Originally written by Isabelle Pavlova for mmorgy.com

At the moment, most press/blogs are concentrating on virtual economies, i.e. real money spent on virtual objects, or virtual money turned into real money. But what happens when we combine those two, ending up with virtual money spent on things meant to be used outside of the virtual world?

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Recently, Future Salon reported that SLBoutique, a popular web based store for items in the Second Life world, would start offering real, physical items in trade for Linden Dollars. This brings up an interesting question... Might the abstraction of MMOs be a good place for the adult industry to start selling their wares? In this article, we look at Red Light Center, a virtual world trying to capitalize on adult products, as well as outlining what could happen when "monopoly money" starts buying tangible products.

Red Light Center

It walks like Second Life, it talks like Second Life, but it's named Red Light Center, and if they have their way, people will be paying $20/month to cruise their faux-grungy adult district. Known in a former life as Red Light World, RLD recently reopened with a new rendering engine and server setup.

Red Light District is an MMOVS... Store? Users go there specifically to have sex, or buy something related to sex. The "have sex" part mimics Second Life/There to a startling point, with users being able to pick poses for their characters and either type to or audio chat with each other. The only thing that sets it apart is the fact that without the $20US/month VIP Access fee, your character cannot get naked, cannot engage in sex, and cannot get close to areas where others are engaging in sexual activity. There is no zoom feature, so the plebs are left to wander behind the velvet rope and lust after the couples who have offered up the cash to use the 3 or 4 poses currently available in the world.

What sets Red Light District apart from other worlds is marketing. Mainly, the fact that marketing for real, non-virtual-world objects is EVERYWHERE. For everyone that can't find a partner in world or want to just buy porn instead, the RLD developers have created a 3D front end to porn and adult web surfing. Unlike other worlds, where you either must create your own content or find others to do it for you, content generation and placement are taken care of by the owner company, which is definitely a plus for the busy porn studio owner. On the user side, this doesn't make much of a difference, though. Click on a cube textured with a Sybian picture, and your web browser pops open to the Sybian store to buy one. Click on a picture of a naked woman (of which there are copious amounts, not a male to be seen unless fondling a female), and you're wisked to yet another webpage to enroll for an account on a porn website.

However, with the lackluster textures and boring architecture, what RLD has basically done is implemented managed VRML for porn sites. There is no cohesiveness to the world, no economic system, it is simply used to market porn or toys. It has the capabilities to let you "meet others" through profile searches, though in my time there, I saw 1 woman (who was doing a very good job of selling the service, moaning "all this can be yours if you have a vip account..." except with many more typos, whlle taking on a very quiet man) and 6 men (1 with VIP priviledges), so the pickings were slim. There is no virtual money, only links to things that will happily take your real, non-play-money backed credit card. The "Ooooh Shiny" factor of a virtual world may attract some people to at least pay the $20 for an initial account, but there doesn't seem to be any innovation in the product selling factor here.

SL Boutique and the Safety of the Monopoly Dollar

SL Boutique, on the other hand, might have a good idea going on here. SLB provides a way for Second Life vendors to market their wares on the web. Not only is this usually an easier interface for shoppers (as they have access to hundreds of content creators without having to worry about teleporting and flipping through vendors), it allows for buying of objects with in world money without having to actually /be/ in the world.

Being able to buy real objects with your SL money on SLB is similar to trading in your Skee-Ball tickets for a prize at the local arcade. This transaction has quite a few features that would be positives for the adult product marketer, mainly due to abstraction from the customer.

A major problem for both the consumer and the business with marketing adult material is credit cards. For consumers, credit cards represent tracking. If someone orders a product on their credit card, it shows up on their bill. If that bill is seen by someone that the consumer doesn't want knowing about the product, it suddenly turns into a problem for the business, in the form of a chargeback. Chargebacks are the term for credit card disputes between a consumer who feels they have been ripped off (charged for something they never received or applied for, for instance) and a business. Chargeback fees can be very expensive, and if enough happen to a business, the credit card company may refuse to deal with them anymore. Most adult businesses simply choose to refund the customer the cash, even if the transaction was correct in the first place.

Spending in virtual dollars put both the consumer and the business at ease. For the consumer, the money is already "converted", meaning that they'll either already have the Linden dollars, or will feed cash to Linden Labs to create the currency. Of course, like the skee ball analogy, the exchange rate will always be in the favor of the market, not the consumer, but with the added protection that the money will provide, it's possible that few will find this an issue. The business will receive the real US currency as converted by SLB on either their own exchange or the Lindex (Second Life's built in currency exchange). The issue of anonymity, money changing, and chargebacks therefore rests on the shoulders of SLB. If they can actually sort those issues out (remember, this is all speculation at the moment), then they may very well have solved one of the toughest issues plaguing adult product sales.

In terms of adult market evolution, virtual worlds and economies are going to be an exciting place to watch. Virtual money will provide abstraction, and that always makes the consumer feel better when in the process of an uncomfortable buying situation.