New World Notes

Top Second Life Fashion Brand Opens Up a Shop in Zepeto; Truth Hawks Compares & Contrasts the Platforms

Happy Halloween! 🎃 SL fam have you ever tried @zepeto_official ? I was recently invited as an official creator and my little concept brand Super Fun reached Hot Creator status 🙌 Here's our @wednesdayaddams inspired outfit 🐈‍⬛🖤 pic.twitter.com/Q0dsLyrfuI

— Truth Hawks (@TruthHairSL) October 31, 2022

Truth Hawks, one of Second Life's most well-known and popular fashion brands, recently opened a shop in Zepeto, a quickly growing metaverse platform from South Korea. Truth was actually recruited by Zepeto the company to do so, Truth told me, but through his non-SL design services studio.

"I much prefer the standardized avatar to create from [in Zepeto]," says Truth, when asked to compare the two platforms.  "I think that's become a bit of a barrier to entry for SL creation-wise." 

That barrier is a whole other post in itself! But for this post I'll just highlight Truth's thoughts on Zepeto as a secondary market for other SL brands:

"If you're already creating 3D content in SL then the transition to Zepeto should be fairly easy. Most Zepetors only upload 1 or 2 variations of a creation, and as you only have to rig one shape, it could be a fun way to expand your brand with minimal time investment.

"Zepeto claims to have 15-20 million monthly users so I can see the potential, but I've just started out, so it's something you have to build up with inventory. SL is definitely more lucrative and I think always will be.

"I've read some [Zepeto] creators are making 6 figures and with it's large user base it seems possible. I'm not sure what the actual % split is, the currency is ZEMs and you can cash out a minimum of $103USD per 5000 ZEMs."

More from Truth on getting started with Zepeto:

Second Life User Creators Were Paid Out $86 Million in 2021! That's Decent Growth & Compares Well To Metaverse Leader Roblox

When I blogged about J.P. Morgan investing in Linden Lab payments spinoff Tilia last week, I missed this point from Forbes columnist and longtime Metaverse expert Charlie Fink:

Tilia is easy for developers to implement, and it’s simple and convenient for their customers to use. Transactions are instant and cost pennies, some of which go into the developer’s pocket. At Second Life, those pennies amounted to $86M last year.

Emphasis mine, because wow. I checked this with company spokesman Brett Linden who clarified that this $86 million is "the amount that was paid out to creators in 2021."

Yes: Second Life's content creator community earned $86 million from their virtual content last year.

This is notable for at least a couple reasons:

Metaverse Platforms Infographic: Now Well Over Half a Billion Monthly Users!

Update, 10/26: Nic just confirmed to me that his official total is now 505 million monthly active users across all the metaverse platforms he's tracking. 

Here's a core slice of the Metaverse Universe chart just updated for Q4 2022, from longtime virtual world analyst Nic Mitham. (Click here for the full version from his analyst firm, Metaversed.) When I blogged his Q1 2022 chart, the total number of monthly active users (based on publicly available data) was just under 500 million. Now, counting  platforms which roughly fit the classic Snow Crash definition, it's over 505 million monthly active users. Those include:

Monday Memory: How Suzanne Vega Singing in Second Life in 2006 Helped Shaped the Virtual World's Culture

When Caroline Mimbs Nyce of The Atlantic asked how much Taylor Swift is like the Metaverse, the question seemed pretty bizarre at first -- but then got us talking about Suzanne Vega performing in Second Life, the first platinum-selling artist to do so in any metaverse platform. While's Vega's appearance did help inspire a rush of other real world brands appearing in SL, it also helped shape Second Life's culture going forward, cultivating it as a virtual world popular with women and indy creators. I have to think if another, very different artist had performed in 2006, Second Life would have evolved in another direction. 

Relatedly, Taylor Swift's massively massive fanbase (229 million followers on Instagram alone) has many tens of millions of gamers/metaverse users. Which is why I said:

The Atlantic Asks Me How Much Taylor Swift is Like the Metaverse -- Spoiler: More Than You Might Think!

Above: SL Cosplay Taylor Tribute by Kylie Quinn

"Weirdly, Taylor Swift Is Extremely Close to Creating a True Metaverse" is a totally random interview with Caroline Mimbs Nyce of The Atlantic I just did, and it starts with a left field premise that winds up with some fairly interesting ways of thinking about the topic. Some favorite excerpts:

Nyce: How important is VR in this? Is that “and”—as in “VR and other devices”—really operative there?

Au: No, no, no. That’s another thing that drives me crazy: the assumption that it has to be in VR. In the book, Stephenson even mentions that it’s mostly just the wealthy who use VR headsets, and regular folks just use a regular computer.

Metaverse platforms exist. The biggest one is Roblox, followed by Fortnite. To be a true Metaverse with a capital M, you would need, like, 15 million people or more in the same virtual world at the same time. And we’re not there yet. We’re close.

This is something that's not discussed much, but think it's worth keeping in mind: In Neal Stephenson's original vision of the Metaverse, the Metaverse has an average concurrency twice the population of New York -- i.e. about 15 million people. We're close to that now. (Stephenson himself was surprised when I pointed that out.)

Then I get to compare Taylor Swift's progress on the Metaverse against what Mark Zuckerberg is doing:

What Went Wrong With Decentraland? Expert Game Analyst on The Blockchain-Based Metaverse Platform With High Ideals, Few Users

You might have seen recent claims that Decentraland, the metaverse platform which raised USD $25 million in Ethereum sales of virtual land to fund its development, only has active users in the dozens. That’s not quite true, game industry analyst and designer Lars Doucet tells me, citing his recent report for research firm Naavik -- as of yesterday, for instance, Decentraland has about 7000 daily active users. 

Which is still not very much! (And tracks with my own data from last Summer.) 

“Everybody who is still playing is basically just playing poker,” Lars tells me. “This seems to be a kind of recurring trend in dead-end crypto projects -- like people turn the [project’s] Discord into a meetup place for poker games. Kind of an eerie rhyme with left-behind American cities where drugs come in and anyone who is left is strung out at a slot machine parlor or liquor store.”

You can see that in this Decentraland metrics tracker, with “ICE Poker” as the most visited location by far. It’s quite a fall from boom times (by which I mean last year) when huge firms like J.P. Morgan were touting their official “headquarters” in Decentraland. 

And there’s some tragedy, too -- I’ve been following the platform since 2017, when the founders raised $25 million in Ethereum to fund it, and tried to keep true to its original, democratic-seeming vision.

“Decentraland is one of the few crypto metaverse/virtual real estate games to take its commitment to decentralization seriously,” as Lars tells me. “Like they seem to actually drink their own kool aid rather than using it as a cynical layer of paper thin marketing material like the other ones. To wit; their infrastructure is actually pretty decentralized!”

Then again, that’s also been one of Decentraland’s challenges.

Here’s why, according to a recent conversation I had with Lars, compressed for length  -- with his own advice on how Decentraland might revive itself:

Listen: Part 4 Of The WSJ's Podcast, "How To Build A Metaverse", On the Dwight Schrute Fallacy & Why Second Life Really Matters

"Second Life's vision of the Metaverse has endured..." Listen to the latest and final episode in the Wall Street Journal's episode on the rise and fall (and rise) of Second Life:

• Stream on Spotify here
• Get it on Apple Podcasts here
• Stream on the web and read the transcript here
• Links to Part 3 here

Telling the story of Linden Lab's disastrous attempt to turn Second Life into a space for corporate meetings and my post-mortem for that, the episode (and series) somewhat ends on a rather abbreviated and ambiguous note, with Philip Rosedale acknowledging the real world as being more irreplaceable than he originally suggested, and host Annie Minoff finding value in its power for people to explore their identity and alternate lives. That last point is true (and moving), but I do think it misses the many other applications of the metaverse beyond "having a second life".  (Again, the name Second Life itself continues to frame things that can be more limiting than enlightening.)

Many of the episode's highlights were featured in New World Notes stories over years; here's some resources for more reading:

Why Second Life Hit a Growth Plateau -- Founding CTO Cory Ondrejka on Team Turnover & the Innovator's Dilemma

Reflecting on the Wall Street Journal's podcast series on the rise and fall (and rise) of Second Life, along with my own chats with him for the upcoming book, Second Life's founding CTO Cory Ondrejka recently posted a thoughtful analysis on the topic in social media. With his permission, here it is in full, reflecting his breadth of knowledge on the subject and the industry as a whole. (Cory is now technical advisor to Google's CEO.)

Between The Journal, talking to Wagner James Au, and the general noise around metaverse-y stuff, lots of discussion about why Second Life has been unable to break out from the plateau of 15 years ago.

Everyone’s got opinions here — and I expect many of them are partially right — but perhaps it’s not that complicated.

If we start in 2007, SL is still growing but churn is making it clear that it’s a very challenging experience to really connect with, and tech limitations are hurting some of the most exciting use cases, but those who do navigate through the challenges keep showing there is something incredibly compelling about SL, about cocreation and shared experiences in places.

But then technology changed (iPhone and web supplanted native PC executables as primary product experiences for most people, SL was not well positioned to follow this pivot and the transition applied a second constraint on growth — beyond churn — impeding resources to support dramatic change).

Sometimes companies survive these transitions — Facebook with mobile, Intel with CPUs, Microsoft with cloud — but it’s never easy.

Plus Linden had two additional challenges:

Carmack: Quest 2 Price Was Raised Because Free Metaverse Platforms VRChat & Rec Room Are More Popular Than Quest's Premium Games

Update, October 17: Carmack later acknowledged that Rec Room and VRChat do make money for Meta via 30% commissions on in-app payments. However, as most free-to-play multiplayer games/worlds monetize at under 10% (usually much less), it's still likely the case that the vast majority of Rec Room/VRChat players on Quest aren't paying Meta anything through those platforms.

I noted yesterday that the Quest 2 attach rate seems pretty small based on Meta's reported revenue numbers, but the rest of that story -- and the explanation for why the Quest 2's retail price was recently raised -- comes from senior Quest advisor John Carmack himself, in his Connect 2022 keynote.  

Basically, he says, Quest 2 owners are not buying enough premium content and instead, are using their headset for free-to-play metaverse platforms VRChat and Rec Room.

"When you have some of the most popular apps on Quest are free apps, VRChat and Rec Room, that we get no revenue from at all, and while they are sitting there at the top of our ranking list in many cases, there's there's not a lot of internal push for that," as he puts it. (Watch above at about 41 minutes in.)

This is a pretty jaw-dropping revelation. Meta developed the Quest 2 and the Quest app store to grow the market for its metaverse platform. But instead, Quest 2 owners are going in droves to VRChat and Rec Room -- leading metaverse platform competitors.  (Rec Room alone, as I recently reported, had 3 million active VR users, most of them on Quest.)

In fairness to Carmack, he adds that he's completely supportive of that happening. Full context of the quote below, and thanks to the eagle eyes of VR devs Derek Johnson and Kim Baumann Larsen for catching this point that I originally missed! 

Meta / Linden Lab Veteran: Metaverse Platforms Which Don't Learn the Lessons of Previous Virtual Worlds Are Doomed to Repeat Them

With episode three of the Wall Street Journal's podcast "How to Make a Metaverse" dropping tomorrow, Linden Lab/CCP Games/Meta developer veteran Jim "Babbage" Purbrick (who spoke with the podcast team for the show) has thoughts on Episode 2 (listen to it here), and the disasters which were unleashed when Second Life's early community management policy was simply, "Be Nice". Citing some highly memorable Not Nice examples, here's the problem as he sees it:

 A Rape In Cyberspace was already 10 years old when Second Life launched and Linden Lab were talking to many of the pioneers who worked on early virtual worlds. Philip should have known better, but pursued a wishful, naïve approach to moderation and Second Life ended up learning a lot of lessons that had already been learned the hard way...

When I first visited San Francisco I hosted a party on Russian Hill to get to know my colleagues only to end up huddled in the living room with other engineers battling a plague of grey goo spreading across the grid that was enabled by an over-permissive API. The API allowed scripted objects to self-replicate and so exponentially overwhelm regions until firewalls of shut down simulators limited the spread and space lasers were able to delete scripts to purge the world of the menace.

Shortly after I returned to the UK I woke up one morning to my first encounter with the infamous Goatse image which a resident had pasted across the world so that it would show up on the live map that had been naively been added to the front page of secondlife.com without enough thought about how it might be abused.

If you don't know what Goatse is, don't Google but click the Wikipedia link above for the love of god.

At any rate, Jim recommends that metaverse platform developers not just read Snow Crash (or forget the dark side of the Metaverse that Stephenson writes about there), but points people to this very helpful list of non-fiction books on the metaverse/virtual worlds.

As regular readers will remember, Purbrick was previously at Meta, begging the team to read  A Rape In Cyberspace and consider the implications. But people at Meta didn't prioritize it, and... here's what happened.

He's also concerned other metaverse platforms may not be learning the lessons of community management. For instance, he tells me, VRChat: