The Fight for the Metaverse

Imagine you wake up but your first impulse is not to reach for your cellphone; imagine instead that you reach for your virtual reality headset. From that moment until your head touches the pillow again (and maybe not even then) you’re in the “metaverse.”

The word “metaverse” was coined by Neal Stephenson in the 1992 novel Snow Crash, where he refers to an immersive virtual world so complex and convincing that it would seamlessly and intimately interconnect to the “real” world. Palmer Luckey describes a true virtual reality metaverse as “a parallel digital world that exists alongside our own, (allowing you to) communicate with other people, play with other people” just as you would in the real world only with advantages — advantages that companies are trying to build now so that you might never want to leave. The vision and the stakes are huge which is why the battle for the metaverse is on.

Second Life entered the battlefield over a decade ago when they launched the first online virtual world in 2003, years after the failure of virtual reality in the 90’s and one year before Facebook arrived. Second Life (owned by Linden Lab) created a revenue-generating platform on which users could craft much of the world they inhabited by creating, renting, and buying new items and territories (avatars, clothing, experiences, real estate, etc.). Business Insider reported that Second Life users translated their creative and entrepreneurial activities into over $60 million in real-world money, every year. Despite these successes, Second Life faced a a technological hurdle that is only now being solved: users could not ‘fully’ immerse themselves into the virtual world they created because they were constrained by their computer screens and keyboards.

Virtual reality headsets are increasingly everywhere but where is the metaverse to explore?

THE MAJOR CONTENDERS: Project Sansar (created by Linden Lab — owner of Second Life), High Fidelity (founded by Philip Rosedale, also former founder of Linden Lab) and Surreal.

Project Sansar: The Seasoned General

Last week I spoke with Ebbe Altberg, Linden Lab’s current CEO, who contacted me after viewing my flowchart on the current VR Ecosystem. He wanted me to know that Linden is a contender in this ecosystem with an entirely new virtual reality world — code named “Project Sansar” — that I had not included in the chart. Altberg emphasized that Project Sansar is NOT Second Life 2.0. He wanted to convey that everything in Project Sansar will be a brand new metaverse that conserves only two features from Second Life — the ability for users to easily create and sell content and the Linden Dollar currency system for buying and selling that content.

Altberg said that they could not just convert Second Life into a virtual reality world because of “performance issues” that arise out of “users (not) necessarily know(ing) how to create extremely optimized content like a gaming studio would.” To preserve that key feature for users in a VR environment, Linden Lab opted to create a new platform.

According to Altberg, Project Sansar’s platform will have user-generated content that is more scalable than what was possible in Second Life. He emphasized that scaling content would permit creators to license their work and, thus, generate more revenues. He gave the hypothetical example of Texas A&M creating a chemistry lab inside Project Sansar which could be licensed to other schools who could then customize it to their own needs and desires. When I inquired about software for content creation, Altberg said that Project Sansar content is currently using Autodesk Maya for rendering but Linden expects to change that by consumer launch day. Linden is also working on better discovery, which is a “walled garden” in Second Life, to allow anyone to search for a particular type of experience and link directly to a downloadable form of that experience in Project Sansar.

Linden plans to launch an Alpha version this summer to a few select testers as a PC virtual reality experience and then expects to tackle other platforms.

Why would anyone bet on Project Sansar to win the metaverse battle? I asked Altberg. He responded that Linden Lab has actually been in the virtual worlds trenches, sharpening their tools for 12 years and they have a user-centric, revenue-generating model that Altberg believes will give them maximum strategic advantage. Unfortunately, another major contender enjoys these advantages too because the general of High Fidelity’s army founded Second Life.

High Fidelity: The Experienced Challenger

After founding Second Life and staying for over a decade, Philip Rosedale, left the company in 2013 to pursue his dreams of creating the “next-generation virtual world” which he calls High Fidelity and diverges from Project Sansar’s vision. I have not been able to interview Rosedale but draw insights from key sources.

In his recent talk at SVVR, Rosedale describes the metaverse as something that contains the web itself; it encompasses what we define today as the Internet but it also allows us to live inside of it instead of merely accessing its content. He also believes, not surprisingly given his legacy with Linden, that the metaverse is a shared space where content should be created by its users. This is why he is building High Fidelity as an “open source software for virtual reality.” He wants anyone to be able to quickly generate a virtual space, have others join them inside that space and easily allow them to explore the various virtual worlds.

Like Project Sansar, Rosedale wants to ensure that the virtual worlds are scalable, and recognizes that it is critical to avoid Second Life’s struggles with scaling due to limitations caused by physical servers. In High Fidelity’s architecture blog, they note that they will be operating their servers in an open shared network, allowing many different people and institutions to deploy virtual world servers, interconnecting those servers so that people and digital objects can travel among them, and harnessing shared computing devices to scale their content and load.

Unlike Project Sansar, High Fidelity’s Alpha is already available for download and users can create and deploy virtual worlds, content and experiences. Thus, the experienced challenger has positioned itself on the metaverse battlefield first and may have achieved some strategic advantage that way.

In Rosedale’s talk, he indicated that, like Second Life and Project Sansar, High Fidelity is experimenting with revenue generation as a layer on top of their open network but it is proposed to operate differently than the others. High Fidelity users will be sharing their machines so the revenue model proposed would “create some kind of currency that is valued on computer time.” They have yet to decide whether it will be bitorrent or a blockchain currency. In sum, while High Fidelity has moved quickly to establish a strategic position for its metaverse contender, its Achilles’ Heel, at least at this time, would appear to be its revenue model.

Surreal: The Hungry Underdog

Surreal has no relation to Second Life but is also hard at work trying to create the “first fully immersive virtual world.” Unlike Project Sansar and High Fidelity, Surreal has no immediate plans for content within their virtual world to be user-generated. During their talk at a recent the NYC VR meetup, they said they were open to this but as of right now, that feature is not available. Because their world is built with Unity, they are not tied to a PC experience and proudly proclaim that Surreal will soon be available on any virtual reality device (Google Cardboard included). Currently, you can email them to request a demo version for Oculus.

Another difference is that your Surreal avatar will be tied to your Facebook identity. This provides a way to verify your identity and tie your virtual interactions to your real world social graph. Surreal’s CEO, Arthur Goikhman, clarified that they did this to protect their user’s privacy but would allow options for people to meet outside of their real world social circles.

According to their Facebook page, Surreal’s mission is “to make social games truly social.” Perhaps they want to approach the metaverse from a gaming standpoint, whereas Project Sansar and High Fidelity like to stay away from social gaming comparisons.

During the meetup, they also mentioned they would be monetizing the platform through product placement and selling items, such as clothes or experiences, but didn’t provide any details into how this virtual economic system would work.

Although my information is limited, it would appear that Surreal is the underdog in this battle, but they are hungry and attacking from a different angle. They will need to move quickly to outmaneuver both the more seasoned competitors for there are additional players entering this hotly contested battlefield.

Other companies like JanusVR, AltspaceVR and Next Galaxy are positioning themselves to enter the battle. I will seek more information for a future post on them.

The battle lines are taking shape and the competitors are lining up along them. It’s hard to predict a winner because they are fighting over turf that we cannot yet fully see — regardless of our VR equipment. All this makes for a conflict never before seen, yet classic in its human dimensions.

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augmented reality & moleskines

augmented reality & moleskines