Tag Archives: #microtransactions

My First Prediction… and Maybe My Last

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{May 14, 2007: For all the reddit visitors, this post is almost exactly two years old, so it’s a bit dated imo. I’m not entirely sure MS is on track, though they may be based on this Where 2.0 event scheduled for the end of this month (Link), or this one at the same conference (Link).}

I wrote the following prediction some weeks back and then bit my lip; didn’t want to look too “out there”. But having just read a news item over on PCWorld.com, Gates Unveils MSN Virtual Earth, I’m ready to own up to it since this marks the first in what I expect to be a series of moves. So here it is:

Prediction: Microsoft is building a virtual 3D world.

And I’m talking virtual world [actually a virtual “mirror” world] as in Snow Crash’s “Metaverse”. I’m making this prediction based on not just recent news, but on some very old things. Here’s the basic breakdown:

– MS purchases Groove (two days ago), software designed for virtual collaboration; good for real world product development, but possibly better for virtual world development [or even better, transreality development]
– MS announces Xbox 2 specs to include “Marketplace” and “Micro-payments”
– Xbox picks Unreal engine 3 as primary engine platform, by far the most realistic 3D on the RT block.
– Meqon unveils radically advanced physics module, also to be compatible with Xbox
– Rumors that MS is pulling out of MSNBC; MS learned the big media ropes and it’s now time to move on perhaps.
– Allegorithmic’s “procedural textures” – infinitely subdivided, efficient, and perfect for games and virtual worlds
– Valve’s creation of the STEAM distribution system, paving the way for online content delivery as well as upstream content creation/distribution/sales
– The emergence of “virtual economies” and studies of their real value
– Longstanding MS goal to be not just a software company, but a major media player
– MS’s ongoing purchases of high-quality game development houses such as Bungie, Ensemble, etc
– MS’s initial involvement with VRML, and then it’s move out and into gaming where the real advances were being made without the concessions and compromises of a consortium
– MS’s positioning of the Xbox as a home media device instead of a game console*
– MS’s attempt to kickstart content development in the mid-90’s by purchasing ultra-pricey SoftImage3D, porting it from the Unix OS to Windows NT, slashing retail prices, and then inexplicably selling it off – leading to a freefall in 3D software pricing
– MS’s seemingly odd practice of hiring artists and content creators (including people studying esoteric musical instruments and such as reported – I believe – in the Seattle press) since the early 1990’s

Note the * item. Seems we got alot of that message from MS during E3. And I’d now add to this list the following:

– the announcement of Will Wright’s Spore (posts here and here) videogame which uses both parametrics and procedurals to allow unprecedented consumer creative potential (it may someday mark the turning point in the deployment and eventual mass acceptance of virtual worlds, imo).
– Sony’s policy shift regarding virtual commerce and the announcement of their new Sony Exchange virtual marketplace (posted originally here).

I already said we should expect a run-up in MS stock here when they were trading $24.19 (March 29) and I see they’re now up to $25.82 barely 7 weeks later. Effectively meaningless, but not bad.

Thiel On Virtual Money

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Via Jerry Paffendorf’s SL Future Salon blog entry, comes word that IT Conversations has a 2004 talk posted on their site by PayPal co-founder and former CEO Peter Thiel. The topic: Virtual Money.

Since the bridge between design, virtual product, and personal manufacturing will be largely built as a result of some kind of monetary incentive, it’s perhaps appropriate to begin considering the different avenues by which this incentive will arrive. It’s an issue that’s currently near and dear to me. Even though I’m not particularly interested in money, one still has to pay for this stuff, so I’ll be giving it a listen soon.

Where’s My Mood Ring?

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There’s really nothing in this article, “Digital Fashions On The Horizon“, over on CNN that’s news to some of us, but posting the link here because it’s being covered by mainstream media… and that’s still of interest. I’m wondering how long before some journalist does a real interview with someone that makes a living doing virtual fashions (a couple candidates come to mind). Just wait til XBox 360 makes micro-transactions for player-created content a reality (assuming that the currently discussed, limited capability is breached; gamers are plenty resourceful). Or Sony’s new System Exchange comes online. There’s going to be an interesting little hiccup in the Real world when that happens.

Getting X’d Out

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Although not definitive, this piece over on Reuters makes it sound increasingly as if Microsoft’s Xbox 2 “Marketplace” will be more like a corporate-run mall instead of an open-air flea market. That would be a shame imo. Having spent the last couple of days exploring Second Life where players actually create content within the virtual world and conduct both virtual and real monetary transactions directly, I’m having a hard time imagining how a closed virtual economy can be a good thing. If game developers interface to MS’s Marketplace – and there’s a strong likelihood they will – they’ll need Content to continue flowing long after the game ships to consumers. And unless they intend to diversify into what, in the real world, is essentially an after-market “parts” market, I expect that they’ll start outsourcing this secondary activity to “modders”. And of course, everyone loves middlemen and the power they have to control (aka raise) prices. Same as it ever was…

Economic Unrealities

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Polycount pointed me to this article over on GamesIndustry.biz that puts a damper on my enthusiasm regarding Xbox’s proposed Marketplace and Micro-payment features. While admittedly speculative, the possibility exists that Xbox 2 will harbor a closed economy for “modders”. That’s not to say it can’t and won’t be circumvented, but I’d personally hoped MS would embrace the possibilities of a more open virtual [game] world in a manner not too different from how Valve has handled Half-Life conversions and now supports new community efforts via Steam. Given some other pieces to the Gates Empire puzzle that I’ve collected over the years, and the assumption people in Redmond aren’t entirely unaware of how the Soviet Union’s stifling economic policies effectively lost them the Cold War, there’s still a possibility something more ambitious will be announced. So until we hear specifics, let’s leave it at that.