Another One To Watch - Wisear

Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Thursday, we’re talking to Second Life founder Philip Rosedale about his return to the platform that pioneered the metaverse, and taking a first look at a startup that wants to popularize neural interfaces. Also: everyone’s favorite snow shoveler.

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Philip Rosedale: Growing virtual worlds is hard

The timing couldn’t be better: Second Life founder Philip Rosedale is returning to Linden Lab, the company behind the pioneering social online world, just as the metaverse has become the next big thing. Roblox went public, Facebook rebranded as Meta, Microsoft is buying Activision, and every tech company suddenly wants to be a metaverse company.

So what’s Rosedale’s big plan to take on these mighty competitors? How does he want to grow Second Life, and make it the place to be in the metaverse?

“I'm not sure,” Rosedale confessed when we caught up this week. Instead of pretending to have a master plan for virtual world domination, Rosedale laid out his concerns about VR, the issues that have prevented Second Life from growing and the steps Linden Lab may have to take to stay relevant.

VR is great for gaming, but not ready for work and social. Rosedale’s startup High Fidelity was looking to build a VR successor to Second Life back in 2013, but eventually shifted course to focus on spatial audio. He has been critical of VR headsets ever since, often mentioning motion sickness as a key remaining challenge.

• In our conversation, Rosedale pointed to accessibility and inclusion as perhaps even bigger issues. “There are tons of people buying the Oculus Quest 2, but that doesn't mean that there's a diverse crowd of people using it,” he said.
• One reason for a lack of diversity among VR users: People need to be comfortable blindfolding themselves in the real world to enter VR, something that can especially be an issue if you are in a room with other people, he said.
• “That's going to skew the gender, age and everything else about using the devices,” Rosedale said.
• This is bound to be an issue if you mandate VR for work, for instance. “60% of people are going to be very uncomfortable using it, and 30% of people are going to say: ‘This is awesome,’” he said.
• That’s not to say that social VR can’t work for a subset of users. Asked about Second Life’s competition, Rosedale professed that he had a lot of respect for VRChat. “VRChat has been fascinating,” he said. “In many ways, [it’s] the closest thing to Second Life that uses VR headsets.”

But it’s not just VR tech that is holding back the metaverse. For example, Second Life has remained relevant to many of its existing users, but its user numbers have been largely stagnant for the past decade, hovering between 800,000 and a million monthly active users.

• “It's been difficult to grow virtual world usage above this million-or-so people,” Rosedale said.
• That’s in part because avatar-based platforms are still not as effective as a simple Zoom call. “We're just not there yet. The experience of communicating face to face as avatars is missing components.”
• Rosedale admitted that social gaming worlds like Roblox and Fortnite are hugely popular, but he argued that there is no equivalent for grown-ups. “Going to a concert or going to a work meeting, those experiences really don't work yet,” he said.
• Rosedale also expressed alarm over ad-based business models for the metaverse, and argued that it instead needs a functioning creator economy. “If the metaverse is going to succeed, it has to succeed on the basis of economic success,” he said.

Next up for Second Life: mobile apps, avatar tracking. Second Life has such an economy, with people selling 350 million items a year to each other — but there’s a flip side to that success: It forces the company to support a lot of legacy tech, because any radical change would break 20 years' worth of in-world goods and wealth.

• “It is almost kind of frozen,” Rosedale said. “It's difficult to make changes to it.”
• That’s not to say that Linden Lab won’t try new things. At this point, Rosedale is only a part-time adviser, but he opined that embracing mobile could be a good next step for the company.
• “Mobile is super important,” Rosedale told me. “We missed mobile at the beginning, because Second Life launched in 2003.”
• Other areas of exploration could include webcam-based avatar tracking, support for larger crowds and a better communication experience to take on Zoom calls.

What about just starting over? If Second Life is struggling with legacy tech, then why not launch something new to attract different audiences, and operate both platforms until Second Life has run its course? Asked about such a scenario, Rosedale didn’t want to rule it out. “I think it's possible,” he told me.

On the calendar

How to build the metaverse, and build it right

The metaverse is ... well, we’re not exactly sure what it is yet. But no matter what it is, it’s clear that much of tech’s energy, brainpower and money are going toward building it.

Join Protocol Entertainment's Janko Roettgers and Nick Statt, along with a panel of experts, at 10 a.m. PT Tuesday where they'll explore what the metaverse could be, what it'll take to build it the right way and what it actually means for your industry. RSVP here.

One to watch: Wisear

Neural interfaces could play a big role for the future of AR and VR, which is why Facebook has been pouring lots of money into things like a wristband to control AR glasses with your mind. But the tech could also be a big boon for gaming, music listening and all kinds of other things we all already do every day.

That’s why Paris-based neural interface startup Wisear has been building biosensing tech that can be integrated into AirPod-style headphones, allowing the wearer to skip tracks, pause playback and pick up phone calls just by thinking about those actions.

Wisear announced a $2.3 million seed funding round today, and aims to have devices that use its technology out in the market within the next 18 months. Fun fact: The company’s funders include a bunch of folks from Snips, the voice assistant startup that Sonos acquired in 2019. And if that wasn’t enough to catch your interest, check out this demo day pitch.

Spoiler alert: Wisear CEO Yacine Achiakh is not controlling the pitch deck with your typical remote …