Economy of Second Life

The virtual world Second Life has its own economy and a currency referred to as Linden Dollars (L$). In the SL economy, users (called "residents") buy from and sell to one another directly, using the Linden, which is exchangeable for US dollars or other currencies on market-based currency exchanges. This economy is independent of the price of the game, which users pay to Linden Lab, not to each other. Linden Lab reports that the Second Life economy generated US$3,596,674 in economic activity during the month of September 2005, and as of September 2006 Second Life was reported to have a GDP of $64 Million.

In 2009, the total size of the Second Life economy grew 65% to US$567 million, about 25% of the entire U.S. virtual goods market. Gross Resident Earnings are $55 million US Dollars in 2009 – 11% growth over 2008.

The basis of this economy is that residents (that is, users, as opposed to Linden Lab) can buy and sell services and virtual goods to one another in a free market. Services include camping, working in stores, custom content creation, and other personal services. Virtual goods include buildings, vehicles, devices of all kinds, animations, clothing, skin, hair, jewelry, flora and fauna, works of art, and breedable in-game animals and pets such as: foxes, turtles, horses, cats, dogs, fish, dragons, and original in-game pets called Meeroos. To make money in Second Life, one must find customers who are willing to pay for the services or products that one can supply, just like in real life.

Because of the existence of virtual land, there is an active virtual real estate market. Originally all land comes from Linden Lab (which is part of the pricing and a revenue stream for them), but after that it is bought and sold much like real-life real estate. Mainstream media has reported on SL residents who earn large incomes from the SL real estate market.

In addition to the main economy, some residents receive a small weekly stipend, depending on the kind of account they have, and when they joined Second Life. There are also the virtual equivalent of minimum wage jobs and charitable organizations that try to introduce new residents to the consumer economy.

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Wikipedia