You are watching Ep 7.
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Sakimori Kagami plays a VRMMORPG called Arch Earth Online. He is a veteran player with the name and appearance similar to an elderly bearded wizard from a certain book about a ring.
One day he purchases an appearance change item as a last resort to spend expiring currency and gets the idea of choosing what he would want to look like if his character was ever a girl.
Falling asleep should have suspended the game, but Kagami wakes up still online and feels the game has has gotten a bit more realistic. Did Arch Earth Online finally get a long-awaited update?