Hackers are stealing Second Life's player-made lootboxes and selling them for profit
Second Life is a virtual world stereotypically thought to be steeped in cyber sex, but beyond that thin layer of prurience is a thriving community of artists creating everything from lavish Beverly Hills-style mansions to the eyeliner your avatar wears. Its economy is a staggering $500 million USD machine of virtual ecommerce, with many players making a real-world living by creating, marketing, and selling digital products. But those same creators are locked in a long battle against groups of cheaters who, using a series of exploits, are stealing their products and selling them for profit on Second Life's Marketplace. It's potentially costing Second Life's virtual artists tens of thousands of real dollars and highlights the nightmare of defending your intellectual property on the internet.
Second Life is unique in the MMO genre for many reasons. It's not so much a game as it is a social space that players can customize however they like. Called 'sims,' these sandboxes are spaces that players fill with all manner of player-designed objects. Unlike other MMOs, however, these objects aren't created using some in-game crafting system, but built with software like 3D Studio Max, Photoshop, and a lot more. Some players build mansions and throw elegant parties while others own retail stores that sell their hand-crafted apparel. And, yes, some just want to have cybersex.
Second Life's creators were on track to take home $60 million USD collectively in 2017.
But it's also unique in that, unlike most MMOs, players can exchange Second Life's in game currency (called Lindens) for US dollars. Peter Gray, who was Linden Lab's senior director of global communication before leaving early this year, told me via email that Second Life's creators were on track to take home $60 million USD collectively in 2017. It's what's led many players to turn Second Life into a full-time job. But for two years now, those same creators have also had to deal with the frustrating rise of 'dupers' or copybotters —players who illegally duplicate their items for profit using exploits.
"It's very much a big deal," Oobleck Allagash tells me. He's the owner of PocketGacha an innovative HUD-based storefront that works with several designer brands in Second Life to sell their products. Since launching in August PocketGacha PocketGacha has made "more than tens of millions of Linden" in sales from "tens of thousands" of customers. While many creators in Second Life were vaguely aware that duping was an issue, Allagash became a unifying voice in the community because PocketGacha's backend system allowed him to track sold inventory across multiple brands and see how widespread the issue was becoming. It's how he became aware that the Marketplace was frequently featuring items for sale at seemingly infinite quantities and exorbitantly low prices—both telltale signs that they had been duplicated.
Allagash tells me that, in Second Life, one of the most popular ways to shop is through games of 'gacha' or, as its traditionally known in Japan, 'gashapon." "It's a game where you have a machine that you play, paying typically about 50 Linden [$0.25 USD] for each go, and you are given either a common item or, if you're lucky, you'll eventually get a rare item which is typically more robust in its design," Allagash explains. "It can be a vehicle or a house, for example." Some gachas might award or make up articles of clothing in a complete outfit, while others, like the popular Kunst
brand, offer meticulously crafted themed decor.
On the surface there's little difference between gachas and the controversial loot boxes that are appearing in many games like Star Wars Battlefront 2, but there's several key distinctions. For one, these items have tangible value. Each play is always rewarded with an item, and any you win can be resold on Second Life's Marketplace for Lindens and then converted into US dollars. Secondly, the proceeds of these items goes to their respective creators, not Linden Lab (though it does collect a small transaction fee for items sold on the Marketplace). And for those who hate the gambling aspect of gacha games and loot boxes, many creators also offer a buyout price to purchase the set in full.
"It develops sort of a trading atmosphere where people will trade for commons and rares," Allagash explains. "There's a whole cottage industry that has developed in Second Life of people reselling a lot of these items that they get."
In Second Life, some items are 'copy' items, which can be copied and pasted multiple times inside of a sim. Most gacha items are different. Called 'transfers,' they can only be placed in a simulation once, and if you sell it, it's gone from you inventory. Like Magic: The Gathering, it's a market valued by the scarcity of sought-after rare products, and Second Life's dupers are undermining the whole thing.
"Some bad guys have figured out how to duplicate as many of these transfer items as they want," Allagash says. "You can duplicate thousands of them, and they have real value on the reseller market." While the exact exploit is a closely guarded secret, the general idea is that these dupers strategically "crash" a sim, which somehow allows them to create infinite duplicates of an item. Dupers can even duplicate in-game gift cards for various player-owned stores, letting them buy anything for free.
According to several players I spoke with, it's been a problem for years that Linden Lab only acknowledged in November after mounting pressure from the creator community. "Recently, we closed an exploit that fraudulent gacha re-sellers had used," the company said in an update posted on November 2. "Our governance team can now catch them when they attempt the cheating method that we have already fixed."
Second Life's creators hoped it would be an end to duping. Inevitably, it wasn't. I spoke with one creator who requested to remain anonymous. Their brand is one of the more popular in Second Life and it's become a full-time job that earns them a healthy income. Days after launching a new product line after Linden Lab allegedly shut the exploit down, they found a suspicious listing on the Marketplace offering the entire product line in one bulk package for almost 1300 Lindens less than the competition.
I don't even like to imagine [the damage to my business] most of the time.
Second Life's Marketplace doesn't let customers see metrics like units sold, so this creator and Allagash had to get creative. The maximum amount of quantity that can be purchased at one time is ten, so they began buying up stock to see how much this alleged duper had. It was an impossible amount. During my interview with Allagash, he demonstrated this by sharing his screen with me via Skype. I watched as he purchased almost 40 full sets of this creator's product line from the alleged duper. He then showed me PocketGacha's backend tracking system, which operates similarly to any retail store, to show how unlikely it was that one person could have potentially over a hundred copies of this particular item when only several hundred had been given away through the gacha game.
Making matters worse, this alleged duper was the most popular listing for these particular items on the Marketplace, effectively tanking their value. "The damage is huge," the anonymous creator tells me. "I'm the one paying for the subscriptions for the programs to create my products, I'm paying for marketing, I'm paying for the cost of running the sims—everything to keep my business going. Then there's the emotional and time investment into the work. The amount of time it takes to make a gacha release, for example, can lead to 16-hour days. I don't even like to imagine [the damage to my business] most of the time. Over a day or two it might just be a hundred dollars maybe, but over years…"
One thing that isn't clear is what these dupers hope to gain, but Allagash and the creator I spoke to both insist it has to be real-world money. "They're clearly not just doing this to be able to have fun in Second Life. They're making significant money," Allagash tells me. Because Second Life's virtual economy is susceptible to money laundering, Linden Lab has a strict process for withdrawing US dollars. Allagash says that if it's possible these dupers have found ways to undermine the game, it's plausible they might have found loopholes in withdrawing their money too.
Creators aren't the only ones finding it hard to compete with dupers, either. As Allagash tells me, Second Life has a massive economy of professional resellers. These players gamble on gachas and then sell the items they receive to ultimately turn a profit themselves. It can be a very lucrative business, according to one reseller—until dupers get involved, that is. "When [dupers] steal designs to sell I no longer invest in a set, depriving the creator of money,"Sushnik Samoas, a reseller, tells me. "The expected return on a copied set plummets. Others may not be quite as scientific as I am, but surely realize they are bleeding money and also stop playing a set giving the thief free reign on the copied virtual goods."