Philip Rosedale: 'Social VR Is Not Sustainable'

Philip Rosedale: 'Social VR Is Not Sustainable'
April 11, 2019

Virtual Reality Bombshell: Philip Rosedale Says Social VR Not Sustainable With Slow HMD Sales, Drastically Scales Back High Fidelity Hosted Content, Moves Focus To PC/Mac Clients


Last week at High Fidelity's regular community meeting, Philip Rosedale stood before dozens of assembled robots, anime girls, and other assorted avatars, and dropped a couple fairly large bombs that are likely to have an industry-wide impact: The company is closing down nearly all its own hosted domains (users can still host their own), and devoting much more attention to supporting its desktop clients -- both PC and Mac. (Watch above.)


"Social VR in HMDs won’t really work until we can do everything in them, including work and messaging," Philip explains to me by e-mail. "We can’t multi-task in VR yet, and that’s a real challenge."


Until then, says Philip, desktop will dominate High Fidelity's future: "[W]e are going to improve desktop PC and Mac performance, look for that over next quarter."


As for no longer hosting most High Fidelity domains: "[I]t is time for everyone to take over from us, if we are to have a decentralized Metaverse," he tells me. "We can’t be regulating the community if it is going to get big.  We are building something a lot bigger than a social VR chat experience."


His reasoning won't be surprising to anyone who follows social VR Steam stats or VR sales figures: there's simply not enough active users in VR-centric social worlds, and VR headsets are not selling fast enough to create an audience for them. Metaverse blogger Ryan Schultz has done a great job transcribing the most salient passages on these points in video above, which include Philip saying:

[I]n the prior year, not only have [we] failed to get 1,000 concurrency, but so has everybody else. Now, VRChat has 1,000 concurrency… But I don’t think that the experience you have in VRChat is yet my vision of a real virtual world...


[VR HMDs] are not selling enough to create a general-purpose community that is both interesting and profitable... This model is not working right now. The flat world that is an open building environment, is not compelling enough as it stands right now, for the number of HMDs that are out there, to get lift off.


While this news is not surprising, I can't emphasize enough how huge a blow this is to social VR and consumer-facing VR in general: Philip Rosedale is easily among the very most well-known executives working in Silicon Valley in this space, and with $70 million+ in funding, High Fidelity is among the most venture-backed.


I've reached out to Rosedale for comments, and will update this post if I get any. One point I asked him is why he doesn't apparently have confidence that sales of the standalone Oculus Quest will boost the market for VR. [Update, 3:35pm: "I think "The Quest and [Vive] Focus are the future," Philip Rosedale tells me, " but it is still going to take a few years, so we have to plan for that."]


I do think he's under-emphasizing the success of VRChat. It may not be the full-fledged metaverse he envisions, but it's getting a lot more concurrency than 1000 -- it's peaking at 6,000-10,000 every day, and by a conservative estimate, has around 100,000 monthly users, a reported third of them of whom are in VR. But Philip's larger point is sobering, and true: Unless you're an extremely small development team (as with Beat Saber), or your support for non-VR is robust (as in VRChat), the market for a metaverse as yet simply doesn't exist.

Related articles

VRrOOm Wechat