department stores for virtual one-stop shopping.

The 10 ways listed in this article are simply a taste of the entrepreneurial diversity that Second Life has to offer. To date there are hundreds of different varieties of businesses all fighting and thriving amid competition at least as fierce as in the "real world." In fact, the parallels between the Second Life economy and any other entrepreneurial endeavor are so similar that even if you don’t plan on opening up your own shop in Second Life, taking a stroll down the virtual street can be a learning experience on how to improve any small business.

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1 Comment »

  1. While most of your points are valid, I have to come up with couple objectins that one should know before getting in SL to earn some hard cash.
    First, Second Life is not a game. It is, as you stated in the opening of the post, a virtual world. There are games in-world, but the whole SL is far more than a game. I am stating this because in the case of the game, there would be much more rules which would affect entrepreneurs. It is much more useful to consider it a platform.

    Then, I am not sure where you got the info about 3000 residents making 20000$ a year. Last info I got is something over 1000 residents with monthly income over 1000$. But, whichever number is correct, that doesn’t make SL sound like a great opportunity. Fact is, the world is saturated with content creators. It is not only those 1000 or 3000 residents that make serious money, one have to deal with all the other who do things just for fun and pocket-money which they never convert into US$.

    Third, prices in second life are very low. Animations, as you said, are popular and needed but their price is usually less than 150L$, which converts to 0.4US$. Most of them are just around 0.20US$. On the other hand, land which one need to set up a business is expensive. residents pay monthly tiers in US$ if their land amount exceeds 512sqm, and any serious shop is far bigger than that.

    I am not saying that setting up a RL business in second life is impossible. Many have proven that it is. But, before running into it, it is wise to double-check all the pro’s and con’s of it.

    Comment by dandellion Kimban — September 11, 2007 @ 5:37 pm

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