Interested in learning what's next for the gaming industry? Join gaming executives to discuss emerging parts of the industry this October at GamesBeat Summit Next. Register today.
When CEO Mark Zuckerberg changed Facebook’s name to Meta and committed to the metaverse, he said that gaming would lead the way.
That’s an interesting comment, considering that Facebook has billions of social media users, while game companies like Roblox and Microsoft (Minecraft) have amassed hundreds of millions of gamers. In fact, the entire game industry’s reach is about as big as Facebook’s alone, at around three billion people.
Though, the numbers of users isn’t the only thing that matters when it comes to building a metaverse that people actually want to go to. It’s challenging to predict who will win, as the incumbents in the space — game companies — may not have an advantage if another party enters the space and creates an ambitious next-generation metaverse. But it is important to note that, Zuckerberg isn’t alone in believing in gaming.
“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” Microsoft chairman and CEO Satya Nadella said in a statement. Nadella’s statement came alongside Microsoft’s announcement that it would purchase game publisher Activision Blizzard for $68.7 billion last week.
One thing that the game companies are good at is keeping audiences engaged for a long time, from many hours a day to many years. Randy Pitchford, CEO of Gearbox Entertainment, calls this the strategy of “games as a hobby,” where game developers can craft work that makes lifelong fans of specific games.
This in-depth engagement is vital to the metaverse because the focus is about getting people to come back, every day, and getting people to have the desire to stay in your realm of the metaverse. App Annie studied gamer behavior during the pandemic on mobile devices, and it found that people spent more hours in the day on their phones and more hours playing games than they did before the pandemic. And while social media commands more hours of time, games generate more revenue from a smaller but dedicated audience.
Leaders in the space include Epic Games, Unity, Roblox, and the new combination (deal pending) of Microsoft and Activision Blizzard. All of them have tools that enable game developers to create engaging content for gamers, and they all come at the challenge of building the metaverse from different directions. Roblox learned early on that a platform for user-generated content could turn its players into creators, and that enabled it to get far more content made by millions of people on its platform. While some of it is amateur, the best content generates millions of dollars in revenue for player-creators and billions of play sessions.
Roblox and Epic Games also appreciate the fact that the universe of game players still has its limitations. Those who are not comfortable with game controllers or the steep learning curve for skillful play may be too intimidated to try. They also might prefer more passive entertainment such as music or videos.
That’s why Epic Games and Roblox have branched out to get more users beyond gamers. Those companies as well as Improbable have staged massive concerts with music stars inside gaming platforms. Adding music as an adjacent entertainment market is appealing to many gamers, but it also expands the appetite for the gaming platform to non-gamers as well.
Rival companies and industries have noticed. Reed Hastings, CEO of Netflix, noted that the biggest competition for its movies and TV shows is time, and games like Epic’s Fortnite are commanding a lot of time.
Who wins in this battle for attention spans? A lot of it depends on what users will like. If users want ultra-realistic characters and environments, that will favor one type of company. If people prefer fanciful cartoon graphics, it would favor someone else. If they want to immerse themselves in virtual reality, Facebook will have an advantage.
“Gaming is definitely a core part of it. I mean, pulling games out of it for a second, I don’t think any of this could exist without the game engine. And gaming created the game engine, right?” said Jason Rubin, head of content for Meta, in a session at one of VB’s recent events. “For a long time, the game engine was the only major tool for real-time 3D graphics. Obviously, there was simulation and other things universities were doing, but for consumers for the most part, it was gaming.”
He noted that game engines are sometimes used to make movies as well. So, the game engine is fundamental to what everyone is building for the metaverse. He noted that much of mobile phone revenue is gene rated by gaming, and it is generating a lot of revenue for VR headsets.
“People like to play. We were born as children and we love to play. We never give it up,” Rubin said. “And honestly, I think more gaming would make a happier world. I think play is a good thing. And so gaming becomes a great way to get people to spend a significant amount of time together. And it gives people a way to build an identity system and do other things and invest in things together. And then I think adjacencies start forming because the people are there, and the possibilities are there.”
But there is also room for cooperation. Marc Petit, general manager of Unreal Engine, said in a panel that his company is making efforts to provide its game engine tools to non-game industries, such as moviemakers, commercial production firms, and industrial designers such as carmakers.
The interests of these companies intersect with a commonality in the creation of 3D animated assets. These companies likely don’t want to reinvent the wheel. For instance, if Porsche is using something like game tools to design cars, then the game makers don’t have to design cars for their own purposes. The companies could trade assets, particularly if there are common standards.
That’s why Nvidia came up with the Omniverse, a simulation environment originally designed for testing robots. Nvidia backed Pixar’s Universal Scene Description (USD) 3D data standard, which Pixar developed for its movies and gave to its animation partners out of a weariness for reinventing 3D tools with every new tech generation. With USD, companies can re-use assets created by others and trade them around (soon) in a marketplace. Nvidia has drummed up more than 700 enterprise customers for the Omniverse, and it is giving individual versions away free.
Richard Kerris, vice president of Omniverse development, said in a panel that the would-be metaverse makers in games and industrial design have different aims. Game makers care about anything that might be viewed on a screen, meaning the exterior of objects such as cars. But they don’t care as much about designing the complete car, and instead they focus on making sure it moves extremely fast through a computer-designed landscape.
By contrast, the designers of automobiles have to care about animating every single part of the car, and they’re not as concerned with making the environment look pretty or running the cars at extreme speeds. In this way, the cars designed by game makers aren’t interchangeable with those designed by carmakers (though Porsche did design a car to run only in Sony’s Gran Turismo PlayStation 5 game).
It’s interesting to see who gamers think will win. American gamers see the gaming industry and traditional “big tech” corporations as equally likely to come out ahead, while in the U.K., 29% think that the odds favor the gaming industry, compared to only 18% for large technology companies such as Apple and Microsoft, according to a survey of 2,000 gamers and 800 game developers by Improbable.
The Omniverse is trying to standardize things so that object trading becomes a lot more popular and so designers can focus on the things they need to get done, rather than reinvent something created by someone else. In this way, the Omniverse could ultimately enable any party to create assets for a metaverse and launch such a universe of worlds.
Game developers are the leading candidates to come up with the metaverse because they’re the ones that are skillful at duplicating reality and creating simulations so engaging that people come back to them over and over again. Kim Libreri, chief technology officer of Epic Games, said in a session that we’re very close to being able to reproduce reality in 3D computer animations that could run on a game console or game computer.
Gaming’s best competition on this front for creating the reality simulation is Hollywood, whose special effects artists have long been able to create lifelike humans and realities that you can’t tell apart from real life. But Hollywood’s creations aren’t real time. They’re pre-rendered and played back to us as linear films. By contrast, games run in real time and they’re interactive.
But eventually, it’s quite possible that the non-game companies could bring out bigger guns. BMW is busy building a digital twin of a factory in the Omniverse, and when it’s done, it will build the factory in the physical world. And Nvidia recently promised that it would create a digital twin of the Earth. It would marshal the talent of the AI experts of the world and the graphics tools of the Omniverse to create a simulation of the Earth with meter-level accuracy, said Jensen Huang, CEO of Nvidia, in a recent speech. Running on the best supercomputers, this digital twin would enable experts to create a climate change model that could predict the Earth’s fate for decades to come.
Such a considerable effort could probably dwarf the efforts of any individual game company. These companies will square off against big tech firms and non-games application makers in the race to build the metaverse. But the question is whether any one company or sector can truly populate a metaverse with enough content. The hope is that a combination of game design, user-generated content, and AI will be the way to flesh out the metaverse.
That’s the plan for Brendan Greene, director of PlayerUnknown’s Productions. Greene is the game designer who pioneered PlayerUnknown’s Productions, the hugely successful battle royale game that has sold more than 70 million copies. Greene recently created his own startup to create Prologue, a single-player game world that is 64 kilometers on a side. Over several years, he hopes to build Project Artemis, a planet-scale game world.
Of course, if the metaverse comes from the game developers or Hollywood, it will probably be dystopian.
The sector of individuals who want the metaverse to mirror more of an ordinary world may need to be prepared to hijack the gamer’s metaverse and refashion it as they like. That way, it becomes a digital twin of the world as we know it now and mirrors all the things we can do in the physical world — but perhaps isn’t quite as dreadful.
Read more from this VB Special Report:
- The metaverse: Where we are and where we’re headed
- Why the metaverse must be open but regulated
- How the metaverse will let you simulate everything
- 7 ways the metaverse will change the enterprise
- Identity and authentication in the metaverse
- Understanding the 7 layers of the metaverse
- Can this triple-A game usher in the promise of the metaverse? (sponsored by Star Atlas)
- How the metaverse could transform upskilling in the enterprise
- Why the fate of the metaverse could hang on its security
- Gaming will lead us to the metaverse
- The potential environmental harms of the growing metaverse
GamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. Discover our Briefings.