Tag Archives: economics

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The metaverse: booming despite your absence

As if an invasion of psychiatrists desperate for work wasn’t hint enough, the metaverse is still big business. Despite the media furore over Second Life and other synthetic worlds having died off considerably, the virtualities themselves have not, as Victor Keegan at The Guardian reports:

Actually, they are booming. The consultancy kzero.co.uk reports that membership of virtual worlds grew by 39% in the second quarter of 2009 to an estimated 579 million. Not all these members are active but I can’t think of anything, anywhere, that has grown so fast in the recession this side of Goldman Sachs bonuses.

There’s another curious thing: Facebook and Twitter are lauded to the skies, but neither has found a way to make money – whereas virtual worlds such as World of Warcraft, Entropia Universe, Habbo Hotel, Club Penguin and Second Life are all profitable because their business models are based on the digital elixir of subscriptions and micropayments, a formula that other websites, including newspapers, would die for. Twitter makes the noise, Second Life makes the money.

If you think virtual worlds are a passing fad, look at the figures. Almost all of the 39% growth came from children.

It seems that many of the newer metaverse startups have learned from Second Life’s very public teething troubles, too:

In order to get a more streamlined experience, most of the new virtual worlds don’t allow users to make their own content. Twinity, which has just raised €4.5m in new funding, has a virtual version of Berlin and Singapore (with London still in the pipeline): you buy existing apartments or rent shops but can’t build yourself. Bluemarsonline.com – still in testing mode – promises much better graphics and more realistic avatars at the expense of not allowing members (as opposed to developers) to create their own content.

[…]

With technology moving so fast and a whole generation growing up for whom having an avatar is second nature, virtual worlds have nowhere to go but up. Only they won’t be virtual worlds – just a part of normal life.

Maybe more normal than normal life. After all, if we continue down the paranoid path of protecting children from reality’s every rough edge, the poor sods will still need somewhere to go and hang out.

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Fabbing becoming price-competitive

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Via Fabbaloo comes news that big businesses are starting to wake up to the savings they can make with 3D printing and rapid prototyping technology. Granted, this is a press release from a company that makes 3D printers, but the solid numbers that they’re quoting with respect to shoe giants Converse speak more loudly than the corporate back-patting:

Converse says its ZPrinters can produce a shoe model in two hours, or nearly 30 times faster than an ABS printer. ZPrinting has also helped:

  • Eliminate eight annual trips to Asia for design consultations at a cost of up to $12,000 per person for each trip;
  • Cut tooling costs from $350,000 in 2006 to $150,000 in 2008 by using ZPrinted models to winnow designs; and
  • Transform the way the company does business by bringing 3D shoe models to key accounts and producing models on demand.

“We’re seeing new prototypes in hours and cutting weeks off our design cycle,” said Bryan Cioffi, manager of digital product creation at Converse of N. Andover, Mass, USA. “Last night’s sketches become tangible color models that we can pass around at this morning’s meeting. Our ZPrinter has become a prototyping center in its own right, and it’s helping us get better products to market more quickly for less money.”

That technology is itself becoming cheaper by the month, so we can expect many other manufacturers to clamber aboard the fabbing train as they attempt to rebuild after the economic slump.

But that same capability may actually spell the doom of corporate giants like Converse. After all, when every town has a 3D print-shop, why pay Converse for a new pair of trainers that they’ve designed when you can just clone their basic design files from a torrent, make some unique tweaks and print out a custom sneaker of your own for a comparable (or perhaps even lower) price?

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The future is local: Braddock, Pennsylvania

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"We will grow" - the bridge to BraddockWe’ve been talking a fair bit about urban decline and decay, and efforts to repurpose collapsing cities.

Now, here’s an example of a dying town trying to go its own way – Braddock, Pennsylvania was once a flourishing steel town, home to Andrew Carnegie’s first free library. Now it has a population of under 2,500, and the axe of a proposed freeway hangs heavily over its neck. 2005 saw John Fetterman become Mayor, and he’s now working to bring “the kind of outside energy, ideas, and interest from the artistic, urbanist, and creative communities” to the town. [hat-tip to Justin Pickard; image by Hryck.]

In other words, if you’ve been reading along with Cory Doctorow’s serialised novel Makers over at Tor.com, or following Chairman Bruce‘s ongoing obsession with “stuffed animal” architecture and squatter culture, Fetterman’s plans will look pretty familiar. Whether Braddock can reinvent itself as a counter-cultural artist’s enclave remains to be seen, but you’ve got to salute the determination of a man willing to work at making it happen. When your government can’t (or won’t) help you, you’ve got to help yourself.

A loosely related story from Canada sees five Ontario grocery stores abandoning their franchisee status in favour of becoming a cooperative organisation that focusses on stocking the local produce that corporate policy previously prevented them from selling. Are we seeing the first trickles of a global landslide toward massive decentralisation, and a return to economies driven by community and proximity? [via MetaFilter]

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The bankruptcy auction that wasn’t

Here’s an interesting art installation that involves some science fictional thinking. Toys by Tomasso Lanza features digital renderings of assets to be sold at auction following the bankruptcy filing of a fictional Enron-like corporation. we make money not art explains:

The quick collapse of the company led to a fire-sale of most of ENT’s assets. In the months following the Chapter 11 filing, the liquidation team split the enormous sale across a number of auction dealers. Lanza created a photographic essay of some of the items surfaced by the bankruptcy auction, some of them perfectly mundane (executive chairs, workstations, gold balls and clubs, luxury cars, a range of sat nav, etc.), others fictitious. They are listed in the catalogue of an auction that dealt with low to mid-valued items and leftovers from previous auctions; despite the low-key of the sale, the dealers got their hands on a few items which were sold at much higher prices than originally expected thanks to their unique nature.

The fictitious items are straight out of a near-future/present day satire of corporate secrecy and hubris.

stock value viewfinder

This lot consists of an off-the-shelf viewfinder, plugged into some sort of digital tuning device with the words FTSE, DAX, HSI, DSM200, PHLX/KBW, MIBTEL, NIKKEI, NYSE, NASDAQ etched on. There is no documentation provided, although it is believed that these devices were secretly owned by a small number of executives and used for monitoring stocks and other financial products too sensitive to be displayed on-screen or retrieved on the company’s computers.

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Japan to ditch cash?

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Japanese cashless payment systemWill the economic crisis hasten the arrival of the long-promised cashless society? It’s an idea that has legs – at least in Japan, where the government thinks getting rid of cash might make their economy easier to manage. [via Technovelgy; image courtesy Jan Chipchase]

Other extreme ideas mooted by the financial authorities include a tax on physical currency or introducing one to operate alongside the yen.

All three ideas are based on a theory concerning interest rates and the concept that a nominal rate of zero — as Japan has now lived with for much of the past decade — may be too high. In Japan’s case, the theory would suggest that nominal rates of -4 per cent might be closer to what is required to rescue the economy from another deflationary spiral. Having agreed that this might be necessary, the next question is how it could be imposed.

Several MPs in the ruling Liberal Democratic Party believe the abolition of cash, though politically radioactive, might be technically feasible. Richard Jerram, a senior economist with Macquarie bank, told investors that “the proposal has become practical with the broad penetration of electronic money and credit cards in Japan”.

He said that all the proposals were radical but worth consideration for Japan. Without physical cash, a central bank can set rates exactly where it likes, runs the argument. Mr Jerram said: “At the heart of the problem of achieving negative nominal interest rates is the idea that physical currency is an anonymous bearer bond with a nominal interest rate of zero.” While a central bank can impose positive or negative rates on non-physical assets, transmitting those rates to physical currency is a huge challenge. By permanently removing cash from a system, he added, policymakers are robbed of the excuse that zero is the lowest that nominal rates can go as a deflation-fighting tool.

I’m no economist, so I have no idea whether this idea is genuinely workable, nor what the side-effects might be. But surely, no matter how deep the penetration of electronic fund transfer systems may be, there’s going to be a demographic or two at the bottom of the stack who’ll suffer at the change-over…

… but then again, maybe not. Africa has taken to electronic money like a duck to water, and as mentioned before cash comes with its own hidden costs for the end user. Whether or not the reduction in costs created by abandoning cash would be passed on to the end user remains to be seen, but you’ll excuse me if I don’t hold my breath.

But here’s your science fictional brain exercise for the day: imagine you’re a drug addict living in a society with no cash. How do you buy your fix without the transaction being visible to the system?