"REAL WORLD SOLD, MOVING TO VIRTUAL WORLD" AN INVESTIGATION INTO THE IMPACT OF THE GLOBAL ECONOMIC SITUATION ON VIRTUAL WORLD BUSINESS

The current economic downturn is being felt, almost without exception, in every single economy in the world. With major economic superpowers being worst hit, there seems like there is no place where an economy would be shielded from the resulting impact of the economic fallout. However, seemingly parallel to the real world are virtual worlds, such as Second Life (SL), where entire economies and societies exist. The past few years have seen a huge explosion in the numbers of people actively participating in these worlds, with predictions that virtual worlds will hit mainstream adoption within 2-5 years. This research explores the most active virtual world economy, SL, in an attempt to assess the potential for small business entrepreneurs within these virtual economies. Research by Linden Labs (the creator of SL) indicates that the SL economy is improving during this economic downturn, with in-world transactions still increasing rapidly. This paper reports on a pilot survey of SL business owners who deal in virtual products and services (pure play businesses). The study concludes that while varied fortunes are being experienced in SL there is no evidence of an overwhelming downturn. The study shows that females are more risk averse, renting rather than owning, and exhibiting consistency in their pattern of investment in the real world. Furthermore we report how the barriers to entry into a SL business are low both in terms of knowledge and financial resources making entry into this economy viable for a wide range of people.