Read more: Eight things you didn鈥檛 know about the internet
Real-estate prices crashing, a big drop in growth, the threat of infrastructure collapse, and authorities printing more money to stave off disaster. No, we are not talking about the bricks-and-mortar homes and stores 鈥� things have been hitting the rocks in virtual worlds too.
The first signs of a digital recession came when the US property market crashed, says , a virtual property developer and the first person to make a million real dollars in the online world . 鈥淧eople became more reluctant to invest in virtual real estate,鈥� she says. 鈥淢ore expensive, larger land holdings became less sought after, leading to a slowdown in growth in Second Life.鈥� By coincidence, Second Life鈥檚 creator, , had already put into place its own version of quantitative easing. Rather than printing more virtual money, Linden Lab created more virtual land and cut the cost of developing it. The effect of this was to stabilise the market.
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But while people have been spending less cash in virtual worlds, more people seem to be visiting them for longer. Whether rising unemployment in the real world means more people are spending more time online, or they are trying to save cash by staying in, more user hours are being clocked up in online worlds, says Chung. As a result, the Second Life property market is steadily recovering.
Recession could still spell trouble for the wider internet, though. Prior to 2006, global traffic steadily doubled year-on-year, says Andrew Odlyzko, who runs . 鈥淏ut in the last few years we have seen a decline in that rate of growth.鈥� In fact, the rate of increase is now almost half 2006 levels.
With this reduced growth has come a reduction in the level of investment into infrastructure. Generally speaking, the internet can handle a 100 per cent surge 鈥� a doubling 鈥� in traffic at any one moment, Odlyzko says. If huge numbers of people suddenly turn to the internet to escape the recession, however, there is a chance that the rise in traffic will outpace the expansion of infrastructure, making internet outages increasingly likely.
