Worlds in Motion 2009 Kickoff

This was a fifteen minute overview of the developments in online world between 2008 and 2009.

Transcript

Good morning! How awake is everybody today?

So, unlike last year, I promise to only take fifteen minutes of your time and not be unduly depressing.

So, welcome to the Worlds in Motion Summit! It’s my privilege this year to kick it off with a little fifteen minute review of trends.

Do you guys realize what happened in the last year? Virtual worlds turned thirty. 1978 was the birth of MUD1, the long-ago ancestor, the primordial virtual world, in text, and PDP, and all that geeky stuff, off in Essex in the UK. And you know what, we’ve kind of arrived, haven’t we.

It’s kind of shocking to think that one half of American adults are gamers today. Which is kind of an incredible stat, if you think back. Even five years ago we were going, “Oh my god, how will we ever be mainstream?” And as we turn thirty, a little over thirty now, it’s worth thinking a little bit about the trends over the past year, and the way in which so many of the predictions that have been made over the last thirty years have actually come true.

On the financial side, virtual worlds have continued to grow in prominence. They are now common marketing tools, we see them used everywhere. At the same time, we have seen, you know, little minor bumps along the road, such as the Korean government finding $38 million dollars of laundered RMT money [real money trade, the practice of exchanging digital currency for virtual money] and shutting down an operation that was laundering money between South Korea and China.

We have seen a virtual world apply successfully to become a bank. Just this past week MindArk announced that Project Entropia was in the process of becoming an actual bank that can you know, give you loans, and get regulated, and all of that. You know, back when we were reading the science fiction fifteen or twenty years ago, we said those kinds of things could happen, but it’s still kind of shocking for it to finally come true.

Virtual goods continue to rise. It is no longer shocking or surprising at all to be told, “you know, you can buy this little 16×16 JPG for the low low price of 99 cents, to send it to somebody who will delete it upon receipt.” This is an exciting new frontier in marketing for us! [sarcasm] So that’s out there now.

We have seen a Congressional hearing streamed into Second Life. That’s a big deal. We said that would happen too. We said that virtual worlds would start to converge with the world of policy and they have. Unfortunately, there was a large fluffy pink cat in the front row, which meant that the Washington Post didn’t take it very seriously, but nonetheless, it was a big step for us.

We have seen the EU put out a position paper asking for a standard set of governing documents for the relationship between users of virtual worlds and the operators. As foretold long ago, that someday we would have to clean up our act, as regards EULAs and TOSes, before the government did it for us. Well, guess what, the time is coming now.

We’ve seen the national taxpayer advocate here in the United States requets that the IRS issue guidance on the issue of virtual earnings and virtual currency, saying “you know, this might be a major tax loophole.” Not exactly a step we’re enthused about, maybe, but nonetheless another step on the road towards legitimacy, acceptance, and total mass market dominance of the universe.

Of course, China now levies a 20% tax on earnings inside virtual worlds as well.

All of this happened in just the last year.

Now, granted, it all happened before the market crash. But it’s still happening.

We have seen the beginnings of big interesting battles around intellectual property. We saw Google launch Lively, leave it open for four and a half months, then close it down, and have it cloned by an outfit in China in VRML all the way down to ripping every piece of art, in under three months. It’s out there now, it’s called New Lively, if you want to go check it out. They were quite unashamed of themselves.

We have seen long-standing worlds that just won’t die; such as the announcement that Uru Live, which has been written off I don’t know how many times, is back now as open source, run by its users. Another thing that was predicted a long time ago, that worlds would have to be turned over to their members.

And of course, we’ve seen serious litigation start, with the Worlds.com patent suits, which have begun already against NCSoft, and with the announcement that they intend to go on to sue Blizzard for World of Warcraft, and Linden Lab for Second Life, and presumably, the rest of the industry, for patent infringement. You know when the patent lawyers show up, that the stakes have gotten real.

Finally, the prediction of long standing that everything would start to get open has started to come true. OpenSim has taken enormous strides over the last year. We’ve seen the project out of Stanford, Siritaka, finally beginning to show videos and demonstrate its architecture. We’ve seen Three Rings, with the project Whirled, begin to gain traction. And we’ve seen the rise of low cost middleware, so that almost everybnody can set up a virtual world at this point, using ElectroTank or SmartFox or whatever, and all the major brands are just diving in.

It is no longer unusual to see a commercial for a virtual world on TV, as long as you are on the Disney Channel or Nickelodeon.

This is a big deal. I mean, so, we haven’t yet had things like the hit song that originated in a virtual world, unless you count YouTube as a virtual world, which we increasingly can. But the cultural penetration at this point is really reaching the point where if your kid isn’t in a virtual world, they’re just not with it. The other kids probably make fun of them.

Of course, there are some interesting wrinkles on the road here. How many of you have seen the completely beautiful yet utterly incomprensible commercials for ComcastTown? Anybody? Yeah, did you know that that was actually an ad for a virtual apartment? I didn’t. It took me about a dozen times of seeing that commercial. And yet, here’s a cable company that has virtual apartments as one of the facings of their website now.

That’s a big step. We’re seeing the major distributors of content beginning to embrace virtual worlds as a medium.

We’re seeing things like the alternate reality games, which went through their own hype cycle, and perhaps now are in a little bit of a trough, start to be being used for things which would make the me of a year ago, with my depressing keynote about how we needed to take social responsibility — ARGs that make me happy. Things like Akoha, which is a pay-it-forward card game, where you are asked to do nice things for each other and pass the cards around, and claim points on a website. We’ve seen things like World Without Oil do quite well in terms of garnering audience.

We’ve also seen the convergence with social networks happen in a way that is deep, that is pervasive. The gaminess of the social web is increasing dramatically, as ratings and levels and points pop up absolutely everywhere. In fact, we’ve seen a virtual world on Facebook, YoVille, become as popular, just about, in North America and Europe, as World of Warcraft — which is a pretty big step. Millions of monthly uniques, logging in via Facebook.

Of course, this year also saw the launch of what I personally pick as the largest MMO in the world someday, Happy Meal 3.0, which McDonalds announced they intend to give login codes away for on every Happy Meal, to bring them into their virtual world so they can play games.

We’re not playing around any more, are we? Virtual worlds are really there, aren’t they?

Now I grant you, we’ve got a ways to go. On the plane, on the way up here yesterday, I saw DOOM running on a Sansa MP3 player. The screen was actually smaller than this microphone. It was this big.

We here who work in this field, who are here at this Summit, aren’t yet designing for screens the size of postage stamps, but that’s the world that is right around the corner. The amazing shrinking screen is such a pervasive phenomenon that you can no longer buy a laptop with high resolution TFTs, because the netbook segment is so hot that the Acer Aspire was the number three selling consumer electronics good at Christmas. Not number three selling computer, it was behind the iPhone. The number three selling consumer electronics good. There are now netbooks announced that have magnets so that you can hang them on your refrigerator. We’re not that far away from the toaster that might need to run a virtual world. The convergence is pretty clear.

And at the same time, we don’t yet have a true web embedded solution that will work absolutely anywhere. Silverlight is now up to 350 million installs, thanks to Microsoft forcing everybody who wants to download something from the download center now has to download Silverlight. Flash is announcing the Open Screen Initiative, to try to get onto every device you own. They want your cable guide to be done in Flash. We’ve seen Unity gain amazing traction.

So the battle for owning the web interactive desktop is on, and the big players are playing hard for it. So that battle is yet to be settled, and we will live and die by that, because the future is not in downloadable clients anymore, that has become obvious and evident.

We have not yet mastered the trick of providing what I call the multi-head experience: the virtual world that you experience on your watch, on your phone, on your toaster, on your browser. But it’s coming. Just yesterday I saw that Sparkle, Second Life IM, is now available on the iPhone. You can buy it on the App Store right now.

So the multi-head world, the ambient world, is coming, and we haven’t solved the questions of ambience. What is a virtual world when everybody lives and dies by the stream? When there is no place? Where what you have is tweets and twitterings and status updates and feeds, and there is no place that you log into? What happens to virtual worlds in that environment? Not yet fully answered, but there’s plenty of indications.

And finally, virtual goods starting to get really real. You know, there’s folks in Kenya who now keep their savings and receive some of their pay in Safaricom cellphone minutes, because it’s safer than the banks. These are virtual goods. That’s us, our industry, moving forward in ways we wouldn’t necessarily anticipate, because when we build virtual worlds, we don’t necessarily think of Masai warriors with cellphones.

But all of that is why we’re here today. That’s why we are here at the Worlds in Motion Summit, to learn about this stuff. So, over the next two days, you’ll be hearing about social media distribution and social media practices — maybe not all the way to solving the ambient cloud question, but the best learning that we have from Electric Sheep and Makena and D&D Tiny Adventures, and Bunchball and other folks who are working in the field.

You’ll learn about freemium models and what the current best thinking is. We’ll hear from Three Rings and GoPets and CampFu and OGPlanet and LiveGamer about funnels and microstransactions and all of those nitty gritty number details, because now we know, it’s real, we live and die by the data.

We’ll hear kids world case studies, because kids worlds are clearly the fastest growing segment in virtual worlds today. So we’ve got a special treat, a case study of RideMakers.

And because user generated content is such a defining characteristic of the social web, we’ve got a special panel with Sharendipity, GameSalad, PlayCrafter, and Mockingbird called “Game Making is the Game.” Sites where users come together and make games and share them with one another, almost like postcards.

But our first talk is going to be really special. That will be Sulka Haro talking about game mechanics that aren’t really game mechanics, rules without rules, in Habbo Hotel, which is one of the most successful virtual worlds out there today.

So thank you for being patient through my brief review. Let’s give a warm welcome to Sulka.

Video

Video of this session is available on the GDCVault behind a paywall.