Second Life, a multi-player role-playing video game that is regarded as the first incarnation of the metaverse, was created nearly two decades ago. At its peak in 2007, the game, which allows users to create avatars and live a second life in its virtual world, had 1.1 million monthly annual users before falling out of favour.
Residents in Second Life behave similarly to humans in the real world: they can watch movies, create families, buy and sell property, get jobs, and make money. The game also has a working economy, complete with its currency that can be bought and traded using fiat money.
Ailin Graef, a Second Life user, used the in-game persona Anshe Chung to become a formidable virtual landlord and Second Life’s first billionaire in the mid-2000s by purchasing, developing, and then renting or selling the virtual estate. Her virtual properties were also worth over a million dollars in the real world at the time.
Now that the metaverse is making a comeback, the virtual economy is following suit. Individuals can now construct and own avatars that can apply for jobs and build professions in the metaverse while also earning real money for their owners.
Later this month, OWNFT World, a Singapore-based company, promises to distribute 6,888 avatar non-fungible tokens (NFTs) constructed on the Ethereum network. Each user can pitch their avatar for appearing in virtual fashion shows, music videos, and animation series for 0.18 ETH ($514) each. ‘Guardians of Fashion,’ or GOF, is a collaboration between Warner Music Group, streaming networks, and fashion labels to create videos and shows.
When an avatar is cast in a show or video, its owner receives a portion of the revenue in the form of GOF community tokens, which can be exchanged for other digital assets such as stablecoins, which are cryptocurrencies pegged to a’stable’ reserve asset such as the US dollar, through a decentralized exchange.
The purpose, according to GOF project director Eu Wing Leong, is to create an NFT project that serves as a passive-income generating asset for its owners rather than a piece of digital art with “no lifetime following purchase, other than to sit and possibly accrue value.”
As we witnessed with Second Life landlord Anshe Chung, digital avatars have long been capable of establishing careers and earning money. Big corporations like Amazon and American Apparel raced to Second Life in the early 2000s, just like Disney, Nike, and Gucci are rushing to create a presence in today’s metaverse platforms.
Latest Developments
But, according to experts, what’s new now is the development and mainstreaming of digital influencers on social media, whether human or generated by people. People who use online avatars to make money, according to Melanie Subin, director of the Future Today Institute, a research consultancy that helps businesses measure future risk and opportunity, could grow in today’s hyper-social and the influencer-friendly world—in particular, people who use such avatars to work as online influencers to generate passive income.
According to Allen, digital figures like Lil Miquela—the first computer-generated social influencer (with a 3.1 million Instagram following)—helped to popular the concept. In 2020, sponsored advertisements with businesses generated an estimated $10 million to $12 million for the avatar’s designers.
NFT avatars will first be employed in metaverse entertainment, such as mascots for e-sports contests or singers staging their performances, according to Catherine Allen, CEO of immersive technology research company Limina Immersive. According to Allen, companies such as Encore have created platforms where artists may perform in the metaverse via augmented reality (AR) and earn money from AR-powered virtual gigs.
Subin says that Genies, an avatar agency founded in 2016, has “represented famous avatars for years.” Last month, announced that its avatar NFT marketplace—which allows users to create their avatars and customize them with NFT accessories—was now open to everyone and that all creators would have full ownership of their avatars as well as commercialization rights to use their avatars however they saw fit. “This is a strong signal of what we should expect to see moving forward,” adds Subin, with users maintaining control and ownership of their avatars while firms provide services to help them generate money.
Rise Of Second Life
However, similar to how Second Life remained a niche world during its heyday 15 years ago, such a use case for online avatars would not replace in-person interactions, according to Subin. She expects upper- and middle-income people in their late 20s and 30s to become the key purchasers and drivers of avatar NFTs in the coming years.
Second Life, on the other hand, might receive a shot at its own second life. The number of players of Linden Lab’s game and the in-game economy they create skyrocketed during the COVID-19 pandemic, with in-game GDP soaring 30% to 40%, according to Ebbe Altberg, CEO of Linden Lab, who told Quartz a year ago. Residents in Second Life made $73 million in 2020 from buying and selling in the virtual world, which they then cashed out.
