New World Notes

Fortnite Becomes Much More of a Metaverse Platform with Unreal Editor Integration, Asset Store, Better Monetization for User Creators

Fortnite in recent years has been the least metaverse-ish of the leading metaverse platforms. While interviewing insiders for my book, my strong sense is that Epic hadn't originally anticipated outside brands considering the platform as a real world application platform, and assumed it would be more akin to a standard modding mode for gamers. And that as a publisher from the traditional AAA game industry, Epic was still holding a tight rein on the platform to protect its brand, even if that meant falling short of the Stephenson ideal.

"It's insane,” as one frustrated community creator puts it to me. “They want to be a part of this Metaverse, but they are limiting what can actually be done. If you're really wanting a true Metaverse, then more brands should be able to be in a space whether [Epic] wants to support it or not."

That all changed this week.

Epic made a series of announcements and updates during GDC 2023 that I'm still combing through, somewhat distracted by Rod Humble's Second Life-but-XXL mic drop.

For one, there's the integration of Unreal with Fortnite (watch above), enabling multi-user, multi-platform live editing. (Question: I wonder if live editing can some day be incorporated into published maps, enabling a creator to alter an experience around its user in real time.)  

And then as mentioned in the video, Epic is launching the Epic equivalent of the Unity Asset Store, called Fab:

 

4 Reasons to Doubt Generative AI Will Be as Transformative as All of Silicon Valley Apparently Thinks

Interesting Axios story illustrates just how much Silicon Valley has shifted its interest and investment into Generative AI startups like OpenAI and Midjourney, away from metaverse platforms and related technology:

According to PitchBook data compiled by Axios Media Deals' Tim Baysinger, through March 16, 2022, companies that played in the metaverse or web3 space had raised nearly $2 billion in funding.

So far this year, metaverse and web3 companies have raised $586.7 million, a bit more than a quarter of last year's total. The totals for generative AI companies are the inverse: Through March 16, 2022, the generative AI space saw $612.8 million in funding. This year, it's up to $2.3 billion.

Driving the news: In a note Tuesday announcing Meta would lay off 10,000 more employees, Zuckerberg spotlighted AI work and reduced the metaverse to an "also." “Our single largest investment is in advancing AI and building it into every one of our products,” Zuckerberg wrote. “Our leading work building the metaverse and shaping the next generation of computing platforms also remains central to defining the future of social connection.”

As I've explained before, conflating web3 with the Metaverse is a huge mistake, as is assuming Meta leads the metaverse industry. That aside, it's clearly the case that the Valley has shifted its buzz toward generative AI.

Is that smart? Obviously I'm biased when I say this, but there's already 520 million+ active users across many metaverse platforms, while the Metaverse's addressable market is at minimum everyone who regularly enjoys muti-user immersive experiences (i.e. 3D games online), roughly 1-2 billion people.

On the other side, there's several reasons to believe Generative AI is not as transformative as its most bullish boosters assume. For instance:

Backstory on Frontlines: Roblox's Viral, AAA-Quality FPS Not a Huge Hit (Yet)

Above: Frontlines' Daily Active User rate via RoMonitor Stats

Last week I described Frontlines, a Roblox game experience with newly updated AAA-level graphics and gameplay, as an amazing breakthrough in metaverse platform technology; I even said it showed how Roblox could be a competitor against Steam itself. That's still true, but here's a somewhat important qualifier to that:

Frontlines doesn't seem to be making much money, and it's definitely not a hit by Roblox standards. Not yet, at least.

According to RoMonitor stats, Frontlines is regularly attracting Daily Active Users in the mid-six figures, with concurrency levels in the low-to-mid four figures. If we're comparing it to a Steam game, that's quite good! Easily placing it among the Top 200 most popular games on Steam out of thousands of available titles.

By Roblox standards, however, Frontlines is not a huge hit; on Roblox, the top games have concurrency levels in the mid-five figures to the mid-six figures. Brookhaven, a mini-MMO that's usually the #1 Roblox experience, has DAU rates between 30-60 million.

Frontlines' monetization rates have not yet been officially reported, but the developer is selling IAPs -- mostly weapon expansions, ranging from 50 cents to $5.00.

But how many players are actually buying those?

I talked on background with a Roblox creator who's behind some of the top experiences on the platform, and they made some rough estimates' of Frontlines' revenue:

Interview with Frontlines' Lead Creator, the Game Which Proves Roblox is a Viable Competitor to Steam -- Seriously.

A key question I tangle with in my upcoming book is what I call the Metaverse Age Cliff. It's very impressive that a metaverse platform like Roblox has 250 million+ active users, but will those users go away when they're no longer impressionable pre-teens and teens, in search of platforms with better graphics and functionality?

Frontlines, a new game experience on Roblox, is a pretty impressive answer to that question. Watch:

Yes, this is on Roblox. I played it last night. It's on par in terms of graphics quality and gameplay with just about any FPS on Steam. And it was made on Roblox. Play here.

"Took millions of iterations and over 4-5 years of work to get it to where it is right now," lead developer Clarence Maximillian tells me. But he and his team did so through a "combination of perseverance, focus, and obsession."

But why do this on Roblox, when a game like this is usually published to Steam?

"It’s mainly about reach. You can get your game in the hands of millions of people with 0 marketing. This especially great for developers who may not have the largest resources and need a place to start. And for those who have resources, it’s also a cost effective way to get your game out there."

Maximillian tells me he created Frontlines with a 5 person team, none of who have a background in professional game development.

 

"We have one guy doing maps, one guy doing audio, one guy programming, one guy making all 3D content and renders, and one guy making the whole vision come to life." (That would be him.)

Alongside Tunneler, the Roblox experience inspired by the Portal games, Frontlines is an example of how the platform can evolve, and eventually compete directly with Steam. (Which already trails Roblox in terms of users.)

And, Maximillian tells me, it's only the beginning for he and his team:

Here's Why Metaverse Hype Shrinks -- While Actual Metaverse Usage Grows

Above: From my January compilation of 800+ metaverse job openings

Mitch Wagner has a good article on Fierce Electronics that helps separate metaverse hype from metaverse reality, and naturally I have much to say on that topic:

So the metaverse is dead, right? Wrong. The hype bubble has collapsed. But the metaverse is growing.

“Metaverse platforms are growing slowly but steadily, and hiring commensurately,” says Wagner James Au...  Metaverse platforms grew by 15 million users year-over-year in the first quarter of 2023, to 520 million monthly active users (MAUs), according to a report from the analyst firm Metaversed. That includes 149 platforms either live or in development, mostly browser- based but with some using virtual reality VR goggles.

And that’s just the prominent platforms with strong usage in the US and Europe, Au notes. It doesn’t include mobile-based Garena Free Fire, mostly played in Southeast Asia and South America, and enjoyed by about 10% of the population of the whole planet—700 million quarterly active users.

520 million MAU is a conservative estimate, by the way, even without including Free Fire and other non-localized platforms. For my upcoming book, I count well over 550 million MAU.

Ironically enough, what we're seeing now is a mirror image of what occurred in 2008-2010, after a couple years of media hype promoting Second Life as the next big Internet platform:

ZEPETO User Numbers & Demographics -- Plus Why It's Called "ZEPETO"

Courtesy the team at Naver, the South Korean company behind ZEPETO, here's some recent user numbers for the mobile metaverse platform that I compiled for my upcoming book:

• Monthly active users: 15M - 20M.
• User-created items sold on the platform daily: 1.5 million.
• Top markets by usage: China, Korea, Japan, Indonesia, Thailand, USA, France, Saudi Arabia, Brazil and Vietnam. "60% of our users are in Asia, 15% Americas, 15% Europe, and 9% MENA."

I'm also grateful for getting a (very unexpected) answer to a question that's been on my mind for over two years: Why even call this thing "ZEPETO"?

Richard Bartle, Top Virtual World Expert, Tries Explaining Core Problems With NFT & Blockchain at a Crypto Conference. It Does Not Go Well.

 

Richard Bartle, the game industry's most respected expert on virtual worlds and the virtual economies in them, was recently invited to speak at a UK cryptocurrency conference about the immense challenges of integrating NFTs and blockchain into a virtual world (to put it diplomatically). He recently posted on social media what happened next, and with permission, I'm republished it here.   

 

 

I was in London yesterday evening to sit on a panel for an informal group called the Crypto Circle. The members are all people who are interested in crypto-currencies, mainly on the investment side (seed fund investors, hedge fund managers, regulatory bodies, banks) but also including tools creators and commentators.

 

The reason I was on the panel was because of the conflation of blockchain, web3 and metaverse concepts. People seemed to be of the opinion that blockchain tech would be a boon for gamers and that this would extend to the metaverse as a whole. I was invited merely to explain why it wasn't all quite as blissfully rosy as they perhaps thought it was.

 

In the end, the panel didn't get much to say; members of the audience started asking each other questions.

 

I did explain some of the issues arising from the use of NFTs and play-to-earn for games, but people either ignored them, brushed them aside or doubled down on them.

 

Despite Widespread Tech Layoffs, Metaverse Platforms Currently Have 800+ Job Openings

With news that Microsoft is shutting down its VR metaverse platform AltspaceVR, along with widespread layoffs across most of the major tech companies, you might assume the Metaverse as an industry is also feeling the string.

Not so much.

On a quick tally of leading metaverse platforms in terms of active users, along with promising metaverse startups I've written about recently, I'm seeing nearly 800 current job openings at minimum. (And by the way, Microsoft and Minecraft developer Mojang still currently have 6 Minecraft-related job openings.) 

Here's links to these job openings available as of today, January 24, 2023:

Roblox, the market leader among metaverse platforms in terms of users, currently has 194 job openings.

Epic Games, developer of Fortnite/Fortnite Creative, currently has 368 job openings.

Rec Room, the most popular metaverse platform among Quest 2 users, currently has 45 job openings.

VRChat, the best next gen metaverse platform, currently has 19 job openings.

Naver Z, developer of mobile metaverse platform Zepeto, currently has 14 job openings.

Lockwood Publishing, the game studio behind Avakin Life, currently has 7 job openings.

Garena, the creator of Freefire, a Fortnite-like metaverse platform that's huge in Asia/South America, currently has 54 job openings.

There's also at least 150 job openings in promising startups featured by New World Notes, including:

Dear Media: Here’s Why It's Wrong to Illustrate Articles About the Metaverse With Pics of People in VR

This new Time Magazine cover is so utterly wrong that it's a perfect example of a problem that's been festering for the last three years: Mainstream media stories about the Metaverse which are prominently (often exclusively) illustrated with images of people in VR headsets.

There's so many other interesting and original ways to illustrate a story about global leaders about to "Meet the Metaverse" at the World Economic Forum in Davos, Switzerland. But unless the point is to ridicule India's Prime Minister and others for being totally clueless about the Metaverse -- not only wearing HMDs, but highly outdated ones at that -- this is the exact wrong way to do that.

There's at three key reasons why:

The vast majority of people who use metaverse platforms do not access them through VR.

There's at least 520 million active users in platforms which fit the broad definition of a metaverse platform. The overwhelming majority do so through smartphones.  Only about 8-10 million of them do so primarily in VR, mostly in Rec Room and VRChat, and mostly through Meta's Quest 2. 

Which brings up an important corollary: With a total install base of about 20-25 million, most premium VR headset owners do not use a metaverse platform.

Wait, an editor might ask -- is there even a "definition of a metaverse platform"?

Yes, if you go by Snow Crash, the actual book which coined and painstakingly described it in great detail, and has been a direct reference for people who have been building something like it for the last three decades.

Which takes us to the next point:

Readings: Why The Fight for Real World Racial Equality is Just as Crucial in the Metaverse

It's a common misconception that virtual worlds are a safe escape from our offline prejudices. This is sometimes true but often not the case. In fact, the anonymous nature of metaverse platforms and other virtual worlds can make expressions of racism worse - especially when avatars are based around a realistic human model. Our best hope is being aware of that reality, and preparing for it.

Here's some New World Notes readings on theme: