About a month and a half ago, I broke down and bought a US spec, NTSC, deluxe edition XBox 360. I knew I was courting the enemy, but frankly I was preparing for the long summer cooped up in the apartment, and I played Call of Duty 2 on a friends system and nearly shit myself from the realism and intensity. So, I paid way too much for the machine, and I bought all the best rated games: Call of Duty 2, Tomb Raider, Elder Scrolls IV Oblivion, and (just yesterday) Project Gotham Racing.

I am going to pause here to insert a “more” link because the rest of this post is likely to only interest the nerdiest of readers. I am going to talk in detail about some video games, my habits, my experiences, and what I believe will be the future of all of this. Please, please do not read further unless that sounded VERY exciting.

I’ll be honest, I was prepared to bitch and moan about Microsoft, between overheating, shoddy online service, weak connectivity, etc. Instead, I am utterly impressed by the hardware and software. The operating system is fantastic, though there is room for improvement, the games are absolutely phenomenal, the wireless controllers are flawless (perfect size and weight, excellent reliability, response time, and battery life), and the system itself has been rock-solid. Their online offering, content downloads, classic game purchasing, etc, is really, really good, and very well thought out. Of course, there are many small gripes and things that can, and will, be fixed, but overall, I am very impressed.

One of the games I quickly became addicted to is the beautiful action RPG, Elder Scrolls IV Oblivion. It’s a fantasy setting role playing game (like Dungeons and Dragons) but with a good deal more action that is typical. Graphically, it is superior to anything I have ever seen. The story is great, and the freedom to roam and find new areas and new side quests is second only to Grand Theft Auto. Very, very good game, but some thing is missing. Very missing.

Nobody sees the success, nobody knows how great I am. There is no trading, no economy, no incentive NOT to cheat. It looks great, plays great, IS great, but is simply not satisfying. Not at all like, let’s say, World of Warcraft.

Blizzard, World of Warcraft’s developers know something that the others just can’t seem to figure out: Diablo, Diablo 2, World of Warcraft… these games have defined the MMORPG (Massive Multiplayer Online Role Playing Game) genre. There is something increasingly fantastic about these games - they are clearly learning from their players’ feedback over time, and improving in ever so subtle ways. WOW currently controls over 50% of the MMORPG market worldwide, over 5 million players (at $16/month), and it is no accident. There’s a new website that graphs the entire online gaming market. For you nerds, this is really incredible information.

A week or so ago, Tom Coates (plasticbag.org) wrote a short post about his WOW addiction. I commented regarding my own previous addiction, and how I quit cold turkey. Well, not so cold turkey because I was so attached to my characters, that a year after uninstalling the game completely, I was still paying the $16 a month to ensure my information wasn’t deleted. (I have since found out, by the way, that Blizzard does not delete cancelled accounts, and you can restart at any time. What a waste of a couple of hundred dollars.)

So there I was, playing XBox 360 Oblivion, unsatisfied, thinking about the greatness of WOW, and my $16, and the time I was spending playing other games, and the joy of worldwide communication and cooperation, and Tom’s addiction, and then it happened. I went back in.

And you haven’t heard from me since. Literally, it took 45 minutes to become completely sucked back in. Every night, instead of blogging, or TV, or other solo activities, I am deep within the server Dalaran, playing with my level 31 Dwarf Paladin, “Shatterstone”, my level 17 Dwarf Warrior, “Grimlokblood”, my level 14 Dark Elf Hunter, “Barakobama” (my favorite name), and my level 9 Gnome Mage, “Grumblethump.” We have grand adventures with people from all over the world. We get better, both statistically, but also strategically. And people there know it. We can join guilds, and trade our treasures, auction our weapons, and learn new skills. The world is so rich it feels nearly endless. Shatterstone is now in the guild, “Beautiful People,” where he is supported by level 60 players who help him get new equipment, and make it through some of the tougher areas.

But WOW is plagued by one frustration, poverty. It takes ages for new players to earn enough money to buy any decent equipment. Without decent equipment, it’s hard to get to the levels where you find more decent equipment. It’s a real problem. Luckily, Blizzard created an excellent in-game auctioning economy, where nearly anything can be bought with in-game gold. Unlike Diablo 2 before it, eBay is not stocked full of weapons and armor for sale for real money. I never forget the first day I realized I could buy a virtual sword for my Barbarian for $400 REAL dollars on eBay. Fucking insane. Now, a quick search for “World of Warcraft” on eBay brings up mostly only one thing. Gold for sale.

A whole cottage industry has sprung up, mostly run out of China, where players “farm gold” for sale to desperate players for real money. Depending on the business of any given server, the prices vary. It seems that average is currently about 10 cents per 1 GP, meaning you get 1000 gold for $100 US dollars. it is literally an industry that is SUPPORTING families in China, where the kids are literally spending hours per day grinding away with high level character in high level dungeons, collecting gold to be sold on eBay or on various websites. Most of these websites also buy gold from players at some wholesale rate, basically turning the whole economy real. Real.

Well, I make enough money to afford some gold, but it seems unethical for many reasons. For other reasons, it seems like a good way to increase the enjoyment of a game, that frankly, I simply don’t have enough time to play as it is.

So I did it the other night. I BOUGHT 1000 GP for $100 real dollars from mygamestock.com, and I feel GREAT about it. My characters are now RICH. I have well-equipped them, but not overly so, and the burden of poverty is lifted from my experience. Even now, while writing this post, I am thinking about playing. Addiction is now official.

Now that I have fully disclosed my addiction, let me talk about some other experiences.

Second Life is an incredible online experience, not necessarily accurately called a game. The website calls it “An online society within a 3D world where you can explore, build, socialize, and participate…” There is a virtual economy that has serious real world implications. One resident made something like $200,000 US dollars last year selling virtual real estate. It currently has over 200,000 “residents”, a far cry short of WOW’s millions, but they are very active, very smart, and generally well-off and willing to spend their money. There’s a 3D object modeler and programming language built into the game, so you can build your own objects to use or sell or give away in the virtual world. The economy is so robust now, that there are real estate tycoons, nightclub owners, inventors, and advertising agencies, all in the “game”. It may not be for everyone, but it is an incredible sociology experiment, and likely the tip of the iceberg in terms of what the virtual world will eventually mean to the mainstream. I don’t want to describe it too much here because it’s not the point. You can read a nice description on Wikipedia here, and or sign up for test drive, it’s free.

Last week, Second Life added a web browser component to the world, opening the door for people to display web pages within the 3D environment. Within a few hours, Matt Biddulph made an AJAX-based Flickr photo browser and put into his virtual house, so visitors could browse through his real-life photos. Whoa. It’s not a major technical achievement by any stretch of the imagination, but fuck is it important. It means that the connections between the virtual and the real are blurring, that the environments we create and the interactions we have online, not unlike this blog, or my experiences with “Shatterstone” in WOW, are becoming more and more real. With real world implications, financial impact, and real “meaning.” Real meaning, real satisfaction, real achievement from a video game.

So what about advertising. Surely these virtual worlds are on the brink of succumbing to adver-glut and SPAM like the rest of the online world. Absolutely. World of Warcraft in-game chat channels are nearly useless in the major virtual cities because of players trying to sell their wares. It sucks frankly, but junk-mail is the lowest and most popular form of advertising. In-game sponsorship (like Nike ads and product placement in FIFA 2006) are becoming more and more popular, especially ins ports games, but it is still very limited, like banner ads were during the first few years of the web.

So where is the future? Well, it seems simple to me. Online games will be the norm - the time of solo, single player games is over. World of Warcraft surpasses Oblivion in every way except for the graphical fidelity, and graphical fidelity is the EASIEST part of game development. Creating meaningful interactions is the hard part. But it’s far more simple when the community of players does it for you. All you need to do is create the right sandbox. In-game ads need an immediate, measurable payoff, like banner ads, but nobody wants to leave their game to see the ad. But I’ve got a solution.

In game ads don’t take you anywhere, they send you something. If I see an ad while playing FIFA about some fantastic new sneaker, clicking the ad will send an email to my real-world email address containing all the information I ever wanted to know about that sneaker. Further interaction from the email forward earns me in-game currency to use for anything from new virtual uniforms, to the +5 broadsword or whatever the fuck. Let me tell you, as a guy who spent $100 on virtual gold a few days ago, I will interact with ads to earn my characters advancement. So will millions more.

One last prediction. Apple. Business Week is running an unimportant article about Apple getting into video games development, and they have missed a huge connection (or 2) as usual. Apple has the second most important micro-payment economy on the planet, .99 cent iTunes songs (I consider WOW gold the first, but thats my addiction talking). The nice thing about having valuable virtual merchandise is that you can inexpensively incent other behavior. Whether that means interacting with ads, or rewarding gameplay, or whatever. iTunes tracks have enormous value, as was demonstrated by the Pepsi promotions of the past, and will surely be demonstrated in the future. Any videogame effort can surely be tied together with iTunes to create something truly crossover experience - real world implications to virtual interactions.

More importantly though is the connection Apple has to another… I have long been predicting another company’s entry into video games. We can see by looking at all the super-successful games of past and present that there are two essential ingredients to a great game, storytelling and interaction. Apple certainly has a good handle on the interaction thing - simplicity, elegance, user experience. But Jonathan Ive knows nothing about story-telling. On the other hand, John Lasseter knows EVERYTHING about it. He, and his colleagues at Pixar, know everything about great storytelling, about 3D modeling and rendering, about technology, physics modeling, and about patient, quiet success. Lasseter is now the Chief Creative Officer of both Pixar AND Disney, and the videogame industry can’t be far out of his sight. In case you haven’t made the whole connection yet, Steve Jobs RUNS BOTH BLOODY COMPANIES. The combination of Pixar and Apple together in video games is perfect, and I think it is not far away.

Add the iPod as a portable gaming system, Mac Mini media hub in the livingroom, OS X as a stable platform, Intel Core Duo as the first processor that has truly allowed desktop-like PC gaming on a laptop, Pixar’s storytelling, character development, and 3D modeling expertise, along with Steve Jobs, Jonathan Ive, and John Lasseter’s vision, and you’ve got yourself a future in gaming my nerd friends.

OK, that’s all for me for now. I’ve got level 30 elite Dark iron Dwarves to hunt. If only I could get World of Warcraft to run inside Second Life… now that would be something.