In the 2018 movie Ready Player One, you may remember the Oasis: a shiny, fast-paced virtual world (or metaverse) with gleaming cities, beautiful avatars, and excitement for all. Epic Games announced on April 13, 2021 that it has raised $1 billion to put towards building what it’s calling “The Metaverse.”

“We are grateful to our new and existing investors who support our vision for Epic and the Metaverse. Their investment will help accelerate our work around building connected social experiences in Fortnite, Rocket League and Fall Guys, while empowering game developers and creators with Unreal Engine, Epic Online Services and the Epic Games Store,” said Tim Sweeney, CEO and Founder, Epic Games in a press release.

Epic Games created the hit video game Fortnite, and its Unreal engine has been used to create many other popular games, and controls the Stagecraft VR set for The Mandalorian.

An eye-popping demo released last May shows off Epic’s Unreal Engine 5, its next-gen software for making video games, interactive experiences, and augmented and virtual reality apps, set to be released later this year. The graphics are so advanced that the demo looks similar different to a high-quality video camera following someone around in real life. In February Epic unveiled its MetaHuman Creator, an app that creates highly realistic “digital humans” in a fraction of the time it used to take.

What is The Metaverse?

So what’s “the metaverse”? The term was coined in 1992 in Neal Stephenson’s hit sci-fi novel Snow Crash, in which the protagonist moves between a virtual world and the real world while fighting a computer virus.

Epic Games’ CEO Tim Sweeney told Venture Beat that the metaverse will be a linear evolution, not a sudden massive disruption. “It’s going to be a meeting place for individuals and creators of all sizes, including brands,” he said. “If you are a car manufacturer, your brand presence in the metaverse isn’t going to be a bunch of advertising for your cars. It’s going to be a place where you can actually drive the cars around and feel the experience of it…We have an opportunity for much, much more interesting interactions.”

Facebook, Google, and Samsung have all been investing heavily in cloud computing and virtual reality, and Facebook’s Horizon is a VR social space intended to serve as a metaverse. Epic may be in the best position to build a successful metaverse thanks to the high-end computers that gamers frequently use. For example, Fornite has 350 million registered users for a demanding graphics program.

Despite his company’s apparent lead in creating the metaverse, last year Sweeney called for collaboration, saying in the Washington Post: “We need to give up our attempts to each create our own private walled gardens and private monopoly and agree to work together and recognize we’re all far better off if we connect our systems and grow our social graphs together.”

On the Shoulders of Giants

Noteworthy here are the long string of various early attempts at doing the same thing.

Blaxxun was a VRML service that worked via web browers, but in 1996 it was essentially an idea before its time. Pentiums just didn’t have the horsepower to push very much in the way of advanced graphics, and the ‘net was slow in those days with half the users still on dial-up modems.

Blue Mars was a 3D massively multiplayer virtual world platform beta in 2009, launched as a competitor to the then-hot Second Life, but it was plagued by funding an monetization issues. The service is still around, but in limited form.

And then there’s Linden Lab’s Second Life. Based on technology available at the turn of the millenium, it opened its doors to the public in 2003. Its thriving virtual economy, international user base and incremental technical advances have kept the project commercially viable, though its foundation on older technology makes true VR using the platform forever out of reach. Linden Lab’s much vaunted spinoff, called Sansar, launched a user-created 3D space in 2017 using VR headsets, but it was plagued by serious design flaws and technical challenges that included jittery head tracking and a lack of contiguity from one world-space to the next, thus breaking the “shared universe” model that had made Second Life such a success. It was sold to a small company named Wookey Search in 2020, and is currently used only for special events.

The Ready Player One: OASIS beta is the 2018 beta phase of the immersive virtual universe from the film. Developed by Directive Games Limited, it’s limited to 4 VR experiences.

The wildly popular VRChat was launched in 2014 for PC and Oculus and supports full-body humanoid avatar tracking via Vive Trackers. A massively-multiplayer game similar to the original Second Life, the game’s popularity has been attributed to use by YouTubers and Twitch streamers, who like the customizable world. VRChat really took off in 2017 when it became available on the Steam platform. A key feature is the relatively easy Software Development Kit that allowed people to create the virtual world they wanted to live in.

Users create anything they want, including such strange creations as odd versions of Spongebob Squarepants, Pickle Rick from Rick and Morty, and an assortment of Pokémon and many anime characters.

The Investors

The investment partners for Epic Games’ Metaverse project are an eye-opening group. For example, Appaloosa is a recent hedge fund, and Baillie Gifford is one of the oldest and largest investment funds in the world. This round includes an additional $200M strategic investment from Sony Group Corporation, which builds on the close relationship between the two companies and reinforces their shared mission to advance the state of the art in technology, entertainment, and socially-connected online services.

Other investment partners include Baillie Gifford, Fidelity Management & Research Company LLC, GIC, funds and accounts advised by T. Rowe Price Associates, Ontario Teachers’ Pension Plan Board, funds and accounts managed by BlackRock, Park West, KKR, AllianceBernstein, Altimeter, Franklin Templeton and Luxor Capital.

The Metaverse and the Challenges Ahead

Creating a multiverse, an online massively multi-user service where the open world is one big contiguous shared virtual space, will be quite the challenge. The first problem is that no matter how much money they throw at the Metaverse project, they’re never going to be able to produce enough content fast enough to fill a whole universe. Content will get dated fast, and what the public will like is going to be largely a hit or miss proposition. They can license popular franchises – or those franchises may seek out spots in their universe – but that’s no guarantee that either that the content will translate well to VR, or that pay-for-play content will appeal to the public at all.

The only way forward is to do what Linden Lab and VR Chat did with their virtual worlds: build some of it themselves, and then open the door for the users to build the rest of it, but this isn’t a well paved road either.

If private users are allowed to make content, there will be a lot of it – but while that solves the content quantity problem, somebody is going to have to police it, with no practical way to keep the platform completely infringement free. You can’t pass through an inspection board before it appears in-game, because that will create a content creation bottleneck and nobody but organized creation groups (read “corporations”) will make much of anything. The only solution that works at all is to allow everything, and then let the owners of branded content file DMCA reports to have it removed if they don’t like something appearing in-world.

Allowing the users to make their own content also creates another problem: technical compatibility and consistency. Making a VR engine that can accept a built scene is reasonably easy compared to one that allows the upload of freeform content in a single open, shared world. Load balancing and performance issues become a very complex problem. Some kind of standards will have to be set in place, and enforced partly by technical means and partly by humans in chairs policing it.

One really important bright spot is that the new Metaverse will use the Unreal Engine, which means that anybody who can operate Unreal Engine will be able to create universe-compatible content. The Unreal Engine is currently the top tool for creating AAA games in terms of ultimate quality, especially in VR, but it’s not the most popular one – that prize goes to Unity 3D, which is used in more commercial games than Unreal Engine by a ratio of about three to one.

Unity, though, has a lingering reputation for not handling massively multiplayer scenarios, or extremely large asset libraries, along with having a rendering engine that isn’t quite up to the quality of Unreal Engine. They have closed that gap considerably in recent years, and it’s the development platform you need if you’re going to make environments, props or avatars for VR Chat.

Unreal Engine is now poised to take on the same role for the Metaverse. While VR Chat is popular now, it’s also limited by the technology that existed at the time of its inception, just as Second Life was limited by gaming technology of the early 2000’s. The Metaverse will be the Next Big Thing, that everybody’s on, with the finest minds in the gaming world working to make sure it all comes together. It’ll take a while, but with the rapid technical advances being made in consumer VR headsets, the virtual world we saw in Ready Player One is something we can expect to see in our lifetimes.

$1 billion is an amazing amount of money for Epic to gather for a single project. This is likely to be one of the most epic thing humans have ever created, and will lead to amazing advances in virtual reality and gaming, as well as affecting the very fabric of our society in ways we cannot even conceive today.

In the movie, though, non-VR is pretty miserable. While we build cool VR, let’s also build a beautiful real world.

It’s up to us.

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