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Facebook is racing the game industry to the metaverse

An image from Facebook Horizon, a virtual reality social app available on Oculus.

This week in Protocol Gaming, your weekly guide to the business of video games: Mark Zuckerberg stakes out his claim to the metaverse, fallout from the Activision Blizzard lawsuit intensifies, and Mortal Kombat hits a major milestone.

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The Big Story

Facebook has its eye on the metaverse

Mark Zuckerberg has long publicly flirted with the metaverse, but now he's all in. "Our overarching goal across all of these initiatives is to help bring the metaverse to life," the Facebook CEO told employees in an address last month.

Then, in a wide-ranging interview last week with Platformer's Casey Newton, Zuckerberg expanded on the topic, saying over the next five years he hopes people stop thinking of Facebook as a social media company and start seeing it "as a metaverse company." On Monday, the company formed the Metaverse Product Group, with a number of executives taking on roles in the new organization.

Facebook's investment is the latest acknowledgment that there is something bigger, better and more lucrative than the internet we know today, even if we can't all even agree on what it looks like. Now, there's an ongoing race between tech and gaming companies to claim spots on the ground floor. (As for what the metaverse actually is, a good starting point is venture capitalist Matthew Ball's fantastic series of essays on the topic.)

The game industry arrived to the metaverse early. Fortnite creator Epic Games and Roblox have both proclaimed desires to turn fast-growing digital worlds into the early building blocks of a next-generation internet. They're just the latest in a long line of game companies to draw inspiration from Neal Stephenson's seminal futurist concept.

  • These platforms are already hosting big-budget events, mashing up intellectual property and acting as the home to real people's virtual avatars in social spaces with built-in economies. These elements don't make Fortnite or Roblox metaverses, but they are components of what an eventual future internet might involve.
  • "We've had this vision of the metaverse way back in the 2000s, when we made our first business plan," Roblox CEO Dave Baszucki said in the first episode of his new Tech Talks podcast, aptly titled "Stepping into the Metaverse."
  • "We've had metaverse aspirations for a very, very long time. It started with text chat in realtime 3D with 300-polygon strangers. But only in recent years has a critical mass of working pieces started coming together rapidly," Epic CEO Tim Sweeney wrote last month.

It's clear why Facebook wants its piece of the metaverse. A huge component of whatever shape the internet takes next involves social interaction. Just like gaming companies, social media firms are great at incentivizing humans into predictable behaviors, and monetizing that attention is how modern gaming and tech empires have been built. That's where VR and AR come in.

  • Facebook has been investing for years in VR and AR based on the idea that the reign of the mobile app might soon be over. The slow but steady success of the Oculus platform is proof its first-mover advantage has been worth the cost.
  • Facebook's Horizon social space is a kind of proto-metaverse designed to try to imitate the kinds of real-world presence and social interaction we might enjoy when VR and AR are fully mature. Facebook hopes these kinds of virtual spaces will open the door for new types of employment, commerce and media.
  • A true metaverse, as Zuckerberg sees it, will have it all. "People will hang out, you'll be able to really feel like you're present with other people, you'll be able to do all kinds of different work, there'll be new jobs, new forms of entertainment," he told Platformer.

Zuckerberg is aware Facebook can't "own" the metaverse. The exec was quick to acknowledge in his interview that full interoperability is a commonly understood pillar of the metaverse. Anything less and you risk sliding into dystopian territory.

  • Underneath its cheap nostalgia trip, "Ready Player One" paints a rather bleak picture of a future destroyed by income inequality and dominated by a giant do-everything tech conglomerate. The last thing Zuckerberg wants is his company compared to corporate villains in cyberpunk storylines.
  • "The metaverse is a vision that spans many companies — the whole industry. You can think about it as the successor to the mobile internet. And it's certainly not something that any one company is going to build," Zuckerberg told Platformer. "I think a good vision for the metaverse is not one that a specific company builds, but it has to have the sense of interoperability and portability. You have your avatar and your digital goods, and you want to be able to teleport anywhere."
  • Referencing "Ready Player One" directly, Zuckerberg added: "Hopefully in the future, asking if a company is building a metaverse will sound as ridiculous as asking a company how their internet is going."

We don't know Zuckerberg's true intentions, and he has a history of sugar-coating capitalist subjugation with euphemisms like "connecting the world." Perhaps Facebook sees the metaverse as a matter of survival, or simply an idea worth investing in because the payoff could be enormous. But what we know is that the game industry, and Sweeney in particular, is intent on fighting tooth and nail to ensure the Big Tech's dominance doesn't squeeze it out of whatever comes next.

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Overheard

  • "There is no excuse. We failed too many people when they needed us because we had the privilege of not noticing, not engaging, not creating necessary space for the colleagues who needed us as leaders. I wish my apology could make any kind of difference. It can't." ―Chris Metzen, a former vice president for story and franchise development at Blizzard Entertainment, offered a mea culpa following last week's explosive lawsuit against Activision Blizzard. Though Metzen left five years ago, his role at the company has many wondering how he was unaware of its culture of widespread sexism and harassment.
  • "We, the undersigned, agree that the statements from Activision Blizzard … are abhorrent and insulting to all that we believe our company should stand for. To put it clearly and unequivocally, our values as employees are not accurately reflected in the words and actions of our leadership." ―Nearly 1,000 Activision Blizzard employees signed an open letter condemning executive leadership and the company's official response to the lawsuit. The employees say they no longer trust leadership and are demanding "immediate corrections."
  • "Considering [the] sensitive time we're living in, we can do better than that. You deserve better. All scenes alluding to self harm are now completely removed from the game. These scenes have no place in superhot virtual reality. We regret it took us so long." ―The developers of VR shooter Superhot explain their reasoning behind an update to the game that removes instances of self-harm in which players are forced to point virtual firearms at their head.

Lootbox

  • District 9's Neill Blomkamp is trying out game development. The acclaimed sci-fi writer and director is now the chief visionary officer at game studio Gunzilla Games, a new developer working on an unannounced big-budget multiplayer shooter, IGN reported. Blomkamp's prior experience in the industry involves a film adaptation of Halo that never made it far off the ground.
  • Ubisoft's Skull & Bones has been a tortured mess for nearly a decade. The pirate-themed spinoff of Assassin's Creed IV: Black Flag has blown through a budget of roughly $120 million over eight years, Kotaku reported in an in-depth investigation last week. The game, originally scheduled for a 2018 release, has been delayed four times in a three-year period.
  • Tilting Point raises an eye-popping $235 million. The company, which specializes in user acquisition for mobile gaming companies, raised a massive first round of funding to help fuel growth of its unique publishing model. Tilting Point offers user acquisition budgets in exchange for a cut of the subsequent revenue growth.
  • It's the end of the road for Tom Clancy's Elite Squad. Ubisoft is shutting down the servers of its mobile game Elite Squad on Oct. 4, claiming the game is "no longer sustainable." The failure of the military RPG is proof that even the biggest game developers can struggle to find success on mobile.
  • PUBG is getting its own anime. Krafton has finally announced its official television adaptation plans for the popular battle royale franchise, all part of a planned expanded universe that includes spinoff games and other media. Krafton has lined up Castlevania producer Adi Shankar, who has plenty of experience bringing video game series to Netflix.
  • Assassin's Creed loses another big name. Ubisoft's franchise art director Raphael Lacoste is leaving the company after more than 10 years, Axios reported. Lacoste is just the latest in a series of high-profile departures from the team behind Assassin's Creed, which Ubisoft plans to reboot as a live service game in the future.
  • Some outlets refuse to cover Activision Blizzard games. Fallout from the lawsuit against Activision Blizzard last week has intensified to the point that three gaming publications — GameXPlain, The Gamer and Prima Games — have now refused to cover the company's products.
  • Mortal Kombat sits on the fighting game throne. The fighting game series is the bestselling of all time, beating Nintendo's Smash Bros. franchise with 73 million copies sold thanks to the strong sales performance of Mortal Kombat 11. That latest entry moved more than 12 million copies, NetherRealm creative director Ed Boon revealed on Monday.

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Look Out For

Gaming adaptations taking Hollywood by storm

Before Detective Pikachu, video game shows and movies had a reputation of being … well, terrible. Now, they're all the rage. A combination of successful TV series and solid box office results for Tomb Raider and Sonic the Hedgehog have created an appetite for both animated and live-action adaptations.

A new Pokémon series is now in the works at Netflix, according to The Hollywood Reporter, and a slew of sequels to big-screen hits are in the works. Arguably the biggest projects are coming from Sony: Tom Holland as Nathan Drake in the Uncharted film adaptation, and Pedro Pascal as Joel in an HBO series adaptation of The Last of Us. Both are slated for 2022.

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