Real-World Economic Troubles Reach Virtual Proportions

Posted by: Matt Vella on January 26

bank-protest1.jpgWith the lingering sub-prime mess, credit crunch, market madness, and global mania over economic coupling/decoupling, these are definitely times that try economists’ souls. But, those real-world economic troubles have rippled into nascent virtual economies, Second Life in particular. The Wall Street Journal and American Public Media’s Marketplace both featured prominent stories last week about the meltdown. But, this month’s MIT Technology review has the deepest and most analytical look at the how and why that has led to the closing of banks, constriction of trading, and disappearance of massive amounts of cash. (Subscription required but oh so worth it.)

As an anecdote, a colleague who was thoroughly ensconced in the Second Life economy, running a full-scale business with dozens of employees, recently told me he bailed entirely given such economic worries. Hundreds of similar stories are floating around message boards and discussion groups on the web. I wonder when people are going to start asking about an economic stimulus package for the ailing Second Life economy to mirror the real-world omnibus bill. Two additional voices to pay attention to in the mean time, Cornell University economist Robert Bloomfield and Benjamin Duranske, an intellectual-property lawyer with an interest in the Second Life banking industry.

All of this, no less, as 80s idol Journey announced it will be stepping into Second Life on Feb. 1. Coincidence or cosmic convergence? You decide.

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About

No longer child's play, the booming global games market is worth billions of dollars. In Games, Inc., BusinessWeek Innovation writer Matt Vella and Tokyo correspondent Kenji Hall analyze emerging business trends in video games and interactive entertainment. They’ll examine everything from button-mashing, chart-topping, console games to serious games commissioned by big corporations to train staff. They’ll also map the evolution of expansive virtual worlds and go behind the strategies at companies that are turning play into big business.

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