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Boom Time in Second Life

No recession for virtual economy

January 27, 2010

Consumers tightened their real-world purse strings in 2009 amid concerns about the economy, but that did not seem to hurt sales of virtual goods.

Users of virtual world Second Life spent $567 million on user-to-user transactions in 2009. That represents a 65% year-over-year increase in spending on user-generated virtual items for avatars. In addition, the service’s Web marketplace saw virtual goods sales of $6.1 million.

Second Life User-to-User Transaction Value, 2007-2009 (millions)

Second Life’s worldwide user base increased by 15% to 769 million, while the amount of time spent in the virtual world climbed even faster, by more than 21%, indicating increased engagement.

Number of Unique Second Life Users Worldwide, 2007-2009 (thousands)

In 2009, Piper Jaffray predicted more than $2.2 billion in virtual goods revenues worldwide, including $621 million in the US. By 2013, more than $6 billion will be spent worldwide on virtual items.

The research firm also predicted that virtual worlds such as Second Life would fall behind in the virtual-goods economy while social network players like Facebook become more involved in the space.

Cary Rosenzweig, CEO of IMVU, another virtual world with extensive user-to-user virtual item offerings, described that service as “more like an e-commerce company … in the sense that we get our money from the purchase of these virtual credits that people use to buy virtual items.

“Virtual goods have value to people,” Mr. Rosenzweig told eMarketer. “People buy virtual goods usually for one of three reasons: to express themselves—so they’re buying virtual goods to make their avatar look terrific—or to build relationships with other people in the form of gifts. And [the] third reason, especially in gaming environments, is that virtual goods enhance your power to effect change, to win, to do what you would like to do in that area.”

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Check out today’s other article, “What Marketers Do with Qualified Leads.”


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