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Exodus to the Virtual World: How Online Fun Is Changing Reality
Exodus to the Virtual World: How Online Fun Is Changing Reality
Exodus to the Virtual World: How Online Fun Is Changing Reality
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Exodus to the Virtual World: How Online Fun Is Changing Reality

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Virtual worlds have exploded out of online game culture and now capture the attention of millions of ordinary people: husbands, wives, fathers, mothers, workers, retirees. Devoting dozens of hours each week to massively multiplayer virtual reality environments (like World of Warcraft and Second Life), these millions are the start of an exodus into the refuge of fantasy, where they experience life under a new social, political, and economic order built around fun. Given the choice between a fantasy world and the real world, how many of us would choose reality? Exodus to the Virtual World explains the growing migration into virtual reality, and how it will change the way we live--both in fantasy worlds and in the real one.

Release dateNov 27, 2007
Exodus to the Virtual World: How Online Fun Is Changing Reality
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Edward Castronova

Edward Castronova is Professor of Media at Indiana University, USA. He is the author of Synthetic Worlds: The Business and Culture of Online Games (2006), Exodus to the Virtual World (2008) and Wildcat Currency: The Virtual Transformation of the Economy (2014). He specializes Games, Technology, and Society, and has served in the past as Director of the BS degree program in Game Design, and Chair of the Department of Media Arts and Production.

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Exodus to the Virtual World - Edward Castronova


This is a work of speculative nonfiction. Professors are generally discouraged from writing books like this. Ordinarily, speculation is supposed to play no role in what we do. Generally, our job is to explain things that are, not predict things to come. Prediction is guesswork; what we're supposed to be doing is not guessing about things but rather developing theories about how the world really works and then verifying those theories against experience. There's not supposed to be much guesswork in that. If anything, we are supposed to be fighting to reduce guesswork, to give people in business, government, education, and families—people for whom guesswork is an unavoidable and unpleasant part of the job—some foundation of accepted knowledge. We're supposed to help provide a basis of known things that will make the necessary job of deciding what to do a little bit easier.

At times, however, a professor finds himself called to write something outside the usual lines, something that involves a mix of experience and visioning. Scientists who learn how things work today occasionally also develop opinions about how the systems they've discovered are going to operate in the future. At times, those future operations will involve big changes. The climatologists who came to understand the role of carbon dioxide in global temperatures knew how those systems interacted, and that was science. When they then surmised that rising global temperatures could dramatically affect human life, it wasn't exactly science any more. The further thought that humans were producing CO2 in historically unprecedented levels (and therefore might be at fault for the temperature changes that would dramatically affect them) was moving even farther from the science of climatology. And finally, when the scientists began to speak out about the future they felt might be coming, that was not science at all, but a form of public visioning. Generally, scientists are not supposed to be public advocates for anything. But when a scientist has seen an ongoing process that might dramatically affect how others live, and it seems that the sooner people know about it the better off everyone will be, public visioning becomes an appropriate role. The climatologists were called to speak out about global warming, not in their role as scientists, but in their role as human beings. Anyone who sees a hurricane coming should warn others.

I see a hurricane coming. It's called practical virtual reality. In my book Synthetic Worlds, I explain that practical virtual reality is not scientific virtual reality, launched in the 1990s, which involves head-mounted displays and laboratory rooms with video projectors and surround sound. That research continues today, productively I assume. Practical virtual reality emerged unannounced from the dark imagineering labs of the video game industry, got powered by high-speed Internet connections, and exploded across the globe, catching us all by surprise. Already, practical virtual reality immerses 20 or 30 million people in worlds of perpetual fantasy. Over the next generation or two, hundreds of millions more will join them.

The exodus of these people from the real world, from our normal daily life of living rooms, cubicles, and shopping malls, will create a change in social climate that makes global warming look like a tempest in a teacup. Their exodus might be your exodus. Many of us will find ourselves interacting in cyberspace much of the time. Perhaps you will be a sexy warrior, and I will be a wayward monk. Or you will be riding your Harley, and I will be driving my Mustang. Or you will be performing at Carnegie Hall, and I will be watching you in my ravishing evening gown. Or you will be orbiting Alpha Centauri, and I will be seeking you with my deep-space sensors. Or you will be a writer of speculative nonfiction, and I will be a presidential candidate trying to see the future. Whatever our deepest shared fantasies may be, we will be able to pursue them in cyberspace together, all day, every day, world without end.

In virtual reality we will be playing, not working, but I think our play will actually be generating a moderate income for us, enough to offset some of the (low) cost of play. In playing we will make durable things that can be sold to other players. We will develop skills that others will pay us to perform. Sometimes, that game income will be a source of value that can pay for things we will always need in the real world—housing, food. More often, that game income will go toward game expenses. I will blacksmith for you and use the money to buy a virtual horse from Jim (or Galahad, as he is known in the fantasy world). Galahad will use the money from his horse to buy tailoring equipment, which gives Guenevere the virtual money she needs for passage on a virtual ship owned by Edmund the Sea-Captain—who is named Hailey in real life. Our demands will be largely virtual, and so will the supplies; production, consumption, and income. We will all spend time in virtual reality just because we can. It doesn't take a lot of resources to keep a body alive, and the mind will be having a good time.

The biggest effect of all of this play, I think, will not be on us but rather on the outside world. While we are playing, things we used to do on the outside, in reality, won't be happening any more, or won't be happening in the same way. You can't pull millions of person-hours out of a society without creating an atmospheric-level event. There will be change. There may be disruption, depending on how rapidly all those hours slip away. If it happens in a generation, I think the twenty-first century will see a social cataclysm larger than that caused by cars, radios, and TV, combined, in the twentieth.

How could it not be? If someone built a persistent virtual reality environment where you could be anything you wanted to be, all the time, wouldn't you go there? At least for a while every day? And if you think you wouldn't, how about other people? Maybe your life is good. Maybe you're a successful business person. An actor. A happily married parent with two nice kids. Maybe you've got a degree from an elite school and you're well on your way to the top. Maybe you're a presidential candidate. But how many people can only fantasize about the life you have? For each happy, fulfilled person, how many are there who are bored, frustrated, unappreciated, defeated, unhappy? There's quite a lot of self-medication going on. Whatever people learn in school, it doesn't seem to be leading to stable homes, happy childhoods, and emotionally grounded adult lives. In some cases, sure. But in my view, there are quite a lot of people who crave change, and virtual reality can make their lives different: more exciting, more rewarding, more heroic, more meaningful. And those people, quite rationally, will spend much of their time in the virtual worlds now exploding onto the scene.

You and I may or may not join them in this choice. Regardless, their exodus, because of its sheer size, will affect us all. The idea that millions of people will start living out their fantasies inside huge computer games is understandably unsettling. Currently, the public's reaction to video games in general seems marked by no small amount of terror. But the situation is not completely unknowable. I am hoping that some informed prediction, with some nuts and bolts along the way, might calm our nerves a bit.

I predict the following:

1. Ever larger numbers of people will spend many hours inside online games. To the rest of us, these choices will feel like an exodus from our reality. Our reality will be changed.

2. As an effect of this exodus, the public at large will come to think of game design and public policy design as roughly similar activities. This is because, structurally, they are the same. They both involve assessing the interests of large numbers of otherwise unassociated people, and then determining the best course of action for the authorities (government in one case, game developers in the other).

3. Because of these similarities, there will be crossovers in knowhow. In Synthetic Worlds I described how real-world policy analysis could be used to help game design. In this book, I discuss how some techniques that game designers have discovered and successfully used may find their way into real-world policy debates.

4. While all of this is happening, we will also have to come to a new and more rigorous understanding of human happiness. Games are designed to make people happy. As the lines between public policy and game design blur, public policy will begin to focus more directly on human happiness, even fun, than it does now. Ultimately, games will force fun onto the policy agenda.

I focus on public policy primarily because we understand how it operates fairly well. We can see the analytical logic behind public policy predictions more easily than, say, the equally (and probably more) important impact of virtual reality on the family. This book tries to focus on predictions that proceed from the nuts and bolts of certain specific models in economics and public policy.

The models I am using here—the nuts and bolts of my prediction machine—include:

1. The likely development of game technology in the next few decades.

2. Human migration and its economic, social, and public policy effects.

3. The economic theory of human time use, and the allocation of attention.

4. The psychology of human happiness, and more specifically, the sensations people get when they play digital games.

5. The tools public policy analysis uses for questions of happiness.

It's necessary to put some concrete foundations under what is, in the end, an exercise in visioning. Since the vision might seem surprising, it helps to know that it is an extension of some fairly well-trod intellectual ground.

I've limited myself to thinking only one or two generations into the future—20–40 years. I imagine much of what's discussed in these pages will happen long before then. But it is just too easy to insist that the revolution is right around the corner. The millenarian impulse is strong. You, the reader, however, should understand that I don't particularly care how rapidly any of this happens. And so I'm content to be conservative and say that some sort of major social change will happen as we move toward a population where the vast majority is familiar with virtual reality from childhood. That would take 40 years. But for all I know, it could happen by the time this book hits the stores. Change will come. Computing power will turn the Internet into a vast universe of fantasy realms, and millions of us will head off into the haze. We can only guess how rapidly it is happening.¹

The full effect of the virtual world exodus will only become clear as time passes. But we can and should start getting ready for the more obvious things right now. Therefore, a book of informed speculation, whose language is academic and cautious yet whose message is fire and brimstone. For better or worse, it's being written by an economist who has taught public policy at the university level for more than a decade. He's also logged thousands of hours inside contemporary virtual worlds and watched their growth closely. He's in his forties, not his twenties; married, two kids; doesn't completely understand his cell phone. All he really knows, professionally speaking, is what every economist knows: When something entertaining appears at an affordable price, people go for it in droves. Only this time, buying the product means disappearing from daily life for hours and hours at a time. It means spending whole weekends and every night until 2 A.M. logged into a computer-driven fantasy world. In previous work, I analyzed the people who logged in. Now, I'm reporting my impressions of how their behavior, as it becomes widespread, will affect everyone else. The virtual world has been discovered; the new frontier shimmers on the horizon, plain to see. We need to start talking about what that means, for all of us.






A holodeck is a perfect simulation room, a science fiction fantasy from the TV show Star Trek: The Next Generation. As conceived there, the holodeck allows users to enter into a deeply accurate simulation of any environment, from the Wild West to the surface of Pluto. Moreover, the holodeck can be populated with simulated people who are just as realistic as their virtual environments. On the TV show, these holodecks are for training and occasional entertainment: Characters use them to practice Klingon fighting moves, or to solve Agatha Christie mysteries. According to the scripts, when the training (and fun) is over, the real people go back to their real work of maintaining and operating a starship. The writers, no doubt catering to their sense of what the audience expects, apparently believe that if a holodeck existed, it would be used like a super-duper but serious TV: Mostly for mild entertainment, but occasionally for working on mental and physical skills; the same mix of sitcoms, training videos, and exercise programs, but super-duper.

As an economist, I have always been puzzled by this mild conception of the holodeck's effect on the Star Trek crew. Economists generally argue that people will pursue as long as possible activities that please them. If Activity A is more pleasant than Activity B, but has the same cost in terms of money and time, Activity A will be chosen first. A person only switches to Activity B when Activity A gets too boring or too expensive. This is the basic economic theory of time allocation, described first by Nobel Laureate Gary Becker almost a half century ago and since confirmed by reams of empirical evidence. And according to this theory, the crew's use of the holodeck is going to be driven by how entertaining the holodeck is, relative to other activities, and how expensive it is to use. It seems to me that a holodeck, on the Starship Enterprise or anywhere else, would be an almost infinitely entertaining toy. Remember, it is said to be programmable to produce any scene desired, including other people. The holodeck seems available to every crew member, free of charge. An infinitely pleasing toy, for free. Considering such an object, the question is not why people spend time with it, but rather why people spend time doing anything else. Why isn't every single crewmember in the holodeck, all the time? If the technology truly existed as described, economics clearly predicts that all crew members would program the holodeck to produce their most desired fantasy existence, and then disappear into it.

But if all crew members are in the holodeck, no one will be running the ship. If you put a holodeck on every starship, no starship would ever report back to base; indeed, no starship would do anything at all.

Now imagine what the world would look like if someone invented and marketed a holodeck not for starships, but for every home. This scenario has moved from the realm of nerdy speculation to that of practical policy. A new technology has emerged, in just the last five years, that is shockingly close to a holodeck. Already today, a person with a reasonably well-equipped personal computer and an Internet connection can disappear for hours and hours into vast realms of fantasy. These computer-generated virtual worlds are unquestionably the holodeck's predecessors. This technology will draw in millions and millions of people, and many of them will indeed dramatically reduce the amount of time they spend doing things in the real world. These developments, which will take place over the next one or two generations, will probably not bring our starships to a grinding halt, but they will alter patterns of daily life in a significant

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