Virtualization 4.0: Utility and Sustainability

It might seem in other discussions like I’ve painted the idea of all-consuming virtual worlds as something largely negative –  not just as a distraction to everyday life, but on a broader scale, as a pitfall along the way to development, or a detour that civilizations might get lost in. It’s possible, however, that virtual worlds offer some promising upsides for sustainability. These are not that obvious right now, but there are examples out there worth examining that demonstrate what those positives might look like.

Virtual worlds and their potential for sustainable consumption.

Compare the ecological footprint of someone who lives their life entirely in the real world, and someone who spends a great deal of their life in virtual environments. Both will need to eat real food, have real shelter, and so on. In some areas though, the VR person’s impact might be dramatically reduced. It’s in those moments of everyday consumption – driven less by biological needs, and more by psychology – that someone who spends their time (and money) in a virtual environment might really shine.

We often buy things for status. The clothes we wear, the cars we drive, even the bottles of water we drink out of – for many of us, the items we consume help signify and shape our identity. Since this consumer culture is often the driver of many sustainability challenges, it’s worth considering how its impacts can be blunted in certain environments[1], and virtual environments seem to offer genuine promise here.

Let’s use shoes as an example. You buy shoes for many reasons. One reason is unavoidably “real world”: you use them to cover your feet. But other reasons, like buying them for status, don’t necessarily have to happen in the “real world” to effectively scratch that consumer itch of yours. And if you buy shoes in the virtual world instead of the real, the ecological footprint is reduced effectively to just one, relatively cheap, thing – to the energy required to power the simulation[2].

With the caveat that not all consumption can be virtualized, take a moment to appreciate what’s on offer here: reducing large sections of consumerism to a what can become over time a single natural resource draw – to energy. Consider the entire life cycle of a real-world shoe; the natural resource extraction and refinement, the distribution and logistics, the post-life disposal and waste. Consider too, just how many different computers running in mines, warehouses, distribution centres, and retail outlets it takes to get a Nike shoe from the Earth into a Foot Locker store – maybe as many as it takes to get a shoe from someone’s imagination into the pixels on your screen, maybe even more.

All of that real world, socially-driven consumption around a shoe involves a wealth of different resources, and yet almost all of that in a virtualized environment is replaced with just a demand for one thing: energy.

The one resource, perhaps above all others, that the universe offers in abundance.

Hopefully you’re seeing the undercurrents of the idea here. I’m not just talking about buying virtual sneakers, but about civilizational development trajectories: if you wanted to make your civilization more sustainable then surely one excellent path towards achieving that involves limiting, to the maximum extent possible, your physical presence and through that your physical draw on the world’s resources. It only makes sense, then, to think that virtualization (and other forms of “dematerialization”) offer a promising way forward here.

 The future of sustainable consumption is…$60 monocles?!

EVEMonocle
Image courtesy of CCP Games

The dashing gentleman above is an example of what a player’s character might look like in the game I used to work on, EVE Online. For many years in the game, these player’s characters were represented mostly just by a single portrait that players could customize, posing their avatar in various clothes, lighting, hair styles, and so on. The game was about spaceships, so you mostly just stared at whatever ship your character was flying in space, rather than their body. But eventually, the game was updated to include 3D environments that players could walk around in. And with that, came the opportunity for the studio making the game to sell virtual clothes. Among the first release of items was that monocle you can see our chap above sporting. Yep, we tried to sell a monocle to our players. We also charged $60 USD for it.

It didn’t go so well.

EVEMonocle2.jpg
The headline sums it up nicely.[3]

I was at the company when this all unfolded. It hurt us significantly, and part of me resented the idea that we would sell virtual goods at all, let alone for such outrageous prices. Ironically, part of why I left this industry was because I wanted to study sustainability and do some good instead. All these years later, my feelings are far more mixed. I can see how, in principle, something like this can offer surprising, and surprisingly large, gains in this new area I’ve shifted focus to.

Returning to the monocle, or “monocle-gate” as it was insufferably labelled; all of this happened essentially a lifetime ago in games industry terms, around 2011. Since that time, the purchase of in-game “cosmetic” items has now become far more accepted, and far more commonplace. I think it would spin people’s heads to know just how far this industry of virtual goods has grown in such a short time.

To illustrate this, I’ll start by comparing two examples of in-game transactions (often dubbed “microtransactions” because they’re usually only small amounts of money[4]):

This is one of the first ever microtransactions offered; some armour for your horse in a fantasy game:

HorseArmor
I think it looks good, personally. For more information on this moment in gaming history see this article.[5]

Though not quite monocle-gate, it wasn’t received well either. Back then in 2006, the idea of asking $2.50 for a cosmetic item was new, and the game was importantly only single-player: there’s less motivation to make a status-type purchase in a non-social environment.

Here’s the big change, however:

As games have shifted increasingly online, even gameplay experiences that once were typically single-player and non-social have become the opposite. Just five years ago, if you played the biggest basketball video game out there, NBA2K, you’d do so largely by yourself or with friends on the couch beside you, maybe at most play some online games with other people.

In the last few years that’s changed, and now this game, and many others like it, are becoming more like the MMO genre – a persistent, always-online world. Now, in these basketball games, you have your own apartment, and you occupy a neighbourhood shared with other players. Naturally, this means there’s shops too. Because the game world is now social those items you buy can be shown off to other people as you walk the neighbourhood (or play on court). Status purchasing makes more sense, and I believe this is key to why we’ve seen this change.

This is the second example of microtransactions, and it shows just how detailed, embedded, and mainstream this has now become. So, to illustrate this, let me take you on a quick tour around the neighbourhood in one of the latest versions of that basketball game, NBA2K.

There’s a barber where you can drop in for a haircut change, which you can pay for with real money, of course:

NBA2k1

There’s countless clothes stores too, for basically any style. Inside are genuine brands, and there’s a strange new grey area created here. It’s somehow more real when they’re officially branded Levi’s jeans. They may not be “real” but they are certainly “authentic” or “genuine” and this surely helps blur the lines between real and virtual even further.

NBA2K (3)

There’s advertising everywhere, too. The billboard above that store is advertising another in-game item, also potentially purchasable for real money.

Speaking of branded goods, why not stop by JBL and get yourself some dope headphones to walk around the neighbourhood in?

NBA2K (4)

And, of course, there’s a Foot Locker with all the big shoe brands you’d expect. I wasn’t using shoes earlier as an example by accident.

NBA2K (5)

People drop into this virtual Foot Locker here and spend virtual currency on virtual shoes for reasons like status and prestige.

NBA2K (1)

To be clear, the virtual currency (VC) most things are sold for can be “earned” in-game by playing, but because there is so much money to be made in this now, the game is increasingly designed these days to be less rewarding in that regard, and through that, to encourage players to reach into their wallets, just like they would in a real Foot Locker store.

The point being made here is we’ve come a long way: from $2.50 horse armour developed in-house, to officially branded Foot Locker stores slinging virtual Nikes in a fully licensed sports game franchise. For the publisher of NBA2K games, virtual goods are now a huge part of their revenue model and have proven highly successful. Oddly, this success comes despite often significant consumer backlash. Games journalist Luke Plunkett captures the broader consumer sentiment in a scathing article about NBA2K’s 2019 release of the game, and about the games industry use of microtransactions more broadly:

2K19 is like a free-to-play mobile game, a predatory experience where the game is always shaking you down for your lunch money, even after you’ve already given it $US50 ($70). To play 2K19 is to be in a constant state of denial and refusal, always aware that in every aspect of the game, from the gyms to the stores to the action on the court itself, you can either spend VC [virtual currency – the game’s money] or be told that you’re missing out on something.

It is not fun to be around.[6]

There may remain a vocal portion of the player base and industry commentators loudly protesting virtual goods sales, but the overwhelming majority seem to have spoken with their wallets. Below is the game publisher, Take Two Interactive, reporting the sales figures for 2019:

Net revenue grew to $1.249 billion, as compared to $480.8 million in last year’s [2018] fiscal third quarter. Recurrent consumer spending (virtual currency, add-on content and in-game purchases, including the allocated value of virtual currency and add-on content included in special editions of certain games) increased and accounted for 24% of total net revenue. The largest contributors to net revenue in fiscal third quarter 2019 were Red Dead Redemption 2, NBA 2K19 and NBA 2K18.[7]

Almost a quarter of all revenue, and figures in the hundreds of millions, driven largely by the sale of two basketball games, and chiefly, the virtual goods sales that happen within them.

We’ve come a long way from horse armour, indeed! The question now is, where might this trend take us?

Breaking down what this all means:

Shifting consumer culture towards virtual worlds might seem like a ludicrous concept, but what I’m trying to show here is that it’s already happening. On a big scale too. One of the most popular games right now is Fortnite, and it’s made over a billion USD in 2018-2019 from purely cosmetic item sales – ones that don’t affect gameplay advantage[8]. In other words, a billion dollars that might have been spent on real world items for similar reasons, has instead been spent on pixels, which largely only needed energy to produce[9]. Big players like Levi’s, Nike, Foot Locker, and big revenue figures mean the industry is valued somewhere around 15 billion USD[10], a huge figure for something not many people talk about at all, let alone in sustainability terms.

There’s a great deal more that can be said about the virtual economy too. It brings many co-benefits, like offering new types of consumer empowerment and control over the goods they purchase, and even allowing them to be producers (owners of the means of production?!) themselves, as creators of in-game content, or people who can monetize their in-game prestige or fame for real world wealth[11].

Virtual goods economies also have a proudly long tradition with social goods, too. For decades now, sales of virtual goods have often been used to donate towards charities, or fund other social enterprises. The largest of MMO-type games like EVE Online and World of Warcraft run regular, highly successful fundraisers, providing millions of dollars in assistance. This example here is an in-game pet from the previously mentioned game World of Warcraft – a Cinder Kitten!

Good Kitty
Sales proceeds of this fiery furball raised over $2 million for relief efforts following Superstorm Sandy.

Levelling up: Games as a competetive sport (E-Sports)

Meaning “electronic sports”, “esports”, if you haven’t heard of it, is the idea of professional gaming. In relation to virtual goods, a more recent twist is that proceeds from virtual goods sales now can also be combined into a pool that serves as prize money for e-sports athletes in major gaming tournaments. These prize pools have ballooned from the hundreds of thousands to the tens of millions in the last five years, driven largely by virtual goods sales. This has, in turn, helped promote the further professionalization of athletes competing, and grown the legitimacy of esports further. These in-game tournaments and esports more generally are now economies in their own right, involving broadcasters, analysts, announcers, along with sponsors for the shows, and sponsors and endorsements for the individual teams and players. To put it all in perspective, an esports athlete coming to the US for a tournament, for example, can sometimes file for the same VISA used by other professional athletes – a golf or tennis star, for example.

ESports at MSG NYNY
Madison Square Garden, New York, sold out on consecutive nights hosting one of the largest annual esports tournaments.

‘When you fill up “The World’s Most Famous Arena”—home to the New York Knicks, Rangers, and the “Fight of Century” between Ali and Frazier—and you do it on consecutive nights, you send notice that you’re to be taken seriously.’[12]

Clearly there is a culture growing here too, not just an economy. Gaming personalities, analysts, athletes, and journalists are all earning money and creating economic value, but they’re also shaping a new culture that draws ever more people in. This culture drives dozens of different economies today while just in its infancy. It will surely drive many more as it develops. Virtual worlds and virtual goods are part of this broader movement, and they’re likely only going to increase in economic and cultural value into the future.

Increasingly, there is a blurring of the line between real and virtual worlds; the status we achieve in them, the sense of belonging and accomplishment they provide, and the wealth, even, that we achieve in them.

Perhaps it was something like this that drove a company like Facebook in 2014 to purchase the virtual reality headset Oculus Rift for a then head-scratching 2 billion USD[13]. Many couldn’t understand why the social network giant wanted to get in on the virtual worlds industry, and why they were willing to pay so much for one of the earlier headset technologies that showed promise and potential for broad adoption.

A lot of commentators seemed to focus on everything I have so far; on gaming and the virtual economies around them. What’s interesting to consider are the broader applications of a virtual environment and economies that could spring up around them. As just one powerful example, imagine being able to buy cheap front row tickets to your favourite sporting team, musician, comedian, or whatever else, using VR? Facebook may have lofty ambitions for virtual worlds beyond games, while hoping for a similar ability to draw people in; to create cultures, and of course, economic value.

Virtualization offers attractive incentives to many companies. It’s often far cheaper to provide a virtual product than a real world one, and although price points are significantly lowered in virtual environments, the overall margins are far larger (hence it being so insanely lucrative for the companies that have done well on virtual goods sales). The potential here for new economies seems to catch the eye of business, but the potential gains in resource reduction should equally catch the eye of sustainability practitioners and advocates. Perhaps we should be having more discussions about virtualization, virtual goods, and how to use combine civic advocacy, business innovation, and government policy to encourage reductions in natural resource draws.

Interestingly though, this idea of increasingly pervasive virtualization of goods will battle both indifference and ignorance from people unaware of the virtual goods industry already out there, and it will also meet some hostility from gamer and game analysts, who are often in conflict with game studios over virtual goods sales. Virtual goods sales have at times been deeply predatory and problematic, as Luke Plunkett’s earlier article demonstrated.

Another recent example is controversy surrounding “loot boxes”. “Loot boxes” are essentially randomly generated boxes of items that players can spend currency on (usually real-world money). Because the items in the box are randomized, there is a chance each time for a good or bad item. They operate similarly to poker machines, and with similar odds for great “payouts”.  What we have here, then, is huge gaming companies employing psychologically manipulative practices to lure gamers, often children, into gambling real money for virtual items.

Even if it may offer some promises for more sustainable consumption, the road towards virtualization, quite clearly already, has its own pitfalls. These flashpoints of controversy all have the familiar whiff of hyper-capitalist greed that we’d find most other places, whether trading oil commodities or offering real estate loans. As discouraging as that is, it’s also an indicator of just how real and high stakes this world, and this industry around it, is becoming.

When the sharks have begun circling, you can be confident there’s something meaty there.

The Transcension Hypothesis, Bucky Fuller, and the Sleepers

It’s not entirely correct of me to say earlier that the Fermi Paradox assumes that advanced civilizations would be motivated to colonize space. This is because the Fermi paradox is something of a living idea; one that is updated as new critiques are made. This idea I’ve focused on – of advanced civilizations essentially leaving our universe and disappearing to a virtual world within, has in fact been added to the theory (as officially as possible). Stephen Webb’s compendium of solutions to the Fermi paradox, If the Universe is Teeming With Aliens … Where is Everybody?[14] now references an idea like the one I’m discussing alongside 74 other possible explanations.

This is thanks to the paper by John Smart[15] outlining an idea called the “Transcension Hypothesis”. Smart and I aren’t quite speaking the same language, but we’re both playing the same game here, pun intended.

There are a few key pieces of source material worth quoting at length here, before I return to assumable them all into something understandable, and something I have some experience myself with.

Firstly, what is Smart’s “Transcension Hypothesis” about? The clearest and most concise summary, sadly, isn’t in the abstract of the paper itself, which is quite dense. Instead, I prefer this summary from H+Pedia – a transhumanist version of Wikipedia essentially, and interesting in their own right.

In the “developmental singularity hypothesis”, also called the transcension hypothesis, Smart proposes that STEM compression, as a driver of accelerating change, must lead cosmic intelligence to a future of highly miniaturized, accelerated, and local “transcension” to extra-universal domains, rather than to space-faring expansion within our existing universe. The hypothesis proposes that once civilizations saturate their local region of space with their intelligence, they need to leave our visible, macroscopic universe in order to continue exponential growth of complexity and intelligence, and disappear from this universe, thus explaining the Fermi paradox.[16]


One key idea here is that long-term sustainability might be cosmologically quiet – hiding its secrets from us

The idea here, as you can hopefully see, echoes my own about civilization development and virtualization. As I said earlier, if you want to optimize your ecological footprint, you will minimize your resource consumption. Smart’s paper echoes this with ideas about “highly miniaturized, accelerated, and local “transcension” to extra-universal domains, rather than to space-faring expansion within our existing universe”.

Think about this in terms of science fiction clichés. It’s extremely common to see future versions of humanity where we’ve colonized other planets, spreading out like locusts to consume, extract, and expand (I feel like sometimes in these movies we are the baddies and we don’t even know it). Less common than this story, historically, is the one where future versions of humanity instead colonize virtual worlds, expanding inwards, as paradoxical as that sounds. If they were to take this route, then there wouldn’t be as much going on in the physical world, perhaps. An interesting idea to ponder, how those two “worlds” might co-exist – but the important point for now, in terms of the Fermi Paradox is that a civilization that develops into “inner space” won’t leave much of a footprint in “outer space”.

Perhaps achieving sustainability means we won’t leave a large footprint to be noticed for other civilizations. If advanced civilizations optimize their existence to vastly minimize their environmental impact, and thereby perhaps, their visible presence, this could help explain the Fermi paradox in a way that’s maybe even uplifting (success is out there, it’s just quiet).

To elaborate on this idea, I’ll include a portion of the abstract from Smart’s paper, worth quoting at length so as to capture the general “feel” of the idea, at least.

The emerging science of evolutionary developmental (“evo devo”) biology can aid us in thinking about our universe as both an evolutionary system, where most processes are unpredictable and creative, and a developmental system, where a special few processes are predictable and constrained to produce far-future-specific emergent order, just as we see in the common developmental processes in two stars of an identical population type, or in two genetically identical twins in biology.

The transcension hypothesis proposes that a universal process of evolutionary development guides all sufficiently advanced civilizations into what may be called “inner space,” a computationally optimal domain of increasingly dense, productive, miniaturized, and efficient scales of space, time, energy, and matter, and eventually, to a black-hole-like destination. Transcension as a developmental destiny might also contribute to the solution to the Fermi paradox, the question of why we have not seen evidence of or received beacons from intelligent civilizations.[17]

There’s a whole lot to process there. In short, Smart is arguing a few key points:

  • The science of evolutionary development presents two ideas about evolution, one as a chaotic and unpredictable system, and another where a “special few processes” are predictable, almost inevitable. In this hypothesis, on a civilizational level, these processes are “constrained to produce a far-future-specific emergent order”. In other words, to produce predictable outcomes.
  • This theory argues that every advanced civilization will encounter a situation that represents that second type of evolutionary development – a process that is predictable. This is because, on a long enough timescale, they will desire a development path that shifts from physical space, towards “inner space” (maybe virtualized space?), a “computationally optimal domain of increasingly dense, productive, miniaturized, and efficient scales of space, time, energy, and matter”.
  • This shift towards an increasingly smaller physical profile, towards “inner space” may represent a solution to the Fermi Paradox. Civilizations that achieved advanced levels of sustainability would not, according to this theory, leave a significant physical footprint and thus be difficult to discover.

This idea of Smart’s is echoed in a far earlier work, from the great thinker and futurist Buckminster Fuller. Bucky talked about this same idea in terms of “ephemeralization” which is explained nicely below:

Ephemeralization is the ability of technological advancement to do “more and more with less and less until eventually you can do everything with nothing,” that is, an accelerating increase in the efficiency of achieving the same or more output (products, services, information, etc.) while requiring less input (effort, time, resources, etc.). Fuller’s vision was that ephemeralization will result in ever-increasing standards of living for an ever-growing population despite finite resources. From Wikipedia

Sounds quite sustainability-related huh? Sounds quite a bit like this transcension hypothesis, too. And these ideas I have of my own about the potential importance of virtual worlds to sustainability, well it all intermingles quite nicely indeed, if I can say so, while adjusting my $60 virtual monocle.

…and the Sleepers?

Right, so… yes, a little confession is perhaps in order. Like I said, I used to work on this game EVE Online, and I was a writer there. It was a wonderful environment in that sense, because the game embraced concepts of transhumanism and other philosophically rich domains quite openly. Fertile grounds for a writer with an interest in these topics like myself.

At one point, the game was releasing a large expansion to its content that would feature a new alien race. My role as a writer was to help shape the story of that race. My brief was more or less that they should be “super advanced and ahead of our time”.

So, the story I created about them was almost literally everything you’ve just read.

It’s so weird. That I’m trying to write seriously paper about sustainability, and that this part of my past life keeps recurring, haunting me like a ghost. Something I wrote as fiction is now something I feel a need to talk about as a potential reality.

This race, the “Sleepers” as they were known, had disappeared into a virtual world, into “inner space”, just like Smart describes. A huge part of their advanced technology was derived from fullerenes, a type of carbon molecule invented by that same “Bucky” fellow, my way of giving nod to his own ideas of ephemeralization. And I was there in that world, that virtual world, as a real person working in a virtual world, roleplaying a real person who was investigating this alien race that had disappeared into a virtual world and…the lines blur.

It was only years later, reading Smart’s paper, that I realized something I wrote about as fiction might be an idea of genuine interest to serious minds.

Vitrauze
Image courtesy of CCP Games. Art by me 😉

The image above hints at the what the structures housing the Sleeper civilization look like. The image was released alongside a short story I wrote that accompanied it and intended to conjure a feeling of detachment. The cosmos surrounding the facility glows red with life while the facility housing the Sleepers –vanished to their VR world within, if they even remain – languishes in a static black and white monochrome.

We made sure (at least at the time I was there) that players had no direct interactions with the Sleepers. All that remained were these silent, enigmatic buildings, and the fearsomely powerful worker drones that sustained the colony’s physical needs. There was no “big bad villain” in this expansion of the game, which certainly bucked the trend of how most games tell their stories. But with the right nudges here and there, the players found an enjoyable mystery.

In this case, players could only pillage these places for scraps of understanding; they could only scratch at the surface of greatness as they pilfered the Sleeper’s sites for breadcrumbs. I was trying to make the experience as close as I could to what it might be really be like, encountering a civilization that exemplified the transcension hypothesis. I was doing it before I had even heard of that term or read that paper. I was doing it, as an example of the paper’s thesis.

Life is strange.


Footnotes

[1] Of course, it’s worth considering dismantling it too, but those are well-explored paths. This isn’t an argument I’ve heard others make, so it’s my focus right here. We have a million eyeballs on that problem, you don’t get much more from a million-and-one, and certainly not at the cost of us not exploring this a little bit further, right? Great.

[2] There is an exception here, of course, since computers require a lot more than just energy, but we’ll shelve that consideration momentarily.

[3] Kuchera, B. (2018, July 4). Leaks, riots, and monocles: How a $60 in-game item almost destroyed EVE Online. Ars Technica.

[4] Perhaps, given that term, you can see why a $60 item, and a monocle of all bloody things, went down so badly?

[5] Fahey, M. (2016, April 4). Never Forget Your Horse Armour. Kotaku.

[6] Plunkett, L. (2018, September 12). NBA 2K19 Is A Nightmarish Vision Of Our Microtransaction-Stuffed Future. Kotaku.

[7] BusinessWire.com. (2019, February 6). Take-Two Interactive Software, Inc. Reports Strong Results for Fiscal Third Quarter 2019. Retrieved from BusinessWire.com: https://www.businesswire.com/news/home/20190206005102/en/Take-Two-Interactive-Software-Reports-Strong-Results-Fiscal

[8] Fagan, K. (2018, July 20). Fortnite — a free video game — is a billion-dollar money machine. Business Insider.

[9] More thoroughly, there are the indirect resource requirements of the people needed to develop those pixels, so there is a broader resource drain still, it should be noted.

[10] Bonder, A. (2016, December 25). 5 lessons from the $15 billion virtual goods economy. VentureBeat.

[11] Video game streamers, for example, are massive celebrities. The top streamer, Ninja, amassed a staggering 218 million human hours watched on his channel in 2018. YouTube’s largest star, PewDiePie, while now a media icon in his own right, launched his career in the same way as Ninja, as a video games streamer.

[12] Cunningham, S. (2016, October 27). How Video Gamers Sold Out Madison Square Garden. Inside Hook.

[13] Kovach, S. (2014, March 26). Facebook Is Buying Oculus Rift, The Greatest Leap Forward In Virtual Reality, For $US2 Billion. Business Insider.

[14] Webb, S. (2002). If the Universe Is Teeming with Aliens … WHERE IS EVERYBODY? (2nd ed.). Copernicus.

[15] Smart, J. M. (2012, September). The transcension hypothesis: Sufficiently advanced civilizations invariably leave our universe, and implications for METI and SETI. Acta Astronautica, 78, pp. 55-68.

[16] H+Pedia is a Humanity+ project to spread accurate, accessible, non-sensational information about transhumanism, including radical life extension, futurism and other emerging technologies and their impact to the general public – From their website main page.

[17] Smart, J. M. (2012, September). The transcension hypothesis: Sufficiently advanced civilizations invariably leave our universe, and implications for METI and SETI. Smart,, 78, pp. 55-68.