Second Life 'Economy' Grows 65%

Second Life is still going strong and its latest 'Economy Wrap-Up' shows how sophisticated it has become: 'Here's a look at 2009 - through the lens of the US dollar value of gross earnings made by Second Life Residents during the year.   In 2009, Second Life Residents in the aggregate earned approximately US$55 million in real money, growth of 11% over 2008. This represents the sum of all US dollars transferred "out" of the Second Life economy by Second Life Residents, and into PayPal accounts, and then to bank accounts and wallets.  We call this figure "Gross Resident Earnings" and it represents the sum total of processed credits for Second Life Residents.  This works as follows: when a Resident business accumulates a Linden dollar (L$) balance through the sale of virtual items or other economic activity, they can sell their Linden dollars to other Residents on the LindeX or the Xstreet SL Exchange, creating a US dollar credit on their account.  Note that we are not including activity from third party exchanges as LindeX and XStreet SL exchange comprise greater than 90% of credits processed.   When a Resident with a US dollar balance on their account moves that balance to PayPal, we record and track that amount as a "processed credit."  Taken as a whole, "processed credits" are a reasonable proxy for Gross Resident Earnings, as they represent surplus Linden dollars gathered by a Resident business and turned into US dollars. In 2009, US$45 million of "processed credits" came from Second Life accounts and US$10 million came via Xstreet SL accounts.  Note that many Xstreet SL merchants also have significant inworld businesses, and use Xstreet SL to collect earnings from their inworld businesses as well as their Xstreet SL businesses, accounting for the fact that processed credits on Xstreet SL are greater than the volume of the Xstreet SL Marketplace and Xstreet SL Exchange.'

Comments

[Rory MacDonald]

That's quite a lot of money. Can you be (or has anyone been) legally prosecuted for your actions in second life?

[James Cherkoff]

I'm not sure. But I think the Chinese now tax virtual currencies. Which is a slightly mind-bending development.