New World Notes

Meta Announces User Content Marketplace for Horizon -- Probably Prematurely & With a Weirdly Non-Competitive Revenue Cut

Meta, a latecomer to metaverse platform development, just announced the launch of a marketplace for user creators in Horizon Worlds, and you can see the potential problems right in the immediate details:

[A] “handful” of Horizon creators will be able to sell virtual items and effects in the worlds they create for others to explore. The idea is that creators can sell everything from access to a VIP section of their world to virtual items like jewelry or a special basketball, according to Meaghan Fitzgerald, the product marketing director for Horizon...

Meta will be taking a cut of what creators sell, though exactly what that take can be is a bit complex. For Horizon purchases, Meta is taking a 25 percent cut of the percentage that’s left after a platform fee. For platforms with a 30 percent fee, like Meta’s own Quest Store for VR titles, the creator will be left with a little over half of the sale price (the math there being that Meta is taking 25 percent of 70 percent).

Emphasis mine, as it bears emphasis. It's good that Meta is giving (some) users access to monetization -- by definition, a core feature to a metaverse platform --  but this initial roll-out comes with some obvious challenges:

Throwback Thursday: Metaverse Developer Philip Rosedale Testified Before Congress... in 2008

When I mentioned that metaverse platform CEOs should prepare to testify under oath before Congress soon, that was not an exaggeration: In fact, that very thing already happened in 2008, with Linden Lab CEO Philip Rosedale. (Wearing a suit for the first time that I'm aware of since meeting him in 2003!) 

Edward Markey (D-Massachusetts), who chairs the subcommittee, seems to have a surprisingly solid understanding of virtual worlds. He described virtual worlds as a “glimpse into future [and] a window into current reality for millions of people.” He noted that “at their best, virtual worlds are vehicles for understanding across boarders and in communities.” The concerns he listed were also on point: consumer protection, intellectual property protection, online banking, gambling, and child protection.

Most of those concerns are still concerning, and yet to be adequately addressed!

Read the whole 2008 summary/analysis from lawyer and virtual law blogger Benjamin Duranske. (Who interestingly enough, later went on to become Chief Compliance Officer at metaverse-developer Facebook.)

Philip's appearance was a friendly fact-finding one, but that was when metaverse platforms like Second Life only had hundreds of thousands of active users.  Now they're used by nearly half a billion people, the plurality of whom are minors in the United States. (And in the US, minors enjoy a special legally protected status.) So the next time subpoenas start flying, CEOs should expect the questions they get from Congress to be much more pointed.

Metaverse Devs & Users: Government Regulation is Coming Soon

In the weeks since my interview in The Atlantic, officials/staffers with at least two major world power governments have reached out to me, asking for advice as to how they might regulate metaverse platforms. I won't name them specifically, beyond saying that they're from member nations of the EU/NATO, and that this is in addition to the EU Commission looking into metaverse regulation announced recently.

In fact, I just had a very off-the-record chat with one of these government research groups yesterday, and was impressed by the level of knowledge they already had about metaverse platforms and their underlying technology, most especially VR headsets.

All of which is a roundabout way of saying: Government regulation is coming. So if you're a metaverse developer -- or for that matter, create and sell content on metaverse platforms -- you should anticipate that legislation directly targeting you will soon be up for serious consideration. 

And unlike with social media platforms and the Internet giants of the last decade, which gained unsustainable reach and power long before governments could catch up, metaverse regulators have something of a head start.

This shouldn't be too much of a surprise, when (for example) 40% of United States Congress members are Gen X or Gen Y -- i.e., people who grew up with games and online virtual worlds, and are often personal users of them.  (As just one notable example, AOC is not only a gamer but uses platforms like Twitch as part of her political outreach.)

What kind of regulation should we expect? If a metaverse developer asked me that, I'd be tempted to say, "C'mon, you should already know what they're concerned about."

That aside, here's at least some of the topics I'm pretty sure (or know for a fact) that government bodies are looking into now, framed in terms of five starting questions*:

Second Life Trolls Meta's Legless, Crotchless Avatars for April Fool's

"[My boyfriend] went to try one of those other metaverses and ever since, he hasn't been the same... down there."

Pretty well-played, Linden Lab! I guess you could say "other metaverses" include equally leg-less Rec Room, but Meta's Horizon Worlds is the clear target. Wonder if Philip Rosedale, who recently returned to helping develop Second Life as a alternative to Meta's "ad-driven behavior modification Metaverse", had a hand (leg?) in this April Fool's smartassery.  

While the announcement is all about avatar legs, the Viagra-scented video of sexy babe avatars talking about their boo's problems "down there" make it pretty clear what we're actually talking about (wink wink):

Fewer Than 1 in 3 US Consumers Are Excited About the Metaverse, and Other Important Findings from Forrester Research's "State Of The Metaverse" Report

Infographic via Forrester Research

The well-reputed tech analyst Forrester Research just published this extensive report on the Metaverse, "The State Of The Metaverse: Look Beyond The Hype To Uncover The Real Opportunities". As the title might suggest, I was one of the many SMEs they interviewed for it, and it's nice how much it aligns with my enthusiastic-but-allergic-to-hype perspective. You can see that in the chart above, suggesting that less than half of all Internet users (Digital Immersives and Digital Socialites) are prime early adopter targets for Metaverse platforms. Personally I'd estimate that Digital Immersives will always remain metaverse platforms' core user base. (Which is still quite a lot of people!)

As part of the report, Forrester conducted a consumer/business survey which brought out some surprising (occasionally vexing!) findings. For instance:

• Marketing executives are way more excited about branded campaigns in metaverse campaigns than actual consumers.
• Only a third of all US consumers who understand the concept are excited about the Metaverse and consider it a positive technology.
• Nearly half of all consumers who understand the Metaverse concept associate it with Facebook/Meta (!!!).

Details below:

Anil Dash's Guide to Good Content & Community Management Applies to Metaverse Platforms Too

In the lead-up to my interview in The Atlantic last week, this recent blog post by veteran Internet thinker Anil Dash helped crystallize my thoughts around community and the Metaverse. Because while it's not specifically about the Metaverse, Anil's insights very much apply to metaverse platforms, especially around fostering community and user content creation.

Here's how, he explains, not to do it:

Find the inevitable initial bad actors or harmful content on your platform, and make them the responsibility of the least resourced, most marginalized team in your organization. When that team’s leader suggests structural changes that might prevent future harms, push them out and replace them with someone who had previously only ever been focusing on growth at all costs.

Half-ass all attempts at moderation and building safety into your platform, choosing only to react belatedly and inconsistently when hate and exploitation happen in your community. As a result, only the bad actors will truly thrive as creators on your platform, since everyone else will get hounded off as soon as they gain any traction or audience.

Much more here. The thing is, many metaverse platforms seem to be following Anil's rules on how not to do it... but doing exactly the wrong thing.

His analysis isn't simply theoretical, or based on years of watching platforms fail at community and content management - they also reflect Anil's role as founder and CEO of Glitch, a popular and much-used platform for creating web apps:

Here's Highlights & Reference Links from My Chat on Second Life & the Metaverse With Charlie Warzel for The Atlantic

Lessons From 19 Years in the Metaverse is a gratifying deep dive interview with me in the Atlantic, for Charlie Warzel's Galaxy Brain free newsletter. Charlie and I plumb into the virtual world/metaverse topics I've felt strongly about in recent years, and it's wonderful to get a chance to have the space to explore them in The Atlantic.

Here's some of my favorite highlights in a much larger article, along with some links to the New World Notes posts I'm referring to.  

I’ve learned that, as humans, we take all of the big challenges of real life and the complex social structures of the physical world and they get re-created in weird ways in a digital, social space. Racism, for example, is an enduring issue and an interesting one in these worlds. There are very basic questions: If you can change your avatar to anything at all, what race would you choose?

What are some good examples of surprising things you’ve seen people do in Second Life?

[I]f you give a user community powerful enough creator tools, what they create in these worlds will be far more interesting than anything a major company can officially create...

One of my favorites is a mathematician who built a house that exists beyond three dimensions—a home shaped like a tesseract, a four-dimensional hypercube. If you walked through their house it would keep just regenerating in interesting ways and you’d walk through it eternally. It’s mind melting.

Philip Rosedale, one of the creators of Second Life, has mentioned that there are are 1,600 Second Life users who earn $10,000 or more a year selling virtual content. I know a few people on the high end who are making millions. And it’s not just Second Life; this is all happening now in Roblox and Fortnite and other places, too.

I’m still taken aback at just how little [the staff at Meta] seem to have learned from past platform iterations.

Also surprising is that Meta’s metaverse team has some Second Life employees on it, like Linden Labs’ former CTO. Another is the former Linden Lab employee Jim Purbrick. Right before Meta rolled out Horizon, he was warning the Meta team about needing guidelines for harassment on the platform, and it seems like the company kind of ignored him... [It] seems Meta is throwing money at the problem without throwing much wisdom at it.

[This new] metaverse hype wave is so similar to 2008. Everything’s being repeated now—the same news stories, the same assumptions, the same mistakes. During the 2008 hype, the tech was not ready for a mass market. Today, it has become a mass-market phenomenon with Roblox and Fortnite and other platforms. I think there are upwards of half a billion people who are now active users on a broadly defined metaverse platform.

Some more links after the break. First up -- my answer on the mistakes being repeated now:

Watch: Meta & Linden Lab Veteran Jim Purbrick Explains What New Metaverse Platforms Need to Learn from Virtual Worlds (Before It's Too Late)

Back when he was leading metaverse development at Meta last year, Linden Lab veteran Jim Purbrick kept telling Meta staffers to read My Tiny Life, Julian Dibbell's pioneering tale of a virtual world community and a trollish abuser within it. But the Meta team didn't prioritize his advice, and the inevitable happened: When Meta launched Horizon Worlds, it was immediately inundated with reports of sexual assault directed at female avatars.

This new video, from Jim's recent talk at The Mixed Reality Lab in the University of Nottingham, crystallizes the advice that Meta should have prioritized -- and hopefully, will be watched by anyone working on new virtual world/metaverse platforms, ideally before they launch.

"It is very tempting for tech companies to take things that are a lot of work, and worry about them later," as Jim puts it. "One of the phrases you'll hear often is, 'Hey, this is a nice problem to have. If our virtual world is popular enough that people want to turn up and cause mayhem, maybe our virtual world is successful and we can deal with it at that point'. The trouble is what you're trying to do with these rules and systems is to establish norms... If you wait until everyone is acting badly, it is incredibly difficult to turn that community around."

Report: Blockchain-Based Metaverse Platforms Like Decentraland & The Sandbox Severely Limited By Crypto Wallet's Age Restrictions

Of all the current metaverse platforms on the market, the smallest in terms of active users continue to be based around blockchain, cryptocurrency, and NFTs. As I wrote last month, platforms like The Sandbox, Decentraland, Cryptovoxel, and Somnium Space have extremity low user rates, with peak concurrencies in the four figures at most (but usually much lower).

One core reason -- in a theme I keep repeating-- is that these platforms put speculation before community, a stark reversal of how virtual worlds typically succeed.  

Another core reason, as analyst Nick Mitham writes: Blockchain Metaverse platforms are effectively limited to adults.

This is because most (all?) crypto exchanges restrict wallet ownership to people 18 and over... but most metaverse users are under 18:

How Much of "The Metaverse" Concept Was Made as a Literary Device?

Is "the Metaverse" as we typically understand it mainly made as a literary device, i.e. to tell a cool fun story? On that theme, here's an interesting couple of reader comments inspired by Gabe Newell's skepticism over the Metaverse (at the least in its current incarnations) -- first from Caltech astrophysicist George Djorgovski, who helped launch the university's virtual world campus:

The original Metaverse as envisioned by the cyberpunk fiction writers (Gibson, Sterling, Stephenson, Stross, etc.) was essentially an extrapolation of the Internet, as an immersive 3D parallel world where the users interact through their avatars, but with the gaming overtones, for literary purposes.

Somehow that degenerated into a now prevailing interpretation of the Metaverse as a gigantic collection of (interoperable?) games and social spaces, or even just calling individual games "metaverses", which makes even less sense. It is like calling one's website "my internet". Maybe this is because most people engaged in this business come from the gaming world. I think that this completely misses the point, and there is no future in it. All this will accomplish is to doom the term "metaverse" as a misguided notion that will be forgotten and/or mocked.

Instead, we will see a continued evolution of the Internet, where all of the humanity's informational content is, and where most of the human activities are, driven by the evolving technologies, including XR. There will be gaming and social spaces, of course, as there already are in the current incarnation of the Internet as a global parallel cyberspace, along with everything else that people do. And that is where the people will stay. To think that there will be a new, separate gaming and social cyberworld distinct from the evolving Internet, a gamers' Metaverse, is just plain foolish, in my opinion.

Incidentally, Zuckerberg does seem to understand this, never mind all of the usual critiques of him or his company. His record and vision give him a lot more credibility.

Reader Martin K. expands on this, arguing that a lot of the specific features attributed to the Metaverse, such as a vast contiguous virtual world, were also invented to make a cyberpunk story cooler: