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Problems with the metaverse? How to solve for low concurrent metaverse users

Inworld Team
November 15, 2022
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A desert with a lone pink tree to represent problems with the metaverse around low concurrent metaverse users

If you listen to the news, the future of the metaverse might seem bleak. In October 2022, it was falsely reported that the well-known metaverse platform Decentraland only had 38 daily active users (DAU). That number was later corrected to 56,697 monthly logged-in users. Earlier in the year, play-to-earn game Axie Infinity admitted that their user numbers had dropped from 1,331,453 DAU to just 588,000 DAU in three months. 

What does this mean for the long-term future of the metaverse, a market that Citi predicted in mid-2022 would be worth between $8 trillion and $30 trillion by 2030? Was all that metaverse hype for nothing? Not at all. 

In this two-part blog series, we’ll dig deep into some metaverse statistics and the metaverse market to look at what’s working in successful metaverse developments, examine why concurrent usage is so low in certain metaverse experiences, look at how others are solving for it, and discuss strategies to stop or avoid the downward usage spiral that low concurrent user numbers often sparks. 

The future of the metaverse market is strong

An empty metaverse world with pink bushes, a pink palm tree, a platform with a bathtub and a geodome in the background. This represents problems with the metaverse around low concurrent metaverse users

Individuals, companies, and investors are still bullish on the metaverse market. According to the U.S. Securities and Exchange Commission, in the first half of 2022, the word ‘metaverse’ appeared in regulatory filings over 1,100 times. In addition to that, 96% of marketers believe it’s important that their brand have a presence in the metaverse and 74% of American adults have joined or are considering becoming metaverse users. 

With Fortnite boasting over 250 million monthly average users (MAU), Roblox boasting over 205 million, and Minecraft boasting over 170 million, there certainly isn’t a lack of interest in the metaverse. Nor is there a lack of money being spent. According to JP Morgan, over $54 billion is currently being generated annually from the sale of virtual goods in the metaverse and, in 2021, over $501 million was spent on real estate in the metaverse. As a whole, the metaverse market was worth over $478.7 billion in 2020 and that is predicted to grow to over $800 billion in 2024.

Problems with the metaverse are.. growing pains

A lake with platform in the middle of it with flowers growing on it. This represents an empty metaverse world due to low metaverse statistics around concurrent users

What certain metaverse platforms are finding isn’t that there’s no future in the metaverse but, instead, how difficult it can be to build new metaverse technologies and business models in public. 

Meta struggled with the technical difficulties of adding realistic legs to Horizon Worlds’ avatars and chose to simplify their graphics in an effort to plan ahead for the technical challenges of keeping latency low on image rendering during times of high concurrent usage the platform was engineered for. Similarly, DAO and NFT metaverse plays like The Sandbox and Decentraland are still figuring out how to make the opportunities and economics of blockchain worlds and games work for both investors and players. 

Indeed, one of the common explanations for those two platforms’ low user numbers is that, rather than develop metaverse land as expected, buyers held it as an investment and left the worlds undeveloped. Undeveloped worlds led to low concurrent usage which further degraded the metaverse user experience and caused usage to increasingly spiral downward from their peaks. 

So, what can metaverse professionals learn from recent metaverse user challenges? Like with any new product in search of a product market fit, it’s an opportunity for the industry to evaluate what’s working and what isn’t and pivot. 

Metaverse users see the metaverse as a social space

A view from an empty metaverse house out at a lake with pink clouds. This is to represent problems with the metaverse market around low concurrent metaverse users

It’s not insignificant that Second Life, the popular virtual world often considered the first metaverse, was primarily a social experience. If you look at the most popular metaverse experiences, they all have that in common with Second Life. 

Around 62% of Roblox players, 58% of Fortnite players, and 57% of Minecraft players say that they use the games to socialize. And those numbers look set to increase. A more recent study found that 84% of gamers use gaming to socialize. Research has also found that social engagement in metaverse user experiences increases average playing time per user by over two hours every month. 

Social-centric gaming tends to be stickier across the board. For example, casual mobile games lose 90% of players after one week but games with multiplayer options and embedded social features maintain players for months or even years. This is particularly true for younger players. According to a 2021 study by the Entertainment Software Association, 89% of 18 to 34 year olds prefer to play with others, that falls slightly to 81% of 35 to 44 year olds, and 68% of 45 to 54 year old gamers also prefer social gaming.

The future of the metaverse is social interaction

An empty metaverse home with a purple tree. This is to represent how metaverse hype hasn't always materialized into metaverse users.

Non-gamers looking to enter the metaverse are also more likely to do it to connect with others. In 2022,  KPMG reported that 78% of U.S. adults saw value in immersive interactions for socializing with friends and family. And while some people see the metaverse as a chance to hang out with their existing friends, a study by Zen Internet found that 18% of British 16 to 24 year olds were using the metaverse as a place to make new friends. 

So, if socializing with other people and players is so critical to metaverse denizens, how can new metaverse worlds or gaming platforms overcome the cold start problem and avoid downward user spirals due to empty worlds? 

The connection between metaverse ‘failure’ and low concurrent user numbers

A platform in the sky with clouds around it in a metaverse world. This is to represent the ongoing problems with the metaverse around concurrent metaverse users

Before we look at how to solve the problem of empty worlds, it’s important to understand the challenges involved. Concurrent users is a metaverse metric used to understand the richness of the experience metaverse users have. It’s different from daily active users or monthly active users since it measures how many people are in a metaverse world at the same time. 

To understand why that’s important, think of a metaverse experience as a nightclub. Concurrent users is a measure of how full the metaverse nightclub is with the assumption that the more concurrent users there are, the richer the experience. Just like a full nightclub tends to be more fun. 

Depending on the platform and geographical distributions of users, two worlds with the same daily active users could have very different average concurrent user numbers. For example, one world with 100,000 daily active users might have more geographically dispersed users who come on at different times and only stay for an average of 30 minutes. That could give that world an average concurrent user metric of as low as 5,000 users. 

In contrast, a metaverse world where 100,000 average daily active users are less geographically dispersed and log on around the same times while also boasting an average play session length of one hour, could have an average concurrent user metric of 40,000 users. Those are extremely different metaverse statistics. The game play or world experience of the first metaverse world will be vastly different than that of the second metaverse world in this example. 

And that difference could be the difference between metaverse failure or success. 

No amount of metaverse hype will matter if a world has low concurrent users

A lone palm tree in the desert of a metaverse world. This is to show how people believe the metaverse market might be dying.

In the highly social world of the metaverse, other players are often the main attraction. Games like Roblox boast an all-time high of 5.7 million concurrent users. Fortnite’s concurrent users are also in the millions. Second Life has average concurrency numbers that range from 27,000 to 51,000 users. VRChat saw its concurrent users in 2022 peak at 42,769 users. 

Low concurrent users degrade the metaverse user experience in a few ways. 

  • Less social. If one of the main drivers of metaverse user experience, user retention, and session length is the ability to be social, low concurrent users makes users less likely to spend time – or return – to a metaverse experience. 
  • Less fun. As much as exploring fully realized open worlds might be exciting, if there is no one to interact with in all those beautiful places, users won’t truly enjoy it. It’s not surprising that worlds with established user bases and core communities like Second Life continue to outperform many newer metaverse experiences. Community is what makes it fun – and sticky. 
  • Less immersive. A metaverse experience that eerily has no other people around takes users out of the experience – making it harder for them to enjoy the game or world.
  • Lack of a shared experience. One of the benefits of playing a game like Fortnite, for example, is the ability to share a consistent experience with millions of users that spans different seasons, storylines, and events. That’s also one of the reasons streaming games like Fortnight are so popular. Participating in Fortnite makes you part of a community. 

The challenge of building strong communities of metaverse users

An empty metaverse world showing a home with green couches and a view of a lake with no people. This is to show that metaverse users aren't showing up.

The challenge with building user communities even a fraction of the size of Roblox and Fortnite is that doing so is a bit of a chicken and an egg problem. The technology adoption lifecycle generally moves through the following waves of users: 

  • Innovators (2.5%)
  • Early Adopters (13.5%)
  • Early Majority (34%)
  • Late Majority (34%)
  • Laggards (16%)

It’s comparably easy to transition from Innovators to Early Adopters and Early Adopters to the Early Majority when you’re talking about buying a new iPhone. But when you’re talking about metaverse experiences, there aren’t enough other metaverse users populating that experience at those transition points. 

The move from one stage to the next in the metaverse platform adoption cycle quickly loses its momentum when the fun and excitement that all the metaverse hype promises don’t bear out due to empty worlds. 

What’s often seen with metaverse user adoption is a lot of initial excitement from Innovators followed by Early Adopters testing out the platform after reading press about it or attending a special event, such as Decentraland’s alternative New York Fashion Week in 2022. But, after that, the platforms tend to slowly bleed users over time due to low concurrent use when the event is over. 

We like to call this the Metaverse User Spiral. It’s hard to pull out of it once it starts since it’s a self-reinforcing cycle. The more users a platform loses, the faster that platform starts losing users. This often occurs until only a small community of power users remain – often that initial group of Innovators and Early Adopters. 

Turning those metaverse statistics around

Wondering how to escape or avoid the dreaded Metaverse User Spiral? In our next post, we’ll examine unsuccessful strategies metaverse developments have used to retain users, look at why those strategies haven’t worked, and talk about innovative metaverse technologies that can turn those metaverse user trends around.

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