Avatars in the Metaverse

Announcer:

Today on Building the Open Metaverse.

Timmu Tõke:

Through managed to build an open marketplace without your assets that exists across many different virtual worlds and games, then that builds a bigger market for avatars in general. So would you rather pay for a skin that is stuck in one game forever or a skin for your metaverse avatar that you can use across your entire metaverse experience?

Announcer:

Welcome to Building the Open Metaverse, where technology experts discuss how the community is building the open metaverse together, hosted by Patrick Cozzi from Cesium and Mark Petit from Epic Games.

Marc Petit:

Hello everybody, and welcome to our show Building the Open Metaverse, the podcast where technologies share their insight on how the community is building the open metaverse together. Hello, my name is Marc Petit, I'm from Epic Games, and my co-host is Patrick Cozzi from Cesium. Hi Patrick, how are you today?

Patrick Cozzi:

Hi Mark, doing great. We have a very exciting topic.

Marc Petit:

Yeah, we're super happy and excited to welcome to our show Timmu Tõke, CEO of Ready Player Me, a startup that's made a lot of noise readily. So Timmu, welcome to the show.

Timmu Tõke:

Hey Mark, great to be here. Yeah, excited to talk about the open metaverse.

Patrick Cozzi:

Great, welcome. So we usually have to kick off the show by asking our guest to tell us their journey to the metaverse. So for you, I mean you've been around a while with starting Wolf3D and you're a gamer as well. So tell us your journey.

Timmu Tõke:

Yeah, yeah. I mean, for me, it all starts from games. Runescape was my game and I played a lot when I grew up. And my first hustle was selling Runescape Gold to other kids in school, which also taught me that virtual currencies and virtual objects and stuff are pretty real. So that's where I started, I played a lot of different games when I grew up. And then when 3D printing actually came around, I started messing around with 3D printing that led to scanning things because I wanted to print them and that led to scanning people. So I was just messing around with scans and so forth. When Oculus was acquired by Facebook, we thought that it's inevitable that VR will happen and VR will be social and avatars will play a big role in VR, and that's where we really decided to commit to building an avatar company essentially, building a great way for people to create avatars. And it started from hardware and has evolved a lot over time to custom building out the tech for gaming companies, and now Ready Player Me.

Patrick Cozzi:

Cool. What a journey. And yeah, there's a lot of excitement around Ready Player Me right now. So for our listeners new to us, give us the overview.

Timmu Tõke:

Yeah. So Ready Player Me is a cross game avatar platform for the metaverse and what we see is that the metaverse is happening around us. Of course, people are spending a lot of time in virtual worlds and the metaverse is not one game or one app or one platform, it's a network of thousands of different virtual worlds. So it makes sense for people to have an avatar that travels with you across many different virtual worlds and it's not stuck in one game or one experience. And in general, I think there's two paths for the metaverse. It's like the more closed path, which the metaverse will be owned by one company or a few companies that make all the rules. We don't think that's a good feature for the metaverse. And then there's the other path, which is the open metaverse, which is a network of many worlds people can visit and travel between.

Timmu Tõke:

And for the open metaverse to really have a chance, cross game services like avatars need to exist to link together many different virtual worlds and make the open metaverse possible. And that's really why we're building Ready Player Me. And more practically, what we do is we have tools for our game developers that they can integrate to solve all their avatar problems. It's a full avatar creator you can integrate into any game engine so your users can create an avatar from a selfie and customize it with different clothing and so forth. And by focusing on helping developers, we're actually creating a network of many different apps. So we have almost 4,000 companies now that use our avatars in their games, in their experiences. And because of that, it's easy for us to create real interoperable experiences where you create an avatar in one game and you can use it across the entire network or combine NFT for avatar that then travels across the entire network of apps we have. So that's where Ready Player Me is.

Marc Petit:

So just for me, if I understand, so do you always use the same avatar? If I create an avatar in Ready Player Me, it's going to look the same in every one of the game? Do you have things like level of detail or it's just the same everywhere?

Timmu Tõke:

Yeah, so on the technical side of things, we serve many very different avatars. So different file formats, LODs, many different rigs, depending on the kind of application you are building. If you create your avatar in a Unity mobile game, it's a very different pinnacle spec compared to Unreal desktop game, for example. And so yeah, we serve many different tech specs. And from the consumer side, the avatars at the moment have one style generally. The assets you can wear on the avatars can depend on the games and some of the assets are in-game assets, they work only in one game. Some other assets are cross game that you can use across the network. But we only have one visual style. We're working on stylizing it and having more styles, more realistic, less realistic to fit into many different aesthetics. And eventually, open that up for developers as well to tweak and create something that fits into their world. But at the moment, it's one visual style.

Marc Petit:

Okay. Do you envision having different outfits? If you go playing a sports game, you probably want to be differently than you play a first person shooter or you don't get to see yourself as a first person shooter, but maybe there's a better example.

Timmu Tõke:

Yeah. So definitely, game developers themselves can create any assets they want for their own game. So if you have a tennis game you want to have tennis outfits. But there's some other outfits that make sense across many worlds that are branded and more general perhaps. And it's all experimentation. We're trying out different things to see what makes sense. But I think if you have an interoperable avatar, interoperable assets, there's going to be some more craziness involving that than an avatar system that is fully controlled by you and is very just purely relevant for your game. So there's going to be some madness involved in that sense or less control.

Marc Petit:

So what about the economics? I mean, platforms like Roblox or Fortnite tend to use avatar customization as a source of revenue. Is that something you plan to monetize as well, and how would you reconcile if the platform has their own monetization scheme on avatars?

Timmu Tõke:

Yeah. So I mean, first what we believe is that if we managed to build an open marketplace of avatar assets that exists across many different virtual worlds and games, then that builds a bigger market for avatars in general. So would you rather pay for a skin that is stuck in one game forever or is a skin for a metaverse avatar that you can use across your entire metaverse experience? So if we link together all the different closed economies, it actually makes a bigger market for everyone to share. So let's take Fortnite as an example. If Fortnite could sell skins that work across the metaverse in many games that Fortnite players play, that people will probably buy more of those skins, pay more for those skins. And that's what we bring with interoperability. And also we don't want to be the only avatar in the metaverse, which we are trying to build the interoperability layer for avatars so we can theoretically take a Fortnite avatar out of Fortnite and make that travel to different games.

Timmu Tõke:

There's obviously a lot of technical problems involved in that, but those are all solvable over the long term. So yeah, to answer the question, ultimately the open marketplace is going to be a better business for developers. That's what we want to prove and that, I think, feels obvious. Yeah, so to add to that, we're not very focused on working with their biggest games and biggest platforms at the moment. Our core focus is venture backed games, virtual worlds, new platforms that are coming up and becoming the next big games. And then on the other side, we have open tools, so any developers building something cool in the garage can integrate our avatars easily and we just want to empower all those games to get to market faster and we want to grow with them. So that's how we think about it.

Marc Petit:

So your platform is a level of abstraction between the experiences, the games, and the avatars. Are you guys using the blockchain or those similar technology to register the ownership of those elements on the blockchain, or do you manage this into your own technology?

Timmu Tõke:

Yeah, so with blockchain and Web 3, I think now first, we use some of it. We have experimented, we have been involved in some NFT drops and so forth. How we think about it generally is ownership in the metaverse is a necessary part. It definitely drives things forward. It feels like it needs to be there and ownership is straightforward to solve. If you're just building a game that is closed and you control the entire economy, it doesn't need to interact with other games, it's obvious to solve it in a centralized way. If you want to have an economy that exists across thousands of different applications that is built by many different developers that creators take part in and so forth, blockchain and NFTs feel like... I mean, this is the only way to really solve that problem today. So that's why we're excited about it and that's why we're dabbling in it.

Timmu Tõke:

But as a developer or as an end user, it's an optional part of the platform. You can use NFTs if you want and enable it in your game, but you can also opt out from that. The other thing we're doing is if you have an NFT that is Ready Player Me compatible, connect your wallet, you enable your own avatar, you can wear it on your avatar and you can actually use it in Web 2 games too. So you just sign in with your Ready Player Me account, you will redeem the avatar that it is wearing the NFT derived asset and you can use it in Web 2 games. So we're bringing more utility for Web 3 or NFTs in Web 2 games as well.

Timmu Tõke:

And the other thing I would say about Web 3 is I think with interoperability and building more open platforms, the main blocker for doing that is not even the technical challenges which are there obviously, but they're solvable over the long term, it's more of the philosophy of the industry and the philosophy of the developers that are building the games and building the worlds. And what Web 3 and the rise of Web 3 in gaming, the biggest thing it's really done is to change a philosophy. So developers are coming up, they're building new games, they are more Web 3 minded, they are more open and connected minded. And I think that is as important as technology itself in pushing us towards the more open metaverse.

Patrick Cozzi:

I love all your passion around interoperability, and open standards and interoperability is a hot topic on this podcast, especially open standards for 3D assets. When we think of avatars and the layer of complexity gets higher and higher, from simple facial animation to metahuman fidelity, all the way up to full biomechanical capabilities with muscle systems. So how are you approaching 3D open standards today and where do you see it going?

Timmu Tõke:

Yeah, so I mean, today there's no real standards for avatars, so we play around that. We support many different file formats, we support many different rig types, we support anything the developer would want in an avatar. And then we just serve a very different avatar for different developers based on what they need, so we assemble it to their target. But over the long run, obviously we would love to see standards emerge. There are some file formats and so forth that are coming along, but it's just so hard to make that happen. And what we believe is that for the industry to really figure out standards, there needs to be a clear use case for interoperability and how that creates a better end user experience and how that is a better way to actually generate revenue with your game, and it's a better business model for your game.

Timmu Tõke:

So what we are focused on is creating interoperability however way we can at the moment and proving that for a game developer, it's a better way to build their game. And when that is proven on a sufficient enough scale, then the industry will basically figure it out. Because otherwise, it's a very philosophy driven thing at the moment. It's like, okay, it feels like it's a better future for the industry, but for people to really make a change, we need to prove on a sufficient scale that it's a better way to do things. And that's why we're focusing that over trying to... We're not spending too much time on taking part of creating standards and stuff because we can work around it. And over time, it's obviously very important.

Patrick Cozzi:

Yeah, and I think the focus on use cases to make the standards pragmatic, I agree with you completely. And there is a lot of discussion on when do you standardize, could you be too soon or could you be too late? I wanted to ask, I noticed that you used glTF a lot and I was curious how that's working for you so far.

Timmu Tõke:

Yeah, glTF is working for us very well and we've built our entire system on glTF. We can also serve other file formats, but that's at core how we've built everything. And we were building some content tools to open up content creation for external partners and fashion brands, individual creators, developers themselves, all built on glTF, the core way we assemble and create avatars and avatar fashion creation tools and so forth. And that's worked really well. And yeah, we're very excited that we went that path and it looks like the industry is also going that direction, so yeah. We're reliant on glTF.

Patrick Cozzi:

And I did make an avatar for myself in Ready Player Me and I exported it as glTF and I dragged and dropped it into a web viewer and it just worked. And I was very, very pleased.

Timmu Tõke:

Yeah. Yeah, that's awesome. That's the idea. Yeah.

Patrick Cozzi:

What about USD? I think I've done some reading that you're also looking at USD?

Timmu Tõke:

Yep, exactly. We're definitely looking at USD. Yeah. But it's not something that we get. Basically our roadmap comes from what developers need and what developers want from an avatar system and it's not a high priority for us at the moment. But yeah, our CTO, Rainer, would know a lot better about the path there. I have a technical background, but yeah, Rainer is the main man.

Marc Petit:

I think you've joined the metaverse standards forum, haven't you?

Timmu Tõke:

Yes, we did.

Marc Petit:

So what are your expectations?

Timmu Tõke:

Yeah, I mean, our expectations is to collaborate, to push the world towards an open metaverse, and I think that's a very important goal or important direction, so that's why we joined. I think we haven't been on any meetings yet because we joined recently, but excited for the first one.

Marc Petit:

Yeah, thank you for that. I think we're still figuring out the operating model, and again, trying to keep things, despite the high number of companies, pretty pragmatic and focused, but avatars is already a topic that a lot of people are raising their hands, want to discuss.

Patrick Cozzi:

Yeah, it's up to 1,700 companies now and avatars is one of the top topics, and yeah, you guys would bring so much use cases to it.

Timmu Tõke:

Yeah, excited to participate, and yeah, do our part.

Marc Petit:

Yeah, because you've been doing it for some time.

Timmu Tõke:

We have, definitely.

Marc Petit:

So let's talk about identity. I mean, we talked a little bit about using the blockchain for recording transactions. We talked about your technology stack to implement your avatar differently depending on the platform. And then there is topic of identity. How do you want to represent yourself, a social or work environment's probably different than in a gaming environment and how do you approach that, would be my first question. Can I have multiple mes on Ready Player Me?

Timmu Tõke:

Yes, you can. You can have infinite amount of mes. Yous. So definitely. Yeah, I mean, how we think about people creating their avatars and what we've seen is it's like creating your social media profile, which is your avatar in the internet today. If you create a profile for LinkedIn, which is a professional use case, you create a more professional profile, you create a more professional avatar, you're probably not going to have face tattoos and you're not going to wear a banana costume maybe. I mean, I would, on a business meeting sometimes. But anyways, it's a more professional look. When you create an Instagram profile, you create a more fun and social avatar. You might be a little crazier, have face tattoos, have a crazier outfit. And that's how we see people creating avatars, it's for use case. But inside the use case, people are pretty consistent in how they use their avatar.

Timmu Tõke:

So people customize their outfits and stuff, but the general identity is somewhat consistent, which makes sense. And I spoke with Philip Rosedale from Second Life, the founder of Second Life, and they said when they built Second Life, they tried to promote people to have multiple different avatars almost. So they have a very easy way to manage your identity between avatars and so forth. But 90, whatever, high 90% of people only used one avatar or one identity. And you buy skins and stuff for it, but you're very persistent in the identity part of the avatar. And yeah, we see the same thing, but it's all early and will play out over time. But yeah, identity is naturally persistent, so that's what we see and that's how we think about it too.

Marc Petit:

Yeah. So one of the expectation about the metaverse is with the technology, it will have more engaging interaction with other people. And one of the things we've seen on the internet for the past decade is the fact that this sense of being anonymous leads to a lack of accountability and leads to toxic behaviors. So you have a point of view on making sure we drive more accountability from people's behavior through identity verification is something that you would consider for your platform or... I know it's a big topic, what's your take on this one?

Timmu Tõke:

Yeah, so I think with this, like many other things, we could rely on what developers need in how they built games or whatever. So developers are not demanding for KYC and a real identities yet. I think it will be the case, it'll be needed even for regulatory purposes. If you really take part of the virtual economy and you have payouts and the sums get big enough and the government gets there with regulation, I think it'll be needed to really take part of the virtual economy. Then I think it's like do you want to make your identity public to other players? That might not be necessary or it might not be the thing that most people want to do. I think it just depends on the use case in the platform as well. We don't have too much firsthand experience with that, so we don't have a very strong point of view.

Timmu Tõke:

But because it hasn't been a main requirement for developers so far, we haven't really looked into it deeply. Yeah. But I think we'll need to have some KYC for the economy part not very far from the future. Not very far in the future. Yeah. So I mean, if people use their real identities in games, then that would definitely make them behave better. And when you look at the traditional social media networks, then most of the big ones or almost all of them are connected with your real life identity. And the network effects of a network of people that use their real life identities actually are stronger because your real identity is more persistent. It's tied to a real identity compared to something that you make up for an experience that is easier to discard. I mean, Twitter is in between those worlds, but most other social networks are very tied to our real life identities. So in that sense, there's definitely something there to explore. And I think the gaming world and the game developers have a lot of appetite for that today, and gamers probably as well.

Marc Petit:

Yeah, no. I mean, I've shared on this podcast that I'm a racer and my reputation on the circuit is very important because that's what gets me to the right races and it's a testament for the player that I try to behave. I try, okay, I do my best, but that reputation is not an attribute of the game I play, it's actually an attribute of myself. And if I develop a reputation that I'm racing, I'd love to carry it over to Assetto Corsa competition so that I don't start at zero. So are these extensions to your platform that you could consider getting into, like managing reputation, managing other aspect of a player's identity or?

Timmu Tõke:

For sure, yeah. So how we think about it is the visual part of the avatar is the part that you have the biggest emotional connection with. That's the first thing, you want to be interoperable and persist in the platforms. But then that is a good thing to attach other identity parts too. So reputation from games, gamer stats, gamer reputation, your wallet, your virtual assets you can carry around with you, all those things make a lot of sense to build around the avatar. But the avatar itself needs to be there. And if you already have something that is naturally interoperable across platforms, then adding other stuff on top of that is obvious or easy compared to going and being like, "I'm a wallet for gamer stats." It's such an uphill battle because there it's not valuable unless there's a network. In our case, we are valuable as a single player tool for developers because we solve a very clear problem of you don't have to build your own avatar system. You save six months to a few years of time. So we are useful as a single player tool, and by focusing on that, we built the network and then the network itself becomes valuable, and then you can start adding a lot of other things on top, like reputation and other parts of the identity.

Patrick Cozzi:

So let's talk a bit more about the future for Ready Player Me. So first, congrats on the $56 million Series B round.

Timmu Tõke:

Thank you. Thank you. Appreciate it.

Patrick Cozzi:

So tell us a bit about how you plan to use the capital.

Timmu Tõke:

Yeah. So I mean, our focus and our goal always is to build something that helps developers and is a great solution for developers. And there's a lot we need to do to just evolve the tools, make them more customizable, make them more flexible for developers, native integrations to engines. There's a lot of stuff like that. It's the whole content tools part. So developers being able to create skins, create content for the avatars easily, submit it without our involvement. That's a big part. And that's also the external part of the cosmetics, which is fashion brands. We work with a lot of fashion brands already. Fashion brands creating stuff and selling it in the metaverse, individual creators, UGC content. And then the content is the base for the monetization. So once you have all the content, then you can start selling it as NFTs, you can start selling it as in-game assets inside games and really proving out the open metaverse economy thesis, I guess, or the interoperable economy.

Timmu Tõke:

Yeah. And those are the things we're working on. The main thing I am thinking about all the time is how do we get the next awesome developer? How do we get the next quality of developers? How do we evolve the product, how do we evolve the offering to get to the bigger and bigger developers and also be a great solution for anyone starting in a garage and building the next cool app. And of course, we're hiring, so we're doubling the team. We're 50 something people now and going to be 100. So please, please reach out. We have a lot of open roles available.

Patrick Cozzi:

And the audience for this podcast is a great target audience for you. There's a lot of very passionate and technical folks listening. And then you spoke about getting more developers on board. I mean, how do you think about your outreach efforts in terms of getting more developers to integrate versus more end users going directly to your website?

Timmu Tõke:

Yeah, I mean, so it's been very inbound driven. So last year, we started from 24 companies using our avatar. We ended last year with 1,000 companies. Now it's getting to close to 4,000 and that's very, very inbound. We have a small sales team and we're going to expand that and that's focused on getting to the bigger companies, bigger opportunities, always trying to go a little beyond what we can get so that we understand what the requirements are and what we need to build and where we need to evolve. But it's very driven by inbound because the product itself is very visual.

Timmu Tõke:

So whenever any developers launch with Ready Player Me, a lot of end users create avatars, the developers, we work with them to create videos and launch material and that all just keeps building more exposure and bringing in more developers. And the tools themselves are quite useful and easy to use for developers, so that's really what's driving it. And they're useful because we've been working on this for nine years. We launched Ready Player Me two and a half years ago. But before that, we spent many years custom building avatar systems for developers so we knew what we had to build.

Marc Petit:

So it's pretty tough out there in terms of fundraising right now. I mean, money is not raining as much as it used to rain just six or nine months ago. We have a lot of entrepreneurs listening to the podcast. You have any advice about how to raise money in a bit of cooler times?

Timmu Tõke:

Yeah. I mean, I think generally the best fundraising advice I ever got and the best, and I practice it now, is just running a very tight process, especially in a low market. So you need to reach out to a lot of investors, at the same time, you need to run a very tight process. How we usually do it when we go out and raise is you have two week sprints basically when you go out to a set of VCs, you try to get to a term sheet at the same time, and you do those two week sprint with different groups of VCs. You start with the ones that you want to practice with, then you go to the ones you really want to get, and then you follow up with another group to create some pressure for the second group. I think that's the strategy that has worked well.

Timmu Tõke:

So you need to create urgency and FOMO in a market where it's not clear if you're not going to raise in two weeks or a month or whatever. It was clear that every deal is going to close immediately nine months ago. So now, it's especially important to run a very tight process and make sure you get some competition in a round because that makes people move fast. And I think generally in a low market, there's a fight to quality. So just focusing on building a great business and building something that is a sustainable long term business, that's what you need to do at any times. I think in very good times in terms of capital, people forget about it and just try to raise more and do crazy stuff. So I think it's generally good for the industry to have a little downturn. Yeah. But it's tough, it's entrepreneurship. You'll figure it out. Yeah.

Marc Petit:

I hear you about quality. I mean, once you weather a few of those downturns, you welcome them because in hindsight, you know this is where you shake the tree and because you can sort out the good stuff, the high quality stuff against the rest. So as a CEO, you're responsible for bringing the funding of the company, but you're also responsible for the culture of the company. So what culture are you trying to build at Ready Player Me?

Timmu Tõke:

Yeah, that's a great question. Yeah, so I mean, we are very open and flexible with how we work. We're very feedback driven. So first any ideas are welcome, the best idea wins. It's a very flat organization in terms of that. Lots of autonomy for people to make decisions, to take a lead. If you're not very proactive and entrepreneurial in our approach, you're probably not going to do very well. We expect you to come up with stuff and then take a lead, so that's important. Yeah, we're a European based team mostly. I’m based in the US myself and we're scaling a team now, but generally very flat organization. And also we care, we're very close. We give feedback because we care about each other and our mission and so forth. Yeah. But it's very exciting to work with a group of people we have. And trust and be trusted is a big-

Patrick Cozzi:

Yeah, congrats on building a great business and a great culture.

Timmu Tõke:

Yeah. So I wanted to say trust and be trusted is a big value for us because we need to be trusted by the ecosystem. All the developers that are relying on us with a very key part of the product. And that's why we need to be trusted and developers need to be able to trust us, so we can't do things that go against developers and the ecosystem and we need to push things forward and not try to build an open platform and then build a wall around it. That's not what we're going to do.

Patrick Cozzi:

Yeah, I couldn't agree more. For building an open metaverse and supporting an ecosystem, you have to get the developer trust. So we'd like to wrap up with two questions and the first is, if there's any topics that we didn't talk about that you wish we did?

Timmu Tõke:

Yeah, I think we covered a lot of interesting topics. There's nothing that comes up at the moment.

Marc Petit:

And our last question is usually, is there a person, institution, organization that you would like to give a shout out to today?

Timmu Tõke:

Oh yeah, I'll give a shout out to HiberWorld. I think they're building an awesome web based platform, very easy tools to create virtual worlds. I think they've been at it for a while and then building some awesome stuff, and we're launching an integration with them very soon. So HiberWorld is my shout out. Check it out.

Marc Petit:

So thank you, Timmu, for this. That insight into Ready Player Me, a fast growing company in an important domain. Trust and be trusted, I'll remember that. I think it's a great guideline. So Timmu Tõke, CEO of Ready Player Me, thank you so much for being with us today.

Timmu Tõke:

Thank you. That was a lot of fun. Thanks for having me.

Marc Petit:

And Patrick, thank you so much as well for being here with me. And thank you to our audience. Keep on hitting us on social, letting us know about this podcast, who you want to hear the feedback. We are also feedback driven organization and team, we try to act on that and be very reactive to the feedback of our listeners. So thank you, everybody. Thank you, Timmu. Thank you, Patrick. Goodbye.