A friend in school brought up a game called Second Life to me yesterday. I'd read an article about it in business week a few months ago, but haven't had a chance to try it out yet. The basic premise of the game is that players in a virtual world have ownership rights to the property and IP that they create in the game. The company backs this policy by supporting an exchange rate between virtual in-game currency and US dollars. This enables players to "cash out" when they quit the game, and also to run businesses selling virtual real estate. (Pretend Estate?)
So what exactly is "virtual" about all of this? Second-Life land plots have rents and a fairly liquid selling market if Business Week is to be believed. Since the US dollar isn't backed by gold (needless to say), in my eyes a video game currency is just as "real" a currency. This has all sorts of interesting implications. Whereas in the past a "theme park buck" was mainly a way to get you to overpay for services, here a company actually has the ability to *Print Money* (again, antiquated verbiage) backed by nothing more than their user experience and IP.
Some interesting business models that derive from this phenomenon:
1. "Free" MMORPG
Currently, games like World of Warcraft make their money by charging a monthly subscription fee. The company leaves a ton of consumer surplus value on the table in this scenario. People are paying to maintain access to an investment that they have made in virtual objects. In Warcraft, this investment can amount to hundreds or thousands of US Dollars in gear and experience, not to mention the value to the player of their in-game social network. Think about it: The player pays $19 monthly to have access to goods and services that they value at *more* than $2,000. How could the company claim more of this value?
Consider a MMORPG that is free for players to play. The company creates and controls a market for the in-game value that these players create. The value of controlling that market, of embracing the market forces created by your user base, is far greater than the value to be gained from subscription fees (I can't imagine that most consumers would be willing to pay $100/mo to play warcraft)
2. Non-Game Currencies
What if Google created the Google Dollar? What about the Microsoft Franc? Current thinking in military strategy and popular social science describes the declining power of "the state" compared with non-state actors. (Al Quaeda to over-use an example)What if companies begin to supplant the role of the state in issuing and backing currencies?
3. Hedge Funds and Market-Making Opportunities
What if you had a hedge fund that specialized in trading virtual (game) assets? Could you approach Blizzard with the idea of making a market to trade Warcraft gear and characters in an official, controlled manor?
Tuesday, October 17, 2006
Tuesday, October 10, 2006
TDH Part 6: What Defines "Rif-Raf" in WoW
As we last left our guild, we had survived our first exposure with "drama". We had also just begun to implement some more rigorous recruiting standards. Though draconian, we felt that the stringent dual criteria of being able to type in at least broken English while also being a mammal would ensure a higher standard of recruit. In all seriousness, we were indeed starting to quality control a little better. As I would soon learn, weather or not someone could get along with me was not always the best indication of if they would fit in the guild or not: The organization had developed a culture that wasn't a carbon copy of my own personality.
I recruited a friendly player named Tikatu into the guild. I had seen him around the server often and we had gotten to chatting occasionally. He had an off-color sense of humor, to say the least. This didn't really bother me at all, (at one point in college I'd gotten into a "most offensive concept" competition, which will remain unwritten) but other people were not so understanding. We were left with a situation in which he would push the limits of what I found objectionable in guild chat. If he went to far, I would remind him that there were women and children present. This in turn created a running "family chat" gag.
unfortunately, what this meant for people who had a lower tolerance for juvenile humor, was that they were almost always being exposed to more than they would like to deal with. In retrospect, clearly my comfort zone was both higher and lower than other guild members.
Now, a guild is a very fluid environment compared to say, a job. People have a sense of social obligation to stay, but not any sort of enduring financial commitment. This means that as soon as players are pushed out of their comfort zone, be in emotionally or whatever, they will leave the guild.
Since I tolerated Tikatu's off-color humor, I inadvertently selected away from those who did not. Several more people left, including the remainder of the original Everquest crowd. For many people, it is easier to just leave and start over than to even bother addressing the issue of another's behavior.
I never wanted to be in charge of censoring other people's behavior or speech. What I didn't realize at the time, is that rather than trying to censor someone, I should have enacted policies never to recruit them in the first place. I would rather have been in a guild with the people who left than with the behavior problem that drove them out. Part of being a leader in this environment meant "protecting" people who were too timid or unwilling to confront others.
Everyone always starts their first new organization thinking that they are somehow different than everything else. Just like dotcoms thought they were a new breed of company, new guilds think that they are the only people to get it. The founders usually have some great vision that you can get by just by being nice to everyone. Reality is not so simple. The fact of the matter is that if you as a leader don't make the tough choices of who to recruit *and who to exclude*, those choices will be made for you. You cannot maintain a guild, and I suspect most social organizations, without an element of exclusion.
I recruited a friendly player named Tikatu into the guild. I had seen him around the server often and we had gotten to chatting occasionally. He had an off-color sense of humor, to say the least. This didn't really bother me at all, (at one point in college I'd gotten into a "most offensive concept" competition, which will remain unwritten) but other people were not so understanding. We were left with a situation in which he would push the limits of what I found objectionable in guild chat. If he went to far, I would remind him that there were women and children present. This in turn created a running "family chat" gag.
unfortunately, what this meant for people who had a lower tolerance for juvenile humor, was that they were almost always being exposed to more than they would like to deal with. In retrospect, clearly my comfort zone was both higher and lower than other guild members.
Now, a guild is a very fluid environment compared to say, a job. People have a sense of social obligation to stay, but not any sort of enduring financial commitment. This means that as soon as players are pushed out of their comfort zone, be in emotionally or whatever, they will leave the guild.
Since I tolerated Tikatu's off-color humor, I inadvertently selected away from those who did not. Several more people left, including the remainder of the original Everquest crowd. For many people, it is easier to just leave and start over than to even bother addressing the issue of another's behavior.
I never wanted to be in charge of censoring other people's behavior or speech. What I didn't realize at the time, is that rather than trying to censor someone, I should have enacted policies never to recruit them in the first place. I would rather have been in a guild with the people who left than with the behavior problem that drove them out. Part of being a leader in this environment meant "protecting" people who were too timid or unwilling to confront others.
Everyone always starts their first new organization thinking that they are somehow different than everything else. Just like dotcoms thought they were a new breed of company, new guilds think that they are the only people to get it. The founders usually have some great vision that you can get by just by being nice to everyone. Reality is not so simple. The fact of the matter is that if you as a leader don't make the tough choices of who to recruit *and who to exclude*, those choices will be made for you. You cannot maintain a guild, and I suspect most social organizations, without an element of exclusion.
Sunday, October 08, 2006
Salsa Dancing & Business Ethics
My fiance is a phenomenal dancer. I've tried going to salsa clubs with her, and she's good enough to make me look good by association. I however felt acutely non-Latin. Attempting to remedy the situation, we signed up for salsa dancing lessons. The first lesson was a ton of fun, and I'm looking forward to going back.
One of the most difficult things about dancing, for me anyway, is that the guy *has* to lead a girl who is probably much better. Apparently, there was some mystic combination of hand signals that are required to get her to move just so without tripping over your foot. The last time we went dancing, we even began working out a set of primitive hand signals. One squeeze means twirl etc. We had it all wrong apparently, The true arcane art here is to push the girl just so to indicate where you need to go. The push needs to be timed correctly with the steps.
So that brings me to the main reason why Salsa dancing mystified me before: Everyone tells you to count in 6, using two groups of three. The *Rhythm* itself from a musical perspective is quite clearly in 4. Apparently this doesn't bother anyone else. For me, it was confusing that these alleged dance beats had no correlation whatsoever to the music.
The other crucial missing ingredient was that the two partners need to place their weight forward into each other slightly, so that each can get a sense of what the other is doing. Aha!
So, in any event, I'm having a great time with the 5 individual moves that I know how to chain together. I feel that my dance partner is hoping for more variety, so we will be back for more.
In other news, I'm taking a class called INTOPIA which is an acronym for something that I can't remember. The class is an elaborate business simulation that I'm not supposed to talk about it too much detail outside of class. The reason why I'm mentioning this at all, is that the same thing happened to me twice: My class mates backed out of business deals that they had signed with me because they got better prices elsewhere, after the fact. I'm sorry but that is just phenomenally uncool. In one case it was a deal for one of our key production inputs, and my team wound up behind the 8 ball at the last minute. I don't think anyone bothered to stop and consider that the lost good will is probably more important that the short term profits gained. Next time I'll have to negotiate penalties for dropping out of the deal or something. Ridiculous.
One of the most difficult things about dancing, for me anyway, is that the guy *has* to lead a girl who is probably much better. Apparently, there was some mystic combination of hand signals that are required to get her to move just so without tripping over your foot. The last time we went dancing, we even began working out a set of primitive hand signals. One squeeze means twirl etc. We had it all wrong apparently, The true arcane art here is to push the girl just so to indicate where you need to go. The push needs to be timed correctly with the steps.
So that brings me to the main reason why Salsa dancing mystified me before: Everyone tells you to count in 6, using two groups of three. The *Rhythm* itself from a musical perspective is quite clearly in 4. Apparently this doesn't bother anyone else. For me, it was confusing that these alleged dance beats had no correlation whatsoever to the music.
The other crucial missing ingredient was that the two partners need to place their weight forward into each other slightly, so that each can get a sense of what the other is doing. Aha!
So, in any event, I'm having a great time with the 5 individual moves that I know how to chain together. I feel that my dance partner is hoping for more variety, so we will be back for more.
In other news, I'm taking a class called INTOPIA which is an acronym for something that I can't remember. The class is an elaborate business simulation that I'm not supposed to talk about it too much detail outside of class. The reason why I'm mentioning this at all, is that the same thing happened to me twice: My class mates backed out of business deals that they had signed with me because they got better prices elsewhere, after the fact. I'm sorry but that is just phenomenally uncool. In one case it was a deal for one of our key production inputs, and my team wound up behind the 8 ball at the last minute. I don't think anyone bothered to stop and consider that the lost good will is probably more important that the short term profits gained. Next time I'll have to negotiate penalties for dropping out of the deal or something. Ridiculous.
Thursday, October 05, 2006
Google & marriage Licenses
Google came to give a presentation on campus today at 7:30am. Clearly, everyone attending had been thinking the same thing. "How do I dress up, yet Techy". For business school, this means that everyone wore some level of dress around the "Sportcoat and Jeans" look. Those who showed up in "full banker gear" were probably secretly logged in the recruiters little black book. "Subject 14 unsuitable for dress code violations..."
The rest of the day was spent frantically driving around town attempting to scratch to-do items off the pre-wedding list. My fiance and I went to the marriage license office in downtown Chicago. To get there, you followed a series of arrows around several corners and finally arrive in a large room filled with clerks. As you look around the various piles of paperwork wondering which form you need, an annoyed looking attendant asks (for the 6.03*10^23rd time today) if you are looking for the license application office which is not actually at the end of the long chain of arrows, but is instead down the hall. This poor man could solve this problem by getting the arrow changed. Clearly this minor adjustment is beyond the scope of anyone's job description.
The rest of the day was spent frantically driving around town attempting to scratch to-do items off the pre-wedding list. My fiance and I went to the marriage license office in downtown Chicago. To get there, you followed a series of arrows around several corners and finally arrive in a large room filled with clerks. As you look around the various piles of paperwork wondering which form you need, an annoyed looking attendant asks (for the 6.03*10^23rd time today) if you are looking for the license application office which is not actually at the end of the long chain of arrows, but is instead down the hall. This poor man could solve this problem by getting the arrow changed. Clearly this minor adjustment is beyond the scope of anyone's job description.
Monday, October 02, 2006
TDH Part 5: I Farm or Family Dies
As we last left our story, Two Dollar Horde had experienced its first brush with guild drama. We lost a few people, but as always seems to happen, a new batch of leaders step up to fill the void as the old ones depart. If you have no idea what I'm talking about, please check the first few "TDH" articles posted previously.
Lonk quickly emerged as a guild leader, setting up a website and getting some guild rules in place. I had still been rolling with an "everyone can invite" policy until Lonk set me straight. Our objectives were different now: The policy intended to promote rapid growth for its own sake was actually *preventing* us from growing.
Several people somehow got invited into the guild without really being able to type in coherent English. There has been a rumor circulating the Warcraft communities for a while about so called "Chinese Gold Farmers" who actually get paid to gather in-game currency. Whenever people go overboard with "China will economically defeat us" doom & gloom forecasts it helps me to remember that it is indeed cost effective to pay groups of people to mine pretend gold. This implies a certain extreme disparity in standard of living, but I digress. The running gag was to say "I farm gold or my family dies". I'd love some external verification that these companies actually exist.
One person I even remember booting specifically. I logged on and got greeted with private messages that one of my guild members had stolen a piece of in-game gear from another player. The person insisted in horrible English that it had been a mistake, with the justification being that they had "wanted it". They said right after "please believe me". So, I said "I do believe that you wanted the item, and what you did was inappropriate" and promptly kicked them.
At any rate, there was some internal speculation that the non English speakers were in fact gold farmers using our guild name as cover. I confronted one of them, but they didn't appear to understand what I was saying. In the end, I realized that we had an organization starting to form that some members really valued and respected. The time was over for open recruiting. Lonk delicately raised the point by saying "Why the f&@%^ does everyone have invite privileges?" Point taken. I consolidated invite ability to a select group of guild officers.
A little before the previous drama had died down, we began some limited raiding activities as a guild. We had been invited by another guild, Deadbanger's Ball and their friends in Poison Arrow to raid Molten Core. Molten Core required a group of 40 people to run effectively. Early on we had about 20 or so from Poison Arrow and another 10 each from TDH and DBB.
We were just starting to get a taste of what organizational work was required to run a raid. We also had taken our first steps to becoming a more "professional" outfit: Don't let everyone who applies into your guild! Strange how the recruiting strategy that had worked when the guild had nothing to offer but a social space failed so thoroughly once we did have something to offer, by way of raids and PvP reputation. Next time: The extra drama that I promised you last week.
Lonk quickly emerged as a guild leader, setting up a website and getting some guild rules in place. I had still been rolling with an "everyone can invite" policy until Lonk set me straight. Our objectives were different now: The policy intended to promote rapid growth for its own sake was actually *preventing* us from growing.
Several people somehow got invited into the guild without really being able to type in coherent English. There has been a rumor circulating the Warcraft communities for a while about so called "Chinese Gold Farmers" who actually get paid to gather in-game currency. Whenever people go overboard with "China will economically defeat us" doom & gloom forecasts it helps me to remember that it is indeed cost effective to pay groups of people to mine pretend gold. This implies a certain extreme disparity in standard of living, but I digress. The running gag was to say "I farm gold or my family dies". I'd love some external verification that these companies actually exist.
One person I even remember booting specifically. I logged on and got greeted with private messages that one of my guild members had stolen a piece of in-game gear from another player. The person insisted in horrible English that it had been a mistake, with the justification being that they had "wanted it". They said right after "please believe me". So, I said "I do believe that you wanted the item, and what you did was inappropriate" and promptly kicked them.
At any rate, there was some internal speculation that the non English speakers were in fact gold farmers using our guild name as cover. I confronted one of them, but they didn't appear to understand what I was saying. In the end, I realized that we had an organization starting to form that some members really valued and respected. The time was over for open recruiting. Lonk delicately raised the point by saying "Why the f&@%^ does everyone have invite privileges?" Point taken. I consolidated invite ability to a select group of guild officers.
A little before the previous drama had died down, we began some limited raiding activities as a guild. We had been invited by another guild, Deadbanger's Ball and their friends in Poison Arrow to raid Molten Core. Molten Core required a group of 40 people to run effectively. Early on we had about 20 or so from Poison Arrow and another 10 each from TDH and DBB.
We were just starting to get a taste of what organizational work was required to run a raid. We also had taken our first steps to becoming a more "professional" outfit: Don't let everyone who applies into your guild! Strange how the recruiting strategy that had worked when the guild had nothing to offer but a social space failed so thoroughly once we did have something to offer, by way of raids and PvP reputation. Next time: The extra drama that I promised you last week.
Sunday, October 01, 2006
The Natives Were Impressed
My audition last Thursday went really well. The Goodspeed Hall piano has verly light action so it was easy to play the Chopin Etude. I just found out this afternoon that I got invited to play it in a "University of Chicago Piano Showcase" concert on the 19th. I figure what with a full course load and a wedding to plan, what harm could there be in tossing in a tight concert schedule?
I'm also going to be learning the Piano portion of the Prokofiev op. 94 sonata which is one of my favorite pieces in general. Its been a few years since I looked at it. It's a nice feeling to be able to circle back to a piece that was once way too difficult, and be able to do it with few problems.
(For those of you waiting for the next TDH installment I'll try to put it together for tomorrow)
I'm also going to be learning the Piano portion of the Prokofiev op. 94 sonata which is one of my favorite pieces in general. Its been a few years since I looked at it. It's a nice feeling to be able to circle back to a piece that was once way too difficult, and be able to do it with few problems.
(For those of you waiting for the next TDH installment I'll try to put it together for tomorrow)
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