When you’re building a virtual world paradise, does it help to do so from an actual one? That was my first thought after reading about Avatar Reality, a startup based in Oahu, Hawaii (the pic is Honolulu’s Aloha Tower as seen from the founder’s office.) Tomorrow the company will sneak preview Blue Mars, its upcoming “3D casual game” MMO, at GDC in San Francisco. I’m from Hawaii, so during a January stay, I caught an advance demo.

Though set on a future Mars terraformed for human habitation, Blue Mars isn’t hardcore sci-fi — indeed, the company’s hoping to attract non-gamer women who’ll enjoy shopping, socializing and playing casual games built into its idyllic locales. It’ll run on a free downloaded client using the ultra-realistic, CPU-taxing CryEngine platform — meaning a large download. They’re aiming for compatibility 3-5 years from now, when standard broadband-powered PCs should run Blue Mars just fine. (Avatar Reality President Kazuyuki Hashimoto notes that Flash-driven games were once considered large, too.)

Unlike Second Life, most of the world’s content won’t be created by users; instead, they’ll license third-party developers, with whom they’ll share revenue from virtual item sales, while also protecting the company from DMCA/content theft complaints (a recurring headache in SL.) A veteran of Final Fantasy developer Square, Hashimoto envisions Blue Mars as an ideal storefront for the many 3D artists he knows. Development VP Li-han Chen is a veteran of Sony Online while company “Mastermind” Henk Rogers previously founded Blue Planet Software, holder of the Tetris license — both of which should help them recruit casual game developers as Blue Mars evolves.

Other details include:

- Open beta planned for fourth quarter of 2008
- Funded with $2.4 million from Rogers and Hawaiian VC
- Sharded MMO, with up to 10,000 players concurrent on each server
- Game platform to use Lua
- User-to-user trading handled by company-run auction
- Users to earn virtual currency by acting as employees (guides, police, etc.) of world’s fictional corporations
- Company revenue to come from multiple sources, including: land leases, item sales, premium services, real-world advertising

And yes, there’s advantages to developing Blue Mars in the paradise that is Hawaii, among them a proximity to Japan, relocation appeal for prospective employees, and a state tax credit for tech startups.

Screenshots courtesy Avatar-Reality.com.