This is quite good. I like how you managed to make the ponytopia both extremely attractive and more than a little creepy at the same time. I feel like you presented the situation without trying to argue it was either good or bad, leaving that decision to the reader, and I quite like that approach.

From a storytelling perspective, I only had two real complaints. One is your beginning. There's no conflict until halfway through the first chapter, when Lars and Hanna start arguing. You do a good job setting up the premise before then, but it still makes for a slow start, and I can easily imagine myself recommending this to people with a "no, really, it gets better, stick with it" disclaimer. The second is that there are lengthy stretches where the story consists only of talking heads, with no action or movement. Chapter 4 was the most notable example.

I also found myself wondering about the ethics of creating a sentient being like Butterscotch tailored specifically to the desires of someone else (assuming they weren't lying about her sentience; I don't know how you'd test that). I realize you can't fit everything into the story, but I thought that might have been a cool topic. You made me think about the ethics in ways you didn't directly discuss, so you're clearly doing something right.

Grammar note: the possessive form of "Light Sparks" is "Light Sparks's," since his name is a singular noun.

Wonderful job with the MMO aspects of life in Equestria. After the "what the literal fuck" line, I had to step away from the computer for a minute to savor it before I could keep reading.

If/when you submit this to Equestria Daily, feel free to let me know. I'm one of the prereaders, and while I wouldn't feel comfortable judging something I feel this philosophically invested in, I'd at least try to make sure it didn't get discarded for lack of pony in the very beginning. (We receive, and reject, a fair number of stories that are about bronies rather than ponies. This is a borderline case, but the pony content increases as the story progresses, and I can tell people to look at the post-uploading chapters before deciding.)