New World Notes

Crystal Frost, Second Life on Unity Project, Focuses on PC/VR Viewer While Linden Lab Works on Mobile Version

In case you missed it amid last week's hoopla over Linden Lab's announcement that they are (finally) developing a native mobile for Second Life built on Unity, there already is a user-run project to bring Second Life to Unity.

It's called Crystal Frost, and it's still going full-guns. 

pai

"It's not going to change," as lead dev Berry Bunny (Kallisti#2038 on Discord) tells me today. "Linden Lab is taking it in a different direction, and they're unlikely to use it for their desktop viewer. If anything it just means I won't have to worry about making a mobile version."

In other words, the era of Second Life on Unity is here.

Berry's original idea is to create a version of Second Life that's optimized to run in PCs and VR, and that remains the goal. Yes, Second Life in VR, with hands-on prim-based creation, a version of SL that can compete with VRChat.

"I'll have the 2D user interface pop up as a holographic display in front of you and can be pulled up with a customizable gesture," Berry explains. "If possible I will be tapping in to the puppetry system that Linden Lab is developing, and barring that I'll be using an LSL bridge to transmit IK targets for hand and full body tracking."

As for Linden Lab's SL on Unity/mobile project, Berry tells me from painful personal experience that they are going to hit some huge challenges:

Meta's Quest 2 Price Increase Due to Competition by Rec Room & VRChat, Contributes to Slow Install Base Growth

Meta's Q4 2022 earnings report was earlier this week, with revenue from Reality Labs, its XR/metaverse division, bringing in $727 million -- down from $877 million in Q4 2021.

So now it's time to play everyone's favorite guesstimating game: How many Quest 2's were sold, and what's the total install base?

Assuming that $727M is mostly from Quest 2 sales (now at $399), that comes out to about 1,800,000 units. That's the high end. Factoring in revenue from app sales etc., let's call that 1.5 to 1.8 million Quest 2 units sold during the Q4 2022 holiday season. 

That's quite a dip in sales! When it sold at $299 over the 2021 holidays, it sold around 2.9 million units (give or take). I'm not surprised, though; increasing the MSRP on an appliance even though it hasn't fundamentally improved is, well, bonkers.

Now let's look at the total Quest 2 install base:

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:

About Those Rumors of Roblox Coming to Quest This Year...

Since it keeps coming up, I should mention the recent single source rumor that Roblox is coming to Meta Quest this year. This one:

Editor Alex Heath launched The Verge’s Command Line paid subscription newsletter last week with a mention of “hearing that Roblox is planning to come to Quest in the back half of this year.” That timing could line up with release of Quest 3 and what’s expected to be a major jump in on-board graphics power, though there’s no indications either way precisely which Quest headsets could see support for Roblox.

That's certainly possible. And from writing my book, my impression is yes, Roblox is working on some kind of VR support in the future. But that doesn't necessarily mean this year, and I see more signs that that won't happen in 2023, at least not in some mass market launch:

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! 

This VRChat Explorer Photographs Beautiful Worlds Like These -- But The Most Popular One Here May Surprise You

Neomance is another great VRChat explorer. Like Bradlee, he explores the platforms' many worlds, takes breathtaking photos of his favorites, and posts them in a dazzling cascade on his Twitter.

Like many -- most? nearly all? -- of the active VRChat community, he discovered VRChat through "random YouTube videos, and I got on to socialize with random people".

Unlike most others, he's spent 2 years actively exploring the platform, deeply browsing the user-created worlds, and learning to photograph them like a pro. (That's even led to a few for-hire VRChat photography jobs.)

Here's five of the favorite recent worlds he's photographed -- tweets include creator credits and info for visiting them yourself:

• Abrepear
• suishogu (pictured at right)
• Ecology (pictured below)
• Forest Magic Shop
• Floating Delight (also pictured below)

If you've explored VRChat at all, you'll notice that many of the most popular and well-visited worlds aren't necessarily the most beautiful -- and vice versa. In fact, of the five worlds listed here, the most popular one might surprise you:

No, Virtual Reality is Not In Its "Early Days" (Comment of the Week)

Above: Nintendo's consumer VR launch in 1994 

Is the market for VR headsets small and active usage apparently low (especially among Gen Z) because virtual reality is still in "early days"? Reader Nadeja thinks otherwise:

I don't think we are in the early days of VR. The earliest HMD were made in the 1960s. NASA worked with HMD in the 1980s, Nintendo had something too. [See above - WJA] Then there were several commercial releases in the 1990s. Now we are in the 2020s.

I rather think that VR headsets aren't so practical and human-friendly. I'm not talking about the technical limitations, the lack of peripheral vision, nausea, the risk of hitting or stumbling on anything as you have essentially a blindfold... but about the HMD device itself.

You could say that someone can wear a HMD for hours, but in general sunglasses and eyeglasses are probably about as much as one can take, and some people still prefer contact lenses.

We need a paradigm shift around HMDs. When VR will be as widespread as smartphones, we would likely not use HMDs, but something else.

Fun fact: In 2015, Mark Zuckerberg predicted that VR HMDs would replace the smartphone by 2025. With the smartphone market currently at about 6.5 billion, compared to VR's total install base of maybe (and at most) 30 million, I'm sort of guessing that's not going to happen.

The categorical mistake, I think, is not realizing that unlike VR, mobile phones had an immediate and obvious broadly valuable use case from the very beginning:

Since Only 5% of Gen Z Uses VR Every Day, is Meta Wrong to Promote Virtual Reality Like a Mainstream Technology? (Comment of the Week)

Responding to our question on how many active users on the Quest VR headset there are, a reader points us to a recent market survey which suggests that use is quite tiny, especially among Gen Z:

Piper Sandler completes 43rd semi-annual Generation Z survey of 7,100 U.S. teens...

While 26% of teens own a VR device, just 5% use it daily. 48% of teens are either unsure or not interested in the Metaverse

This prompts reader "lieisacake" (LOL) to observe:

Forget the Quest 2's Install Base -- How Many Quest 2 Owners Are Active? (Comments of the Week)

Above: Most popular games in the Quest store as of today

I spent much of last week pondering the mystery of why Meta hasn't announced that the Quest 2 has crossed a 10 million unit install base (as it almost certainly has by now, based on earnings reports). Reader Zack makes an even better point:

Consider Meta might actually experience terrible numbers of ACTIVE users... I personally worked in VR since DK2 days, 2015 or so. I own a Quest 1, and although I believe in this tech's future, I still have to fight my way into my next VR session, every not so often time I decide to wear it.

So only guessing here... if say 50%+ of Quest2 owners don't even use their headsets past the first 30 hours of "novelty and excitement" phase... THAT would be really embarrassing for them... and I feel that's the reason why 10M units is not enough to have a self-sustaining ecosystem.

While Zuckerberg did say 10 million was Meta's magic install base milestone, Zack's point helped remind me to double check Zuck's specific wording in 2020:

We had this milestone in our mind that first we needed to get the technology to the place where you could have a standalone headset, it could be portable, it could be high quality — do the tracking and all that. And Quest was the big milestone on that. Then, from an ecosystem perspective, we believed that if we get to 10 million units active, then that’s kind of a critical magic number.

Emphasis mine! That could really solve the mystery: Maybe 10 million Quest 2 units are sold, but that doesn't mean 10 million are being actively used. 

Martin K. chimes in on that tip:

Mystery: Quest 2 Install Base Must Have Passed Zuckerberg's 10 Million Target By Now - So Why No Meta Announcement?

With Meta's Q2 2022 earnings report out now, it's once again time to engage in some Quest 2 install base tea leaf reading. I've written about this multiple times (most recently here), but the basic gist is: Most or nearly all the revenue from Meta's Reality Labs division comes from sales of its Quest 2 hardware device, with an MSRP of $299. So doing the back-of-envelope math:

• Back in April, I calculated the Quest 2 install base as about 11-13 million.
• According to the latest revenue report, Q2 revenue for Reality Labs was $452,000,000 million.
• Which suggests up to 1.5 million more Quest 2 units were sold between April and June 2022.
• Giving us a grand total Quest 2 estimated install base of 12-14.5 million units maximum.

Even at a very conservative estimate, Quest 2's install base crossed over 10 million months ago.

Which brings up a new mystery: Why hasn't Meta announced Quest 2 hitting a 10 million milestone?

10 million is, after all, Mark Zuckerberg's (somewhat arbitrary) target goal for the Quest 2. As he put it in 2020: