"Have you seen our dogs before?"
Two customers have just shown up in Darryl Chin's store, D&D Dogs, and he has instantly switched from shooting the bull to salesmanship. The two say no, they're new customers. So Chin starts showing off the canines he has for sale. He instructs a St. Bernard to poop -- just to demonstrate what his pups can do.
"Too funny," responds one of the customers. Her name is Eve Callahan, and she's dressed in neon-orange Daisy Dukes and a matching halter top. Eve turns to her friend, a big guy wearing what look like leather pants. "Pick one, hon."
After a moment, the pair settles on a bulldog. With the added purchase of a trick from the obedience school in the corner -- they choose "growl" -- the whole transaction comes to 450 Linden dollars.
Showing off a pet's scatological prowess may not be a traditional sales technique, but little about this business is traditional. These are digital pooches, sold in a virtual store in an online role-playing game called Second Life, which boasts close to 25,000 players around the globe -- and growing. Its players log onto an Internet server that contains the gamescape, where sophisticated graphics depict land, waterways, and buildings. They are represented onscreen by animated characters called avatars who communicate via their creators' typed messages, which pop up in the corner of the screen.
Second Life has no explicit purpose. People spend their time shopping, creating, and socializing -- online poker tournaments are popular, as are nightclubs. They erect buildings and create other objects using the 3-D equivalent of old-school drawing programs. Using scripts -- short strings of computer code -- they can make the things they draw move or respond to commands. And players who have design know-how, or coding expertise, or business smarts, can sell what they create or buy to other players who may lack those skills.
And while Darryl Chin's customers pay with Linden dollars -- a make-believe currency named for the game's creator, San Francisco's Linden Lab -- that currency has a real-world value. It comes down to supply and demand. New players are given a stipend of Lindens along with their game subscriptions, but it isn't enough to score prime real estate, fashionable clothes, or other digital desirables. The result is a thriving currency market. That 450 Linden dog purchase netted Chin and Ed Caggiani, his partner in the cyberdog business, about $1.84 at the prevailing rate of 245 Lindens to the US dollar. Yeah, that might buy them no more than a cup of coffee, but the purchases add up. In the month prior to that small transaction, the pair of twentysomething software engineers pulled down 310,790 Lindens, worth about $1,268.
Players cash in their virtual earnings at online currency exchanges such as GamingOpenMarket.com, where the market for Lindens resembles a stock page on Yahoo Finance, with charts, graphs, and daily highs and lows. The creators of at least one Web site, IGE.com, have made a business of buying Lindens and other gaming currencies cheap and selling them at a profit.
Indeed, Second Life isn't the only game whose currency can be exchanged for real money. Aficionados of Web-based adventure games such as EverQuest and Ultima Online routinely shell out for fantasy gold pieces or magic swords that let them advance more quickly within the game. The trade in Lindens, in fact, is small compared with these older, more established games. GamingOpenMarket, which operates ATMs all over the gamescape, oversees about a quarter of the Linden market; in January, it handled trades in excess of $196,000 US. In all, the international trade in virtual goods and cash is worth at least $100 million a year, estimates Edward Castronova, a professor at Indiana University who is writing a book about these virtual economies. And he isn't talking Linden bucks.
Yet Linden Lab -- unlike most of its gaming industry rivals, which either ignore or discourage the trade of real money for digital goods -- openly encourages such commerce. It's one of several ways the company treats Second Life more as a simulated reality than a game, which makes its product both fascinating and potentially troublesome. The commingling of real and imaginary economies raises puzzling ethical, social, and legal questions. For example, is it wrong, or even a real crime, for a player to steal cybermerchandise from another within the context of a game? What of a player who hacks into another's account to steal or delete fantasy cash? Should a company be compelled to reimburse its players for stolen make-believe goods? And who, if anyone, should control the virtual cash flow once a game currency becomes susceptible to real-world volatility?
Sitting in Linden Lab's offices in San Francisco's South of Market, the CEO marvels at how fast his creation took on a life of its own. The company's digs are a dot-com relic. Situated near South Park, ground zero of the tech explosion, the office features the wide-open layout popularized by 1990s startups -- desks are scattered about, unhindered by cubicle walls. A whiteboard at the entrance greets visitors with notes, jokes, and drawings. Linden Lab, one joker has suggested, should opt for an inflatable office that could easily be moved, for example, to Hawaii (cons: no scissors or other sharp objects allowed).
Rosedale's workstation is in the middle of the large room, a circular command center of desks covered with papers, monitors, and books -- among them, appropriately, Lord of the Rings. The young CEO was one of those former boy geniuses we heard so much about during the tech heyday. A computer fanatic since childhood, he started his first company in high school. After college he started another company, which was later acquired by Real Networks, where he then worked until he left to start Second Life in 1999. Now 36, with graying blond hair, Rosedale's tanned, unlined face is animated as he traces the evolution of the world where he is creator, dictator, and -- for the moment -- Mr. Greenspan. His pale blue eyes open wide and his hands fly with enthusiasm as he talks. For him, Second Life isn't a game; it's a grand social experiment.
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