Virtual Platforms and the Metaverse

For the foreseeable future, most of us will interface with the budding Metaverse via consumer-facing, interactive and immersive virtual platforms. These will be accessible from a variety of devices, such as a web browser and VR headset, and it‘s here that we’ll hangout, buy things and show them off, collaborate and build, learn and perform, work and relax, consume in and experience the Metaverse.

Today, the most popular virtual platforms are Roblox and Minecraft, and, to a lesser extent, Grand Theft Auto Online and Fortnite Creative Mode (as theyre just a subset of their master games). And just as the leading indicators of the mobile internet were smartphone penetration and usage, alongside the number of app developers and their total revenues, the growth of these virtual platforms is easy to track: total active users and engagement, as well as total active-user spending, and developer revenues. All of these are way up over the past decade — and, at least thus far, sustainably so post-pandemic.

It‘s no coincidence that all of the leading virtual platforms today originated in gaming. Games have long been the most complex, scaled, and diverse simulations, as no other consumer-grade experience required a comparable amount of computing power. And because these experiences were designed to be fun, not Metaverses, they’ve also attracted and retained a larger number of users and greater user spending. More explicit efforts to build a Metaverse platform have either failed or hit comparatively low ceilings.

“The condition is extremely rare that a market is simultaneously large and technologically demanding. It is usually the case that the markets that require really powerful computers are very small in size, whether it‘s climate simulation or molecular-dynamics drug discovery. The markets are so small, it [sic] can’t afford very large investments. That‘s why you don’t see a company that was founded to do climate research. Video games were one of the best strategic decisions we ever made.” — Jensen Huang (2021)

To this end, it‘s important to emphasize that virtual platforms are a subset of virtual worlds, not synonymous with them. The hit multiplayer game Call of Duty, even with extensive user modding, is not a virtual platform. It’s a virtual world and game. The latest iteration of The Legend of Zelda is an open-world sandbox game, not a platform, least of all an online multiplayer one with developer and UGC capabilities. Animal Crossing does not fit this definition either. The ability to richly customize items and then sell or trade them does not mean a game is a platform. A virtual Disney theme park where you make your own rides out of prefabs doesn‘t fit this definition either; that’s just a branded SimCity (or, really, Sim Theme Park).

According to Bill Gates (as told by Chamath Palihapitiya), a “platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it.” Tim Sweeney argues “something is a platform when the majority of content people spend time with is created by others.” Virtual worlds, whether game-based or resembling a fashion show or gallery, may connect to Metaverse platforms, integrate with Metaverse-based services, and use Metaverse-specific technologies (see interchange in Section #5), but they are not virtual platforms. Instead, theyre more like the Metaverse version of an app or website.

A virtual Metaverse platform must have the technical ability for (relatively-unbound) creation (engine + studio + tools), services to support it (prefabs and asset marketplaces, voice chat, player accounts, payment services), and operate a multifaceted economy (i.e. consumer spending thats shared with on-platform creators/developers, as well as creator/developer-to-creator/developer revenues). In success, these platforms generate a virtuous circle. Better technology and tools lead to better experiences, which brings in more users and more per-user spending, which means more platform profits through which better technologies and tools can be produced, as well as greater creator/developer profits through which better experiences can be produced, which attracts more developers and more users, etc.

Crucially, these requirements are not limited to games (Roblox no longer categorizes itself as a gaming platform, and defines what‘s built inside it as “experiences” not ’games‘). As a result, we already see — and certainly will see more of — other types of platforms. Snap, for example, is trying to become an augmented reality and location-based Metaverse platform that’s also built around their account and avatars system (Bitmoji), and sometimes delivered through their hardware. Niantic, too, is working to develop a “planet-scale augmented reality platform for current and future generations of AR hardware”. And this will likely integrate into Pokémon Go, which continues to expand its UGC capabilities and remains the one of the largest mobile games globally (and the largest AR game by far). Facebook is working on its own VR and AR platforms, while Microsoft continues to pursue the same opportunity via its HoloLens platform (which integrates into its Minecraft virtual world).

Nvidia‘s Omniverse is another great example. The service helps businesses bring together various digital assets, irrespective of their formats or engine, into a single virtual environment. This is an interchange solution (Section #5), not a platform in a strict sense, as Omniverse is really just enabling businesses to work with more file formats, and especially to collaborate with third parties using different tech stacks. But it’s not hard to see where this might end up.

Hong Kong International Airport was famously designed in Unity, a leading game engine. Unity wasn‘t used because it’s the best tool to design an airport — that‘s typically rendering software purpose-built for the architecture industry. Instead, Unity was used because it was superior at simulation. As a game engine, Unity could not only render a not-yet-real environment, but realistically stress-test it for fire, a flood, a power outage, backed-up runway, and for the flow of humans in an emergency. This was, itself, an enormous leap. And it’s one now being used in countless other areas, from industrial engineering to film. Cars are being designed using simulation/game engines, then this same software is being deployed in the end-product. Hummers dashboard UI is now based on the Unreal Engine and can simulate the vehicle live.

This is where the potential for Omniverse gets so exciting. As the world shifts to mirrorworlds and simulation technology, it becomes possible to interconnect previously independent simulations. Imagine interconnecting the Hong Kong International Airport to the local highway to scenario-test the flow of traffic. Then to the streetlights system that manages that traffic. Potentially with precise information on every car on the local grid.

What‘s key to Omniverse is that it can do this irrespective of the file formats and engine/simulation technologies being used. In other words, everything doesn’t have to be on Unity, or Unreal, or AutoCAD. And while Omniverse is, today, intended for design and testing, one can imagine Nvidia using this technology, plus its own industrial computing power, to operate much of the overall mirrorworld live.

Other companies hope to pursue this opportunity from other angles. Matterport enables real-estate owners to create vivid replicas of their properties. The most basic value here is that buyers, renters, suppliers, construction professionals and service providers can navigate these 3D scans to understand potential issues and opportunities in ways that would be impossible with blueprints or photographs. A next step is the integration of ‘live’ data, representing dynamic facilities or neighborhood systems. Real-time or simulated flows of electricity, security, HVAC, weather and traffic become visual and interactive overlays. Then, after that, trying to connect these many digital twins to the point that the traditional ‘floor plan’ or ‘street map’ has become irrelevant. PTC Corporation, meanwhile, hopes to do this with industrial AR.

There are also a number of virtual platforms that aspire to displace the likes of Minecraft and Roblox through the use of blockchain. These include Decentraland, The Sandbox, Cryptovoxels, Somnium Space and Upland, and dozens more are in development. Subsequent sections will address more of the technical benefits of blockchain-based foundations and decentralization. But what‘s more important versus today’s leaders is their economic incentives. These platforms provide users/players with the ability to truly own in-game items or land, a far greater capacity to generate real-world income, the scope to directly participate in the growth of the platform‘s overall value, and sometimes even partial governance rights over it. Done correctly, this can be a big unlock for user motivations. If we love to play Fortnite, or use Instagram, it stands to reason we’ll invest in and use them more if we can profit from and/or help govern them. After all, millions of people spent billions of hours tilling fields and sowing crops in Farmville for neither income nor ownership of Farmville or their own farms. This is the premise of Gala Games, a sort of blockchain reimagination of Zynga (makers of Farmville), from the co-founder of Zynga.

Although the most successful virtual platforms benefit from strong virtuous feedback loops, many, many virtual platforms are likely to exist and be popular. As a point of optimism, consider the past seven years. When Mojang was sold to Microsoft in 2014, Minecraft had sold more copies than any other game in history, and also had more monthly active users (25MM) than any Western title in history. Today, Minecraft is over 5× larger. Meanwhile, Roblox has grown from fewer than 2.5MM MAUs to over 200MM, Fortnite was created and now boasts 70MM, GTA Online has more than doubled to 50MM+, in addition to various blockchain-based platforms.

“Just as every company a few decades ago created a webpage, and then at some point every company created a Facebook page, I think we‘re approaching the point where every company will have a real-time live 3D presence, through partnerships with game companies or through games like Fortnite and Minecraft and Roblox. That’s starting to happen now. Its going to be a much bigger thing than these previous generational shifts.” - Tim Sweeney (2020)

Certainly, the tech/gaming community believes that more are to come. Early last year, Riot Games bought Hypixel Studios, which previously operated the largest private Minecraft server before shutting down to build their own voxel-based sandbox platform. A number of well-funded start-ups, such as Mythical Games, Playable Worlds, and Singularity6, are also picking up traction.

And crucially, the designs of the Metaverse are oriented around interconnection in a way that today‘s dominant social/Web 2.0 platforms are not. If Facebook isn’t ‘the internet’, nor even all of GAFAM collectively, then the Metaverse, too, should be abundant. Which brings us to the next, and most important, section.