Video Games

Economy Booming, In Fantasy Alternate Reality


Second Life, different than the first:

In a post on the Second Life blog, Tom Hale, Chief Product Officer for SL owner Linden Lab, said user-to-user transactions in the immersive world spiked 30% over last year to $160 million, breaking all previous company records…..

Additional high-points for the company included included the fact total sales on Xstreet, the Second Life marketplace, reaching $2.3 million, an 82% increase year-to-year and a 24% increase over the previous quarter. Total Linden Dollars exchanged on LindeX, the in-game currency exchange, totaled $31 million, a 9% increase over the previous year, and monthly unique users with repeat logins peaked in March at 826,214, a 13% increase year-to-year and an all-time high.

Katherine Mangu-Ward looked at encroaching statism in the unreal world of Second Life back in February 2008. Wagner James Eu with more on this from Reason magazine's June 2008 issue. Kevin Parker wrote on the economics and politics of video and virtual worlds back in our April 2004 issue.

NEXT: Lies of the Ethics Industry

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  1. Surprised you didn’t link to the Drew Carey video.

  2. Economy Booming, In Fantasy Alternate Reality

    Barry and the Dems will probably claim it as evidence that the stimulus is working.

  3. My connection speed is too slow for a second life.
    There’s a lesson in that somewhere.

  4. Second Life is a good contrary indicator for IT. Unemployed software nerds = more Second Life content.

    1. Quite true.

      1. + unemployed everyone else = more players.

  5. The real world story on the virtual economy is the effect of gold farming.

    Its seems that growth in the virtual economy is being driven by low wages in China. …just like growth in the real one.

    What does that have to do with the immigration debate?

    Everything. Doesn’t it? Access to cheap labor makes economies zoom.


  6. Why does the media care so much about Second Life? No one else does.

    The SL marketplace hit $2.3 million real dollars last year? So what? A little while back, World of Warcraft’s owners made $2 million in ONE DAY selling an in-game flying ghost pony.

  7. Oh, I thought you were referencing the artificial growth our economy has had with the government inflating another bubble.

  8. My local cable news channel (NY1) was all rah-rah this morning about the recent ‘bull market’ and positive trends in consumer confidence and earnings reports and stuff. Serious question – is there any truth to it? IANAE(conomist). I would hate to think they’re just peddling smoke and mirrors :/

    1. I’m not either, but the state-aligned media is on at least its 5th wolf cry on that topic since BO took office.

      The short term outlook is bleak because of unemployment. The long term outlook — well, you read H&R so you know how that looks.

      Maybe there’s some term in the middle where things aren’t entirely depressing.

      1. Unemployment is a trailing indicator, not a leading indicator. When unemployment goes down in earnest, we’ll be well into the recovery. Though unemployment has started to trend down.

        1. It’s going to take what, like 2 years of robust growth to get unemployment back to where it was in 2005?

          Yes, it’s a trailing indicator. That’s why I said “short term”.

    2. Well, GDP had another quarter of decent growth, 3.2%. That’s the 3rd straight quarter of growth. Unlike the previous growth, there wasn’t a big goosing from government expenditures. Business investment was up 4.1% and consumption went up 3.6%

  9. the state-aligned media is on at least its 5th wolf cry

    Good point. It’s like, the DJIA goes up 100, and it’s all “the recession is over!” And it goes down 100, and it’s all “massive uncertainty over Obama’s latest regulatory scheme!” Every bump up or down has to have some concrete explanation. Meanwhile, yes I do read here and big gov seems determined to funnel money to its friends at all costs, rather than say, get out of the way. I dunno if Goldman Sachs is guilty of anything, I dunno if more regulation is necessary (but I would only support such if it could be proven the market doesn’t “work”), but I do know that the President’s friends (and their friends) will be taken care of come hell or high water.

  10. The U.S. economy might be experiencing a reverse tax overhang in 2010. Just as expectations of a future phased-in tax cut can depress jobs and incomes in the present, as they did in 1982 and 2002, the expectation of a national tax increase in January 2011 could be raising economic activity this year.
    Many projects that might otherwise have been scheduled for next year are being pushed ahead to take advantage of the greater after tax returns that are scheduled to end soon. This would indicate strong growth until the late autumn or winter, and then a crash.
    The journal and its contributing economists have theorized in the past about how expected tax rate changes can effect business decisions and consumer behavior over time. Has anyone written about a surge of unexpected prosperity in 2010 before the Bush cuts in income and investment tax rates expire?

    1. Interesting point. That sounds like a totally rational explanation of what could wind up being a false “mid-term” recovery. All I know is not to trust anything I hear from the morning newsheads.

    2. I haven’t heard anything about that possibility, but it does seem logical.

      I’m sort of torn on the prospect of a recovery in the near future. On the one hand, it would obviously be good for our country, but on the other, it would appear to show that central planning and socialist (yes, it is) economic intervention is good for the economy.

      1. Not necessarily Tulpa. Informed people know that other nations like China are recovering more strongly than the U.S. without the benefit of fiscal stimulus and are actually helping pull this country out if recession. And they know that the Federal Reserve has been pumping a tremendous amount of liquidity into the banking system. But that would have happened under a John McCain or Mitt Romney Administration.
        And Obama has done some good things. In March 2009 he relaxed mark-to-market rules that were contributing to the downturn. And he left the Bush tax rates in place (for a while) when many in his party wanted to raise them immediately. Doing so would have created a depression, not a recovery. (Why is “Obama” not part of the dictionary of this editor?)

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