Report: Second Life Making $100M a Year

Virtual 3-D world Second Life currently has revenues of $7M a month and is approaching $100M a year, a company insider has told LAUNCH.

Linden Lab, Second Life's parent company, would not confirm an exact amount but said that revenues exceeded $75M in each of the last three years (yes, that's a strange way to put it) and that the company is profitable. Q1 2011 was its best quarter to date.

Our source said 15% of revenues come from sex-related services. So how else is Second Life, around since 2003, making money?

Company spokesperson Peter Gray confirmed to LAUNCH that the "primary revenue source is actually virtual land." That includes private islands (shown above) and land for stores within the game. Flipping real estate may not be profitable in the real world anymore, but you can get your fix in Second Life, where no one worries about paying mortgages or rising interest rates.

Second Life gets a 5% commission from each sale in the Second Life Marketplace, which is where members buy and sell real estate as well as avatar apparel, home furnishings, breedable virtual pets, and virtual cars.

Also, users who own stores within the game at some point redeem their Second Life currency, called Linden dollars, for U.S. dollars. The company charges 2% of the total cashed out. One U.S. dollar is roughly equal to 250 Linden dollars. When users buy Linden dollars to spend in within the game, they pay a $0.30 transaction fee. Transactions between users within the game are not subject to any fees.

Store owners in Second Life can also pay for “enhanced” listings on the homepage or for a specific category, starting at 299 Linden dollars for seven days.

Second Life residents hold the equivalent of 29.3M in Linden dollars, according to 2011 Q1 reports. While the number of user hours dropped slightly in Q1 compared to previous quarters, repeat logins have held steady and the size of Second Life's economy has grown.

If you have experience buying/selling real estate on Second Life, get in touch at tips@launch.is or leave a comment below.