Typing up the virtual worlds discussion – with Raph Koster, Clay Shirky, and Reuben Steiger. What a terrific panel, the speakers were really knowledgeable so it was a great pleasure to listen in. These are more notes on my interpretation of what was said – not a transcript. Errors are mine, and I apologize.

Raph – there has to be stuff to do. Chat is not it.
Reuben – Second Life is a game to the extent that life is a game. Lots of applications for “things to do”. It’s more than just a chat room with an interface.
Clay – I have never in my life bet against users. Users know what they are doing. And they’re not staying in Second Life. They leave, they don’t come back.
Raph: the only valuable statistic here is, of the people who came here two months ago, what percentage of them are back this month. Unfortunately, we rely on the providers for these numbers. The Linden Graphs look wrong, the numbers don’t add up because they’re structured differently. I wouldn’t use money as a measure. 1% of users can be monetized 10 to 100 times the average user. Money is a measure of passion, not of growth. As is usage hours. And number of subscribers is just like, how many people came to the website. They can’t even download the client for god’s sake.
Raph: average playtime is 20 hours per head on most games – on that count Second Life is behind.
Audience: It’s been 20 minutes, let’s get beyond Second Life’s numbers.
Reuben – we’ve just decided to expand beyond Second Life. We chose Gaia online as our second platform. It’s got the 2nd biggest message boards on the net, it’s transferring from 2D to 3D. It’s 2D social. The virtual world universe arrays itself within a quadrant. Games, not games, web, not web. As a company, Second Life monetizes — “not well”. You strip away the window dressing, it’s a hosting model. It would be an extremely profitable model to sell virtual objects for your virtual world. Second Life doesn’t do that.
Moderator: This is new, the ecosystem is still forming.
Raph: I disagree.
Clay: This isn’t so new. To the ecosystem question, this isn’t “early days and who knows what’s going to happen”. We should be looking for hybrids, where 3d representation of the actual 3d world can provide value that’s not better than real life, but better than nothing.
Raph: Virtual worlds were born 1978-79 as games. Continued, commercially available as games in 1982, making millions of dollars. Became more social and went graphical in 1985 with habitat. I wrote a whole book on how games are cognitively different. The pattern has never changed since 1989 – social virtual worlds have 10% the audience of what games have. So when you ask – is this going to swallow the web, or is it going to be a widget on the web? The latter. The Snow-Crash -Hypnotized folks think it will swallow the web – they’re wrong.
Moderator – what will come out of this that will sustain it going forward? Is there something that needs to be different? Is it just going to die?
Clay – I don’t think anyone thinks it’s going to die. Tens of millions of people are doing this now.
Reuben – I’ll pick a scenario. Second Life continues to grow, and an enormous ecosystem of alternatives will sprout up, there will be a more gamelike, directed experience, they will be more polished and from large media companies. And it will never supplant the web. It will never be more effective to read or sort large data sets virtually in 3D. So this begs the question of interoperability. While users want to get rid of the walled gardens, platform operators want the opposite. It’s usually the smaller, less successful companies that want to be part of a federated identity system. I think this will be a big conundrum going forward.
Raph: Users don’t want universal identity. They like multiple identities.
Kaliya Hamlin: Nobody’s ever said that Open ID, which is in the process of being adopted on the 2D web, is about always having one identity all the time.
Clay: I think people want a facilitated sign-on. But they don’t want to walk their star wars character into World of Warcraft – it would be like going to a costume party in the wrong attire.
Audience – The great thing about Second Life is the architecture. I can show you through my house without building it.
Clay: Tools like SketchUp, the 3D modeling tool, will reverse it – it allows people to create 3D objects that they may later take into different environments.
Reuben – when second life was developed, a decision was made to use primitives, because they are lighter weight. But with respect to collaborative work and saying virtual worlds is a bad substitute for real life – I’m not sure I agree. With the introduction of voice, with shared viewing of objects, collaboration in these environments is extremely powerful. 5 of the world’s biggest technology companies have platforms that have enterprise use-cases planned for virtual worlds. The bar to cross is not “be better than reality” but “be better than WebEx”.
Moderator: at IBM we are often insisting that international employees meet virtually.
Audience: Technology will improve, and the experience will get more interesting. Like VR.
Raph: VR is a parallel thing that is completely unrelated. Don’t be fooled by the similar terminology. Virtual World practitioners don’t know anything about VR. This is a red herring. It’s not representation that matters in virtual worlds. It’s communication. The poster child for this is that the largest and most popular sites have the worst graphics.
Clay: I want to challenge the assumption that technology eventually gets us there. “Ooh, a ladder will get me 3 times as close to the moon.” Screens are the wrong way to get to believing we’re in space. When it wants to be tricked, the human brain will think it’s in a 3D world, but when it doesn’t want to?
Raph: Second Life loves the fact that it’s one continuous world. This has always been a detriment actually to most worlds. You don’t want to hear what’s going on in the room next door. Millions have been spent trying to make bigger worlds that nobody really wants.
Reuben: What people desperately want is… search that works, the ability to find stuff to do and find and communicate with their friends.
Raph: The best VW operators are ones that recognize that what they make is like running a real life venue. You can bowl there. But the people who go to the bowling alley “just to bowl” are the sad cases. You’re supposed to be hanging out with your friends – talking, drinking, it’s the excuse for you guys to hang out. You’re bizarre if you’re not a gamer right now. Every kid under 15 is very savvy about these worlds, it’s not unusual for them to sample 20-30 worlds in a year. Let me try this, oops the free beta ended. They’re not loyal to the world, they’re loyal to their social circles, and they have named and trademarked their social groups, in Dunbar Number sets of 150. It’s a truism, social bonds migrate out of the space.
Clay – that process also happens in parallel – they’re also comfortable communicating in more than one way at a time. They join a bulletin board to discuss life in virtual world, they make collage-y constructs of the software, even when the software providers think they have made a monolithic application.
Reuben – which is interesting – the concept of “stickiness” has changed. In one virtual world, you can create a competing virtual world and pick up your friends. But other types – there’s a diabolically sticky aspect of Second Life. Their friends are there. Their content is not transportable. And their revenue base is there – if they have built a business there it’s hard to migrate.
Raph: the first two are fungible, and the third will follow. But people are insanely loyal to their “first time”.
Reuben: The idea of having a mini version of yourself is so cool, right?
Raph: It’s not always a version of yourself, although many people start out that way. the more people stay in worlds, the more they will engage in identity play. It’s easy to go in as yourself. Some say virtual worlds are for the exploration of identity. And people leave because they’ve figured out who they are. Then they can go home.
Reuben: Doesn’t that change as this becomes the 3d equivalent of email?
Raph: Everybody does this… it’s a normal part of being human. You know me as authoritative lecture guy, that’s different from who I am in other circumstances. They don’t want people to know that the one with the tie and the one with the bra are the same person.
Audience: How does that work for business? For the enterprise?
Raph: My sense is that in the end people prefer to play. Second Life shows this. “We’re going to have a political rally!” And there’s the bunny. It pushes towards play. Collaborative product design leading to the fabbing industry is a great application.
Reuben: the idea of virtual worlds is contagious. We have Diageo as a client. But first we had to say, there’s no such thing as drunkenness. So we had to make that. We wrote scripts to make the drinks toast together. It’s the introspection that goes on in translating the brand, that is so valuable. The client must think about themselves in a new creative way.
Audience: I’m from Korea. Cyworld
makes a half a billion dollars a year. Virtual world stuff is a lot more real to us. Cosplay is a costume place where you dress up as your avatar in real life. Bloggers always go by their online names in real lives, you have to call them that even if they are 50 years old. People are more comfortable expressing themselves online.
Raph: Korea leapfrogs because of a unique confluence of circumstances. The financial collapse, followed by a government initiative to hook up broadband all over the place, a cultural tradition of respecting games, people living close together. Games are for kids here, but there it’s more respectful. Internet cafes, import restrictions on japanese electronics meant that game consoles never made it to Korea.
Clay: There’s also retrofrogging. We had such great copper that we now lag the world in broadband. That was our Minitel.
Raph: There’s a confluence between photosynth and Google maps and Zillow and what not, and virtual worlds will be a part of this. Fabbing is more esoteric but it’s a big one. We’re nowhere near the limits of our gaming culture yet here. They will become the dominant entertainment. In Korea my cabbie new my name and wanted my autograph. In Korea the number one music star wants to hang out with a professional gamer so the fame will rub off. We don’t get that here yet. I like to predict off the past - it’s a poorly distributed future. Within 5 years it will be as normal for people to have a virtual world of their own as it is now for them to have a blog. It will be odd if you can’t point to it from your mobile device. We know it’s going to go that way, but most people aren’t in the loop and don’t know that that’s what’s coming.
Reuben: Everything’s a game, but most of them are really bad games. In terms of product design, the world is slowly catching on to this concept. The way customers want to interact with you, if you enable the formation of a community of people who like your company, patterning your interaction with the outside world in the form of complex, fun interactions is highly leveraged. Microsoft had to go through our statistics database. The average user spent 24 hours engaged with it. They’re used to measuring the impact of advertising in the fractions of seconds.
Raph: The gamification of the real world. Now I’ll restate what Reuben just said. If those coders hadn’t grown up with pong – rankings, ladders, reputation systems, etc. all come from games.
Clay: I’ll predict that the commonest use in business will be training, not collaboration. It will be those plaecs where a moderately accurate rendition triggers what you’re supposed to be doing to train reflexes. Games do that so beautifully. I’m skeptical of the general purpose collaborative environment.
Moderator. I would support the training prediction. I see the gamification. I see it there.
Reuben: My prediction is about the impact of virtual worlds and virtual object exchange. What virtual objects are doing is encoding complex social gestures – this may sound apocalyptic – people will replace the buying patterns that they currently use to serve that human need, by buying $100 shirts and 40 pairs of shoes and huge houses, they will replace it by buying stuff for their avatars.
Raph: Games are good at teaching problem solving, about collabortive problem solving. People don’t even know they are collaboratively problem solving. I object to the word training, it sounds so rote. Games are inconsequential – I mean that literally – the consequences aren’t real. The world of schools and companies will have to adjust itself to games, because this is how kids are thinking now.
Reuben – I draw a distinction between games and virtual worlds myself. We’ve launched many products. The synchronous social culture, as opposed to the goal-directed play, has value. In the future, games will allow users to interact with them, change them. On the part of the “operator”, it’s a basic community-building principle; if you’re committed you have to pattern interaction regularly. Train the users what to expect of you, so it’s not just a monument.
Audience: How much international mixing goes on?
Raph: Many large virtual worlds are running in Korea, there’s Habbo Hotel in Scandinavia. Each was born in order to service a territory, and then you get bleed-through. There is ethnic rivalry, unpleasant behavior, language gap. There have been attempts at translation etc. The net in general encourages tribalism. The downside to your circle of friends is your homogenous circle of friends. We’ve seen street gangs, bloodshed in the real world, rivalries between countries in StarCraft and CounterStrike, there’s conflict between Japanese and Chinese – Final Fantasy 11 has a major gulf between players. Certain things we can’t easily hide. You can hid race but not language skills. It’s hard to hide gender, as it turns out, few people can do it well.
Clay – as the Brazilian population began to grow on orkut, there was a backlash. Social capital relies on the mafia, the exclusion produced by inclusion is like pollution.