This Week in Business is our weekly recap column, a collection of stats and quotes from recent stories presented with a dash of opinion (sometimes more than a dash) and intended to shed light on various trends. Check back every Friday for a new entry.
The games industry has always had snake oil salesmen in it. It also always had a lot of ambitious people who honestly believe in even more ambitious visions. Unfortunately, these two groups of people can be difficult to distinguish from one another, as we've seen with the recent buzz and investment around the metaverse.
Let me give an example of what I mean. Earlier this week, Improbable announced it had been working on a series of technologies it would offer companies to help them make a metaverse, with CEO Herman Narula talking at length about the wonderful things the metaverse will do.
Before we get into it, none of this is to suggest Narula is anything but one of those ambitious people with an ambitious vision. Improbable has existing multiplayer services, SpatialOS, and military simulation businesses, even if the business as a whole isn't profitable yet. It has also demonstrated its impressive technology in ways that I think have applications inside large-scale virtual worlds of the sort often promised by metaverse makers. I'm still not convinced that technical wizardry will actually produce fun games, but I can see how it enables new experiences at the least.
However, Narula's metaverse pitch had a few things in common with some shady hard sells I've seen in the past.
QUOTE | "I think it's very natural to be suspicious of something that feels like another technological pitch about how tech can make our lives better... We've seen technology go bad before." - Early on, Narula acknowledges the skeptics.
Validating the audience's reservations and pre-existing concerns like that is a good way to build trust with them, but it really requires an explanation of why those reservations are unfounded.
QUOTE | "Why is this new thing better than what has come before? Part of what inspires me is that the metaverse was not born in a tech company's earnings call, this presentation, or an '80s novel. To me it was born about 10,000 years ago, because 10,000 years ago is when the oldest monument we're aware of built by humans... was created. To me, it's a symbol of human beings' need and frankly fundamental machinery of living in other worlds, of living in the world of imagination.
"When I look for the metaverse, I see it in Dante, or perhaps somewhat lower brow, Harry Potter, or any other virtual world created by human beings over the last few thousand years. I think the metaverse is a return home. It's a return back to a world of useful and powerful ideas that guide us and grow us and inspire us. It's a return to the warmth of what human beings can bring to the world, and somewhat away from the consumerism and mechanism and focus on production that has dominated a lot of technological evolution of the last 100 years." - Narula explains why he thinks the metaverse is more legitimate than past tech ideas that promised a better world and failed to deliver.
I will grant Narula that people like to imagine living in other worlds. They like escapism. It's partly why video games exist. Or movies, books... lots of stuff. So maybe there's some demand out there for this metaverse, whatever it winds up being.
But the idea that this current push was "not born in a tech company's earnings call" is absurd. While that may be literally true -- I've listened to enough earnings calls to know CFOs aren't typically interrupting to say, "Holy crap, dudes, I just got this killer idea" -- this hype for the metaverse is 100% being driven by money. If the make-a-better-world metaverse being promised wasn't simultaneously a make-a-bunch-of-money metaverse, it would not be eagerly pursued by so many entrepreneurs and investors who would like the description of their wealth nudged up from "abundant" all the way to "obscene."
And Narula, like many metaverse proponents, does an exceedingly poor job of explaining what the metaverse is, how it will be built, and what it will offer people that they don't already get from any of their infinite existing options for escapism. Instead, we get vague gestures toward home, humanity, inspiration, warmth. He is not selling strategy, shrewdness, and substance; he is selling sentiment and optimism, enthusiasm as unbridled as it is ungrounded.
We've heard that kind of sentiment plenty of times over, and not to spoil the ending, but the improvements to the world are debatable at best and are of secondary importance to the money.
QUOTE | "I don't think there's a reasonable number that would make me say, 'You know I was going to change the world with VR and try to change humanity forever but here's a number.' It really is about making sure that we get to deliver our vision of consumer virtual reality." - In 2014, Oculus founder Palmer Luckey says he's not interested in selling Oculus to a larger company because it's really about changing humanity forever. (Facebook would announce the acquisition of Oculus three weeks later.)
We're also hearing that sentiment a lot around blockchain, despite the fact that it generally involves unconscionable energy use in the midst of a global climate crisis and an incredible amount of electronic waste produced by mining operations.
QUOTE | "Old money is not going to pick us up - it pushes us down, exploits, and systematically oppresses. New money is positive, inclusive, fluid, strong, culturally rich." - Spike Lee shilling a blockchain cryptocurrency company with a list of good things and absolutely no explanation as to how any of this leads to that.
Granted, the metaverse and blockchain are not the first time someone has promised great things without explaining how the product they're selling results in that. And this particular strain of non-explanation -- promising to simultaneously a) make you rich and b) help the world -- has clearly proven effective in selling people on highly speculative endeavors.
Bringing it back around to where we started, this is why I don't trust myself to tell the snake oil salesmen from the true believers in the metaverse field (or the con men from the marks, if you're particularly pessimistic about it). Because those two groups are acting in ways indistinguishable from one another, and that makes it similarly tough to pick out good faith endeavors from get-rich-quick schemes.
I've made my feelings on blockchain pretty clear in the past, and will do so again in the very near future. I'm not so down on the metaverse, even if I think much of the current hype is inflated, some of it by blockchain faithful desperate to find a use case to explain the value of their cryptocurrency and some of it by people who are surprisingly eager to realize the dystopian sci-fi they loved in their youth.
From my interpretation of the sales pitches these crowds are making, we're talking about iterations on things that already exist, like Second Life, Roblox, or Fortnite. These are games as places where people can play, socialize, or gather for events. They are not particularly new, and they are not particularly novel at this point. But there's plenty of room for design evolution and technological advancement in these experiences, perhaps even fulfilling the promises of today's aspiring metaverse makers. Some of them, at least.
But even in my most generous assessment of the potential of the metaverse, "a return to the warmth of what human beings can bring to the world" is not in the cards. And anyone suggesting otherwise is almost certainly selling snake oil, whether they mean to or not.
The rest of the week in review
QUOTE | "Looking at the mechanics of the technology itself is to miss the point entirely. It is the belief in others that makes it sing. And so we face a decision. Yes, the loud and youthful new may seem naive and unfamiliar. But what if we are indeed presented with the manifestation of an aspiration, a hope of something better?" - Former Superdata CEO Joost van Dreunen, in his weekly newsletter, explains that skeptics shouldn't be asking how cryptocurrency works or what function it can perform. Instead they should just think fuzzy thoughts about a better world as they burn this one to ashes.
QUOTE | "If we can have a kid learn twice as fast, we can pay teachers twice as much." - 10 years ago this month, Atari founder and serial entrepreneur Nolan Bushnell was pitching a fantasy outcome of what would happen after his latest start-up BrainRush revolutionized education with cloud computing, condensing all the education of a normal four-year US high school career into one year.
QUOTE | "It's little more than a flashcard tool, leaving students to memorize facts and then take quizzes." - Common Sense Education's review of the BrainRush app for educators.
QUOTE | "Sometimes you've just got to stick with it and believe. That's why I think Amazon has such a good shot at becoming a big player in the space. From all the other businesses I've seen, they don't tend to give up. It's almost as if when something doesn't work, they get really angry and double motivated to get it right." - Amazon Games vice president Christoph Hartmann talks about why the (presumably livid) online retail giant is still pursuing a foothold in games.
QUOTE | "Apple lied. Apple spent a year telling the world, the court, and the press they'd 'welcome Epic's return to the App Store if they agree to play by the same rules as everyone else.' Epic agreed, and now Apple has reneged in another abuse of its monopoly power over a billion users." - Epic CEO Tim Sweeney is absolutely shocked that Apple would go back on its commitment to let Fortnite back on the App Store the same way Epic went back on its commitment to Apple to not sneak an alternative payment function into an app and dodge the 30% cut it had contractually agreed to give the iOS maker. Shocked!
QUOTE | "This new process does not change how music can be used on Twitch." - Twitch explains how the deal it just struck with the National Music Publishers' Association doesn't do streamers any favors beyond potentially letting them escape with a warning instead of a DMCA strike if they stream a game and any licensed music makes it into the stream.
QUOTE | "I hope they keep going more mainstream commercially, because although BioWare titles and the like will probably never be as adventurous as more indie content, that kind of spending and normalisation of gameplay mechanics brings oxygen into the space for the rest of us." - Boyfriend Dungeon developer Tanya X. Short was one of several creators who spoke to us about the evolution of the dating sim genre.
STAT | 2 - The number of additional investigations Activision Blizzard investors found out about Monday because the Wall Street Journal reported on them before the company itself disclosed them, one from the SEC about whether the company gave investors proper notice about the California Department of Fair Employment and Housing investigation that led to a lawsuit, and another with the Equal Employment Opportunity Commission over allegations of gender-based harassment that has been ongoing since May of 2020. Activision Blizzard is reportedly in talks to settle the latter investigation and could end up paying millions of dollars in the process.
QUOTE | "The company is confident in its prior disclosures and is cooperating with the SEC's investigation." - A day later, Activision Blizzard responded to the reports of those investigations.
QUOTE | "We are party to routine claims, suits, investigations, audits, and other proceedings arising in the ordinary course of business, including with respect to intellectual property, competition and antitrust matters, regulatory matters, tax matters, privacy matters, labor and employment matters, compliance matters, unclaimed property matters, liability and personal injury claims, product damage claims, collection matters, and/or commercial claims. In the opinion of management, after consultation with legal counsel, such routine claims and lawsuits are not significant and we do not expect them to have a material adverse effect on our business, financial condition, results of operations, or liquidity." - The entirety of Activision Blizzard's Legal Proceedings section in its annual report filed with the SEC earlier this year. You know, just the "routine" and "not significant" stuff, multiple investigations from US government agencies into violations of equal rights laws of the sort that any company would be dealing with.
QUOTE | "The past three years have been full of unexpected twists and turns, but I feel honored to have worked with and met so many great people at Blizzard and across the Activision Blizzard businesses." -Blizzard chief legal officer Claire Hart announces her departure from the company and I'm not sure the phrase "unexpected twists and turns" has ever felt quite so loaded with significance.
QUOTE | "Final outcome is supposedly down to us as an industry. But in my opinion it will most likely be determined by the promised actions -- or inaction -- of the global giants who have had a hugely profitable business model rightly challenged." - Departing UKIE chair Stuart Dinsey shares a few thoughts on the loot box controversy and the UK government's consideration of legal restrictions, saying he is personally "uncomfortable" with the monetization mechanic.
QUOTE | "RIP Sir Clive. You were a genius, way ahead of your time in so many ways. We all owe you a great debt of gratitude." - Revolution Software's Charles Cecil was one of numerous industry luminaries paying tribute to Spectrum ZX creator Sir Clive Sinclair after the celebrated inventor died last week.