If you didn’t catch The Wall Street Journal today… Robin Sidel did an excellent article on the current monetary/economic tragedy occurring in Second Life. My quick summary of the article is:

- Linden Labs (owner of Second Life) shut down about a dozen Second Life banks prompted from complaints that these “pretend” banks are not living up to the promises they made to pay high interest rates, etc. etc..

- These “virtual” banks trade “Linden Dollars” which are convertible with US currency – thus customers of these banks have/could lose real US dollars.

- Second Lifer’s can’t make “virtual” ATM withdrawals, etc.

- Depositors might have lost upto $750K in real life dollars

So you guys have heard me write over the past year about my concerns about Second Life, so I’m not going to re-hash those conversations. What I do want to talk about is how this type of environment can be harmful to the company’s operating in this environment.

Second Life and other virtual worlds like them are at best a way to communicate to people. Not “Second Life” people, but real honest to goodness, beef eat’in, milk drink’in people who have first lives where mortgages, kids, cars, jobs, money and the real world economy matter.

What’s ironic is Second Life (aka “Utopia”) needs to have the same oversight as the real world – e.g. law enforcement, bank regulators, lawyers, etc.

But for some reason, companies have tried to be virtual companies to these virtual people while trying to influence their first life decision making. But no one really figured out how and if that influence actually works. I again, ask the question “what is the benefit of association with Second Life?”

If you look at Second Life as a gaming media – akin to The Sims then perhaps there is value… but the metrics and goals should reflect that, vs. the current construct of trying to actually conduct business in a virtual world and then driving real world business.

The bottom line – your virtual life can be just as screwed up as your real life – so why deal with it twice?

Scott

The Wall Street Journal WSJ Robin Sidel Second Life Linden Labs virtual banks world The Sims gaming media advertising marketing Hewlett Packard HP Scott Berg