Doing business in Second Life

Anshe Chung's million-dollar profit in real-estate sales over 30 months wouldn't be all that impressive, really, were it not for one thing: The land she sells is made entirely of pixels.

Chung is one of some 1.7 million denizens of Second Life, a virtual 3D world that, frankly, reminds me a bit too much of "The Matrix" for my liking.

But Chung clearly has enjoyed success there -- and not just socially: After plunking down 10 bucks for membership three and a half years ago, she started an aggressive campaign of buying, dividing, and selling Second Life property (which is quite visually impressive). Her holdings, which include not only land but virtual malls, chains, and store brands, are now worth "several million Linden dollars" (the currency of Second Life), which she asserts is convertible into at least one million dollars, American. She claims that makes her the virtual world's first millionaire.

Her operations have since grown to include the development and sale of properties for large scale real world corporations, and have led to a real life "spin off" corporation called Anshe Chung Studios, which develops immersive 3D environments for applications ranging from education to business conferencing and product prototyping.

Now, this isn't the first instance of individuals reaping real monetary success from a virtual world. I remember back in the day of text-based RPGs such as Gemstone III, players were willing to fork over real-world cash for powerful weapons. That trend has continued with graphical RPGs such as Everquest and World of Warcraft.

But Second Life clearly has opened up a whole new world of financial opportunity, and it's not just entrepreneurial types like Chung who are taking advantage. As reported by InfoWorld Lead Analyst Jon Udell, companies like Sun have attempted to leverage the success of the virtual universe -- though with arguably limited success. (Media companies also have staked ground there.) Udell attended a "block party" IBM held there and found the experience to be less than satisfying: The venue seemed to detract from the experience more than enhance it.

And at least back in October, Udell's prediction for Second Life serving as the next big business platform was not particularly optimistic: "[If] history repeats itself, we'll find that fancy 3-D designs will ultimately prove no more compelling than fancy Web pages."

Virginia Hines, InfoWorld's VP and General Manager of, dipped her foot into the virtual waters of Second Life recently to investigate its b-to-b potential, as well as its applicability to a future version of InfoWorld IT Exec-Connect. Though she was impressed by the system's underlying technologies, deeming Second Life "a fascinating experiment and laboratory for all the social sciences," she came away with some healthy skepticism about the medium's business potential.

Among other things, she noted that it's not sufficiently usable and navigable to attract and retain new users. Moreover, the current residents of the world are more focused on playing than working, which means that "any effort to use Second Life for B2B marketing purposes will probably require enticing a new demographic into the community, as opposed to attracting current members."

Finally, she said that "many of the current corporate ventures in Second Life are hard to locate, fail to attract traffic, and offer little user value. Without a more grounded value proposition, the concept of being in Second Life just to 'establish a presence' doesn't seem very fruitful."

Have you had any experience in Second Life? Do you think there's potential here for some serious business opportunities?