Virtual migration

Ted Castronova’s new book, Exodus to the Virtual World is out. People are migrating to synthetic worlds – not literally, of course, but they spend a lot of time, money and attention there. I suspect that in Castronova’s capable hands the analogy will be pushed near to breaking point but not beyond it, and I’m looking forward to reading the book.
In a review of his earlier book, Synthetic Worlds, I wrote:

Many observers believe that online games are like real economies. In Synthetic Worlds, Castronova demonstrates that he knows better: online games are real economies. People devote time and skill to producing things that other people value, such as Jedi Knights. That’s supply and demand: an economy. The aliens and the light sabres aren’t real, but the human effort and the human desires are. It becomes easier to realise this when the synthetic economies spill out into the corporeal one – when grand wizards are bought and sold on eBay or Romanian entrepreneurs supervise workshops of virtual gold-miners.
One synthetic world, Second Life, offers no game-play as such but sells virtual real-estate that users can build almost anything on. One real-estate maven, “Anshe Chung”, a Chinese teacher based in Germany, is reported to make $150,000 a year buying, improving and reselling virtual homes in Second Life. Others have businesses designing virtual clothes or selling virtual advertising. “Tringo”, a game-within-a-game that was created and made popular within Second Life, was bought from its creators by Nintendo and released for the GameBoy console. (Tringo’s programmers, not the Second Life hosts, owned the intellectual property.)
At this point it is possible to take the discussion in almost any direction, and Castronova tries many. He has an eclectic approach to research – some amateur sociology, a spot of anthropology, some national income accounting with liberal use of the back of the envelope. The research occasionally seems a little flaky, but it’s well ahead of the gushings of consultants and media pundits. Meanwhile, Castronova’s grab-bag of methodologies works fine for exploring unmapped territory.

Castronova writes about the new book:

I try to project the medium-term impact of virtual worlds on daily life in the real world, especially in regards to politics and policy. To make projections, I rely on the history of human migration: knowing in general what happens when people migrate, we can forecast what’s going to happen as people migrate to virtual worlds. To explain why many will migrate, I propose a psycho-physiological theory of fun. Then I argue that the people who design virtual worlds are actually doing public policy. As such, their innovations will bleed over into real-world policy-making. You get some odd outcomes when you suggest that real world governments will try to please citizens raised in virtual world policy environments: things like zero economic growth, huge estate taxes, and full-employment economies, all at once. Bottom line: big political change is coming.

Tim Harford’s blog

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Tim, also known as the Undercover Economist, writes about the economics of everyday life.