When we talk about MMO games and their problems, the first question is "Who's running the server?" We take for granted that an MMO is a machine with a trusted server and a bunch of not-very-trusted clients. (I myself have been working on a multiplayer MUD-like game, and while it is open-source, there's still a trusted server that players log into.)
This assumption is fundamental, but it's bunk. Let me explain.
Bitcoin got a lot of attention earlier this year, while a Bitcoin bubble was going on. (Which is to say: earlier this year, there was a Bitcoin bubble, because there was a bubble.) Bitcoin is supposed to disrupt standard economic models, because it is secure, private, untraceable, frictionless -- a lot of words got used up. Everybody has the wrong end of the stick, I say.
Look, what is Bitcoin? Never mind the privacy cheerleading and the libertarian wallahs. What is Bitcoin, in essence? (And Litecoin, Feathercoin, and the other twenty knockoffs that aren't taking off. I'll just use "Bitcoin" generically from now on.)
Bitcoin is a decentralized, cooperative system for validating the exchange of digital tokens.
People want to use this for a currency. I don't. The economic arguments can be hashed out by economists. I think it's sufficient to point out that nations have monetary policy, and having your monetary policy set forever by a single rigid algorithm is only marginally less stupid than handing it over to the whims of South African gold-miners. But whatever. Bitcoin will go big or it won't, and my only investment in that is schadenfreude or embarrassment. Let's think about other uses for digital tokens.
...You're way ahead of me. (Because you read the title of this post.) What is a World of Warcraft server?
Blizzard runs bazillions of these servers, and people pay $15 per month for access. What service do they pay for? The opportunity to put in time and effort, and get out virtual goods -- gold, weapons, armor, pets, etc. Then, to trade virtual goods for other virtual goods. And that's all.
This is a consensus system, although Blizzard sets the trading terms. I could take a WoW screenshot and photoshop in my name, a giant glowy mace, and a trillion gold pieces. Would anybody care? Of course not -- that's not acting within the system; I couldn't trade my imaginary gold for WoW imaginary gold.
World of Warcraft is a centralized, rent-burdened system for validating the exchange of digital tokens.
Oh, there's a fancy UI and a lot of nice scenery, and the trading terms are baroque, but basically it's a big token-trading box. (It's even based on a proof-of-work system, just like Bitcoin! Not computational work, but still work.)
I trust the conclusion is obvious. Blizzard's role in the system could be swapped out for a Bitcoin-like network. It would be open-source and decentralized, but still do the job of enforcing the game rules, preventing theft, detecting "counterfeit" goods in the system, etc.
...In theory! I'm glossing over all the engineering and organizational questions here. Scaling is hard. Fast distributed networks are hard. Clearly Blizzard does a lot of work (art creation, story creation, combat mechanics, etc) which is subsidized by subscription fees. A decentralized version would still need to think about all of that.
(Although it wouldn't need to do all of that. Perhaps the system I'm hypothesizing would use Dwarf Fortress or Minecraft-style visuals, rather than high-end fantasy-photorealistic art. Maybe nobody cares about story. Lot of ways this could go.)
My point is, there's no inherent need for a central, trusted manager for an MMO-like system.
I am certainly not the first person to point this out. But when I poke around the nets, nobody seems to have drawn these threads together. Lots of people talk about decentralized MMOs, but they seem to presume trusted parties, or else divide up the trust domain. ("Anyone can administer a server.") There are noncentralized network libraries (Badumna). There are companies talking about accepting subscription fees for their (centralized) MMO in Bitcoins. There's even this article, which explicitly compares MMOs to the Bitcoin network, but doesn't go on to consider changing the MMO model.
I don't think anybody is tackling the question of a distributed game which is crypto-secured and validated by a concensus network. If I'm wrong, point me to them!
To me, this seems way more interesting than replacing currency. Bootstrapping a currency runs into all sorts of inconvenient questions about nations, and financial regulations, and money-laundering laws, and "why is this going to work again?" But bootstrapping a game is very easy to explain! "People will play because the game is fun. No, you don't have to care about the tokens -- if you're not playing the game, they're meaningless." And so on.
I bet something like this could take off. It would be a big project, but there are bigger (and sillier) open-source efforts out there. And it would be pretty funny if the giant online gaming companies turned around in ten years to realize that nobody needed them any more.
(Footnote: I've thought about this occasionally over the past year or so, but this post was spurred by the new Stross novel, Neptune's Brood. He's touched on virtual economies before, in Halting State, but this book is explicitly about bitcoin-style currency. Yes, he has an SFnal explanation for why his society uses it. I won't spoil the fun.)