Are Virtual Worlds Part of the Cause of our Real-world Recessions?

That’s the question asked in a recent article on Terra Nova, which offers some (very solid) arguments for the idea that our increasing interest and involvement in ‘virtual environments’ (using that term loosely enough to encompass sites like Facebook and Hulu, as well as more obvious examples) is actually affecting our ‘offline’ consumerism to the point where it starts to look like an economic downturn.

Let’s construe the notion of “virtual economy” quite broadly: If you receive an experience by yourself through a machine that runs on digital technology, without doing or buying anything physical (other than press a few buttons), it’s virtual. To [listen to a song on YouTube] is virtual; to go to a concert is real, to buy a CD and play it is real, to play your own instrument is real. The virtual transaction does not require the movement or alteration of anything physical. Not even physical money changes hands. The real transaction involves material being created, moved, consumed, all by human hands.

TV viewing is down among 18-34 year old males, and movie attendance is flat. Meanwhile, more and more time is being spent online or playing videogames. If you want to get 80 hours of fun watching movies, you need $1000. You can get the same fun from a game for $50. Spending time online or playing videogames simply involves less expenditure in the real economy.

The author goes on to make several more telling observations: why spend money on birthday cards when you can send most of your friends a virtual beer and best wishes via a free app on Facebook? Why buy and fill a bunch of photo albums to give friends and family (once one of my wife’s favorite gifts) when you can simply share a Collection on Flickr? How much less are we paying the phone company for ten-minute, long-distance phone calls that we’ve replaced with a couple @-replies on Twitter?

For that matter, consider this scenario: It’s the 1960s, and all of your friends that you currently spend time with online are actually your local friends and neighbors. Let’s assume that you’re seeing them face-to-face just as often as you currently interact with them virtually, and for approximately the same amount of time. How much more would you be spending on clothes? Food (both as a host/guest and eating out)? Entertainment? Gas?

Ten bucks says they aren't shopping for new stuff from Ikea.

Consider for a moment that, less than ten years ago, that sort of situation with that level of consumerism would have been the norm. Given that, it seems inevitable that our time online has a perceptible impact on the economy. Are we causing the recession? Certainly not, but there’s a good chance that virtual environments are one of the invisible, untrackable contributors. Did you spend more gold in Eriador or Azeroth than cash at your local movie theater this weekend? Me too.

The whole article is extremely thought-provoking and interesting, I highly recommend reading the whole thing, but in the meantime, tell me this: what offline activity have you mostly (or entirely) replaced with some online equivalent in the last year or two?


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