Transportable Avatars and Economic Concerns

The idea of developing transportable avatars – avatars that will be able to move both within and between different virtual worlds – has been raised in popular and academic forums for years. However, to date it appears that relatively little progress has been made on this front. While there are likely technical issues with developing such a large and complex project, it is also possible that some of the issues holding back this endeavor are likely to be economic in nature as companies seek not only to establish technical standards, but economic ones as well.

The Possibility of Transportable Avatars

Certainly some of the limits in developing transportable avatars are practical and technical. Given that virtual worlds are coded in different ways and based on different platforms and engines, the ability to move avatars from one world to another is currently restricted. This difficulty is further exacerbated by the fact that while some worlds are based on the world wide web, others run on their own Internet-based application programs. As a result, standards have to be created (and first of all agreed upon) that would work to universalize avatars and their paths through virtual environments.

Despite the potential issues with developing technical standards, it is also likely that some of these limits are financial, especially if there is a possibility that transportable avatars would be able to move between social worlds and game environments, and could possibly take their virtual assets with them. For companies that profit from their virtual economies, preventing the transport of avatars between virtual worlds can also mean protecting their economies and, perhaps more importantly, protecting revenue.

Virtual Economies in Social and Game Worlds

Perhaps one of the more interesting elements of transportable avatars is the fact that Linden Lab, the developers of one of the biggest virtual social worlds, was reported by Businessweek to be involved in the development of transportable avatars. Linden Lab profits from in-world land and from selling Lindens to residents, both which may prove to be an issue with respect to transportable avatars. The first issue facing the company is whether residents would necessarily want to maintain land within Second Life if their avatar could be moved around between different worlds. The second issue is that if residents were able to purchase currency in another economy (and possibly one that is subject to inflation and devaluation), such as is common within the closed worlds of video games, then move it Second Life, Linden Lab could lose money while the resident could profit.

Beyond social worlds, issues also arise around the possibility of transportable video game avatars. In order to have value to players, video games require structure in order to ensure that the game is attractively challenging. This structure also ensures that gameplay is fair, which makes challenges meaningful as well as making competition possible, since participants are provided a standardized way to judge their achievements relative to other players.

In order to ensure equality, many games close their internal economies to offline influences. While these restrictions can be broken, the intent is at least partially to ensure that players remain equal in their interactions, and are not advantaged over one another. However, the possibility of buying virtual currency for a game world in an environment where these practices are acceptable, then taking it back to the game in question stands to put players who elect to move money in this way – as well as have the money to spend on virtual currencies – in an advantageous position within the game.

Perhaps even more serious, at least from an economic perspective, is the possibility that avatars could generate virtual currency through a game and then move to a world in which these currencies could be exchanged for offline money. In many games riches are easy to obtain through the completion of quests and the sale of “loot” left behind when monsters are killed. Under this system, it could be possible for players to quickly generate a wealth of virtual currency to be moved and then traded for offline money, effective generating money for nothing.

Moving Forward

While it is possible that the development of transportable avatars will happen in ways that are, as of yet, unanticipated and even unexpected, the structures of virtual worlds, avatars, and economies as they currently exist are not necessarily amenable to these changes. Although these issues are not insurmountable, they do present a number of concerns around the development of transportable avatars that will need to be answered prior to the widespread development and availability of these virtual entities.

Given the possible issues with avatars, assets, and currencies moving within and between drastically different virtual worlds, there remains a need to consider not only the technical implications of such a project, but also the economic ramifications. Certainly some of these issues, such as the possibility of generating money for nothing, are of such great economic consequence that they would not make it past even the earliest stages of development. However, they are issues worth considering both if transportable avatars are a possibility in the future, both in terms of their development and their potential effects on virtual as well as offline economies.

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10 thoughts on “Transportable Avatars and Economic Concerns

  1. Jennifer,

    Thanks for sharing this interesting article. I agree that making avatars and other objects portable between virtual worlds has ramifications for vw economies. But I think that with proper management, those ramifications will be mostly positive. Just like real world economies, open trade, when combined with open labor in particular, has great positive economic effects on trading partners. I won’t get into the proper role of government (real and virtual) in managing the economy, but I think it’s fair to say that vw developers will want to have strong tools to manage their economies, and the importance of those tools will increase as economies become more open.

    Artificial scarcity underlies many vw economies. Take a typical MMORPG for example. There is no inherent reason why an avatar can’t have as many virtual swords as it wants. Game devs build scarcity into the system artificially for two reasons: as a gameplay element to preserve the psychological rewards of engaging in certain game behaviors (Zynga, officially sanctioned RMT, other learned monetizing behaviors), but more importantly for our discussion, they do this to facilitate price discrimination within a freemium monitization plan. An avatar doesn’t own a virtual sword in the sense that you own your real world stuff. It owns it as a software right in the vw. This right is tradeable only to the extent that the vw allows this, or to the extent that the user can broker an out-of-game transaction with another person to exchange the sword for dollars, in-game items, or items from another game. In the conventional universe where virtual worlds don’t allow interoperability between each other, in-game trading of user/avatar rights (e.g. virtual sword ownership) is rather inefficient. It appears to create economic value in that both parties to a trade are happier post-trade than pre-trade. But since the scarcity of in-game rights is artificial, each trade erodes the overall artificial scarcity constraint of the vw’s implicated in the trade. This is a big reason why vw developers, and game devs in particular, are so eager to police, if not control, such trades.

    Let me pause to draw a distinction here. Interoperability takes place on multiple levels: functional portability (the avatar looks the same when you take it from SL to an OpenSim grid) and behavioral portability (the destination world knows that your avatar is a “dragon” in the source world, but is free to express “dragon” in whatever way it wants, or to replace it with an appropriate analog upon translation).

    In a universe where vw’s are interoperable on a behavioral level–ie, you can take user/avatar rights, including currency, from one world to another while preserving fundamental behavior types–it would be much more difficult for developers to use artificial scarcity as a design principle. To effectuate freemium model worlds, developers will need to come up with pay gates that are more meaningful than mere cosmetic effects in many cases. Eventually in a world of high-level interoperability of both rights and graphical / code elements, I could see that developers will have to monetize based on added functionality–better content (game quests, communication and profile management functionality, etc.), not just a prettier virtual sword. Currency will still have to be limited in quantity, and may need to be held apart from specific vw’s, in order to maintain any function as a store of value and avoid arbitrage or outright fraud.

    This might seem like a pain for developers, but I think the vast increase in value to users as a result of opening vw economies offers a bigger base economy from which developers can extract rent. Say, 5% of a trillion instead of 10% of a billion.

    Sincerely,

    Zeke
    nocubicles.com

  2. Thanks for your article, Jennifer. To me, the question of interoperability or asset transferability between virtual environments seems a bit of a favourite topic for scholars, but industry types seem much less interested in it. What incentives would real companies running MMOs and similar environments have for opening up their interfaces? Winners like Blizzard probably wouldn’t want to leak their customers to other services, but I suppose newcomers and underdogs could implement one-way transferability as a means to lower the customers’ switching costs.

  3. Vili, I agree that developer parochialism is a bit of an obstacle for those who would like to see more vw interoperability. Users would like to take their achievements and social relations, etc., across vw borders, but larger developers have a vested interest in keeping their data proprietary, and maintaining barriers to switching. Also, content control is a real issue. So yeah, I tend to agree that initially it will be newcomers and independent types who commit to open standards. But eventually, when the network of vw’s (particularly entertainment-focused vw’s) and users whose data is portable becomes large enough, big developers will start to take note of the opportunity. And to me, the most interesting aspect of interoperability is not just the ability for users to maintain control of their vw rights and relationships. Interoperability also opens up really exciting opportunities for developers to create content that spans virtual worlds, leading to a global metagame that is bigger than the sum of its parts.

    Zeke

  4. Hi ZekeV,

    I believe that “network of vws” and “global metagame” already exists today in the form of Facebook. And just as you say, big developers whose services has thus far been walled gardens are starting to take note of the opportunity: e.g., Habbo UK is now available as a Facebook App. I think it’s a momentous step to take for services like Habbo, as it enables them to benefit from the massive viral effects but also exposes their user base to the cornucopia of competing apps.

    Sure, Facebook as the glue between virtual environments is not quite what the Metaverse roadmap people and other visionaries had ind mind, but future seldom turns out the way you imagined it to.

    Another service that has potential to integrate MMOs in a similar but even tighter way is Avatars United. It’s like Facebook for avatars, complete with an OpenSocial compliant API for programming third-party applications. But what’s interesting is that the API provides not only the social graph information, but also each avatar’s stats and possessions inside its MMO (as far as can be obtained through various channels, e.g. Armory in WoW).

    This means that you can build Facebook-like apps that leverage in-game information from MMOs like Wow and EVE. For example, there’s an app called EVE Achievements that creates a WoW-style achievements metagame on top of EVE, which doesn’t originally have one. I could also imagine an achievements metagame spanning multiple MMOs.

  5. Avatars United looks like an interesting platform. Of course, if they have hooks into WoW and Eve data, that would mean they must have negotiated a relationship with the developers. Unless these big, successful MMOs are making some of their data open to the general public?

    Ah, I see that EVE does have an API. Also I checked out AU’s website and see that you are an advisor to them, so don’t reveal anything secret to me!

  6. There is no real need to transport special-purpose avatars — think of them as logins for Websites. You don’t necessarily want your Amazon login to be available to owners of other sites (but you might be wiling to share your Facebook or Twitter login to cut down registration times).

    When it comes to general-purpose avatars, however, we already have transportability. Over 300 grids are now running on the OpenSim platform — grids owned and operated by schools, private companies, social worlds, and individuals. Most of these grids are connected via the hypergrid protocol, meaning that avatars can teleport from grid to grid, while retaining access to their appearance and even inventories.

    This is despite the fact that OpenSim is still in its infancy — it hasn’t even reached the 1.0 release yet — and there are many incompatible versions currently in use (not all grid operators upgrade to the latest version at the same pace, creating teleportation issues).

    In addition, some grid operators prefer to keep their grids private. For example, schools may want to limit their virtual campus to registered students and teachers. Companies may want to run their grids entirely behind the corporate firewall, to use for corporate training and virtual meetings.

    But for those who want to run a public virtual world, and allow avatars to come and go, the future is already here.

    Maria Korolov
    Editor, Hypergrid Business
    http://www.hypergridbusiness.com

  7. Zekev: EVE has an API and WoW data can likewise be pulled through Blizzard’s Armory, so no special relationship with operators is needed. I didn’t realise that advisory board thing was public already, otherwise I would have mentioned it so as not to appear a shill!

    Maria: Thanks for the comment, OpenSim is indeed a relevant mention in this context.

  8. Zeke, you raise some fantastic points about transportability and interoperability. It seems that in most cases what’s being talked about is transportability people are interested in having access to the same avatar appearance across worlds less than the same abilities – who needs shadow bolts in a world without fighting? Of course, this also raises the issue of what options could do to transportability. The incredible customization of SL is not available in WoW, which could make moving avatars back and forth difficult. Furthermore, the limitations that having limited, similar-looking avatars in WoW could, for example, be undermined and stress put on the system by suddenly having to render a vast range pf appearances, costing companies money possibly in terms of server space and lost revenues from those for whom the game quality declines. This is sort of a side issue, though, and one that is likely manageable.

    I actually think interoperability is the more interesting option, and one that could be beneficial to companies that are willing to implement it. In general, players and residents become attached to particular avatars when they’ve spent a lot of time working on them. It’s one reason that they find it difficult to start new games in many cases, because alongside the attachment to the name and appearance is the association with hours worked to develop wealth, get gear, complete tasks, and make social connections, all of which could be lost if the avatar was abandoned rather than moveable.

    It seems to be the big issue here is convincing developers that it could be worth their while to implement this kind of a system, as Vili also points out. Certainly it’s all manageable, and I agree that it could be completely worthwhile if it could just get off the ground. It’s just that a system of true interoperability would have to be developed with the input of multiple companies, which I’m sure would be a less than easy, straightforward process if the development of web standards are anything to go by and multiple companies were involved, which they’d have to be if they wanted to be able to move avatars anywhere else. Toss in the fact that they may have a difficult time seeing the benefits, or could be imagining the possibility for failure, and getting this all off the ground is, at the very least, an interesting and worthwhile if still challenging prospect.

  9. Vili, I agree with your point that right now there’s little incentive for companies to open to transportable avatars, especially from an economic perspective. However, I am curious as to whether developing the capacity to do so could actually increase users – if Eve players could suddenly check out Second Life, for instance, Second Life’s population could increase, as could their economics. Of course, the flip side is that SL residents could do the same, taking time and money away from that virtual world. Right now, I suspect that the incentives for doing this would be to offer the most appealing user experience (WoW, anyone?) and then offer people an easy way to get into it as a means to capitalize on the market without having people feel like they have to abandon an avatar on which they’ve spent a great deal of time, energy, effort, and possibly even money. That said, anyone who wanted to try this would have to be pretty sure that they had something that no one else wanted.

  10. Overall, we already seem to have a few systems available that make transportability possible, as well as highlight the potential for developing transportability in and amongst some of the larger games and virtual worlds. I’ll admit to only having a passing familiarity with OpenSim – I’m still trying to get it up on my mac – but it does provide a good example of how this is possible. At the same time, the development of programs like Habbo that are being extended to highly popular sites and applications suggests that not only are developers aware of this, but they’re willing to try new things in order to make these worlds more accessible and integrate them with other platforms. Given some of what we’ve been talking about, I suspect that both examples can be read as ways of looking into these options without fully committing, to see if they’re safe and have potential. Trying out OpenSim and its capacities for transport and making Habbo available on Facebook are both relatively low-cost, low-risk ways of seeing how the possibility of transportability could (or even should) work, and will hopefully lead to broader systems of this kind of thing.

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