Chapter 2 – It is only a game

“The human imagination is an amazing thing. As children, we spend much of our time in imaginary worlds, substituting toys and make-believe for the real surroundings that we are just beginning to explore and understand. As we play, we learn. And as we grow, our play gets more complicated. We add rules and goals. The result is something we call games.
Games cultivate – and exploit – possibility space better than any other medium. In linear storytelling, we can only imagine the possibility space that surrounds the narrative: What if Luke had joined the Dark Side? What if Neo isn’t the One? In interactive media, we can explore it.” (Wright, 2006)

“We live in a complex world, filled with myriad objects, tools, toys, and people. Our lives are spent in diverse interaction with this environment. Yet, for the most part, our computing takes place sitting in front of, and staring at, a single glowing screen attached to an array of buttons and a mouse. Our different tasks are assigned to homogeneous overlapping windows. From the isolation of our workstations we try to interact with our surrounding environment, but the two worlds have little in common. How can we escape from the computer screen and bring these two worlds together?” (Wellner, Mackay & Gold, 1993) Ubiquitous computing foresees computers that are embedded throughout the physical environment, that can communicate with each other, and that can monitor their surroundings and respond in dynamic, “intelligent” ways. (Boone, 2008) The power of computing will be utilized beyond the traditional box and be applied to almost every aspect of our lives. While this may seem a distant proposition, a different type of technology-produced world is already here: the virtual world.

In many ways, ubiquitous computing is viewed as the opposite of virtual reality. The earliest writings on ubiquitous computing recognized this fundamental difference. “Perhaps most diametrically opposed to our vision [of ubiquitous computing] is the notion of ‘virtual reality,’ which attempts to make a world inside the computer . . . . Virtual reality focuses an enormous apparatus on simulating the world rather than on invisibly enhancing the one that already exists. Indeed, the opposition between the notion of virtual reality and ubiquitous, invisible computing is so strong that some of us use the term ‘embodied virtuality’ to refer to the process of drawing computers out of their electronic shells.” (Weiser, 1991) Yet, the two share an important common trait: both are mediated by computing ability.

The previous chapter introduced “MMORPGs” which are also sometimes referred to as game worlds or virtual worlds. Some of the most popular American MMORPGs are World of Warcraft, Everquest, Ultima Online, Dark Age of Camelot, Star Wars Galaxies, and City of Heroes. Legend of Mir, Final Fantasy XI, Lineage II, MU Online, Ragnarok Online, Lineage, and Kingdom of the Winds are some popular Asian MMORPGs. Dubit, Runescape, Playdo, and Habbo Hotel are popular in Europe. (Terra Nova, 2008)

Another type of popular virtual world is the social virtual world, also sometimes referred to as “unstructured.” Some popular social virtual worlds are Second Life, Sims Online, Project Entropia, and There. (Virtual Worlds Review, 2008) Categorization as “social” does not fully comprehend these virtual worlds. Each world relies to an extent on user-created content. For example, Second Life started as a largely blank slate with most in-world objects being designed and created in-world by individual players. (Second Life, Create Anything, 2008) Social worlds can also have some game-like incentive aspects. The entire concept embodies far more than traditional video games.

A. What is a Game?
Frasca (2001) defines a videogame as “any forms of computer-based entertainment software, either textual or image-based, using any electronic platform such as personal computers or consoles and involving one or multiple players in a physical or networked environment.” They tend to have the following elements:
1.  Graphics:  Any images that are displayed and any effects performed on them. This includes 3D objects, 2D tiles, 2D full-screen shots, full motion video (FMV), statistics, informational overlays and anything else the player will see.

2.  Sound:  Any music or sound effects that are played during the game. This includes starting music, CD music, MIDI, MOD tracks, Foley effects, environmental sound.

3.  Interface:  The interface is anything that the player has to use or have direct contact with in order to play the game . . . it goes beyond simply the mouse/keyboard/joystick [and] includes graphics that the player must click on, menu systems such as how to steer or control pieces in the game.

4.  Gameplay:  Gameplay is a fuzzy term. It encompasses how much fun a fame is, how immersive it is and the length of playability.

5.  Story: The game’s story includes any background before the game starts, all information the player gains during the story or when they win and any information they learn about characters in the game.
Source: Adapted from Howland 1998

Following Caillois (2001) videogames offer combinations of chance, competition, role-play and kinaesthetic pleases. They can offer both paidea and ludus rules thereby allowing players to engage in goal-oriented or ‘free play’ activity. In this manner, videogames are not to be viewed as restrictive rule systems. Recognition must be given to the necessity of exploration and deduction as well as the player’s ability to ignore or even subvert a designer’s intention. A player can develop tactics and strategy, perhaps exploiting weaknesses or flaws in the game, or they may even define their own games within the world made available, thus imposing their own ludus rules. Furthermore, the definition of a video games employed here recognises that certain games – or certain sequences or modes within games – are designed as non-goal-oriented ‘playgrounds’. (Newman, 2004)

In a best games review for gaming platforms, Berens and Howard (2001) demonstrate the relevance of industry-derived genres, as ‘they are useful pointers and reflect the industry’s current view of how they operate.’ Integrating some similar categories, they present seven game types: (1) action and adventure, (2) driving and racing, (3) first-person shooter, (4) platform and puzzle, (5) role-playing, (6) strategy and simulation, and (7) sports and beat-‘em ups. (Id.)

On the other hand, what is not a videogame? Rollings and Morris (2000) state “a game is not: a bunch of cool features, a lot of fancy graphics, a series of challenging puzzles, nor an intriguing setting and story.” They do not preclude these characteristics; rather these qualities do not, in themselves, make a videogame nor help to describe the uniqueness of the form.

So, what do players want in a videogame? Rouse (2001) identifies a range of player motivations and expectations. Among them, three are most important: (1) challenge, (2) immersion, and (3) players expect to do, not to watch. Livingstone (2002) found similar expectations. “In interviews with children regarding their experience of screen entertainment culture, what is most notable when children talk about computer games, the words that appear over and over are ‘control’, ‘challenge’, and ‘freedom’.” All of these point to the importance of player activity. A videogame must provide novel or exciting situations to experience, stimulating puzzles to engage with, and interesting environments to explore. Moreover, it must offer the player not merely suitable or appropriate capabilities, but capabilities that can be earned, honed, and perfected. (Sherry, 2001) Virtual worlds foster the sense of first-hand participation in a game world generated by the computer and as such can be understood as a form of ‘embodied experience’. (Newman, 2002)

B. The Real and The Virtual
Virtual worlds are just that, virtual. They are not real, but rather unreal. Unreal means artificial, fictitious, imaginary, intangible, and invented. (Ryan, 1999) However, to say that virtual worlds are purely unreal is not quite accurate. They are also real in the sense that all things that are artificial or invented do not fall entirely outside reality. If they did, many actions and creations of mankind would need to be removed from reality such as economics, language, and most importantly, laws. “[It may seem that] socio-political reality is not that different, finally, from the virtual kind, and that a human being never inhabits a physical landscape without also inhabiting its ghostly, abstract counterpart – the geography of language, law, and fantasy we overlay, collectively, on everything we look at.” (Dibbell, 1998) Laws are ‘invented’ and ‘intangible’, but hardly insignificant. “Law creates truth – it makes things true as a matter of law. It makes things true in the eyes of the law. And when law makes things true in its own eyes, this has important consequences in the world.” (Balkin, 2003) Laws regulate action within a social system. (Lastowka and Hunter, 2004)

Our culture is awash in such unreal realities, which take the form of deceptions, myths, fantasies, neuroses, and daydreams. Indeed, mythologies and shared illusions may provide an important basis for cultural cohesion. For example, in the classic Hans Christian Andersen story, “The Emperor’s New Suit”, an innocent child ultimately reveals that the Emperor’s new suit, which no one has ever seen, does not exist. The greater moral of the story, however, and the reason for its popularity, is that it is common to encounter social conventions which require participants to embrace a shared illusion. This story, and the stories in other cultures that resemble it, merely highlight extreme examples of this phenomenon. (Andersen, 1984) There are many senses of the words ‘real’ and ‘unreal.’ Ontologically speaking, virtual worlds have much in common with Disneyland. (Dibbell, 1998) Mark Poster (1999) notes, post-modern cynics like Jean Baudrillard have gone so far as to claim that Disneyland is reality, and America is the simulation. Tomorrowland, Fantasyland, and Main Street are physically real, but that physical reality is largely a faux representation of (unreal) environments from science fiction, fantasy, and American history – the real and the represented are blended together. (Doctorow, 2006) Common cultural spaces like cinemas share a similar status. They provide a setting where we may be scared, saddened, and frustrated by things that are significantly unreal. In fact, video games (especial MMORPGs) have been called a ‘new frontier of cinema’. (Wolf and Perron, 2003, citing, Le Diberder, 1996)

Christian Metz (1982), writing of the psychodynamic effects at work in cinema reception, observes that film is like the ‘primordial mirror’ – the original instance in which subjects are constituted through identification with their own image – in every way but one. Although on the cinema screen “everything may come to be projected, there is one thing and one thing only that is never reflected in it: the spectator’s own body.” This will be discussed later in greater detail with regard to copyrights and the concept that interpretation is an act of creation. A theory put forward by Pierre Bourdieu which complements the theories of immediacy, immersion and presence also discussed later. The process of identification is clearly involved in film viewing, and yet the cinema screen fails to offer the spectator its own body with which to identify as an object. For example, in Last Action Hero: “Young Danny Madigan is a big fan of Jack Slater, a larger-than-life action hero played by Arnold Schwarzenegger. When his best friend, Nick the projectionist, gives him a magic ticket to the new Jack Slater film, Danny is transported into Slater’s world, where the good guys always win. One of Slater’s enemies, Benedict the hit man, gets hold of the ticket and ends up in Danny’s world, where he realizes that if he can kill Schwarzenegger, Slater will be no more. Slater and Danny must travel back and stop him.” ( What seems a silly plot for a movie is actually what game player seeks when they play MMORPGs.

Metz (1982) is forced to distinguish between primary (ongoing) and secondary (intermittent) identifications with the camera that records a given scene and the human actors that appear within the field of vision. But the application of psychoanalytical theory to technological mediations of identity is both simplified and complicated when it comes to figures that appear on screen as direct extensions of the spectator: sites of continuous identification within a diegesis. Diegesis, from the Greek term for ‘recounted story’, is conventionally employed in film theory to refer to the ‘total world of the story action.’ (Bordwell and Thompson, 2001). It is used here to designate the narrative-strategic space of any given video game – a virtual environment determined by unique rules, limits, goals, and ‘history’, and additionally designed for the staging and display of agency and identity. The video game avatar, presented as a human’s double, merges spectatorship and participation in ways that fundamentally transform both activities. (Rehak, 2003)

Virtual worlds have not always been necessary to create these shared illusions. Game-playing allows many to share an illusion and have been around for a long time. Elements of play have been intrinsic to interactive impromptu dramas long before the advent of modern war games. Children’s games, such as ‘playing house’ or ‘Cowboys and Indians,’ are the quintessence of very simple role-playing games. These games are a type of scenario where players take on the roles and personas of fictional characters via role-playing.

Essentially, these games are a form of interactive and collaborative storytelling. While novels, television shows, and cinema, are passive, role-playing games actively engage the participants. This allows them to be simultaneously the audience, an actor, and an author. A classic example of this would be in a thriller when an unlucky character ventures alone down the wrong alleyway. The audience experiences dramatic irony and says “Don’t go down there!” because they know the serial killer is patiently waiting for his next victim. This is called Reader-Response Theory. It was developed as a response to the New Criticism idea of the autonomy of text. (Iser, 1978; Iser, 1989; Todorov, 1980) Two strands of reader-response theory take a different approach to the question of reader authorship. Closer to the argument here, Wolfgang Iser (1978) sees readers as co- creators. Georges Poulet (1980), on the other hand, suggests a greater distance between reader and text. He sees the interaction as largely one of two consciousnesses. Further, David Bleich (1978) argues that the first step in reader-response is fictionalization, the making of an aesthetic object no longer real. This response theory has also been applied to images such as art. (Freedberg, 1989) In a role-playing game, the player may experience a sixth sense which tells him to choose an alternative route. (Pagliassotti)

In many role-playing games, players take the roles of characters in an imaginary world that is organized, adjudicated, and sometimes created by a game master. Each gaming system has its own name for the role of the game master, such as ‘judge’, ‘narrator’, ‘referee’ or ‘storyteller’, and these terms not only describe the role of the game master in general but also help define how the game is intended to be run. For example, the Storyteller System used in White Wolf Game Studio’s storytelling games calls its GM the ‘storyteller’, while the rules- and setting-focused Marvel Super Heroes Role-Playing Game calls its GM the ‘judge’. A few games apply system- or setting-specific flavourful names to the GM, such as the ‘Dungeon Master’ (or ‘DM’) in Dungeons & Dragons. The games master’s role is twofold. First, he provides an imaginary world with a cast of characters for the players to interact with (and adjudicates how these interactions proceed). Second, he is likely to be responsible for advancing some kind of storyline or plot, albeit one which is subject to the somewhat unpredictable behaviour of the players. (Pagliassotti)

The collaborative feature of role-playing games comes in two forms. The first feature is very different to other games such as most sports, board games and card games which place players in opposition, with the goal of coming out the winner. In role-playing games, the players are generally not competing against each other. It is not a zero-sum game. “Zero-sum describes a situation in which a participant’s gain (or loss) is exactly balanced by the losses (or gains) of the other participant(s). It is so named because when you add up the total gains of the participants and subtract the total losses then they will sum to zero. Cutting a cake is zero-sum because taking a larger piece for yourself reduces the amount of cake available for others. Situations where participants can all gain or suffer together, such as a country with an excess of bananas trading with an other country for their excess of apples where both benefit from the transaction, are referred to as non-zero-sum.” (Wright, 2001) Hence, when playing most of these games, the only way to lose in fact is not to enjoy the game. The second form of collaboration is highly creative in that all of the players are writing the story together, as a team. At the end of the session the events that transpired could be written into a book that would tell a story written by all of its participants. This is an important point to note, especially in MMORPGs, if one were asserting copyrights.

Traditionally, role-playing games developed from war gaming. However, they are generally simpler, more fantastic, and less realistic or historically exacting. They also usually require far less space and equipment than the older and more traditional hobby of recreating battles. The term ‘role-playing game’ is used for certain distinct methods of play. One is the traditional method where a pen-and-paper or tabletop game is played with dice by several people. This frequently involves several types of polyhedral dice. Another method of these games incorporates the use figurines on a grid (usually a square or hexagonal one) to illustrate strategic and tactical scenarios for play. These are used particularly during combat which is often a major feature of such games. When figurines are used, position, terrain, and other elements can affect the probabilities. For example, a character making an attack from an opponent’s rear or flank may gain a significant bonus on their chances ‘to hit’ and may also gain advantages on any damage they inflict. On the other hand, figurines may not be used at all. Instead a whiteboard, chalkboard or similar drawing surface is used in the place of any figures or tokens. Nonetheless, many gamers are also collectors of the figurines and engage in the related hobby of painting and customizing them. (Appelcline)

A further style of play is live action role-playing (LARP). Here, the players physically act out their characters’ actions. “When it comes to immersive game play, some people just have to get off the couch. They are LARPs, a catch all term for the battle re-enactments, medieval militiamen, and anime imitators. This type of game play is usually more focused on characterization and improvisational theatrics and less focused on combat and the fantastic, if only because of the physical limitations of the players themselves. Live action gamers often dress up as their characters and use appropriate props in the game. The related style of freeform role-playing is less physically oriented, and is often played at conventions.” (Zjawinski, 2006) Chislehurst Caves, Kent play host to these games regularly.

‘Role-playing’ is also the term used as a name for a genre of video games that lack the ‘role-playing’ element of pen-and-paper games but borrows game play elements from these games. These games are called CRPGs which stands for ‘computer role-playing games’ or ‘console role-playing games’ depending on whether the game is played on a personal computer or on a video game console. These computerized simulations have become increasingly popular. The most recent computer role-playing games have endeavoured to incorporate social interaction via networking. They began in the realm of text based chat rooms, and soon moved to static persistent worlds represented in the text MUD. “In computer gaming, a MUD (multi-user dungeon, dimension, or sometimes domain) is a multi-player computer role-playing game typically running on a bulletin board system or Internet server. Players assume the role of a character, and see textual descriptions of rooms, objects, other characters, and computer-controlled creatures or non-player characters (NPCs) in a virtual world. They may interact with each other and the surroundings by typing commands that resemble plain English. Traditional MUDs implement a fantasy world populated by elves, goblins, and other mythical beings with players being knights, sorcerers, and the like. The object of the game is to slay monsters, explore a rich world and complete quests. Other MUDs have a science fiction setting.” (Bartle, 1990) Now, they have advanced to incorporate graphical representations of tokens (characters, equipment, monsters, etc.), as well as physical simulations obscuring much of the underlying rules of the games from users. Online role-playing games of today are defined by massively multiplayer online games such as EverQuest, Ultima Online and World of Warcraft.

In technical terms, games have spiralled into a realm previously reserved for special effects (SPFX) driven action movies. (Negroponte, 1996) Special effects (SPFX) are used in the film, television, and entertainment industry to create effects that cannot be achieved by normal means, such as depicting travel to other star systems. They are also used when creating the effect by normal means is prohibitively expensive, such as an enormous explosion. They are also used to enhance previously filmed elements, by adding, removing or enhancing objects within the scene. Many different visual special effects techniques exist, ranging from traditional theatre effects, through classic film techniques invented in the early 20th century, to modern computer graphics techniques (CGI). Often several different techniques are used together in a single scene or shot to achieve the desired effect. Special effects are often ‘invisible.’ That is to say that the audience is unaware that what they are seeing is a special effect. This is often the case in historical movies, where the architecture and other surroundings of previous eras are created using special effects. (Information Slurp)

These new games remediate cinema; that is, they demonstrate the propensity of emerging media forms to pattern themselves on the characteristic behaviours and tendencies of their predecessors. In introducing the concept of remediation, Bolter and Grusin (2000) emphasize the hybrid, dialectical nature of media appropriation: “The new medium can remediate by trying to absorb the older medium entirely, so that the discontinuities between the two are minimized. The very act of remediation, however, ensures that the older medium cannot be entirely effaced; the new medium remains dependent on the older one in acknowledged or unacknowledged ways.” The non-networked computer games resemble the mental world of a two-year old: everything evolves around you and nothing happens when you are not present. (Lastowka and Hunter, 2004) Virtual worlds are different. Computer games of this nature subtly reflect our way of thinking about the real world. (Bolter, 1984) They are created by computer code designed to act like real world property. (Fairfield, 2005)

C. Interactivity, Physicality, and Persistence
Virtual world is a term used by the creators of the game Ultima Online, though they seem to prefer ‘persistent state world’ instead ( Neither is a universally accepted term. Perhaps the most frequently used term is ‘MMORPG,’ which means ‘massively multi-player on-line role-playing game,’ apt since virtual worlds were born and have grown primarily as game environments. However, virtual worlds probably have a future that extends beyond this role. Moreover, MMORPG is impossible to pronounce. Other terms include ‘MM persistent universe,’ with ‘MM’ meaning ‘massively-multiplayer;’ also, there is Holmsten’s term, ‘persistent online world.’ ‘Virtual worlds’ captures the essence of these terms in fewer words, with fewer syllables and a shorter acronym; by Occam’s Razor, it is the better choice. These virtual worlds are computer programs with three defining features:
   – “Interactivity: it exists on one computer but can be accessed remotely (i.e. by an internet connection) and simultaneously by a large number of people, with the command inputs of one person affecting the command results of other people.
   – Physicality: people access the program through an interface that simulates a first-person physical environment on their computer screen; the environment is generally ruled by the natural laws of Earth and is characterized by scarcity of resources.
   – Persistence: the program continues to run whether anyone is using it or not; it remembers the location of people and things, as well as the ownership of objects.” Castronova, 2002) Joshua Fairfield (2005) uses a similar description to explain rivalrous code which he, in turn, defines as virtual property.

Interactivity is a key value of multimedia. As noted earlier, traditional media gives the user a passive role of watching or listening as a linear work unfolds. The benefit of digitisation is that it allows users to select precisely the information or experience they want. (Williams, et al, 1996) MMORPGs are the first persistent (24 hours a day/ 7 days a week) virtual worlds, and the first instance of individualized mediated experiences within a mass audience (each player’s experience is unique despite the large number of simultaneous participants). (Wolf and Perron, 2003) Another definition of MMORPGs is any computer network-mediated games in which at least 1,000 players are role-playing simultaneously in a graphical environment. ( They are also the first interactive mass medium to unite entertainment and communication in one phenomenon. (Filiciak, 2003)

A virtual world is the consequence of blending the graphical three dimensional environments of games like Tomb Raider and DOOM with the chat-based social interaction systems developed in the world of MUDs. Ironically, both games have now been turned into big screen movies. Traditional first-person shooter games organize its user interface around a software-simulated ‘camera’ that, in the game’s representational system, serves double duty as a body situated in the diegesis. For example, in Tomb Raider, you manoeuvre Lara Croft around on your screen and do things. In a virtual world, other people are running around in the same virtual space as you are, and they can talk to you. “J.R.R. Tolkien, perhaps the cultural and intellectual father of these worlds, used the term ‘Secondary World’ to describe his fantasy universe. It would amaze Tolkien how completely un-secondary his fantasy worlds have become. Virtual worlds are neither fantasy (constructions of the mind) nor reality (impositions of nature). They are Artistry: mental constructs expressed by their creators in whatever media the physical world allows. At the 20th annual Arts Electronica Festival, a Golden Nica was given to Team chman for their development of the game Banja. The award horrified purists of electronic arts. Yet anyone who has wandered in worlds like Norrath has experienced the art of other people at an unprecedented deep psychological and social level. You are not looking at a painting. You are in it. And it is not a painting at all, but immersive scenery that induces you and thousands of other people to play parts in what becomes an evolving and unending collective drama.” (Grau, 2003)
The avatar’s navigation of ‘contested spaces’ and interaction with others generates the narrative. Arguing that video games are as much about architectural, sculptural, and other ‘spatial’ properties as they are about narrative or cinematic pleasures, Jenkins and Squire (2002) remind us that, “If games tell stories, they do so by organizing spatial features. If games stage combat, then players learn to scan their environments for competitive advantages. Game designers create immersive worlds and relationships among objects that enable dynamic experiences.” The hot digital cinematography alone does not make a digital story immersive.
Unlike single-player games, these virtual environments do not go into cryogenic suspension in your absence. Events transpire. Battles are fought. Rivalries flare. Alliances are formed. What makes the game immersive is a world where no territory is off-limit, anything you see is fair game. This virtual world cannot be turned on and off. Actions have lasting consequences, both narratively and socially. (Herz, 1997) As players construct their characters (avatars), accruing strength and skill with experience, they also rely on other characters. Despite this generally non-competitive nature, role playing games usually have rules, which enable the players to determine the success or failure of their characters in their endeavours. Normally this will involve assigning certain abilities to each character – from something as mundane as being quite strong to having x-ray vision. ( Success relies more on social interaction and less upon combat skill. Avatars enter the mythology; and their actions accrete to the continuity of the galaxies. (Herz, 1997)

As such, the MMORPGs bring another type of code into existence; one which is designed to act more like land or chattel than like ideas. A type of code more prevalent on the internet than the first type of code and which uses most of the internet’s resources. In fact, it makes up the structural components of the internet itself. The chattel-like code creates virtual property akin to real life property. This type of code is rivalrous, if one person owns and controls it, others do not. Fairfield (2005) points out that rivalrousness of consumption – the fact that one actor’s use of a resource bars others from use as a consequence – is different than exclusivity. Exclusivity is a function of rivalrousness. Many resources, including purely non-rivalrous resources, can be protected by exclusionary rules. For example, the Recording Industry Association of America has attempted to use exclusionary rules to protect its non-rivalrous music.

Cyberspace is a (virtual) reality within the world’s computers and computer networks. While cyberspace should not be confused with the real Internet, the term is often used simply to refer to objects and identities that exist largely within the computing network itself, so that a web site, for example, might be metaphorically said to ‘exist in cyberspace.’ According to this interpretation, events taking place on the Internet are not therefore happening in the countries where the participants or the servers are physically located, but ‘in cyberspace’. This becomes a reasonable viewpoint once distributed services (e.g. Freenet) become widespread, and the physical identity and location of the participants become impossible to determine due to anonymous or pseudonymous communication. The laws of any particular nation state would therefore not apply. (Heylighen, 1994) This ‘space’ in cyberspace refers to something in particular: the rivalrousness, or ‘spatial’ nature, of certain internet resources, like URLs, domain names, email accounts, virtual worlds, and more. Many oppose the analogy that the internet is a space; however, many online resources mimic physical properties. (cf. Goldsmith, 1998; Sommer, 2000; O’Rourke, 2001; Wu, 2000) For example, a chat room is just like a conference room; a URL is similar to real estate in the real world. This type of code is ubiquitous and consequential as well as sharing three legally relevant characteristics with real world property: rivalrousness, persistence, and interconnectivity. To the extent academics have approved of place language describing online resources, they have done so out of a sense of psychological utility, not a sense that the language is descriptively accurate. (Yen, 2002) “Of the many metaphors that have been applied to the Internet, the most prominent and influential has been the imagination of the Internet as a separate, new physical space known as ‘cyberspace,’ and its comparison to America’s Western Frontier.” (Id.)

Rivalrousness, in the physical world, lets the owner exclude other people from using owned objects. For an analysis of the right to exclude in physical property, see Thomas W. Merrill, (1998) who stated that “the right to exclude others is… the sine qua non” of property rights. The desire for the power to exclude in cyberspace is strong too. So this power has been designed into code. By design, code can be made so that it can only be possessed by one person. Thus, rivalrousness exists also in code. If one person controls rivalrous code, nobody else does. (Fairfield, 2005) For example, if one person has a given email address, nobody else can receive mail at that same address. If John Smith owns a given internet address, Paul Walker cannot put his website up at that address. No one but John Smith (or those he permits) can post content to that address.
There are other characteristics drawn from the physical world that are incorporated into code as well. Objects and places in the physical world are persistent. For example, a painting need only be painted once. After that, it remains in existence for as long as someone wants it. Similarly, code is often made persistent – that is, it does not fade after each use, and it does not run on one single computer. For example, an email account can be accessed from a laptop, a desktop, or the local library. When an email account owner turns her laptop off, the information in that account does not cease to exist. It persists on the server of her Internet Service Provider. The trait of persistence is linked to a technological phenomenon that will have greater importance in the discussion that follows. The trait of persistence is achieved through distributed computing – that is, the code runs on multiple computers simultaneously. A common form is that code is split between a client program that runs locally, and a server that manages coordination between other interconnected accounts. Thus, for example, your email client may run on your local laptop, and receive its information from your Internet Service Provider’s server, where the information is stored. As will be demonstrated in the next chapter, this is an important feature in virtual worlds.

Objects in the real world are also naturally interconnected and affect each other. Two people in the same room experience exactly the same objects. Likewise, code can be made interconnected, so that although one person may control it, others may experience it. The value of a URL or an email address is not solely that the owner can control it; the value is that other people can connect to it, and can experience it. They may not be able to control it without the owner’s permission, but – as with real estate in the real world – with the owner’s invitation they may interact with it. This becomes a very important argument for the owner’s of virtual worlds. They want to control the world and those who are allowed to experience.

In summary, the traits – rivalrousness, persistence, and interconnectivity – mimic real world properties. If I wield a sword, I have it and you do not: Rivalrousness. If I put the sword down and leave the room, it is still there: Persistence. Anyone can interact with my sword – with my permission, you can experience it: Interconnectivity.

Rivalrousness gives one the ability to invest in property without fear that other people may take what one has built. Additionally, rivalrousness lowers monitoring and detection costs for protecting property. Whereas in commons property misuse is quite hard to police (because the mis-user is entitled to be on the property and make some use of it), interference with rivalrous private property is very easy to detect. For example, if you take my pen from me, I will detect the loss fairly quickly. (Ellickson, 1993) Persistence protects that investment by ensuring that it endures. Interconnectivity increases the value of the property due to network effects – not least of which is the fact that other people’s experience of this resource may be such that it becomes desirable, and hence marketable, to them.

The audience does not just watch the story or play a game. The audience is the story. The participants are as interconnected virtually as they would be in reality. They are creating as much as they are consuming. This is a quantum leap from conventional first person shooter technology. (Fitch, 2004)

D. Star Wars
Virtual worlds, populated by thousands of people, are giving rise to new kinds of stories that demand a world-builder’s creative aspirations and attention to dramatic potential. (King) This is a new concept in games. Based in San Rafael, California, LucasArts has grown from its roots in 1982 as a small research group funded by Atari into a full-fledged software developer that employs 350 people. Their ambition is concentrated on Galaxies, which was under construction for two years in partnership with an Austin-based team from Sony Online Entertainment. The architects of Star Wars Galaxies are welding together an interactive galaxy whose size and complexity will make the Death Star look like a moon globe. The epic saga that fans have consumed on the Empire’s terms will become an interactive galaxy of their own adventures as smugglers, mercenaries, canteen keepers, and aspiring Jedi Knights. (LucasArts Press Release, 2006)
Some games are based on novels and comic books, such as Star Wars. The films and video games established legions of characters and locations to avid fans, yet these digital thrill rides revealed very little of the tightly controlled Star Wars universe. One could be the top gun of the Rebel Alliance in Shadow of the Empire for Nintendo 64, but one could not get drunk and sing “You’ve Lost That Loving Feeling” in the Mos Eisley canteen afterward and have the locals remember you. Your adventure was not a permanent event. The player had less influence than a minor comic book character because the fantasy vanished as soon as the game was over, and with it, any of the player’s exploits. Their stories were lost.

Massive multi-player online game changes these experiences into a new type of game in which layer upon layer of experiences are melded together in a persistent virtual environment. Although this would pose the possible questions, whether a Rebel Alliance star pilot known as Maverick Starkiller singing this song in an effort to attract the attention of some lovely female alien in the style of Maverick the U.S. Navy Fighter Pilot from Top Gun (Paramount, 1986) would be a copyright violation of 1) the film Top Gun and its associated rights, or 2) the song “You’ve Lost That Loving Feeling”, The Righteous Brothers (performers) written by Phil Spector, Barry Mann, and Cynthia Weil; produced by Phil Spector and released December 1964 on Philles; and its associated rights; or the trademark in the name and/or representation of Maverick.

Twenty-five years ago George Lucas conjured up a galaxy for the original Star Wars movie. LucasArts is now expanding that galaxy so that others may interact in it. Nevertheless in one fundamental way this galaxy is drastically different. Everything is not under the game-maker’s control. This multimedia product combines both computer-generated displays and digitized pre-existing information to form its images, which are far more diverse than the images which appeared in the film. (Turner, 1995) The individual elements of the product are all protected by copyright in their digital format. (17 U.S.C.A. §102(a) (1996); CDPA 1988, ss 1-8) The software which enables the action is also protected. (17 U.S.C.A. §102(a) (1996); CDPA 1988, ss 1-8)

However, the characters in Galaxies will not be actors, or drawings in a comic book, or passages in a novel. They will be autonomous human beings, each with a mind, ego, and agenda of their own. (Grodal, 2003) Crucial to this evolution is the avatar’s gradual but relentless acquisition of ‘liveliness’. In appearance, movement, and disposition, avatars have ever more clearly come to mimic their player, developing personality, individuality and an ability to act within the virtual world. (Id.) Players exist with their avatars in an unstable balancing act. Players experience games through the exclusive intermediary of another – the avatar – the ‘eyes’, ‘ears’, and ‘body’ of which are components of a complex technological and psychological apparatus. Just as one would not equate a glove with the hand inside it, one should not presume the subjectivity produced by video games to transparently correspond to, and thus substitute for the player; although, it is precisely this presumption which appears necessary to secure and maintain a sense of immersion in ‘cyberspace’. (Rehak, 2003)

Spacewar! established a set of elements vital to avatarial operations in most video games which followed it:
“1. Player identification with an onscreen avatar.
2. Player control of avatar through a physical interface.
3. Player-avatar’s engagement with narrative-strategic constraints organizing the on-screen diegesis in terms of its (simulated) physical and semiotic content – the ‘meaning’ of the game’s sounds and imagery – that constitute rules or conditions of possibility governing play.
4. Imposition of extra-diegetic constraints further shaping play (for example, timer, music, scorekeeping and other elements perceptible to the player but presumably not by the entity represented by the avatar; an instance of this in the relatively austere Spacewar! would be the software function that ended a game when one player ‘died’).
5. Frequent breakdown and reestablishment of avatarial identification through the destruction of avatar, starting or ending of individual games and tournaments, and ultimately the act of leaving or returning to the physical apparatus of the computer.” (Jenkins and Squire, 2002)

‘Liveliness’ comes from the increasing subjectivization of video games: a move from the god’s-eye perspective utilized in early games to perspective rendering that simulates three-dimensionality, first as static scenery, then as fluidly navigable space. Avatarial operations flow from two elements that inter-depend in various ways. First is the foregrounding of an onscreen body, visible in whole or in part. Second is the conceit of an off-screen but assumed body constituted through the gaze of a mobile, player-controlled camera. Differing articulations between camera-body and avatar-body lead to different, though related, modes of play and subject effects. In every case, the intent – to produce a sense of embodiment – announces itself from the dawn of video game history. (Levy, 1984)

Concurrently, characters and material from the games have been overlaid onto the movies. When the original Star Wars trilogy was re-released onto video and DVD, it had new scenes and overhauled special effects. For example, the ship invented for Dash Rendar in Shadows of the Empire had a cameo appearance in the Special Edition, which came out in 1997. There’s a scene as Luke Skywalker and Obi-Wan are coming into Mos Eisley to look for a pilot who will take them off the planet. You see the ship flying over the town. (Dibbell, 2003) In Episode I, the names broadcasted for the pod race were originally conceived for Episode I Racer, a game that sent players slaloming through the desert canyons on Nintendo 64s. The superimposition is subtle. And subtlety is the most important feature of credible fiction. Making sure these superimpositions take is a tricky business. There is a religious dedication to the integrity of the fictional environment.

Most Hollywood studios use McDonalds’ Happy Meals, video games and other tie-ins to stoke the box office. “Some video game companies are offering product placement in their games. Virtual ads are viewed by real eyeballs. In game advertising industry generates more than $60 million which is predicted to grow to half a billion dollars by 2009. One of the biggest players, Massive, Inc., has inserted ads in almost 50 titles.” (Gaudiosi, 2006) In contrast, the people who run Star Wars do not consider novels, toys, comic books, and video games to be promotional vehicles that exist merely to pad the bottom line. (Herz, 2002) These products are considered to be shards of an alternate reality. Each one must be scrupulously verified against all the others, for fear that it may break continuity. (Id.; Star Wars Galaxies FAQ) Accordingly, the licensing division of Lucasfilm has developed into a type of secular clergy, whose primary function is to illuminate the Star Wars oeuvre. George Lucas is very particular about maintaining control over his work. In order to do this, he originally contracted with 20th Century Fox to make only one movie, but retained the rights over any sequels. He also insisted on maintaining all rights in merchandising and licensing. It is remarkable that he was able to do so; but back in the 1970s, movie studios were not interested in nor understood the power of merchandising and licensing. Charles Lippincott, LucasArts Marketing Director, changed all of that. (Empire of Dreams: The Story of Star Wars on Bonus Materials from Star Wars Trilogy DVD set (2004)).

Licensing maintains a FileMaker Pro database with, at last count, twenty-five thousand entries, gleaned from every scrap of media the company has produced, in addition to an extensive archive of imagery. All of this is accessible to employees and licensees on a corporate intranet. For all intents and purposes, this database is the Star Wars bible. All functional, aesthetic, and metaphysical queries are referred to it assiduously. The entire Star Wars oeuvre is maintained in a database commonly called ‘the canon’ by Lucas employees, without a trace of irony as they really do see themselves as a secular clergy. A smaller version of this database can be found at Every time a player creates a new character, that character is put into a database. That character is forever maintained in the continuity that is the epic Star Wars. Every character must be fixed for this alternate reality to maintain continuity and game play.

The Star Wars ‘canon’ is subject to theological debate just like any other religious touchstone. As Galaxies will transport the universe into the future after the films, an enormous degree of scrutiny is focused on every detail of the interactive experience. (Herz, 2002) For example, how should a character be brought back after they have been killed? Cloning was deemed to be the answer. So, players can go to a facility and create a replica of their character/avatar. A chain of ‘cloning facilities’ are situated throughout the universe. Each cloning facility is effectively a place where a player gets to reconstruct a partial ‘save game’. “The cloning facility ‘saves’ your character’s current physical attributes (including customisations) and knowledge (represented by skills and XP values).” ( When a character dies, he or she will re-spawn at the last cloning facility they visited, with their attributes, skills, and XP reset to whatever they were the last time the character was cloned. So each character has a replica maintained in a cloning vat in the character database maintained by LucasArts. (Herz, 2002)

Notwithstanding that the new Star Wars testament continuously checks itself against the old, Galaxies feeds new information into ‘the canon’. For example, the films provide you with only a glimpse of small sections of any given planet. However, all of the planet must be traversable in the game realm. All of the known areas must be connected. Thus, the builders must generate new terrain. The maps are then uploaded to the Ranch and become permanent planetary surveys. “That will happen with everything,” says Blackman, “Every time we create a new character, a new creature, a new location, every time we include an event, those become part of continuity. Already, we have created several hundred creatures, and they are all now established in the continuity as native to whatever planet they are on.” (Strickler, 2002) Skywalker Ranch is a cross between Disneyland and Yellowstone Park. Home to George Lucas’ production company, the 2,600-acre ranch is a reflection of its owner: high-tech and low-key. Although he has become famous for pushing the envelope of special-effects technology, Lucas still writes his scripts in longhand. While technicians fiddle with a physics lab full of paraphernalia, he takes quiet walks in the solitude. (Id.)

A game’s success is contingent upon players’ willingness to invest themselves (financially and emotionally) in their characters. (King) They must want to become citizens of this virtual world, if it is going to prosper. (Id.; Herz, 2002) The very development of a massive multi-player game mirrors this change. Game designers are no longer authors. They must now act more like urban planners, or local politicians. (Bartle, 2004)

E. Second Life
Second Life is a privately owned three dimensional virtual world, just like Galaxies, but is only partly subscription-based. (Parker, 2003) It was originally made publicly available in 2003 by San Francisco-based Linden Lab, and founded by former RealNetworks CTO Philip Rosedale. Philip Rosedale (Philip Linden within Second Life) has stated that his goal with Second Life is to demonstrate a viable model for a virtual economy or virtual society. In his own words, “I’m not building a game. I’m building a new country.” (Terdiman, 2004) Players visit this virtual world, as if it were a real place. They are more like travellers than game players. They explore, meet new people, and participate in individual and group activities. If they decide to visit frequently, they learn new skills and mature socially. In a sense, they are learning the culture of the virtual world. (Id.)

The Second Life world is generated by a large assortment of servers known cooperatively as ‘the grid’ which run sims that are owned, operated and maintained by Linden Lab. There are currently two grids available for public use, Agni is referred to as the Main Grid, and Siva, the Preview Grid for public beta testing. There are possibly other grids for Linden Lab’s use as well. Teen Second Life is often thought to be on a separate grid as well, but in fact it exists on Agni. The origin of use of ‘grid’ could come from the fact that sims are arranged in a grid-like matrix pattern or it could come from the real-life use of ‘grid’ to refer to a collection of networked servers (which Second Life is).

A Second Life client program provides its Residents or users with programming tools to view and modify the Second Life universe. The term, Resident, is used by Linden Lab and may be meant to give users a feeling of ‘belonging’ and ownership of the virtual world. It is also used throughout most of Second Life’s user interface in place of ‘user’. The Residents may also participate in its virtual economy, which simultaneously has begun to operate as a ‘real’ market. As of December, 2006, between about ten and twenty thousand users are in Second Life at any one time. At precisely 8:05:45 AM PDT, October 18, 2006, the number of registered accounts in Second Life hit 1 million Residents. (Pathfinder, 2006) Eight weeks later, on December 14, 2006, this number doubled to 2 million Residents. (Terdiman, 2006)

When Linden Lab released Second Life in 2003, it had crafted a reflection of the architecture of modern societies, complete with contemporary clothing, buildings, vehicles, and opportunities for starting online businesses. (Yi, 2003; Totilo, 2004) Second Life accurately simulates the laws of physics in virtual space: flags move in the wind, objects fall to the floor if a character drops them. Linden Lab also gave its users a scripting language and an integrated development environment for building new objects. Users could assemble prefabricated shapes into composite objects and give those objects behaviours. All objects in Second Life are composed of one or more geometric building blocks called ‘primitives,’ or (more colloquially) ‘prims’. Each prim can be sized, shaped, coloured and textured. Additionally, through the use of the Linden Scripting Language, programmers can insert event-based actions into a prim, so that it can interact with avatars or with other prims inside of an object. For example, by coding an ‘onTouch’ function, a developer could make a ‘button’ prim in a phone respond to the touch of an avatar, enabling someone to retrieve voicemails from a ‘voicemail’ prim. (Linden Scripting Language Wiki, By combining verisimilitude with the power of malleability, residents gained the freedom to craft ingenious objects, and they put that ability to use. According to Linden Lab’s Cory Ondrejka (2005), residents have inserted over 100 million such objects into the world. Over 380,000 distinct objects changed hands in the month of July 2006 in ten million user-to-user transactions, which (given the exchange rate of 300 Linden Dollars (L$) to one U.S. dollar) yielded an internal economy of US $10 million for that month. Linden Dollars can be freely exchanged to U.S. dollars through Linden Lab’s LindeX Currency Exchange. (Id.)

The story of Second Life is an interesting story of information economics. The legal implications are intriguing. By granting its participants intellectual property rights, Second Life has given its residents a significant stake in the virtual world. Individually, the residents now ‘own’ a part of Second Life; and, as a collective body, Second Life residents thereby ‘own’ most of the content of the virtual world. As a result, residents retain significant control over their world and, by extension, power.

Constitutional theorists will be quick to point out that the source of this power is still maintained by Second Life’s provider, Linden Lab. (Lastowka and Hunter, 2004; Balkin, 2004; Balkin, 2005) Theoretically, Linden Lab could — if it wanted to — reverse its policy. After such a change, any participants who create new content would once again have to consent to transferring their intellectual property rights to Linden Lab. The theoretical potential reversibility of the decision to grant participants of virtual worlds ‘rights’ means that Linden Lab’s decision is not formally akin to signing a virtual Magna Carta. With or without ‘rights’ granted to its participants, Linden Lab’s relations to Second Life’s content creators remain contractual on an individual, rather than societal, level. John Perry Barlow in A Declaration of the Independence of Cyberspace, proclaimed, “Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather.” (

Given this situation, supposing Linden Lab was to grant its participants a ‘right’ to decide — perhaps through referenda — what changes they want in the world. Such a delegation of governance to the people of Second Life might be viewed as a social contract. The legal ramification would be different. At best, only the contractual relationship between Linden Lab and each of its customers would change. Should Linden Lab violate this right, users would have no recourse other than leaving Second Life.

Second Life’s Terms of Service stipulate that “Linden may amend this Agreement … and/or modify the Community Standards at any time in its sole discretion by posting the amended Agreement or modified Community Standards at,, another current website designated by Linden or by communicating these changes through the primary contact methods you have established with us.” (See Second Life Terms of Service, § 1.2) The Resident’s only choice may seem to be to exit.
However, this has not happened. Instead, they mutiny. For example, the Resident’s of Second Life had a virtual equivalent to the Boston Tea Party when an early idea to tax residents on the objects they made was overturned. It is a tax-free free-trade area with minimal regulations which has more in common with a kind of spirited frontier capitalism than it does with the collaborative, everything-for-free ethic of sites like Wikipedia. (Harkin, 2006) Another example was when the participants of Second Life also held demonstrations at the entry points of the world. They would light their avatars on fire and wander around telling new players of all the terrible problems with the place until Linden Lab was forced to fix them. (Ondrejka, 2005)

There is a difference between Linden Lab granting such participation ‘rights’ and the ‘rights’ it granted its players in November 2003. Linden Lab granted – intellectual property rights – that are rights guaranteed by real-world intellectual property laws. Granting intellectual property rights in virtual world objects injects real-world guarantees into the virtual world. This, in turn, creates a relationship between the two realms that is described as permeability. (Second Life Wiki, GJSL ) Linden Lab is not simply bound to a contract with its customers, but to the social contract of Linden Lab’s real-world jurisdiction. Any content created thereafter by Second Life’s participants is their intellectual property, not Linden Lab’s. Should Linden Lab decide to change its policy again, content created before that change would remain the participants’ property. This concession to participants of real-world intellectual property rights in their creations inserts real-world “legal DNA into Second Life’s genetic makeup,” and subjects Linden Lab to an external authority. (Mayer-Schönberger and Crowley, 2006) Bruce Ackerman (1989) argued that a “distinctive aspect of the American constitutional tradition” is its “evolving commitment to dualistic democracy: its recurring emphasis on the special importance of those rare moments when political movements succeed in hammering out new principles of constitutional identity that gain the considered support of a majority of American citizens after prolonged institutional testing, debate, decision.” In a similar manner to this type of constitutional moment, Linden Lab limited its future behaviour through its own decision.

Economic forces may prompt more virtual world providers to follow Second Life’s lead. However, this process of constitutionalization, i.e., voluntary constraining norms in virtual spaces through norms of a real-world jurisdiction, while restricting what virtual world providers can do in relation to virtual world participants, is not synonymous with a movement towards democratic governance within virtual worlds. Linden Lab provided a constitutional moment, not a democratic one.

The constitutionalization of virtual worlds has been made possible by the confluence of two factors: property rights and the permeability between the virtual world and the real world. Judge Easterbrook (1996) suggested that virtual spaces need stable property rights. Linden Lab did not act because a real-world government command forced it to act, nor because of aggressive popular demand among its participants. More precisely, Linden Lab introduced intellectual property rights because of second-order market forces. The need to compete – and thus retain and enhance its power in relation to other virtual worlds – impelled it to sacrifice power within its own jurisdiction.

Business acumen is only half the story. Without a real-world legal system and a real-world guarantee of intellectual property rights that can be exercised out with the virtual worlds and their own internal rules, Linden Lab’s property rights guarantee lack a ‘constitutional’ nature. Real-world law functions merely as a catalyst for the advancement of virtual world governance. Even if virtual world creators grant intellectual property rights to their participants, market forces will continue to fuel an intense regulatory dynamic. “[E]conomic globalization intensifies competition among nation-states.” (Kapstein, 1994)

In other words, jurisdictions may be forced to surrender power within their realms in order to gain competitive advantage among their competitors, enabling a capital mobility that reinforces the jurisdiction’s need to compete ferociously with others for this capital. Manuel Castells, in The Rise of the Network Society (1996) pointed to the importance of the “political capacity of national and supranational institutions to steer the growth strategy of those countries or areas under their jurisdiction” for staying competitive in a global economy. Jagdish Bhagwati, In Defense of Globalization (2004) summarized some of the main arguments of globalization critics: “corporations would … be able to seek profits by searching for the most likely locations to exploit workers and nations, thereby putting intolerable pressure on their home states to abandon their gains in social legislation.” As such, Linden Lab may have brought the forces of globalization into the sphere of virtual worlds.

F.  Paidea v Ludus
Working out the rules of a game constitutes a large part of the fascination and challenge of playing the game, and is the prime motivation for play. Once the rules have deduced and overcome, the games may lose their appeal. The demands made by videogames on the player’s imagination have been overlooked frequently in accounts of play. (Newman, 2004) Deducing, collating, and working within or around a game’s rule sets represents a large part of the pleasure of videogame play and highlights the active, participatory role of the player. Two computer programs facilitate a virtual world – one program runs on the player’s personal computer, and the other program runs on a game server accessed by the player using the Internet. (Fitch, 2004) These online role-playing games generate revenue from a player’s purchase of the computer program that runs on his personal computer and from a monthly subscriber fee that allows the player to access the game server.

The market is very competitive. Since virtual worlds are human networks, one could forecast that only a few virtual worlds will eventually dominate the market. (Woodcock, 2008; Castronova, 2002) The inclination to network monopoly is improved by the partiality most players to ‘live’ in one fantasy world at a time. Add to that the fact that switching is expensive because it can take weeks to become familiar with a new world. “To someone raised in an historical worldview – one valuing linearity, genealogies, traditions, rules – explanations of the game sound haphazard, unplanned and immature. But to someone familiar with global information spaces such as the world wide web, games such these provide environments for learning postmodernist approaches to communication and knowledge: navigation, constructive problem-solving, dynamic goal-construction.” (Johnson-Eilola, 1998)

Moreover, the growth in the number of virtual worlds has been spurred by a growth in user base and revenues. Games are big business. According to the Games Developer’s Conference (, game industry revenues have exceeded box office revenues since 1999. One recent survey estimated the market for online electronic games in 2003 was $ 1.9 billion, predicted to grow to $ 5.2 billion in 2006, and $ 9.8 billion by 2009. In parts of Asia, online games have become ubiquitous; an estimated one in four teenagers in South Korea play NCsoft’s Lineage. (Associated Press, 2003) Virtual worlds are notable as one area of internet commerce that seems to be profitable. (Dibbell, 2003; Terdiman, 2004) Most software game titles require the player to pay a one-time fee to purchase the game. Virtual world-based games require the player to purchase the game software and then pay additional monthly fees (from $10 to $20) to access the virtual world on an ongoing basis. This revenue stream seems to be stable and growing. (Sellers, 2006; Castronova, 2002)

Millions of individuals are embracing the unreality of virtual worlds by paying substantial sums of money to exist in them. Hundreds of millions of dollars in revenue are flowing into the coffers of Sony, Electronic Arts, and the other companies that own virtual worlds. (Snider, 2003)

“Massive, Inc. has inserted the Coca-Cola logo into SWAT 4 and put Diet Sprite Zero vending machines in Tom Clancy’s Splinter Cell Chaos Theory. Massive can also place updatable graphics on billboards – each rented to the highest bidder – in networked games like Anarchy Online. CEO Mitch Davis says gamers will soon be able to, say, test-drive the latest Porsche in a racing game or outfit their characters in Rocawear’s new fall line. ‘Imagine if a certain brand of sneakers increased your avatar’s dexterity,’ Davis muses.” (Gaudiosi, 2006) Intel and McDonald’s have reportedly paid millions of dollars to place their products in front of the eyes of avatars. (Edwards, 2003; Richtel, 2002) One might predict that where large amounts of real money flow, legal consequences follow. Hard cash alone, however, does not establish the legal significance of virtual worlds. (Lastowka and Hunter, 2004)

Hard cash does inspire currency speculation though. Jamie Hale of Gaming Open Market (GOM) has seen a way to make some real cash from unreal currencies. Gaming Open Market (GOM) is an exchange site designed specifically for trading online game currencies. The trades are cheaper than the auction and dealer sites, and the trades are instant and secure. They traffic in the currencies of virtual worlds, trading game money for U.S. dollars or, soon, even allowing players to trade across games. The GOM Currency Exchange (GCX) makes buying and selling game currency incredibly easy. It offers market overview and historical charting. It has a complete view of where the market has been, and a better idea of where it’s going. All in real-time. The online games it serves include Ultima Online, Star Wars Galaxies, Second Life, The Sims Online, There and others. ( Hale and his colleagues have avatar accounts in each of the games whose currencies trade on GOM and will personally deliver the funds to the buyer in the virtual world. Currently, GOM only facilitates dollar-to-game-currency trades. (Id.) In the future, once traffic in the various currencies increases, Hale intends the exchange to allow players to make trades directly between, for example, Lindenbucks, Second Life currency, and Simoleans, the currency of The Sims Online, using variable exchange rates. (Terdiman, 2004)

Some game developers find that such behaviour is an anathema. For example, game companies, like Origin, which produces Ultima Online, say they do not mind if players buy and sell the virtual goods in secondary markets because, ultimately, it increases interest in the game. Linden Lab, which produces the metaverse Second Life, actively encourages secondary-market trading, because it sees such activity as part of a larger social and economic experiment, with its game at the center. And still others, like EverQuest publisher Sony Online Entertainment, see such trafficking as nothing but a headache. “The official line is that the selling of characters, items or equipment in EverQuest goes against our end-user licensing agreement,” says Sony Online Director of Public Relations Chris Kramer. “It’s currently not something the company supports and causes us more customer-service and game-balancing problems than probably anything else that happens within the game.” (Terdiman, 2004) At the moment, Hale is hoping that they can either fly beneath the radar long enough to establish a reputation for protecting players or, alternatively, that they can convince the developers to let them continue unheeded. But Philip Rosedale, CEO of Linden Lab makers of Second Life, believes there is nothing at all wrong with what Hale is attempting to achieve. “It’s so great. It’s hyper-liquid,” said Rosedale. “When you reduce trade borders you get faster development…. If you’re a casual player of an online game, say, Star Wars Galaxies, you’re not going to go on eBay and make a bid. I mean, that’s lame. You go on Gaming Open Market, and it’s done.” (Terdiman, 2004)

The skill of attracting customers who are prepared to pay an ongoing fee to visit their virtual world is the key to business success of these virtual worlds. That in itself requires virtual world builders to offer a form of entertainment that is unceasingly more attractive than the competition. As it happens, virtual worlds appear capable of offering entertainment that is appealing enough to people that they sacrifice large amounts of their time to it. (Alter, 2007) They offer an alternative reality. They can live their life in a different country if they so choose. In reality, life in a virtual world is exceedingly desirable to many people. A competition has arisen between Earth and the virtual worlds, and for many, Earth is the lesser option.

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