Habitat
Lucasfilm's graphical online world for the Commodore 64, where the players taught the designers that a virtual world can't be planned in advance.
Chip Morningstar and F. Randall Farmer built Habitat at Lucasfilm Games, and its beta ran in 1986 on Quantum Link, an online service for Commodore 64 owners dialling in by modem. Players steered cartoon figures — avatars, a word that picked up its computing sense right here — that could talk, trade, own things and get mugged.
The designers' 1990 paper "The Lessons of Lucasfilm's Habitat" is still required reading. They had built quests players finished in a few hours and an economy that collapsed the moment someone found a bug that printed money. Their conclusion: run a world like a city, don't write it like a novel. Habitat lives on today as Neohabitat.