Editorial: My Social VR/Virtual World Predictions for 2021

Photo by Hulki Okan Tabak on Unsplash

Every year, for the past couple of years, I have traditionally drawn up and published a list of predictions on where I see social VR and virtual worlds going over the next twelve months. As someone who keeps an eagle eye on the comings and goings of the various companies that are building the ever-evolving metaverse, I’m pretty well placed to be able to make some educated guesses.

However, you should be aware that my track record as a prognosticator is truly lamentable; more often than not, I have been proven dead wrong. For example, I rather sarcastically predicted that Cryptovoxels would fail, hard, and it has done nothing but flourish (something which I am happy to see and report on here on the RyanSchultz.com blog). So, what do I know?

Therefore, please take the following three predictions with a grain of salt.

Second Life will continue to be successful and profitable—but it will face increasing competition from newer platforms such as VRChat, and it will no longer be the most popular virtual world

My first prediction is a no-brainer. In my predictions for 2019, I wrote that Second Life would “continue to coast along, baffling the mainstream news media and the general public with its vitality and longevity”, and that still holds true. Linden Lab sold the money-losing Sansar social VR platform to Wookey, and the remaining, profitable company was successfully acquired by the Waterfield investment group.

As of yet, there have been no major changes announced by the new owners; it would appear that Waterfield is content with the way that Linden Lab is running the virtual world of Second Life and the Tilia payment processing business (which has also been picked up by a few non-SL clients). However, Linden Lab’s CEO, Ebbe Altberg, might decide that this year is now a good time for him to step down (although I would personally hate to see him go, as he has been one of the better CEOs in Linden Lab’s sometimes rocky history).

However, I will agree with a prediction made by Wagner James Au of the long-running blog New World Notes, who in his list of predictions stated:

Both VRChat and Rec Room will finally surpass Second Life in peak concurrency numbers.

In fact, we have already seen days and times when the total number of users in both VRChat and Rec Room surpasses that of Second Life. I predict that 2021 will finally be the year that a newer platform will pass the venerable Second Life to become the most popular metaverse.

I am busy exploring VRChat most evenings, wearing my Valve Index VR headset and using my Knuckles controllers, and greatly enjoying the enhanced audiovisual experience it gives me. (I get a big kick of out being able to wiggle my avatar’s fingers!) VRChat now gives me serious vibes of what Second Life was like in its heyday, circa 2006 and 2007: a place which you might not always like, but a place you could not afford to ignore! A place where you are never quite sure what is going to happen.

And it would appear that other popular social VR platforms, such as Rec Room, are also reaping the benefits of the network effect: the more people who join a platform, the better the value it provides. This same network effect helped drive Facebook into becoming the dominant force in social media, and it turned Fortnite into a cultural juggernaut, so it is not something to be lightly dismissed.

The coronavirus pandemic will continue to provide opportunities for social VR and virtual world companies, particularly for remote workteams, conferences, and education

The testing, approval, manufacture, and delivery of COVID-19 vaccines will continue to be slower than originally anticipated, and virus mutations may blunt the effectiveness of some vaccines, and require some to be reformulated in response. All of this means that we are not going to be returning to “normal” anytime very soon.

This situation provides a window of opportunity for metaverse-building companies to sell their products and services to corporations, conferences, and educational institutions. I expect that we will see more announcements this year of conferences taking place with a social VR/virtual world component, for example.

While games and recreation will still form the largest part of the virtual reality consumer market, we can also expect to see more practical applications of VR in areas such as pain reduction, physical rehabilitation, and mental heath support.

And we can expect that more and more corporations will be looking at downsizing expensive downtown real estate and shifting permanently to remote workteams, which will fuel the what I like to call the “YARTVRA” (Yet Another Remote Teamwork Virtual Reality App) market.

Facebook is going to have a very bad year, despite the commercial success of the Oculus Quest 2

The Quest 2 is not a toy. It’s a virus disguised as a toy.

—Cix Liv, The Voices of VR Podcast with Kent Bye (source)

Speaking of Facebook, I predict that the corporate behemoth is going to have a rocky year. On December 3rd, 2020, Bloomberg News published an article on their website, titled Facebook Accused of Squeezing Rival Startups in Virtual Reality (original article, archived link), which paints a rather damning picture of Facebook’s ruthless corporate tactics in dealing with (and stealing business ideas from) much smaller companies.

Frankly, Facebook faces major hurdles in public relations and public perception, a problem that is only growing worse as the company becomes more powerful and more profitable, and seeks to enter and dominate new markets. Many people (myself included among them) simply don’t trust Facebook anymore, and aren’t willing to have their personal data shared among the many companies under the Facebook umbrella, strip-mined for profit, and sold to the highest bidder.

To give one example, recent changes to WhatsApp privacy policies, forcing users to share information with Facebook, have led to many people abandoning the messaging platform. Add to this the recently-announced U.S. federal government investigation into Facebook’s possible illegal monopolization of the social networking market, and the fuss kicked up in the virtual reality community by Facebook requiring Oculus VR device users to sign up for Facebook accounts, and it seems pretty clear that Mark Zuckerberg will be called upon to testify before even more government panels this year. (And you might not know this, but the next time that Mark or Facebook COO Sheryl Sandberg set foot on Canadian soil, they can be compelled to appear before a Canadian parliamentary committee with jurisdiction over tech issues, as a direct result of refusing to show up for hearings in 2019, which were attended by representatives of countries all over the world.)

So, these are my three predictions for 2021 (and I reserve the right to add more as they come to me). What do you think will happen this year? Feel free to leave a comment on this blogpost, or join the free-wheeling discussion on the RyanSchultz.com Discord channel, and share your predictions with the 460-plus members there! We’d love to have you become a part of our cross-worlds community!

Editorial: My Social VR/Virtual World Predictions for 2020

Photo by Jen Theodore on Unsplash

Now that I am (finally!) finished my annual holiday tradition of utterly ransacking all the Advent calendars and December shopping events I can find in Second Life—the better to clothe my small army of alts with fashionable freebies!—it is time to turn my attention to predictions for the coming year.

Let’s start with a look back at my predictions for 2019, shall we? I said then:

  • That Second Life would “continue to coast along, baffling the mainstream news media and the general public with its vitality and longevity”, and that “the ability to change your first and last names in SL will prove very popular—and also very lucrative for Linden Lab”. Well, I am going to stick to that prediction. Implementing avatar name changes in SL turned out to be a thornier problem than Linden Lab anticipated, hence the delay, but they now have eight years of pent-up demand for this feature, and I anticipate that it will still prove popular—and profitable—for Linden Lab. I myself upgraded one of my alts to Premium to be able to change her legacy name of Bumbly Rumpler. (I know. I know. I don’t know what I was thinking at the time!) I also snagged her a lovely new riverside Victorian Linden Home in the process.

  • That OpenSim would move on implementing virtual reality support, but (as far as I can tell), that work has stalled or been abandoned. To be honest, I have barely set foot at all in OpenSim this past year, so I regret that I am not in any position to make predictions for 2020!

  • That “one or more blockchain-based virtual worlds are going to fold”—a prediction which has come true, at least for MATERIA.ONE, which has not officially folded, but is currently on an indefinite hiatus. The landscape is littered with various blockchain-based projects that are either dead, moribund, or stuck in pre-development hell: Aether City, Ceek, The Deep, MARK.SPACE, MegaCryptoPolis, The Sandbox, Stan World, SuperWorld, Terra Virtua, and VIBEHub. And yet, somehow, new crypto projects keep appearing, hoping to become the next Bitcoin.

    However, three blockchain-based virtual world projects appear to be doing well—Cryptovoxels, Decentraland, and Somnium Space—and I expect that they will all continue to do well in 2020. I note that both Decentraland and Cryptovoxels have tended to rank in the Top 5 in sales volume on the OpenSea marketplace (this screencap is from a tweet made Dec. 27th):

I’m already working on a predictions blogpost for the various social VR platforms and virtual worlds in 2020. Among my predictions is the following: if Linden Lab cannot find a way to increase the overall number of users in Sansar within the next 12 months, even with a pivot to (and an exclusive focus on) live events, then the company will do one of three things:

– convert the existing Sansar code to open source and let the community take it over (which I think is the least likely option);

– sell Sansar to another company and keep Second Life running (or perhaps sell off Linden Lab and all its assets entirely to another company); or

– shut down the Sansar project completely (which I think is the most likely option).

In case you haven’t been paying attention, the honeymoon period for Sansar is OVER.

I am increasingly worried (even heartsick) over the future of Sansar.

  • That “the Oculus Quest VR headset will ignite the long-awaited boom in virtual reality”. I think that we can agree that the Oculus Quest has been a runaway success. Facebook is apparently selling the units as fast as they can make them, and they are now backordered until late February 2020. (The Valve Index is also selling well, and also similarly backordered.) I do predict that this will bring many more people into those social VR platforms which can natively run on the standalone Quest headset, such as VRChat, Rec Room, and AltspaceVR.

  • That “Linden Lab’s launch of Sansar on Steam will likely have only a modest impact on overall usage of the platform”. I deeply regret that this prediction has come true in spades. I said at the time that Linden Lab ditching its SandeX and launching Sansar on Steam would be a terrible mistake, and I take no pleasure in being proven correct. Sansar has been pummeled by negative reviews by Steam gamers, adding to the general sense of malaise about the platform in the past year, especially since approximately 30 staff working on the project were laid off by Linden Lab a couple of months ago, in an attempt to trim their continued financial losses. This was a move which was probably imposed on CEO Ebbe Altberg by the Linden Lab board of directors, who are probably very worried that if Sansar tanks, it will take down Second Life with it.
Photo by Drew Beamer on Unsplash

O.K., now that we’ve looked at how well my predictions for 2019 have fared, now it’s time to peer in my crystal ball and make some new predictions for 2020.

First, all current social VR platforms and virtual worlds will struggle with a key problem: effective promotion. Getting the word out to the public about the various platforms is proving to be more and more difficult in an age of social media overload and short attention spans.

We can expect to see more partnerships between various platforms and influencers (such as Sansar’s continued partnership with the VR vloggers Cas and Chary, and my own recent sponsorship and advertising deal with Sinespace). By the way, my partnership with Sinespace is not exclusive, we can still see other people 😉 and I am still actively looking for other advertisers and sponsorships for my blog and the Metaverse Newscast show (hint hint).

Second, every single eye will be on Facebook as they launch their new social VR platform, Facebook Horizon, early in the new year. It’s disgusting to me how even the smallest Facebook announcement gets oceans of fawning mainstream press coverage, and you can certainly expect Horizon to suck up all the oxygen in the press room when it gets closer to launch date. If Facebook Horizon, backed by the almost limitless resources and reach of its ambitious parent company, fails to take hold in 2020, then that will be the clearest indication yet that the nascent social VR industry is in trouble (and that I might be out of a job!).

Third, as I have said above, I am extremely worried about Sansar. The Sansar website has recently had a complete redesign to focus almost exclusively on live events:

It would appear that Linden Lab is going all-in on Sansar as a platform for live events, to the detriment of other features such as avatar customization (I don’t expect anything new this coming year). However, competition in the live events market in 2020 is likely to be intense, with the following products also planning to focus on hosting such events:

  • Microsoft-owned AltspaceVR (which has also recently announced a pivot to live events);
  • VRChat (which is already home to popular talk shows such as ENDGAME, and many other regular live events);
  • Wave (which has already pulled off some spectacular musical events such as the recent Lindsey Stirling concert);
  • Upstarts such as Ceek and Redpill VR (which are in various stages of pre-development and may or may not launch in 2020);
  • Not to mention that Facebook will also want to muscle in on this extremely lucrative territory (with Oculus Venues, and probably Facebook Horizon, too)—and Facebook will not hesitate to ruthlessly use every tool and tactic at their disposal to achieve market dominance (including “hiding” posts about competing platforms in their Facebook, Instagram, and WhatsApp social network users’ newsfeeds). Facebook also has deep pockets to ink deals with major talent, locking them into exclusive deals to appear on their platforms.

Expect many skirmishes on the live events battlefield in 2020, and also expect some causalities to occur.

Fourth, Second Life will continue to coast along as it always does, still boasting approximately 600,000 regular monthly users in recently released statistics by Firestorm, and still making millions of dollars in profits, both for its content creators and for Linden Lab. It’s the gift that keeps on giving, and I see no sign of it stopping anytime soon. I predict that SL will still be around five years, perhaps even ten years, from now, and that people will still be logging in, and still merrily ransacking Advent calendars 😉 …and I will continue to blog about steals, deals, and freebies in Second Life!

Fifth, we can expect to see the upcoming Educators in VR International Summit as an example of an increasingly important use of social VR platforms in 2020: conferences. This is a natural fit, and one that saves precious resources (such as airline fuel) in an increasingly environmentally-conscious world. We can expect to see more conferences and meetings hosted in VR as an alternative to real-world meetings (although, as High Fidelity found out, the remote workteams support marketplace isn’t quite there yet, since the vast majority of companies still expect their employees to show up to their offices rather than work remotely from home). I think it’s going to take another generation for that shift to take effect in any widespread fashion.

Sixth: those social VR platforms which currently lack an in-world economy, currency, and a marketplace for user-created content, will be moving towards implementing those features. VRChat already has a booming off-world economy in the creation and sale of custom avatars. We already know that both VRChat and Rec Room are making plans in this area, based on job postings on their websites, but we can also expect other platforms to take this step, taking their cues from the continuing success of the mature, fully-evolved in-world economy of Second Life.

Platforms where people can make money tend to attract droves of new users, appealing to their greed and the universal desire to strike it rich (Decentraland as a more recent example; although its continued success is not 100% guaranteed, investors have sunk a lot of money into it, and it will be interesting to see how this ultimate expression of virtual, cut-throat capitalism will evolve and grow over the next year).

Finally, at some point Apple (and other companies, including Facebook) will launch the first consumer-oriented augmented reality headsets. The over-hyped Magic Leap One has turned out to be rather underwhelming (and underselling) so far, but who knows? Perhaps future AR products may ignite consumer interest, and have an as-yet-unknown impact on the current crop of social VR platforms.

Perhaps the big bet we all placed on virtual reality has been misplaced? We won’t know the answer to that hypothetical question until at least another decade has passed. Of course, some social VR platforms may decide to extend support to whatever AR/MR/XR hardware becomes available in the future, too. Anything can happen.

So these are my social VR/virtual world predictions for 2020. Please check back in a year, and we’ll see just how accurate I was!

Image by Jim Semonik from Pixabay

Editorial: My Social VR/Virtual World Predictions for 2019

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Time to peer into that crystal ball and make some predictions!

First: Second Life is going to continue to coast along, baffling the mainstream news media and the general public with its vitality and longevity. It will continue to be a reliable cash cow for Linden Lab as they put a portion of that profit into building Sansar. And I also predict that the ability to change your first and last names in SL will prove very popular—and also very lucrative for Linden Lab! Remember, they’ve got seven years of pent-up demand for this feature. (I have a couple of avatars myself that I’d like to rename.)

Second: An unexpected but potentially ground-breaking development in OpenSim was the announcement of the release of a virtual reality OpenSim viewer to the open source community at the 2018 OpenSim Community Conference. There’s still lots of technical work left to do, but if they can successfully pull this off, it could mean a new era for OpenSim.

Third: I confidently predict that one or more blockchain-based virtual worlds are going to fold. Not Decentraland; there’s too much money tied up in that one to fail. But several cryptocurrency-based virtual worlds are starting to look like trainwrecks of epic proportions (and I’m looking at you, Staramaba Spaces/Materia.One). Somebody still needs to explain to me why people will want to pay to hang out with 3D-scanned replicas of Paris Hilton and Hulk Hogan. The business model makes absolutely no sense to me. Another one that I think is going to struggle in 2019 is Mark Space.

Fourth: I also predict that one or more adult/sex-oriented virtual worlds are going to fail (yes, I’m looking at you, Oasis). I’ve already gone into the reasons why even the best of them are going to find it hard to compete against the entrenched front-runner, Second Life.

Fifth: High Fidelity and Sansar will continue their friendly rivalry as both social VR platforms hold splashy events in the new year. (I’m really sorry I missed the recent preview of Queen Nefertari’s tomb in HiFi, but it looks as though there will be many other such opportunities in 2019.) And High Fidelity will continue to boast of new records in avatar capacity at well-attended events (it certainly helps that they’ve got those venture-capital dollars to spend, to offer monetary enticements for users to pile on for stress testing).

Sixth: the Oculus Quest VR headset will ignite the long-awaited boom in virtual reality that the analysts have been predicting for years. There; I’ve said it! And those social VR platforms which support Oculus Quest users will benefit.

Seventh: Linden Lab’s launch of Sansar on Steam will likely have only a modest impact on overall usage of the platform. I’m truly sorry to have to write this prediction, because I love Sansar, but we’ve got statistics we can check, and they are not looking terribly encouraging at the moment. And where is the “significant ad spend” that was promised at one of the in-world product meetups back in November? Now that they’ve pulled the trigger and launched on Steam, it’s time to promote the hell out of Sansar, using every means at Linden Lab’s disposal. Paying bounties to Twitch livestreamers is not enough.

And Facebook? If they thought 2018 was a bad year, I predict that we’re going to see even more scandals uncovered in 2019 by news organizations such as the New York Times. And more people (like me) will decide that they’ve had enough of being sold to other corporations and data-mined to within an inch of their lives, and jump ship. The public relations people at Facebook are going to face a lot of sleepless nights…

And, still on the same topic, we might yet see the launch of a new social VR platform backed by Facebook, after they decide to ditch the lamentable Facebook Spaces once and for all. Maybe it will be based on Oculus Rooms; maybe it will be something completely different. But despite my negative feelings about the social networking side of Facebook, they still have the hardware (Oculus), the money, and the reach to be a game-changer in social VR. (Just not with Facebook Spaces. At this point, they should just kill the project and start over. Any improvements will be like putting lipstick on a pig.)

Finally, I predict that the RyanSchultz.com blog will head off into new and rather unexpected directions (that is, if the past 12 months’ activity is any indication!). I never expected to cover blockchain-based virtual worlds, or Second Life freebies; they just kind of happened.  Expect more of the same in 2019, as various new topics catch my interest.

My Predictions For The Next Two Years

Photo by Wyron A on Unsplash

I’ve been hanging around virtual worlds of one kind or another for over a decade now. I’ve seen them come and go. Some were spectacular failures that provided lessons for other companies. Others just kind of meander along, not attracting very many users or ever becoming very big (like the multitude of OpenSim-based grids).

What usually happens in today’s hyper-competitive computer applications marketplace, is that one or two players in a particular market segment get big (e.g. Microsoft, MySpace, Facebook, and yes, in its own way, Second Life), and then continue to grow like a juggernaut, based on the network effect, while the smaller players in the marketplace fight each other over the leftovers. The ones who get big are usually, but not always, the early entrants into the field (Second Life is a prime example of that, although there were notable virtual worlds which were founded before it, like ActiveWorlds).

But social VR and virtual worlds are not a zero-sum game. Many consumers are frequent visitors to a number of different metaverse platforms, and many creators build and sell products in various virtual worlds. Right now, success in one VR-capable virtual world (e.g. VRChat) generates interest in other social VR spaces. As they say, “A rising tide lifts all boats”.

It’s still not clear where all this is going, but I’m willing to polish my crystal ball and make a few predictions of what will happen over the next two year period, from now until April 2020.

What I predict will happen, over the next two years, is that one of the Big Five computer companies:

  • Alphabet/Google
  • Amazon
  • Apple
  • Facebook/Oculus*
  • Microsoft

Is either going to launch their own social VR/virtual world/metaverse product, OR is going to buy one of the Big Four metaverse-building companies:

  • High Fidelity
  • Linden Lab (Second Life and Sansar)
  • Sine Wave Entertainment (Sinespace)
  • VRChat

(We’ve already seen this happen with Microsoft’s purchase of AltspaceVR.) We could also see a company buy out a virtual world, just to grab the programming talent, and then shut the world down completely (as Yahoo! did with the promising Cloud Party).

Now, there’s no guarantee that any of the Big Four companies WANT to be bought out by the Big Five. Perhaps instead of a buyout, a strategic partnership deal will be inked. But I bet you anything that it’s tempting for the bigger companies to buy their way into the evolving metaverse marketplace, rather than design something from scratch.

I also predict that a LOT of the new virtual world/social VR startups we see popping up are going to fail over the next two years. There’s a lot of virtual-reality-related (and especially blockchain-related) hype taking place, and some people are investing in startups that are risky. Some smaller companies have jumped into grand virtual-world-building projects without realizing the sheer magnitude of the work involved in creating a fully-featured, viable metaverse. I’m afraid that some investors are going to get burned.

I also predict that Sinespace and VRChat are going to pull ahead in terms of features, simply because they decided to build on top of the popular Unity game engine, and they can use all the cool Unity development tools that are popping up. By comparison, feature development on Sansar and High Fidelity will be slower, as they continue work in-house on their own engines.

And finally, I expect that Second Life’s 15th anniversary celebrations will entice some former users to dust off their old accounts and revisit the platform to see what’s new. It may well herald a renaissance for SL! At the very least, it will help stave off a slow decline in SL’s user concurrency figures.

*Sorry, but as I have said before, Facebook Spaces is not a palatable social VR/virtual world product. It can’t even come close to competing against what High Fidelity, Second Life, Sinespace and VRChat are currently doing. But I bet you anything that Facebook has other plans up their sleeve. They can still try to leverage off their 2-billion-plus Facebook network (not to mention 800 million Instagram users) to become a potential major disruptor in the evolving metaverse marketplace. I’m not counting them out yet!