The latest virtual world news that's been buzzing around the Web this week is a post on the Google Blog announcing the launch of Google's "Lively," a Web-based "3D virtual experience" that allows anyone to create a miniature virtual world, design it, fill it with 3D objects, and embed them on their blog or Web site, allowing visitors to interact via avatar with one another in a virtual environment.

EA's "The Sims 2" has created some very neat branding opportunities. About a year ago, EA released a "stuff pack" -- a collection of items that can be imported into the game -- that were modeled and branded after clothing retailer H&M . Just this past week, EA released another stuff pack for Ikea, the well-known Swedish furniture company (the one with the meatballs).

The biggest fuss that's been made so far over "Grand Theft Auto IV"'s content has been the Mothers Against Drunk Driving getting into a tizzy about the fact that your character is able to get tanked and get behind the wheel of a car. Weigh that against the $500 million Rockstar and Take-Two raked in during he game's first weekend -- the largest entertainment launch in history -- and it's a relatively minor hiccup in the game's lifecycle.

Create a sandbox for the player, then once they've branded that sandbox with their influence, connect that sandbox with other sandboxes. This model is starting to reach maturity -- and it is terribly exciting. There are a few issues that need to be worked out, though.

Nintendo suffered a brief PR fiasco last weekend when the director of marketing for its European division, Laurent Fischer, dismissed concerns that the Wii's memory space was too small, saying that only "geeks and otaku" would want more storage space on their Wii. For those who don't routinely use Japanese slang in their day-to-day conversation, Wikipedia describes "otaku" as often having "significantly greater negative connotation than geek does in the West, especially as the term geek has become less derogatory. The term otaku in Japanese occasionally suggests a creepy, obsessive loner who rarely leaves the house."

According to a Nielsen study (via IGN), people across all age ranges are playing a lot of Xbox360. The Xbox360 accounted for over 50% of console use across the study, the Wii accounted for between about 25-30%, and the PS3 accounted for only about 12-20%.

This month, casual games took a drubbing from industry skeptics, and now it seems next on the firing line is in-game ads. Speaking at a recent conference, Wild Tangent founder Alex St. John said that in-game ads, although they're generating a lot of excitement in the market, are not especially effective ways of communicating with gamers.

The business world seems to have a youthful crush on video games these days. Which is certainly justified. Nintendo is the quintessential example of the Blue Ocean Strategy, having moved into a space unoccupied by any competitors, mopping up with its brilliant play - supply still can't meet demand over a year later. In the past weeks, "Grand Theft Auto" had the largest opening weekend of any media, ever. However, much like young love, the business world is more infatuated with the idea of a relationship, than with actually getting to know the object of its crush.

By all reports, casual games are a booming sector of the gaming industry. Research firm DFC estimates that by 2011, they will have grown to a $1.1 billion industry. But this week, execs from prominent firms have been speaking out against the very concept of "casual" gaming and gamers.

tk