February 2007, Reuters reported that real estate prices in Second Life had climbed to undesirably high levels and that land speculators could suffer when more is created. Lynden Lab’s virtual world was so popular that people were looking towards virtual real estate as a smart investment. In fact, Second Life was starting to imitate the real estate climate in Sydney, with high property prices and a fear that cheaper properties being developed on the outskirts in large quantities could significantly damage to the market rather than help struggling families.

Just a few months earlier, Second Life had produced its first millionaire. Anshe Chung, who is really Ailin and Guntram Graef (a German couple), began with an account worth US$9.95 and turned it into a million dollar property portfolio. So successful was Chung that big corporate entities decided that it would be a great way to promote brand awareness. New users were also flocking to Second Life. After all, having discovered that you could make money off Second Life, it was inevitable that people would join the already large number of Second Life inhabitants by the bucket load. Coca Cola, Telstra, BMW and many other large multinational companies bought real estate in Second Life and set up their own virtual worlds.

It all seems to have been a bit of a waste of time though. Second Life is now sprouting ghost towns as people get over the hype and begin to abandon the game. The Sydney Morning Herald reports that in Australia alone, there are now only 12,245 active users. The number once stood at over 16,000 just late last year. Employees of companies are now largely the only users to populate the corporate worlds they built within Second Life, while the Herald also reported that of 20 brand lands studied last year half of them had now disappeared from Second Life.

Easily accessible figures prove that Second Life is now in some serious trouble.