I read Business Week every week. Not necessarily from cover to cover, but pretty close to it. Although I think that it is a quality publication and clearly I derive value from reading it regularly, honestly there is not too much in there that really surprises me. This week’s edition is definitely an exception to that rule.

The cover story is about the virtual world of Second Life. For those of you unfamiliar with it, it is a Web-based massively multiplayer game. But, unlike most games in this genre (i.e. World of Warcraft) where the players have missions and are somewhat guided by the game, Second Life has absolutely no game-imposed limitations. It exists as a virtual world where the people themselves form the landscape, culture, goals, etc. through interaction, just as we do in the real world.

Now, that in and of itself is not news. If that were the whole story I would have simply flipped past it – online virtual words are old news. What made me stop, and what I still cannot believe, is that through this world people are actually making REAL livings creating virtual properties, goods, and services! How?

The game has a currency system pegged to U.S. dollars, and players can use a credit card to buy and redeem real dollars based on those earned / spent within the game itself. It also enables players to use tools to build their own items within the game, and to maintain the property rights to those items. Again this is not that shocking to me. Maybe it is a neat feature, but so what? I can buy and sell virtual clothes and cars and houses, oh my.

The thing that is overloading my logic circuits is that, according to the Business Week article, there are people earning $90,000 in real U.S. dollars a year selling within the game, and people with hundreds of thousands of dollars of virtual real estate holdings. More mind blowing, this level of economic activity is coming from a relatively small group of people – just 170,000 players. That means that each of them is spending some serious real world money every month for these virtual goods and services. That is, of course, unless there is some funny Enron-style accounting going on in the World of Second Life.

OK, moving beyond that ludicrousness, something else the article discussed was real companies using Second Life to mock up products, test advertising, and conduct training. Now, that makes a lot of sense to me. By doing these things virtually, companies can save a large amount of money. The Second Life world functions very similarly to our own world, and the people who interact within it are real people. Advertisers, market researchers, and product designers can clearly save time and money by conducting all of this online.

I have to wonder if this “game” will eventually morph more into a business tool than a pseudo-social entertainment experience. I suppose that they are really too interdependent for one to fully evolve without the other. I also wonder if this can reach a critical mass and sustain it over time. We will just have to wait and see.