Metaverse startups must heed the mistakes of the past 40 years of virtual worlds

When it comes to the development of the metaverse, we think of companies like Epic Games with Fortnite and Roblox with its huge world, or the visions of the future from and films like Ready Player One. These are all huge undertakings from huge companies.

Yet the metaverse won’t just be the domain of big business (though it’ll no doubt have a huge piece of that pie). Startups are going to say, and I talked about the role these companies will play in the metaverse’s growth with CEO Frédéric Descamps of Manticore Games and CEO Raph Koster of Playable Worlds (and whose design credits include the MMORPG worlds of Ultima Online, Everquest, and Star Wars: Galaxies). This was part of our “Metaverse Startups” panel at the Into the Metaverse event.

What’s interesting here is that Descamps and Koster’s companies represent two distinct approaches to metaverse development. Manticore runs Core, a platform for people to make games — it’s all about user-generated content (the path Roblox has taken). At Playable Worlds, Koster and co. are building a cloud-native sandbox MMO.

“One of the most amazing things about the topic of the metaverse, one of the many, many interesting aspects, is there are so many ways to go about it,” Descamps said. “We’re creating a multiverse, a place where people can gather and play all sorts of things. There is not just one, single definition of it.”

And for UGC-driven metaverses, you need to build tools for folks to create.

“We’ve built some tools to allow almost anybody in the world to make games, to create worlds … and share that with other players. But other people have taken a different approach. Some start with a game, some start with music — the concept of live events. For some, it’s small, like a glorified chat room, a glorified, graphical chat room. And some are all in VR.

“And [that variety of approaches] is one of the most exciting aspects of what we do. … The good thing is that startups can move very fast. We can truly innovate. We can build everything from scratch, from the ground-up.”

Descamps noted that startups don’t need to build on legacy tech and systems of other companies as another key advantage they have when it comes to building the metaverse. New ideas, new approaches can bubble up and give them an advantage over a Roblox, an Epic Games, or Facebook.

“Everybody is talking about big tech these days. The beauty in having startups participate in building something like this is really is the about the freedom to establish new kinds of standards, new kinds of ways of doing things instead of falling into familiar old molds,” Koster said. “There’s so many ways to do this. I’ve come to be a big believer that you need to lead with entertaining content first. As Frédéric said, we’re seeing that happen across a wide range of initiatives, ranging from the Fortnite-style ones to live concert things and so-on.

“We’ve come a long way from Snow Crash. There used to be a vision of this being Snow Crash. But these days, people understand that metaverse might mean new takes on Pokémon Go as well. It has a very widespread — for me, the common element is around server-side identity, server-side gameplay as opposed to experiences that people install as apps. I think that’s a common element that cuts across those definitions.”

Do we get it?

Startups need to build clients and communities, and I wondered if this is hard because the metaverse remains such a squishy idea. When it comes to startups, what is the metaverse? How do you educate people about it?

Maybe the better way to think about it is … will it be the users who define it, not those building it?

“For a long time, the concept of metaverse materials was arcane. It was for the cryptic panels at GDC that nobody would attend, except maybe Raph and I. It was for the theoreticians of gaming, people who read sci-fi. Today, it’s very different. Today, the customers, the players — who by the way are the most important part, as Raph was alluding to — are the ones who are going to define ‘what is the metaverse and the multiverse.’ We’re at the turning point where it used to be an arcane topic in gaming, but now, everyone in gaming knows it,” Descamps said.

“But now it expands beyond gaming because you have the hedge fund guys, the [venture capitalists], and even the consumer … I think if you go to the consumer with the multiverse, it’s going appeal to a very small sliver of them, like with an MMO. But now, there’s a much broader reach, a much broader vision, where you don’t have to explain what the metaverse is. You can get to that later.”

It’s still important to establish that common ground — hence why we keep throwing around Ready Player One, Snow Crash, or Fortnite when we talk about the metaverse. These are concepts folks can understand quickly.

“These days, with the rush of investment, the of rush speculation, we find a lot of people who define it around virtual goods and cryptocurrency. Other folks might define solely around virtual space. There are some folks who define it solely around UGC. There are a wide range of assumptions people have, and it’s driven by popular media,” Koster said. “People think of it in terms of Snow Crash — No! Ready Player One — No! The holodeck — No! You can almost pinpoint where they’re coming from based on what media they were reading when they were 12.

“You do have to establish some common ground when you talk about it, because there are so many directions in which it can go.”

Do investors get it?

Startups court another audience beyond users like you and me. They’re looking at the folks with the money: the venture capitalists, the investor funds. They have the fuel these startups need to help the metaverse grow. But do the monied folk get what they’re building?

Part of it depends on the type of investor, Deschamps explains.

“What has really helped, quite frankly, is not just the COVID and the explosion of gaming activity but also Roblox going IPO, Unity going IPO,” he said. “All of a sudden, these amazing models are there for all people to see, not just those in gaming.”

He notes how investors like Mitch Lasky’s Benchmark (a Manticore backer) are familiar with the UGC model thanks not just to Roblox but the success of modding. Remember: PlayerUnknown’s Battlegrounds grew out of a mod for Arma 3. He also noted the wave of creators from YouTube and TikTok that was once looked down upon are now not just drawing attention and investment but also are mainstays of today’s entertainment, and how that’s happening with creators in games.

Koster noted how the “early steps” are getting validate. Think of how folks like Star Wars: Rogue One screenwriter Gary Witta turned Animal Crossing into a talk show.

“Things like that open doors for people to think about this in a different way, and I think COVID has prompted a lot of that thinking because we got to see it happening. There’s a flurry of new startups and initiatives around how we do better gatherings than just Zoom calls,” Koster said. “Things with spatial audio, more avatar like, are cropping up as people realize that [Zoom and other call apps] are an unnatural mode of interaction, compared to something with more spatial quality to it.”

And the money is seeing it, too.

“The big thing, having been through a few cycles here, we have seen more than once this rise of virtual worlds go up-and-down. In a lot ways, metaverse is often — we can think of it as connected virtual worlds, a network. We’ve been through more than one boom, and a lot of those approaches have been tried. … It’s taken Roblox a dozen years to build its flywheel up to where it is now.”

And when it comes to lessons learned, I brought up how folks were getting married in Everquest 20 years ago, and he went even further back.

“We literally have 40 years of history with virtual worlds. The first launched in 1978. This is not a new discipline,” Koster said. “There’s a lot of lessons learned. And one of the things we have to ask ourselves — and with investors, I’m sure it’s always a question — is how many old mistakes are we startups going to make again. That’s one of things that has to be on the top of their minds. The technology has evolved; it’s easier in some ways make these things. On the other hand, it’s harder in a lot of other ways. We’re now in a very different world. It’s no longer a hobbyist audience — it’s a broader audience. We have seen the impact of big-tech social media on our culture. All of those questions get raise now when you talk metaverse.

“It’s no longer a cute hobbyist techno-fantasy. It’s now a real thing.”

Even if it’s all virtual.