Walking billboard from your chair

CNET News.com reports that Armani is the latest business to set up a proprietorship in Second Life. The virtual world’s inhabitants can trade virtual goods with virtual currency called Linden dollars, named after the program’s developer, Linden Labs. The company acts as a central bank.

Armani is joining the ranks of other real-life businesses like Reuters and Cisco who have set up shop in Second Life.

Some may be turned off by this apparent waste of money, but the model has worked before. Microsoft has used a proprietary currency in a virtual environment over Xbox Live since November 2005. Gamers can exchange money for MS points (which are conveniently difficult to compute). $1 equals 80 MS points. That means it costs the user 1.25 cents for every point. To make it worse, Microsoft only sells points in bundles. This invariably means you will have points left over after you buy the DLC you really want, encouraging you to buy more.

Second Life is more flexible, however, since it has its own economy which businesses use as a platform for promotion and direct sales to virtual consumers. This gives the businesses a human face, lessening the perceived sleaziness by the newly-infected brand zombies (you and me).

I can understand business’ eagerness to capitalize on this new market. As of this writing, over US$ 986,000 has been spent in a 24-hour period in Second Life. Such transactions have motivated businesses like Armani to pimp their digital wares (and wearers). Pimping is the appropriate word, here, since users are viewed as commodities to big companies looking to cash in on the “viral” craze.

~ by Jason on September 26, 2007.