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Linden Dollars: where’s the panic?

I have to say I was a little bemused at the announcement by Linden Lab of their faith in the strength of the Linden dollar, after a selling run over the past 24-48 hours. On checking the current rate, it shows a 10.4 million Linden exchange throughput with the exchange rate deteriorating to 307.9 Lindens per US dollar at its worst but now bouncing back to 288 at time of writing.

Based on a rough benchmark of 285 or so (which is around half-way between today’s low and average highs over recent months), that’s a less than 10% decline. Sure the volume is up, but did it require a full expression of confidence? Like any such expression, it can cause concern rather than provide reassurance. It also arguably shows a lack of confidence in the cohort of veteran Second Life residents who are on the whole likely to sit through any short-term fluctuations like this.

I had a brief chat to Tateru Nino this afternoon and she made the great point that supply of Linden Dollars on the exchange does tend to rise when there’s a decline of faith in Linden Lab – it’s not a lack of faith in the currency itself. This has been acknowledged to some extent in Linden Lab’s announcement, but perhaps a better tack might have been to provide some more transparency around its recent changes. There’s also another angle that could have been taken: that any fluctuation in the exchange rate can bring benefits as well as challenges. If any government expressed confidence in its currency every time it fluctuated 5-10%, there’d potentially be a lot more fluctuations.

Expressing faith in any currency can set alarm bells ringing, so here’s hoping for some more information in coming days to show that faith as justified. For mine, I did log in to look at buying some Linden Dollars if the decline had been significant. That’s the type of reaction that you’d expect from a Second Life resident with a longer-term view, who’s also happy to make a buck ;)

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Virtual goods – endless growth?

farmville Over the past year, the hype around virtual goods as the next big thing has continued unabated. Like the hype surrounding virtual worlds, it’ll eventually ease off, but underneath that is the reality of the very significant growth that is continuing. Two recent announcements have really emphasised that growth.

The first comes Ning, who now claim to host more than 1.6 million social networks. They’ve launched Ning Virtual Gifts. Pretty much anyone can create their own gift and sell it or buy someone else’s to give as a gift. Nothing particularly new there, but Ning’s size makes it one of the more interesting market tests for monetised virtual goods.

The second interesting development comes from social game creator Zynga, who has confirmed that US $487,500 has been raised for the welfare of children living in Haiti, via the sale of virtual sweet potato seeds within the Farmville game for Facebook. More than 56 million Facebook users play Farmville each month, with 50 million users playing one of Zynga’s social games daily. For mine, the combination of fun and social good has always been one of the best hooks for involvement and Zynga are proving that in a big way.

What these two examples have in common is proof of the widespread adoption of virtual goods. Virtual environments like Second Life have demonstrated the power of virtual goods for years, but the social gaming sphere and upcoming worlds like Metaplace are speeding up the rate of adoption through simple, intuitive interfaces that in some cases are also doing good in the real world. Of course, nothing grows endlessly, but if anything is likely to exceed post-hype expectations, it’ll be the virtual goods you pay small amounts for, in the pursuit of some casual fun.

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Virtual Gold Farming explained in 11 simple steps

WIred Magazine have written a simple overview of the booming virtual gold trade. World of Warcraft is the focus of the article – after a year or so involved with WoW I can vouch for how much work it takes to accumulate half-decent gold reserves, hence the burgeoning market in paying someone else to earn the gold for you.

Virtual goods are a fast-growing market, with World of Warcraft playing its fair share in driving demand. Non-gaming worlds like Second Life have virtual goods as the key to its economy, with just as many ingenious methods of earning money.

Thanks to Guy Kawasaki for the heads-up.

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