SXSWi 2009: Virtual Goods - Making it Work for Your Community
April 1st, 2009 in Web Design Culture
by: Matthew Griffin
The recent explosion of the virtual goods market has changed the way the world thinks about economic value and has pushed our culture one step closer to a sci-fi existence unimaginable to previous generations. At first, virtual goods seemed like a mere sub-feature in a social internet sphere that has existed in some form since the computer network was first conceived. But as virtual goods grew into a multi-billion dollar industry in just a few years, it was clear that their real significance had been underestimated. This SXSWi panel featuring Susan Wu (pictured right) as moderator took a look at the current state of the virtual goods market and discussed strategies for implementing virtual goods in various types of social networks. I'm going to give a brief overview of the three social networks represented on the panel and then take a few paragraphs to analyze the virtual gifts phenomenon from a Christian worldview.
Virtual Goods in Different Virtual Environments
Andrew Sheppard (hi5.com) - Traditional Social Network
The traditional social network (MySpace, Facebook, Hi5) is the birthplace of the idea of "gifting", and gifting still seems to be the primary incarnation of virtual goods on these types of sites. Gifting takes place when one member of the social network buys (with real currency) a virtual gift for another member of the network. In most cases the gift is an icon of some sort (flowers, present, candy, etc.) that then shows up on the recipient's profile page. Andrew Sheppard explained that gifting will continue to be the focus of hi5.com into the foreseen future. However, the gifts themselves have become more elaborate and engaging. Instead of a static icon, Hi5 is now experimenting with animated gift unwrapping and other interactive features. While the popularity and profitability of the gifting method has continued to grow, it's really like a wheel versus a car when it comes to online virtual goods as we will see in the next two sections.
Kevin Dasch (imvu.com) - Alternate Reality Games (ARGs)
The virtual goods economy presented by Kevin Dasch is part of the newer online sphere of ARGs. ARGs differ from traditional social networks in their level of user immersion. ARGs such as imvu.com and Second Life offer complete virtual 3D worlds as opposed to merely providing communication enhancement tools. A member of an ARG can create a perceivable persona/avatar. The member then has the ability to control this being in a semi-realistic virtual environment along with hundreds or thousands of other members' avatars. The ARG is unique in that it allows a member to control his or her avatar in a fashion similar to a modern video game but with no real rules or objectives other than social interaction.
This combination of highly immersive and highly social creates an atmosphere that is almost a copy of real life. And what would real life be without creativity and commerce? That's where the virtual economy comes in. For example, imvu.com sells virtual clothing items (shirts, hats, pants, you name it) to virtual fashion designers who then customize them with art and design and resell them at a markup. But fashion is just the beginning. Virtual real estate can be bought and sold, advertising space can be leased, along with every other conceivable virtual good corresponding to real goods. Kevin Dasch explained that imvu.com has found that the more control over virtual good creation and sales is given into the hands of the members, the more successful the model becomes. Hmmm.... sounds familiar. Ever heard of Adam Smith?
Susan Choe (outspark.com) - Massively Multi-player Online Games (MMOs)
The MMO is a close relative of the ARG and really predates the ARG. Susan Choe was at the panel representing outspark.com, the creator of several incredibly successful MMOs. The MMO is similar to the ARG in its immersive and social nature but the MMO adds the element of objective/purpose. In other words, you have specific tasks to accomplish that are programmed into the environment itself. The MMO is more like participating in a fairy tale world than a carbon copy of reality. Susan's company, Outspark, has developed MMOs out of a diverse range of game concepts from World of Warcraft like role playing games to snow boarding.
In these games, the pressure to purchase virtual goods is even greater than the ARG and traditional gifting, because many times the virtual good is something necessary for advancement in the game: a better snow board, a more powerful character, etc. And this is in addition to the virtual goods that are purely "self-expression" oriented. Of the three companies represented, it sounded as if Outspark was the most successful in monthly income per member from virtual goods.
Virtual Goods and Alternate Reality Through the Christian Worldview Lens
I've talked to many Christians (and non-Christians) who immediately dismiss the idea of alternate reality games and virtual goods as ludicrous—an advanced form of escapism. And while I would agree to some extent, the rapid growth and adoption of these new technologies by a diverse group of individuals points to something deeper—something longer lasting than simple escapism.
We live in a culture that falls increasingly into the postmodernist category. The social and vocational structures we operate in, however, are still cold, rigid modernist ideals. These structures treat humans as production machines. They expect us to leave our families to go to work every day, work in cubicles inside of giant concrete cubes, live in houses that all look alike, and they expect us to function and react in an algorithmically definable way. After all, from the machine we sprang and into the machine we descend. But this modernist ideal has wrenched us from institutions that are intrinsic to our being: family, community, local culture. This is, of course, in part the reason for the reaction of postmodernism against modernism. Postmodernism attempted to regain some of the humanness of humanity.
I see this same reaction extending out into the world of ARGs and other social online networks. We crave community; we crave intimate family; we crave cultural connection. And in many ways this alternate reality is providing for that need in a way that the old modernist structures won't permit. Ironically, the ultimate symbol of the modernist worldview, the computer, is the human's instrument of choice in regaining humanity.
As far as Christianity is concerned, the practice of imagining a world better than our own, more just than our own, less cruel than our own, is a long time tradition. And one which has greatly benefited humanity. It is part and parcel with our original purpose of taking dominion of the earth. Just as our world sprang forth from the imagination of God, we are to imagine and bring about creations of our own, not as God but as beings with the imprint of God. As long as we are using alternate realities to this end, just as we have in books, plays, and movies, we are within the bounds of historic Christianity. But when we start using virtual worlds and virtual goods as an end in themselves, we are in defiance to the reality in which we have been placed. And that's a big theme in the postmodern existential worldview: defiance toward any situation in which my participation is compulsory; defiance toward anything I am by nature rather than choice. This is where the postmodernist view of virtual worlds and virtual goods makes a sharp break from Christianity.
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