Business in Virtual Worlds

Metaplace: Buyer Beware – The Apple or the Geocities of 3D Worlds?

Raph Koster is a leader in virtual world development – he’s seen it all, done it all, and has a proven track record of success. In forming Araea there was significant interest and excitement in what he’s come up with next – a follow-up to Everquest or Star Wars, a new platform, a new piece of technology?

(Edit: See Raph’s reply to this post below)

Metaplace was the answer. As Raph recently commented:

“We are re-inventing virtual worlds that stop working like AOL,” Koster said, “and start working the way the Web does … You can build a massive multiplayer game in minutes, there are style sheets to make building easier.”

“Virtual worlds have enormous potential,” Koster said, “but they are obsolete, built on 20-year-old technology. We don’t know what you’ll do with [this], but that’s the power of this new medium and that’s why we’re so excited.”

In Raph’s view, the world needs a platform that is open to users to develop virtual worlds, games, 3D spaces using tools that are interoperable, and that allow them to make some coin while they’re at it.

Sound familiar? Second Life was built as an environment built by its users. Raph claims that the proprietary walls need to come tumbling down – users should be able to slip from world to world as easily as they move around the Internet. This isn’t the case with Second Life in spite of its ability to move content back and forth with external databases and Web sites.

Raph’s comment about avoiding the AOL model of the net is telling, especially when compared with the Electric Sheep Company whose recently stated goal with its onRez client for Second Life was to create a more “AOL-like experience” for users of virtual worlds, in this case Second Life.

There is significant hype about Metaplace. Raph’s leadership inspires confidence that as a platform for developing 3D content they have as good a chance of getting it right as anyone. Their success will largely rest on the tools being simple enough, stable enough, and ubiquitous enough that anyone will be able to set up a 3D space without needing to learn C++ (or worse, LSL).

I’d like to offer a more critical review, not because I don’t think there’s significant room for a platform such as Metaplace, but because Metaplace (if it does become ubiquitous), will play a large role in shaping how we think about virtual worlds and their creation.

These are random thoughts. They’re based on a nagging feeling I have about the platform – the same feelings that tickle the back of my mind about Linden Lab’s slow move to open up its own architecture. Also, they’re not based on direct experience with the platform itself – still in closed Beta, Metaplace may be such a significant advance in platform tools that it becomes the Microsoft of virtual world building (did I say Microsoft? Oh!!! THAT’S where that nagging feeling is coming from).

Claim: No More Walled Gardens
Much of the hype about Metaplace is driven by excitement at the idea that anyone, anywhere will be able to construct their own game, world, 3D social space, education center, etc. Unlike Second Life, Metaplace seems to offer two additional promises on top of the idea of user-generated content:

1) your “world” will be your own, with greater control over the entry into that space by other users and their objects (in Second Life, your Victorian sim can be visited by a bunch of robots and with object entry on, you might end up with a rotating banner in the middle of your town square)
2) the ease of object creation will address the steep learning curve that users face in places like Second Life, and make 3D creation accessible to more users (with the benefit, as in SL, that scripters, texture artists, and modellers will be able to sell their product to others).

Reality: One Large Walled Garden, as Long as its THEIR Walled Garden
In a recent posting on their business model, Metaplace was asked whether their technology could be licensed so that “builders” could tinker with the Metaplace tools towards enhancing, adding or improving on the core software. Its unclear what their technology will include – for example portable “open source” plug-ins? Not sure. But they do comment on the licensing of tech: The response:

Can I just license the tech?
No. As you’ve probably noticed, we’re big on openness and the value of the network. We believe that each world created using the Metaplace technology makes the entire network more valuable. There’s more users, more content, more scripts and it’s one more step towards making virtual worlds ubiquitous. Long-term, we see ourselves evolving into a network service provider that handles things search, DNS and other network-level services. To accomplish this goal, we want to encourage as many worlds on the network as possible. Adding another walled garden doesn’t help us accomplish that goal.

OK, am I missing something? First, they say they’re big believers in openness. In giving everyone value because of how free and open the tools are. And then they say that all of this openness will be within the closed walls of Metaplace itself.

Let’s not fool ourselves here. The business model may have variations (especially in how the individual “worlds” are partitioned off) but that doesn’t sound THAT much different to me than owning a business in Everquest or a store in Second Life – it may have your name on it, but you’re still within someone else’s walled garden.

I don’t place a value judgement on whether this is good or bad – I do place a judgement on promoting Metaplace as being “more like the Internet and less like AOL” when in fact users will have options around how their worlds are constructed and accessed but no control over how their worlds are hosted.

Will Metaplace put copies of its technology in escrow in case of business failure?

Claim: We All Win Financially
Metaplace makes a great deal about how “free” it is. Anyone can build a space at no charge. As well, Metaplace stirs up excitement because it positions itself as similar to Amazon Associates, and highlights the ability to make and sell objects, sprites, scripts, etc. They say:

Can I cash out of the system?
As long as what you’re doing is legal, we’ll gladly let you cash out in a manner similar to Amazon Associates or Google Adsense.

Reality: Metabucks as a Control Tool and ASP Pricing Model
Again, I don’t make any value judgements here, but a few things: one, Metaplace is creating its own currency. If Metaplace is also arguing that it’s “like the Net” and NOT a walled garden, why do they need to create a new currency system? What’s wrong with the US Dollar, or a currency of the user’s choice?

I can’t see any argument as to why they need to create an artificial currency unless it’s to create a layer of transactions over which they can take a “cut”, by being able to centralize the serving of that currency. If their model is to be a “network service provider that handles things search, DNS and other network-level services” then where does the creation of a virtual currency fit in? Will network-level services include creating virtual monies, acting as virtual banks, and charging virtual banking fees? Who is going to set the exchange rate? Will Metaplace artificially float its currency if needed to hike or decrease its value (as a way of defeating MOOflation, perhaps?)

Second, Metaplace acknowledges that if your “build” reaches a certain size, bandwidth, etc., they will have to charge a fee. Currently, their direction on this point amounts to:

We don’t know the exact cutoff size yet, but we’ll be figuring it out over the next few months. If your world exceeds that cutoff, we’ll change you in our virtual currency and give you the tools to pass on some, or all, of the costs to your players if you want.

OK, I admit it’s a beta phase, and I acknowledge that sites like Flickr allow you in “to a cap” for free and then charge for storage and bandwidth, but we’re talking about something here that’s a little bit more than a few albums of family photos. Here’s a scenario:

- Someone creates a game using the Metaplace platform.
- They do it for fun, expand bit by bit, free at first, then maybe pay a hosting charge
- Something about the game strikes a chord and suddenly there’s 1,000 users a day, then 10,000….then 1,000,000?
- OK, hold on, now I’m paying a fee to Metaplace, and maybe charging a fee to users, but Metaplace is taking a cut that THEY determine (and likely have the right to change at will). I want to move my content onto my own host, using my own viewer, and to port my content onto a new platform and pay a “flat fee” to license the Metaplace tech.
- Reponse from Metaplace: sorry, we don’t license the tech, and by the way we’re taking a cut as well from all those sales, currency trades, etc. You’re stuck with us, have a nice day.

Claim: Good Clean Fun
Metaplace is advertising itself as primarily a site where individuals can create entertainments – games, mini MMORPGs, social environments. Stuff is easy to make. Easy to sell. Easy to access. Easy to make some money off of.

Reality: We’re Covering Our Butts and You’re Stuck
Metaplace has made a very strange decision, which is to lay a claim that in order to respect LAW, they need to put safeguards in place to protect the flow of currency (although the flow of objects WITHIN the walled garden will be left to the community to report). I’m not a lawyer, but one of the clear arguments in virtual worlds is that the platform owners are like ISPs – they provide a platform, hosting, etc. but can distance themselves from legal issues related to content because they can’t be expected to monitor every user.

Regardless of the legal reasoning, and I DO believe its better to create safeguards before government steps in to create them for us, it’s important to recognize limits to a user’s choices related to “cashing out”. A few quotes:

and our digital currency cannot be transferred back into real world money except by approved business partners who have agreed to a terms of service that prohibits illegal content.

How will we get a return on our investment for making and promoting said game using the Metaplace platform?
The issue here is about legality; ultimately, the approving body is actually governments, not us. In some countries, for example, running a world that featured gambling and cashing out the profits is illegal. We need to do a verification step so that we can be sure we (and you) are respecting the law.

Who are these people who will be verifying the legality of the content I’ve created? If I can’t charge dollars instead of metabucks for access to the content that I supposedly own (and rent space on Metaplace to host, in one sense), then why do I need an intermediary again to convert this new currency into US Dollars?

Claim: A Large, Open Community of Creators, Sharing, Selling, Building
Our motto is: build anything, play everything, from anywhere. Until now, virtual worlds have all worked like the closed online services from before the internet took off. They had custom clients talking to custom servers, and users couldn’t do much of anything to change their experience. We’re out to change all of that.

Reality: Uncertain Interoperability, the Apple of Virtual Worlds
First, in the current version being tested in Alpha, Metaplace supports 2D and 2.5D, but NOT 3D, although there are plans for this in the future.

There is uncertain current or future support for interoperability with Maya, 3ds, and other assets (can someone correct this if I’m wrong?)

And a final reality – Metaplace may well be the Apple of Virtual Worlds. It may be as beautiful as an iPhone, as functional and as easy to use as the jog wheel on an iPod. Finding assets may be as easy as accessing iTunes, and the cost “per song” may be a reasonable $0.99.

And Apple is one of the great business stories of our time.

But Apple is not Linux.

One last quote from Metaplace:
As with most free things on the net, we will have some advertising. However, if you’re a premium world builder and want to turn them off, that will be an option as well.

OK, first: “As with most free things on the net”…….I think you might mean:

“As with most free things on the net launched by commercial enterprises or firms funded by venture capitalists in California

But taking away all the fun stuff about 3D, gmes, MMORPGs, communities of users, etc., doesn’t the whole thing sound not only like Apple but also like Geocities, or perhaps an ad-heavy mySpace of 3DSpace: Build your own site for free, pay more to get more bandwidth, use our tools to make your site, and oh, if you every want to move it to your own server, sorry! And we’ll be serving you ads unless you pay to get rid of them.

There’s a HUGE demand for something like Metaplace and it represents what may be a defining moment in creating greater ubiquity of 3D(ish) content on the Web – but buyer beware, and let’s not be solely distracted by the tools.

Apple is beautiful because by closing the ‘walls” around the aesthetic which is Apple, they preserve the aesthetic and the ability to continually refine the user experience according to their proven, experienced eye. A closed garden is not a bad thing, but what I dislike is language implies a sort of portable, user-defined community that Metaplace surely is NOT.

I love my iPod. Would I buy one today? I’m not so sure. The lack of portability of media that I BOUGHT is perhaps understandable, but today I would rather buy open format audio, or rip from a CD, not be stuck with one major source of content, one closed platform, and would prefer to keep more control in my hands than Apple (no matter how gorgeous their iPhone is for example, it’s still a LOCKED platform).

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