Thursday, February 01, 2007

Beyond Second Life Toward V-Economy

In light of the groundswell in interest and argumentation around virtual worlds, especially Second Life, Clay Shirky, Henry Jenkins and I decided to do a 3x3 posting. The first round is “blind”––we riff on what we are thinking. The next round will be in response, so check back in for that next week. Here is the first offering from Clay, Henry, and see mine below. For the background on this conversation see my post from a few weeks ago here.

1. Count

The time has come. Virtual worlds need a standard of measurement and protocol across platforms. In roughly a year, the field has gone from Wild West outposts to a place of accounting on all levels: politically, procedurally, and economically. The recent
Le Pen Front National conflagration and the announcement of a virtual Swedish consulate mark a new level of seriousness to this format. The tiny worlds are growing bigger and more real. Of course, Linden Lab, the Second Life (SL) creators, have been able to track every avatar gesture, in-world instant message or digital purchase from day one. Exhibit A: Second Life CEO Philip Rosedale and CTO Cory Ondrejka in a Google TechTalks 2006 talking about use and design of SL. It’s for everyone else that a standard needs to created.

Dmitri Williams, among others, is working on a Standard Metrics of Use for population gauge. In a peer-to-peer gesture, Williams has offered up the following categories of measurement as a start:

Economic activity
Active users

Marketing designer
Mario Menti of GMI has developed with the recently open-sourced Second Life client an automated data-collection system for surveys (consensual, I’m sure). This is not trivial.

In a recent Reuters video interview, when asked what most people do in the world, Second Life’s Rosedale responded, “shop.”

2. Shop

I guess mutant-indie-minority culture is not what it used to be. OK, perhaps the future tense of virtual world development will not be dominated by radical experimentation in nation building and identity play. The cyber-strip joints will get moved to the periphery of town as it were. There is a civilizing mission going on, but it is not from the top down.

These are worlds made by user-generated-content. The “world gods” have provided the code, servers, and procedural aspects. On these collaborative grids, world building is done in the image of its users: us. This stage of open-ended development parallels, in many respects, the early moments in the popularization of the Internet. The shift from multi-format Internet to World Wide Web, with its html code, coincided with a population of net citizens represented by an explosion of individual Web pages.

In the mid ‘90s, people had doubts that this “e-commerce thing” would work. Uh, guess it caught on.

At present,
IBM is reportedly investing $100 million dollars in 3D-Internet development (that’s U.S. not $Linden). V-commerce, if one follows the lead of IBM’s Irving Wladawsky-Berger, is the natural evolution of e-commerce. Wladawsky-Berger suggests that the success of the 2D-Web page for commerce is based upon the common experience with mail-order catalogues. This makes virtual shopping a long-standing American tradition invented by none other than Founding Father Benjamin Franklin in 1744 to distribute scientific books. Direct marketing proceeds from that point to the heyday of the Montgomery Ward catalog at the end of nineteenth century. In the virtual world model, the 3D Internet exploits a form of distributed marketing that looks, feels, and smells a lot like…a real store. Actually, the tactile is lacking, but the social and spatial aspects are robust.

Let the wild rumpus begin in earnest. On February 1, 2007,
Reuters reports “$1,033,762 US Dollars spent in Second Life over last 24 hours as of 11:00am PST.” In analyzing gaming worlds, the economist Edward Castronova developed the terms of semi-finite virtual economies. We now get to see how this works with a much more porous economy. The first rogue Second Life server was announced on Tuesday.

Until now, land had been the highest valuable commodity in Second Life because it was scarce–virtual space based upon actual server space. The open-sourcing of the world promises to destabilizes an economy based on real estate, as some have already complained. Linden Lab board member Mitch Kapor makes clear in his “
billion dollar business plan,” that Second Life’s business model in the near future will not be in land owning but transactions and software.

3. Be @ home

A virtual world plan for Net domination calls for a merger of the experiential with universal standards––amongst worlds and even across media genre. Yes, I want my Blog to talk to my Webpage, which should, in turn, be in close communication with my avatar…who skips merrily ‘cross portals. That said, let’s keep some perspective on why this is interesting in the first place. What virtual worlds promise is an augmentation of human-to-human communication. We seem to yearn for synchronous connectivity and virtual worlds promise to deliver exactly that. Looking at the 150-year build out of telecommunications capabilities, what we find with many of the current platforms from text message to instant messaging to virtual worlds are designs for simultaneous connectivity. Putting a human face to things is a lot of what this is about, even if that human face is a codebot. These platforms are not simply to facilitate shopping but to develop further (or perhaps more massively) the ways in which virtual and “portable” spaces can be inhabited as a home. Hello worlds.


Blogger Jonathan Salem Baskin said...

Great, thoughtful post! I have two questions to pose:

1. Anonymity vs. Ubiquity: Can the merging of offline/online 'self' offer enough benefits to overcome the desire for anonymity/multiple 'selves' that drives lots of online and virtual experience? I think it's amazing that we can create avatars/handles/whatever that represent versions or aspects of our true selves, in a way extending our ability to communicate with other people...but do we have to forsake this for a more integrated, transparent, single presence, in order to unify our lives offline and on?

2. Thought vs. Action: It's really interesting that Dmitri Williams and others are offering a gauge for determining population...really proving presence, or existence, in these online worlds. This is a fundamental problem with gauging the merits of branding in the RL too; a consumer who happens to catch out of the corner of his eye a beer commmercial on TV is 'counted' as being aware if he can remember it (when prompted). How is this any less ephemeral than someone who registers for SL, flys around for a bit, and then never comes back? I wonder if the online measurement tools -- which seem to be based on behavior and time variables -- might offer tools for older, offline marketers to use?

February 03, 2007 10:24 AM  
Anonymous Anonymous said...

It's interesting that you say the "spatial aspects" are robust. I think it's the clumsiness of the spatial aspect of maneuvering in 3D space that will be a strong barrier to seeing this kind of environment as a "next step" in e-commerce and online sales. I suspect sales in this space will continue to grow and in crazily large numbers... it will be interesting to see what kind of crossover there is into the "traditional" e-commerce space.

The physical bookstore provides the ultimate virtuality but we choose amazon/etc. instead because they are more convenient-- not jut for the transaction, and not even for location, but because it's easier and more efficient to browse. That a SL book store, for example, would be even *better* is a tenuous proposition at best. If anything it seems obviously *less* convenient, more cumbersome, etc...

Personally, I see little logical basis to assume that SL is the next step in the sequence of commerce technologies you seem to be positing in section 2. I suspect it will be more of a parallel development with some small, deep overlaps.

February 03, 2007 5:01 PM  
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Forgot to put my name to my comment...

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Blogger dyerbrookME said...

The "mutant-indie-minority" culture the minority, and will remain so. I think Beth is underestimating the power of the mediocre majority of Middle America (or Middle Asia for that matter) to insist on its own -- and liberals who subscribe to freedom and who are at least willing to tolerate free enterprise can't get too fastidious about this.

Beth imagines the cyber-strip joints will get moved to the periphery. She couldn't be more wrong. Like it or not, SL is normalizing the exotic and the seamy, not becoming marginalized as it gets more corporate presence. No, it's the quaint little book salons that will likely be moved to the periphery. You have to look at what people really do, how they spend their time, and what they want, which is more likely to be Panty Hog than Penguin Books, as I've explained here:

I'm all for debunking SL hype, but on the way to doing it, let's not introduce new hype and new fake numbers. The IBM investment of $100 million dollars is in a lot of different things, not just Second Life. When the press speaks breathlessly of "IBM putting 1,500 engineers into SL," they mean the kind of try-mes that Clay is talking about. I quizzed one of the Eightbar leaders at length today, and found out there are...200 who have joined, gotten on an inhouse bulletin board, have made an avatar and fooled around inworld. They aren't exactly doing engineering yet, they appear in fact, to be doing stuff like glorified teleconferencing.

Everybody is getting all excited about marketing and catalogue-type activity, but this isn't exactling hooking up to RL in the accelerated way people imagine -- things people didn't especially want to foster are being incentivized, and the virtual market of virtual things are more important at this point than any other kind of market.

My Herald piece talks about the real traffic numbers on RL-related book stores: low double digits. And there really is a good metric for traffic in SL already in the game interface. Despite all the agitating against it by corporations who come out looking badly in this system, it really does work. It measures time avatars spend on land, weighted for daily log-in populations. If some top 20 "popular places" game the system, so what? The SEARCH, sorted by traffic, tells you that AOL is doing better than Reuters; but that Prokofy's Pharos Plaza is number three in the search spot for the word "news". Go know!

Land isn't scarce; the Lindens make it any time they want to spend capital on servers. Yes, they've told us that it's stupid to be in the land business, and yet their auctions still run full tilt, raising some troubling moral, if not legal questions.

Just what are these "transactions" and "software" services that you imagine? Why would anybody stay in a world where land is devalued and anonymous hacksters can subject everyone to grief? The real winners will be those who make compelling closed walled gardens that preserve value, not only of land but of intellectual property -- just like real-life countries -- but provide for ease of travellers' and immigrants' entry -- just like the US.

Why hang around on LL's LindEx when Supply Linden prints Lindens into it, devaluing its value? I think LL, in order to keep its position in virtuality, will have to offer some kind of continued walled-garden of its own, possibly with educational sims or a real functioning Lab. People will begin to get over their hatred of AOL, Compuserve, Geocities, etc. as old models discredited by Web 1.0 when they start to realize that Web 2.0 is different and NEEDS walled gardens to SURVIVE.

There's a limit to how much connectivity people really want. It's a mistake to look at the tiny 2 percent of intellectuals in urban centers whose own jobs and personal lives are related to IT as any kind of hallmark of real desirability or usability on a mass level. People will want Worlds for Windows, only if they are safe, immersive, discreet, and hold the value of their user-made content. That's why there are 8 million in WoW.

February 03, 2007 9:10 PM  
Blogger Beth Coleman said...

@ Jonathan Salem Baskin

1. Anonymity vs. Ubiquity. We’ll have both, as we do now. Your email tells me a lot about you, where you work and how you self-represent. Avatar-based systems can function the same way.
2. Thought vs. Action: Yes, everything can be “counted” online in a different way than off. Where you click, where you go, etc. But we are not robots. The relationship between counting and human behavior…not a one to one.

February 06, 2007 10:18 AM  
Blogger Beth Coleman said...

@ chris lott

do you remember what Doom or Quake looked liked? Clunky can work for people if the incentive is there. Perhaps I should not have said “robust spatial” but simply spatial. I think people want to “play” with each other in ways that are not only text-based or still images.
You write, “I suspect it will be more of a parallel development with some small, deep overlaps.” I agree parallel development, not replacement of other systems. The question is how “deep” are the overlaps.

February 06, 2007 10:23 AM  
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Anonymous Anonymous said...

"They aren't exactly doing engineering yet, they appear in fact, to be doing stuff like glorified teleconferencing. "

Is glorified teleconferencing something like the glorified arithmetic people used to talk about when debunking the hype surrounding computers when I was a college student in the 1960's? I suspect so.

I've posted a more extensive version of my own thoughts about this here.

--Dale Hunscher

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