Bill Gurley, a VC with Benchmark, gave a very different presentation for him at Web 2.0, on MMORPGs of all things. Why? "Some of the most interesting things going on are Social in nature." Also available as MP3 via Weblogs Inc.

But mostly because its a great business model:
* Recurring revenues
* competitive "Moats," user investment of time raises switching costs
* Network effects/ increasing returns
* "Real" Competition
* Time engaged (20 hours/week on average)
* Unlimited complexity
* High risk, high reward

Shanda, the largest market cap in China tech $2B.

* Key was distribution through internet cafe penetration
* $100MM rev this year, 700K concurrent users

Ncsoft, $1,6B market cap in Korea, Lineage

In the US
* Sony's Everquest, $500JJ in profits in eight years, $80-90MM in revenue

Passionate about MMORPGs
* Prosecution of in in-world theft
* Real-world retaliation
* Resale of digital assets/accomplishments
* Earn a living playing games ($40-60k a year for leading players)

Casual Games & Avatars
* Many in Korea (NHN
* TenCent in China (QQ) -- leading IM company in China, 90MM active monthly users
Revenue models: extra game play, levels avatars, clothing, furniture
* AOL and Yahoo following suit, experimenting in the margin
* Gaming, communication and social networking are colliding

Interesting products in the US
* NeoPets - 23M registered users (kids), argues it is a virtual world. His characteristics for a virtual world: avatars, persistence, education, group activities, currency and virtual economy
* SecondLive by LindenLabs, focused on development tools to let people in the world create the world

Will be a very competitive alternative for a consumer's time.