Terra Nova

Virtual Magic Kingdom: It’s a Virtual World After All

Many Terra Nova readers have no doubt already heard about the impending launch of Disney’s “Virtual Magic Kingdom,” which will (re)construct several popular theme park attractions like the Haunted House and Space Mountain in a virtual MMOG environment.  This is a promotional project with the specific goal of motivating increased visits to Disney theme parks.

MMOGs and Mulligans

MMOG design is nothing if not path-dependent in the extreme: it piles the path-dependence intrinsic to coding large, complex applications with the path-dependence that comes from the accumulated activities and expectations of a virtual society.

It is interesting in this regard to see Mythic's recent announcement that among the future changes they hope to make to Dark Age of Camelot is the addition of a new server type designed for "casual players".

Predictions for 2005

Well, after further review, I hit 0.500 for 2004, so it's time to throw down for 2005. Read on for 10 fearless predictions for 2005:

So, about those predictions . . .

What's the point in making predictions unless they are graded? Clearly it's time to shine the harsh light of history on my fearless 2004 predictions that were posted on January 2nd of last year. Read on for the predictions and the grades:

Bah, Humbug & Digital Distribution

What’s the point of wrapping Christmas presents?

Just A Little R-E-S-P-E-C

Over at City of Heroes, the developers have recently added the ability to “respec” a character, meaning, to take the character’s accumulated experience and choose a different set of powers and abilities, to rescind previous choices. In City of Heroes, respeccing is difficult to do, and the number of times you can do it limited to three.

MMOG developers historically have implemented the capability to respec with great evident reluctance and caution. Some players also strongly oppose respec features. The major question I have is, “Why”?

You spent how much!?

As TN readers will know, the development of Shenmue Online - a Sega / JC Entertainment / T2 co-production was announced recently (press release .pdf).

The proposed MMORPG is set in China (including Hong Kong) during the 1980s. It features Kung Fu action (nanaa nanaa, nanaa nanaa, na na naaah, every body was…) and is seen as an attempt by Sega to break into the Chinese gaming market. All good stuff - then I saw the development budget!

Got a Life

Salon.com and the UKs Guardian Online both feature a piece James Meek called Get a Life. The feature covers the business of MMORPGs both from the publisher stand point and the growing trade in item trading. I did not spot anything that would surprise a TN reader (though of course they have impeccable sources: Dr C, Julian and Professor Bartle are all referenced [edit: scandalously Julian is not cited, but Nick Yee is – sorry I was halucinating]) but it is interesting to see MMO coverage stretching across the media landscape.

Incidentally the Guardian aunched a games blog this week.

Do ya a deal Govna?

You can’t go anywhere in the MMO metaverse these days without someone making you a very very special offer.

Paradigm propagation

Why does EverQuest have levels?

Endgame

eGenesis’ A Tale in the Desert (ATITD) is unusual in many ways. There is no killing (well if you try very hard you can kill yourself – permanently), there is a highly evolved legal system, and the player voted to the position of Demi-Pharaoh has the power to terminate the account of another player.

ATITD also ends.

When the players, or citizens as they are called, reach a certain level of development and the story arc reaches its climax – that’s it. For a long time players and commentators have been wondering what comes next. We knew that after the First Telling there would be a Second, but what? Would eGenesis just re-boot the servers and off we go again?

Oh, no. They had something hidden in their robes.

MMO Sex please we’re Avatars

I guess if you are easily offended you really shouldn’t read on.

Terror Games

From the September 11 Commission: "In the fall of 1999, training for the attacks began. Hazmi, Mihdhar, Khallad and Abu Bara participated in an elite training course at the Mes Aynak camp in Afghanistan. Afterward, K.S.M. taught three of these operatives basic English words and phrases and showed them how to read a phone book, make travel reservations, use the Internet and encode communications. They also used flight simulator computer games..."

Emphasis added. Full text available through the New York Times (registration required). A virtual world implementation could only have made the training more effective.

Gaming on the MMOve

I'll tell you what I want, what I really really want – remote access to my favourite MMOs’ that’s what! And it looks like my wish is finally being granted.

Not quite Camp David but...

At the ComWork symposium Julian introduced a catchy proposition. Juxtaposing an image of a group of some of the most prominent MMOG developers with that of the U.S. founding fathers he asked us to consider the similarities. Both groups operate(d) around questions of governance, normative behaviors, how to sustain vibrant communities... basic social contract questions. So I'm left to muse about what we might make of the recent "EverQuest Guild Summit." This past weekend Sony invited 60 guild members and community leaders (note: a lot of these were the hard-working people who produce all that "auxiliary" material like maps, item databases, and class helpers that makes EQ playable) to discuss a variety of matters related to the game and customer service. I remember when I first gave a talk about culture and ownership in EQ several people commented that Sony was so at the far end of things in terms of inattention to customers and "big hammer" solutions that it was almost unfair to see what was happening in the game as pointing to any significant issues we might generally face in the MMOG world. I disagree of course. EQ, like all games, circulate in a broader culture and work with, and through, all kinds of conventions (legal and otherwise). They may be extreme, but they do tell us something important. So here we are several years later and they are holding an intensive event soliciting player input on matters from game structure to service. It's probably no real surprise. EQ players have made some interesting attempts at group organizing (recall the Steel Warriors protest for example). The leap from communal action to "summit" is one we've seen before... offline.

Imperial Crackdown

At the recent SWG Fan Fest, Haden Blackman (LucasArts Producer of SWG) discussed SOE / LucasArts’ anti-eBay’ing strategy - but he wasn’t giving much away.

Synthespians

NPCs are rubbish. They are simplistic vending machines that lack the sophistication of even the simplest natural language processing system. Over on MUD-DEV Amanda Walker recently proposed a tangential solution..

Support your local guild leader

Guilds can be the lifeblood of an MMO - so why don’t they get much support from developers?

Guccis at dawn

It’s a small world. Even, it seems, when the universe is expanding physically, virtually and intra-virtually.

Back in February we covered the sale of 2Ls ‘Island’ (see: 2L's Virtual Land Sales Attract Investors, Controversy). Things are now up and running. The Island has become Avalon and it looks like violent collision between the physical and the virtual might just chip off a few L$, US$ and £.

There also appears to be a burgeoning relationship between Fizik Baskerville / Rivers Run Red and Linden Lab / 2L.

Taking the subway

David Thomas of buzzcut.com, writing for the Denver Post, has penned a beautiful meditation on the state of the games industry. In the piece Nobody walks in LA Thomas reflects on E3 as a celebration of dreams: where lies are mixed with the desire to be lied to, and where mere bits and bytes - sometimes - are transformed into something wonderful.

What women want

Thanks to E. Izawa of the Women-Dev list for pointing to an interesting interview with Anastasia Odiakova, beta liason for Wild West Sim MMOG. While the game's plans to implement a system for player offspring (new players will be "born" into readymade families of other players) is interesting, the vision of what women will do in the game (not to mention what they might want out of one) seems a bit... narrow:

"Female characters will have more of an impact in WWS than in any other RPG. Since new players are introduced into the game as offspring of existing players, women are an absolute requirement for the game world.”

As the author of the piece notes, being seen as valuable to a game by virtue of a uterus might cause some pause. I think it's downright creepy. Ms Odiakova goes on to note that prostitution will also be a legit part of the game and that the goal isn't historical accuracy "but rather 100% accurate to the romanticized version of the era...". Of course, whose romanticized story is getting told is still key. I continue to wonder when the idea that it's not simply a matter of inclusion, but the content and context of the inclusion, will sink in.

Lest this get written off as just some random cluelessness/bad wording/design choice we should not forget it comes pretty close on the heels of the Intel IT Manager game incident (memorycard, watercoolergames, and vesterblog on that). You remember, the one where you couldn't hire women? ;) I've written elsewhere that I think it's actually pretty amazing how many women play despite games often working to disenfranchise them. But do we write off WWS as an anomaly or are there still ways MMOGs need a good dose of critical analysis/design interventions around gender? (And I'm not even touching on the issue of race, something that really needs to be picked up on more.)

Advertising and Branding in Virtual Worlds

New paper alert! I’ve just put the finishing touches on a paper about advertising and branding in virtual worlds.

Click here to download the paper in PDF format. Warning: It’s nearly 4 MB. (There are lots of pretty pictures.)

It’s based on a presentation I gave back in October at Miami University in Ohio. The presentation received such a great response I decided to turn it into a paper. Yes, it took me a while but hey, all this virtual worlds stuff is done in my “spare” time.

When I say advertising and branding in virtual worlds I really mean in virtual worlds. All examples discussed are various forms of in-world advertising. The marketing of vw’s to the general public is not covered. But within virtual worlds, I’ve found that advertising and branding projects have taken the following forms so far:

[1] Community members who create their own brands and ads to advertise virtual products they are creating and selling to other members

[2] Official ads for products made by the company that owns/operates the world

[3] Contextual advertising campaigns by real, offline companies who are now branding objects within virtual worlds (Nike & Levi’s in There, McDonald’s and Intel in TSO)

[4] Entire virtual worlds created to advertise or promote a company or organization (Coke Music, America’s Army, Aero House, Mokitown)

One interesting trend I also discuss in the paper is how teenagers seem to be more receptive to in-world advertising than adults are, often bringing elements of branding into the worlds themselves. In fact, many of the fully branded worlds are targeted to teens and kids.

Now that I’ve given you the cliff’s notes summary, go read it and let me know what you think. Posts are welcome here. If you prefer to discuss privately, contact me through VWR.

Virtual Worlds and China's Government

From /. : A Korea Herald article on the Chinese government's efforts to control foreign MMOGs. View from 60,000 feet: by 2006, China will overtake the US as the largest presence on the internet. Its government won't be far behind.

Multi-User Avatars: MMORPG Economies May Soon Exceed Entire US GDP

World of Warcraft has just announced a new player race: two-headed ogres (thanks Slashdot and MMORPGDot). The official info page indicates that two players will cooperate in running the avatar. There's probably a precedent of this within text-based MUDs, but with the scale of current graphical worlds, these shared-ownership avatars create a very interesting and potentially extremely lucrative value proposition.

Graphics Shmaphics

Replace the text of a MUD by graphics and you get virtual worlds that look like first-person shooters.

Replace the pictures of a first-person shooter by text and you get IF Quake.

If only it hadn't been released April 1st...

There's Island of Women

On March 30, There will unveil its very own Paradise Island of iVillage women. Although the island is described by There as a "a special iVillage sanctuary" the boundaries between the iVillage island and the rest of There's world will be far fuzzier than the original fabled Paradise Island, as males will be able to freely access it and interact with "the natives."

This will be an interesting experiment for several reasons:

1 - It's a virtual space doubly marked by gender and commercial co-branding. (Is this the first of its kind? Anyone know of any precedents?)

2 - iVillage is a text-based community of women whose bonding often takes place specifically around members' relationships to their RL bodies in the form of pregnancy, dieting, health, and beauty tips. While there may be the rare case of role-playing and gender-bending in the iVillage web community (ie. men posing as women), most participants' online identities are extensions of their RL (female) selves. Will this direct tie between offline/online identity carry over into a virtual world? Or will iVillage women use There to role play, whether that means creating an avatar that looks radically different from their RL body, or even choose a male avatar?

3 - The branding of a virtual space as female automatically sexualizes it. Already some of the male community members in There are viewing the addition of iVillage island as a welcome opportunity to increase their chances for romance. How will the iVillage women respond to these romantic overtures? Is There prepared to deal with any Mr. Bungles that show up?

We'll find out soon. Next Tuesday the experiment begins.

At last - a free lunch

Guild Wars the free MMORPG is out pretty soon.

The business model seems to run like this:

Base content, access to the world / community – Free
Content expansions – Paid per ‘chapter’

They are also using a skills based combat system. So, in theory, the casual player can compete on a pretty level playing field with the power gamer - at no cost (did I mention that bit?).

Prediction time: have they actually cracked the casual player issues?

Sponsored links

What do Bonusprint, Ofoto and RCS have to do with developing online games?

EA Exec Predicts Virtual World Growth

At the D.I.C.E. summit held this week in Las Vegas, EA CEO [edit: Chief Creative Officer, not CEO] Bing Gordon discussed the medium-term future of games. Virtual worlds will play a prominent part. Basic message: Each generation of teens is more comfortable than the last when combining different media. "What magic circle?" they will say.

Read on for a few quotes, thanks to GameSpot. Also, coverage at Gamespy.

Confounded industry

I often wonder about how narratives, especially speculative ones, shape reality. There certainly seems to be a powerful effect on markets (in that stocks can be ‘talked’ up or down).

So with trepidation I note that in November 2003 Dr Castronova posted The Coming MMORPG Crash, Or Not and then First Sign of an MMOG Downturn?.

Then in February Mythica was taken into the dark woods never to return. And last week the news sort of sneaked out that (according to gamespot) Ubisoft have followed the cancellation of the online component of Uru: Ages Beyond Myst by pulling out of The Matrix Online – leaving Warner Bros. Interactive Entertainment to take the project forward (with Monolith Productions remaining as the Dev shop). According to Warner Bros. Beta is still expected to hit our screens this spring with the full release in November.

Though these events do have too be contrasted with industry predictions that overall the MMO market is growing in strength.

So maybe it is just all a case of too much too soon.

Though none of this helps when all I want for xmas (publishers start taking notes now) is a Steam Punk based virtual world. I want wear decent clothes (with an unfeasibly tall hat) and create infernal devices comprising of pistons, valves and shiny bits made from brass.

Confound you games industry, confound you I say.

MMO-Skill

Over at GamerDad’s Long Shot column, Dave Long kicks off his current post with the statement:

“the reason I don't play a lot of the conventional massive player games is because there's no skill involved in them”

His argument is that for some players most MMOs just don’t provide enough control or hand-eye co-ordination based challenges. He goes on to feature a new crop of what one might term hybrid-MMOs that are starting to mix FPS, RTS game play stylee with the social and levelling side of trad-MMOs.

The two hybrid-MMOs referenced the piece are: Jumpgate (which I have heard good things about from other MMO players) and PlanetSide.

But, sorry, I’m obsessing, I just can’t get out of my head a big flashing sign saying: wadayoumean no skill involved !

OK. Deep breath. I'm calm.

Mmm now if I could have optional real time FPS type combat, with neat flying machines and a good community – all the to music of Mike Oldfield, I might just be happy :)

Group types

So, there you are, level 50, playing alongside the friends you've known since you were all level 5. Elsewhere in the virtual world are other parties of L50s, who have also grown into almost unitary groups over time.

Is your group doing basically the same kind of thing as these other groups? Or will different groups of friends focus on doing very different things? Do these things change, depending on the level at which the group operates?

In other words, are there "group types" like "player types"? If so, what might those types be? Can the groups themselves perhaps be regarded as ersatz individual players, so there might be an "explorer group" or "socialiser group"? And are the groups that form in the West and those that form in Asia different in this regard?

New Trade Volume Data

Second Life's land auctions can be used to reveal the real-dollar value of the trade happening within its virtual borders. It comes to $2.17 million annually. 2L has about 2000 users [edit: 2,000 is the number who actively engaged in trading in this period. 2L has many more users than that.], making the annual per capita trade volume $1,084. If the 750,000 users of Sony's virtual worlds traded at about the same rate, that would come to $814 million. It's another hint (the first came in this post) that the amount of trade within virtual worlds dwarfs the amount of trade on eBay (which, according to my own tracking, probably amounts to no more than $100 million world-wide).

Here's how I got the $2.17 million figure: Second Life allows users to run their land auctions in both real dollars ($) and Linden Dollars (L). By the Law of One Price (stating that arbitrage will eliminate price differences in comparable markets), the same effective price must be reached in auctions of both kinds. One 2L user, Kathy Yamamoto, posted land auction data showing that the average Linden price for land was L5.47 and the average dollar price was $0.0294. That implies that $1 buys as much land as L186, meaning the exchange rate between dollars and Lindens is 186 to 1. I queried Philip Rosedale, Linden's CEO, about trade volume within the world, and he reported that the first week in February saw about L7.76 million in trade among the 2,000 users. That's worth about $41,700, or annualized ("times 52" if you hate business lingo), $2.17 million.

Let me speak

In SW:G I keep encountering players that are talking to each other. And I’m starting to feel left out.

‘No I dnt ventrilo or teamspeak thx’ - I type.

But the merits of voice in MMO are highly debatable. Richard has views ! In the unambiguously titled Not Yet you Fools! he talks about the problems of breaking immersion in the world. Though he does offer a potential hope for the future when technology is neat enough for technology to integrate into the role play i.e. what if a dwarf or a troll avatar really sounded like one irrespective of who was speaking.

But what about the social worlds like Second Life and There, one could certainly imagine that being able to press a _chat_ button might increase their appeal.

So far I’ve only touched on game design issues, no this is not a MUD-DEV take over ploy, what I’m wondering is whether there are issues outside gameplay.

Would voice be a potential revenue stream for game companies, does voice add new legal or social issues to the mix ? Are MMOs with their highly specialised linguistic conventions be sites where real-time text translation and text to speech technology could get the world playing together ?

Ren
www.renreynolds.com

2004: Predictions and Resolutions

Though Terra Nova managed to missed the traditional "Year in Review" discussion, perhaps we can redeem ourselves by asking the collective what they think will or should happen in 2004 (in MMOGs, VWs, etc). I don't have any clue, so won't venture any thoughts.

The Politics of Unresponsiveness

It seems that everyone has a view about the goings-on over at The Alphaville Herald. Oddly, the only view we haven't from is Maxis. Which is interesting. It would be easy--and probably helpful--for them to put their spin on the toading of Urezinus. Maybe he's a no-goodnik, maybe he's really using his account to sell simoleans. We only have his side of the story...

Of course, from the perspective of the PR flak their silence is not odd at all. Better to keep your mouth shut and hope the storm all blows over than to open your mouth and create more damage. We've come to expect this from developers. Standard Operating Procedure is to make no public response to publicly-voiced user concerns.

From other perspectives however this approach is a little odd. MMOGs are businesses where consumers have low switching costs, and where the quality of the community seems to be more important than the quality of the physics engine (else, why could EQ and UO still be making money?) Seen purely from the consumer-satisfaction standpoint, remaining silent on issues of general import to the community is, well, weird. Wouldn't you want to encourage people to stay with you, and to explain to these First Amendment-obsessed Americans than, well, no, there is no free speech issue in our game, etc etc.

Of course, if you take my perspective that much of what is going on in MMOGs involves a genuine community of indviduals, and as such has political, governmental and legal interests, then the silence is also odd. Politics in our systems (by which I mean Western, parliamentary, representative democracies) operates in public, and we are surprised when decisions of the type in issue here are taken in secret. Or, looking at it another way, governments usually find that the bitter pill of decisionmaking goes down easier with some sugar of "public consultation".

So, in thinking about the Alphaville Herald Affair, I've come to the conclusion that developers need to take the lesson of politics to heart; not because they are running political systems, but because as political consumers we love to hear why political choices are made, even if we don't agree with them. Developers will have an easier time of it if they open up, rather than batten down the hatches.

No doubt Maxis will disagree. Perhaps the true explanation for their silence is the most interesting: that Will Wright has found that players enjoy the intrigue and the plotting that occurs when they have no idea what the government is up to. Oh, and it creates column inch after column inch in all the useful blogs...

Yet Another Videogame Violence Bill

This time its Leland Yee, D-San Francisco, who, apparently ignorant of the inability of these statutes to survive court tests elsewhere, announced legislation to:
1. Ban sales of first-person shooters to minors, and
2. Enforce restrictive display of such games in stores (i.e. on high shelves and behind glass cases)

Yee presents evidence that lots of kids get their hands on FPS games even though the games are rated mature. His website also notes that in the year 2000, every "American Academy of X" worth mentioning released a consensus statement that exposure to violence in media, especially interactive media, makes kids more violent. Yee's fact sheet heavily cites one study (literally, one) which found that FPS games involve, and reward, a heck of a lot of violence. [edit: for more, see Yee's interview by HomeLan Fed here]

For what it's worth, Yee's measure has received formal support from NOW, and been opposed by a stupid evil bastard.

Meanwhile, the IGDA and the Free Expression Policy Project have argued that those stodgy academy types are off their rocker; that there's no consistent evidence of an effect of violence in entertainment on violence in children. Gerard Jones makes an interesting point: the 1970s, he says in Killing Monsters, was the CareBear decade. No violence until Star Wars. (Certain 1970s TV shows could be construed as a particularly malicious form of violence against the mind, but leave that for another post). Yet in the late 70s and 80s, there was no sign of a drop-off in youth violence. Similarly, the generations who actually read the Iliad seem to have been no worse off from repeated exposure to lurid, affirming descriptions of spears piercing human flesh.

Two reasons I bring all this up here. First, there's been much talk about the possibility of bad legislation affecting virtual worlds. Yee's bill seems to be pretty bad legislation: banning HalfLife 2 and putting it on the shelf next to Playboy is a surefire way to ensure that every teenager will want it. Yet the theory behind it, that games are a cause of violence and obesity and backtalk, rather than merely comorbid with a large range of teenage behavior that grownups don't like, seems to be fairly popular. More than just teen behavior is at stake here; grown-up gamers are clearly being stigmatized by the stereotypes implicit in these theories and codified in this legislation.

Second, if the researchers cited in Yee's Fact Sheet had played MMORPGs, they probably would have noticed quite a bit of violence there too. Much of it is of the first-person variety; it gets rewarded; in most of these games, it can become a way of life ("A pulls the mob. B tanks the mob. C roots the mob. D nukes the mob. Continue until the mob is killed. Then repeat one hundred bazillion times.") On the other hand, I play a cleric in EQ, I can't fight my way out of a paper bag. All I do is hang around and heal the wounds of people who are fighting.

The point being that virtual world experiences are complex. Will legislation respect the subtleties? Is there enough sensible expertise out there? Judging from the efforts of Dr. Yee (PhD field: Child Psychology), we do have reason to be concerned.

Sims Shadow Government

So, I'm going back on my promise not to post anymore on politics this week. This is too choice to ignore. Peter Ludlow et al's fabulously fabulous Alphaville Herald has just posted an interview with SnowWhite, the head of the Sims Shadow Government. It absolutely boggles the mind. I won't say anything about it here. Res ipsa loquitur (or, as we lawyers say, "The thing speaks for itself.")

Democracy, Shmemocracy

At the risk of picking up on something which has already been addressed elsewhere, I want to spitball about the concept of democracy in virtual worlds.

Yes, yes, we all know the arguments: users want democracy but can't be trusted to exercise it; democracy is not fun and so doesn't belong in a game; it's the developer's world, and they spend a lot of money to build it, and if users don't like the absence of democratic involvement well, they can take a hike. Of these, the only one that I ever bought was the idea that it was the developers' world and they could set the rules.

In another life I wanted to be an architect, and these days I still spend too much time reading about urban planning and the like. And I keep getting echoes of the same sorts of issues there as I see in VWs and politics. So take as one high-profile example, the discussion about the buildings and the memorial at the WTC site. Now, Larry Silberstein has the right to rebuild the buildings, and as long as he complies with zoning requirements, no-one can tell him what to build or what it should look like or how many million square feet of leasing space it should have. So why do millions of people (New Yorkers generally, relatives of victims, firefighters everywhere, etc) think they should have the right to be involved in the decision? Because they feel like they are affected in some meaningful way by the decision, and so should have a say. It doesn't matter that they won't be putting up a single penny of their money to build the new buildings, they still feel "democratically" tied to the outcome.

Why is then that, when the initial Silberstein-approved plans met with such disapproval, that Leaping Larry S and Governors Pataki and McGreevy agreed that it would be a good idea to establish a competition, and allow for participation from New Yorkers, relatives of victims, etc? The short answer is that it was good politics. Larry S can tell everyone to go to hell, but in the end it becomes a difficult political football if he doesn't provide for the processes of consultation and involvement, even if in the end he pretty much ignores it.

Now, to me, involvement in decisions in virtual worlds feel a lot like the processes involved in urban planning. Many ordinary Joes and Jills (users) feel they should have a right to be consulted in decisions that affect them, even as property developers (game developers) chafe at the idea of other people telling them what to do with their building (world/game).

In offering this observation, let me say two things. First, I think that it demonstrates a fundamental decision of mine to buy the "this is a world" concept. A number of really smart people--Greg Costikyan, Eric Zimmerman, Raph Koster, maybe even Ted Castronova--keep insisting that these are games in some meaningful sense, not worlds, and that this is the secret to understanding why concepts of political philosophy (or law) just don't apply here. Thing is, I just don't buy that. I don't want to try to defend why here, but I will another time. But it's important to understand this point, because one simple way of arguing against this is just that this stuff doesn't matter, or is reliant on some quasi-philosophical conception of games as separate from moral decisions in other contexts. This is, as they used to say in my moral philosophy classes, bollocks. But let me leave that argument for another day.

Second, I'm not trying to defend a normative claim here that "we MUST introduce democracy to MMORPGs". I'm just making a descriptive claim that people tend to have expectations of political involvement in a number of arenas outside the usual "Pull lever #214 to vote for Schwarzenegger." And games designers can continue to ignore this as long as they like, and it will continue to be a cap on their long-term success. It may be that politics is too messy to code well, but I doubt it. And I suspect that the key to the next paradigm-breaking VW is politics and community, and not user-created-content (as I kept hearing all the time at the State of Play conference)

(Hmm, my self-imposed "Keep Posts Short" rule just got busted wide open)

The Coming MMORPG Crash, Or Not

GameSpy gives a brief review of 16 (16!) major new virtual worlds scheduled for release in the next 12 months or so. This adds to a market already loaded with big-hit recent releases Sims Online (currently re-vamping itself impressively) and Star Wars: Galaxies (clearly a high-quality offering). Meanwhile, new social worlds like Second Life and There crowd their way forward, old veterans Ultima Online and EverQuest hold on to their users, and Asian games continue to expand rapidly.

Is the growth rate of user interest fast enough to make all of these games winners? No! User interest can't possibly grow that fast. It would defy economic reason. Surely a crash looms.

Of course, if user demand doesn't rise quickly enough, we know that this crash won't be like other crashes. Worlds won't shut down. Once the development costs are sunk, it doesn't take many subscribers to keep the lights on.

Rather, the main effects would be:

1. Media coverage: Right now this medium enjoys a great deal of positive whuffie, but it won't if several major releases tank. Expect many negative stories and commentary over the next two or three years.

2. The pipeline would dry up. The main real effect of a crash will be to close off new development deals. Don't expect major new worlds in 2006 or 2007.

Here's the contrarian view: I thought the crash would be here already, in Q4 2003, and that SW:G and TSO would have been the end of UO, and that World War II Online and Earth and Beyond would have been long gone. Nope. They're all chugging along nicely; just today I saw WWII Online on local store shelves in healthy numbers. In other words, this market continues to amaze. It already defies economic reason. Maybe it will eat all of this supply glut and continue to burn onwards. That's what needs to happen to sustain exponential growth. And it just might do that.

First Glimpse: Big Markets Inside Virtual Worlds

Internal data from Second Life give us outsiders our first glimpse at the volume of trade inside virtual worlds. It's big. Really big.

Over a one-month period, the users of 2L had a stock of 8.35 million Lindens (L$) and used it to conduct L$19.2 million in trade. Economists call the ratio of trade to the money stock "velocity;" in this case, it's 2.30.

Economists also tend to assume that velocity is constant. It's the turnover rate of a single unit of currency and is determined by the efficiency of market institutions. Second Life doesn't seem enormously different than any other world in this regard, so let's assume the velocity is about the same in other worlds, such as Norrath.

Data from Norrath in Summer 2001 indicated that the typical user had about 7,700 platinum pieces (PP) in cash. At that time, EverQuest had 400,000 users and the exchange rate between PP and dollars was 100:1. This means that the total money stock was (7700)*(400000) = PP3.08 billion. Using a velocity of 2.3, total in-world trade would have been PP7.084 billion. At the then-current exchange rate, that comes to $71 million.

So, a game like EQ has $71 million monthly in in-world trade. Current data from eBay suggest that the combined export-import trade for all US games except EQ - games whose total populations nonetheless well exceed EQ's 400,000 - is only about $1.3 million monthly. Evidently, in-world trade is much greater than out-world trade.

The figures for EQ suggest that each user does about $18 of in-world player-to-player trade monthly. That number feels about right (seriously! I've actually played EQ quite a bit). If we think about the market as a whole, we have upwards of 10 million people in the various worlds right now. At $18 per person per month, that's an aggregate in-world trade volume of $2.2 billion annually. According to UN data, that volume of trade would make virtual worlds the 144th largest economy in terms of GNP, right up there with Malta and Albania.

On the other hand, this number is such an extreme telescoping of assumptions as to have little merit in an absolute quantitative sense. We only have the velocity number - the keystone of all this - because Philip Rosedale of Second Life was kind enough to let me see it. It's frustrating that we don't have better data, and that we're forced to put together this crazy-quilt patchwork of assumptions to get even the most basic feel for what's going on. (If you're the proprietor of a big game and can see how some of these data, if released, could benefit the entire industry, get in touch.)

However, these data do yield convincing evidence of a qualitative, if not quantitative, nature: Whatever we see on eBay is dwarfed by what's happening inside the games. A great deal of value is changing hands out there. And it's all denominated in gold pieces.

Have You Seen Me?

From the LA Times:

Where did everybody go?

One month into the new TV season, overall audience levels have taken a hard tumble from those last year. New shows have sputtered, and scores of established series have slipped in the standings. Even some of the biggest hits - "Friends," "ER," "Survivor," "CSI" and "Monday Night Football" - have lost millions of viewers.

Network executives can't explain it.

For the first time ever, overall television viewership is down from one fall season to the next, the biggest shock to hit that industry since the Nielsens showed that cable networks were significantly cutting into the market for the big broadcast networks. But this time, nobody seems to know where they went. Even more troubling, the biggest drop was in the most coveted viewers:

One demographic group, in particular, was noticeably smaller: young men. The industry is fretting as 8% of men ages 18 to 34 have apparently sworn off television this season.

"It's hard to buy into the explanation that all of these young men suddenly decided to stop watching television at the same time," said [Lloyd] Braun [ABC Entertainment Chairman], who speculated that a factor for ABC could have been two lackluster "Monday Night Football" matchups.

18-34 year-old males are the most desirable audience for TV because they are the last, best hope for advertisers wanting to influence brand choices, that demographic controls a disproportionate amount of the disposable income, and if you can "brand" them, they'll likely stay with the same products for the rest of their lives (when they will control an even larger chunk). So this slippage is a deadly threat to TV and advertising's bread and butter, these are the eyeballs they have contracted to deliver. This year alone it may cost them hundreds of millions of dollars in refunds and rebates to the advertisers, if November "Sweeps" fail to deliver the numbers the networks promised.

Hmmm.... Hundreds of thousands of 18-34 year old males stopped watching TV, where have I seen something like that before? Oh yeah, they're over here, the bulk of the customer base for MMO's comes from exactly that segment of the population, putting in 20-25 hours a week in patterns remarkably similar to those of television viewing. That's not to say that our kind of MMO is the sole cause, this year's dip may have as much to do with XBox Live as with EverQuest. But I am morally certain that it is due to online gaming, and it looks like the TV industry may have a hint of that as well:

"They're not putting on a lot of shows that might appeal to a 25-year-old," he [Brad Adgate of Horizon Media Inc.] said. "These guys are probably doing something else - playing video games or surfing the Internet or reading Maxim.

For a long time, TV programmers and the viewers have had a deal: They'd put out shows, and we'd watch them. They'd put out less of it, and we'd still watch it. They'd put in more commercials, and we'd still watch it. "The Honeymooners" actually only ran for a single year, but back then a "season" was 39 episodes. By the time Star Trek ran for three, a "season" was 26 episodes. And this year, a full "season" worth of a show is 13-18 new episodes, the rest of the year will be filled with re-runs and pre-emptions. The episodes are shorter as well, down to a 44 minute "hour" (which may get "stepped on" by local affiliates or cable companies for the loss of another minute). Even by strictly objective measures, the quality of TV programming has been dropping steadily for a long time.

But they've been getting away with it, because TV's real customer isn't the viewers, but the advertisers. Actually producing new shows is an overhead cost in the process of delivering the eyeballs, and every business tries to minimize their overhead. Since how much new entertainment they delivered didn't have much to do with how many eyeballs they could deliver, it was only logical to spend less on it. After all, where were you going to go? There wasn't anything new to watch anywhere else, either. And now the chickens are coming home to roost.

This seems to be my week for playing Chicken Little, but this is a far bigger potential threat than anything academia alone might do. Samuel Clemens advised "Never engage in a war of words with anyone who buys ink by the barrel." We may already be in a fight with an industry that has their own satellite-beamed presence in every living room in America. If TV starts viewing these games as a competitive threat to their bottom line (and I'm pretty certain we are in the long run, those gaming hours have to be coming from somewhere), this will get to be a very bumpy ride. Nobody is "fair and impartial" when they think you're picking their pocket.

Growth Rates of Synthetic Worlds

It's early, and we don't have the best data, but the numbers we do have suggest exponential growth in the number of synthetic worlds in the eight years from 1996 to 2003. Indeed, the trend bears uncanny resemblence to Moore's Law: The number of worlds seems to double every 18 months.

These conclusions are drawn from Bruce Sterling Woodcock's priceless MMOG subscription data:

Considering first the number of worlds, the data (including Meridian 59, Lineage, and Second Life, which Woodcock's chart omits) show an average annual growth rate of 45 percent. By the Rule of 70, a variable with annual growth rate r doubles every 70/r years; 70/45 = 1.55, or about every 18 months.

Considering subscription levels or aggregate population, these also are revealed to grow exponentially, this time by the interocular impact test - look at the chart and it hits you right between the eyes.