Sun Microsystems is at the Austin Game Developers Conference this week, pitching developers on its latest R&D effort, Project Darkstar – an open-source server platform for massively multiplayer online games, social networks and virtual worlds.

This isn’t the first time a company has created a platform that developers can use to create MMOs and virtual worlds; in fact, it’s a market that might be described as having more lions than gazelles. IBM is among those promoting infrastructure for virtual worlds. Sun’s effort is a typical one in the larger competition among server makers such as Dell, HP and IBM: beat out the other guys by concentrating on a niche, which, in this case, is games.

Sun figures that if can solve the common problems for game developers, then those companies can spend less time worrying about their server infrastructure and more time focused on making their games fun. If Darkstar works, it can shave a lot of money off the cost of games, which cost tens of millions to make.

Sun argues that its open-source approach will be appealing to a broader set of customers and that Darkstar makes strides to be optimized for the latest technology: multi-core servers, or those with multiple computing brains per chip.  The project’s director of research, Karl Haberl, tells me that the Darkstar code lets programmers take advantage of multi-threaded servers, or those that can process more than one string of code at a time.

Online game servers will typically separate a game into regions. Players in one region can’t talk to another. And it is quite common for the processors associated with an active region to get bogged down. The result is that part of a game is shut down for users. Darkstar servers work in a different way. They break a problem into pieces and distribute the work among a bunch of available cores. It dynamically expands or contracts its processing, depending on the work load.

Darkstar has been in the works for a couple of years.  Right now, it’s a research project and so Sun doesn’t charge for a license, Haberl said. Sun is just about finished with its beta testing. Massively multiplayer online games can be built on top of Darkstar.

Haberl said that Darkstar could be considered a cloud computing application, such as Amazon’s Elastic Compute Cloud, or EC 2. A product of Amazon Web Services, EC2 lets customers such as game publishers configure the servers that they need and change it as capacity demands rise or fall. Darkstar doesn’t currently run on EC 2, but it could in the future, Haberl said.

Right now, the company is driving the adoption of the Darkstar technology. One thing build on top of Darkstar is Project Wonderland, a virtual worlds toolkit. Sun wants the platform to feature industrial strength notions of security, identity, and authentication. With Wonderland, developers have everything they need to create immersive 3-D virtual worlds.

Companies such as Electronic Arts have made big investments in their own server technology. But many of the smaller companies don’t find it economical to do so. For the big investors in server technology to switch over is a lot harder. Even so, Haberl reports, people from large game publishers are looking at the technology.Ultimately, Haberl predicts that small, medium, and independent developers will employ the technology.