New World Notes

Dear Media: Stop Hyping a Virtual Real Estate "Boom" in Blockchain Worlds With Few Users & Little Growth

Above: Decentraland's dynamic world map. The red dots represent the few actual users in-world

Decentraland is a very interesting experiment in blockchain-based virtual world creation that I've been following for four years. And while there's a lot that's noteworthy about it, there's one thing it still sorely lacks: A mass market of actual users. According to co-founder Ari Meilich, who I chatted with last week, Decentraland currently has:

• About 300,000 monthly active users
• 18,000 daily active users
• A maximum concurrency of 2,500.  

By virtual world standards, these numbers suggest a very niche virtual world. (By contrast, for instance, Second Life currently has about 500,000 MAU and a max CCU of about 40,000.) Despite that relative paucity, Decentraland is actually much larger than other blockchain-based virtual worlds like The Sandbox, which currently has only 30,000 monthly active users.

None of this, however, would be apparent to readers of breathless hype pieces about a supposed virtual real estate boom in blockchain-based virtual worlds -- like this recent story in the New York Times:

Mainframe May Make a Metaverse While You're Looking the Other Way

Mainframe Industries recently announced funding for making a massive cloud-native MMO, but the word "Metaverse" is conspicuously absent from that news... even though it sure looks like they're building a Metaverse kind of experience:

Mainframe Industries, the startup behind the first cloud-native massively multiplayer online game, today announced it has raised $23 million in new funding led by Andreessen Horowitz... “We’re creating a persistent living world that people will call their home for years and hopefully decades,” Thor Gunnarsson, co-founder and chief executive of Mainframe, told SiliconANGLE.

"We’re not working on a VR product and Metaverse as being discussed implies VR to a lot of people, so didn’t want to lead people into thinking we’re in the VR space," Sulka Haro, design director of Mainframe, tells me now. "We’re definitely in the business of building a world millions will want to live in for years, if that is what Metaverse is about."

Haro was a lead designer on Habbo Hotel, a hugely popular virtual world platform last decade, and his team includes vets from CCP, Ubisoft, Remedy, and Blizzard Entertainment. This strong background in game development may give Mainframe an advantage over say Improbable, which also had ambitions to create massive single-shard MMO worlds, but has fallen short so far:

Philip Rosedale: The Metaverse Isn't for "Everybody" & Meta Shouldn't Succeed at Making It

Here's a new interview on Axios with Philip and veteran game industry journalist Stephen Totilo, with some bombshell quotes like these:

• Of the metaverse, he says: “I think what we've learned — and somewhat with some sadness, given the work that I've done, I would have to agree — is that it's not for everybody, and maybe it's never for everybody.”
• And of Meta’s chances of succeeding with their new metaverse project: “Well, I hope they don't.”

He goes into detail on both points further in the interview, including his thoughts on why the Metaverse is never for everybody -- which I concur with, but only to a certain extent:

Free Fire: The Little-Known, Potential Metaverse Already Played by 1 in 10 People in the Entire World

Free Fire is a cross platform online battle royale game which on the surface, is largely dismissed by the Western game industry as yet another knockoff of PUBG and Fortnite. But AR/VR investor Julie Young has been looking much closer for well over a year (months before the current Metaverse buzz reached fever pitch), when she observed that the game, from Garena -- a game studio/publisher owned by massive Singapore-based conglomerate Sea Limited -- has the early makings of a metaverse:

In Brazil, they partnered with DJ Alok for a live set in Free Fire. In Colombia, they held an event where two of the country’s biggest soccer players hosted a live tournament for charity. These are perfect examples of Sea’s incredible agility and execution. But on a more philosophical level, they demonstrate that Garena could actually become more than just a very profitable gaming platform - perhaps Free Fire, down the road, will become a new type of platform altogether.

... and based on current user numbers, Free Fire is already well positioned to be The Metaverse, if it wants to become that. As she tweeted yesterday, reporting recent user numbers: "Free Fire has 700 million quarterly active users concentrated largely in some of the highest growth regions in the world (or as @nachkari pointed out today, 10% of the world plays the game quarterly."

Yes, nearly 1 in 10 of everyone across the entire earth already play Free Fire. And for purists who scoff at the idea of the Metaverse emerging from a casual combat game, it's worth remembering that Neal Stephenson's original Metaverse also had a heavy combat game component. 

I chatted with Julie a bit about Free Fire last night, and from that, my sense is that the platform is very much moving in the Fortnite Creative direction that Epic is taking, adding monetization mechanics for user creators. And the thing is, Free Fire has some considerable advantages against Epic -- namely eyeballs:

Facebook's Biggest Metaverse Safety Problem is Baked Into Facebook's Brand

The man driving Facebook/Meta's Metaverse development is seriously worried about safety on their now-in-development platform, according to a leaked memo reported by the Financial Times:

Andrew Bosworth, who has been steering a $10 billion-a-year budget to build “the metaverse”, warned that virtual reality can often be a “toxic environment” especially for women and minorities, in an internal memo from March seen by the Financial Times. He added that this would be an “existential threat” to Facebook’s ambitious plans if it turned off “mainstream customers from the medium entirely”. The memo sets out the enormous challenge facing Facebook, which has a history of failing to stop harmful content from reaching its users, as it tries to create an immersive digital realm where people will log on as 3D avatars to socialize, game, shop and work. Bosworth, who will take over as Facebook’s chief technology officer next year, sketched out ways in which the company can try to tackle the issue, but experts warned that monitoring billions of interactions in real time will require significant effort and may not even be possible. Reality Labs, the division headed by Bosworth, currently has no head of safety role.

These are all valid concerns but nothing in the Times report says anything about a core safety vulnerability on virtual platforms:

User identities, and how they're linked to one's real life name and identifying details. But this is the key means by which people -- mostly women, but also vulnerable minorities -- are targeted for stalking and abuse across platforms. Especially in immersive Metaverse-type spaces, where many mistakenly assume their identity is safe behind their quirky avatar name.

To cite just one example, Linden Lab had to walk back a plan to require real names only in Sansar, its erstwhile Metaverse platform, after strenuous protest from women and members of the LGBT community. Their concerns are quite correct, when it's not uncommon for women to be stalked in real life after their stalker does a reverse image search of their avatar.

But the thing is, Facebook's brand and DNA is utterly linked with real names. It is even stated explicitly in its stock filing with the US government:

With Disney Announcing "Our Own Metaverse", Prepare for an IP Bloodbath Across Competing Platforms

Above: Dozens among the hundreds of user-made ROBLOX worlds using Disney IP

I'm not surprised at all by this announcement, but I'm somewhat surprised that no one at Disney explained to company leadership what a Metaverse actually is:

Disney CEO Bob Chapek is preparing the company to blend its physical and digital assets in the metaverse. “The Walt Disney Company has a long track record as an early adopter in the use of technology to enhance the entertainment experience,” Chapek said Wednesday during the company’s quarterly earnings call. “Our efforts to date are merely a prologue to a time when we’ll be able to connect the physical and digital worlds even more closely, allowing for storytelling without boundaries in our own Disney metaverse, and we look forward to creating unparalleled opportunities for consumers to experience everything Disney has to offer across our products and platforms, wherever the consumer may be.”

For one thing, saying "our own Metaverse" is functionally equivalent to saying "our own Internet". For another -- and this is key -- a Metaverse by definition is an immersive experience that is editable and expandable by all its users.

Which in very practical terms in this context, means: Millions and millions of users creating and engaging with content that lifts and incorporates Disney intellectual property, in all kinds of infringing and unauthorized ways. 

That's plainly obvious to anyone personally involved in metaverse platforms, and even evident after just a few minutes of online searching. ROBLOX, the largest self-styled Metaverse, has hundreds if not thousands of user-created worlds that use infringing Disney IP (see above). And Disney is famously (and very litigiously) protective of its intellectual property. Again, from just a few minutes of searching, you find stories like this:

Can the Metaverse Grow GDP Without Growing Real Material Consumption?

Chart via Noah Smiths Substack

Here's an essay with an interesting new twist on the Metaverse conversation -- or rather, a rebooted twist. Economy journalist Noah Smith argues that a growing Metaverse can grow GDP without necessarily growing production of real life goods. Curiously -- based on the chart above that accompanies his thesis -- United States' GDP grew rapidly in the 2000s during the explosion of social media and online gaming, while energy consumption remained relatively flat. (GDP amusingly spikes right around when Second Life launches in 2003, which I'm totally sure is a causal correlation.)

Anyway, as Smith writes:

Rec Room, Which Already Has a 3 Million+ User Headstart on Facebook Horizon, Is Hiring Like Crazy

In case you missed it (and I meant to blog this last week, sorry), Rec Room is hiring like crazy, with around 60 open positions.

"We're growing a lot," as Rec Room Influencer/Partner Head Shawn Whiting tells me. "Mobile (iOS and Android) is growing very quickly so almost every team is hiring to keep up," Here's the company career page.

Rec Room, which Facebook/Meta's Horizon roughly resembles in terms of graphics and avatars ((but launched first), has something that Facebook/Meta does not:

Survey: Facebook Staffers Strongly Support Meta Name Change, Metaverse Goals -- Pros With Other Metaverse-Related Companies Skeptical

Here's some very interesting survey data from developers at Blind, the anonymous community app for employees, asking users in the high tech sector their opinion of Facebook's shift to Meta and Mark Zuckerberg's plan to make a Metaverse capable of holding over a billion users.  Taken between October 28 and November 1 by 11,673 verified tech professionals, including 1,120 Facebook staffers, the results are striking -- especially when you compare the broader industry perspective with Facebook’s own internal opinion.

First, to the statement, “I believe Facebook’s rebranding as Meta is a good business decision”:

An overwhelming 84% of Facebook company staffers support this move.

But do Facebookers believe they'll be successful at actually making the Metaverse?

Over 3 in 4 believe Facebook will succeed at making.

However, there was a slightly less optimism opinion that the 1 billion user target can be reached by 2030:

67% answering Yes to 1 billion by 2030 still suggests high internal confidence for such an ambitious goal.

Now compare and contrast these Facebook answers to the roughly 10,000 workers across the tech sector who took this survey:

Metaverse Veteran Zuckerman Unleashes on Metaverse Wannabe Zuckerberg

In the Atlantic, longtime Internet activist and scholar Ethan Zuckerman takes textual fisticuffs to Mark Zuckerberg's Meta and Metaverse ambitions, going through the long evolution of the technology like an avuncular Bane. ("Ah you think the Metaverse is your ally? You merely adopted the Metaverse. I was born in it, molded by it.") Because Ethan's hands-on history with the Metaverse started as a developer in the 90s, and features a long stop at Second Life:

When Linden Lab launched this metaverse in 2003, there was a brief burst of enthusiasm where otherwise serious entities, such as businesses and universities, bought and built out their own islands in Linden’s proprietary world. (Harvard’s Berkman Center for Internet and Society, now the Berkman Klein Center, had its own island.) The learning curve to build objects in Second Life was steep, the universe was populated haphazardly, and the Second Life client demanded a very fast computer and a very patient user. But pioneers in the space saw beyond these limitations and envisioned a system that was so emotionally compelling that journalists and activists would be forced to engage with it to reach audiences.

I was invited to the Metaverse Roadmap Summit in 2006 to see some of these “serious” Second Life spaces. The one that finally caused me to lose my shit was Camp Darfur, an exhibit designed to help metaverse explorers understand what Sudanese refugees were experiencing when they were displaced from their homes. Of course, this was Sudan as understood through the eyes of well-meaning Bay Area techies, which meant it featured a roaring campfire surrounded by wooden tree stumps where you could sit and contemplate the horrors of genocide. Given that women routinely walked miles from barren, tree-free desert camps to collect firewood, risking assault and rape in the process, it seemed like the sort of detail you’d want to get right in simulating the refugee experience.

I vividly remember Ethan losing his aforementioned shit on the topic, because I was onstage at the Metaverse Summit when SL's Camp Darfur project was discussed. (I first blogged about it here  -- pic of the notorious campfire above.) I was more interested in the group of Green Lantern roleplayers who protected the camp from griefers, but Ethan's objections to the project itself were painfully on point, a lesson in how easy it is for us to lose sight of what actually matters amid our ebullience over new technology.

Ethan also gets into the challenge of Second Life's poor branding, a theme I also keep coming back to: