Why Fortnite, not Meta, is winning the metaverse

Wednesday, January 4, 2023

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Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Tuesday, we’re looking back at the widespread derision Meta faced last week over Mark Zuckerberg’s VR selfie and how the company’s metaverse ambitions compare to Epic’s Fortnite. Also: a nearly $6 billion — with a “B” — class action lawsuit against Sony.

A metaverse battle royale

Meta learned yet another hard lesson early last week about the uphill battle it faces in building the metaverse. The company launched its social VR platform, Horizon Worlds, in France and Spain, and CEO Mark Zuckerberg celebrated the moment with a selfie featuring his now-familiar cartoonish avatar.

It didn’t go well. Within hours, the image had gone viral, with a tidal wave of criticism over how elementary the scene looked and many wondering how Meta could still be so far behind modern video games in graphical fidelity. The uproar is a telling moment in Meta’s pivot away from standard social networking and especially so when compared to the success of competing platforms like Epic’s Fortnite, which last week enjoyed one of its most celebrated crossover events yet.

Meta is doing itself no favors by focusing so heavily on VR. A central pillar of Zuckerberg’s vision for the metaverse is that it will involve a combination of VR and AR, and a great deal of the company’s immense $10.2 billion expenditure last year has gone toward the development of next-generation devices Meta hopes will give it a competitive advantage in the future.

Yet the focus on VR is also inhibiting the platforms it runs today, like Horizon. One Twitter user said Zuckerberg’s selfie, which featured a randomly placed Eiffel Tower in front of a Spanish cathedral, was “eye-gougingly ugly.” Another joked that Horizon Worlds had “billions and billions poured into it and this is the result … The Sims but worse, and with nothing below the torso.”
The Onion chimed in: “Mark Zuckerberg Worried His Metaverse Avatar Doesn’t Fully Capture How Inhuman He Looks.” Many others joined in with plenty of cruel comments, ranging from “the Metaverse is just Animal Crossing but you’re being hunted by Mark Zuckerberg” to “5000 newspapers died for this.”
But despite everyone having a collective laugh at one of the most powerful executives on the planet, the criticism speaks to a very real problem Meta faces, one that is both reputational and technical.
It’s a problem shared by many of the proto-metaverse platforms, like Decentraland and The Sandbox, which alongside Horizon, “still look worse than a 2008 Wii game,” as New York Times columnist Kevin Roose put it.
“Stylistically, it can help to build simple, cartoon-like characters, rather than trying to make things look realistic,” said Sam Huber, CEO and founder of metaverse development studio LandVault. It’s also “difficult to design complex visuals in VR,” he told me, because “you only have hand controllers, which makes moving around with legs very difficult. That’s why Meta has made the choice for avatars to be from the waist up only.”
Meta’s headsets are not yet advanced enough to power visuals on par with modern games or filmmaking CGI, and Horizon Worlds in its current form feels like a poor imitation of massive multiplayer gaming platforms, from World of Warcraft to Second Life, that have existed for decades now.

Zuckerberg eventually responded, having felt enough pressure that he posted a second time to his Facebook page, on Friday. In the post, Zuckerberg promised “major updates” to the graphics for Horizon and its avatars, with plans to share more at the company’s Connect conference later this fall.

“Also, I know the photo I posted earlier this week was pretty basic — it was taken very quickly to celebrate a launch. The graphics in Horizon are capable of much more — even on headsets — and Horizon is improving very quickly,” Zuckerberg wrote.
In the post, Zuckerberg attached two new renders that showcased what a more ideal version of Horizon and its avatar design might produce, including a more lifelike selfie that aligns more closely to the version he advertised back when his company rebranded as Meta in October of last year.
Meta is hard at work on new hardware that will likely enable more advanced visuals. And its metaverse expenditures this year are not slowing down, even as Meta cuts costs elsewhere by freezing some hiring and even raising the price of its Quest 2.
For the past two quarters, Meta has still maintained heavy spending on its Reality Labs division, which posted a near $3 billion loss in Q1 of this year and a $2.8 billion loss in Q2.
Yet Meta is already planning alternative access points for Horizon, including browser and mobile versions. “Within the next two years when the sale of the VR headsets doesn’t pick up, Meta will release a desktop version of its metaverse,” Huber said. “Of course it’s more fun and immersive on a VR headset. It’s great to be able to experience the metaverse there. But a desktop version would be a lot more accessible.”

But are Meta’s priorities the right ones? It’s an open question whether VR and social platforms like Horizon Worlds are the right roads to building the metaverse. Video game platforms — most prominently Epic’s Fortnite, Microsoft’s Minecraft and Roblox — seem to be doing just fine by focusing on engaging experiences and fun crossovers.

Fortnite, for instance, last week launched a popular crossover with iconic anime Dragon Ball Z, featuring excellent character skins and in-game items, many of which players can earn for free, which instantly created viral meme fodder.
In one of the more popular tweets lambasting Zuckerberg’s metaverse, one user commented on Zuckerberg’s VR selfie by writing, “In Fortnite you can be Goku with a shotgun.”
The Fortnite-DBZ collab has created countless hilarious moments — from Goku hugging Superman to the anime’s central hero doing the Griddy dance after a victory.
A common consensus I’ve seen is that this is what the metaverse should be: a silly, over-the-top mashup of pop culture in the vein of Ernest Cline’s “Ready Player One” (minus the dystopia), and one that’s underpinned by fun gameplay, competitive multiplayer and meaningful rewards for showing up and putting your time in.
Horizon Worlds lacks all of that, and there’s no easy path for Meta to clearing those hurdles unless it invests heavily in game development and the kinds of valuable and lucrative partnerships Epic has landed for Fortnite.
“Firstly, [the metaverse] needs to be engaging — people need a reason to go there,” Huber said. “The reason is exciting in-game mechanics, that’s what gaming has shown us. This is what the likes of Epic are doing well, but Meta is not.”

Of course, there won’t be one metaverse, at least not right away, and that much has become clear in the months since Meta has embarked on its quest to build Zuckerberg’s particular vision of the future. There will likely be many metaverse platforms, all competing with each other, and Meta’s might emerge as successful for reasons we can’t yet conceive of, and it could entirely hinge on the mass adoption of AR and VR many years from now.

But for right now, Meta’s idea of working and socializing in VR is losing to a goofy video game where you can play as Goku, team up with Iron Man and engage in a high-octane gunfight with Ariana Grande. One of those is a metaverse the public clearly wants, and the other is not.

— Nick Statt

Overheard

“Sorry to slice up the rumors, we're not making a Blade game but we can't wait to see what our friends at @MarvelStudios are cooking up for next year's movie!” — Ubisoft took the unusual route of denying a fast-spreading rumor yesterday that it’s working on a new game based on the vampire hunter Blade, after fans confused an Instagram post from actor Edwin Gaffney as a hint the French publisher was concocting something in partnership with Marvel.

"This perfection of controls really runs through the veins of Japanese game developers. It's been that way forever. There is something unique about moving a character in a Japanese game. The feeling that you have, the pleasure that you take … I look at developers like Platinum Games, when you play Bayonetta, that movement is perfected. They're second-to-none on that perfectionism. That's the local culture." — Nicolas Doucet, the studio director at Astro’s Playroom developer Team Asobi, talked to GamesIndustry.biz about what it means to develop games that feel like they’re crafted in Japan.

In other news

Saudi Arabia gives the greenlight to Activision acquisition. Saudi Arabia’s General Authority for Competition has become the first regulatory body in the world to approve Microsoft’s acquisition of Activision Blizzard.

HBO Max is removing 36 titles from its service. Did you know Elmo had his own talk show? Well, you won’t be able to watch it on HBO Max anymore.

Embracer Group’s Lord of the Rings purchase has strings attached. The massive rights deal, announced last week, means Embracer can now produce films, video games and other media based on the LOTR franchise, but with some key restrictions.

Streaming is officially more popular than cable now. Internet-based viewing surpassed cable TV consumption for the first time in July, according to Nielsen.

PlayStation VR2 has a launch window. Sony on Monday said it would launch its second VR headset in "early 2023," although the company is still keeping pricing under wraps for now.

A Star Wars project in limbo. A remake of the famed BioWare game Star Wars: Knights of the Old Republic is in flux after a major studio shakeup resulted in the project moving from Saber Interactive's Aspyr to another unnamed studio, Bloomberg reported.

Roblox poaches a key Meta executive. Steve Park, a government relations head at Meta overseeing Japan and South Korea, is leaving for Roblox, the WSJ reported. He will head public policy for the Asia-Pacific region as Roblox eyes growth overseas.

Sony goes all in on adaptations. The PlayStation maker is developing new films based on Days Gone and Gravity Rush, Deadline reported. The projects join in-progress adaptations of Ghost of Tsushima, God of War, Gran Turismo and The Last of Us, among others.

MoviePass aims to relaunch by Labor Day. Access will initially be limited to invited beta testers; the service will apparently offer multiple tiers starting at $10 a month.

Sony is facing an existential class action lawsuit

A new class action lawsuit filed in the U.K. on Friday is accusing Sony of overcharging players for digital purchases on its PlayStation Store. The suit is asking for between 67 and 562 pounds (or $79 and $661) each for an estimated 8.9 million eligible consumers at a maximum total of almost $5.9 billion. (There's even a sleek website set up for it.)

Central to the lawsuit is Sony’s 30% cut of all digital goods on PlayStation in combination with restrictions Sony puts on developers that lawyer and consumer rights expert Alex Neill claims is anticompetitive. “PlayStation users have lost out due to this unlawful anti-competitive conduct,” the lawsuit says, according to the Financial Times. The FT notes that the suit is one of many flooding the U.K.’s Competition Appeal Tribunal thanks to a recent 10-billion-pound ($11.8 billion) lawsuit against Mastercard that has spurred a lucrative market for class action litigation funding.

Sony has yet to respond, but the claims strike at the heart of the game console business model. They also touch on a central dispute between Fortnite maker Epic Games and mobile app store operators Apple and Google, both of which Epic sued after its failed attempts to bypass the store’s payment systems. Console makers have claimed in the past that digital commissions are how they recoup the cost of selling hardware at little to no profit.