APPENDIX THREE:

Virtual Internet Communities

Although virtual Internet multi-user communities (VICs) are best known through popular gaming or social interaction sites such as SecondLife and World of Warfare, they are by no means limited to such uses.

Whatever the intended purpose of a VIC, it will have the following characteristics:

The abbreviation MMORPG (Massively Multiplayer Online Role Playing Game) is often used to describe gaming VICs.

Among the many possible uses of a VIC, the following types already exist:

Evidently, there are many other possible sectors in which VICs could have a role. They are particularly suited to depicting environments in which groups of individuals need to interact in order to accomplish a task.

It's a notable feature of most of the gaming or social networking sites that they have developed economies, something that in most cases was not predicted by the owners and operators of the sites. In many cases, the operators actively discouraged economic activity, and even when trading was built into the workings of a VIC from the beginning, they failed to anticipate that in-game values would come to have 'real-world' value. By now, the operators have come to understand that they are powerless to resist the human proclivity to trade, and usually provide 'official' channels for exchange of in-game currencies for real-world currencies. The economies of some VICs are far from small; some users actually make their living from participation in VICs.

Taxation is another economic feature of many VICs, through the issue of trading licences, commissions on asset sales and 'land' taxes. External taxing authorities have also begun to take an interest in virtual economic transactions.

The legal basis of VICs is well-worked out in terms of the rules and conditions that are applied by the operators to participants, with considerable similarities both between the various VICs and between VICs and the real world, particularly as regards human interaction. However, there are potential conflicts between operators and participants as regards intellectual property and behavioural enforcement. These will tend to intensify as economic values increase in VICs.

Interplay between the virtual and real worlds is going to be one of the key areas of cultural and economic development, not to say difficulty, during the next 30 years.

Many people have concerns about the impact of VICs on real world behaviour, particularly the education and socialization of children, and there have been some horror stories concerning addiction to VICs. But the fears seem overblown, on the evidence so far. Most VICs are highly moral places, even if they suffer from deception and criminality as does the real world. And the everyday experience of the users of VICs is highly 'groupish'. In almost all the sites, it is impossible to do well or 'get on' without interacting intensively with your fellow participants. The image of a solitary child locked into its gaming machine night after night, learning antisocial or violent habits, could not be further from the truth of the VICs.

CYWORLD

http://www.cyworld.com/cymain/?f=cymain

Originated in South Korea in 1999, Cyworld is a social networking site, offering personal 'rooms' which users can decorate with their own pictures or items bought on the site with 'acorns', themselves acquired for realworld money. Cyworld's daily revenue from selling "acorns" may be around US$300,000.

The 'room' has an associated photo gallery, message board, guestbook, and personal bulletin board. Users can create their own avatar: 'Your Minime represents all aspects of you ... the "you" inside of you, the "you" you want to be. Or just the "you" you feel like sharing today. Have fun styling your Minime. You can change its hair, clothing, facial expression, mood, position and background as often as you like'.

At its peak, 90 percent of South Koreans in their 20s were said to be members of Cyworld, and daily visitors topped 20m. Cyworld opened in the US and other countries, but was not so successful elsewhere.

Cyworld users form 'buddy' relationships with other users; buddies can visit each other's rooms. 'Clubs' are community rooms that users can create to discuss a specific topic.

The site bans under-13 year-olds. Rules of conduct include:

MYSPACE

http://www.myspace.com/

MySpace, owned by News Corporation until 2011, was founded in 2003 and had more than 100 million members at its peak, but has declined since the advent of Facebook. It is a social networking website offering an interactive, user-submitted network of friends, personal profiles, blogs, groups, photos, music, and videos.

Users have profiles with 'About Me', 'Who I'd Like to Meet' sections and blog spaces. A 'Friends Space' contains a count of a user's friends, a 'Top Friends' area, and a link to view all of the user's friends. Friends may leave comments in the user space.

There is a Groups feature which allows a group of users to share a common page and message board.

Some US mobile phones can interact with MySpace.

There are criticisms of various aspects of MySpace's systems, which are possibly under-engineered and may allow too much freedom to users. There have been problems with identity theft, and misuse of the site for sexually abusive purposes.

The minimum age to register an account on MySpace is 14 and there are limitations on user spaces for children aged 14 to 16. A bill currently in the House of Representatives would ban usage of the site in public places.

MySpace's music section has helped many amateur bands to publicize themselves.

My Space bans the commercial use of user spaces.

SECONDLIFE

SecondLife is a 3-D virtual world, launched in 2003 by San Francisco-based Linden Laboratory. Users have easily-modified avatars, can socialize and trade. Avatars can be animated, can make gestures and can make sounds from a stock library. Client programs provides users with tools to view and modify the virtual world. Land is bought and sold; developers are invited to construct housing units for sale (and do so). In 2014 the site has more than 1m users, of whom between 10,000 and 20,000 are 'in-world' at any one time.

The SecondLife currency is the Linden, worth about 270 to the US dollar. There are open-market currency exchanges, although Linden Lab tries (just like a Central Bank) to maintain currency stability. Currently the Linden economy totals about USD500m annually. Many residents derive significant income from in-world activities.

Users can upload objects created outside SecondLife, or create them in-world. The site protects the intellectual property of its residents. Most of the SecondLife world and its contents has been created by residents.

Scheduled concerts form part of the SecondLife world. In late 2006, a public concert was given by the animated avatar of a well-known recording artist.

Membership can be free, but in order to own land there is a subscription fee (US$72 annually). There are property taxes payable to Linden Lab.

A user can belong to up to 25 groups; there are various facilities for groups. There is a separate SecondLife site for under-18s; they may migrate with their 'possessions' to the main site on reaching 18. Teen-grid avatars are subject to nudity restrictions.

Some in-world trading companies have acquired 'real-world' registrations.

Secondlife's 'Community Standards' are a good sample of virtual world 'ethical codes':

We hope you'll have a richly rewarding experience, filled with creativity, self expression and fun.

The goals of the Community Standards are simple: treat each other with respect and without harassment, adhere to local standards as indicated by simulator ratings, and refrain from any hate activity which slurs a real-world individual or real-world community. Behavioral Guidelines - The "Big Six"

Within Second Life, we want to support Residents in shaping their specific experiences and making their own choices.

The Community Standards sets out six behaviors, the "Big Six", that will result in suspension or, with repeated violations, expulsion from the Second Life Community.

All Second Life Community Standards apply to all areas of Second Life, the Second Life Forums, and the Second Life Website.

Intolerance
Combating intolerance is a cornerstone of Second Life's Community Standards. Actions that marginalize, belittle, or defame individuals or groups inhibit the satisfying exchange of ideas and diminish the Second Life community as whole. The use of derogatory or demeaning language or images in reference to another Resident's race, ethnicity, gender, religion, or sexual orientation is never allowed in Second Life.

Harassment
Given the myriad capabilities of Second Life, harassment can take many forms. Communicating or behaving in a manner which is offensively coarse, intimidating or threatening, constitutes unwelcome sexual advances or requests for sexual favors, or is otherwise likely to cause annoyance or alarm is Harassment.

Assault
Most areas in Second Life are identified as Safe. Assault in Second Life means: shooting, pushing, or shoving another Resident in a Safe Area (see Global Standards below); creating or using scripted objects which singularly or persistently target another Resident in a manner which prevents their enjoyment of Second Life.

Disclosure
Residents are entitled to a reasonable level of privacy with regard to their Second Lives. Sharing personal information about a fellow Resident --including gender, religion, age, marital status, race, sexual preference, and real-world location beyond what is provided by the Resident in the First Life page of their Resident profile is a violation of that Resident's privacy. Remotely monitoring conversations, posting conversation logs, or sharing conversation logs without consent are all prohibited in Second Life and on the Second Life Forums.

Indecency
Second Life is an adult community, but Mature material is not necessarily appropriate in all areas (see Global Standards below). Content, communication, or behavior which involves intense language or expletives, nudity or sexual content, the depiction of sex or violence, or anything else broadly offensive must be contained within private land in areas rated Mature (M). Names of Residents, objects, places and groups are broadly viewable in Second Life directories and on the Second Life website, and must adhere to PG guidelines.

Disturbing the Peace
Every Resident has a right to live their Second Life. Disrupting scheduled events, repeated transmission of undesired advertising content, the use of repetitive sounds, following or self-spawning items, or other objects that intentionally slow server performance or inhibit another Resident's ability to enjoy Second Life are examples of Disturbing the Peace.

With fairly minor adaptions, it would do very well for a code of social ethics under which most 'real-world' inhabitants would be only too happy to live their lives!

WORLD OF WARCRAFT (WOW)

WOW is a virtual reality game, and can be termed a massive multiplayer online role-playing game (MMORPG). There were previous versions of the game, and there are other, related games. The series was originally released in 1994. There are 7.5m players of WOW worldwide.

Players have avatars (characters) which explore the landscape (provided by the operator), fight monsters either alone or in groups, join inter-group 'battles' and perform 'quests' for treasure or other assets. Characters can amass financial rewards and acquire value due to their history and accumulated skills. Characters and their assets can be traded within the game, and indeed have external value, although overt commercial behaviour in the game world is frowned upon. Much of the trading is conducted on e-Bay.

Typically, users enter WOW by buying retail software packages for US$50 or thereabouts; ongoing service is provided for US$0.50 or so per day.

When creating their characters, players can choose between eight different races and nine different character classes. The races are split into two diametrically opposed factions, the Alliance and the Horde, which battle against each other. Players can also adopt professions.

The names of WOW character classes and races, and the scenery of the game world, recall Tolkien-esque fantasy stories. The game world is also inhabited by non-player characters; interaction with them is conditioned by the reputation of a player.

Although the owners of WOW provide 'events' and other developments to sustain the complexity and interest of the WOW environment, there is considerable interaction between the owners and the players, particularly over issues such as trading and value acquisition.

The owners also have problems with deception by players. In December, 2006, they announced: 'In our continued efforts to combat cheating in World of Warcraft, more than 105,000 accounts were closed and over 12 million gold was removed from the game economies in Europe, Korea, and the US in the month of November. The closed accounts were associated with activities that violate World of Warcraft's Terms of Use, such as using third-party programs that allow cheating, and farming gold and items. These types of activities can severely impact the economy of a realm and the overall game enjoyment for all players.'

There is an 'Exploitation and Client/Server Manipulation Policy' which details the owners' stance on the use of third-party programs or utilities, bug exploitation, usage of user interface modifications, and client/server manipulation. 'The factor that links these various policies is that they are all considered "cheating" and our intent is to keep the playing field level for all players.'

The owners deploy 'Game Masters' on the site to assist players and enforce rules of conduct. Game Masters are described as follows:

The extensive rules of conduct are directed towards maintaining the mediaeval, fantasy 'feel' of the site, and specify recommended or permitted behaviour of players in various in-game circumstances.

There is criminality on the site, known as 'scamming', and an extensive policy that attempts to deal with its consequences (which may, evidently, have significant 'real' financial consequences). Scamming is defined as: Acquiring items or any other "possessions" from another player through misinformation, confusion, or fraud. In short, using any sort of deception to gain at another's expense. But the site does add: Caveat Emptor (Buyer beware)! and adds: Be careful in the friends and alliances you choose in game. When you join a group or guild, you are now governed by other player's rules. It is your choice to stay in a guild or group if you do not agree with their methods and practices.

Everquest

EverQuest (EQ) and (since 2004) Everquest II were operated by Sony until recently. EQ is a virtual reality game similar to World of Warcraft (see above), and can similarly be termed a massive multiplayer online role-playing game (MMORPG). It was launched in 1996 and has about 450,000 players. EQ offers a 3D fantasy world in which players have avatars which interact with each other and fight monsters etc singly or, much more frequently, in groups. Single players find it very hard to progress. Players may fight each other.

Participants pay for the game software and then pay a recurring monthly fee. Multiple instances of the world exist on various servers, each one hosting between 1,000 and 3,000 simultaneous online players.

EverQuest allows the acquisition and trading of valuable objects and attributes, but has tried to prevent trading of them on e-Bay or in the real world, mostly unsuccessfully, and now seems to have given in to the inevitability of trading on and around the site.

Players of Everquest, more perhaps than players of some other virtual reality games, have developed their own rules of conduct and even a language of specialist terms and abbreviations which they use between themselves.

In 2002, Edward Castronova, associate professor of economics at California State University at Fullerton, famously completed a study of the economic activity surrounding "EverQuest," concluded that players earn an average wage of $3.42 for every hour they play the game and collectively produce annual gross "exports" of more than $5 million. And if the "EverQuest" universe of Norrath were a country, its per-capita gross national product would be $2,266--comparable to the 77th richest country on Earth and ranking it between Russia and lithuania. Platinum pieces, the in-game currency known as pp, end up with an exchange rate of about a penny per pp, making "EverQuest" currency more valuable than the Japanese yen.

"It's a robust, free-market economy filled with wealthy, hardworking people," Castronova said. "What you see with 'EverQuest' is that economies happen by themselves. If you get a bunch of people together and they have things they can produce and opportunities to exchange them, you've got the makings of an economic system."

Entropia Universe

http://www.entropiauniverse.com/en/rich/5000.html

Entropia Universe is an online virtual world with particularly well developed commercial and trading activities using Entropia PEDs, which have a fixed exchange rate 10 PED = $1 USD. Participants may withdraw PED assets at any time as real world currency, including through cash machines.

Entropia has more than 500,000 participants from 220 countries. Entropia was launched in Sweden in 1995. Participants have avatars, with a range of emotions and gestures; once designed, an avatar cannot be changed, although it can wear different clothes. Participants assume the roles of colonists (miners, traders, explorers, merchants) on the planet of Calypso. A wide range of professions is available to colonists. Animals can be hunted and their parts traded or sold. Other potentially revenue-earning activities include organizing events, operating a shop or providing a service such as hairdressing, managing a land area and working as a pilot.

Forming Societies is an important element of the Entropia Universe. Societies allow groups of colonists to band together and utilize their diverse skills for the common good of the group.

Avatars on Entropia have advanced telepathic powers. Says the site: 'Mindforce is the mysterious frontier of human evolution. Scientists of the future have found a way of utilizing the latent power of the human mind through specially implanted chips.'

External real-world companies can (and do) sell real-world items within Entropia. There is an advertising system.

There are no charges as such for playing Entropia; however, many necessary services must be bought, there are taxes, and the owners presumably benefit from seignorage and exchange trading.

As with other virtual worlds, there is crime on Entropia.

Land sales by the owners have raised surprisingly high prices. In 2005, the 'Asteroid Space Resort' was bought by a colonist for one million PED (US$100,000). Its owner intends to turn the resort into a venue for "Live Entertainment in Virtual Reality". After making back his $100,000 in just six months, the owner said:

"It's a tremendous vindication to reach the break-even mark so fast; very few people really believed a turnkey virtual business inside an MMORPG could do these kind of numbers, but the dynamic real cash economy in Entropia Universe is extremely conducive for operating a business or developing a trade; however, once you have the tools or skills it's really up to the individual to serve the community and develop the business. It's definitely work, but since it exists within a Video Game style world, I'm in my element. But, not everyone is going to get rich. In many respects, Virtual Reality is like the wild west, you have to be bold and not a quitter; many of the laws that will eventually govern Virtual Reality are not in place yet; it's fiercely competitive, there is always intense debate in the forums, of course not everyone is going to make money; you need vision and you have to place your faith in technology. But, this is definitely the decade of the gamer!"

New participants agree to an extensive set of terms, some of which are:

There are all-embracing liability disclaimers and indemnities which read as if they go far beyond what is legally enforceable in most countries, including Sweden, which is the applicable law of the Agreement.

Other legal agreements which apply as appropriate in Entropia include a Third Party's Items Purchase Agreement, and a Cash Card Holder Agreement.