Earlier this week, a bunch of companies gave Epic Games a big ol’ pile of money — $1 billion to be exact — to help it accomplish its goals for the future.
This kind of thing happens a lot, both to Epic specifically and to companies in general, of course. Whenever it does, companies usually note in their press releases where that money will be spent. In gaming, that tends to be on new games, new technologies, or for bigger companies, acquisitions.
In Epic’s case, we see something quite different — it’s going toward something called “the metaverse.”
“We are grateful to our new and existing investors who support our vision for Epic and the Metaverse,” said CEO Tim Sweeney of the funding round. “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.”
Epic Games, and more specifically Sweeney, has been talking about the metaverse for some time now, though never quite so explicitly in the form of an announcement that they’ve raised a billion dollars for it. They’re not alone, either. The idea of the metaverse has caught on across the tech industry over the last decade, with multiple companies seemingly in a race to make it happen.
But what is the metaverse? And why does Sweeney, the head of a company that makes a video game engine and runs a battle royale game, believe Epic might be poised to make it happen?
What is the metaverse?
The word “metaverse” stems from a 1992 sci-fi novel by Neal Stephenson called Snow Crash in which people use simulated forms called avatars to interact both with one another as well as non-human programs in a virtual space. Though that’s where the idea stemmed from, those pioneering the idea in reality haven’t yet come to a consensus as to what an actual metaverse might look like, as the massive collaboration and industry shifts required to make it happen are still a long way off.
What people do generally agree on, as laid out by Epylion Industries managing partner, essayist, and analyst, Matthew Ball is that the metaverse is the idea of a persistent, synchronous, virtual space where people can interact with one another in real time and where both planned and spontaneous events occur that bridge the gap between the virtual and real world. The metaverse will have its own economy to enable content creators of all stripes to profit from what they make in the space, and within it all services, companies, individuals, and platforms will be interconnected. In theory, it’s a successor to the internet.
To put it another way, Sweeney has frequently described the jump from the internet as it is now to the metaverse by comparing it to how email evolved to interconnect individuals at different institutions (he does this often, but you can hear him mention it at his 2020 DICE talk). In the early days, email was just a bunch of internal systems. He, Tim Sweeney, could message someone else within Epic Games, but he couldn’t connect with anyone outside of that system. But then the “@” symbol was added to email addresses, and then tim@epic could connect with a different tim@microsoft and tim@sony, and so forth. Essentially, everyone collectively agreed to connect their respective closed systems to everyone else’s in order to make an open, interconnected system.
Sweeney’s point is that whatever the metaverse becomes, it will eventually break down barriers between closed systems, so that rather than having separate systems and accounts for things like Facebook, Twitter, Google, Fortnite, Call of Duty, and so forth, everything will just be interconnected and work together as one digital economy. And if you’ve read even a single article about the Epic v. Apple lawsuit, you likely see one of the directions this is eventually going (more on that a little later).
Who is trying to build the metaverse?
Right now, there are a lot of spaces that already exist that are kind of like this hypothetical metaverse, but aren’t quite there yet. You might already be thinking about MMORPGs, like World of Warcraft, where hundreds of users interact together in a virtual world in real-time, and which has its own economy. It does tick some of the boxes, but World of Warcraft isn’t ubiquitous — it’s still a closed system. And furthermore, it can’t hold everyone at once. WoW and other MMOs like it still have to split people into different servers and instances in order to function, and depending on how they’re structured, most MMOs aren’t persistent worlds either — they’ll frequently reset back to a former state for one reason or another.
A number of other games have toyed with this idea in different ways, though all come up short. Second Life, IMVU, Minecraft, and especially (and explicitly) Roblox have tried to make prototype metaverses of their own. Outside of literal video games, a number of other major tech companies are dipping in as well. You likely already participate to some degree in Google’s efforts to interconnect all its online systems, apps, tools, and commerce. Facebook is involved via Oculus VR and its Facebook Horizon initiative. And everyone who is up to something involving the cloud — cloud gaming or otherwise — is probably thinking about this to some degree as well.
Of course, no one’s done it yet, in part because one platform making a closed virtual space doesn’t meet the qualifications. The metaverse needs to be ubiquitous to meet its own definition, so just setting up another persistent virtual world in a video game doesn’t cut it. So no, Fortnite isn’t the metaverse either. It’s not just because it’s limited to 100 people per match — Fortnite is still a battle royale video game where players do very specific things. You can’t log into Fortnite and do anything that isn’t already coded into the rules of the game. So while the IP crossovers and giant Travis Scott concerts and its general use as a social space are good signs, Fortnite isn’t, nor will it eventually literally become, the metaverse. Not by itself.
But what Fortnite can be is a powerful tool, a puzzle piece, a lever to move the tech industry in the direction of the metaverse Sweeney is trying to build.
What is Epic’s plan for the metaverse?
With all his talk of breaking down barriers, it should be pretty clear that Sweeney and Epic’s current fight with Apple over payment systems in Fortnite is about more than just V-bucks. Sweeney is trying to get all the major tech companies on board with his vision of interconnectivity, a vision he outlined in detail in his DICE talk last year. In the last decade, Fortnite has helped pioneer this vision by being among the first truly cross-platform games. Prior to the lawsuit, players could play Fortnite on any major platform, their purchases from one platform would carry over to another, and they could play simultaneously with their friends across platforms.
The real sticking points were the payment systems and revenue share issues, which Sweeney is currently taking Apple to court over. If he wins, that’s another wall knocked down and another step toward true interconnectivity. If he can’t get consumer tech companies on board willingly as he did with the console giants, well, maybe the courts can make it happen for him.
Critically, it’s likely none of this could have ever happened had Fortnite not taken off in the way it did. Sweeney’s vision for the metaverse surely did not spring up overnight, but in an interview with VentureBeat he acknowledges he first began thinking about it in earnest explicitly because of Fortnite’s success. Of course, all his eggs aren’t just in that one basket. Epic also has Unreal Engine, which is used not just across games (and recently became entirely free for developers up to their first $1 million in revenue earned) but also in filmmaking, with The Mandalorian and Westworld notably using its tech. And while its PC storefront, the Epic Games Store, hasn’t succeeded in becoming as enormous and ubiquitous a beast as Steam, it arguably never needed to. It’s enough, at least for Sweeney’s vision, that games could launch successfully somewhere other than Valve’s platform.
But even that, too, is thanks to Fortnite in a way. Fortnite in its Save the World incarnation was nearly cancelled, and the explosion of its battle royale came as a total surprise to the company, resulting in months of intense crunch as Epic struggled to staff up. Instead, it became an international hit, successful to the point where companies like Nintendo, Sony, Microsoft, Apple, and Google couldn’t ignore it if they wanted to. Were Fortnite simply a mediocre battle royale with little following, any one of those giants could have easily halted its cross-platform ambitions. But with piles of money coming in from players every day, it was critical to pay attention. So on PC too, Fortnite brings consumers to the Epic Games Store, and numerous other games there benefit from the traffic.
Now, Epic is fielding a steady flow of partnerships through investments like the recent $1 billion round, as well as acquisitions. It’s picked up both Psyonix and Tonic Games in recent years, adding fellow social games Rocket League and Fall Guys to its ambitions. It’s picked up a number of companies like Twinmotion, Cubic Motion, and Hyprsense to build out Unreal Engine, but it’s also brought on SuperAwesome, which focuses on “kid-safe” online services and would theoretically help make whatever the company is building safer and friendlier for a general audience (though there are still plenty of questions as to what moderation of this space would look like and who it would benefit).
So, when are we getting the metaverse?
Though Epic is now pursuing the idea openly and in earnest, we’re still a long way off from the metaverse. After all, even though Fortnite has broken down barriers, most online communities, networks, and spaces are still closed in numerous other ways. And while Sweeney has made clear that he sees gaming as a critical, unifying point for the metaverse to converge around, more than just the gaming industry has to be on board. If the Epic v. Apple suit doesn’t go the way Sweeney wants, that could mean critical setbacks as well.
What’s more likely, as Sweeney told VentureBeat, is that the metaverse will be a linear evolution rather than a “massive, sudden disruption.” He anticipates we’ll slowly see barriers break down over time and more spaces become better interconnected. Gaming has already made key inroads, and if current trends continue we’ll see cross-platform play and services become more and more standard throughout the current console generation.
With gaming continuing to grow into a financial giant, Sweeney believes this will draw other industries — for instance, a car manufacturer isn’t going to just put up a bunch of static ads for their cars in a theoretical metaverse. Instead, people will be able to drive cars around and see what they feel like, and we already see a version of this in Rocket League. Fortnite’s been more experimental with its metaversal advertising — we’re not looking at pop-up ads for Star Wars anymore. We’re dropping onto the island dressed as Darth Vader, and J.J. Abrams is asking us to vote on whether we want to watch Darth Jar Jar or a Rey and Kylo power ballad. Rather than the tortuous process of figuring out how we can play the same video game with our friends on the same platform, we’re all together — mobile, PC, and console players — and some of us are playing Fortnite as Kratos driving a tiny Warthog around a map.
And speaking of Kratos, it’s worth acknowledging one company supporting this metaverse in earnest. Though we’ve already gone over the major gaming platforms mostly opening their gates to Epic’s vision in small doses, Sony is taking far more than begrudging steps forward. It contributed $200 million to this latest funding round, and $250 million during a different round last year. Which is all sort of ironic, given that it was one of the more reluctant adopters of cross-platform play from the beginning.
It’s hard to say exactly what’s piqued Sony’s interest in this vision. The best hint we have at the moment is Sony’s focus on Epic’s technology. Sony Group Corporation president and Chairman Kenichiro Yoshida specifically called out Epic’s tech capabilities in his formal statement alongside the funding round, and last year, Sony worked in close collaboration with Epic to announce Unreal 5 Engine alongside the first footage of anything running on the PS5.
And to get a bit more speculative, Sony may stand to benefit more than any other gaming giant from Epic succeeding. Unlike its console competitor Microsoft, it doesn’t already have an interconnected web of online services, computing tools, and cloud infrastructure. And while it may be ahead in the gaming market in terms of sheer console sales, Xbox Game Pass and xCloud more closely resemble facets of the metaverse than a big hardware box does. What Sony does have is numerous interests across tech, film, and music that could slot in perfectly to existing infrastructure. If Epic succeeds in driving a metaverse, then Sony gets front row seats to all the new advertising and commerce opportunities that come with it for its entire technology empire.
Slow though the change may be, if you play games with any regularity, you’re likely already connected to Tim Sweeney’s proto-metaverse in some way. That doesn’t mean that what he and Epic are building is inevitable, as it’s still ultimately up to various companies and legal systems to tear down their respective walls, and walls coming down inevitably comes with certain consequences for both those companies and the people who engage with them. But to hear Sweeney tell it, those arbitrary walls are the only meaningful barrier remaining to the metaverse.
“We realized that you don’t need this crazy technology to do this,” he said in the VentureBeat interview. “We have everything we need right now. And the limiting factor on becoming reality is not much more than that. Developers learning what elements really make for awesome online social experiences, continuity of experience, and science fiction.”
Rebekah Valentine is a news reporter for IGN. You can find her on Twitter @duckvalentine.