(un)Real Estate
What do virtual worlds have to do with the built environment?
written by Alina Nazmeeva and Dr. Andrea Marie Chegut
(un)Real Estate is the Medium blog series and podcast series. It is a part of an open-ended research project at MIT Real Estate Innovation Lab, exploring the economy of the virtual, the value and norms of virtual space, land, goods, and a real life made of bits.
In both blog series and the podcast series, we speak of games as seriously as we speak of cities. Applying our understanding of urbanism, city science and finance to the study of virtual worlds, we aim to draw critical parallels between virtual worlds and urban systems and learn how they alter and reinforce each other. Each of the chapters of this first introductory post will be expanded in the form of independent articles. The Reality of the Virtual will explore virtual worlds as social space, The Labor of Fun, will focus on the tension between play and labor and its economic ramifications, (un)Real Goods, will look at virtual markets and the trade of virtual goods. Finally, (un)Real Land, on which we will focus the most, will explore the concepts of real estate, property, land and urban design in virtual worlds.
Next, in the podcast series, we intend to develop a deeper understanding of the concepts of space and the built environment in virtual worlds. Specifically, in the podcast series, we will discuss the idea of virtual worlds as social spaces; the economic value of virtual real estate, the relationship between geography and economy within the virtual, what this all has to do with urbanism, real estate and city-making. We aim to have guest speakers from the game studies, social and political science, and urban design.
Virtual Values
In 2005, Jon Jacobs took out a mortgage on his house in order to invest $100,000 in a new property, which he resold in 2010 for $635,000. Before it was sold with 500% markup, Jon’s property became an increasingly popular destination: he built a dance club, a stadium, and a mall that cumulatively generated over $200,000 in revenue per year. In a distinctly different realm, Anshe Chung has been a real estate developer since 2004. Starting with less than $10 of the initial capital she became a millionaire by 2006. She is still in business, and her company not only subdivides, develops and designs real estate for sale and lease, but also enforces zoning, covenants and rules of social conduct within the property. In another place, in 2018, an anonymous buyer purchased a vacant 100 m2 land parcel for $175,000 from an anonymous seller. Currently, the parcel is on sale again, and its value has dropped to around $25,500. [1]
Jon Jacobs’ former property is located in a massively multiplayer online game called Entropia Universe; hundreds of thousands of Anshe Chung’s developments are placed in the social virtual world Second Life, and the anonymous real estate speculation is happening in Genesis City of Decentraland, claiming to be the first blockchain-powered virtual reality world. Virtual space is traded for hard cash.
These stories come as no surprise, as more and more of everyday life takes place online. The virtual has expanded from the realm of the desk-bound screen in a bedroom, to a mobile, hand-held, real-time, pervasive reality, bleeding into the concrete space through the geolocation tags, Pokemons and Instagram filters. Further, the online space has become grounded in the concepts of property ownership. From domain names and web-sites, closed gardens of mobile applications, and software to social media stickers, crypto-collectibles, virtual clothes, pets and real estate: users came to value virtual space and virtual goods in terms of the exchange value.[2]This produced the complex relationship between individual users, platforms, content and data, in which online space and content are contested not because no one owns it, but because everyone thinks they have a stake. There is no no-man’s land on the internet, and everything is an asset.
The subject of our study — virtual worlds — are the harbingers of this reality. Since the 1970s, from the exclusively text-based and niche environments of the original multi-user domains, they became more immersive, graphic, audible, massive and massively commercialized.[2]In the mid-2000s, Entropia Universe, Second Life and World of Warcraft seemed to be the next big thing, spurring media and academic hype, speculating on our future virtual lives. Fueled by the Silicon Valley techno-utopianism , people, corporations and investment flooded the virtual frontier.[3] Now, forgotten by the mass media and academics, these worlds might not have fulfilled the promise of virtual utopia, but exploded outwards, becoming a part of everyday like many technologies do.
The reality of the Virtual
Now there are 2.2 billion gamers. Epic Game’s Fortnite has over 250 million registered users: anumber which exceeds the population of most of the countries on Earth. It also had hosted the most attended live concert in the world’s history . League of Legends — which was launched in 2009 — long enough ago to become a digital relic — has 115 million monthly players , and is the most prominent e-sports battlefield. Microsoft’s purchase of 2015— Minecraft — has around 112 million monthly users and has recently launched Minecraft Earth, so users can start building with voxels everywhere .
To give a general definition, a virtual world is a persistent, graphic, interactive, internet enabled social environment.[5] The users interact with the world and each other in real time using avatars: their three-dimensional in-world representations. The interplay between avatar representation, persistence of the space and sociality — as everyone who participates is repeatedly exposed to the same objects and contexts, performs or witnesses collective activity, builds a reputation and observes the other’s action — gives to the worlds their ‘worldliness’ and makes them places. [6][7]These places are rather akin to coffee shops or libraries than to websites and social media. You are on social media, yet you are in virtual world.
This negates the myth of the solitary gamer. Most of the virtual worlds necessitate the emergence of social arrangements with different degrees of complexity. Sociality, as well as cooperative or competitive action play a fundamental role in virtual worlds, to the extent that they are critical to advance in some of them, or are the primary attractive feature for users in others.
In this context, calling virtual worlds games obfuscates social systems and political economies emerging in and around them. Virtual worlds are organised not only by rules and feedback loops, but also by spaces and objects that exist beyond the practice of play. As Richard Bartle, the creator of one of the first virtual worlds MUD1, said: ‘The Pasadena Rose Bowl (in California) is a stadium, not a game’ [8], implying the variety of use of the stadium: for concerts, parades, other types of social gatherings and economic exchange. So virtual worlds, as the stadium in the example are venues and environments that extend their instrumentality and purpose beyond the practice of play.
Game structures — feedback systems and roles — matter as they enable the emergent social and economic structures within and around the world. Some virtual worlds, let’s call them goal-oriented, operate as systems of interconnected feedback loops, where one performs a certain set of actions in order to fulfill predefined objectives and receive known outcomes. Consider the practice of accumulation: In Minecraft, one spends quite some time clicking in order to mine ore, or pick herbs that are needed to craft tools and objects. In World of Warcraft, through the repetitive slayer of lower level creatures, one accumulates valuables and skills.
More complicated missions require concerted effort, higher skills or specific items. Thus, the users congregate, practice and accumulate things. When creating an account in WoW, a user selects from a limited number of roles or classes: warriors, priests, mages and others. Each comes with certain skill sets and advantages. As the success of the collective action depends on the combination of different skill-sets within the group, the guilds and clans are designed as a formula of certain player classes. This interplay between predetermined roles and objectives, clear demand and supply of necessary items and skills frames the economy and the social structure of the world.
In contrast, social virtual worlds have no predetermined feedback loops, roles and narratives. Second Life was a clean slate at its beginnings in 2003, and the users were given tools and three-dimensional space to occupy and modify and in-world currency, Linden Dollars, which can be exchanged for hard cash. The residents buy and sell property, attend events and meet, visit shopping malls and buy virtual items: freedoms and opportunities of Second Life are modeled after the freedoms and opportunities of the first life. In 2019, Second Life is a massive user-generated landscape, international economy and a marketplace of virtual goods, populated by over 600 thousand residents.
the Labor Of Fun [7]
The definition of the virtual — as almost or nearly actual [8]; performing as if it is actual — is intimately connected to the concept of play. The virtual is playful, as both are commonly perceived as juvenile, extraneous and bearing no serious consequences. As the Protestant ethic renders work as imperative, play is defined as an individual, secular, and optional activity. This juxtaposition of play to anything instrumental and practical corresponds to the classic concept of play from theorists such as Johan Huizinga or Robert Callois, who defined it as an activity outside of ‘ordinary life’, ‘separate’ and ‘unproductive’.[9] The virtual, as opposed to real, actual, substantial and concrete, is similarly overlooked as unimportant.
New technologies re-define the spaces of play. The Industrial Revolution, for instance affirmed the territory of playful activity to the emergent leisure class with its parlor games. Urbanization gave play other special spaces: public playgrounds, parks and domestic play-spaces. Mass production structured play around objects — toys — available for larger population. Computers and the internet allowed play to enter the virtual. [10]
Further, where play is a practice, game is a structure upon which the practice of play can be applied. If we generalize a game as a system of rules and rewards, then play tests the limits of this structure.[11] Game-ness [12] — this rule/reward system — is imposed onto a daily existence: through gamification of virtually any activity which otherwise is considered boring: those could be your job, your house chores, repetitive physical exercises or manual labor. With gamification, anything can be fun. With gamification, any action is a part of a game, where the practice of play is replaced with a mechanical task that reinforces status quo and structures life in a more effective way.
While the everyday resembles a game, virtual worlds become rapidly growing job markets and spaces of and for digital (re)production. Gold-farming workshops — offices, where workers collect and trade valuable items while playing online digital games — sprawl globally in places where electricity, hardware, and labor are cheap: in China, Indonesia, Russia, Mexico. [13] In World of Warcraft and League of Legends people collect and trade virtual items, sell their labor and provide services in exchange for money. In Second Life, we see the so-called virtual ‘creative economy’[14] : the users design virtual goods for sale; provide services: run music clubs, lecture halls or games; develop land and speculate in the real estate market. On Steam Workshop or on Minecraft Marketplace, the users publish free of charge or sell the content they designed to be used in virtual worlds.
Concerned with labor and value, these cases can reveal the tension between the creators, owners and governors of virtual worlds — developer or publisher corporations, and the worlds’ inhabitants — the users — who de-facto produce its cultural and economic value. [16] The users commit time — sometimes hundreds of hours — in the development of their characters, creation and design of virtual items and environments, progression in games or participation in social structures. On the other hand, most of the publisher/developer corporations believe themselves to be the sole proprietors of all in-world content, including the characters, items stored in the users’ inventories, other virtual goods and landscapes. Besides, most of the publisher/developer corporations are not liable for any damage to your content if their systems go down or change. As a result, the users have little or no political and economic control over any content they produce or bring value to.
(un)Real Goods
If the items with the label Prada are valued more than with the label H&M, virtual goods likewise can be scarce, unique and increasingly coveted.
In 2018, over 140 million gamers in the U.S. spent money on virtual items.These items can be both functional for the player achievement or purely cosmetic, serving as status symbols or as a means of expression. The sales of virtual goods are the primary revenue model for most of the developer and publisher corporations. For instance, for Epic Games, virtual goods is the only revenue source from Fortnite; Linden Lab always takes a cut from any resident-to-resident transaction on the Second Life Marketplace; same might go for Microsoft, which recently developed Minecraft Marketplace.
Akin to the ‘real’ world economy, virtual economies presuppose scarcity. In theory infinitely copyable, in a virtual world, virtual goods are engineered to have a finite determinate quantity. In virtual worlds, scarcity serves as a familiar means to organize society: so users collaborate or compete for scarce items; it turns play into work and channels the exchange value for virtual goods. Manipulating scarcity, corporations control social dynamics and the economy of virtual worlds: they can release more copies of valuable items, introduce new ones, or alter the narrative or the environment. [16]
In many virtual worlds, the concept of private property has rather a virtual character, as the publisher corporation typically retains the intellectual property rights over every single in-world object and script. Sometimes these rights are shared with the users, such as in the case of Second Life, where Linden Lab can use user-created content for promotion and monetize it, and the creators can sell and use their content outside of Second Life.
Most of the virtual worlds have markets and in-world currencies that can be exchanged for virtual goods. The developer/publisher corporations facilitate the exchange of real-world cash into in-world currency, as they sell virtual goods to the users. Yet they prohibit the user-to-user transaction of virtual goods for real-world cash (as secondary markets violate the corporations’ IP rights, potentially damage the quality of the content and threatens their profit). Nonetheless, secondary markets proliferate: with the gold farming practices, or virtual goods marketplaces, such as notorious IGE, closed down in the late 2000s, or Gameflip, which on the contrary, attempts to build the business in partnership with game publishers and developers. Besides, virtual worlds’ economic structures vary, and while WoW, EvE and Fortnite have the policy against secondary markets, Second Life’s revenue model is based on resident-to-resident trade of virtual goods, and the exchange of Linden Dollars (in-world currency) to real-world money.
When users purchase virtual goods or virtual real estate, in most cases, they merely gain a right-to-use it. In other words, a producer sub-licenses a temporary right to use the software to the users. In relationship to the concepts of access and possession this is quite similar to the use of Kindle or Netflix, as the users of these platforms never own a copy of the books or shows. But in virtual worlds, users do not only consume the content, but actively participate in its production. [17]
(un)Real land
(un)Real land rests on a Cartesian grid. From Yona Friedman to Superstudio, the visions of the post-war pre-internet architects explored the dynamics between spatial frameworks and individual freedoms they enable. Often, these simultaneously utopian and critical ideas depicted spatial frameworks of infinite Cartesian grids or grid-like modular structures.Virtual worlds echo this totality of structure as a precondition for the world to exist: as their content is stored, displayed and interacted with via Cartesian grid. The grid — arguably the most efficient strategy of spatial expansion, implemented across times and continents, from the Roman Empire camps to the Great American Grid — manifests itself in the virtual frontier. In a virtual world, the grid serves as a logic and a structure for the space; the components of the space are arranged in relation to it; further, the materials and textures, simulation of physics, and visualisation are calculated based on the cartesian grids.[18] On the level of user interaction, when one engages with the environment of a virtual world: building a structure in Fortnite, exploring the map of Second Life or terraforming maps in Minecraft, they operate within and interact with the isotropic structure.
In the most basic level, Minecraft — a virtual playground of clunky cube-shaped blocks, utilizes the modular grid into a system of voxels which become a construction material for the users to build their own worlds. In Decentraland, the grid is not only the modular structure that determines the dimensions of the spatial elements, such as roads, plazas and private land, but as each of the parcels represents a non-fungible token, which can be bought and sold, the grid is directly connected to the real estate market. This is reminiscent of a hyper regular cadastral or parcel map. In Second Life, the ‘region’ grid corresponds to the content server structure: each region is stored on one server core of Linden Lab data center, thus each parcel of the grid has equal content capacity limitations.
Fundamentally, virtual frontier has its limits. (un)Real land is finite. Its limits are determined by the size and the complexity of the simulated space: literally, how large and detailed is the environment. Second, the systems of protocols and rules produce spatial and action frameworks, that limit the scope of the interaction afforded to the users.
As the environment and the action are inseparable, each space or artifact corresponds to a set of activities, codified to be performed in or with it. When manipulating virtual objects, one can only select from the available options, while the use of objects in the physical world, in most cases, does not require a selection from a drop-down menu. The predetermined choice of actions, however, does not diminish the creative use and mis-use of virtual world objects and spaces. For instance, in Minecraft, arranging certain combinations of voxels — with the help of redstone — users not only build new objects but engineer and invent new machines. Across many virtual worlds, the practice of modding — alteration of features, items and environments by the users — varies from small changes to complete revamps.
On the surface, virtual worlds consist of ecological and human-made landscapes: continents, islands, bodies of water, cities and infrastructures. These constructed environments perform as a context for interaction and in itself as an interactive agent; as a space to explore and modify; a resource of valuable items; or a space to occupy or speculate upon.
In the narrative-driven, goal-oriented worlds, land and built environment are typically designed by the developer corporations, and are not sub-licensed to the users. Yet the environmental design affects ways users interact and congregate, and as a result, affects the value of in-world goods and economic exchange. The geography and economy of virtual worlds are deeply connected, as the economic activity, accumulation and reputation building in virtual worlds inherit its spatial logic from the physical world. The users go to spaces which are crowded with others — cities and towns, or intersections of the major routes — for meeting and exchange. They explore the space in order to accomplish missions, build reputation or collect valuable items. These patterns often result in the abandonment of some of the virtual spaces, and server crashes due to overpopulation in other ones.
On the other hand, in social virtual worlds, there is real estate market, user-to-user trade of virtual land, and practices of ‘place-making’. The environment, with its cities, landscapes and artifacts is user-created, and, in some cases, user-monetized. When the number of users is larger than desirable real estate (supply is less than demand) the prices surge. yet artificial land has artificial scarcity: it is either up to the users, or to the game developer/publisher corporations. Hence, the land can expand, if it brings economic benefit for those who controls it. Besides, the real estate market in social virtual worlds is affected by the environmental, locational context. For example, in Second Life, it depends on the visual quality of the neighborhood, and rules and zoning regulations (aka content rating). In Decentraland, it depends on the proximity of public infrastructure — roads and plazas — and proximity of the thematic districts.
Reflections
Virtual worlds are complex social and computational systems. Ultimately, the spaces of virtual worlds blend visual culture and aesthetics and computer science into a spatial system that operates with the tropes and affordances inherited from both spatial and ‘computer-mediated’ interaction. Besides, as mass entertainment products, virtual worlds infiltrate global culture and influence other social and technical systems, and the ways society understands them.
The systems that were originally designed as parts of digital games and virtual worlds, have been migrating into the everyday reality. Most of the concepts that fuel the Smart City rhetoric, have been already envisioned and implemented in form of digital games. As virtual worlds are total computational systems, anything that happens within them can be recorded, processed and analysed to improve the efficiency of the system and experiential quality of the world. Their systems work as real-time feedback loops: something that concrete cities on Earth are opting for, as they embrace distributed systems of data collection and processing, and physical space and ways we interact with it are increasingly governed by code.
Both virtual worlds and contemporary urban spaces are products of the experience economy. For both, fun is one of the main design objectives. Akin to virtual worlds, spatial-computing fuelled Disney World Resorts, Potemkin villages of new urbanism suburbia, desperately imitating visual language of lively Jane Jacobs-like streets, or tourism-imploded historic centers of old cities: all capitalize on smooth and leisurely experience of fantasy and fun.
Hyper-programmed public spaces, over occupied by ping-pong tables, water features, public art pieces, gift shops and pop-up markets, fairs and other activities pervade urban space. All combine sociality, consumption and leisure. Now and globally, it is hard to imagine a proposal for a public space which would not employ such an urban design strategy.
As everything solid melts into (or finds its replica in) digital data, the data is a native condition and context of virtual worlds, habitual for billions of people. As common, legal and economic regimes that govern virtual lands, explode into the concrete reality, the study of virtual design and its value becomes critical.
It almost seems that cities turn into videogames, and videogames become cities. Virtual worlds are one of the permutations of a computation fuelled and commercially driven experiences of fun. They apply familiar concepts from urban design and architecture studies such as of social space, environmental design, participatory design practices and real estate finance to a different terrain.
Virtual worlds are increasingly becoming the dominant media (and spaces) of the contemporary world, and the questions of their design, as well as the underlying concepts of the space, society, and economy within them are increasingly becoming critical.
Stay tuned!
Notes:
[1]See the parcel number here: “Most Valuable Lands in Decentraland | Why Are They Worth so Much?,” Blockchain Gamer And Investor (blog), August 9, 2018, https://dclblogger.com/most-valuable-lands-in-decentraland-why-are-they-worth-so-much/. Look how much it costs now here: https://market.decentraland.org/parcels/22/2/detail
[2] The juxtaposition between the ‘original’, non-commercial virtual worlds, such as LambdaMOO and the commercialized play practices in virtual worlds in 2000s is depicted by Steven Shaviro, in his essay “Money for Nothing: Virtual Worlds and Virtual Economies,” (2007) where he elaborates on Play Money by Julian Dibbell. See also Julian Dibbell, Play Money: Or, How I Quit My Day Job and Made Millions Trading Virtual Loot ( New York : Basic Books 2007)
[3] A concise summary of the ‘discovery’ and the occupation of the virtual frontier and its connection to the Western ideas of progress, utopia and appropriation of space can be found at David J Gunkel, Gaming the System: Deconstructing Video Games, Games Studies, and Virtual Worlds (Indiana University Press, 2018)
[4] See T. L. Taylor, “Living Digitally: Embodiment in Virtual Worlds,” in The Social Life of Avatars, ed. Ralph Schroeder (London: Springer London, 2002), 40–62, https://doi.org/10.1007/978-1-4471-0277-9_3.
Similar ideas regarding the social and spatial clues, as it relates to persistence of space and individual embodiment in form of avatars can be found at Edward Castronova, Synthetic Worlds the Business and Culture of Online Games. (Chicago ; London: University of Chicago Press, 2005)
[5] The general definition of Virtual worlds I provide derives from Castronova’s Synthetic Worlds and Bartle’s From MUDs to MMORPGs
For more see: Richard A. Bartle, “From MUDs to MMORPGs: The History of Virtual Worlds,” in International Handbook of Internet Research, ed. Jeremy Hunsinger, Lisbeth Klastrup, and Matthew Allen (Dordrecht: Springer Netherlands, 2009), 23–39, https://doi.org/10.1007/978-1-4020-9789-8_2.
In this study, I specifically look at the three-dimensional virtual worlds. However, the definition of virtual worlds does not limit them to three-dimensional representation of space. For example, the early virtual worlds, such as LambdaMOO were text-based; another example, Habbo Hotel is based of fixed axonometric view of space.
[6] Richard Bartle, Designing Virtual Worlds. Indianapolis, IN: New Riders.
[7] Nick Yee, “The Labor of Fun: How Video Games Blur the Boundaries of Work and Play,” Games and Culture 1, no. 1 (January 2006): 68–71, https://doi.org/10.1177/1555412005281819.
[8] Virtual, Adj. and n.” In OED Online. Oxford University Press.
[9] For the work of 20 century scholars I mention see: Huizinga, Johan. Homo Ludens: A Study of the Play-Element in Culture(1955); or Caillois, Roger. Man, Play, and Games. (New York: Free Press of Glencoe, 1961)
[10] For the brief introduction into the history of technology, space and play see Mary Flanagan, Critical Play: Radical Game Design, (The MIT Press,2013)
[11] Further, the practice of play is not limited to games. People play with toys, participate in carnivals and role-play and in other playful activities that can be characterized as practices of play. For more see Miguel Sicart Play Matters. (The MIT Press, September 2014)
[12] Gamification is an application of game-like attributes to a non-game context (P.J. Patella-Rey, “Gamification and Post-Fordist Capitalism,” in The Gameful World Approaches, Issues, Applications, edited by Steffen P Walz and Sebastian Deterding,(Cambridge: The MIT Press, 2015))
More on gamification see: Steffen P Walz and Sebastian Deterding, The Gameful World Approaches, Issues, Applications (Cambridge: The MIT Press, 2015).
[13] More on goldfarming: Zixue Tai and Fengbin Hu, “Play between Love and Labor: The Practice of Gold Farming in China,” New Media & Society 20, no. 7 (July 2018): 2370–90, https://doi.org/10.1177/1461444817717326.
See also Joyce Goggin, “Playbour, Farming and Leisure,” , Ephemera: theory and politics in organization, no.4 (2011)
[14] Tom Boellstorff describes Second Life as creationist economy, stating that it is synonymous to creative economy. See Coming of Age in Second Life. (Princeton University Press, 2010)
[15] Nick Dyer-Witheford, Greig De Peuter, and Inc Ebrary, Games of Empire: Global Capitalism and Video Games (Minneapolis: University of Minnesota Press, 2009).
[16] More on scarcity see Edward Castronova, Synthetic Worlds the Business and Culture of Online Games. (Chicago ; London: University of Chicago Press, 2005)
[17] More on the relationship between game developer/publisher corporations, players and the blurring concepts of labor and play see Julian Dibbell, Play Money: Or, How I Quit My Day Job and Made Millions Trading Virtual Loot ( New York : Basic Books 2007)
[18] Luke Pearson connects post-war paper architecture and videogames in his article “From Superstudio to Super Mario — e-Flux Architecture — e-Flux,” https://www.e-flux.com/architecture/becoming-digital/248078/from-superstudio-to-super-mario/.
