Ashridge

Virtual Learning Resource Centre

Virtual worlds – October 2007

The Serious Virtual Worlds Conference at Coventry University’s Technocentre was the first event of its kind outside the US. HM Revenue & Customs has launched a crackdown to catch people making profits in Second Life without paying their due. ABN AMRO has opened the first virtual European branch office in Second Life, an exact copy of a real building.

The Second Life economy is booming; eight times more transactions were conducted in the first half of the year than in the same period of 2006. When real-life financial markets suffered a credit crunch, Second Life experienced its first bank run. So many avatars queued in front of virtual teller machines trying to withdraw so much money that it forced the bank, Ginko Financial, to cease operations and turn deposits into perpetual bonds. A US attorney predicts that in Second Life disputes between virtual residents could be settled in real-life courts of law.

A glitch in World of Warcraft, the most popular massive multi-player online role-playing game, gave researchers the opportunity to study the spread of an epidemic and how to form an emergency plan to ensure the survival of the human race without putting the population at risk of a real disease. Experts say the imaginary online lands of World of Warcraft or Second Life are a glimpse of the Internet of the future. Google, Linden Lab and others are moving towards the day when a person will be able to stroll around a 3D Web using a virtual replica of themselves that they have created.

A growing number of Singapore-based companies are interested in promoting their real-life goods and services in virtual worlds. Australian technology and digital media companies will soon be able to break into the Chinese market without needing to physically go there.

UK

The Serious Virtual Worlds Conference recently held at Coventry University’s Technocentre, was the first event of its kind outside the US. It brought together software developers and organisations interested in the 3D technology of social and gaming media, such as Second Life, from across the UK and internationally. The event coincided with the official launch of the university’s Serious Games Institute.

HM Revenue & Customs has launched a crackdown to catch people making profits in Second Life without paying their due. It is concerned that thousands of individuals are using the virtual 3D world to sell virtual items to generate real-money profits and not pay the proper taxes. Tax inspectors are using a snooper computer system, Xenon, to scan Second Life, which has 35,000 regular users in the UK, and are rumoured to have created their own Second Life character to patrol the virtual world to root out tax evaders. In July, 145 players earned more than $5,000 a month on the site, up from 116 in February. The Revenue says that if someone is running a business, it is required to be registered; “the virtual aspect is a red herring”. Users of other games such as Entropia Universe are also in the Revenue’s sights.

Europe

Last December Dutch bank ABN AMRO opened the first virtual European branch office in Second Life, an exact copy of a real building with a small door, walls and a roof. The door was awkward for avatars (the word comes from the Sanskrit for “incarnation”), electronic alter egos, to enter because their real life counterparts use a keyboard and mouse to move them. But the normal rules of gravity do not apply, so the walls and roof were then made permeable to allow avatars to fly through them into the branch. ABN AMRO, which has created a Young Professional Island where people can meet, holds investment seminars every two weeks for about 40 avatars.

The Portuguese government has launched a state-sponsored arbitration centre for the artificial world. It hopes to show that arbitration is a useful method of resolving business conflicts, in the real world as in cyberspace.

Rest of the World

The Second Life economy is booming. Some $38.7m worth of transactions were conducted in the first half of the year, eight times more than in the same period of 2006. Despite the existence of 7.7m registered residents as of June, many users of Second Life experience the same loneliness online as they do in reality. Only 10% of new users are still active after 30 days and at any given time only between 20,000 and 50,000 are logged on. Most corporations – Coca-Cola and IBM among others – have a presence in the virtual world. Most hardly attract any online visitors, which is why some firms have already closed their branches.

When real-life financial markets suffered a credit crunch, Second Life experienced its first bank run. So many avatars queued in front of virtual teller machines trying to withdraw so much money that it forced the bank, Ginko Financial, to cease operations and turn deposits into perpetual bonds. Second Life’s economy is tightly managed. To ensure that the Linden dollar does not move too far from an exchange rate of L$270 to the American dollar, Linden Lab, Second Life’s San Francisco-based owner, uses a set of monetary instruments allowing it to inject or mop up liquidity.

A US attorney predicts that in Second Life disputes between virtual residents, over financial transactions or antisocial behaviour, for example, could be settled in real-life courts of law. In August, in the first legal battle between two digital characters, a resident of Second Life filed a civil suit against another virtual resident for selling pirated copies of his SexGen software, which animates avatars into erotic poses.

A growing number of Singapore-based companies are interested in promoting their real-life goods and services in virtual worlds. A travel agency, an online graduate university and a computer maker are among those looking to tap the 8m inhabitants of Second Life. One of Second Life’s first banks, First Meta, extends credit to Second Life players to buy digital goods their avatars use in the virtual world. The bank hopes to introduce other types of financial products, such as mortgages and loans.

A glitch in World of Warcraft, the most popular MMORPG (massive multi-player online role-playing game) has given researchers the opportunity to study the spread of an epidemic and how to form an emergency plan to ensure the survival of the human race without putting the population at risk of a real disease. In September 2005, what was intended as a minor hindrance for a small group of characters in the online game spiralled beyond the control of the program makers into a full-blown deadly epidemic called Corrupted Blood that left the landscape strewn with corpses. Professor Fefferman of Tufts University, Boston, says virtual games could be of great value in helping scientists understand how quarantine measures can fail, how transmission mechanisms work and the existence of “immune” characters who act as carriers, passing the virus to others while failing to succumb to symptoms.

Experts say the imaginary online lands of World of Witchcraft or Second Life are a glimpse of the Internet of the future. The newest batch of games is essentially graphic-based chatrooms, social hangouts navigated by using the keyboard to move around a humanoid image. There are sites for children, such as Disney’s Club Penguin, a cartoon land of igloos that has 700,000 paying subscribers, and Be-Bratz, an online community linked to a new kind of Bratz doll that has a USB computer interface. There are also sites for adults, like Red Light Centre, modelled after Amsterdam’s red light district. Gartner Inc, a research company, predicts that 80% of Internet users will have virtual identities by 2011. IBM is said to be developing a program that will allow avatars to wander the Web freely. Already, musicians with new albums, such as Suzanne Vega, have held Second Life “concerts” in which their avatars perform. But the crossover between virtual and real worlds can get ugly. A Ukrainian player of Lineage ii was charged with murder after stamping a fellow gamer to death when an online dispute spilled offline.

Google, Linden Lab and others are moving towards the day when a person will be able to stroll around a 3D Web, and not just their own sites, using a virtual replica of themselves that they have created. In this future scenario, you could go shopping with friends during a lunch break, even while you remain miles apart. In reality, you would be in front of your work terminal, but on screen you would be transported to a digital replica of the shopping centre.

Australian technology and digital media companies will soon be able to break into the Chinese market without needing to physically go there. David Liu is the founder of the Beijing Cyber Recreation District (CRD), an 85 square kilometre precinct for digital entertainment and media companies. The CRD has spent $200m developing the electronic Dotman portal. It has both a regular web interface and a three-dimensional immersive environment, similar in feel to Second Life. When finished in mid 2008 it will be able to handle 7m concurrent users. The virtual world is based on the Entropia Universe platform from Swedish developer MindArk and is different to Second Life, in that it is connected to real world economic infrastructure.

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