Step into the Metaverse podcast: EP02 - How to Build a Rich and Vibrant Metaverse Economy with Jon Radoff

Good day everyone and welcome to the Step into the Metaverse podcast. My name is Mark Van Reimenam and I'm also known as the Digital Speaker. I am a future tech strategist and I think about how emerging technologies change organizations and society. This podcast is part of my new book called Step into the how the Immersive Internet Will Unlock a Trillion Dollar Social Economy. The book is available as an ebook, hard copy and audiobook. As part of this book I did nearly 100 in depth interviews with the stakeholders involved in creating the open Metaverse, the investors, the developers, the artists, the collectors, etc. And I've turned a selection of these interviews into this podcast as I think that these conversations are too valuable to leave them on my computer. In this interview I interviewed John Radaff. John Radaff is an American entrepreneur, author and game designer. His work has focused on online communities, Internet media and computer games. He is the CEO and co founder of Beamable, a live game service platform that enables the creation of online games based on Unity. We had a great conversation on what the Metaverse means for gaming the seven layers of the Metaverse, how the Metaverse will change the future of work, and which things we have to do differently when developing web 3.0 compared to web 2.0. Enjoy the conversation.

Maybe you can just give you a brief background of what you do and what's your role in the Metaverse.

Sure. Well, I guess my own background is I grew up in the Metaverse. My first two loves were computer programming and Dungeons and Dragons. And as I think you learn from my conception of what the Metaverse is, Dungeons and Dragons sort of was the proto Metaverse. It was a realm of pure imagination and real time interaction between people was social, was creative. By the time I was a teenager I was making computer games, online games. I met my future wife in an online game when that was way weirder than it is now. We started a game studio together. I dropped out of college to do that. Made one of the first online games on the Internet. I've done stuff outside of games as well. I started a creator platform for websites called E Prize. So it was for publishing websites to make it less technical, non technical for people that just wanted to get their content online. That company I took public. I started a company called Gamer DNA, which was an advertising network for game companies that wanted to drive demand awareness for their games and then got back into game development, started a company called Disruptor Beam. We made games with rich storytelling and social interaction in them and ultimately brought that to the world of popular television shows. So we had a game based on Game of Thrones, one based on Walking Dead, Archer, Star Trek. Star Trek was the biggest game that we did. But after doing that for a few years, I just came to realize, number one, I have a unique background. I've built games. I'd also built creator platforms and other business products before. So I had a very unique background and I love making games, but I could help millions of people make games. And I also saw the Metaverse happening. Now, I was talking about Metaverse before Mark Zuckerberg started using the word. But I had always looked at it as the next generation of the Internet where it become much more real time. So to me, it's not actually about ar, VR, all that stuff you asked me, like what's my one sentence definition of the Metaverse? It's the next generation of the Internet built around real time activities. So within that, that's a big tent which can include AR&VR and MMORPGs and virtual worlds and zoom and spatial audio, like Clubhouse. All of that is part of the Metaverse. The common theme of all those is it's real time and it's interactive between people. As opposed to the first couple of generations of the Internet were more about publishing information and accessing it asynchronously, or making an order through E commerce or shopping. So much more transactional, whether that was purchases or information access, whereas this is real time and experiential. So when I looked at what the Metaverse would become, it was clear to me that game technology would build that right. So there was this urgent need that all game developers had to have, not just the 3D engine, the surface space of the game experience, which is something that Unity and Unreal have really done a great job at, but the live services underneath that, which provides the persistence and interaction of the worlds, the social experience, the community, the economies. And that hadn't been standardized, still isn't, and that's what we're working on. But ultimately, that combination of the 3D engine and the live services, that's what the Metaverse is going to be built on. And I knew that our phase one would be help game developers come to market with all the things that they need to build games around economies and communities. And that if we do a great job on that and make it really easy and make it scale so that lots and lots of people can access it, then that would prepare us to then expand into all this other stuff of the Metaverse, which you start to get a hint of Some of the stuff that is like that in experiences like Roblox and the more social experiences, rec room, all that. So it's going to extend from games to more social stuff, workforce collaboration, and also just pure creative expression.

That makes sense. I think what we will see is, I have the feeling that it will sort of move to the entire fabric of society. So everything that we do in real life in some form or way will eventually, eventually be able to be done in the metaverse.

Certainly everything where you can feasibly dematerialize or digitize the experience can move into the metaverse. But then also we can even go a step beyond the kinds of experiences. So it won't just be mirror the things from the real world into the metaverse will start to restructure experiences. Like one of the examples I've given before is like, think about the live music experience right now. If you go to a concert. Well, concerts happen in physical space, so they're built around real estate and there's limited space for things like, you know, who can be in a front row seat. And yet a concert does deliver a kind of experience that cannot be replicated into say, just watching a music video or a recording. Because concerts are a conversation between the artist and the audience, which is a unique dynamic of having the community present and interactive with that music experience. So what happens when we start thinking about things like that, like a music concert, for example, where you've got that live, dynamic conversation aspect with the artist going on, but no longer do we have to think about all these rival goods like the front row seat, like you can actually restructure the way you even think about space so that everybody can have a front row seat, or you just start to have completely different things that are not, not even possible in our physical reality. So I think that gets really, really interesting to project into the future and think about games and these new experiences. And Metaverse just happens to be the best word we have for all of that right now. Because some of these things, some of them will be games, some of them will inherit properties from games, but a lot of the time it's going to be something different that we don't actually have right now. I think things like Roblox actually give us a few of the indications of what that looks like. Because there's a lot of things that people do in Roblox that you would never build a product just for that. Right? Like you would adopt me. Probably wouldn't have become a super popular game as a standalone. But once you have portable Identity, portable social structures that can move from experience to experience. You enable this whole realm of additional experiences that people can start to have. So I'm really excited to just see all the creativity that's going to happen.

Yeah. And you described seven layers as part of your Metaverse infrastructure. Human interface, decentralization, spatial building, creating economy, discovery and experience. But which do you think is the most important and why and which is the most challenging to develop?

Well, I want to answer your question maybe a slightly different way because I think first of all they're all challenging. Everything there like has enormous technology challenges and many social challenges within them to be successful at any of those layers. I think there's an opportunity for all of us humans though, which is not just the experience of all these. Like we just talked about some really amazing experiences and that's great. And I will never take anything away from just the purely experiential. But in the world right now there's about one and a half million people making games on Unity every month. There's 7 million people that are actively creating in Roblox. There's 50 million people that are YouTubers making content there. YouTube starts to sound like a big number, but in general the number of people who are actively being creative in this space, it's just not that large. And there's billions of people who could become creative. Like I feel like that's my massively transformative purpose in life, which is to bring about more creativity in all people. Because there's this enormous creative genius out there in billions of people that just isn't getting out for whatever reason. Time, access, or more often than not, just the technology has way too many barriers in it. There's too many financial constraints. So if I can help the world do that, that's good. But I think that's sort of not just the challenge or the important, but that's like what would be really transformative for humankind is to enable more creativity across the planet. Like imagine if we could just get 1% more people in the world to be really creatively expressive, like how world changing that would be. And 1% should just be only the beginning. So I see this as a space where we can bring far more creativity into the world. It's a place for expression, emotion, connection with each other. It's really about the most human things there are. And if we can solve for that, which is going to be hard, that's the opportunity. So I guess that's my answer is like bringing about creativity, which I mentioned. Creator economy is a layer but to be clear, like bring forth that creativity requires innovation up and down.

Yeah, you need to hold Stack in order to, you know, become a creator and to have, not to have to build the technology, but just to recreate, I guess.

Um, and you have to make the technology ergonomic and ubiquitous and available and discoverable. Like all that stuff is. It's got a lot of challenges.

Fair enough. And what role will games play in the Metaverse?

Well, I mean, games have been the real time activity that were there from the beginning. Right before we had Zoom conferences and we were doing real time stuff, you know, I guess we had audio, audio calls before that, but that was about the closest thing you could get. But games were the ones that created spaces for worlds and started to help people understand how to interact within these spaces. And I think it's actually what had prepared people for the Metaverse. So there's a technology answer to what you just asked, which is technologically speaking, it's 3D graphics rendering and the semiconductors that enable that, and the 3D engines and the live cloud infrastructure on the Internet and the real time technology, all that's the technology. It's the same technology for all the non game applications. But the real thing that games have done is trained people on how to exist in virtual space and express themselves and form social connections and treat their social connections with people as real. Like, I, I don't like to talk about actually virtual versus real. I think about virtual versus physical because I think both are real. Like our conversation right now is a real connection, even though we're on opposite sides of the planet and people may not have been ready for these technologies if they hadn't become accustomed to it through the acculturation that has been happening in games and virtual worlds now for several generations, and particularly the last couple of generations since 2000 or so.

Yeah, I can clearly see the role that gaming plays in the Metaverse. But the metaverse is broader than just gaming. So we've seen of course, Microsoft announcing their sort of enterprise version of the Metaverse. How do you think that the Metaverse will change the future of work?

Well, it's going to dematerialize space. And that means that in the future I think people will collaborate more effectively because we are organic beings and the way we express ourselves physically is an important part of our communication. And a 2D screen doesn't quite capture all of it. Captures a lot, but it's not the same as being in the same room for someone and standing around a table. And again, I think Games actually still the thing that prepares people for the work version of that. I look at something like tilt 5, for example, like till 5 in the early testing for that platform. I don't know if you've looked at it. It's, you know, their target market for games was things like card games and board games. Things where people do already kind of congregate socially around a table. But what happens when you can dematerialize and digitize that experience so that people can come in from anywhere and still have that social experience of being physically around a table? Things like that are going to inform so much of all of these dreams that Microsoft and others have around how we work together, how we socialize together in space.

And of course you hear a lot of stories about the metaverse needs to be interoperable, it needs to be decentralized. We should not want to have a metaverse that is controlled by big tech. What does the blockchain, what role does blockchain play in the metaverse as well as self sovereign identity or self sovereign reputation? How does that affect or work out in the metaverse?

Well, I think that walled gardens and open platforms are both going to coexist. When I talk about the, I have talked about the megatrends that are going to shape the metaverse, I don't think of the metaverse as one thing. I literally do think of it as it's the Internet and it's just going to be much more geared towards these real time activities. So within that you can still have walled gardens. Sometimes having a walled garden is a good thing. Like, I don't even want to. Like, it sounds like when I say the words walled garden, like it's, oh, these people are going to shut us inside walls and they've got some nefarious purpose. And sometimes they do have a nefarious purpose. But there's a lot of reasons why it can be a feature of the experience to have certain guardrails around content and experience and rules and communities and things like that, which are good. I think though that there's a really interesting set of experiences that people are not going to be able to have in walled gardens either. So I'll actually start with an example from a walled garden. Like we can go back to Roblox again. Like there are games in Roblox. But for the most part, many, many, many of the experiences that people will have inside Roblox wouldn't exist if it wasn't for a large community that could easily slip from one experience to the other. That said While it's a largely frictionless ecosystem inside Roblox, there's still a lot of constraints on what you can do. The technology has limitations. There's only so much you can do, say with gr, there's rules on the kind of content, there's a lot of regulation of the community. And again, that's fine. They wanted a certain kind of community, they had a certain set of technology, they made the tools easy to use. But I'm dreaming of a future where we really invert that whole model. And creating an experience like that is as easy as publishing a website and crafting a world becomes something easy for just about anybody to do. Like, let's get it to the. To be as easy as it is in Roblox, but with the freedom to go wherever you want. Because then we'll reach this whole, you know, we'll have an exponential increase in creativity, innovation, all of this other stuff that we've already seen with Roblox. But it'll reach a whole new scale because there'll be so many more versions of it and so many more interconnections. And that's where interoperability comes into play. And you brought up blockchain. Blockchain is a partial solution to that. It doesn't solve all problems. But blockchain is particularly good for things like self sovereign identity, or transferring assets and value and currencies between different systems because it adds this ability for programmatic value, essentially. So we had web 1.0 and 2.0, and the Internet generally is about programmatic information exchange. Blockchain is about programmatic value exchange, which is completely revolutionary. So it just allows you to have this ecosystem of the community, can build code components that do interesting things with that value, whether it's a defi protocol like they have in blockchain, or whether it's a marketplace for NFTs where you can open up the economies of online games and virtual world experiences. So again, like, we can't, I don't think we know yet all of the emergent innovation complexity and whatnot that's going to surface out of that. But I think it's really, really important that we allow that to happen. Right. So that's my answer to blockchain and open standards in general. Right. Like also within that would be standards like Open XR and WebAssembly and all these things that potentially allow people to add content and code and applications in an ecosystem that is not regulated by a few set of rules or a few technology constraints. That would be a huge tax on Innovation.

Yeah, it makes sense. And so you also discuss simulations in the Metaverse in your articles. Does it include for your digital twins? And how does an enterprise metaverse look like if they all use digital twins?

Yeah, well, so digital twins are part of simulation. I mean, broadly speaking, simulation is used all over the place. Whether you're talking about a game or a game like thing like flight simulator, or you're talking about trying to actually model the real world, like traffic patterns, or the way an H VAC system might work within a building, or how people move about inside an environment, like our examples of some of the simulations that I've seen people working on. So to do accurate simulations that are based on the real world, you want to be able to bring information about the current state of the real world into your simulation so that you can model around it. So digital twins is really about, you know, largely taking information from the real world and creating a bridge between it and the metaverse, the virtual world. So could be something simple like a thermostat to something much more complex like a car, or even a factory or even an entire city can be brought in in the form of digital twins.

Okay, yeah, makes sense. And so you just briefly mentioned already web 1.0 and web 2.0. What things do we have to do different for web 3.0 compared to web 2.0 to make it an open and vibrant economy?

Well, I mean, the Internet has been in an interesting trajectory. So Web 1.0 was very open, there was a lot of innovation, but it was also very hard to make things. So the platforms that really won out and brought about Web 2.0 were in many ways just a reaction to how hard a set of problems were in Web 1.0, whether that was content publishing, creating an online store, selling things online, sharing photos of your kids with your family. Like all of those things were just prohibitively hard to do in web1tado. So a group of companies saw the problem and they fixed the problem and they made it easy. But in the process of doing that, they gained enormous power and built walled gardens around it and extract big rents and ultimately, I think, cut down on the innovation that could happen. A good example of just destroying an ecosystem would be like, look at the early Facebook and how they opened up app development in their ecosystem. And you could almost time the decline of the Facebook app ecosystem to the day that they started demanding 30% of the revenue with all the payment systems and regulating what people could or couldn't do within it. Like today, like that app ecosystem is A shadow of its former self. Even in mobile, where you've gotten to much greater scale. It isn't quite like PC software development, where if you look at PC software development, there was an enormous number of software companies that emerged with real, durable, sustainable, growing enterprise businesses built on top of that. Right? Just as Web 2.0 kind of built upon that openness of the Web 1.0 platform and they built big sustainable business on it, you don't see quite so many sustainable businesses inside those web ecosystems. So the thing that I think is important for Web 3.0 is hopefully a lot of the things we just talked about around open standards, blockchain openness, open source, all of those things are resurgent now that people see the cost of building everything within a walled garden, which is, you're not going to create a lot of sustainability other than the walled garden itself, which you really are delivering most value to them. So I hope, I hope we've all learned and there will be walled gardens. They, they're not going away. And that's fine, let them exist and let them build great stuff. But let's also challenge ourselves to build the creator tools where people can publish anywhere. That's what I'm in the business of, a beamable for games and later the Metaverse, because that's the way we're going to bring most creativity, innovation and sustainable business opportunity to everybody.

But what are some of the dangers then that we can, you know, that can also come with the Metaverse, which we, of course, we have a lot of problems with the current Internet, from hacking to scams to what have you. What are some of the dangers that we can expect in the Metaverse and how can we prevent them from happening?

Well, I think we just have to always remember that human nature doesn't really change. So none of these things that we're creating technologically are really a cure for the human condition itself. So unfortunately, people are still going to be nasty to each other and people will be good to each other as well. Like, I'm more focused frankly on the positives of, like, if we can bring, put creative power in the hands of people, like that's a net positive. But we're not going to change human nature and people are going to be mean to each other online like they are in the physical world and like they are in web 1.0 and 2.0. But we could do a better job of just distributing power more evenly through the ecosystem. I'm not against people becoming billionaires and making a great product and profiting from it. I think that's wonderful. Absolutely no problem with that. I'm a capitalist, but I think limiting it to a few near monopolies just isn't good for the world for the reason that not going to see the best of everybody in terms of what they can make.

Yeah, makes sense.

People tend to focus on the technology a lot and don't pay as much attention to the cultural trajectory and the social change and all of the social learning that we have gone through over the last decades. Really? Because I think it's the culture change, the cultural evolution that actually drives this more than the technology. The technology just follows that anytime you create a technology that the culture isn't ready for, it just sort of languishes. Right. Like, VR had technology problems in the past and people would joke about it and say, like, why isn't VR working? Well, people weren't ready for VR yet. Like, they hadn't experienced enough virtual worlds. It was just too much of a leap from what they were used to. So, of course you get some people to get excited about it because there always be people like me who are, you know, I'm a nerd and I'll, like, geek out on anything that's really cool, but just to sort of like, really connecting with everybody around the world, like, there's a certain amount of acculturation that they have to go through. So I would just spend time on, like, what are those culture trends? Like, a big thing that I've written about is just the mainstreaming of the virtual world and digital identity. And that 20 years ago, people didn't even think that people you met online really almost. They'd almost act like they didn't count as other humans. Like, now people have friendships online that are very important to them. And actually there's been some research that's shown that early friendships online are different than early friendships in physical reality. But then if you go like a year, if you elapse forward a year, like, they start to actually look very similar after a year has elapsed. So people weren't ready for that back then. They didn't take it seriously. They just approached it. Their mental model was very different.

That's a very good point. Thank you for mentioning that. And other than that, thank you so much for your time, John. I really appreciate it. So thank you so much.

Okay, thank you. Take care.

Have a good day.

Bye.

Bye.

And that wraps up the conversation with John Radov. If there's one thing that stands out for me from the conversation, it is the challenge ahead of creating an open Metaverse and the role that gaming will play in the Metaverse. I couldn't agree more, which is why in my new book, Step into the Metaverse, I discuss what is required to make sure that the Metaverse is built on top of web3 infrastructure. If you enjoyed this conversation, don't forget to hit the like and subscribe button on your favorite podcast platform so you will be notified when any of the other interviews will become available. Thank you and see you in the Metaverse.