Online Extra: Virtual Land, Real Money

Second Life is an online world where a savvy avatar can make a bundle. Its best known land developer explains how

Anshe Chung is the online identity for a Chinese-born language teacher living near Frankfurt, Germany. She's the best-known executive in Second Life, an online world run by Linden Lab of San Francisco. Known inside the world as the Rockefeller of Second Life, she prefers to keep her real name private to deter intrusions into her human life.

Chung runs a very real business buying plots of virtual land, developing them into communities complete with houses, beaches, mansions, and other features, and reselling or renting those properties to Second Life players. Since she began two years ago she has amassed land and Second Life currency -- which is convertible into real U.S. dollars -- worth more than $250,000.

Even Chung acknowledges that it's a strange business. Recently, Chung's avatar, or graphic character, met Rob Cranes, the avatar of BusinessWeek's Silicon Valley bureau chief Robert D. Hof, at her home inside Second Life for a chat about how she started the business and where she's headed. These are edited comments from that conversation.

Do you generally spend most of your time in-world in a particular place -- like this?

No, I am very nomadic. In fact, for more than one year I did not have a home, despite being the biggest land owner. I am always busy with developing land, selling land, buying land, or meeting with my team. I lived on one small 1,008-square-meter piece for six months, then was homeless one year.

What do you do on a typical day?

I usually get up very early in morning, then get in touch with the sales team to finish transactions they prepared. After this is done and information is passed on to the billing department, I have to deal with many quality-control issues with the development teams. Then I also get in touch with Guni (my husband), who is managing our development team, discuss projects and the market situation of the day. I also spend a little too much time with media.

How big is your team?

We have seven people in the U.S. and Europe who work like freelancers for us, kinda fun work. So they play the game with us. We have 10 people employed full-time in our new studio in China near Wuhan. That is just since this month. China is our main location now: management, billing, accounting, and development.

Offshoring, even in virtual worlds?

This is not a new concept. When I played Asheron's Call [another online game], the world where "Anshe" was born, I was the richest avatar of my server. I was kinda lucky with trade skills. Then the Russians took over the economy [inside the game]. Nobody knew, because they hid they were Russian. I found out after they hacked my account. This time we decided that we are not going to wait for Russian or Chinese people to come here.

Why China? Less expensive in terms of people?

We are able offer competitive salar[ies] there, yes. And of course I have very good connections there.

How much will the China operation allow you to expand your business?

This is difficult to tell. But we are ambitious. Honestly, once the team is trained completely, I think the land-trading sector might be hard for others [to] compete with us in. Right now, our plans are limited by how fast we can train people.

Are you looking at expanding into other virtual worlds?

Yes, there are other platforms, most of them in development. We are looking very carefully at those and we are in touch with some of the companies that work on them. On the other hand, Linden Lab is very good to work with. Second Life is still the most advanced one and has very big potential.

What do you like about how Linden Lab manages Second Life? You were quite unhappy in December when the company started allowing people to go directly to specific points inside the world, bypassing "telehubs" where lots of people gathered. That devalued your land, right?

Yes, the telehub situation was big mistake where Linden Lab screwed up in many ways. Basically, they acted like a government that decides to build one big dam and flood one city. However, they finally realized what they did and changed their policies. They made a buyback offer for devalued land. That way we still all took some loss, but within what one can call acceptable business risk.

Can you tell me how you first heard about Second Life, and also how you decided there was a business opportunity?

I read about Second Life on Terranova [a blog about virtual worlds]. Then I took a look at this seemingly hopeless little thingy. I logged in and it looked like an empty and dead place, incredible laggy [slow], clumsy, and ugly. And beside that, it seemed really pointless.

But I really liked the degrees of freedom to really change and edit this world and also the lack of strict and insanely limiting rules that the big companies usually impose in their worlds. I did not come here for business, but found it an interesting challenge to see if I could "play" here for free. I also made it [an] iron rule to not invest RL [real-life] earnings.

To what do you attribute your success?

One reason for my success here, I strongly believe, is that I am not only here for business. I am very deeply rooted in this world, like a real native person. Most people who just come here for money fail miserably. They are foreigners, act like foreigners, and lack deep understanding of this virtual country. Many of them are also lazybones who think you just need money to make more money. The truly successful people I know here all are deeply involved in life and society here too.

What was attractive about the land business in particular? I gather you started with other activities first?

In the land business at that time, there was nobody who did [a] large volume and professional service with low margins. This was not exactly planned. I think last autumn it become obvious that if I would start selling L$ [Linden dollars, the in-world currency] in huge quantities, it could become serious income. Something became very real when I was able send money to one poor boy in the Philippines and it was enough he could live on. Now it is exciting to see it creating jobs in China.

Do you see expanding the business beyond land sales? What other opportunities might there be?

We have moved from land trading to land development to community development. Entire communities. This continent here, called Dreamland, is unique in that it contains several themed and zoned communities. Examples of communities here are German or Japanese communities in Second Life that we are hosting, or lifestyle communities such as furries, gay/lesbian, gothic people.

Our new studio will hopefully soon allow us provide new types of content and services together with land that will take landowner experience in SL to a completely new level.

Did you expect to build such a large business inside Second Life?

Please do not think any of this was planned even one year ago. It more or less just overwhelmed me.

Does it all seem very strange sometimes?

Yes, at times it becomes really kinda surreal. I feel like I am reading a cyberpunk novel. This kind of interview, of course, is difficult because it blurs the online role and real person.

Yes, a little odd for me too.

Also, what now happens with branching out into RL. I don't know if there is any other company in the world that has actually started in a role-playing game. You can say this virtual role-playing economy is so strong that it now has to import skills and services from the real-world economy.

Do you admire any other activities or creators in SL?

In general, I am a big fan of some cultural projects here and also admire the people who help others connect who might have difficulty in RL, such as people who are immobile. I think these kind of places have great potential to help people have new experiences and realize their dreams.

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