Virtual Property Revisited

Wednesday's column on Virtual Property brought a massive and fascinating outpouring of e-mail from gaming programmers and execs, Web architects, Cyber Movers and others transfixed by the idea of virtual property, an idea being dramatically advanced this week on eBay, where middle-class Americans are starting to shell out big bucks for virtual characters, potions and symbols. Quotes from a fraction of the enormous response to this idea, and some questions some of you might be able to answer (hopefully):

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?

Comments

virtual property

[th0m]

jon,

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