The Economist November 20th 2021 Business 71Themetaversearchitects
If you build it
T
he planetis black, perfectly spherical,
does not really exist, and is exactly
65,536km around (being the sixteenth
power of two, a number any hacker worth
their salt would recognise). A single 100
metrewide road runs round it. All the real
estate on the virtual planet is owned by the
Association for Computing Machinery, an
academic body.
The Association sells parcels of land to
enterprising programmers wishing to de
velop them. Many do: their efforts are re
sponsible for the houses, bars and sky
scrapers that line the great road. At any giv
en hour the road bustles with people, or at
least, with their 3davatars. Some are going
to work, some are going on dates, many are
just milling around in the way that people
have done since the invention of streets. A
few take their cars—like everything else in
that world, really just bundles of computer
code—out off the highway and “race [them]
in the black desert of the electronic night”.
That is how Neal Stephenson, a science
fiction author, aptly described what he
called the “metaverse”, in a tonguein
cheek cyberpunk novel called “Snow
Crash” (1992). Three decades later, the me
taverse—a sort of immersive sequel to to
day’s textandpicturebased internet—
has been anointed as Silicon Valley’s latest
Next Big Thing. Microsoft is integrating
virtualreality offices and avatars into its
“Teams” remotecollaboration software.
Mark Zuckerberg, the founder of Facebook,
is so enamoured of the concept that on Oc
tober 28th he renamed the firm “Meta” to
signal its focus on this new “north star”.
It sounds like westcoast technoutopi
anism. But some glimpse of the potential
could be seen on November 8th, when Ro
blox, an online game with 200m monthly
users, reported its quarterly results. The
number of daily players rose 31% yearon
year, to 47.3m, propelling revenue to
$509m. David Baszucki, Roblox’s cofoun
der and boss, said that the firm had pre
dicted the rise of what is now called the
metaverse when its first business plan was
written 17 years ago. In 2020, when it was
still privately held, Roblox was valued at
$4bn. Today it is listed and worth $68bn,
not least thanks to an over60% bump in
its shares in the past month.
For metaverse enthusiasts like Matthew
Ball, a venture capitalist, online games
such as Roblox—and “Minecraft”, “Fort
nite”, “Animal Crossing” and “World of
Warcraft”—serve as proof that immersive
virtual worlds can be popular and profit
able. According to Newzoo, a marketre
search firm, consumers spent $178bn on
video games in 2020. Besides blasting each
other, many gamers use them to keep in
touch with distant friends. And they are al
ready happy to spend cash on virtual prop
erty. Newzoo thinks around 75% of the in
dustry’s revenue comes from games that
allow the sale of virtual goods, for example
powerups or clothes for players’ avatars.The videogame industry has been experi
menting with virtual worlds for decades,
says Raph Koster, a veteran designer, ex
ploring how players use them to socialise,
create and run entire economies based on
virtual goods. Interest waxes and wanes as
each generation’s ambitions bump up
against technical limitations, he says. But
now that the subject is in the air again,
some metaverse enthusiasts reckon that
the benefit of all that experience might let
videogame firms like Roblox, Epic Games
and Unity beat the tech titans to the punch.
Roblox is both a game and a platform. In
the same way firms such as Squarespace
provide tools that allow tech neophytes to
create websites, Roblox comes with a set of
easytouse programs that let punters
build and monetise their own 3dgames
and experiences. “Piggy”, for instance, is a
usercreated horror game inspired by “Pep
pa Pig”, a cartoon. In “Adopt Me”, users rear,
collect and trade exotic virtual animals.
(The latest craze is programmes based on
“Squid Game”, a Netflix series.)
“Every experience is built by our com
munity,” says Manuel Bronstein, Roblox’s
chief product officer. The firm busies itself
handling behindthescenes problems,
providing server space and infrastructure
to support its users’ creations. It has its
own currency, called Robux, which is paid
for with real cash. Users can spend it in
what is, in effect, an app store that sells the
powerups or cosmetic items like shirts,
hats or pairs of angel wings which avatars
need to stand out. The developers of those
virtual items get a cut—around 27%—from
each sale.
The game’s popularity has led to other
firms offering experiences within Roblox
as a marketing strategy—a simple but ef
fective way to merge the digital and the
real. Users can wander round a virtual ver
sion of the Starcourt Mall, a place in
“Stranger Things”, another Netflix series.
In May one user resold a virtual copy of a
real Gucci handbag for around $4,100. On
November 15th Roblox announced grants
worth $10m to develop educational experi
ences, including a simulated trip to the In
ternational Space Station.
Mr Baszucki is not the only boss in the
games industry with metaversey ambi
tions. Tim Sweeney, chief executive of Epic
Games, the privately held firm that devel
ops “Fortnite”, has been a fan of the idea
since he wrote “Unreal”, an early multi
player 3dshooter, in 1998. Like “Roblox”,
“Fortnite”—which is, at least on the sur
face, a straightforward action game—has
been flagged as an early example of what a
metaverse might look like. “We don’t see
‘Fortnite’ as themetaverse,” says Marc Petit,
a vicepresident at Epic, “but as a beautiful
corner of the metaverse.”
Also like Roblox, it has seen crossovers
from the real world. In 2019 “Fortnite”Besides the tech titans, video-game firms want a slice of the metaverse pie