Real Growth from Virtual Economies – Part I: The VR Boom

Apologies for the long summer break this year, I am hoping to return to regular posts of 1-2 per month starting now. I have also been working on putting together an e-book with most of the ThoughtInfection posts from the last year and a couple of all new essays that will only be found in the ebook. I am hoping to release some time this fall – please stay tuned for that.

This is part 1 of a series on the coming boom in Virtual Reality Economies which I have titled Real Growth From Virtual Economies. In this post, I will make the case that a major boom in the proliferation and adoption of consumer grade virtual reality hardware is about to happen, but this will mark just the beginning of a deeper shift towards mass virtualization which will spread out across our social, economic, and political reality. 


We have been hearing about the promise of virtual reality for years now. Since at least the 90’s there has been a pop-cultural fascination with virtual reality. Before even the internet existed, there was talk about how soon we could all be living virtual lives within virtual reality. VR was going to change everything, and it was going to happen soon.

But it didn’t.

Major disappointments like the VirtualBoy marked the end of a hype cycle for VR that would not come around again until it was kickstarted back to life by the Oculus Rift in 2012. Now there is reason to believe that VR might actually live up to the hype this time. For a number of reasons, I think that we are in the beginning stages of a major VR boom, one that will see VR hardware in most homes within a decade. In the same way that we have seen smartphones go from an astounding new technology to totally ubiquitous in under a decade, I think we will see a similarly amazingly quick and complete adoption of VR over the coming decade.

The VR technological zeitgeist.

The first reason that VR is about to boom, is that the technology has finally gotten to a point where the problems of making a person feel like they are present within a virtual world have now become tractable. This is the single realization that Luckey Palmer came to in his garage a few years ago. Smart phones have driven down the costs of small, lightweight, high-resolution screens far enough that a device which straps that technology to the face is now possible. In addition smart phones have also driven down the costs for sensors which can provide accurate and low-latency head-tracking.

Now other companies in addition to Oculus are entering the field, and we are moving towards the release of high-quality consumer grade Virtual reality devices likely in early 2015.

Additional technological advancements should also be considered enabling technology for the emergence of VR including the continued growth of high speed networks which can handle the bandwidth to allow smooth communication between users in virtual spaces, and the incremental improvement of technologies to allow users to mirror their own actions in virtual space (1,2,3).

All of these technological improvements mean that a VR experience with a true feeling of presence can soon be a reality, but for this technology to see a rapid adoption it also is going to need a strong demand to make it happen. The smartphone took off as a technology because people wanted to be able to do things like mapping and browsing with a device that they could hold in their hands. The killer apps were what drove the uptake of the technology. But what about for VR, are there killer apps which will take the technology beyond the hands of the techno-elites?

The killer apps of VR already exist. 

The application of VR to next-generation gaming is obvious, so obvious in fact that I am not going to say anything more than this – the Oculus Rift is going to give every gaming console manufacturer a run for their money when it is finally released.

As big as VR is going to be for video games, it is important to note that this is much bigger than gaming. Contrary to what the Oculus Rift is typically being used for today, I think the most important role of VR is in enabling not just presence but shared presence. Imagine being able to sit across the table from your distant friends and family and have a cup of coffee. That coffee is real, and its really on the desk in front of you, its just the other side of the table and the person sitting there is thousands of miles away.

Now imagine sitting around a camp fire telling stories with a group of your best friends. For me, there is something magical about that kind of space, sitting staring into the flames while you chat about everything and anything. I see no reason that this kind of social experience could not be recreated within a virtual environment.

The future of communication is VR, and Facebook can see that.

The delivery of TV and movies could also constitute a killer app for virtual reality. Oculus developers are already experimenting quite successfully with recreating the shared theater-going experience in virtual space. While this might seem to be somewhat of a niche application for the hardware, I think that wanting to share a movie experience with particular friends could perhaps be hugely popular.

Another very exciting (killer app) for virtual reality might be to bring consumers right into the action for live sporting events. Imagine being able to sit courtside for any NBA game. It would make the experience of watching such an event on television seem downright archaic.

The proliferation of VR hardware will be just the beginning. 

As soon as Virtual reality gets over the initial few baby steps of an emergent technology and one of the many killer apps gets a hold, I think we are going to see nothing less than an explosion. The fact that so many obvious applications for VR, running the gamut from social and professional communication to entertainment and sports tells me that this is a technology whose time has come. I would not be surprised if we see multiple VR devices in most home a decade from now.

And as the hardware for VR starts to become omnipresent in the next decade, its wider economic effects are going to be intense. Just as the smartphone provided the infrastructure for new kinds of digital market places (ie the multi-billion dollar App market), VR may provide the infrastructure for whole new kinds of economies.

In my next post I will discuss the emergence virtual economies and discuss whether virtual jobs might hold the key to job growth in the 21st century. 



Corporations are not people, but soon they could be.

There has been a fair amount of talk lately about the nature of corporate personhood and the destructive effects it can have on the political process. The WolfPAC, a political action organization which is (somewhat ironically) collecting money in order to lobby governments to create limits for the amount of money that can be donated to political causes. I agree that there exists a desperate need for some kind of counterbalance for the undue influence that money has on the political process, but I also recognize that this is a complex issue. In particular I am concerned that the way in which WolfPAC advocates for an amendment to the constitution which would explicitly state that corporations are not persons, and should not be granted the rights and privileges of persons. While in the current corporate stranglehold on political power in the United States certainly needs to be addressed, I think precaution is needed in any legislation or amendments which addresses the nature of personhood. In particular, I think that a bit of futurist thinking is highly relevant here and should be taken into account in any discussion of the nature of personhood. Corporations are not people, but some day they might be and we should be prepared for that. Corporations are artificial entities created by law. Primarily, they exist to shelter their investors from liability for actions of the corporation (thus the limited part you see in some business names). In the eyes of the law, a corporation is a separate person who is responsible for their own actions. Thus, if you are somehow injured by a corporation, and you decide to sue, the corporation itself can be held responsible while you cannot take the individual shareholders to court. Over time there has been a tension in the law trying to establish what rights and priveledges should be afforded to legal persons like corporations. While they have a right to sue and be sued in court, they have not historically been granted the right to free speech. This is what changed in the Citizens United v. Federal Election Commission case which opened the door to unlimited campaign financing by corporations in the form of political action committees. In response to this, WolfPAC and others have suggested that an amendment should be made to constitution to state the following explicity:

Artificial entities, such as corporations, limited liability companies, and other entities, established by the laws of any State, the United States, or any foreign state shall have no rights under this Constitution (source)

I think that adding such a constitutional amendment to explicitly remove any possibility of inalienable rights from non-natural persons is a dangerous precedent to set. While we currently live in an age when computers do not yet have the kinds of abilities that we would associate with a person (ie free-will), it may not be long before we are dealing with such entities. The long legal history of corporate personhood leaves the door open to finding ways to give rights to artificial entities, be they corporate or silicate. If we close that door, and enshrine a rule which states that artificial entities cannot have personhood, the consequences could be dire. If and when one of the many projects to model the human brain succeeds, and we manage to invent a computer which can reproduce key human qualities (free thought, free will, emotion etc…), we must have the legal ability to determine what rights such an entity should have and give those rights to them. The legal question of the rights on a purely artificial person also extends to questions about the rights of simulated persons. If one day we can recreate you entirely within a computer should you not maintain the rights and privileges of a person? I am not by any means sure that such artificial intelligences or simulations should indeed be considered persons and given the rights a person should have, but I am 100% sure that such entities can never be persons. We must leave room in the law for legitimate persons, which may need to one day carry not only the legalistic rights of corporations, but perhaps one day the inalienable rights of natural citizens as well. Serious legal people who wear suits and squint at legislation all day long will probably laugh at such an argument. Corporate personhood is running roughshod over democracy, lets not get off in the weeds worrying about theoretical artificial intelligence, right? But this is exactly the time to think about the deep implications that changes to the law could have, the beauty of the US constitution is that it is a document written almost 250 years ago and is still somehow relevant today. I think organizations like the WolfPAC that want to try to put some limits on the power of money in politics are working for a good cause, but if they want to do it by changing the legal definition of personhood, they need to give a lot of thought to the future first.