The DeanBeat: Our 360-degree view of the metaverse ecosystem

I’m very proud that we were able to create an original event around the metaverse this week and that it received good attention in spite of crazy news like GameStop‘s stock frenzy and Apple’s reaffirmation of its stance on privacy over targeted advertising.

Our GamesBeat Summit: Into the Metaverse and GamesBeat/Facebook: Driving Game Growth event drew more than 3,400 registered guests (not counting those who viewed livestreams), building a community around the metaverse and mobile games that we didn’t really know was there. We had record engagement with this metaverse event, and that confirms for me that we’re all fed up with the Zoomverse. Thank you for support, as you affirmed that I’m not alone in this passion. While we may not be able to define the metaverse yet, it feels like we all agree something else should connect us amid the bleak reality of the pandemic.

When we started work on our metaverse conference last year, we weren’t sure if we would have half a day of talks. We wound up with 29 talks and 68 speakers (not counting the 13 sessions and 33 speakers from our GamesBeat/Facebook: Driving Game Growth event on Tuesday). What we wound up with was a 360-degree view of the metaverse ecosystem. That will help us figure out what it is.

As I searched for speakers in this space, I was pleased to find so much more effort going into it this across multiple industries related to gaming and entertainment. And some of the people thinking about this have been contemplating it for decades. Ian Livingstone, the cofounder of Hiro Capital (and years earlier, Games Workshop), has been thinking about this for so long that he named his venture firm after the lead character in Snow Crash, Hiro Protagonist. And if you could somehow find out the secret research and development funds of the largest companies in technology, games, entertainment, and other industries, you would find billions upon billions of dollars being invested in the metaverse.

While assembling this event, the only session I wasn’t able to schedule in time was Brands and the Metaverse. But we can do that one in the future, as brands need some time to catch up. Yet I’m glad about what we got done and that our event didn’t present a monolithic perspective of the metaverse, which is rapidly moving from a hypothetical sci-fi dream to something real.

Just what is the metaverse?

We found that it is hard to define the metaverse, the universe of virtual worlds that are all interconnected, like in novels such as Snow Crash and Ready Player One.

When I say the word, I mean an online universe that connects worlds, each of which is a place where you are enticed to live your life. Matthew Ball says it will give us virtually infinite supplies of persistent content, live content, on-demand playback, interactivity, dynamic and personalized ads, and content distribution. It won’t have a cap to how many people can be in it at a time. It will have a functioning economy. You’ll watch movies with friends by your side. You’ll play games. You’ll shop, socialize, and come back every day.

Vicki Dobbs Beck of ILMxLab says the metaverse brings together all of the different arts of humanity in one place. During the conference, I discovered that no one had the same definition of the metaverse. I learned this in the town hall Q&A, when Hironao Kunimitsu of Gumi said it would take a decade to create the metaverse, while Jesse Schell of Schell Games, Tim Sweeney of Epic Games, and Cyberpunk creator Mike Pondsmith of R. Talsorian Games said that we have a version of the metaverse that already exists.

But nobody disputed how important the metaverse will be. I see it as the ultimate revenge of the nerds, the people who dreamed of making the Star Trek holodeck or the main street of the metaverse in Snow Crash. How big a deal is this?

“It’s like being at the beginning of motion pictures, or television, or the web,” Schell said.

The open or walled garden metaverse

Sweeney stood up for the open metaverse, saying it should be democratically controlled by everybody, not just the tech giants with their walled gardens. That would only hold up innovation, result in big “taxes” for consumers, and put the rights of users at the bottom of the list. Those are bold words for someone who is suing Apple for antitrust violations. Jason Rubin, the vice president of play at Facebook, didn’t repeat the same words about Apple. But he said Facebook’s goal is to knock down barriers that limit access to games. If Facebook succeeds with its Instant Games and cloud games, it could find a way to bypass the app stores, just as Sweeney is trying to do.

These are sentiments that make me feel that Sweeney is far from being alone. Ryan Gill and Toby Tremayne of Crucible proposed blockchain and the open web as a way to create agents that will represent us in the metaverse. Perhaps the open web could give developers a way around the app stores, or maybe Unit 2 Games’ Crayta technology will enable developers to build their dreams in the cloud.

Meanwhile, CCP Games CEO Hilmar Petursson reminded us that Eve Online, created back in 2003, already exists as a metaverse for 300,000 souls who are dedicated to it. While his audience is small by Roblox standards (Dave Baszucki’s company has 36 million daily users), it is bigger than Petursson’s native Iceland, and he has 17 years of learning about the metaverse, or an online haven where people are willing to live their lives for decades.

The creative leaders of the industry voiced their support for the metaverse as a new place to tell stories. Vicki Dobbs Beck of ILMxLab and Siobhan Reddy of Media Molecule talked about “storyliving,” or creating new experiences that emerge as we live our lives online. Those experiences could blend both emergent and narrated experiences, they said, while Baszucki at Roblox is putting his faith in user-generated games, which might be the only way to populate a metaverse with enough things to do.

Genvid Technologies CEO Jacob Navok described the interactive reality show of Rival Peak, which has become a hit on YouTube and Facebook where influencers can summarize the week’s events in a Survivor-like competition between AI characters. The “cloud-native” games like Rival Peak are the kind of modern entertainment that could be enabled by the metaverse.

Mark Long, CEO of Neon Media, is itching to get a big transmedia project underway that shows that entertainment properties can span different types of media and live in a kind of metaverse. And Hironao Kunimitsu of Gumi, whose company is working on a massively multiplayer online virtual reality game, told us how the metaverse isn’t just an inspiration from Western science fiction. He got his inspiration from the Japanese anime series Sword Art Online.

We had alternative views of the metaverse, as expressed by Akash Nigam of Genies and Edward Saatchi of Fable Studio. They argued that existing smaller 2D efforts — like Instagram AI characters — might be the earliest and most accessible manifestation of the metaverse. And John Hanke of Niantic and Ronan Dunne of Verizon talked about an augmented reality alliance that will take the metaverse on the go.

The chicken and egg problem

I saw from the presentations that we have a huge chicken and egg problem. Dunne mentioned that Verizon has committed $60 billion to the 5G network on the assumption that people will use it. The infrastructure gets built because we have a long history of proving such capital investments as reasonable investments.

But who’s going to write the first check for the metaverse? Sweeney doesn’t have that much money, despite the riches of Fortnite. Apple could write that check. Maybe Google or Facebook or Amazon. But then we know that Sweeney’s dream of openness would probably go up in smoke.

Does the metaverse require us to lay down that kind of money for the infrastructure? Probably. We’re talking about the next version of the internet, which would support shifting most of the world’s population into online living. It’s the place where gamers will be able to play every game they’ve ever wanted. If we’re not that ambitious, then I wouldn’t really say it is the metaverse we are trying to create. The tech giants have that kind of money, but Sweeney isn’t so sure we should trust them.

When you think about the scale of the problem, it’s a big one. Fortnite has amassed more than 350 million users, and that gives Sweeney a big advantage. He hopes to evolve Fortnite over time into the metaverse. But Fortnite’s world is built for 100 players to fight each other in a single shard at a time. That’s the battle royale experience. But a metaverse needs 100 million people to be in a shard at once. Can Epic bolt on this capability to a game that was never designed to accomplish that?

Dean Abramson and Sean Mann of RP1 pitched their “shardless” world architecture that they hope will allow them to cram 100 million people into a single world without melting the polar ice caps. Abramson started working on the problem a decade ago, after designing the concurrent architecture of Full Tilt Poker. But, again, we have the chicken and egg problem. Who will adopt this technology, which hasn’t been proven yet, and toss out the architecture that has a lot of legacy users?

Fortunately, we have more resources dedicated to this purpose now than ever before. We’re at a rare moment when financial, cultural, entertainment, and human interests are aligned. Gaming had historic growth in 2020. The odds are good it will keep growing. Mobile insights and analytics firm App Annie estimates mobile games, already the biggest segment, will grow 20% to $120 billion in 2021. This growth means that game companies will have the cash to invest in the metaverse. Roblox, which is banking on user-generated content for the metaverse, raised $520 million and will still go public soon. That gives Roblox a big war chest to build the metaverse that founder Dave Baszucki wants to see.

The exchange rates and toll bridges between worlds

Roblox and Minecraft have hit critical mass as well. But if we were simply to connect those worlds, it would be hell to figure out the exchange rate between the currencies of the games. How do you translate the most valuable gun in Fortnite to something in Roblox?

Together Labs, creator of IMVU, has figured out a way to get users paid for the things they create with VCoin, which could be transferred between worlds or cashed out in fiat currency such as U.S. dollars. Folks like John Burris of Together Labs, John Linden at Mythical Games, and Arthur Madrid of The Sandbox are figuring out how to best do the payments and economies of the metaverse, using blockchain. Like Petursson, they might be creating products for the techno-geeks of the world, a very small audience that could make them vastly profitable. They are learning so much, but they have to figure out how to make cryptocurrency and blockchain relevant to the masses.

One of the possible misconceptions of the metaverse, as depicted in Steven Spielberg’s Ready Player One movie, is that we will want to take a single avatar and move from one world to another world instantly. Petursson warned that you can wreck game economies if you cause the flow of labor to switch from one game to another. That is, if you can mine something cheaply in Minecraft, and then convert it to something valuable in Roblox, where it’s more expensive to obtain the same resource, then all of the labor force in Roblox will shift to Minecraft and then take their resources back to Roblox. Why would different companies allow that to happen to their worlds? That’s one reason that Frederic Descamps’ Manticore Games lets users create multiple worlds — all within the same company — where the users can instantly teleport from one experience to another.

If we don’t make worlds interoperable, then we’ll have the Tower of Babel, no different from today’s game industry. To make game worlds interoperable, Sweeney noted that we would have to figure out a new programming model, built on something like Javascript that can cross over different platforms. And yes, that means that code created by someone at Nintendo would have to run in Sony’s game world. That way, you could take your avatar and your guns and shoot at characters in another world. We have the tech to do that through cross-platform tech — from blockchain to Javascript — but how would fast would it run? Who would debug it?

Sweeney said that if all companies could look beyond their own interests — and consider enlightened self-interest — they could create a metaverse for the greater good that could lead to such a large economic boom that all companies will benefit.

Common standards are necessary, but perhaps governments would likely get into the picture as well, said futurist Cathy Hackl. After all, the U.S. government probably wouldn’t want the metaverse to originate in China, or visa versa.

Living in science fiction

Above: Jensen Huang of Nvidia holds the world’s largest graphics card.

Image Credit: Nvidia

I don’t want to suggest that this is too hard a problem for society to solve, or that we have no hope of creating an ambitious metaverse. As Nvidia CEO Jensen Huang said in an interview with me that “we’re living in science fiction now.” A passionate engineer, he believes the metaverse will come about soon because we have made so much progress in other technologies such as graphics and AI.

Remember how we used to talk about AI as a fantasy? Then, around eight years ago, it started working better with the advent of deep learning neural networks. Now we have 7,000 AI startups around the world that have raised billions of dollars. 76% of enterprises are now prioritizing AI in their 2021 IT budgets. Now technologies such as Open AI’s GPT-3 could enable some really smart AI characters, which means we could populate the metaverse with non-player characters, or NPCs, who are so intelligent we could talk to them for hours and never figure out that they are not really human beings. With Huang’s chips driving these advances, we’re on a path of accelerated innovation, and the advances in AI will help advance the creation of other inventions, such as the metaverse. It’s a snowball effect.

If, as Playable Worlds cofounder Raph Koster says, “the metaverse is inevitable,” then we should think about some of the downsides.

We also have to think about the consequences of the metaverse. It would be wonderful if it became our digital Disneyland. But if it succeeds in creating artificial companions for all of us, we might lose interest in the real world and it might become the most addictive drug ever made. These are all problems that we have precedent for, as the science fiction writers like Neal Stephenson, William Gibson, and Ernest Cline have all taught us with their dystopian visions of the metaverse.

It would be a shame to create paradise and leave out a lot of people. That’s why Stanley Pierre-Louis, the CEO of the Entertainment Software Association, reminded us that we should make the worlds diverse from the get-go while using the most diverse creative teams we can find. Otherwise, the metaverse creators could shoot themselves in the feet, creating an elitist colony instead of something that is accessible to everyone in the world with a smartphone. It is critical we get the metaverse right from the start, Pierre-Louis said, echoing Sweeney’s words even though they were both talking about different things.

Our NPCs, ourselves

Richard Bartle, the game scholar at the University of Essex, offered some useful cautionary notes about creating the metaverse in the closing talk of our event. If we create artificial beings with sapience, or real intelligence and free will, then we have to consider whether we should treat them as our slaves, as we do in modern-day video games. If we think of these virtual beings as our property, then it’s OK if we turn the switch off on them or slaughter them for sport. But if we come to think of them as real people, or companions, then developers face a real ethical dilemma over how much power they should give us over these artificial people.

Rony Abovitz, the former CEO of Magic Leap, announced his new startup, Sun and Thunder, at our event. Over the next 15 years, he wants to create synthetic beings, which are AI-driven. But rather than just create them, Abovitz wants to imbue them with intelligence so that they can then help his company develop more synthetic beings. Sounds crazy, but it just might make sense in our world of accelerated change.

Bartle wants us to remember that the metaverse should be the place that he has always dreamed of. It should be the place where we are free from the social pressures of society, where we are free from the limitations of our own “roll of the dice,” or our individual heritage. The metaverse should be the place where we can be the people we can’t be in real life. Where we can be our best selves. And rather than be a vendor who extracts the biggest toll on the metaverse, developers should help us reach that goal of being our best selves, Bartle said.

Beyond the Zoomverse

I’ll reiterate why the metaverse is so important. We need this to happen now because we are stuck in the Zoomverse. The coronavirus has tainted our world, and the digital world provides the escape. For our mental well-being, we need something better than video calls. Something more human. Something that brings us together. Just as the world needed a vaccine and science brought it to us, our social needs are so great that we have to build something like the metaverse and, like the proliferation of smartphones through the world, bring it to everybody.

It will be a long road, and that is why we need inspiration. We need people to paint a vision for what life could be like. Sci-fi writers laid the groundwork. Now it’s up to the game industry, and whatever other industries want to come along for the ride, to build it and make it fun. And as I said in my opening speech, I hope one day, our GamesBeat community can hold an event inside the real metaverse.

Once again, I am so glad to see our speakers point out the momentous decisions we face around the building of the metaverse, which could either be humanity’s cage or its digital salvation. I appreciate the time you gave us, as apparently you might have all been better off making millions of dollars by buying GameStop stock instead.

I’ll weigh in next week with a roundup of our GamesBeat/Facebook: Driving Game Growth event.

But first, I need to sleep.