Tag: Wookey

Lars Doucet: Some Required Reading for ANY Metaverse Company Hoping to Make It Big, and a Voice of Reason in the Current Metaverse Hype Cycle

If you really want your platform to become the seed for “The Metaverse”, then you need to give it away.

—Lars Doucet
If you want to make a mint off the metaverse (and especially if you dream of being the next Roblox), you’d better be listening to what Lars Doucet has to say! (image source: Photo by Jason Leung on Unsplash)
Lars Doucet
(image source)

Lars Doucet is an independent game developer and consultant for various multi-million dollar game projects (through his company, Level Up Labs), as well as a games industry analyst, commentator, and blogger at Fortress of Doors.

On July 1st, 2021, Lars wrote a Fortress of Doors blogpost titled So You Want to Compete with Roblox, which is primarily directed at those companies who desire to become the next billion-dollar-valued metaverse platform (Roblox, as many of you already know, obtained a market valuation of UA$41.9 billion when the company went public this past March). However, much of Lars’ wisdom also applies to any social VR platform or virtual world that wants to break into the big leagues, especially if they are competing against an entrenched front-runner in a particular market segment, so I decided to write up this blogpost as an introduction to Lars’ ideas for my regular readers (if you’re not interested in my thoughts, just click over to read Lars Doucet’s blogpost in full; I have links to other content of his at the tail end of this post).

Lars starts off by dashing any dreams of would-be Roblox competitors, saying that they are too late to try and overtake something which has been building for years:

I used to get so many pitches from startups eager to knock PC gaming powerhouse Steam off its block, that in 2018 I wrote one big standard response called So You Want to Compete with Steam, with a follow-up a year later. The dust has now settled and the result is clear: all of the new contenders failed but Epic, and even they have a long upward climb ahead of them.

Flash forward to today, and my inbox is stuffed with pitches from start-ups wanting to compete with Roblox, that plucky Lego-ish multiplayer game-creation platform currently valued at 41 billion dollars.

So I guess we’re gonna do this again. Here’s how you can build a successful business that competes directly with Roblox: DON’T.

I say this out of love: the vast majority of you are going to fail. I admire you and your hard work and dedication; I’m pessimistic simply because your task is incredibly hard.

First of all, you are late to this party. Roblox first launched in 2006, a full fifteen years ago – that’s five years before Minecraft, if you can believe it. They have a massive head start and are playing by an entirely different set of rules. Your only chance is to flip the entire problem on its head.

Lars outlines three components which absolutely must be in any product that tries to make a dent in the ever-evolving metaverse, they are:

  • High quality multiplayer support for user creations out of the box
  • High performance servers with excellent reliability
  • Powerful, user friendly, and joyful creation tools

Note a couple of the words he uses very carefully. “Multiplayer” support for user creations out of the box means the ability to support collaborative creation of user content (an example of this are the user creation toolset in NeosVR, although I would argue that they are not particularly “user friendly”, as they are powerful, but also have a rather steep learning curve). Many social VR platforms still lack collaborative building tools, or any sort of in-world building tools, forcing content creators and world builders to use external tools like Blender and then import 3D models.

Note also Lars’ reference to “joyful” creation tools—in other words, make it FUN to create something. From what I understand, one of Horizon Worlds’ strengths is its content creation tools, which are apparently easy and fun to use. Do this part especially well, and you will empower your userbase to create wonderful worlds, which attracts new users, who then also become content creators—it becomes a virtuous circle.

Then, Lars tackles each of the selling points of products who say they are going to be the next Roblox, “but with…”, harshly but accurately poking holes in the arguments. I’m not going to quote this section in my blopost; it’s better if you go over there and read it in full yourself.

He then talks about how Roblox spends a lot of money on hosting and network infrastructure, and how cloud provider costs (e.g. AWS) can eat up a significant chunk of cash as your platform grows. He then discusses what he sees as the three big problems you’ll face as a metaverse platform creator:

First Problem: Chicken-or-the-Egg Deadlocks

Which comes first, the chicken or the egg? (Photo by Grace O’Driscoll on Unsplash)

Lars states:

One of the key themes of So You Want to Compete With Steam was a nasty paradox best articulated in Joel Spolsky’s Strategy Letter II: Chicken and Egg problems, which also applies to would-be Roblox competitors:

• You need players
• Players won’t show up without content, so you need creators
• Creators won’t show up until you have players

Joel points out that you can’t expect this deadlock to solve itself – instead you need to just go out there and deliver a truckload of chickens or a truckload of eggs. Typically this means spending a lot of money. Anyone able to rely on organic growth alone started ages ago and that door is now closed to you.

Note particularly that last sentence, which I am going to repeat in bold for those of you who still don’t get it: ANYBODY ABLE TO RELY ON ORGANIC GROWTH ALONE STARTED AGES AGO AND THAT DOOR IS NOW CLOSED TO YOU. I have repeated versions of this statement on my blog until I was blue in the face, and few of the newer social VR platforms have been paying any attention.

Linden Lab’s fatal mistake with Sansar (one of many) is that they 100% expected that they would be able to build a high-end social VR platform with a in-world currency and an integrated marketplace for user-generated content, just put it out there, and expect it to sell itself! What worked for Second Life in 2003 most assuredly did NOT work for Sansar in 2017. A last-minute, hail-Mary pass. pivoting from social VR to a live events platform, essentially failed, and Linden Lab landed up selling Sansar to Wookey. At present, Wookey has suspended all development and furloughed all its staff. Millions and millions of dollars† were sunk into a platform which is currently on life-support, hanging on by a thread, and could be unplugged at any moment. Say a prayer for Sansar; it could use one.

Lars Doucet advises:

Seed your platform with awesome material by paying your own employees to build beautiful creations. Hire contractors and independent content creators and then pay your staff to train them in your tools. Pay these people to make tutorials and guides and videos and post them all over the internet and don’t stop. Set up an affiliate system with creator and influencer rewards. And that’s just the obvious stuff – you need to be thinking about new and innovative solutions to this problem 24/7. Pay any and every price to get high quality content onto your platform.

Second Problem: Platform Dynamics

Here Lars differentiates between different kinds of platforms, from open to closed:

Image source: So You Want to Compete with Roblox

On one end you have open platforms like the World Wide Web where each of the five aspects is owned by no one but the commons.

Towards the middle you have different kinds of closed platforms like Windows and Steam where certain components of the stack are proprietary, but others are unowned; the owner either refrains from (or is simply unable) to capture most of the value that creators produce on the platform.

On the far end are digital company towns, proprietary platform stacks privately owned from top to bottom. In the physical world company towns are communities where a single corporation is not only the sole or principal employer, but also owns all the housing and stores – the company is your boss, your landlord, and even your grocer. Total ownership grants the company power over not only every aspect of their workers’ lives, but also their families and the entire local economy. Digital company towns likewise squeeze as much value out of creators as possible.

And he makes the point that Roblox is a company town, controlling the creation tools (Roblox Studio), the playback engine (the Roblox app), the discovery methods (the Roblox discovery portal), and the marketplace (items can only be bought and sold using Robux through the Roblox Marketplace, with all financial information managed by Roblox). While it might look tempting to set up wannabe Roblox competitors using the same model, Lars makes it very clear in his article that this is a tactical error:

Look, I know some of you as customers actually like company towns from giant companies like Apple precisely because they’re locked down and you trust the platform holder. Good for you, sincerely! You are more than welcome to continue liking them as a customer. But this article isn’t addressed to you; it’s addressed to startups who think they can deploy this kind of vertically integrated stack without already starting from a position of strength.

Simply put, if you’re trying to build a Roblox competitor in 2021 under the company town model, you’re delusional. You should not build a company town for two very good reasons:

1. Company towns are bad, and you shouldn’t do bad things*
2. It’s way, way, way too late to succeed with this strategy

So, if you can’t rigidly control everything in order to compete against the entrenched front-runner(s), what can you do? Lars suggests giving something away:

Give people a reason to build on your platform. Make them owners, not tenants.

What should you give away? Well, that depends on your specific situation, but I recommend “as much as you possibly can.” Recall the five components of a platform:

• Creation tools
• Playback engine
• Discovery methods
• Marketplace / transaction engine
• Relationship with the customer

Again, I’m going to refer you to Lars’ blogpost for more details.

Third Problem: Ownership and Trust

Building trust with content creators is key (Photo by Jannis Lucas on Unsplash)

Platforms tend to follow a certain kind of life cycle, and there’s no better primer than Dan Cook’s Game of Platform Power. In it he outlines how platforms transition through “Growth” and “Engage” phases where they are friendly and generous to the creators who produce value on their ecosystems, before maturing into the “Extract” phase where they leverage their size and power to lock-in users and capture as much creator-produced value for themselves as possible.

A classic example of this is Second Life, which is now merrily coasting along, collecting fees for the sale of in-world land and currency, still going strong at the ripe old age of 18 with a locked-in, relatively small but highly passionate userbase who resist leaving their friends and communities behind to join other virtual worlds. For example, it’s hardly a surprise that Linden Lab, now owned by the deep-pocketed Waterfield Network investment group, has recently raised its fees for buying Linden dollars. Second Life is a cash cow, and they are rightfully milking it!

And Lars makes what I think is a somewhat counterintuitive, very nervy, and potentially game-changing suggestion on how to build that trust with content creators: make it easy for them to pack up and leave!

No matter how generous your platform is today, content creators aren’t dumb, they know how this works, and they’re being exploited right now by company towns like Roblox. Words are cheap. What they want is assurance. Trustless assurance. And no, I’m not talking about blockchain.

You really want to shake things up? Give content creators a loaded gun pointed at your platform’s head.

Another word for this is “exit rights.” If you want creators to come over in the first place, give them the power to leave anytime they want.

Mind. BLOWN. I can see how Lars Doucet is a highly-paid and in-demand consultant, just for these few paragraphs of advice alone! However, I would also add that we need to see some metaverse interoperability and standards before we can really put this into action. However, Lars makes a rather compelling case for doing at first what sounds like corporate suicide, using companies such as Substack as an example of how and why such an approach works.

Lars wraps up by dispelling some common myths about what is the “metaverse” (for example, that the metaverse cannot and should not be owned by any one person or company). And he wraps up by saying that anybody who wants to become the next Roblox is embarking on a wild, crazy, risky venture—but that “simply the riskiest thing to do is to play it safe.”

As I said in my blogpost title, this is some harsh advice that many commercial social VR platforms probably don’t want to hear, but should definitely read through at least once.

You can read more of Lars’ wisdom and advice on his blog, called Fortress of Doors (here’s his recommended reading list), and by following him on Twitter.

*As an aside, Lars wraps up his Fortress of Doors blogpost with the following highly-accurate-but-snarky observation:

That’s not to say someone fundamentally can’t craft a “Dark Metaverse” under the company town model. It’s just that their name is Facebook, it will be a dystopian hellhole, and you don’t have a chance of competing on those terms.

🙌 PREACH, LARS! 🙌

†More specifically, 75 million dollars (US) over four years, according to this Sansar Wookey Investor Fact Sheet, which is attached to the publicly-accessible LinkedIn profile of Wookey CEO Mark Gustavson:

Part of the Sansar Wookey Investor Fact Sheet

This is the first time I have shared this figure on my blog. Mark and his V.P. are currently the only two Wookey employees left on the payroll; as I have said above, all the rest of the Wookey staff have been furloughed.

Editorial: Are Social VR Platforms Dependent Upon High-End PCVR Doomed?

Today’s Melatopia Festival in Sansar: Less than 45 Avatars Total?

This afternoon, I paid a visit to Sansar to attend the virtual version of the Melatopia South Asian festival. I had a chance to catch up with some old friends and listen to some great music. Sansar is still (to my mind) the most beautiful virtual world, with a vibrant marketplace (44,582 items and counting) providing endless avatar customization options (there was even a mini velociraptor avatar running around amidst the crowd at the concert stage!).

But all the while, I had this nagging little voice in the back of my head, asking: Where is everybody?

To the best of my knowledge (and Wookey may correct me if I am mistaken), the Melatopia event never went above a single instance, and there were never more than 45 avatars total present at the festival (and most of the time that I was there, the figure from the Codex was in the low-to-middle thirties). (UPDATE: There was briefly one time in the afternoon where the festival hit a high if 51 avatars, spawning a second instance.)

Even granted that most people would be watching the show via Twitch, Facebook, Instagram, or YouTube, I find that to be a shockingly, abysmally low attendance figure, especially compared to the multitudes that would have attended the real-life version of this festival, were it not for the coronavirus pandemic.

Frankly, this blogger has long ago given up trying to chastise Wookey for their puzzling lack of promotion of events on the Sansar platform. There’s only so many times I can write the same editorial: YOU NEED TO PAY FOR PROMOTION. YOU CANNOT EXPECT PEOPLE TO COME TO SANSAR IF YOU DO NOT PROMOTE THE PLATFORM. But my pleas (and those of many other observers) seem to have fallen on deaf ears. Whatever Wookey is doing to promote Sansar, it’s clearly not enough.

But it does raise a bigger question that I have only addressed in passing in earlier editorials discussing and dissecting the demise of the old High Fidelity and the near-death experience and resurrection of Sansar. And that question is: was it a mistake to build social VR platforms that would only run on tethered, high-end virtual reality headsets like the Oculus Rift, the HTC Vive, and the Valve Index? The collective term I and many other people use when talking about these VR headsets, all of which require a high-end Windows gaming computer with a powerful graphics card to run, is PCVR.

Let’s face facts: both now and for the foreseeable future, the clear VR headset of choice by consumers will be the wireless, standalone Oculus Quest, especially now that Facebook has released the newer, cheaper Oculus Quest 2. And Facebook will stop selling its Oculus Rift S tethered, PCVR headset (the successor to the original Oculus Rift) this coming spring. Business Insider reported:

“We’re going to focus on standalone VR headsets moving forward,” the company said in a blog post on Wednesday. “We’ll no longer pursue PC-only hardware, with sales of Rift S ending in 2021.”

The Rift line of headsets required a powerful gaming PC to power virtual reality experiences. The headset connected to the PC with a set of wires, but the latest Oculus Quest headsets are able to replicate this experience with a single detachable USB cable in addition to operating without a dedicated PC.

As such, Facebook isn’t outright killing its PC-driven virtual reality efforts. It will continue supporting higher-end, PC-powered virtual reality on the Quest line of headsets. 

“We’ve seen significant growth in PC VR via Oculus Link,” the blog post said, “and the Rift Platform will continue to grow while offering high-end PC VR experiences like ‘Lone Echo II’ and ‘Medal of Honor: Above and Beyond’ well into the future.”

Two years ago, TechCrunch reported on the disagreements within Facebook over the company’s decision to focus on standalone as opposed to high-end, tethered headsets, saying that Brendan Iribe, the co-founder and former CEO of Oculus, was “leaving Facebook  following some internal shake-ups in the company’s virtual reality arm last week that saw the cancellation of the company’s next generation ‘Rift 2’ PC-powered virtual reality headset, which he had been leading development of”.

If Facebook is leaving the high-end PCVR market, what does that mean for the future of social VR platforms which either do not run on the Quest, like Sansar, or do not run at their full technical capacity, like VRChat? (I wrote about my earlier experiences running VRChat on my Oculus Quest here. Although I’m sure the situation has improved somewhat since then, the fact remains that you still need PCVR to really experience everything that VRChat has to offer.) Are those platforms that run best (or only) on PCVR doomed?

No. So relax. (Yeah, all right, I admit that was a click-bait blogpost title. Sue me.)

While the market for high-end PCVR might mature more slowly than that of wireless VR headsets (and definitely more slowly than most overconfident observers had originally predicted), eventually it will come. Devices may come and go in popularity, but the overall trend is clear: ever more data being pushed to your headset, creating ever more detailed environments. Eventually, that screen door effect that can sometimes make it difficult to read text in a VR headset will vanish. Visual fidelity will only improve from here on in. Consumers and businesses will demand it, and they will buy it. It’s inevitable.

While we do not yet know what future headsets various tech companies have on their drawing boards, we can be assured that other companies will definitely step into the PCVR market while Facebook is stepping out, and up the VR/AR/XR game (many eyes are watching to see what Apple will do, for example). As I like to say, a rising tide lifts all boats. I believe that many people who get their first taste of VR from an Oculus Quest will no doubt graduate to more powerful, tethered devices. (Even Facebook may decide to change their minds at some point in the future, particularly if they should see any potential competitors do well.)

I myself have already placed my order for a Valve Index kit to replace my trusty, four-year-old Oculus Rift, as part of my personal boycott of Facebook/Oculus products and services (more info here). I have heard through the grapevine that they are selling well since Facebook’s decision to force Oculus device users to get Facebook accounts, which is not sitting well with many early VR adopters at all.

And I very much look forward to visiting future virtual festivals in Sansar in my shiny new Valve Index!

Sansar Announces an Extension of the Grandfathered Sell Rate for Content Creators Cashing Out—But the Deadline is Tomorrow!

Way, waaay back in November, 2018, I reported on a change to the cashout rate for Sansar dollars which, to this day, has remained controversial among many content creators:

The buy rate will be set to 100 Sansar dollars to 1 US dollar. The exchange rate back (the sell rate) will be set to 250 to 1. However, the sell rate will be grandfathered for current Sansar users at the “legacy” rate of 143 to 1 until at least the end of next year (2019). 

Well, when Sansar went through the wrenching ownership change that eventually led to it being acquired by Wookey, many content creators were expecting that grandfathered rate to be extended beyond the end of 2019, but no announcement was ever made.

But just yesterday, the following announcement was posted to the official Sansar blog by Lacie, Sansar’s community manager:

We are happy to announce that we will be extending the Grandfathered rate of (143 Sansar Dollars to 1 U.S. Dollar ratio) until the end of 2021 to the creators that help our platform grow with their excellent creations. In order to be eligible for this extended rate, you MUST follow the instructions below:

If you would like to apply for the Grandfathered rate – you will need to send in a support ticket by August 28th. 

You can send in a support ticket at the following link: Link

You must include the following to be considered eligible:

1) Title of Ticket: Grandfathered Rate

In the body of the ticket, you must include:

2) Your full Sansar User Handle (Example: Lacie-5474)
3) Your email linked to your Sansar account
4) A link to your Sansar Profile (Example: https://profiles.sansar.com/profiles/Lacie-Sansar )
5) Indicate that you wish to receive the grandfathered rate.

The deadline to submit your requests is August 28th, 2020, 11:59 p.m. Pacific Time, which is tomorrow, so don’t delay!

Lacie also writes:

Additionally, please note that our product team will be developing a forum post announcement in the near future that will outline both our current and future marketplace strategy. Please keep your eyes posted for this.

Although I had put my dream of becoming an avatar clothing creator in Sansar on indefinite hold, I might just apply for the grandfathered cashout rate, in case I change my mind! Sometimes it pays to keep all your options open.

UPDATE 1:00 p.m.: After writing and posting this blogpost, Lacie reached out to tell me that, despite the blogpost mysteriously being dated yesterday, this announcement had been made two weeks ago via the official Sansar Discord channel. Thanks, Lacie!

UPDATED! Linden Lab To Be Acquired By an Investment Group Led by Randy Waterfield and Brad Oberwager

Please note that I am taking the entire month of July off as a self-imposed vacation from the blog so I can focus on my other work, except for sponsored blogposts, and major breaking news such as this. See you in August!

Randy Waterfield (left) and Brad Oberwager (right). Source: LinkedIn profiles

This evening, Linden Research (better known as Linden Lab, the makers of Second Life) dropped a bombshell press release: the small but profitable privately-held company which has been run pretty much independently since it was founded by Philip Rosedale in San Francisco in 1999, will be acquired by an investment group.

SAN FRANCISCO, July 9, 2020 — Linden Research, Inc. announced today it signed an agreement to be acquired by an investment group led by Randy Waterfield and Brad Oberwager. Closing of the acquisition is subject to regulatory approval by financial regulators in the U.S. related to Tilia Inc.’s status as a licensed money transmitter as well as other customary closing conditions. Upon closing, Mr. Waterfield and Mr. Oberwager will join the Board of Directors of Linden Research, Inc.

“We’re excited for this new chapter to begin. We see this as an opportunity to continue growth and expansion for Second Life and our money services business Tilia,” says Linden Lab CEO Ebbe Altberg. “We’re grateful for the ongoing support from our community, business partners and investors. Now more than ever, there is increased recognition of the value and utility of virtual worlds to bring people together for safe, shared, and social online experiences.”

“Both the company and its virtual world community have a unique culture and creative energy that remain important to the long-term success of Second Life,” says Brad Oberwager. “There’s a bright future for both Second Life and Tilia and we’re excited to help fuel these growth opportunities.”

“Since its inception 17 years ago, Second Life has been a pioneer in the concepts of virtual societies, land and economies,” says Second Life founder Philip Rosedale, who is now CEO of High Fidelity. “I’ve known Brad for 14 years personally and professionally, and I’m confident he will bring his passion and proven strategies to help Linden Lab achieve new heights in distribution, scale, and quality while remaining true to the original vision, creativity, and community that makes Second Life unique and special.”

Mr. Oberwager has spent his entire career in technology and consumer-focused companies. Mr. Oberwager is the founder and Chief Executive Officer of Jyve, a Silicon Valley based technology company. Prior to Jyve, Mr. Oberwager owned Bare Snacks, acquired by PepsiCo. Mr. Oberwager is an advisor to several technology start-ups and sits on the boards of several technology and CPG companies.

Mr. Waterfield is the Chairman and CEO of the Waterfield Group. The Waterfield Group has invested in over 100 technology, financial, insurance, bank and other companies.

One commenter on the news over at the RyanSchultz.com Discord server noted:

One of the new investors in the group that bought Linden Research [Linden Lab] is Randy Waterfield, the Wookey guy.

Wookey, of course, is the company that bought Sansar from Linden Lab earlier this year, after the platform went through two rounds of staff layoffs and almost folded.

What does all this mean? Damned if I know! I’m quite sure many Second Life users will be wondering what it all means as well. New owners could mean a shake-up at Linden Lab, and we all know how much some Second Life users hate changes (witness the fuss last year over Tilia).

Of course, it might also be the best thing to happen to the platform, a new opportunity (with fresh investment!) to take it to the next level of growth.

Interesting times, indeed! Stay tuned.

UPDATE 11:08 p.m.: The news took many by surprise, including the team who work on the most popular Second Life viewer program, Firestorm, who tweeted:

Please don’t ask us, this was news to us too.

Longtime SL blogger Inara Pey reported:

I reached out to linden Lab on finding out the news, but was informed the company has no further comment on the acquisition beyond the press release.

However, given that the acquisition will see Mr. Waterfield and Mr. Oberwager joining the board, I would anticipate that – given the nature of acquisitions – it is unlikely there will be any immediate visible changes to Linden Lab, Second Life or Tilia Inc., and, and the company will likely to continue to operate in a “business as usual” mode with regards to both Second Life operations and the community for the immediate future. That said, there will likely be a lot of speculation as to the future of SL, together with concerns / fears as to what the longer-term future might be.

While it is purely speculative on my part, I would hazard a guess that the acquisition will take into consideration the increased interest Second life has witnessed over the last year(ish), and particularly as a result of the SARS-CoV-2 pandemic, and will see in inflow of cash for the company that will allow it to (hopefully) meet its immediate goals with both Second Life and Tilia Inc., and allow both platforms to continue to be developed.

And (of course!) there is an ever-growing comment thread over on the Second Life Community Forums.

UPDATE July 10th, 2:08 p.m.: In response to the intense level of speculation on the above-mentioned comment thread on the SL community forums, Brett Linden, Senior Director of Marketing for Linden Lab, made the following statement:

Good day, all!

Just jumping in to respond to a few of the comments…

A few folks are speculating that this is the end of SL and nothing could be further than the truth. Any talk of dismantling or radically changing the fundamentals of SL that we know and love is inaccurate. While we can’t get into specific details about the deal itself, I want to emphasize the fact that this keeps Linden Lab as an independent venture led by two investors who have a great deal of awareness about what SL is and isn’t. They are excited to join and help us grow both SL and Tilia while also respecting and recognizing the needs and sensitivities of the existing culture and community. 

And, in response to a question about when more detailed information would be forthcoming about the acquisition, and when the new owners would address the Second Life community, Brett said:

Great question! We look forward to being able to share more as soon as we can and I know that Brad is eager to meet the community as we get closer to the closing/approval date.