UK Second Life Users Likely To Be Hurt By Brexit Fluctuations on US$-to-Pound Exchange Rates

Last year, many Second Life users based in the UK celebrated their impending Brexit from the European Union with a party in the virtual world (above). But ironically, British SLer Michaelatv Destiny makes an interesting point about Brexit in the official forums:

I'm just getting some feedback from my fellow Brits. In 2016 I had an affordable [SL] homestead I could keep under my present retired income. We were getting $1.49 to one GBP. Our currency crashed big time after stupid decision to leave.

In no time at all it was down to $1.35, which added £6 a week extra on my tier, which I could not afford. So been waiting 3 years for GBP to recover back to $1.49. Again. This hasn't happened, and I really losing hope I will ever be able to buy or rent in the near future.

Brexit happens any day now, and there's no doubt in my mind that our GBP will go into free fall. I conservatively predict the pound will be almost worthless, crashing to about $1.10 to one GBP. That would push up the price of a homestead to £9 -£10 a week, from-pre 2016 levels.

More conversation here. For the many older British living on a pension, especially, even a small change to the British pound-to-US dollar exchange can adversely impact their discretionary spending (i.e. entertainment, i.e. Second Life), so she's probably right. I'm not any kind of expert on exchange rates, but this analysis from Capitol.com does suggest sharp fluctuations and a downward trend for the British pound against the dollar, greatly accelerated by Brexit:

 

The pound’s plunge on revived hard Brexit fears was one of the biggest market news. Meanwhile, the US dollar benefited from the fresh signs of strength in the US economic data as well as positive developments in the US-China trade tensions, pushing the GBP/USD rate downward.

Nowadays, the British currency cannot boast of its stability, remaining at gunpoint with the unceasing Brexit worries. Analysts at Rabobank argued that “the electorate may have given PM Johnson a majority in the House of Commons on the hope that he could finally put Brexit to bed, but trade negotiations between the UK and the EU will dominate much of the domestic political landscape.” They also added that should “talks be difficult a ‘no deal’ Brexit would still be a prospect for the UK at the end of 2020. This could bring strong downside potential for GBP.

Based on recent and on past demographic data related to Second Life use, about 5% of the userbase is from the UK.

Hat tip: This Plurk by Gorgeous Yongho, which has more conversation about this coming slide.

Chart via Capitol.com.

Comments

[Joey1058]

I'm woefully ignorant about minutiae concerning Brexit. But wasn't one of the selling points supposed to be strengthening the Pound against the Euro? What the heck happened?

[Da5id Weatherwax]

As I posted in the referenced thread -I'm a performer in SL and my SL existence pays for itself *plus a little bit* as a result. Changes in the USD:GBP rate will not change that, everything I pay for in SL is either billed in $L or USD. If the GBP tanks against the USD that will actually be to my benefit since that "plus a little bit" will become "plus a little bit *more*"