Wednesday, 17 September 2008

Second Life Economy - No Space For Small Business.

Second Life is advertised to many people as a way of making money by creating Virtual Products. However is this really true because as most people should no money is not easy to aquire. So i decided to investigate to see how the Second Life Economy worked and if there was space for Small Business.

After talking with many mall owners and small business owners i found that many dont even breakeven and if they do its worth nothing in the real world. Most of them continue to keep there Businesses open because they enjoy it rather than for money. This proves that small businesses dont make any money but do the big businesses?.

So i went to talk to some of the bigger business owners who had high rankings in the Premium Search service. It took some time to get them to talk to me but once i did they told me a lot about how they are doing. I found that they are very successful as they can afford to do a lot of marketing which means they get a huge amount of customers. The small business owners are unable to compete with these Giants of the Second Life market. To be successful in second life you need a huge amount of starting capital and have to do a huge amount of Marketing. This means that small businesses have no chance at making the big money.

Small Business Owners Have No Chance - Fact

I think Second Life is no place for someone to make money from unless they already have large amounts of money already to invest. I am talking about Thousands of Dollars not just pennies. So dont be fooled by the Lindens or the Media thinking that you can make a fortune from nothing.

Monday, 8 September 2008

Second Life Economy - The Future?

You may think the Second Life economy is something that is not important to the regular business owner however if you invest in looking into the economy you can make better forecasts and calculate increases and decreases in sales before they happen. If you own a mall spot then this probaly wont help you but if you own a entire sim which makes many sales then this might be very important. I would like to point out i am not giving you the answers but teaching you what you need to do to look at the economy and its current state. I did this because if i write a report today, tomorrow it will be outdated and i have a life to live. I think

So the economy why is it important? and what effects it?. Ok one of the things that effects the economy is the exchange rate of linden. If people can get more linden for there dollar then they will buy more because they gain more purchasing power. Therefore the first thing you can keep a eye on is this exchange rate as it will effect your sales expecially when large changes are made.

Birth Rate/Death Rate? Huh there is no such thing in Second Life!. Your wrong as Birth rate in Second Life is the number of people who enter and Death Rate is the people who quit. Therefore try to find some useful statistics on what the population of the game is like. The linden lab published data is not valid as it includes alt players and other defects as they wish to make it sound better than it is. One way you could check the "Birth Rate" is by checking what good and bad publicity Second Life is getting.

Bad Publicity = Decreasing Population
Good Publicity - Increasing Population

Death rate is more difficult and near to impossible to measure but a high death rate should be expected as i estimate over 50% who are born quit within 1 week. This leaves you with the other 50% who stick around for a short while and then theres the rare few who decide to play for the long term.

Second Life Alternatives - You need to check if there are any alternatives that could pose a risk such as a new grid. If you expect a competitor to lauch and steal Second Life players then be prepared as this reduce sales. Never think Second Life will last forever because it wont and a alternative could come out at anytime or Linden Lab could make a distarious error... So expect anything and make sure you have a plan in place. For example if you hear a new game similar to Second Life is opening then i would sell off some of your capital because your sales are likely to go down because the Second Life "Birth Rate" will decrease. You could then invest this money in the alternative.

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