Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier

This article talked about some of the various virtual worlds that exist or have existed over the years such as Norrath, Ultima Online, The Sims Online and Project Entropia. I was surprised to learn that some 20% of Norrath's citizens considered their online virtual life in this world to be thier real life! Though that does not appeal to me, I must admit that I spend so much time in front of a computer that it does in fact take up a very large portion of my life. I might as well be in a virtual world! But, I'd never consider it more real than my everyday life.

Castronova also pointed out that gaming companies are making profits in the hundreds of millions just from the money customers spend on creating thier avatars. Wow, as if we didn't already have enough to spend money on! Now, we've got to go around paying for virtual reality representations of ourselves. Will there be a social stigma against those with low-quality avatars as happens in Neal Stephenson's novel, Snow Crash?

Castronova ends by talking about how virtual worlds will become highly commercialized. I hope these virtual worlds don't become 3D Myspaces with advertisements lining the walls everywhere I turn!

Virtual Economics

No offense to the previous week’s reading assignments, which I found interesting, but this weeks article “Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier” by Edward Castronova was more what I'm accustomed to reading. It lacks the philosophically stimulating questions and simply summarizes some data on the money and time spent by people either "living in" or "visiting" a virtual world. I think what kept my attention were the journal entries of the author’s first hand accounting of his initial experience in the land of Norath. I’m happy to say that Second Life is not nearly as hostile and I’m thankful that we do not have to start out fighting for our lives and working! In fact one thing I like about Second Life right now is that I don’t have to work there! What I find amazing about the article is that although it is over 7 years old (and systems have increased in popularity in his time) the amount of time and money that people spent in a virtual existence is mind-blowing. I checked for some updated statistics on the economics of virtual reality games and there are plenty of articles to be found, especially since the popularity of World of Warcraft has spun off many first person game systems for children.

Even in 2001 Edward Castronova calculated the GNP of Norath to be about $135 million and the 77^th richest country (roughly equal to Russia at that time). I found this amazing so I looked for some more up to date information. It seems the author has just recently published updated work, in a peer reviewed journal http://dmitriwilliams.com/EconVW.pdf/ (July 2009). In this work he comes to a bit different conclusions. He has three conclusions (taken in part from his blog): http://terranova.blogs.com//

1.) Real world economic analysis works to evaluate the virtual world (that he studied): could possibly be used to test Real world economic research & policies?

2.) Results were not particular to one server

3.) This analysis is a better real-world assessment of Value (the GNP of the virtual world now comes to one of the poorest nations!).

Even though the one society he looks at had a much lower GNP than originally calculated – I imagine if you could add up all VRs as a single country that their GNP would be significantly higher. I also believe that his conclusion #1 is fascinating and can hopefully lead others to looking at the VR as a means of testing potential economic policy and theory; prior to implementation. At least it may provide another tool for evaluating how changing the “rules of play” may affect the GNP both of our virtual existence and our existence in Earth.

On a side note: I found an link to a new peer reviewed journal of for papers on VR and Education for anyone who is writing something or plans to publish on these topics.http://www.jvweducation.org//