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Improbable takes another crack at explaining the metaverse

After skepticism of the company's vision, CEO Herman Narula wants to be more precise about what it is, and how it's different from what already exists

Last month, Improbable added itself to the list of high-profile companies exploring the metaverse with a media briefing in which CEO Herman Narula resorted to some flowery language.

"I think the metaverse is a return home," Narula said. "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."

I did my level best to cover it fairly in our standard news write-up, and then had a bit more fun with it in a pointed installment of This Week in Business, the site's regular editorialized recap of the week's events.

Improbable saw that column and within hours had reached out hoping to set up a discussion with Narula about the metaverse, which we agreed to. It seemed the least we could do seeing as how we had implied he was selling snake oil with his metaverse pitch.

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Herman Narula

When we talk, Narula is gracious about the This Week in Business column, conceding that some of his comments from the briefing "sounded like a commercial for a really nice toothpaste or something."

He also pointed to the column as evidence that there have been "problems in communication and specificity" around the metaverse, so in the interest of addressing that, we ask Narula what the metaverse will actually be.

He begins his answer by talking about why people play games and bringing up self-determination theory. He says generally speaking, when people do things out of intrinsic motivations, there are three main drivers: they enjoy the feeling of competence, they enjoy self-expression, or they enjoy having meaningful interactions with other people.

"Let's go with the thesis that the reason people play games is not precisely entertainment, it's actually the fulfillment of those motivations," Narula says. "And the better games get at fulfilling those motivations, the more engaging they become. And the good news is we know that the more those motivations are fulfilled, the better the psychological health and outcomes for people."

"To me, the metaverse in the beginning is about trying to create ever more fulfilling experiences, and my version of it would say it's not only about what we typically associate with games"

Narula says if those motivations aren't fulfilled -- for example, if people feel they have bad, monotonous jobs or are socially isolated from other people -- then they're likely to have worse mental health outcomes.

"To me, the metaverse in the beginning is about trying to create ever more fulfilling experiences," Narula says. "And my version of it would say it's not only about what we typically associate with games."

Narula says that could mean an environment not about fulfilling the goals of a game but about socializing, mentioning games like Fortnite where players create things, hang out with people or attend concerts as an example.

"The metaverse also implies taking and sharing value between those experiences," he adds. "It can also imply -- and it does for me -- earning money, creating value, possibly having a job inside the world. Basically, the consequences of those experiences aren't limited to just a game; they actually mean something in the real world.

"So we think about the metaverse as ever-more fulfilling experiences which allow you to transfer value between them and which can have consequences that go beyond normal gameplay," Narula said, calling that his preferred definition of the metaverse aspiration.

"Why it's a good thing is the more we can fulfill people's needs and give them opportunities to self-express and earn income and do interesting things and create, the theory goes the better their psychological health outcomes are."

Better mental health in society is a noble goal, but I'm unclear on what the metaverse has to do with this. Games of all stripes already address all of those needs individually; games like Roblox arguably provide people with all three motivations of self-determination theory and Narula's potential for earning money on top of that.

As for the idea that fulfilling those needs will help to build successful businesses, that seems to run counter to the numerous successful businesses that employ people in the monotonous jobs Narula mentioned, or that make money without fulfilling people's psychological needs or in fact even depriving people of that.

"Even an evil, disinterested, or amoral entity seeking to get people to pay them to spend time in virtual experiences is going to have to crack the code of fulfilling them"

"The money lies in fulfillment, and even an evil, disinterested, or amoral entity seeking to get people to pay them to spend time in virtual experiences is going to have to crack the code of fulfilling them," Narula says. "It's not going to work if they give them horrible experiences that make them want to churn. Just ask anybody trying to build a free-to-play game and improve retention; it's tough.

"That doesn't mean to say there aren't very scammy, very exploitative ways to keep people playing. Gambling is a good example where you can trick people's dopamine receptors. But one of the problems with casinos is they sort of destroy their own customers and they don't create multi-year long-term engagement because they destroy their own customers in many cases.

"My hope is the basic economics of this tend to result in a more positive outcome."

Narula also says the metaverse doesn't have to be created by a single company, which leads him to bring up blockchain technology with an acknowledgement that GamesIndustry.biz has publicly taken a dim view of its use in gaming.

He stresses repeatedly that he doesn't consider himself a blockchain advocate and is still early in the process of understanding the technology, but sees promise in its potential applications within gaming, particularly in how it might enable a decentralized metaverse.

This was something Narula talked about in Improbable's pitch briefing, saying that closed systems could bring in lots of money, but weren't good for other companies to invest in. Given that there are plenty of people who have built successful businesses and continue to invest in new ones on existing closed systems -- consoles, iOS, even Roblox -- we ask why that matters.

He likens it to a hypothetical totalitarian government which is wealthy thanks to abundant natural resources but is not a welcoming place for new businesses due to strict controls.

"Economics and the consequences of economic principles get a lot of hate on today's internet, but the basic incentives exist there and they can be very powerful forces for positivity..."

"You get to a local maximum where the rulers of that place can be pretty wealthy, but that country will never be a world superpower," Narula says. "It will never have a vast economy that unlocks value in the trillions and trillions of dollars because it's fundamentally limited by a lack of investment. Economics and the consequences of economic principles get a lot of hate on today's internet, but the basic incentives exist there and they can be very powerful forces for positivity when they're properly harnessed."

He continues: "I think a forward-looking business might say, 'Maybe we do make this open,' not because we're very nice people but because a small percentage of a really big pie is going to be a lot better long term and more valuable than a big percentage of a small pie. Also they have to do a lot less work. The really exciting thing about an open platform is everybody does the work and value is created for everyone. It's a bit more like government than it is like a company. One of the things I'd like to see is ways to let users actually vote on policies. Why not have people make meaningful decisions, binding decisions about how parts of the metaverse work?"

This is an idea Narula returns to a little later on, as he talks about Helium, a blockchain-powered Long-Fi radio network that provides long-range wireless coverage for connected internet devices with minimal bandwidth needs (GPS trackers, weather meters, etc.).

"If that thing really takes off, the people who came up with it will own a share of it, but they won't have the hassle of having some massive multi-thousand-person company that has to make all these difficult decisions and the users can govern what they created," Narula says.

We ask if the appeal of blockchain then is the potential to create all the scale and profit of a closed platform but without having to be responsible for what happens with it.

"I don't think that's fair," Narula says. "Wikipedia for me is a great example of something that works... I think the narrative we've been somewhat sold by large tech companies is, 'That's just the way people are. It's not us, it's you guys. You're all just kind of jackasses and if we leave you alone, you'll hate each other.'

"I think that the right incentives create the best communities and governance can be part of those incentives. Nothing stops a blockchain project from having a central authority or governor making certain decisions if that's appropriate. But those can be better held in check. I'm more inclined to say that when communities can vote on things, when they have the right incentives to vote on things and to make decisions in their own interest, then they make good decisions. That's basically why we do democracy, right? If we don't believe that, I think we have a way bigger problem than just blockchain and the metaverse."

Wikipedia is a non-profit of course, and to this point the buzz we've seen around the metaverse and blockchain is coming from people keenly interested in a generous return on investment. But Narula says alternative models of cooperation could work, suggesting a public-private partnership as one idea.

"I think we need to be more optimistic that better designs are possible," Narula says.

"I don't see us building a great metaverse or a great society by taking one ingredient and over-maximizing it"

"If you have a large closed platform -- and I feel bad saying this because these companies are also my friends, partners, and in some cases customers -- if you just leave a company like that, even with the best of intentions -- think about Google's 'Do No Evil' -- eventually the desire to create ever-more profit and ever-more scale and to tell a growth story to the public markets will lead it to doing things that are not in the interest of its users. And maybe it's not the current leadership, it's the next leadership or the leadership after that. So you have to control the incentives to begin with. You have to create structures the users actually own part of, where they can block the things that happen."

So the thing that will save us from the evils of capitalism and the need for permanent growth is the latest new growth market venture capitalists are lining up to invest in?

"I mean, 'the evils of capitalism' is a different discussion," Narula says. "But we have to draw a distinction about a lot of different things."

He says the markets and economic forces he's talking about pre-date capitalism, and adds that there are significant differences between "hyper polarized regulatory capture American capitalism, Nordic socially minded capitalism with great public services combined with very profitable companies, and fully awful capitalism combined with non-functioning government."

"There are lots of different flavors," he adds. "I don't see us building a great metaverse or a great society by taking one ingredient and over-maximizing it. I think we need to just pick the right mix of things and create the right set of incentives. Parts of the metaverse could be like Wikipedia, why not? It's a good thing to have some parts that are literally not for profit. Other parts probably can be for profit, but we have to make sure the people who run them don't have absolute ownership over the users and the front doors, because then they don't have to compete. And other parts should probably be [creative commons], like open-source software."

At the end of the conversation, we're unconvinced by Narula's optimism, but we do have a clearer idea where he's coming from.

"That's great," Narula says. "We should talk more. It's good to have an optimist and pessimist talk about these subjects."

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