Virtualization gives some advantages:
1: You can move the VM between physical hardware with little trouble. Power off VM, robocopy the files, power it on. For older Windows operating systems that required a reinstall if the underlying HAL changed, this is a large lifesaver.
2: Fast backups with the snapshot functionality.
3: Cloning -- need more instances, grab more hardware, fire up Hyper-V or ESXi, slap the VM on and go to town.
4: Clustering -- several physical machines can host one VM through a SAN and if one box fails, the failover can pick up where the main machine left off on the machine (not the app) level. This means you don't need to worry about how apps will deal with jumping MACs or hardware changes unexpectedly.
5: Security. If a VM got infected, it can be powered off and rolled back to a safe snapshot, and also a snapshot taken of its dirty state for forensics.
6: Ability to run on future hardware. Say everyone ditches x86 and amd64 and decides to go to IBM's POWER architecture and emulate legacy stuff. The stuff in the VM won't care that is is actually isn't running on a different CPU.
Of course, virtualization's disadvantage is performance losses due to the added overhead of more context switching.
For a MMO, virtualization isn't really needed except at the database core. If a zone server  goes down, there will be people nerd raging on the forums, but in reality if someone gets to it in 24 hours or so, people won't be pulling their subscriptions. The only real thing that would cause people to bail is a large player database rollback, so days to weeks of playing are lost. However if you have a good database cluster, this isn't going to happen.
Virtualization is just one of many IT tools. Sometimes it is an excellent thing to have. Other times, there isn't any real need to have it, especially for CPU intensive stuff on a server that can be cloned or easily reimaged with the apps on it.
: I'm assuming zone servers handle the combat mechanics, only sending updates to the core player database when a player loots an item, dies, logs out, disconnects, or at a periodic interval if nothing else changes.
These issues haven't stopped some observers from predicting huge revenue streams for social networking sites, such as Henry Blodget, who sees Facebook hitting a "$1 billion run-rate within a year"."YouTube, the report suggests, could earn substantial advertising revenue if it could figure out a way to acquire premium content from distribution deals with companies like Viacom Inc., NBC and Walt Disney Co. However, the report noted that Google so far declines to pay the sums required to purchase the content.
Dead? No excuse for laying off work.