Is Virtual Life Better Than Reality?

When reality gets hard to take, there's an escape to a parallel universe — a virtual world without end where real people create online personas called avatars. Anything is possible.

Catherine Smith showed CBS News correspondent Jerry Bowen that her avatar has "red hair" and "big nice cool glasses."

"This is my deck overlooking the beach, and I've got neighbors that have a giant pirate ship," Smith explained.

Smith can't afford a beach house in real life. But in Second Life, the online game created by her employer, Linden Lab, she — and nearly 100,000 other subscribers who pay $10 a month — can have that and more.

"You can go skydiving and not be afraid of dying; you could become a wild animal, something that you could never do in real life," she said.

As hard as this may be to believe, there is real money changing hands among the players in these games, Bowen reports. An estimated $1 billion worldwide is spent by users buying and selling virtual goods, such as furniture for virtual houses and clothing for their avatars. But it's paid for with real-world credit cards — at Second Life alone, $6 million a month.

"I put in 40 hours a week easy," said Shannon Grei, who supports herself in Medford, Ore., by making virtual clothes for avatars in that other world.

"I couldn't believe that it was really, that it was real, that you could even do that, and it just blew my mind, it still blows my mind," Grei laughs.

She's not alone.

"What we have here is a virtual loft of sorts that we created for the artist Regina Spektor," says Ethan Kaplan of Warner Bros. Records, which has set up shop to publicize the pop singer's music.

"Our goal with second life is to make it better than real life in a lot of ways," says Phillip Rosedale, Linden Lab's CEO and founder.

But there are real-life problems. Hackers have tried to shut it down. Who do they call when hackers strike?

"We generally call the FBI," Rosedale said.

But it doesn't stop there. Second Life itself is being sued in the real world over virtual land deals that went bad. And in China, a man was sentenced to life in prison for murdering a friend who sold the prized sword he'd loaned him — a virtual weapon that existed only in cyberspace.

Meantime, the possibilities are seemingly endless. That's what creators of Second Life and other sites expect will draw the generations that grew up on video games: The chance to create their own alternative identity in a virtual world.

In fact, Bowen says he can't resist.

There's one job he's always wanted — and before Katie Couric gets on board, he went for it. The beauty is, Bob Schieffer will never know.

"This is the CBS Evening News with Jerry Bowen," a virtual Bowen said from a virtual anchor desk.

And that's the way it is ... in the virtual world.