Second Life: Cashing In On Virtual Real Estate
A second life, cashing in on virtual real estate. Making money – big money – has always been about understanding two things:
– The universal law of supply and demand
– And the incredible power of marketing
When you know how to put those two pieces of the puzzle together, you can become unstoppable in business – regardless of the marketplace or niche you find yourself in.
These two key components can make you millions selling software, smartphones, luxury handbags, pizzas, or even…virtual real estate that only “exists” in a video game?
Believe it or not, that’s exactly what legendary Second Life “virtual real estate developer” Anshe Chung has pulled off.
Clearing more than $1 million (US) in cold hard cash by developing real estate in this digital landscape, she’s become the first video game player on the planet to become a millionaire by buying and selling virtual real estate.
The Anshe Story
Before we dive headfirst into the nitty-gritty of how you can become a virtual real estate mogul and a real-life multimillionaire by purchasing, developing, and then selling digital real estate, it’s important that you hear the details of the Anshe story.
A former schoolteacher that grew up in China (but is now a citizen of Germany), Anshe – like millions of other people around the world – jumped headfirst into the online video game Second Life around 2005.
Starting off like most others as just a digital player looking to have a bit of fun in this wide-open electronic landscape, she quickly realized that there was the potential to make real money (tangible money) by purchasing, developing, and then selling off the limited digital real estate that existed on each Second Life Server.
Because Second Life developers encouraged currency conversions from the digital in game money, known as Linden dollars, to more traditional currencies like the US dollar (currently at a rate of 270 Linden dollars to a single US dollar), purchasing a “nest egg” to secure digital property prove to be easy in the early stages of this video games existence.
One property became two, two properties became four, and four properties became entire blocks and regions of the digital landscape – all of them controlled by Chung.
The Universal Law of Supply and Demand
And while her digital holdings were impressive in the early stages, it wasn’t really until the Second Life developers stopped expanding the physical real estate available in their digital world that things really started to get interesting.
Servers today are capped at the rough equivalent of 16 acres of physical land in the real world, and once you own the digital part of the landscape you own it unto you sell it off – just like you would in the real world.
Chung saw the opportunity to lease and rent her digital properties to new players, using that money to fund the purchase and development of other land assets that less savvy digital real estate investors were under appreciating.
Most thought that Second Life would be just another video game fad, a passing ship in the night, but Chung saw its incredible growth and the desire and demand for players to have control over their own little chunk of this digital world.
As she gained control over more and more property of the supply was dwindling dramatically, until she essentially reached a monopoly on large tracts of land that she could sell to the highest bidder – or continue to lease and rent all on her own.
This enabled her to parlay some of these properties into better real estate deals that she would not have had access to otherwise, making moves the same way that real-world property developers flip certain properties to gain new assets and extra leverage.
When marketing is added to the mix…
However, just like in the real world, virtual real estate is not worth all that much until it has already been developed.
Understanding that new players to Second Life weren’t going to pay top dollar for undeveloped land that they would then have to spend their own resources to build up and develop on their own, Chung began to create a marketing plans and strategies to develop specific “neighborhoods” that would entice specific types of players – and that’s when the value of their properties really began to explode.
A handful of the “islands” that Chung owns have been developed into their own little communities, and some of them she has sold out right (for hundreds of thousands of dollars in real currency) but others she retains and leases out or charges accessories to players that want to become a part of that neighborhood.
How you can become a virtual real estate developer
With Second Life expansion in the player base growing exponentially each year, far outpacing the rollout of new servers from the Linden Lab developers, supply and demand is definitely in the new virtual real estate developer and investors favor – especially if you know how to market and develop those properties effectively.
Now is the time to jump headfirst into the world of purchasing Second Life developments if at all possible, or at least coming up with creative real estate deals with your own cold hard cash that can be flipped for other assets.
Also, keep a weather eye out for any news about new Linden Lab Simulation Servers that are going to be opened up to the general public.
There is always and initial “land rush” when new servers open up, but if you are lucky enough to gobble up specific tracts of land you can then sit on them or develop them yourself to rent, lease, or sell to other players.
If you just don’t have the money to fool around with real estate development in the “real world”, but understand the power of real estate investing, taking the plunge in becoming a virtual real estate developer in a game like Second Life might make all the sense in the world.
Be smart about the development moves you make, always keep your ear to the ground about different movements that are happening in the video game world as well as news from the developers, and try to take advantage of every opportunity available to you as a new virtual real estate developer.
Oh, and don’t be shy about cashing out. Just like the real world, they’re sure to be a “market correction” and housing bubble that hits Second Life somewhere down the line – and you don’t want to be left holding the bag when it does X commission point.
If the market proves to be too competitive, it is always best to look for alternative games to profit from.