Virtual Words And Third World Countries
At the end of today's Silicon Valley Junto meeting, Valerie Cunningham asked me for my opinion on the craze for virtual real estate.
My response was that most of our wealth is imaginary, and that investing in virtual real estate is just like investing in real real estate. Even the risk that the game company will go out of business or change the rules of the game is roughly analogous to the chance that a government will seize your land or outlaw whatever makes your land valuable.
As it turns out, my response was prescient. The folks over at Linden Lab recently changed the way avatars move around in Second Life. Instead of teleporting from one hub to another (roughly the equivalent of going from subway station to subway station), Second Life now allows point-to-point teleportation. The result? Folks who had paid big (virtual) bucks to buy prime "hub" real estate are up in arms.
Just imagine how a store owner inside Grand Central Station would react if suddenly people stopped using the subway!
The story is still developing, so it will be interesting to see what happens from here. Will the price of virtual real estate drop to take into account the increased perceived risk?