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Second Life crisis: first sex, now money

By Channel 4 News

Updated on 06 August 2007

As Second Lifers contemplate a world without gambling, Ben King asks what such restrictions will have on a place where anything goes.

Second Life is used to being rocked by scandal on a weekly basis - if it's not cartoon bestiality or virtual rape, it will be terrorists using it as training camp, or anarchists tearing down bastions of corporate power.

But last week, the virtual universe was hit by a scandal of a different kind - a full-scale financial crisis.

A couple of typically bizarre incidents have contributed to it.

Financial centre World Stock Exchange has been hit by theft of 3.2m Linden dollars, and a bank called Ginko Financial was hit by a run on deposits, forcing it to restrict cash withdrawals.

It's difficult to know how seriously to take events like this (and in Second Life, taking anything seriously is usually a mistake). 3.2m Lindens sounds like a big number, but it's only £6,000. In any case, these shenanigans won't affect the vast majority of residents, who neither use banks nor invest in the virtual stock exchange.

But Linden Lab, the company which developed Second Life and which rules over it, has decided to outlaw one of its biggest industries - gambling.


Second Life began as a place where anything goes - the possibilities of what you could do were restricted only by your imagination and your programming skills.

This has led to a massive fall-off in the amount of business being done in the virtual world - since the news was announced, the total spent every day has fallen from over $2m to $1.2m.

As Linden Lab put it on the company blog: "Because there are a variety of conflicting gambling regulations around the world we have chosen to restrict gambling in Second Life."

But it represents part of a major shift in Second Life. It began as a place where anything goes - the possibilities of what you could do were restricted only by your imagination and your programming skills.

As usually happens on the internet, total freedom resulted in an orgy of creativity -with the emphasis on 'orgy'. All kinds of sexual perversion blossomed in the fertile soil of the multiverse - but because they were little known outside the circles who participated in them, it was never much of a problem.

Since then, media interest has grown, and the number of people using Second Life has kept climbing too - to the point where they have started to place a strain on the computers which run it.

Popular areas of the world regularly grind to a halt under the weight of activity, and others are so slow that SL becomes almost unplayable.


Different things are banned in different countries - but if it's banned anywhere, it probably has to be banned in Second Life, too.

As it grows, Linden Lab is moving some of its servers around the world. Previously, they were all in the US - the further away a resident was the worse the play experience would be.

These servers are now setting up internationally, which should be good news for players in Europe and Asia - unless those players have a penchant for something that's banned in some part of the world, like gambling or kinky sex.

As the servers spread around the world, they're increasingly subject to local law. Different things are banned in different countries - but if it's banned anywhere, it probably has to be banned in Second Life, too.

So this crackdown on gambling is part of an increasing bid to clean up Second Life. It's an inevitable process, of course, if Second Life is going to develop from a rather entertaining niche interest into what some of its participants hope it will become - the precursor of a three-dimensional internet.

Second Life definitely needs some technical improvement - it's currently extremely difficult for an inexperienced visitor to use.

And if it is going to increasingly be home to large corporations, it may need a clean-up, too. Companies like IBM and Reebok won't appreciate having all kinds of sexual shenanigans happening next door.

But cracking down on the seamier side of Second Life may have unintended consequences - of which the financial crisis is just one. After all, the next virtual world is only a click away.

Will making a world safe for big companies end up driving away the very people who make Second Life what it is?

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