Personalization in MMORPG's and Virtual Worlds

The Wall Street Journal has a great article on virtual fashion in the game Second Life.  The article provides a nice insight into how the same problems that exist in real life  bleed into the virtual. 

What I find really interesting is the microeconomics of the Second Life world.  Second Life successfully uses micro payments, which has pretty much failed so far in the web "pay for content" model.  There is no supply limitation and the demand leverages to some extent the addictive quality of on-line virtual communities and the apparent low cost of the micro payments, which can creep up unexpectedly.

The article points out that Second Life has over 700,000 residents, definitely large and diverse enough to take advantage of economy of scale.  On new systems, before wide adoption occurs, the skills necessary to make any money on those systems will be minimal as the designer/programmer learns the system API and the users are incredibly hungry for anything.  With system maturity will come competition.  Second Life already has an official Nike shop for outfitting your avatar. 

Second Life also has a special teen section, though to get in you only have to provide a birthday that fits with being a teenager.   I wish Linden Labs (the makers of Second Life) would create a server system that was only hooked up through schools, which would provide a  guaranteed student/teacher population.  What an interesting economics course that would make in high school.