Just a week ago, we were laughing at Second Life’s attempt to position its economy as being safe compared to the real economy. That seemed difficult to believe, as a variety of things have been conspiring against Second Life for quite some time, and much of its own economy was based on its own inflated hype-bubble that overstated how many users there were and misled companies concerning what people actually did in Second Life (hint: it wasn’t visit virtual clothing stores). With that bubble rapidly deflating, it really was only a matter of time until the wider Second Life economy faced its own crisis, and apparently (despite claims to the contrary) that’s manifesting itself in a real estate crash within Second Life. At least in the real world, the property is a physical thing that has some intrinsic value. We’ve pointed out in the past that betting your business model on an economy made up of virtual goods is quite dangerous, and it appears Second Life is discovering that fact pretty quickly.
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