New World Notes

Rosie's Rift Rips a Rift Into Reality

Rosie Summers recently wandered into a neighborhood park, and casually dropped this black hole into the grass.

"Soon as I saw its colossal size in an area of familiarity," she wryly notes, "the fear set in."

This rip of existence was made possible through several pieces of technology, and her own artistry:

VR's Pandemic Winter: Oculus Quest Only Now Reaches 1 Million Unit Install Base, According to SuperData, Which Downgrades HMD Sales Forecasts

The numbers from Nielsen analytics company SuperData seem to welcome us to VR's winter season:

The growth outlook for augmented and mixed reality (AR/MR) headsets has been revised downward due to Q2 setbacks for consumer AR/MR. We now estimate that AR/MR headsets will only account for 23% of XR revenue by 2023, down from a prior projection of 36%. Magic Leap experienced mass layoffs after it failed to appeal to consumers or developers of consumer software. The company has now pivoted to focus on enterprise customers. Similarly, smartglasses maker North was acquired by Google, reportedly for less than the firm had raised in venture funding. There are reports Apple is testing AR devices, and a product from the company will certainly grow the consumer AR market overnight. However, we believe a consumer AR headset from Apple will not arrive until 2022 at the earliest and will take some time to reach true mainstream adoption. 

More here. While SuperData also reports that the Quest outsold the PSVR in Q2 2020 (the second quarter since Q4 2019 that this has happened), the Quest install base remains surprisingly now:

If COVID-19 Kills Off the Hands-On VR Demo, How Can VR Grow?

Earlier this year when the pandemic hit for the first time, my family and I were fairly well-prepared, in the sense that we had a huge supply of sanitary wipes on hand, even when store shelves had been completely wiped out of every bacteria-killing product.

Why? Because late last year, I had been spending quite awhile doing VR demos. Which basically means wiping down the equipment with sanitary wipes, every time another person steps up to give your VR product a try.

It's really the paradox of virtual reality: Convincing people it's a powerful technology means spending quite a lot of time physically touching them in real life. "Eye condoms" like the one here -- popular at VR conferences, often handed out right at the entrance -- are a laughably thin level of sanitary protection. They might help prevent infection from bacteria on the VR headset, but you're still in close contact with one or more strangers throughout a typical VR demo, sharing the controllers, holding and positioning people around so they're tracked properly, often literally holding hands with them, so you can make sure they're properly clicking the proper controls. 

I thought about all this after Upload VR's Ian Hamilton made a very astute point:

Are Facebook's Holographic VR Glasses Viable? One Expert's Deep Dive

UploadVR has an interesting story on a new prototype created by Facebook’s VR research division which replaces the traditional, totally bulky virtual reality headset with something closer to the sunglasses form factor we've been wanting since Snowcrash:

Facebook Reality Labs’ new approach is a thin film where focusing is done by holographic optics instead of by the bulk of the lens. "Hologram" in this context just means a physical “recording” of how light interacts with an object- in this case a lens rather than a scene.

Facebook claims the research may be able “to deliver a field of view comparable to today’s VR headsets using only a thin film for a thickness of less than 9 mm.” The total weight of the display module is claimed as just 18 grams.

But is this approach viable? I put that question to a colleague who happens to be one of the world's top experts in AR/VR technology (and so prefers to remain anonymous). They read Facebook's research paper associated with this prototype, and came back with this assessment: 

 "I think the tech is cool and the research is good for longterm innovation but is likely years away from a product. I think the Panasonic and other pancake optics is a bit closer."

What's holding Facebook's approach back? 

Here's the deep dive from my expert, citing the research paper:

Unreal Engine Updated Royalty Agreement To Transform Indie & VR Games

While everyone in games and 3D graphics are enthusing over the new tech demo for Unreal Engine 5 (see below), it's probably the fine print that's more important today. Specifically, its updated royalty agreement:

"You may have missed it in all of the #UE5 excitement," as Epic evangelist Alan Noon puts it, "but my fellow #gamedev people might want to take note of the new licensing terms: Royalties are waived on your first $1 million in gross revenue."

"This is a really cool move by Epic Games for small teams and people just getting started," as indie game dev Chet Faliszek puts it. While it won't matter to major developers and publishers for whom $1 million is a pittance, it will mean everything for tiny studios-- especially for those focused on VR, where a $1 million gross tends to be toward the high end for a hit game going after the VR-0nly market.

Philip Rosedale Launches Limited Early-Access to 3D Audio/2D World Experience for Massive Live Events on Any Device

After months or more of relative secrecy and silence, High Fidelity founder Philip Rosedale just unveiled Limited Early-Access invites to a 3D audio version of his virtual world platform, writing on his Facebook wall:

We now have a way to bring people together using 3D Audio. It's a lot easier to try than to explain, but the basic idea is you can get in with one click on any computer or phone, no download. You can move around in a big space where all the audio is High Fidelity (haha but very true) and in 3D. So everyone can talk together at the same time and you hear them all, or you can break off into discussion groups, or use different areas for different purposes.

This work is part of a larger project to build a whole new huge virtual world that is accessible from any device, but COVID made us decide to release what we had working. You can use it for things like performing live DJ/Music, events, family gathering, all-hands meetings, or whatever you can think up. The experience is very warm and connected - and very different than video conferencing.

Go here to sign up to request access, which I just requested myself. Philip describes it to me as "Audio plus 2D world".  I've always said High Fidelity's spacial audio (demo below) was among the most impressive things about the platform, and now, he seems to be leaning into that. What's just as interesting is he's been showing it off to top musicians like Thievery Corporation's Rob Garza, who's quoted on the High Fidelity site about how impressed he was with the experience, using it to play and share music from his latest album.

Davigo: Indie Game Pits VR-Powered Giant Against PC-Powered Davids

Davigo is an upcoming multiplayer indie game for VR and PC which turns the relative lack of VR headsets into an advantage: The player with the VR rig plays as a giant, while the PC players are the little Davids scurrying around trying to defeat him.

This via Road to VR, which has more details on getting involved:

If you want to get your hands on a Steam code for the public alpha, simply head to the game’s Discord channel.

According to a Steam news update, the team behind Davigo is currently exploring more gameplay mechanics, including frangible armor, destructible levels, and flammable terrain—perfect for obscuring the vision of a would-be Goliath.

The studio also says that both the current art and sound are placeholders at the moment, and that they’re hoping to bring greater polish to the game in the meantime.

Furthermore, the studio wants to support Oculus Quest, however is still in the process of researching how to make it possible. Davigo is slated to support your standard swath of SteamVR headsets, including Oculus Rift, HTC Vive, Valve Index, and Windows VR headsets.

I'm personally tickled, because way back in ancient history (by which I mean 2000 or so), the founders of Linden Lab toyed with turning its haptics-powered system "the Rig" into a game like that:

Profit Probably Wasn't Alyx's Point -- But VR Won't Be Profitable Until It's Cheap (Reader Comments to Has Half-Life:Alyx Made Money?)

Lots of interesting reader comments to my post last week wondering if Half-Life Alyx has yet to make a profit for Valve (almost certainly not) including this one from Kent Bye, a VR podcaster very much worth following:

How would you incorporate the fact that Valve makes 30% off of future XR games sold through Steam? Tons of copies of Half-Life Alyx were bundled with Index headset. The Index has been sold out for months & months. I know lots of people waiting to play it on the Index, because it is by far the best VR HMD.

Valve is collaborating with Microsoft & HP on a new PC VR headset, and reportedly collaborating with Apple on making an AR headset. Valve is more interested in cultivating a more open ecosystem that pushes the medium forward.

There will be an entire generation of XR developers who get their start by modding Half-Life Alyx. It's already inspiring what's possible for the next wave of VR games and set the bar for quality & immersion.

To try to reduce down the impact of this game into a single binary number or profit or loss misses the cultural & inspirational impact it has had and will continue to have on the broader XR ecosystem. Perhaps Half Life Alyx will continue to be a loss leader, but it is certainly paving the way for all sorts of other XR & AR devices from Microsoft, HP, & Apple.

That's all very valid, especially the point about the modding community that'll emerge around Alyx, which reader "seph" also eloquently made awhile ago. My main goal was to illustrate how much money Valve is leaving on the table by making Alyx a VR-only game -- along with pointing out how difficult it is for a AAA-level VR game to make money, even in the best of circumstances. But as Kent says, Alyx's core purpose is to be a loss leader for VR device sales. 

Speaking of which, "SnakeTheFox" (love the name) argues VR device sales are a non-starter at the current price:

Has Half-Life:Alyx Made Money? Let's Do the Dirty Math on a VR-Only Game

Update, 8:50pm: In a VR community page conversation on this post, Facebook pal and veteran game designer Tadhg Kelly says my original estimate of average Valve salary is way off:  "$150,000 per year per person forgets facilities, office costs, time off and social security etc etc. And Valve reportedly has a healthy bonus structure. Closer to $250,000 easily." I've updated this post and estimate accordingly -- which now suggests Valve is much farther away from a profit from Alyx than I originally guessed.   

We now are pretty sure Half-Life Alyx drove VR installs by about 1 million, and it's a reasonably educated guess to say the game helped sell about 180,000 units of Valve Index, the HMD it was pre-installed on. Another question that looms: Has Half-Life Alyx yet turned a profit for Valve? Putting publicly available reports and estimates together, we can make a tentative answer: Probably not yet.

Here's roughly how much Alyx has made so far:

Direct purchases of Half-Life: Alyx generated $40.7M in revenue, and hundreds of thousands of free copies of the game were also bundled with devices like the Valve Index headset to boost interest in VR.

And here's how many people Valve paid to develop Alyx:

“Right now it’s around 80 people,” the company said, “which puts it as the largest single team we’ve ever had at Valve.”

And here's how long those 80 people have been developing Alyx:

We started in February of 2016, I think, with a small team, and we brought out a small prototype. Then people started to play that, understood what we were trying to do afterward, and started joining up. We had 80 people on the team when we were about midway through. 

OK so development over four years, but not 80 people total during those entire four years. Let's average it out to between 40-60 people per year.

Now time for some dirty math after a quick visit to Glassdoor:

Fortnite is Succeeding at Becoming a True Metaverse Where Actual Metaverse Companies Have Mostly Failed

Reader Tan Mojo saw the literally massive Travis Scott performance in Fortnite, and says something succinctly that's been hovering in the air:

This was life changing. For a person like me who wants to become a content creator, this was a huge realization that the metaverse does not lie within known pastures. SL, Sansar, OpenSim, VRChat, High Fidelity, Sinespace -- all of these platforms INTENDED to become the metaverse have all failed in their own way (although I still have hope for Sinespace).

And here comes Fortnite with cartoony graphics, player base of kids, twitchy gameplay, and now live social events! Not intended to be the metaverse, but is starting to morph into one. The goal of Epic Games CEO is to transform Fortnite into a social hub that supports monetized user created content. Fortnite already has a creative mode and now offers a non-combat hub/map.

Yeah, the music was prerecorded and the entire event was pre-scripted. But, it was one of the most visually stunning things I've ever seen. The audience was not passive either. The event manipulated player actions, clothing, and surroundings.

This is a significant event. 12.3 million in attendance. Epic Games has the technological infrastructure to spin up 100,000+ virtual instances to accommodate that many people. It has made me rethink what the metaverse could be and who might be involved in actually creating it.

I downloaded Fortnite last night. I'm looking forward to this weekend of exploring the non-combat aspects of it. I also plan to do this Core and hopefully soon, Crayta, via the Stadia platform.

Minecraft was the writing on the wall. This Travis Scott Fortnite event just broke that wall.

I agree that Sinespace is still in the running to be a metaverse, but I am of course highly biased. What's fascinating to me is that a conscious intent on a company's part to become the metaverse (i.e., roughly defined, an open and shared 3D world that unifies all content and varieties of imagination), almost by definition insures that this goal will not be met. But when the original goal is just to make a fun and broadly appealing game -- as Minecraft did years ago, and Fortnite is doing now -- your chances of evolving into a metaverse seem to be much higher.

Mr. Mojo's point echoes a tweet storm recently unleashed by VC Matthew Ball, who wrote this must-read essay on the metaverse earlier this year: