New World Notes

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:

Tomorrow, 2pm-6pm PDT: Join VR Evangelist XaosPrincess in High Fidelity for a Worldwide Lockdown Party

XaosPrincess in High Fidelity from her home in Bavaria

 The Lockdown Dance Party runs tomorrow (April 25) from 2pm-6pm PDT in High Fidelity, and it should be a massive, worldwide rave. It's organized and hosted by famed social VR evangelist XaosPrincess, who's been trapped like most of us in a Coronavirus quarantine for weeks:  

"Ever since the lockdown has been announced in Bavaria on March 20th," she tells me, "I have been dreaming of getting all my friends from social VR together, in order to experience the heartwarming feeling of being part of a friendly crowd again."

Here's all the details for joining the fun via PC, Mac, or VR. The event is hosted by startup Tivoli Cloud VR, who will donate $10 in cloud computing power to fight coronavirus via Folding at Home for every single person who joins the party -- to bring your friends, and have your friends bring their friends! And if you do attend, don't forget to take and submit cool pics to our #NoAvatarSocialDistance challenge!  

Half-Life: Alyx So Far Sold About 680,000 Copies, Has Been Played By About 180,000 Valve Index Owners (Based on SuperData Numbers)

New revenue report from Nieslen analyst firm SuperData* has some very interesting data for people following MMOs/virtual worlds and VR, especially in the wake of Valve's first VR-only game:

Half-Life: Alyx performed modestly by the standards of AAA games but was a blockbuster by the standards of virtual reality (VR) exclusive titles. A total of 860K gamers played the PC VR title in March. The game had a limited addressable audience, as there was an install base of fewer than 4M PC-compatible VR headsets at the end of 2019. 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.

If your real interest is how many people bought and played Half-Life Alyx, some back-of-envelope math gives us some pretty reliable estimates (assuming SuperData's numbers are also fairly reliable):

VR Innovator Seeking Medical Experts to Help Build Out Multi-User, Immersive Information Hub for Battling the Coronavirus

The Coronavirus VR Information Hub is a new space created in Acadicus, a multi-user VR-based teaching platform lead developed by Jon Brouchoud, who's been creating award-winning virtual world-based projects for real world work for well over a decade. As the name suggests, Brouchoud and team created the hub to gather information and VR demos/models to help fight the Coronavirus -- and he's seeking medical instructors/professional with access to VR equipment and Coronavirus-related experiences, advice, or 3D demonstrations to share. (Contact information on the site.)

"VR is an ideal medium for simulating and rehearsing rare or dangerous situations in a safe environment before working with human patients," Jon tells me. "Our goal is to continue working with healthcare providers to share their expertise, and continue gathering information about the skills and procedures needed to effectively combat coronavirus.

"In a situation like this, where millions of medical professionals suddenly and urgently need potentially life-saving training and practice managing infectious disease, VR could enable rapid remote training far superior to anything available today.  When it comes to skills training, immersive VR offers much higher bandwidth and retention over flat-screen 2D video."

Here's an example of the kind of content they're looking for:

Half-Life: Alyx Isn't VR's Killer App -- But It's Modding Community Could Be

I was disappointed to see Half-Life: Alyx sales and usage floundering, but reader "seph" makes a very good point about how Valve likely sees its long-term success:

I don't think Valve cares about selling Half-Life: Alyx itself, it's free with every Valve Index purchase and it's being bundled with partners' headsets like Vive's new Cosmos Elite for free.

Half-Life: Alyx is only 10-15 hours of gameplay, it wasn't meant to hold people's attention longer than that is another consideration. The longevity plan seems to be the same as all previous Half-Life games, which is letting the community create more content for it.

Tools have been released for the Source 2 engine to help with modding Alyx along with Hammer, a new level editor built with creating levels for Alyx in mind.

Road to VR reports those tools actually haven't been released yet, but will be soon-ish. And Seph points to the track record of other Valve games, once modders get their hands on the tools: