KEY POINTS:
Lonely? Ugly? Broke? Don't worry, you can make friends, have a makeover and earn a million from the comfort of your armchair. There's a catch - your friends and looks will exist only online. But, for an increasing number of virtual adventurers, the money made within the games they play is cold, hard cash.
A report by analysts Screen Digest says the market for massive multiplayer online games (MMOG) now generates NZ$1.4 billion in the West alone. The report's author, Piers Harding-Rolls, says "millions of people are playing MMOGs. These new games have brought with them many new gamers - and new ways of making money."
Virtual reality is now one of the fastest-growing markets in the world. Among the different kinds of MMOG are networking games, such as Habbo Hotel; shared 3D worlds, such as Second Life; and games where players can look after a virtual pet or become a respected dragon-slayer, such as World of Warcraft.
Second Life is probably the most well-known virtual world because of its similarity to reality and the increasing number of high-profile people and companies from the real world who are involved.
It's a world created by computer programmers at a company called Linden Lab, based in San Francisco. Since 2003, would-be residents have been able to sign up, create an online version of themselves (called an avatar) and explore a world that is similar to our own - except the players can go anywhere, do almost anything, and look however they like.
Second Life also has a thriving in-game economy, based on Linden Dollars. L$500 is roughly equivalent to $2.75 and the virtual money can be used to buy clothes, property and accessories.
Second Life has around four million registered users, although Linden Lab says only 144,108 residents actually use the in-game money.
"The big revenue generators are still the traditional subscription games that appeal to the hardcore gamer," says Harding-Rolls. This is where players pay a fee to join a game or site and continue to pay to play.
Habbo Hotel is a virtual hotel where visitors can hang out with friends online or listen to some of the world's biggest bands. This functioning world has staged gigs by U2 and Gorillaz and record company Innocent has launched a virtual band, 365, to exist only in the Habbo World.
The site, launched seven years ago in Finland, is now available in 29 countries. It is so popular that it has 66 million users worldwide. It doesn't cost anything to sign up with Habbo Hotel. It makes money through selling credits as well as letting companies advertise on the site.
Children even have a virtual world. In Club Penguin, the avatars are penguins and while children can chat with each other through their Antarctic avatars, they can also explore the snowy world and play simple games.
Like Habbo Hotel, it's free to sign up but the best features are subscription only. Moderators check conversations for inappropriate language or behaviour to provide a safe online haven.
So how can it be possible to make money from this virtual gold rush, aside from setting up your own MMOG if you spot a gap in the market?
A 3D-modelling tool in Second Life allows any resident with the right skills to build virtual buildings, landscape, vehicles, furniture, and machines to use, trade, or sell.
Although virtual land can be bought for less than a dollar, real estate is how the first Second Life millionaire made her money. Ailin Graef, a teacher from Frankfurt who is in her 30s, joined the site (using the avatar Anshe Chung) three years ago.
Since then, she has made L$3 million by trading land and property that she has created using 3D computer modelling skills. "My initial investment in Second Life was less than L$10," she says. "I realised people who were looking for land didn't have the programming skills to develop it."
Graef is the most successful member of a new cottage industry - "virtual loot farmers" - who play the games just to obtain fantasy goods that they can sell in the real world. The best loot farmers can make real money, although playing to earn is a time-consuming business.
Gareth Lancaster is the man behind avatar Moopf Murray, a successful in-game entrepreneur whose Skoopf roller skates ($84) have become a Second Life best-seller - 60,000 pairs were sold in two years. Lancaster gets about $35,000 a year from his virtual business savvy.
One United States writer has even chronicled his attempts to make it rich in the virtual world. Julian Dibbell, the author of Play Money: Or, How I Quit My Day Job and Made Millions Trading Virtual Loot, has turned his in-game quest for cash into a real-life book.
An increasing number of web-savvy corporations are launching virtual versions of their products online for promotional purposes, because it's a cheap way of targeting a very tricky demographic.
This year, Sony will have its own virtual world, Home, available through PlayStation3.
In the past, Sony has been dedicated to making boxed video games rather than web content, but it's clear that the company now wants a piece of the virtual gold rush.
As with Second Life, gamers will be able to create avatars, buy clothes, create homes and network online.
"It's about emerging entertainment, powered by the audience at the centre of the experience," says Sony's Phil Harrison. "It's not just about Sony brands and games - it's a much wider network of connected spaces. The games industry is on the threshold of a new era of creativity, collaboration, communication and commerce."
It's not just big businesses that is getting creative online. Hillary Clinton and Republican George Miller have both held press conferences in Second Life. French presidential candidate Segolene Royale has an avatar and her right-wing rival Jean-Marie Le Pen has opened a Second Life headquarters.
With politicians appearing online it was only a matter of time before the media followed suit.
Reuters was the first news agency to open a bureau in Second Life, staffed by fulltime "in world" correspondent Adam Pasick, known in the game as Adam Reuters.
Pasick, reporting from Second Life, says it works in two ways. "We bring in real-life Reuters news for those who want it and I write stories specifically for Second Life residents."
Despite the buzz about MMOGs it's important to remember that there's a dark side to these brave new worlds.
"It is a little bit like the Wild West out there at the moment," Harding-Rolls says. "There are hardly any regulations or rules surrounding what you create and how you sell it.
"There are dangers with trademarks, copyright and classification of content - it's all murky ground.
"It's an experiment at the moment. I imagine in the future that user-generated content will be applied in a more rigid way so it can be policed more easily."
As well as the possibility of being penalised for copyright infringement, "gold-farming" is another issue facing virtual worlds.
Gold-farming, in contrast to the small-scale enterprise of loot-farming, refers to the organised practice of using a whole factory of gamers to play through games to acquire in-game goods.
In WoW and similar titles this might mean playing to get hold of magic potions or weapons. In other titles it could mean playing to accrue status or money.
These virtual items are then sold for real money - to cash-rich, time-poor players who want to advance in the games without spending their days in front of their computer.
Dibbell describes in his book a visit to an office in Tijuana where unskilled workers make $26 a day to play online, "harvesting the resources of imaginary worlds".
Some of the problems that are affecting players mirror what happens in the real world. Skyrocketing property prices have become a problem in Second Life. In December last year prices jumped 24 per cent.
Where do these virtual worlds go from here? Screen Digest says subscription revenues from MMOGs will rise to $2.1 billion by 2011.
Harding-Rolls isn't convinced that this will mean a huge increase in the number of virtual/real millionaires. "Second Life is quite unique but it's not actually particularly commercially successful," he says.
Although there are people who make money online, it's unlikely that many gamers will turn a profit from virtual endeavours.
Then again, with the market set to grow by a third in the next four years, there's everything to play for.
- INDEPENDENT