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The future of virtual worlds

At the AlwaysOn Stanford Summit 07 the virtual worlds was under scrutiny. Virtual reality pioneer Jaron Lanier led a panel (below) with Philip Rosedale, CEO of Linden Labs (Second Life); Irving Wladawksy-Berger of IBM; Chris Sherman, CEO of Gaia Online and Chris Melissinos, chief gaming officer at Sun.

At the AlwaysOn Stanford Summit 07 the virtual worlds was under scrutiny. Virtual reality pioneer Jaron Lanier led a panel (below) with Philip Rosedale, CEO of Linden Labs (Second Life); Irving Wladawksy-Berger of IBM; Chris Sherman, CEO of Gaia Online and Chris Melissinos, chief gaming officer at Sun.

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The big question was whether virtual worlds would be a real business or just merely a place for "Meetings, learning and training may be killer apps of virtual world. Don't underestimate any technologies that help us do that in a more human way," said Wladawsky-Berger.

"The money question is like asking in 1995 or 1996, how do you monetize the excitement. eventually the answer became clear--the Web significantly expanded the number of people who used IT as well as the number of applications. More and more, if you are an IT company like IBM or Sun, the more people who use IT the more money we make. We love that. Virtual worlds is the evolution of the Web," Berger said.

Lanier quipped that IBM could apply its army of consultants to fix buggy Web and virtual world.

Wladawsky-Berger responded, "Virtual worlds is presenting what IT does in a much more human way. At some point ERP will be reinvented for the virtual world. For example, a hospital administrator can design and manage a hospital in ways that look more like their [physical] hospital. It will require massive innovation and that will happen."

"Virtual worlds are critical to adoption of next generation services," said Chris Melissinos, chief gaming officer at Sun. "This will be a multimillion dollar marketplace across the board."

Rosedale predicted that in ten years virtual world access will be more ubiquitous than Web access. "The technical infrastructure will be some sort of highly open and decentralized architecture," he said. Virtual worlds are spaces with 3D objects require enormous amounts of computation. Currently Second Life infrastructure include 12,000 cores and 15 gigabytes of data. "The network of machines will be larger than the Web architecture today. Google has a couple hundred thousand machines--the virtual world will have tens of millions of hosts."

In addition to making money for infrastructure providers, Rosedale noted that content creation is also a viable virtual world business. Residents of Second Life transact more than $1 million a day, and about 40,000 residents are cash flow positive, he said. In one Second Life shop, 830 residents are making greater than $1,000 per month from selling virtual clothing. "Just like the Web, a network effect business is driven by creativity and economic success," Rosedale said.

Gaia Online environment, which is aimed at teenagers, has more of a 2D environment. "In a few years, computer graphics will be as good in real time as watching a movie, but today we have to be open to different modalities," Sherman said. "Teenagers are looking for accessibility. They are multitasking and don't necessarily want to be in a deep environment."

Lanier pronounced that "civility is the killer app of virtual worlds." He modified that point, stating that "open creativity" is the killer virtual world app, distinct from a game environments, which often bring out less civilized behavior.

Rosedale added that virtual worlds are appealing for the future for humanity because they have the potential to bring a more balanced offense and defense, whereas the real world moves people closer to a larger radius of damage...like wars.

"If give users the sense that they own or control things, they will police 50 times better, Melissinos said.

Lanier concluded the panel predicting that in 25 years the technology will be so good there will be no IBM or manufacturing jobs and that buying and selling goods in the virtual world will save civilization.

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Virtual worlds won't save civilization, given human nature seems to replicate itself in digital worlds. It could potentially be more like "The Matrix," if you the machines get too smart, but in the near term you can count on virtual worlds becoming an economic force in business and entertainment. It's not hard to imagine the intersection from Facebook and Second Life, for example, where, as Rosedale predicts, people will spend more time in virtual worlds than on the 'standard' Web. Some of us will continue to hang on to the analog world...