Virtual Property, Rights, Riots and Governance

“Virtual property” popularly refers to virtual goods – items purchased for use or display within virtual worlds, online games, and social networking platforms (like Facebook). The term could equally apply to other cyberspace assets, like land in Second Life or Entropia. Even items acquired through the investment of time or expertise (rather than a specific currency exchange), like my Sea Turtle. If you use such simple definitions, property does not influence rights or governance: The virtual environment doesn’t substantively change anything in law. Contracts can still control the relationship between the people and organisations involved. Copyright still protects the underlying electronic and creative concepts. What’s all the fuss about?

The utopian ideals of some of the early internet pioneers are long since forgotten. More recent debates about the rights of avatars have been steam-rollered under “the tyranny of the End User Licence Agreement” (quoting Andres Guadamuz – although perhaps such an agreement is still more democratic than a unsigned contract with society). So who cares? Read More

Animal Farm

Pandaren Monk We finally have some reliable figures for the commercial value of “minipet” micro-transactions in the game, World of Warcraft. Specifically, the sales of just 1 item: In November and December 2009, at least $2.2 million worth of Pandaren Monk pets were sold. 220,000 at $10 each. We know this because “50% of the purchasing price” was donated to charity, and “more than $1.1 million” was donated (via WoW.com).

Over 220,000 sales to a market of about 4-5 million potential customers (only active WoW players can use the minipet, and the pet does not appear to have been sold in China or Taiwan). Roughly 5% of potential customers spent $10 on an ostensibly useless vanity item: A small pet that follows you around, looking cute.

Like most virtual goods, the cost of making and selling this pet is marginal: Primarily some additional art and marketing time, all built on the back of existing systems (store, staff, world). The first 2 months of Pandaren Monk sales will have made contributions to Blizzard’s profits of about $1 million. That’s only around 1% of the business’s turnover in that 2-month period. But that 1% is “free money”. Blizzard (-Activision) would be doing a dis-service to its investors if it did anything other than continue to milk this virtual cash cow.

Apply a healthy bit of European cynicism, and it is easy to conclude a scam. Tobold‘s:

“Send me $10, and I promise to send $5 of it to charity.”

Of course, Europeans fundamentally don’t understand US philanthropic culture: The idea that it’s fine to exploit your fellow human and make outrageous amounts of money, so long as you give some of it away in the end. Some philanthropy is able to take a somewhat rational, balanced view of what is good for the world. But there is a tendency to support visually appealing issues, such as charities servicing the needs of children.

The purpose of this article is not to argue that a European, government-centric re-distribution of wealth is preferable to an approach lead by personal responsibility. (I’m not sure it is.) The problem emerging here is more fundamental: That virtual goods are replacing trade-able value with non-trade-able value. Non-trade-able value that, by definition, can not offset inequality in (game) society. Donating part of the price of sales to charity is pure irony. In true Orwellian style, we’re sleep-walking into a potentially broken social structure with the best of intentions.

This article started as a box during my Adventures in the Invisible Tent, but has been expanded here in much greater detail. This article describes what a minipet is, highlights the role of money to balance inequality in society, and explains the problem with virtual goods. Read More

Valuing Nothing

In 2007 I wrote some introductory Thoughts on a Socio-Economic Environment based on Nothing. This article continues to explore the value of things in a highly intangible, knowledge-based economy. It wanders through internet-based payment systems, economic structure, role of government, organisation of information, community, and society, before disappearing into the realms of philosophy. It contains no answers, but may prove thought-provoking. Read More

Paying for Points

Dominante's WeeWorld avatar and room. This article examines the sociological implications of the different reward systems used in virtual worlds.

The original WeeWorld article attracted a lot of feedback from WeeWorld’s users. One common question was, why do we have to pay for points? Or even, “WHY DOWE HAVE TO PAY FOR POINTS!!!!”

Why indeed?

  • WeeWorld has 2 kinds of points: Gold points we buy with Dollars (“monetary rewards”), and green points we earn by doing things in the world (“achievement rewards”).
  • Gold points can buy more things in WeeWorld than green points. So the things we want most, tend to be bought with gold points. In other worlds, achievement rewards (like green points) are more important.
  • The things we want are things that not everyone has. We want those things because it helps us make friends. To stop everyone having them, those things cost points. If those things were free, everyone could have them, and then we wouldn’t want them.
  • Gold points are bought with our parents’ money. So some of our friends have less points, because their parents don’t have as much money. We may want to help them by giving them some of our points. That helps us keep friends.
  • Unfortunately, in WeeWorld, gold points cannot be easily shared. So WeeMees with lots of things tend to have those things because their parents’ have lots of money to buy them. This is “unfair”.
  • In other worlds it is easier to earn achievement rewards (like green points). This means we could earn our own rewards, instead of our parents earning them for us. But those rewards cannot be shared. That means we cannot help our friends who have fewer rewards. That might also become “unfair”.
  • Perhaps gold points would work better if we could share them, and we could earn gold points ourselves?

That’s the simple answer. With apologies for “we” and “our”. This article explains and expands those ideas. Read More

WeeWorld

WeeMee. WeeWorld is a teen-orientated social network, best known for their customized avatars, “WeeMees”. WeeWorld has evolved into an eclectic mix of community, casual games, and virtual goods. Steve Young, creative director, spoke to a small group in Edinburgh. Steve discussed the motivations and behaviour of WeeWorld’s users, and explored the challenges of working with 2D WeeMees, particularly as they move into WeeWorld’s new virtual (synchronous) world.

Users

WeeWorld’s core market are teenagers, mostly in North America. Average age 16 (minimum 13, although younger users may simply lie about their age). 60% are female. The dominant market segment was characterised as “spoilt rich kids” – typically those with their own computers. Of the 23 million registered users, about a million visit the WeeWorld site each month, and 80,000 login each day.

Usage differs from other teen social networks, such as Gaia Online: Only 6% of logged-in users visit the site’s forums, while 80% alter their WeeMee. Teen worlds are evidently not generic.

WeeMees (from the Glaswegian, “little me”) can be placed within personalised 2D rooms (in the style of “cardboard theatre”), used as characters within casual games, or rendered as avatars in a new virtual world called, simply enough, “World”. WeeMees are also used on third party websites and services, including messenger services, such as AIM or Live. Initial ideas for WeeMees had resulted in a lot of avatars simply being copied. APIs now provide some control over how WeeMees are reused.

Users’ main aim is “to gather as many friends as possible”. And to chat in a variant of the English language that even JeffK would find almost unintelligible: $iNG-UL?

Virtual Goods

WeeMees can be customized for free: Body, clothes and accessories. However users can also buy “Points”, which can be spent on specific items.

Points can be purchased via PayPal transactions or pre-paid cards, which are sold in US stores. Kids tend to regard these mechanisms like free credit cards: They are not seen as real money.

People pay for “uniqueness”. However, items need not be complex: The most popular item sold is a simple Alice band.

The most fascinating revelation was that the introduction of the new synchronous (virtual) world doubled the sales of virtual goods. This “World” is not even out of beta testing yet. “World” places WeeMees in the same interactive space as one another. This contrasts to the other areas of the site, where WeeMees are not competing for space. I think that implies the more an avatar needs to stand out from the crowd, the more virtual “Bling” is worth to that avatar’s owner.

WeeWorld is keen to avoid its Points being traded as a virtual currency. Money can only be converted into Points, not back again.

Design

The key to WeeWorld’s success is “immersion”. The key to its revenue is “engagement”. These concepts guide development.

Although WeeMees are cartoon-like (in the style associated with South Park), customizations still need to reflect what people would wear in “real life”. For example, T-shirts branding needs to be subtle – a small logo on part of the garment.

The goal for user-generated content (customizations of WeeMees and rooms) is to make it hard for the user to create something that looks bad. For example, MySpace customisations can (and in my opinion, sadly often do) look terrible.

WeeWorld has adjusted to match conservative US culture. The cannabis plants created in early experiments are long gone. There are no alcoholic drinks. Negotiations with Walmart even forced WeeWorld to disable the customization of boob (brest) size.

The development of “World” posed an interest problem: How should WeeMees move? All the artwork and customizations had been designed for static display, without movement animations. The World uses embedded Flash objects to display information to users, so the amount of data transferred about other users’ movements needs to be minimal.

The solution was to make WeeMees hop. Users can also select a trajectory and fire their WeeMees in a particular direction. Navigating World’s 2D platform-ed environment is quite cereal, but strangely fun!

Development

Social networks are becoming more like virtual worlds, while virtual worlds are becoming more like social networks. WeeWorld is trying to steer a path down the middle. Like all the businesses involved, they are still “feeling their way”, finding out what works.

Development time-scales for WeeWorld (and similar products) are very short. Steve was somewhat frustrated that development of the “World” had taken a whole quarter (3 months). The contrast to video-game style virtual worlds is stark: Those typically take 3 years to construct.

WeeWorld use a Scrum/agile development process (which suits the constantly evolving product). Casual games (a commonly requested feature) are often out-sourced to other developers.

The ability to develop content quickly makes it very easy for good ideas to be copied by competitors. For example, Zwinky might seem remarkably similar…

Pro-Auctioneering, the New eSport

Electronic Sport (eSport) is the competitive play of video games, often professionally, for prize money. In South Korea contests are so popular they are broadcast on dedicated television channels. E-sports generate less enthusiasm in the rest of the world, but their popularity seems to be growing.

There are parallels to traditional physical sports: The games played are accessible to the general public, but require huge dedication, skill, training and coordination to be “the best”. Many football (soccer) fans enjoy “kicking a ball about” in the street, but don’t expect to be playing at Old Trafford. Likewise there is a huge difference between beating Quake‘s single player mode and competing against top players. Probably the biggest difference is that eSports focus on the screen (what the player is doing), rather than on the player themselves (as tends to be the case with physical sports). This, combined with the traditional “geekiness” of video games, helps explain why most eSports professionals are rather devoid of charisma. Not that that stops tournament organisers putting these people on stage…

Traditionally eSports have favoured fast-paced games, either played individually or as small teams. Contests take place in short bouts. Examples include Starcraft and Counter-Strike. While these games require a degree of strategy, exceptional hand-eye coordination and reflexes are key to winning.

There have been attempts to promote casual games eSport, but tournaments remain biased towards fast-paced games. In the case of World of Warcraft’s (WoW) arena tournament, the core of the original game (the massively multiplayer part, where players are expected to invest time developing characters) was systematically removed to create a platform for traditional eSports. Missed opportunity. And here’s why:

This article proposes a rather curious “eSport”. One that is entirely dependant on the core facet of Massively Multiplayer Online Games (MMOGs) – the other players. An E-Sport that is played over days, rather than minutes. A game within a game, that tests abilities beyond simply clicking the mouse faster than your opponent. Allow me to introduce, Pro-Auctioneering. Read More

Platform Azeroth: Why Information is Broken

This article explores why the best information in World of Warcraft (WoW) is not available from within the game. It considers how to better bring information into the game environment.

Analyse this:

Screenshot of WoW in-game browser hack.

Above is a World of Warcraft screenshot, showing an in-game browser. This is not a feature of the game. The “Knowledge Base” is technically a support database written exclusively by the game’s developer and operator, Blizzard. However, an enterprising hacked called Vladinator noticed that this in-game database took its information from a specific webserver. The Knowledge Base could therefore be re-directed to a different webserver: In this case a server that shows information from Wowhead, a third-party site that contains reference material on almost every item, quest, and thing in the game.

Blizzard was quick to block the hack.

This article attempts to explain the utterly illogical structure behind these events. It builds on some of my earlier comments about the use of micro-transactions for in-game education (“Learn2Play”). Read More

BarCamp: Living on Virtual Fish

For those that missed my BarCamp Scotland presentation, “Living on Virtual Fish”, you can view it on SlideShare.

The following articles loosely correlate to each of the talk’s sections, and provide more depth and explanation:

  1. Learn2Play, the new Real Money Trading?
  2. Adventures in Online Advertising
  3. Thoughts on a Socio-Economic Environment based on Nothing

Thoughts on a Socio-Economic Environment based on Nothing

One of the first economists to seriously examine virtual worlds (Edward Castronova) makes the observation that scarcity is fundamental to the environments that thrive. Utopia is boring. That’s a common theme of a lot of subsequent academic studies: The underlying patterns of human behaviour and motivation don’t fundamentally change from the physical to the virtual.

We have to “exist” in the real world (“eat, drink, breath”). We are highly likely to continue to “live” in it too (that is, perform social/economic/spiritual functions, in addition to biological existence). But it is not necessary to rely on it quite as much as we do now. Critically, living in virtual environments opens up some avenues for society’s development that may otherwise close.

Start at the “peak oil“-type resource analysis. The idea that up to this point, western culture (in particular) has assumed increasingly easy extraction of resources, but from this point forward will have to start dealing with the implications of increasingly hard extraction of resources. It follows that any “standard of living” (social status, economic income, etc) that is based on rampant consumerism and resource use, is likely to become highly unstable.

The fact that telecommunications and computerised technology is generally much more resource efficient than physical networks and products is almost a secondary consideration. The most interesting thing for me, is the creation of a sustainable socio-economic environment largely based on nothing.

That statement sounds like nonsense. But it has already mostly happened in highly developed western economies. Some examples:

  • The majority of a city like Edinburgh’s economy is tertiary (service sector). A significant proportion of that economy is knowledge-orientated (finance, research), where people never need deal with a physical product. Ever. Their work is often defined by their minds and their interaction with other minds.
  • The British “High Street” retail trade doesn’t really sell products, it sells “the experience of shopping”. In a broad economic sense, the actual sale of the products isn’t what makes most shops profit. Rationally, if they were only selling products, those products would be far cheaper.
  • Of a typical physical product made in somewhere like China, the minority of the cost is resource and manufacture. Much of the cost is in areas like the intellectual property rights of product designers, who typically live in the west.

So the most advanced types of work (which are also the ones generating a disproportionate amount of wealth), and the crude capitalist motivations of most western societies (the accumulation of stuff we don’t need) are already mostly based on “nothing”. It isn’t such a quantum leap to move those processes into a virtual environment.

We will never leave behind the physical world. But consider that once almost everyone in western society worked in agriculture, and now a tiny proportion do. There has always been a logical progression of society’s development which have led to progressively fewer people working in older sectors of the economy. This may simply be the next iteration. We are unlikely to understand it any better than an 18th century agricultural worker being shown a steam engine. As Charlie Stross’s Unpacking the Zeitgeist demonstrates, the present would be hard for us to have understood 30 year ago. Indeed, his description of the present is still a mystery to most of those living now.

But “our” children seem to embrace it. Many of the kid’s virtual worlds (such as Gaia Online) allow their young customers to buy virtual collectables using real money – these items don’t physical exist, but still represent something “of value”. These are not geeky male niches. Barbie Girls gained 3 million online users in its first two months – which from a discrete market of US teenage girls, probably numbering less than 20 million in total, is impressive.

There is still a big gap between making trivially small payments for virtual goods on glorified online social gaming/networking platforms, and the integration of these concepts into mainstream society and economy. However, these children are now developing some of their life skills in these virtual environments. Perhaps they will naturally accept what we will struggle to comprehend?

This topic evidently requires a lot more research and consideration. I’ve posted it here as a record of my current thinking only.