The video demonstration of "Free Realms" suggests Sony is reaching as broadly as it can, including themes from all sorts of games, books and movies popular with the tween set, plus social networking features.

There is combat in the game, but it's completely optional. Players can also raise pets, grow roses and play little games within the game. Or they can just grab a pair of skates and hit an icy lake in the virtual world, of join a soccer game with other online players.

Players can also be musicians and play "Guitar Hero" like rhythm games. Their character options include an adventurer with an Indian Jones-style hat or a wizard that looks like Harry Potter.

Smedley said "Free Realms" will use a "velvet rope" business model with a few twists.

Basic play is free on PCs and the PlayStation 3 console, after viewing a mandatory pre-game video ad. Advanced features will be available to players who pay a $4.99 per month fee, or a $9.99 family subscription for up to five players.

The game will also have playing cards available online or in retail stores, but the big news in his speech today may have been an affiliate model called "Share the Wealth" that's debuting with "Free Realms." It will compensate blogs and other Web sites that direct people the game via promotional spots appearing on their sites.

"We're going to radically reinvent the business model of most MMOs by giving back to the people who love our games and have built an ecosystem around them," he said.

As an example, he said an unemployed person looking to make some extra cash will be able to run the "Free Realms" ad on his or her blog to get a little revenue. Then he displayed one of the ads appearing on "Dick Cheney's Turkey Hunting Blog."

It seems likely that Sony will use some of the same business approaches with "The Agency," the online spy game I wrote about on Monday. That game is being developed at its Bellevue studio for a more adult audience.

Smedley previewed the game during his speech but didn't say anything about pricing. He also said it will be released in 2009 but he wasn't any more specific about the timing.

He also announced that Sony Online Entertainment is adding a free, in-game voice chat feature powered by Vivox to all of its games, starting with "Star Wars Galaxies" and its "Everquest" franchise.