Week 3 - Virtual Worlds and Gaming

My ex-colleague's 10-year old son had a "second life". He paid money to set up his virtual apartment with virtual furniture. His apartment got broken into, and the furniture was stolen. As far as I understood, none of the agreement types indicated in one of our readings applied to protect against this situation, or offered any corrective or punitive recourse. I didn't pursue the story further to learn whether any virtual private detective services were offered or acquired, or simply more furniture was purchased. It is likely that the poor (pun not intended) father had to come up with more money regardless. The son's virtual life (I would imagine) felt quite real to the father.

According to Virtual Economy, "[i]n the first quarter of 2009, the virtual world of Second Life saw $120 million USD exchanged through user-to-user transactions, with a record monthly $45 million USD in transactions in March." In the virtual gaming world, "U.S. revenues exceed[ed] $1 billion in 2006." (Source: Textbook, pg 326) Following the money, not only are companies - such as IBM, Coldwell Banker, Dell, Armani, Ben & Jerry's, BMW, CISCO, Coca-Cola, and Domino's Pizza - doing business in the virtual world, there are specialized firms helping them in this expansion. And as in the non-virtual life (I'll revisit later why I didn't say "real"), the Virtual Economy article notes that people are influenced by social interactions to buy things. This environment offers many opportunities for businesses and individuals. Somewhat akin to what happened when online stores hit the tipping point, for businesses there are now more places to sell more stuff to more / same / different people. And for individuals, new opportunities arose to earn a living in virtual worlds.

"[W]hether you are in the physical world or the virtual world, people look for the core fundamentals of government, law, and order." (Source: First Monday) The growing economic activity in virtual worlds has also generated money disputes, offering scenarios for law and order to be restored. This is apparent in the opening up of another market for the legal community: virtual law. And in the fact that governments across the world are looking at whether, where and how they need to intervene. Virtual businesses are being held accountable in China. There was a class action lawsuit filed against a leading MMOSG's creator - a privately held American Internet company. And Government of Canada's Office of the Privacy Commissioner is informing people about privacy in virtual worlds.

So the virtual world is as real as it gets (which is why I hesitate to say 'real' and 'virtual' as if they were mutually exclusive.) The life and activities undertaken in a virtual world affects people, relationships, safety, livelihood, money... every part of our non-virtual life. Nick Yee thinks that behaviours that participants adopt in virtual communities carry over into the non-virtual part of our world. (Source: Textbook, pg 331) It is important to recognize and understand the distinct behaviour that people exhibit in virtual worlds, just as it is business-critical to understand where consumers' and people's online activity exhibits somewhat different patterns from that off-line.

Hence, any business contemplating expanding (or entering) into the virtual worlds would need to undertake similar planning as when going into, for instance, another country with different laws, culture, and social / consumer behaviour than the one(s) to which they are accustomed. The key is understanding the unique characteristics of this new "land", devising a business strategy suited to it, and offering value that makes sense to this somewhat unique group of land-dwellers. In other words, everything they would do as part of sound business practice in the real world.