Citigroup Chairman Sandy Weill told our Mary Thompson this weekthat people should start giving their money away even before they have a lot of it. Ok, that's a great idea, though it's a bit easy for him to say. Weill and his wife have generously donated $250 million to Weill Cornell Medical College, and he feels passionate about it. Now we have the scientific proof behind that passion. In the latest edition of Science there is an article called "The Gift of Giving," which explains, in scientific terms, why more Americans give to charity than Europeans, and why we're happier about it.
Turns out that in Europe, with higher taxes and more state-funded social services, rich Euro-types give less and are less cheerful givers--because they're being taxed to support the needy. While in America, where taxes are lower, people give more, and feel better about it because it's voluntary. SCIENTIFIC PROOF SUPPORTING LOWER TAXES!
How did scientists determine all this? They measured neural responses: "Subjects experienced a hedonic reaction when tax revenues were transferred to a charity, and subjects who showed greater neural activation under this regime were more generous when charitable contributions were made voluntary. The sense of well-being in the voluntary giving condition surpassed that seen when subjects were taxed." Somehow I don't think they wired up Sandy Weill for this. But you never know.
UNREAL REALTY CHECK
The real estate slump is even hitting Second Life, where there is no "real" real estate. Second Life is the virtual online world with more than seven million citizens. People "live" there and spend virtual cash which can be turned into real money. But! The site's Economic Statistics page shows land sales are slowing. So far, halfway through June, 31,666,096 square meters of "land" have been sold. Double that for a full month and you get around 6,332,192, off 16% from May's total of 75,827,392.
Land auctions are off even more: so far in June 4,010,400 square meters have been auctioned...double that for a full month and you get 8,020,800, down 65% from May's 22,988,144! Is Second Life a First Life indicator of slower consumer spending? No. Overall positive cash flow on the site continues to grow, it's only land sales showing some slowing. Even the average price per square meter is down some.
What does it mean? More importantly, why did I get out a calculator for this?
MAKING MONEY IN VIDEOGAMES A MILLION DIFFERENT WAYS
I am constantly amazed at all the ancillary markets/products/MONEY being made in videogames. I did a story involving "World of Warcraft" ("WoW"), made by Vivendi's Blizzard Entertainment, which has nearly nine million players
online around the world who fork over subscriptions, either by the month, or, in some cases, players pay by the hour.
It's a cash machine. Get this: my son and some of his friends are selling off their top-level WoW characters on eBay for several hundred dollars. Now, turns out you can't actually sell the characters, Blizzard owns them, even if you make them. So sellers are instead selling the "time and effort" put into building the characters up.
Buyers fork over the dough and then get the seller's WoW account and password. In an even stranger twist, many of the buyers are "Chinese gold farmers," guys in China who spend hours and hours using these top-level characters to plunder and collect "gold" which they then sell back to people like my son, who buy it to get cool gear for their characters rather than earn the gold themselves through gameplay. Think of it as outsourcing the entry level drudgery videogame play. Blizzard and purists don't like any of this, because it means people without skill can buy their way into the top levels of the game and drag down the quality of play for everyone. But it also shows how the entrepreneurial spirit will find a marketplace in anything, anywhere.
EVEN IN INSURANCE! Fireman's Fundhas started issuing insurance policies for videogame developers! The company says it costs about $10 million to develop ONE GAME. Here's the release: "With each new technological advancement, such as three-dimensional graphics, artificial intelligence, and enhanced voice and sound effects, the probability of loss increases. Game producers also face similar risks to that of the film industry, especially if the game is tied to the release of a major film. A developer might hire the lead actor of the film in order to film the motion-capturing components of the video game. If that actor were to be injured (on or off the set) and unable to work for several weeks, the developer would still have the expenses of the crew, equipment, and facility rental."
ELVIS HAS LEFT THE BOTTLE
Elvis memorabilia can be big business, maybe even a good investment. But maybe not this time. Tomorrow (June 16th) in Los Angeles, there will be an auction which includes one of the King's prescription bottles. No pills, though. Police insisted the drugs be removed before sale. The drugs inside were reportedly for the prescription antihistamine Naldecon (bet they're past their "best used by" date). The auction will be live on eBay and hosted by Julien's Auctions. Other items include Elvis's gold-plated semi-automatic pistol which he reportedly gave to actor Jack Lord for "Hawaii Five-0." It could fetch as much as $20k. But it's the bottle getting the most attention based on the bizarre-o factor. It's expected to sell for between $2,000 and $4,000. You gotta be on drugs to pay that.
I'm on vacation for the week. If you see anything absurd in the world of business, let me know.
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