“Sign up forms must die,” proclaims Luke Wroblewski in his new book Web Form Design: Filling in the Blanks.

I couldn’t agree more.

There is an emerging trend among Web 2.0 sites to employ a gradual engagement model as a way to give users a taste, often times a complete activity or experience, before asking them to sign up.

Virtual worlds and MMOs are quite possibly the worst offenders when it comes to forcing users through a registration process. Guests are often relegated to look at sample screen shots and read descriptions of a world before deciding to hand over their personal information for a closer look.

By and large, enthusiasts have populated online worlds to date. Whether they are hardcore gamers or early adopters of virtual worlds, they don’t need convinced to try a new service and they don’t care how easy or hard it is to use.

The design paradigm must change if the industry is to be successful in attracting and retaining casual users. If you are publishing a casual social or game world this year, even in 2008 there is a chance it will be the first avatar-based, immersive experience for your users.

In some ways, the Free to Play model that many world designers are using is addressing the monetary investment piece of the puzzle, but most worlds are still requiring a sign-up process before putting users into the world.

As experience designers we need to move the sign-up process from the download/sign-up page to a series of interactions in the world. The percentage of casual prospective users that are lost between the web pages describing a virtual world and the sign-up form is non-trivial. Equally significant is the number of users lost between sign-up and entering the world.

If you are still not convinced, an excerpt of Wroblewski’s book has been posted over at A List Apart.

David Helgeson, CEO of Unity Technologies sat down for a few minutes during GDC to talk about the growing excitement around his company’s software. Unity’s primary product is a virtual world and MMO development platform that can deliver experiences on the web, PC, Mac, and Wii.

There is much interest in Unity right now because it offers advanced 3D graphics capabilities from within the web browser using a very modest plugin that installs without a browser restart. If you want to see the platform in action, checkout their website portfolio or play an Electric Sheep favorite, Raptor Safari developed by Flash Bang Studios.

Click here to listen or download.

Presented by John Bates of Entropia Universe, Eyjólfur Guðmundsson Chief Economist of CCP, and Craig Sherman of GAIA.

Some Gaia statistics:

5 million visitors/month, 3 billion page views/month, 1,000 auctions closing daily, 1 million forum posts per day (second only to Yahoo!), $1 million/month in digital goods, and “many thousands of dollars” per day is being made off prepaid cards sold in Target stores.

Gaia is launching an MMO this summer that will be Flash-based. It has been in development for two years and they expect it to almost immediately become one of the top MMOs.

Panelist discussion:

Can a virtual world or MMO exist without an economy? Panelists agree it’s not likely because any time users perceive value in the world, a market will emerge regardless of terms of service.

Things without dollar value still have value. The acceptance of these MMO and virtual world economies will continue. They look just like traditional economics (inflation/deflation, economic utility) just a different currency.

Taxation on virtual world revenue is not really that exciting. When people pull money out of a virtual world, it is income and therefore should be reported as income to taxing authorities.

There will be a fundamental switch to micro-transaction economy in place of subscriptions. This change is well underway in Asia and is starting to happen here in the U.S.

Presented by Andrew Schneider of Live Gamer and Steve Goldstein of Ping0.

Why is there demand for black market goods? Many do not have time to play so they outsource, they have more disposable income to spend, etc.

Current analyst estimate that $1.8B+ is on the secondary market for virtual goods. IGE stated nearly $1B in gross transactions in 2005. ItemBay and ItemMania accounted for $974B in gross transaction volume in 2006. Economist projections are $5B in gross transactions by 2012.

Sony created the Station Exchange for EverQuest II as a sanctioned service to try to curb black market exchange. They found that majority of people paying real money for virtual items are not farmers looking to make a quick buck. Legitimate exchange promoted sense of ownership and reduced customer service issues by 40%. Interestingly, there was negligible impact on game balance.

A legitimate secondary market must only facilitate trading with publisher/developer consent, be safe and secure for players, and not support farmers. Panelists are discussing the Bragg vs. Linden Lab case and strongly recommending not giving ownership to players of their content.