The Corporate Metaverse Can’t Compete

I recently spent part of my afternoon throwing giant Wendy’s Baconators at a basketball hoop, and no one was there to see it. 

When I entered the Buck BiscuitDome—a low-poly stadium shaped like a giant burger, one of the many mostly barren “worlds” to visit in Meta’s Horizon Worlds—and saw that no one was there, I wasn’t surprised. Recent reports revealed that Meta is bleeding users by the hundreds of thousands, and that the company can’t even get its own employees to hang out in its virtual reality metaverse. 

As I walked into the stadium and picked up the Baconator waiting for me, the emptiness allowed my mind to wander. How rare and precious it is, in these days of constant noise, to be really alone online, I thought. To fling air balls at a cartoon hoop in peace.  

The BiscuitDome is an abandoned relic of a Wendy’s brand activation; digital litter left from a one-month March Madness-themed event earlier this year. But it’s emblematic of what many corporations seemingly think that the metaverse is for: pricey ads that might draw a few eyes at first, and then fritter off into forgettable detritus. Brands like Absolut Vodka, Balenciaga, and Prada are staking their claims on the metaverse. But compared to popular virtual social platforms—vibrant, active spaces in VRChat, Rec Room, Roblox, or even the still-thriving, 19 year old Second Life—these glorified billboards are sad comparisons. 

At the 1990 SIGGRAPH conference for computer graphics and interactivity, where he appeared on a panel titled “Hip, hype and hope—the three faces of virtual worlds,” John Perry Barlow, a cofounder of the Electronic Frontier Foundation, was quoted as saying that bullshit is “the grease for the skids upon which we ride into the future.” As we watch Mark Zuckerberg click his avatar’s heels to show off virtual legs that don’t yet exist, and people clamor to pay too much money grabbing virtual land to immediately recreate entrenched landlord-tenant structures and financialized real estate, everything about the new metaverse hype seems to be riding that grease.  

Corporations like Meta are attempting to manufacture enthusiasm for the metaverse (more specifically, its own metaverse). Clearly, it isn’t working. In its recent earnings report, Meta’s Reality Labs unit, which operates its metaverse and virtual reality projects, reported an almost 50 percent decline in revenue and an operating loss of $3.7 billion in the last year. Meanwhile, virtual social spaces like Roblox, VRChat, Rec Room, and Second Life already have loyal, active, creative user bases. People who were involved in these successful spaces told Motherboard what modern pushes toward a corporatized metaverse are missing. 

WHAT EVEN IS THE METAVERSE? 

It’s almost impossible to read anything about the metaverse that doesn’t mention Neil Stephenson’s Snow Crash. Most mention that it’s where the word was coined, and stop there. Wagner James Au, author of The Making of Second Life: Notes from the New World, told Motherboard that Stephenson lays out a detailed blueprint of what the metaverse is meant to be. Au’s rough definition: the metaverse is “a vast, immersive virtual world simultaneously accessible by millions of users through VR and other devices, highly customizable avatars and powerful experience creation tools. It is integrated with the real world economy and compatible with external technology.” 

In Horizon Worlds, users can build their own worlds using Meta’s tools, but everything is done within Meta’s walled garden (and building also happens only inside a headset). By comparison, Rec Room—the first VR social world to gain unicorn status, with millions more users than Horizon Worlds—has many of the same issues as Horizons, with rigid avatar creation and a focus on world-building as the main creative outlet. The difference is that it meets people where they are, and most of them are anywhere but in a VR headset. The overwhelming majority of its users are on platforms other than virtual reality. This is intentional: Rec Room initially launched as a PC-VR game, but when VR headset adoption didn’t take off, the company expanded to everything else. Now users are on Xbox, Playstation, PC, and mobile phones in Rec Room. As a result, Rec Room has gained 75 million lifetime users since 2016, including a 640 percent year-over-year increase on mobile. Horizon Worlds has less than 200,000 active users.

“We want Rec Room to be the most radically cross-platform social app in existence,” Rec Room CEO Nick Fajt said in 2021. “At the end of the day, Rec Room is trying to connect people, not devices.”

According to the Wall Street Journal, more than half of the Oculus headsets purchased aren’t used again after six months, and the number of users actively online at the same time is fewer than VRChat or Second Life. Even fewer seem to want to use one to purposefully subject themselves to advertising or attend daily workplace meetings. 

“The brand experience wants to create a store in a shopping mall, which is a very top down presentation of what a brand offers,” Rosedale said. “And so the question is, are there people that are willing to go to that, today? Do they have any interest in that? And of course, the answer is no. And that’s why we all feel like Facebook’s a bit off the mark on this.” 

Rosedale said that the fraction of people who are willing to become avatars and interact with strangers in the virtual world is negligible. “These words are not for everybody,” he said. The ones who do want to immerse themselves in a “second life,” or commit to a VR rave scene, is a cohort of “fascinating, wonderful, special people,” he said. “But it is by no means a horizontal slice of any kind of society.”

For most adults—the people with the means to buy a VR headset or a PC that can run a resource-heavy platform like VRChat—the allure of a virtual life isn’t enough to get them in, and shooting Baconators definitely won’t do it. 

WHAT CORPORATIONS THINK VS WHAT IS REAL: REPLICATING REALITY IN VR 

When faced with a near-death experience, people tend to rethink their priorities; faced with it collectively during the COVID-19 pandemic, many people thought for a moment that this was our chance to leave behind old, exploitative notions of work and capitalism, and embrace solidarity, empathy and social connectedness. 

To brands and their respective corporations, this moment in time represented an opening.  

Jiamei Bai, associate partner at McKinsey, recently told Fast Company that there were “10 years of digital adoption in a matter of 100 days during COVID.” This wasn’t because those companies offered anything new or exciting, however. It was because people were forced into those choices, buying price-gouged toilet paper on Amazon from inside their homes and logging on to “Zoom happy hours” with people confined to video chat tiles. But for corporations, this was a thrilling time.  

Scott Belsky, chief product officer at Adobe, spoke about this at a tech conference earlier this year. Before the pandemic, he said, brands usually had real-life photoshoots of their products, which involved on-site marketing teams, photographers, directors, and people to stage the can of Coke or whatever the item was—and if it needed to be revised, the process had to be repeated. People, in real life, had to get paid. “When the pandemic hit a lot of these companies were forced to render as opposed to shoot [in real life], and so they adopted a 3D production pipeline,” Belsky said. “What we’ve seen from those companies is that they never went back, you know. That it was a better-faster-cheaper moment.” Now that the metaverse is here, those companies that went “better-faster-cheaper” are “metaverse ready,” able to move their 3D rendered soda cans to virtual worlds. 

If they want to keep up, new metaverse investors should be asking themselves why people would want to visit their world, and whether they can create things, express themselves, and connect with other people within it in ways they can’t elsewhere, Hornyak said. “There are a ton of specific communities in VRChat that couldn’t really exist elsewhere that pull in tons of users to the platform,” he said, pointing to communities like the thriving VRChat rave scene, where hundreds of people gather in virtual clubs on weekends, and groups that build cars to show them off or meet up with other people to speak sign language with. VRChat has one of the most active social scenes of any virtual social platform out there. Its active users peak every weekend around 11 p.m., at around 70,000 to 75,000 people logged in at the same time.  

“I think when you cut through the buzz, being successful in this space is just about creating a solid product that appeals to an actual audience, and building a community from there,” Hornyak said. “You can’t make a social VR platform—or a metaverse—without keeping in mind that people have to actually want to be in it.”

Many corporations are betting that not only will people want to hang out inside of versions of real-life stores in the metaverse, but they’ll want to go to work every day in replicas of traditional office spaces, too. This is another of Meta’s apparent mandates in its push for virtual reality development: to make Workrooms, its VR application for the workplace, slick enough to use for meetings. Like bosses calling employees back to a return to the office post-pandemic, it’s easy to imagine managers forcing teams into meetings in VR that could have been emails. As the next step beyond office workers getting accustomed to days hooked to Zoom, the thinking seems to go, workers can bridge the body language and physical presence gaps present in video meetings by assembling in the VR equivalent of the “world if…” meme. 

“The more immersed you are and the more you can see other people, it really starts to feel like you’re interacting with that physical person,” Shane Scranton, CEO of VR meeting software company IrisVR, said in 2020. But so much context still remains missing in virtual reality: the ability to make real eye contact, to know when someone is leaning in to listen closer or leaning back to take a pensive moment, and quality facial expression tracking, to name a few elements of body language that no commercial VR meeting software out there has nailed. And the same fatigue that plagues Zoom workers will be present in VR too, in more dimensions than ever: most headsets on the market now are hot, sweaty, and uncomfortable to wear for long periods, and induce motion sickness in many people.  

Tuong Nguyen, senior principal analyst at research and advisory firm Gartner’s, told the Washington Post that this all amounts to a “huge” nonstarter. “You’re saying, ‘I’m giving you this tool to do your job, but you might get a headache or throw up after.’” 

Companies have been calling virtual worlds the future of work since virtual worlds have existed—even before computers could display graphics, let alone immersive 3D platforms. In 1972, the Palo Alto-based research and development company Xerox PARC promised the workplace of the future in computers that could display the news and send articles to coworkers; almost 30 years later, PARC computer scientist Pavel Curtis created one of the first online role-playing games, LambdaMOO, which was entirely text-based while being immersive and  interactive. Former journalist Julian Dibbell, who documented a yearlong project embedding in LambdaMOO, told Motherboard that even at the time, the focus on online worlds as office spaces seemed off the mark to him.

“I felt that a lot of people were going down the wrong path, even then,” he said. “And yet, in order to get a crowd into your virtual space, it has to be a game really of some kind… Maybe play is really what it’s all about, on some level. It doesn’t have to be a game, necessarily, but again, what do people get here that they don’t get in the real world? It’s a sense of malleability and fun. And, the office stuff is not so much that.” 

GOVERNANCE, MODERATION, AND THE MESSY RISK OF HUMANS IN YOUR VIRTUAL STORE

Jim Purbrick, formerly a senior member of the engineering team at Oculus, once told everyone at Oculus to go read Dibbell’s book My Tiny Life, which not only contains his legendary 1993 essay, “A Rape in Cyberspace” (which documents a user taking non-consensual, sexualized control over another user’s virtual persona through explicit text descriptions), but is both a warning about losing oneself in the metaverse, and the lessons learned in trying to keep such a space safe and sane. Over the course of his year-long experiment embedding in this virtual world, Dibbell observed (and made) friends and enemies and lovers, and had his first cybersex experience. People had to decide together how to deal with harassment, trolling, and hate, in a nascent virtual social world before corporate, codified terms of service or community guidelines became commonplace. People kept coming back, even when it got messy, because they were invested in each other and what they built. Users had a hand in everything that happened and what other people “saw,” from the environment to the social mores. 

For anyone making a virtual world today, this is the dream: to build a world so immersive that people can’t stay away, building their own, organic communities and relationships within it. But it’s also a tale of real moderation struggles. How does one build a freely-growing community with rules and rails? My Tiny Life is instructive because it shows people struggling with these issues of governance and moderation, years before 3D avatars entered the equation. People remained committed to the community because they felt some stake in how it formed, and how it was run. 

For many companies, the thought of letting people run roughshod over their hard virtual work would be untenable. Unpredictable humans will do unpredictable, and potentially unsavory, things to your nice sterile VR world or shiny new brand activation. In 2006, after it opened a news bureau in Second Life, CNET learned this the hard way when a protestor pummeled a live interview with custom-made flying penises. 

But the risk of flying penises has to outweigh the payoff of a truly interactive space. Customization and control over one’s own experience—in a social way, beyond the same 10 pre-programmed hair, nose, or outfits to choose from—is central to immersion. 

“It’s the social stuff that you really have to get right, in order to make it take off,” Dibbell said. “It’s not usually going to be just because there’s some new dazzling interface, that people are going to want to come back to a particular place. It’s going to be about, what can they do there that they can’t necessarily do in their physical world? And how does it connect them to other people?” 

This “live construction of reality” is where the magic happens, Rosedale said. “It has to be collaborative, though. Not, ‘I do whatever I want,’ but, ‘you and I figure out what to do to get there,’” he said. “That’s the thing that’s electrifying about virtual worlds. And the big companies have both not completed the technology to do that, and don’t have the right mindset.” Brands think they can build virtual storefronts that will be captivating enough to draw people in and keep people there—but these experiences are mostly devoid of substance. “They’re imagining that they can build a designer boutique that’s super cool to hang out in. And I think that statement is just false,” Rosedale said. 

Companies have fallen into this trap for decades. Many big brands, including General Motors, 20th Century Fox, Intel, IBM, and Adidas, opened up shop in Second Life in the early 2000s, as hype for the platform peaked. They spent, on average, six figures each on campaigns that look a lot like the virtual malls and billboards we see today in more modern virtual worlds, commissioning Second Life architects and marketing firms to set up their campaigns. American Apparel claimed to be the first real-life retailer to open a store in Second Life; the company bought a private island and opened a store where people could pick out items and have the real thing delivered to their homes.  

The few instances of successful campaigns worked with users in already-existing spaces, instead of trying to force people into boring new virtual malls. And they know their audiences. In spaces like Walmart Land in Roblox (not to be confused with VRChat Kmart, the unsanctioned project where people LARP as Kmart employees), there’s not a lot of aggressive Walmart branding or stuff to buy. There’s just Roblox games that kids would enjoy, and live musical events with Gen Z artists. In L’Oreal’s brand activation in Second Life, the company placed replicas of its cosmetic products within an already popular user-generated world called Greenies. 

“If I was going to leave you with any conclusions, it would be, don’t take Meta’s framing for what it is,” Au said. “Corporate engagement is simple. You just have to respect the community and the platform, and understand the medium. It’s a totally different thing than traditional social media. It won’t be the dominant thing, it will be a large part of it.” What worked on Instagram probably won’t work in an interactive, live world.

The BiscuitDome is the kind of place you enter once, look around, and walk out of, having gained nothing—not even a craving for a bacon cheeseburger, an incredibly low bar. If we’re really meant to exist in the metaverse someday, spaces like these add nothing of value toward that future. If anything, they sour people to the prospect.

After I got tired of shooting burgers, I went to Meta’s Horizon Venues, its event space. I walked past a few people milling around, and through a poster advertising a Death Cab for Cutie show. A room with a balcony opened up in front of me, and I stood at the railing, suddenly rendered tiny and cartoonish in front of a video of the band playing (which was 30 feet tall, for some reason). One other person was there watching, too. 

I stood facing Ben Gibbards’ weirdly giant visage for a moment, then turned to my left, and realized that the other person I’d passed earlier had walked over and was standing at the railing next to me. Her mic was muted and so was mine, but she raised a hand to wave. I waved back. 

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