This came out awhile ago, but Linden Labs has announced changes to the way it operates its online XStreetSL marketplace, a significant player in its virtual economy and source of a wide variety of virtual goods for use in Second Life.

The major change seems to be to the way in which XStreetSL will handle free items, or “freebies”. Despite being given to other residents for free, these items will now have a monthly listing fee of L$99, or about $0.40 USD each. At the same time, other costlier items will be subject to new rates for listing and commissions on the site.

The possible economic consequences of this move are interesting, especially given the polarizing nature of the availability of free items within the virtual world. The so-called “freebie economy” of Second Life, which provides free items to residents who do not feel like paying for virtual goods, has frequently been criticized for harming the overall economy. However, the freebie economy also attracts residents who may later begin to make paid purchases that do feed into the paid economy.

Despite the standing criticism of freebies, the reaction to this news – ostensibly designed to clean up the marketplace – has been critical. Discussions around changes to XStreetSL have been largely negative, with New World Notes and its readers reporting that some content creators are starting to remove their goods in retaliation. The common theme seems to be that the new listing requirements on XStreetSL may work to limit the freebie economy which, based on the number of low-cost transactions made in any given month, is a highly compelling element of Second Life. At the same time, there is also speculation that this change will work against creators who offer high-quality niche or specialized goods that do not sell quickly. Implementing higher listing fees will likely force their removal from the marketplace simply because the fees are too expensive to be covered through sales.

The full roadmap of upcoming changes can be found here.