What is intriguing is that psychologists often use virtual environments as a way to study phenomenon in physical space that can be difficult to explore. Virtual environments are then used as a substitute, which draws questions concerning the transfer of results from virtual environments to the physical. As described in a paper by Yvonne Slangen de Kort, this is not trivial: "Whether research in VEs will – to a smaller or larger degree – substitute for research in the real world remains to be seen and will definitely require significant progress in technology and a more thorough understanding of the human factors issues involved. However, the fact that VR-technology has already been embraced by large numbers of professionals in design, urgently calls for research to increase our understanding of person-environment transactions in virtual worlds. The need for more research that addresses applications of perceptual simulations in general and related questions of validity and reliability has been stressed ever since the emergence of environmental simulation as a research paradigm."

The Iowa Electronic Markets and Tradesports.com allow people to trade contracts that pay off based on the outcome of the 2008 US presidential campaign. Prices in these 'prediction markets' appear to be superior to traditional polls. This superiority is consistent with economic theory, because traders' price influence is tied to their trading aggressiveness, which in turn reflects their confidence. As long traders' confidence is tied closely enough to the quality of their information, prices in prediction markets will be superior to an equally-weighted average of people’s beliefs. In this post, I throw down the gauntlet to those running (or considering running) a trading exchange in Second Life—create a 'Second Life Indicator Contract' (SLIC) that would predict the future user base or economic activity in Second Life.

If virtual worlds do become an important engine of global business, prediction markets could be an important economic force, and could even allow those investing heavily in a world to hedge their investments (offsetting the risk of their investments by taking positions that would be profitable in the event of a downturn in the prospects of the world they chose). SLIC markets within SL would be an excellent way to provide proof-of-concept for this idea, at a low-stakes level. To make my proposal a little more specific, let’s assume that we can get a reasonable measure of Second Life’s economy by measuring the total US dollar value of all Linden’s currently in circulation—currently around $13M.

Anyone trying to create a futures market like this will face a few challenges. One hurdle will be to develop metrics of virtual world success that are relevant, and not too subject to manipulation either by the game developer or its residents. The supply of Lindens seems reasonably objective and hard to manipulate, but doubtless there are better measures of the success of Linden’s economy that would capture the value of land, the user base, etc. Another challenge is that, for everyone who takes the winning side of a contract, someone else takes the losing side, and losses can be larger than the initial investment. Thus, people would probably need to deposit collateral to cover losses. Finally, the exchange would need to make sure that they don’t face trouble from the Commodities and Futures Commission.

Despite these challenges, I encourage exchanges in Second Life to take up the challenge. My guess is that they would be far higher volume than what we see now, because what is traded would be a known quantity. A small commission on each trade and someone can probably make a fair bit of profit. Anyone interested? The World of William Shakespeare ended a year of development yesterday, closing with a stress test. (Many thanks to our alpha testers!) Unfortunately, that might be the last bit of news from Arden for a long time. We have come to the end of our funding, and while we are still working, I'm not sure when we will have anything worth reporting. Follow these links for background on the Arden project.

What now? Work continues, with an uncertain time frame. I really enjoy writing systems in NWN Script, so I will keep tinkering. But - there's no telling when there will be anything to report. Based on the current direction and progress of the project, I should downplay expectations. Think "small Dungeons-and-Dragons world with a Shakespeare layer," not "World of Warcraft but with Hamlet." When we have built a small world that people like to play in, we will do some experiments. Small, limited objectives. The bigger objectives of the Arden project are on indefinite hold. Even completing the more limited objectives will take a lot of time. Thus, while I appreciate all the support and inquiries that have been made, my stock response now is "don't hold your breath; nothing worth noting is going to happen for a long time." The Bard has left the building for now, and his return date is unknown.

He started by describing text MUDs (1978), in which 100 to 200 concurrent players wandered around virtual places in the form of interconnected rooms. He described to what extent today’s MMORPG inherits most of its design (chat, emote, social structure, etc) but more interestingly pointed out how MUD space was "not correct in 2D sense" using the following schema: The next step corresponded to 2D MMORPG such as Lineage or Ultima Online, which involved 3000~5000 concurrent players per world. Due to the technical impossibility to have everyone in the same place, there are "parallel universes. As opposed to MUDs, space in geographically correct and as he showed with exampled, players approximately needed about 2 hours from end to end by walking.

Geographical correctness: should the system looks and behave like a real-life equivalent (which somehwat connects to the work of Harry Drew). Given that geographical correctness is now common, time and transportation is an issue: it takes time to go from A to B and transportation systems must be designed (teleportation, flying in Second Life). Presence of concurrent players. Presence of "places" with functional capabilities (communication, trading). Although this may look obvious to many reader, this description if interesting from the research point of view (as well as to have the developers' opinion). In my case, this is important for my research about how location-awareness interfaces can convey information about people's whereabouts in digital spaces. Given the differences to represent space, there are some implications in the way location-awareness tools can be designed. More about this topic later.

His current research concerns the study of gaming experiences at the intersection of gaming platforms and spatial environments (location-based applications, virtual worlds, tangible interactions, ubiquitous computing). He basically studies people's interaction with these technologies and works with developers and designers on new ways to design and use them to create playful systems. Last year, he completed a PhD in human-computer interactions about location-awareness interfaces in both virtual reality and ubiquitous computing. He blogs at Pasta and Vinegar, a weblog about emerging technologies usage and foresight and is co-producer of the LIFT conference in Geneva and Seoul. He also created the Near Future Laboratory with Julian Bleecker, a research and innovation lab which designs, constructs and analyzes new digital interaction rituals.

"I think a lot of modern game design is actually unethical, especially massively multiplayer games like World of Warcraft, because they are predicated on player exploitation," Mr Blow says. I've never seen it expressed specifically in relation to level grinds or raid farming obligations, but the concept is familiar enough. Julian has made it a number of times, under the rubric of "ludocapitalism." (Damn, give that itinerant wordsmith from Indiana a prize). I'm not sure that I have a great deal to say about this. Well, apart from maybe one thing.