In mid-2005, American author Julian Dibbell had somewhat weird conversation with chap from the Inland Revenue Service. Its aim – to discover the depth of links between the virtual economies now thriving in the increasingly well-populated worlds of internet gaming, and real-world economic life.
Dibbell had just spent year “tumbling down the rabbit hole of virtual economies” parlaying his trade in intangible treasures and virtual currencies into real living income and he wanted to ask some serious questions about his tax liabilities. Okay he had to pay tax on the real income he’d earned – but what about goods traded in virtual gold. Did it count as barter?
“So these things you deal in,” pondered the perplexed IRS official, “they aren’t worth anything?… If you have this thing that’s in cyberworld, it’s not in the real world.” And while he concluded that the United States government didn’t yet recognise Britannian gold pieces as legal currency so Dibbell should just let the whole thing lie, another official predicted the tax department’s hands-off stance to virtual world wealth wouldn’t last.
These conversations are recorded in Dibbell’s book Play Money: Or, how I quit my day job and made millions trading virtual loot (Southern Publishers October 2007). And, year after they occurred, US Congressional Committee was set up to investigate how virtual assets and incomes might be taxed.
That’s just one indication not only of the fast-paced growth of virtual worlds but their increasing encroachment into real commercial life.
What started as game space for geeks has been quietly morphing into what’s now seen by many as the future of web-based commerce and communication. The so-called MMORPGs (massively multi-player online role playing games) provide virtual space in which you can not only fight dragons, leap tall buildings and go on treasure quests – you can socialise, work or shop, go to concerts, bars or business meetings. All the things, in fact, you might do in the real world with the odd additional advantage – like being able to choose your looks, or fly, or get together with people who live in New York or Hong Kong as easily as you can your next-door neighbour.
Millions of gamers from around the world are already meeting in such spaces on regular basis. They’ve created thriving virtual market economies that trade in anything from spells and skills to swords and shopping malls. And what changes hands inside purely digital lands like Second Life, World of Warcraft, Everquest or Ultima Online (to name few) has real value. One Second-Life gamer (going by her online, or avatar name of Anshe Chung) claims her trade in virtual real estate has made her real-life millionaire. She’s not the only one.
Certainly some serious market forces are at play in the MMORPG environment but the social, ethical and legal dividing lines with ‘first life’ remain very grey area. Real life law suits are being pursued against gamers who’ve perpetuated virtual fraud and some players are taking the game’s creators to task for failing to provide the sort of legal protection property rights or transactions receive in the real world. Meanwhile, the failure to gain any legal redress against someone who’d stolen his precious virtual sword prompted one Chinese player to take real-life revenge by tracking down and killing the player whose character had perpetrated the theft.
Such anomalies aside, virtual economies are increasingly attracting the attention of real-life business. Companies like Sony, adidas, Nissan, Mercedes-Benz and Sears run shopfronts in Second Life (SL) – 3D virtual world that gamers can download for free and largely create their own content. These days, according to its creator, Linden Lab, it has some 10 million residents (though this figure includes multiple account holders and inactive accounts) and around half million regular visitors. News agency Reuters opened bureau in virtual building there last year and its reporter (whose avatar name is “Adam Reuters”) regularly reports on SL activities. Topics range from virtual concerts with real-life bands to the various legal and technical glitches that threaten fair play in the virtual wonderland.
Organisations that operate globally are increasingly using virtual world environments to showcase their wares, launch new products, run recruiting seminars or conduct virtual meetings with employees around the world.
Earlier this year 40 employees from IBM’s global delivery centre in five far-flung countries met to sit and brainstorm company capabilities – without leaving their desks. The meeting was between their virtual characters or avatars and the venue was on an IBM “island” in Second Life.
And just last month, those unable to physically attend the Digital Future Summit being run by the New Zealand’s Ministry for Economic Development (MED) in Auckland were invited to simultaneous virtual summit that took place in Second Life. Sent out through the KEA global community network, the invitation urged those interested to “participate remotely” in live global discussion taking place on November 28-29.
“The summit is being held in Auckland but forget carbon miles because you can attend free via your Second Life avatar … and participate in Q&A sessions with expert Kiwi and international presenters.”
There were other options for remotely accessing the conference – like watching it as webcast and participating through online questions, MED explained. But it is keen to spread the communication net as widely as possible in order to feed into the Government’s Digital Future Strategy due to be released in March next year – and what Second Life attendance offers is greater sense of immediacy for remote participants.
That sense of immediate interaction, the element of play, an ability to choose how and where to meet – and the persona you choose to interact with are not the only attractions of MMORPG environments. In world where both companies and individuals are becoming much more aware of the need to limit the size of their carbon footprint, virtual gatherings are one means of treading more lightly on the planet (though the computer power driving virtual realities remains an energy-guzzling factor). There’s also research to suggest that the sort of leadership skills and capabilities players learn in virtual worlds are very transferable to the real one and how this crossover might be exploited is of obvious interest to any company interested in upskilling its employees.
So from e-commerce, are we now moving to v-commerce? Just what are the commercial implications of increasingly populous virtual worlds?
V-promise
Imagine thousands of people from around the world collaborating in virtual project teams, solving complex strategic and tactical problems across multiple countries or cultures. That’s the sort of promise that excites companies like IBM, which has embraced Second Life with enthusiasm. The company’s global CEO Sam Palmisano has his own SL avatar who makes fairly regular appearances in virtual life to announce company initiatives.
The latest, announced in October, is an agreement between his company and SL creator Linden Lab to work together to further the 3D internet influence.
Its aim is to develop new technologies and methodologies based on open standards that will “help advance the future of 3D virtual worlds” by improving interoperability between virtual world platforms and technologies as well as expanding their capabilities. Increasing numbers of users will demand expanded use and will want “virtual worlds that are fit for business”, says IBM.
Specific collaborative projects include exploring technology that will allow “universal avatars” to travel between virtual worlds without having to reconstruct their identities; security-rich transactions both within and across virtual worlds; platform stability that will provide easier, faster interactions and better cater to high-volume business use; int
