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Virtual Property Revisited
The response to Wednesday's column on Virtual Property was instantaneous, massive and fascinating.
I wrote in that column that in (based on a San Jose Mercury News story by Ariana Eunjung Cha) that in recent weeks, Ultima Online players have begun going onto eBay spending real $US dollars, sometimes thousands of them, to acquire video-game assets that included characters, houses, castles, gold, armor and magical potions.
This seemed especially significant: eBay, one of the most revolutionary and successful business sites on the Net, was advancing and legitimizing the idea of virtual property.
Middle-class Americans were beginning to pay substantial amounts of cash for the ownership of virtual materials.
Net economics are changing again, and this time it's eBay demonstrating how the Net and the Web are attracting millions of individuals who not only want more choice, selection and freedom in their retailing choices, but who are beginning to value digital property in very new ways.
Some gamers wrote me to jeer that this wasn't new, that gamers had been trading characters and armor for years. Others said this wouldn't change gaming, pointing out correctly that in games like Quake, there are few collected assets to sell. "Shut up," wrote Aladdin, "you don't know squat."
But there is a huge new idea here, and plenty of people grasped it. A lot of gamers had obviously been thinking about the issue long before eBay started auctioning virtual properties.
"?your comments on virtual property are right on," wrote Brandon Reinhart, a Game Programmer at Epic Games Inc. (www.epicgames.com). Reinhart said he'd spent hundreds of dollars on two accounts. "The property means a lot to me..it has value." Reinhart said gaming was bringing a number of real world issues to the virtual world, including the theft of virtual property as well as the trading and auctioning of it.
He said inexperienced players needed to be especially careful these days. "I lost 700,000 Ultimate Online gold pieces in an attempt to purchase a Tower, a structure it's no longer possible to build on UO because there's no more open land. "The lines blur even more" he wrote. "What a great time to be a game programmer!"
The idea of virtual property - elevated by the staggering success of eBay - has all kinds of implications. If cyber-property is seen as having intrinsic value, measurable worth than can be traded, valued, and sold, then get ready for even more billions of dollars to start flying around the Net and the Web.
"I like your angle here," wrote Pat Dane, "and it's right in line with a company I founded a year ago." Dane's company is CyberMovers.net, which offers Website relocation, maintenance and move-in services. In a sense, Dane may have grasped the future, even gotten a step ahead of it. Only he doesn't need big vans, boxes and burly crews.
CyberMovers "offers a Full Range of Site Management, Location, Relocation, Promotion and Maintenance Through Our "virtual" Web Master Services. CyberMovers will meet "the needs of various customer segments - from the first time personal site owner to the more advanced small business site owner who needs to "relocate" to another hosting service or ISP."
The idea of Web movers and property managers dovetails with the surprising news that eBay customers are shelling out thousands of dollars for property, potions and tools on congested Ultima Online, which increasingly looks like an overdeveloped New York City suburb.
Scott Franke wrote that the concept of virtual property offered new employment as well as economic possibilities.
"?this is something you danced around in your article," he wrote, "but I wanted to bring it to your attention on the off-chance that you hadn't considered it."
I hadn't, really. But Franke wrote that from the exorbitant prices being paid for gaming characters, it seems reasonable to assume that some people could make their living entirely by playing these games full-time and selling the property they make.
"While the actual price per hour of playing time isn't realistic at this point, it can definitely be a job people would enjoy doing. And I can assume that the people who spend this much time now would not mind quitting work to make a lower salary if they get to play as much as they want." From the gamers I know, this is a reasonable assumption.
The notion of virtual property extends into digital money as well, especially when it comes to gaming. Charles Evans, the Senior Vice-President of e-gold wrote into to agree that gaming was mainstreaming, that is, moving quickly beyond geeks and nerds and into the American middle-class. (Ultima Online is played by more than 125,000 people globally). "As a follow-up," he suggested, "you might be interested in Dark Castle (http://www.dcastle.enteract.com/), a game which requires players to purchase equipment with "plats" that can be purchased only with e-gold. Dark Castle operators, wrote Evans, have found credit cards to be both expensive and risky, so they use an e-gold payment system exclusively.
Britt, a Web architect wrote: "this is a huge idea. The concept of virtual property very much transcends computer games, although that's where it's being introduced to the middle class. In two years, we'll be going to architecture school to design Web sites for anxious families with hundreds of thousands of dollars to spend. Virtual property is just around the corner."
But Scott Franke is right. Economically, it's one thing for geeks, nerds and programmers to be trading potions. It's quite another when millions of middle-class Americans - the primary consumers in the world's richest country - join in. If we are, in fact, entering an age in which virtual property is becoming valuable, and is actually moved, maintained, up-graded, managed, and re-sold, then the Net would continue its revolutionary challenge to conventional notions of economics.
Online, individuals are using technology to re-distributing wealth and property, both intellectual and material. Virtual property seems an almost inevitable extension of that notion, already in evidence through eBay, on thousands of e-trading sites, and via Mp3 players. In a different sense, open source and free software movements are distrubiting software in this way, only for free. But they still have value - that's sort of the point.
Some questions I can't answer, but would love to know more about from those of you who might help:
Is Net and Web property infinite? That is, is the Net so expansible that it could never be overcrowded and congested?
How much, if at all, will computer gaming be affected by what is sure to be the growing purchase of and trading for virtual characters by the hordes of relatively affluent middle-class gamers thundering online? Are there other gaming characteristics that may soon be applied to the real world?
Are there other employment and economic possibilities beyond gaming in the concept of virtual property - as in Pat Dane's CyberMovers? Could this notion spill over into architecture, construction, design, real estate and other kinds of bartering?
Although the VR version of cyberspace has not yet hit critical mass to start producing 3D versions (despite my, others valiant efforts with things like VRML and AlphaWorlds), the 2D version is very much starting to take on these Matrix-like effects. Some parts of the matrix are very popular (.com, .net, .org) while others are not (.us) while others are barely populated (.ro, .pt). People buy and sell these virtual addresses for some very huge amounts of money. Other people are the architects providing home building services, and down the bottom are a bunch of hackers like me trying to get the plumbing working.
What is happening now is the move from the 2D virtual property to the 3D. Although 3D is populated by game engines (and you can class, Isometric, 2.5D and 3D in this) eventually the same thing will spread to the general populace. As Katz points out, the arrival of the Middle-class into once what was hacker territory is a significant thing. We legitimize both the worth of the property and the fact that it exists. Stock options - how much virtual property are they? They are no more than a bunch of bytes on someone's harddrive these days, so what is the difference between that and a couple of pieces of armour and a good character.
The early adoptors always end up with a bunch of the most valued parts. Look around at the domain names, slashdot logins (I got in real early to get mine for example and the newer crowd haven't got such a range anymore. Maybe the login here will be worth something someday?). An interesting thing about these early adoptors is that normally they take the best stuff, not because it is, but because it reflects their personality or other trait that they like to express themselves with. Then, as time progresses, they become some of the most valuable simply because others want it. The gaming examples are just following the same trend already established in the flatlands. How long before some of these game environments start "meeting" at the seems?
The flip side to this is that, because we are digital, we can create as much property as we like. Just because a few games are hot today does not mean that they will be the only property available in a year down the track. Effectively limitless space can have some interesting effects on what and how items are valued. At what point do people come in to make a hedged risk on a new piece of virtual real-estate.
The funny thing that I find about all of this is that it will create jobs for the middle men. OK, so eBay is probably one of only a couple of sites on the 'net doing this now. How long do you think it will be before we start to see specialist virtual game property trading companies/sites being formed (darn, I should go out and patent that business idea!). That is, what we have in the real world will be mirrored in the virtual which will be mirrored in the real world... Just like the Matrix.
Life is complete only for brief intervals in between toys or projects -- John Dalton
{{if you haven't read Ender's Game, this probably won't mean much to you.}}
/., cnn.com, and nytimes.com.
>> * An account with a history of positively moderated posts
Wow. That would have made Val & Peter Wiggin's lives easier. Remember the time they spent creating those personas? Peter's political beliefs gradually became "syndicated" on a few of the Nets. Card couldn't have foreseen the exact structure of the Net (and who's to say that present-day structure is the structure?), but I think it's safe to say that our "major news nets" would include
Card hypothesized syndicated columnists (Jon Katz & Chris Locke both come to mind) whose opinions were posted -- much like Martin Luther's theses -- and debated vehemently. the debate was very public, and the political figures of the day stayed tuned, because the popular opinion in the debates let them know how to adjust their platforms.
Val & Peter (Locke and Demosthenes) were so well-known, and made such good points, that they eventually became political figures.
So... let's presume a persona comes into being on the Net. Let's say that this persona takes the name "DrTuring" and becomes immediately (and enduringly) popular with the online community. Let's say that a "Write-in DrTuring for President" campaign starts, and takes root. How much would Bill Gates pay the real DrTuring for the keys to that account? How much would Bush, Jr. pay? Are we no longer discussing profits of a few thousand bucks?
As more and more people enter the online community, political sites and news-debate sites will grow in power, and that power will have to spill over into the real world.
The entire concept of property (and even identity) is "virtual." Before the Industrial Revolution, you could pay to have documents forged that introduced you as whomever you pleased. With the advent of the photograph, identity became a more tangible thing. And now, with the advent of the "nick," technology has caught up.
another 2 cents from
Jurph;
penny for your thoughts?
much as it pains me every single time i realize it, i'm afraid that i have to report that once again you're picking value out of vapor and getting all excited about something that, as always, isn't exciting or new at all.
i'm tempted to launch into an extensive diatribe, but i've got work to do today. suffice it to say that the "virtual property" that's got you so frantic in the last couple days is nothing more than a sale of service. it's amazing that you're managing to misunderstand this to the extent where you think there's something new.
every month i buy a package of 'minutes' for my mobile phone from my wireless company. these are just numbers in a computer, of course - am i purchasing "virtual property" here? and, if i am, haven't people been doing that for years?
i could subscribe to a paying-members-only web site; i could choose to pay for HBO; i could buy an Ultima Online account or good domain name from ebay. these are all the same thing - i'm buying the right to use a service. just because i'm not getting a physical product in return doesn't make it magic or 'cyber' or anything else you might want to think.
okay, the UO accounts and domain names might have certain 'added value' in terms of the time/effort invested in bringing them to their current status, but that doesn't make it any different. by buying an account or a domain, the purchaser is simply entitled to access to certain kinds of service in return for their cold hard cash - but hey, who pays in *cash* these days, anyway?
ooh! ooh! virtual property paid for with *virtual money*! another monumental technological discovery from jon katz! better write another /. column about this!
please.
-thom
-- in china, chinese food is just called food.
> Is Net and Web property infinite? That is, is the Net so expansible
/.
> that it could never be overcrowded and congested?
The Net is crowded and congested today. Good domainnames are rare, good spaces for banner ads are expensive, popular servers are overloaded and slow...
It doesn't really matter if property is infinite on the Net or not, because crowding occurs when some neighborhoods are considered better than others and people want to be (seen, live, work...) in cool places and not on the end of nowhere. Then prices and value rise.
Net property behaves exactly the same way as real estate. While a few acres in Siberia or Alaska are dirt cheap, people want to pay millions for their offices in Manhattan, downtown London or Zurich.
Given the minimal cost for undeveloped space, the main business on the Net seems to be net-estate development. Just have a look at Yahoo, MP3.com, cnet.com, etc. They succeed because they manage to convince people that crowding in their place is cool and then selling the crowd to the highest bidder.
Very confused and crowded at
johi
Are there other employment and economic possibilities beyond gaming in the concept of virtual property?
He said inexperienced players needed to be especially careful these days. "I lost 700,000 Ultimate Online gold pieces in an attempt to purchase a Tower, a structure it's no longer possible to build on UO because there's no more open land.
But suppose the programmers created a way to insert more open land into Ultima? (I haven't played Ultima, but the same sort of change might happen in any virtual economy.) Suddenly, all those virtual properties that players have been accumulating lose their status of no longer possible to build. The "Ultima artifact" monetary system suffers a sudden devaluation. This sort of changing of the rules which defined the value on a monetary system is much like printing money without limit - it can lead to runaway inflation and people leaving that economy.
There could end up being a conflict between the "virtual economy" and the "usage" view of a virtual item. (Adding new land to Ultima might make perfect sense as far as making the game more playable for the current number of people involved, yet it would devalue the surrounding virtual economy.)
There could also be the sort of "insider trading" issues that affect all commodity markets. "Sell your properties now, they're going to open a new continent next week."