Insights · November 11th, 2006

A trend worth serious attention in 2007 is the blending of virtual and physical money. Money has been readily changed from currency to currency for a long time. But now traditional money can be traded for virtual money, and vice versa.

At the simple end, there is, a game site which attracts a wide demographic for the scrabble-like QWERTY, a host of online card-games, mah-jongg, and other fairly simple and short-duration games. One of’s primary target markets is middle-aged women. Players have two choices – play for free and be subject to advertising that interrupts your games, or pay to play and get the skip the ads. Players accumulate points, which they can use to buy new clothes for their electronic images. Virtual money for virtual goods. At, if you win a jackpot spin (and you get one chance for almost every game you win), you can win regular money. Virtual games that yield physical money.

Then there’s the traditional gaming world where you trade your debit card information to download a game – the same economic model that started with Pong. Physical money for virtual games.

Second Life takes that further. Physical money for virtual land, virtual advertising, virtual clothes, and as the title suggests, a virtual life. As I’m writing this, on a Friday afternoon, the Second Life game boasts 1,335,838 residents. 533,825 of them have logged in during the last sixty days. That’s more than 1/3 – a very good return demographic. 13,831 residents are online right now. And in the last 24 hours, Second Life residents have spent $632,935 US dollars. Sometimes the number for a given 24 hour period is over one million dollars.

Second Life’s virtual economy runs on Linden Dollars, which can be purchased for US dollars, or earned through buying or selling virtual goods, services, or land.

Second Life hasn’t escaped the notice of the US corporate world. Real companies such as IBM, Disney, Adidas Reebok, and others have established marketing footholds. The reverse has happened – companies started inside Second Life as purely virtual ventures have incorporated in the real world, hired staff, and even done real-world work.

Expect further blurring of the financial lines across physical and virtual dollars. And note that I didn’t say “real and virtual.” Virtual money is getting pretty real.

Related Links:
Wikipedia entry about Second Life
Second Life

Brenda Cooper

Art & Society
Nikolas Badminton – Chief Futurist

Nikolas Badminton

Nikolas is the Chief Futurist of the Futurist Think Tank. He is world-renowned futurist speaker, a Fellow of The RSA, and has worked with over 300 of the world’s most impactful companies to establish strategic foresight capabilities, identify trends shaping our world, help anticipate unforeseen risks, and design equitable futures for all. In his new book – ‘Facing Our Futures’ – he challenges short-term thinking and provides executives and organizations with the foundations for futures design and the tools to ignite curiosity, create a framework for futures exploration, and shift their mindset from what is to WHAT IF…

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