I think the next step in MMO evolution -- keeping in mind the group focus of MMOs -- is music.
Yes, music.
Not background music like you find at a mall, the dentist's office, or an elevator. Groups are important to MMOs, and to people generally. Communities are a part of who we are -- we are geared to be social and be part of a community. Robin Dunbar has some great work on this that finally made me realize, not only does communication create and reinforce community, but in a stronger sense communication is community. (See, for example, The Human Story or Grooming, Gossip, and the Evolution of Language.) But there are other mechanisms that are a part of the story -- dancing and music.
I'm not sure how this would be implemented exactly in an MMO. Making would be a part of it. Perhaps music would be a spell, like it is used very indirectly with bard classes (like in EQII). Instead of just clicking a button and activating a musical art, you would actually have to interact with the interface to play something. And, you'd have to co-ordinate with your group members. That's the important part -- co-ordinating with the other people there. Co-creation of music, for an in-game purpose but more importantly for group bonding.
So, more than DDR or GarageBand. And, the 1st International Workshop on Musical Metacreation (MUME 2012) will be held October 9, 2012, in conjunction with the Eighth AAAI Conference on Artificial Intelligence and Interactive Digital Entertainment (AIIDE'12). Not exactly what I am talking about, but, close enough to mention here.