Virtual Worlds

Is it too early for Augmented Reality?

Before I answer the question, let me refer you to this chart put out by Gartner this past summer. Notice that Augmented Reality is on the far left with a yellow triangle, which means “more than ten years” before mainstream adoption.

Ok, now I’m not going to argue what mainstream adoption is, as that would require a whole discussion of the Gartner research and a bunch of other stuff. What I will say though, is that I think that it will happen within ten years. The thing that has me thinking though, is the amount of mainstream EXPOSURE augmented reality is getting right now. This could drive (accelerate) mainstream adoption or it could be deleterious and actually handicap the technology so much, that it never reaches the mass market.

I’ve been tracking augmented reality on google, youtube, blogs, university research, and in the corporate world for more than a year now (and I’ve been aware of the concept and tech for much longer), and I can tell you that the exposure curve, or degree of exposure has been gaining a lot of critical mass in the last twelve months. Everyone is talking about AR right now, Microsoft XNA can do AR, the FLARToolkit is AR in Flash, and tons of commercials are starting to come out with AR or “AR like” elements.

Today is the superbowl and rumors are already flying about AR ads from General Electric, Coke, and maybe a few others. You can already find the following examples on the net:

Coke Avatar Ad

General Electric (you can do this at home)

Did I mention these will be showing at the Superbowl? I’m not sure there is any method of reaching out to the mass market at one time than a Superbowl commercial. Now, I’m not saying that this will drive adoption, but I’m saying that this amount of exposure, this early in the technology curve, could either be very good or very very bad.

Why bad? Well, first of all, the great majority of augmented reality is based on using markers or “fiducials” which are essentially printed patterns on paper that are viewed through a video stream, recognized by software, and then cause a 3D object to be displayed on a monitor. This works great for particular uses like the Lego kiosk or conference room presentations, or goofing around in your office. There is a long list of applications, but the real promise and potential of augmented reality isn’t based on these novelty applications…it is in something that is ubiquitious, wireless, mobile, global, pervasive, and connected to everything. As I have said before, Augmented Reality is NOT just about compositing 3D graphics on a video stream. Anyone that believes it is, misses the point entirely.

But anyway, I think back to the very early 90s when virtual reality started getting exposure. I fear that history may repeat itself. The technology was nowhere near ready…the graphics were terrible, the head mounted displays were giant and bulky, the whole thing was slow and caused eye strain, vertigo, and headaches, and the list goes on. However, Hollywood jumped on the idea and was putting out VR movies left and right, and then (the worst thing ever!) the greedy money guys jumped into the game with a lot of overeager, overpromising marketing types.

Virtual Reality obviously didn’t deliver what it promised and it was soon one of those things you didn’t to be associated with. “Virtual Reality” in a business plan meant certain death. Some of the same people weren’t quite satisfied with this and the movement to rebrand it all as “Virtual Worlds” (piggybacking on the early successes of MMORPGs) started developing. Looking back now though, is it any wonder that many of the virtual worlds companies (or the ones using VW tech for military/government/academic “solutions”) are the same seedy guys in suits and the technology has barely moved from where it was in 1995 or 1996? In contrast, the game industry kept moving forward like gangbusters…this is one of the differences between innovation and greed, but I digress.

I predict that Augmented Reality is going to get a massive boost in public mass market exposure in the next six months (starting today). You will see several high profile venture capital deals where an insane amount of money is either going to go to the established players (particularly Total Immersion and Metaio) or some unknown startup with a glitzy exec team, big corps are going to get on the bandwagon or increase their current efforts (IBM, HP, Sony, Nokia, Intel), Universities are going to increase their research programs (there are at least half a dozen great programs out there right now), and floundering virtual world solutions companies are going to attempt to twist/retool their marketing pitches to get a ride too, although they may try using different terms and marketing speak…augmented reality, enhanced reality, mixed reality, etc. I bet Forterra does this, and it wouldn’t surprise me to see the UCF Institute of Simulation and Training trying to leverage their facilities as well.

I think that most (not all) of the venture deals in this space are going to be a total waste of funding for the time being. You have to look beyond a pretty business plan, accomplishments in other industries, an experienced executive team, or a demo that your 14 year old son likes. Before you throw any money at a venture deal in the augmented reality space, you better know exactly what you are getting in to. Ask around, pay attention to what bloggers are saying and talking about, read the right sci-fi books (Gibson, Stephenson, Sterling, Vinge, Stross, Niven, etc.). You have got to look AHEAD when considering an investment, not the NOW.

Anyway, Augmented Reality is at risk of getting people excited about the future potential and vision now, while we are still crawling around with basic concepts and marker technology. The industry doesn’t even have a decent lexicon and is generally one giant unexplored area of technology that has not really been trailblazed and pioneered yet. Sure a lot has been done in the last 20 years, but this is still an embryonic market. You can’t get people excited about the Coke: Avatar commercial, or Roku’s Reward, and then deliver this:

I’m just sayin.

If what I predict does happen, Augmented Reality (or at least the thing we are dreaming about) will have to rebrand itself. I already don’t think that “augmented reality” is a great term anyway and we need to find something a little shorter and more direct, but that is just me.

When I get some time, I’ll write another post describing where I think the technology could go and what we should be striving towards creating over the next 5-10 years. The future is very bright and I am extremely optimistic on the potential here. Augmented Reality is a disruptive technology and it will change the way we see the world, interact with media, and communicate, but as with the virtual world and MMORPG industries, there are too many projects and ventures going about it the wrong way (almost backwards in some senses).

Let’s do this right and not get ahead of ourselves. I welcome mass market exposure, new companies, a lot of venture capital activity, and willy-nilly innovation, but I don’t want to see us get mired in poor delivery and over promising. We have to break away from the “novelty” of AR and build something real and world changing.

What do YOU think?

PS Follow me on twitter already. @robertrice

NASA MMO Workshop

I attended the NASA MMO Workshop on Monday in Baltimore. I have a few comments on it that I’m going to post here, but first, I want to point you to my blog post over at killtenrats.com  There is a lot of misreporting about the NASA RFI/RFP and the project in general, and I thought it would be better to comment on that over there (more traffic hah).

Anyway, my overall analysis is that more than half of the attendees simply did not pay attention to either the original RFI, the website, or even the slides shown at the workshop. I guess everyone was expecting NASA to cut a fat check to fund a whole MMORPG and get a free ride. I was surprised at how few people there still seemed excited and full of ideas by early afternoon and the sheer amount of whining and complaining people who just didn’t get it. Not really shocking I guess if you have had any experience working in the industry. I complain about the stupidity a lot, and there is good reason for it. I’m not just being bitter, I speak from experience.

So, if you can look beyond the misinformation and all of the “space cadets” out there, the NASA MMO project is actually a pretty sweet opportunity for the right company, consortium, or team of people. 

I think the larger picture here is the chance to do something entirely different than the usual generic crap the game industry has been feeding us, and really make a difference. It isn’t every day that you get an opportunity to get deep access to NASA like this for one thing…and second, Space is one of those things that has a vast potential to really captivate the imagination. If done right, NASA and their partner could have a real blockbuster on their hands, as well as the chance to really make a difference and inspire kids and teenagers to aspire to greater things.

It won’t take $50M or $500M to make a solid successful MMORPG, and there are probably a dozen non-game industry companies that would be more than happy to join a consortium and provide funding…for either a percentage of the royalties, or simply the chance to contribute to a worthy educational effort (tax deductible maybe? or purely for the PR?).

The big risk here isn’t the business model, or even the graphic engine, but rather how fun and engaging it will be. There are half a dozen ways to approach this (I have my own ideas here, and yes, I have a team that is submitting a proposal…we welcome any interest in partnering from developers, publishers, or aerospace companies interested in funding)…the trick is to make it fun and engaging without *directly* teaching (no one wants homework right?). Also, scripted repetitive quests are a no-no. While there should be some guidance and direction, there has to be an equal amount of “sandbox” and freedom to experiment. And finally, the winner here will have a easy to use intuitive suite of tools that any educator or game designer wannabe can use to make their own content, missions, whatever. 

Facilitate! Learning will occur on its own in the right environment with the right content. Don’t shove it down the player’s throats, and make it fun.  I guarentee that the market is actually larger than just high school kids, particularly if it is designed *properly*.

Maybe we will get lucky and my team will get a shot at this. We have been building a killer platform (for augmented reality, mmorpgs, virtual worlds, and simulations) that would make this NASA project just SING. Seriously. I really want to talk more about the tech, but I can’t (at least not yet).

Ah well. Soon enough my friends, soon enough.

I’m going to be out of town for most of the next two weeks. I’ll blog more when I can.

Second Life Grid Trademark really annoys me

Apparently Linden Labs, the creators of Second Life, have gone out and filed a trademark on the word GRID. For you virtual world folks, the word implies a lot of things and is usually interchangable with a number of other cyberspace related words. Anyway, I don’t have a problem with LL getting a trademark on “Second Life Grid” which is usually how it is presented but to try to trademark the word grid by itself is pretty damned cheeky. Personally I find it offensive, insulting, and unfair. They might as well try to trademark cyberspace, web, network, polygon, avatar, pixel, link, and a few other generic terms that are common words, terms, and phrases used in the virtual worlds sector (which includes your standard virtual worlds, mmorpgs, and simulations).

I’m pretty disgusted with this.

I’m beginning to sense a bit of desperation from Linden Labs these days. Their CTO left recently, and their CEO has decided to “step down” in the near future. The media backlash against their unrelenting PR in late 2006 through 2007 (studded with misleading and disingenuous stats about their active users and subscribers) is continuing, and SL is handicapped by many problems that don’t seem to be going away anytime soon.

I think that Second Life would have died a long time ago, but for the fact that there is no clear competitor. Sure, there are places like there.com or whatever, but Second Life has bent over backwards to wrangle a lot of big name corporate sponsorships and virtual presences, and catered to the explorer and tinkerer types. Of course, there are a lot of virtual world experts, luminaries, entrepreneurs, and researchers that have found a home in Second Life. To be sure, SL has been valuable to a lot of people, and to some degree has validated virtual worlds in business, research, education, and online collaboration.

But I still think that the Emperor has no clothes, and the SL house is a house of cards that is very shakey. The first company that comes along with a better offering…more functionality, streamlined performance, better features, etc. will marginalize SL and dominate it, much in the way that World of Warcraft came out of no where and smacked down most of the MMORPG industry (not to worry, that gorilla is getting old and someone will knock them off their throne soon enough).

Anyway, I don’t want to get too far into an anti-SL rant here (at least not without doing it comprehensively and backing up my opinions), but their desire to trademark grid is crossing the line and just one more straw on the camel’s back.

 

 

Emotive neural interface at GDC is nothing really new...and it doesn't read your mind

After an “unveiling” at the Game Developers Conference this week, Emotive Systems is making a lot of waves in game industry press and it is starting to crest into the mass market media.

Here are some samples of what people are saying about “Emotive Epoc Neuroheadset”:

“It was the hottest thing on the show floor and people were shocked.” (here)

“Startup Emotiv Systems is hoping to crack the code on human-computer interaction with a unique technology, based on “unfolding” the cerebral cortex (here)

“…World’s First Brain-Controlled Video Gaming Headset”  (here)

There is more but I don’t feel like linking it all. 

The emotive technology is nothing more than a lightweight and cheap EEG (electroencephagraph) that measures electric signals in the brain. This technology, used in interactive applications and games, has been around since the early 90s. I myself had hands-on experience with at least two systems around 1995/1996. The cool one was controlling a skiier going downhill.

The technology doesn’t read your mind. Do I need to repeat that? It doesn’t read your mind. It doesn’t connect to your brain, and it has no idea what you are thinking or feeling (press materials notwithstanding). What it does do, is measure electric signals, of which there are different types, locations, and strengths, that can be assigned (think key binding in your favorite FPS) to particular inputs.

So yes, it is absolutely possible to use this tech to do basic control of a game, but not much beyond that. You have to learn basic biofeedback techniques (breathing, concentration, temperature, and brainwave *type* generation) which is fairly easy to do with a decent feedback loop and sensitive equipment.

One of the things the technology is not suited well to, is movement. That is, getting accurate signals when YOU move around. Even flicking your finger fires off electric signals in the brain, and this can confuse or overload a typical EEG…this is why when you get your brainscanned (been there, done that) you have to stay completely still. Now, you might see the Emotive guys demoing their tech and moving around while doing it…that *might* (I don’t know, I haven’t seen their stuff first hand) be indicative of sensors that aren’t that sensitive, and the massive electrical impulses generated by movement might be needed to be registered. This would actually be a good thing, particularly for living room-based games on a console that require jumping around playing air guitar.

Their ability to measure “emotions” is a little high-tech fakery as well. They aren’t reading your emotions at all, but they are measuring verious signals generated by your body that change during different emotional states. Remember mood rings? Same thing. The electrical conductivity of your skin changes based on a number of emotional and psychological factors, as does your temperature, and a gazillion other factors.

All in all, the big thing to take away here, is that the Emotiv headset is a simple EEG that works, is very cheap (finally), and can be used as a gaming peripheral. I fully expect some VC to go nuts over this and throw a lot of money at them, but I caution you…this type of technology has a very high risk of becoming nothing more than a fad…remember the nintendo virtual boy? The Emotive headset can be used as a controller for just about any game (and I mean that in the loosest sense of the word) but what it really needs is a killer app (game) designed specifically for the interface. This is the same challenge that the wii had with its unique controller. You MUST have games designed specifically for the technology. Do that, and the market will adopt it much faster and you gain a lot of ground in avoiding the pitfall of becoming a gimmick or a fad.

PS, I would suggest releasing a free or opensource SDK. Let the innovators and hackers get their grubby hands on this and let’s see what they come up with. I’d like to see some easily accessible motion tracking tech out there as well (no, not limited infrared stuff like the wii…I need 360 6dof control!).

Seriously people…the reason we don’t have flying cars, true brain interfaces, and a massive virtual universe that is directly integrated with reality is because it is so damned hard to get funding to innovate or do R&D. Everyone is too busy trying to throw billions at things like myspace, youtube, facebook, etc.

Anyway, congrats to the Emotive folks…but don’t buy the media hype. 

“Walled Gardens” are not the problem…

Maybe it is just me, but my experience has been that most people I talk to don’t have their own websites anymore. Instead, they have a page on myspace, a profile on facebook, a gallery on deviantART, items for sale on EBay, or they have a blog on one of the hosted blog communities (like wordpress or blogspot). In a similar fashion, gamers usually have distinct characters in multiple MMORPGs (and not always the same class or even gender).

One of the problems that everyone faces, is trying to manage all of these identities and profiles. It is a real pain in the neck creating a new account on the latest social networking site (fad!) or some other website. In the Web 2.0 world, there are a few options for creating an ID once and using the same login for other places, and a few social sites make it easy to import your basic profile data or even entire friends lists (sometimes even sending out email invites to everyone in your address book).

In the virtual world sector (including MMORPGs) several ideas have been bandied about concerning avatars that easily migrate from one world or game to another (where you create a character or avatar once and use it anywhere), and some virtual world platforms boast the goal of breaking down the so-called “walled gardens” to create hundreds of thousands or millions of virtual worlds…one for every user.

This sounds good on paper, but I wonder if anyone is considering problems this approach naturally creates, particularly given the social and psychological natures of humans.

First, I should probably define what a “Walled Garden” actually is. The term, particularly in regards to the internet, refers to an exclusive or proprietary environment or community that is “closed” or that requires membership of some type. AOL is a good example of a walled garden, in that you had to be a subscriber to access most of its content, and the whole thing was pretty much setup as a network within a network. For MMORPGs, each of them is, by definition, a closed garden. You need a unique client application to access the servers and game network. The client handles everything from rendering the world’s graphics to acting as the interface for chat and gameplay interaction with other players. You cannot use the client software from one game to access the virtual world of another game.

There are more than a few benefits to the “walled garden” approach. A few examples include security, management and moderation, contextual consistency, advanced features, “uniqueness”, easier access to the flow of traffic of other users, etc. etc.

The problems are also plentiful, but generally ignored (or perhaps unrealized by designers and evangelists?). To help make my point, let me go back to web communities and social networks which are all technically walled gardens at one level or another.

  • Ease of use and content generation

It is easier to setup a profile on any given social networking site or a hosted blog than it is to setup a server, register a domain, and set it all up yourself.

  • Easier to network and find traffic

It is deceptively simple to do a basic search and find friends that are already on a particular site, find new friends with similar interests, share just about anything, and so forth.

  • There is a strong sense of community or belonging

While the strongest feelings of belonging are based on smaller social circles, being a member of a particular site or community can engender similar feelings (even if they are very subtle or subconscious).

Remember, these are walled gardens…supposedly a bad thing in the minds of a lot of experts in virtual worlds, cyberspace/metaverse, etc.

But what are the problems if everyone can have their own virtual world? This is the same as everyone having their own website.

  • Traffic is harder to find and drive to your site. Without an overarching and all encompassing community or world, you basically have to use the entire internet as the replacement. Instead of being able to leverage internal stats, tracking, referrals, and other features and functionality, you end up trying to compete with everyone on the web for attention.
  • Client and Server applications must be open and freely available. The lowest common denominator wins the day for the greater market saturation and standardization. All content must be as simple and generic as possible for a truly open metaverse/internet. As soon as you start having to worry about downloading billions of modules, extensions, or versions so you can access one location over another, you realize that this misses the point, and it becomes a turn off for a lot of market share.
  • Open = unregulated and unmoderated. If anyone can make an avatar or character that can go to any virtual world or game, it becomes an imbroglio of issues to sort through when e-commerce becomes involved, not to mention hacking and security headaches. Sure, this isn’t an issue with the internet so much right now, but we are talking about webpages, not immersive worlds…this is a whole magnitude of difference in complexity and elements.

The better approach, I think, is a walled garden of many gardens. Yes, I think that at some point there will be a truly open and ubiquitous platform that is pretty much ungoverned and the transition from web 2D to cyberspace 3D will occur, but I think it will quickly denigrate into chaos and become a useless mishmash of crap. The true successful ventures will be the massive ones that are indeed a walled garden, but are also composed of nested worlds/gardens. You belong to Myspace, but you have your own unique page that you can customize to your heart’s content…but ultimately, it is moderated and controlled by Myspace.

Maybe I’m drawing too much of a distinction over what might be nothing more than a fine grey line. I dunno…I just think that trying to make the whole internet into an open (in all senses of the word) 3D universe isn’t the great idea that it sounds like. While I don’t like the idea of one company pretty much owning and controlling the virtuality that we have been dreaming of (particularly if it isn’t MY company), I think that this is exactly what is going to be required, at least in the interim of the next decade or so to push the industry forward, establish the standards, build the market, and so forth. Also, at least as far as MMORPGs go, making them all so generic as to allow characters to move from one to the other seamlessly is a really stupid idea. Then again, most of the titles coming out these days are virtual copies of each other in the most generic way possible, maybe it isn’t so bad…after all, they are starting to look alike, and you can find the same old static quests, missions, creatures, and classes in each one. Perhaps I’m getting bitter in my cynicism.

I feel like the voice in the desert sometimes…I have a clear vision of how things could and should be done, what the missing pieces are, where the convergences of various technologies needs to occur, and how to build “IT”. But the money flow keeps going towards the same ideas, the same people, and the same failing models…both in design, business, and execution. I’ll say it again for the hundredth time…where are the pioneers, innovators, and dreamweavers? Ten to fifteen years ago there was a tangible sense of excitement in the air and new ideas were constantly being explored and pursued (not just in the internet sector mind you). Now? It seems like the only exciting thing is another social network, another mobile phone, another way to shove ads in your face, or another MMORPG that is more static and single player oriented than a truly immersive world full of engaging experiences and a sense of wonder.

One way or the other, I’m going to shake things up (or at least get a damned good start at it) this year. 2007 was pretty crappy in many respects, but 2008 still has promise.

Yes, you will see me using “hybrid”, “convergence”, “adaptive”, and “evolving” a lot this year. Good stuff is coming.

PS: Yes, I realize that I sometimes ramble my way through these blog posts. Most of them are brain dumps and they aren’t intended to be edited and polished articles that follow a strict outline. So, if I need to clarify something, or I missed a point, feel free to comment or email me.

Virtual Items...who owns what?

The issue of virtual item ownership has been percolating in the background of the industry for a few years, occasionally coming to a boil as a dispute gets some press or litigation occurs. One one side, we have the publishers and developers of massively multiuser online games (usually role-playing, hence the term MMORPG) and virtual worlds (Second Life, Project Entropia, etc.). On another side, we have the end-user…the players who spend hours and hours drudging along to level their character and gain hard to find or rare items. This category also includes people that spend time in various virtual worlds…in some cases generating or creating content of their own. There is a third side that everyone seems to ignore for the most part, and that is the Government (the US Government for the most part).

When you create an account with a MMORPG or Virtual World (VW), you generally have to agree to a “Terms of Service” that is loaded with a lot of legal sounding mumbo jumbo. Among other things, users are expected to recognize and agree that the developer (or publisher, depending on how things are setup) owns, claims full copyright, and reserves all other rights regarding to everything within the game or world. For example, the World of Warcraft Terms of Service states:

Ownership.

All rights and title in and to the Program and the Service (including without limitation any user accounts, titles, computer code, themes, objects, characters, character names, stories, dialogue, catch phrases, locations, concepts, artwork, animations, sounds, musical compositions, audio-visual effects, methods of operation, moral rights, any related documentation, “applets” incorporated into the Program, transcripts of the chat rooms, character profile information, recordings of games played on the Program, and the Program client and server software) are owned by Blizzard or its licensors. The Program and the Service are protected by United States and international laws. The Program and the Service may contain certain licensed materials, and Blizzard’s licensors may enforce their rights in the event of any violation of this Agreement.

Second Life, however takes a different approach:

Content available in the Service may be provided by users of the Service, rather than by Linden Lab. Linden Lab and other parties have rights in their respective content, which you agree to respect.

You acknowledge that: (i) by using the Service you may have access to graphics, sound effects, music, video, audio, computer programs, animation, text and other creative output (collectively, “Content”), and (ii) Content may be provided under license by independent content providers, including contributions from other users of the Service (all such independent content providers, “Content Providers”). Linden Lab does not pre-screen Content.

You acknowledge that Linden Lab and other Content Providers have rights in their respective Content under copyright and other applicable laws and treaty provisions, and that except as described in this Agreement, such rights are not licensed or otherwise transferred by mere use of the Service. You accept full responsibility and liability for your use of any Content in violation of any such rights. You agree that your creation of Content is not in any way based upon any expectation of compensation from Linden Lab.

Before I continue, let me declare a few definitions to help clarify what I am talking about. Yes, labels and names are important. Let’s define User Generated Content (UGC) as content that is built (like fitting legos together) or customized (character race, stats, name, appearance, etc.) based on other content that is created by the developer. Your character’s avatar in the game is not created by you…individual components are created by the developer and put together by you (this includes equipping the character with particular gear and items, or selecting skills, etc.).

User Created Content (UCC) is any content that is created by the user from scratch. This includes written fiction and stories, textures, 3D models, animations, code (widgets, applications, scripts, etc. usually based on some sort of scripting language provided), and so forth. In the case of Second Life, it is a very open environment and architecture, that lets users use tools to create and upload new content. Second Life makes no claim to this content, and they are willing to literally sell ownership rights to sections of virtual “land”.

Ok, moving on. Regardless of which type of content we are talking about, people have a natural feeling of ownership for their character/avatar, as well as everything that the character or avatar “owns”. This goes beyond the name of the character and its likeness, personality, and backstory. In MMORPGs particularly, there is a significant and substantial time requirement to develop characters, complete quests, collect items, and so forth. Users equate their time and effort to collect these items (indeed, most of these games heavily emphasize item collection) as their investment to acquire the items. Remember, MMORPGs are supposed to be about role playing…you are your character. All of these games have built in mechanics to trade items from one player to another, as well as sell these items directly to another player for in-game currency (platinum, gold, silver, whatever), sell them in in-game shops, or even post them on auction systems built directly into the game. While this is absolutely necessary as functionality in any MMO game, they serve to reinforce the perception of ownership…not just by the character, but by the player as well. So, naturally, people attempt to sell items, currency, characters, and even entire accounts for real world currency. There are dozens of auction sites for doing so (Ebay has been particularly aggressive about disallowing such sales), and venture capitalists have funded several ventures that exist solely to buy and sell game currency in multiple MMORPGs (gold farming anyone?).

Developers are usually against this. The reasons vary, but basically they don’t like being left out of the loop and not making any money on it, they feel that users don’t have the right to sell something that doesn’t belong to them, and there are a lot of potential legal issues and pitfalls that developers simply do not want to be exposed to or have to deal with when it comes to this particular issue. It is interesting to note that some publishers, like Sony Online, have changed their stance somewhat and make provisions for things like character transfers and whatnot, but they charge a fee for the service (I don’t believe that the mechanics are there for person to person sales though).

The issue is further muddied by the growing emphasis on virtual item sales (microtransactions) where developers sell game items directly to the player. $5 gets you a shiny sword or some unique piece of limited edition clothing. But do the players actually own this? Or are they just paying for access or limited license to the object? Are they in fact paying a service fee to use the item?

I’ll come back to that in a moment. First though, I want to talk about the third entity coming to the party. The Government. For the time being, the Government has limited its interest and interference to crowing about ratings systems and mature content (rightly so), and the occasional congressional nutcase (both parties) hollaring about how games are destroying our youth and the definite cause of much teen violence (which is ludicrous). The danger that lurks is when the Government decides that virtual items DO have real value, and they DO belong to the end user. Which means, they are taxable. Great. You really want to own your level 70 Warrior in World of Warcraft? What’s the market value on that? Do you really want to have to declare it on your tax return and pay for it? How about virtual property taxes? Be careful what you ask for…

Another quick point…I think Second Life made a big mistake in selling virtual land. The concept is good (and honestly, I was pitching this in the mid 90’s (95/96) with my first MMORPG venture), but there are some issues. One of the problems that Second Life has (and they have many) is that they have a difficult time keeping new users (the reasons I may discuss in some other post). People make accounts, buy some virtual land, build some objects (usually displeasing to the eye, but that is the nature of the toolset and no moderation over user created content), and then they don’t come back after they get bored. What happens? Landscapes filled with a chaotic imbroglio of buildings and objects with no consistency or context…and no population. So, Linden keeps releasing new land and the cycle repeats. Because some user OWNS those objects and virtual land, there is nothing Linden can actually do about it to clean it up or reclaim it.

Wouldn’t it have been better to sell leases, licenses, or limited rights to the property? Pay rent and do what you want. Quit paying rent and your virtual land gets forclosed on and resold. This simple little twist would have made Second Life a much greater success than it is now. Revenues would have been higher, the economy would be much more stable, and high traffic areas would be much easier to develop. Plus, the continual refreshment of content would help keep the world alive and vibrant. This approach (applied to virtual items as well) would let developers maintain all rights to their content in games and solve a few potential pitfalls. Even in WoW, the terms of service should be modified to allow users to transfer ownership rights of their license or service agreement.

I’m not an attorney by any means, but I think this is the way to go. Oh, I haven’t discussed the pitfalls I mentioned earlier. If the user owns everything, what happens in a MMORPG where there are thieving skills? What happens if another character kills your character, or screws up a quest or raid you were in the middle of trying to earn some epic item? If these things have real world value and ownership tied to it, you could conceivably sue them, and the developer for the loss or even emotional distress. Think about it… not very reassuring, is it? What happens in a server outage or rollback? Bugged items?

The moment that users (especially gamers) claim full ownership to the virtual items and start placing real world value on them, the pandora’s box opens wider and wider. Then at some point, developers will be shut down after litigation (ruining it for everyone) or the government will step in with a fat tax package (Obama already wants to raise your taxes by a ludicrous amount…it wouldnt be a far cry for anti-corporate and anti-gamer politicians to go after the mythical internet tax or the more realistic virtual item tax).

Just my two pieces of gold.

If you noticed I was incorrect in anything I mentioned specifically here, or you have some data on which party has been more vocal and anti-gaming (or even which politicians favor taxing internet stuff), please comment and let me know.