Back in February, Ready Player Me launched an experimental trial where players can use generative AI to craft their own avatar outfits in a variety of games. That combined the explosive trends of generative AI and user-generated content, and the New York company hopes this will lead us to the open metaverse.

I did a fireside chat about this topic Timmu Tõke, CEO of Ready Player Me, at the SXSW 2023 event last month in Austin, Texas. Tõke has been leaning into these trends — as well as the broader trend of personalization among a new generation of creators — for a long time. He started the company (now based in New York) in Talinn, Estonia in 2014. And nine years later, the company’s avatar platform is being used in more than 6,000 games.

And those avatars are interoperable. Back in October, Ready Player Me released its Avatar API that improved interoperability for cross-game avatars. The aim is to let users take their cross-game avatars — and the economies that develop around them — wherever they go in the metaverse, whenever that comes together in a big way.

While some big companies are taking a walled-garden approach, Tõke wants to see the open metaverse happen. Ready Player Me could be a defacto standard if its products win in the market. But the API is part of an effort to come up with standards in both games and the metaverse. It took a year to get done.

One question is whether the biggest companies in the industry will back Ready Player Me’s API, or if they will all go their own way or they will pursue a different technology as a standard for avatar interoperability. So far, Ready Player Me has Web3 partners like Spatial and VR Chat, and it has enterprise customers like Verizon. But it would be nice to see more triple-A game companies get on board. Somebody has to keep the metaverse from being a Tower of Babel.

We talked about these things and more — including ideas for how the metaverse could come about — in our talk at SXSW. Here’s an edited transcript of our interview.

GamesBeat: Please tell us more about yourself.

Timmu Tõke: I’m the CEO of Ready Player Me. Ready Player Me is a cross-game avatar platform for virtual worlds, for the metaverse. We see that people spend more and more time in virtual worlds with every year that goes by, every decade that goes by. That’s why we started the company nine years ago. The metaverse isn’t a single app or single experience. It’s a network of thousands or millions of experiences and worlds. It makes sense for you as a user of the metaverse to have an avatar that travels with you across many different virtual worlds and becomes your virtual identity that’s persistent.

From a publisher’s point of view, when you’re building a new game or a new virtual world, you need to build an avatar system for your game. Building that system can take many months or even years. It can be a pain point for developers. We work with 6,000 companies now that use our avatar system, our avatar tech in their games and virtual worlds. As a user, you can use the same avatar in all of those different places.

Why we believe that’s important to work on is because the metaverse has to have plans. One of those plans we’re going to talk more about today. Those are either going to be part of a closed metaverse, a closed app, where the metaverse is going to be owned by one company. And then there are open platforms, which means that the metaverse is more like the internet, where you can navigate between different pages and worlds and have a consistent experience across many of them. We think that’s the more plausible plan. For that to happen there need to be services and portals and standards to link together different virtual worlds, so it will become more of a network, not owned by one company.

We’ve been working on this for nine years. We started from hardware and 2D standards and went to custom building out tech for big game companies like Tencent, and eventually building Ready Player Me. We’re close to 100 people now.

GamesBeat: Nine years ago, were you thinking about the metaverse way back then, or was something else the inspiration?

Tõke: I was thinking about the metaverse more than I was thinking about school when I was 12. Runescape was a game I spent a lot of time in. My first hustle was selling Runescape gold to other kids at school. It was obvious to me already that virtual worlds and virtual assets could have real value in some sense. Then I started messing around with 3D printing, which led to scanning things, which led to scanning people. That’s what led to building a company around avatars. It was mostly because–Oculus was acquired by Meta, or by Facebook back then. We thought, “Okay, VR is going to happen. VR needs avatars.” You’re looking at another person’s avatar face to face. That’s the whole experience, or a big part of the experience. That’s when we decided to build an avatar company. At the core the idea was that people would spend more time in virtual worlds over time, which meant that avatars would become more important over time.

GamesBeat: The name of the company, Ready Player Me, was of course inspired by Ready Player One. In that book and movie, it’s really a single company that controls this whole metaverse, the Oasis. It’s pretty dystopian in that way. It’s not an ideal way to have this universe of virtual worlds controlled by one company.

Tõke: It’s kind of weird that we named the company after the story, but we’re actually trying to avoid that scenario. We named it after the story because at the time, two years ago or whatever, we didn’t really know what the metaverse meant. We wanted to make it clear that it wasn’t about only making avatars for games, or only games as we know them. It’s a bigger thing. It’s how we’re going to live in the future. We’re going to live in virtual worlds. A bigger part of our lives will be in virtual worlds. The best way, we thought, to achieve that back in the day–well, people knew the movie, so we wanted to connect it to that. That was basically why we made that connection.

GamesBeat: We have things like the Open Metaverse Foundation now. At VentureBeat, we’ve started something called the Metaverse Forum, which is all about advocating for the open metaverse. A lot of groups out there are raising their concerns that you don’t want an oligopoly of companies or just one company controlling this. How long have you felt that sentiment, that we don’t want one company to rule them all?

Tõke: I think it started from finally understanding that we’ll probably spend more time in virtual worlds, when the metaverse trend or hype started. That’s what led many people to think about it more. If it’s just a game that’s only on one platform, there are lots of games you can play. It’s not like the next version of the internet. Some people understood this before, but the broader public started thinking about it more recently. That’s one thing.

The other thing is the web3 space, which has impacted people’s thinking on how to build games. The promise of NFTs, for example, is you can own something and do what you want with it. The promise of interoperability is built into what they are. A lot of game developers are coming up now and thinking about integrating some kind of web3 elements in their games. They’re quite forward thinking about being more open, more opposed to centralization, more pro-decentralization. Those things have created the moment where now, people are more open-minded about building more connected games and more connected worlds.

GamesBeat: One or two things I’ve heard about the metaverse and how it might come to be came from Jason Rubin at Meta. He mentioned that the metaverse is going to have 3D-animated worlds. What you need to do that is a game engine, and the people who know how to use game engines are game developers.

It follows that gaming is going to lead the way into the metaverse. People who know how to build that already are here and now making games. You think of companies like Epic, with Unreal and Fortnite, or Roblox, or Activision Blizzard with Call of Duty. But you don’t really think of avatars as something so important or that big a deal. How do you feel that an avatar can have more importance?

Tõke: The avatar is your identity. It’s the persistent part of any social virtual experience. You need to have an avatar in any 3D world that you visit. The avatar is a representation of yourself. So why should you create an avatar each time from scratch that looks and feels different, that doesn’t represent your overall identity? At some point we understood that the avatar can be the glue or the link between all those different things.

A single game can’t be the metaverse. It’s a single game, a single world. A single game engine can’t be the metaverse. There need to be services that link together different parts of the market – different game engines, different games, different worlds, different cryptocurrencies, whatever. The avatar feels like a very persistent part of every experience. You can use that to build those bridges. That’s very powerful. And just from a business perspective, a big part of the gaming economy today is around avatars. Games heavily monetize avatars. People are very willing to pay for avatar assets. If you have kids from eight to 10 to 15 you’ve seen those Roblox and Fortnite payments on your accounts. Those are avatars. It’s a massive business.

Also, when you open up the avatar and allow people to buy assets for their avatar that work across thousands of games instead of just one game, this creates a bigger opportunity for games to sell more stuff, just from a business perspective. Those avatars are more useful for people. They can use them in more and more places, which makes them more likely to spend on avatars. It felt like a no-brainer business opportunity.

GamesBeat: You can infuse a 3D animated avatar with a lot of different things. You can put somebody’s identity in there, a verification of who they are, the stuff that they own and bring from one place to another. All the things that are associated with being able, or wanting to be able, to travel to new places. You can bring stuff that gets translated from one world to another world. If you take your high-level sword from one world to Call of Duty, maybe it becomes a high-level gun. These are ideas that you can play around with.

Tõke: We believe that the avatar is the strongest part, because it’s something you have an emotional connection with. Naturally, when you think about your metaverse experience, it’s the center of the experience. You can attach things to that. Things you own, the wallet you use to pay for things, and so on. We’re very focused right now on making sure we make the best avatars, and most important, build the best tools for game developers. Any other things we add are to make game developers’ lives better, make it easier for them to monetize. That’s what we’re all about. Any additional services or parts of the product we add need to give game developers more power and more options, rather than just benefiting us as a platform.

GamesBeat: On the flip side, why do you think consumers or players want this? Are they asking to be able to take their avatars from one place to another? Are they that attached to what they build?

Tõke: Yes, totally. Consumers want to have an avatar that represents them, number one. They want to create an avatar where they can take a selfie and send it out, that looks like them, or something that doesn’t look like them, but it represents what they want to look like. Then once you have an avatar to play with that you like, one that maybe you’ve bought some stuff for, then you want to take that to multiple games. We see that in our network.

Players play several games with avatars. They sometimes create different avatars for different use cases. A professional avatar is going to be more professional. You might think of that like your LinkedIn profile. When you have an avatar that’s more social, maybe it looks cooler. But inside the use case, people want to use the same avatar.

GamesBeat: As far as the buzz around the metaverse goes, we’ve seen Ready Player One inspire a lot of people. Some people liked it and some people hated it, but it raised the metaverse into the public consciousness. Of course, Mark Zuckerberg renamed Facebook to Meta in 2021. That led to skyrocketing awareness of the word “metaverse.” If you look at the previous 20 or 30 years since the word came into being, 2021 was the hockey stick up moment. But now it’s also almost a hockey stick down. It’s maybe half of the usage you see in Google trends. What do you think about that buzz and the changes we’ve seen?

Tõke: First, it’s nice for those of us who can focus on building things. But thinking about the challenge, yes, the metaverse came into the public consciousness a couple of years ago. People started speaking about it a lot. That’s great. The fact that the buzz has come down hasn’t changed how game companies are performing, for example. Gaming is a $200 billion industry, almost four times bigger than music. It’s a massive industry. The metaverse is already here in the billions of people who play games. If someone has 10 to 15 year old kids, they hang out with their kids in Roblox. That’s what they do.

I used to hang out with my friends on a basketball court. We were there to spend time together. The basketball was kind of a side activity. Mainly we were hanging out together. Part of that is happening now in virtual worlds. The fact that people speak less about the metaverse doesn’t really change that. A whole generation of kids are metaverse natives. Almost 3 billion people play games. People spend more and more time in virtual worlds with every year that goes by.

GamesBeat: Do you think we want to hop from world to world to world?

Tõke: Yes.

GamesBeat: When people say the metaverse is already here, I guess the problem I have with that is that then you can think of Second Life as the original metaverse back in 2003. People lived a lot of their lives in Second Life. But it didn’t feel truly like a metaverse, because you’re not really traveling between worlds. You can travel within Second Life, but you couldn’t go from Second Life to World of Warcraft. These borders are not porous. They’re very difficult borders to get through. You’d have to pay someone to do it. To me it feels like the metaverse should be something where you go from place to place and you can do it in real time. You snap your fingers and you’re there. You don’t want to wait and deal with latency. It should feel like you’re in the Star Trek holodeck, a simulation of something real. When I describe it that way I think maybe it helps address some of that confusion about whether it’s here or it’s coming in the future. A lot of this science fiction stuff is coming in the future.

If that’s the scale, from Second Life to the holodeck, where do you think we need to be in order to have real businesses there?

Tõke: I fully agree. The real metaverse is the one where it’s open, interoperable, you can navigate between different worlds and have a consistent experience. We’re not there yet at all. We’re there with games. People spend a lot of time in virtual worlds, which is the first step to the metaverse. You need to have interesting experiences. On the scale of a closed game to a fully open metaverse, we’re very early. We’re doing some things that haven’t been done before with avatars. We’re on our mission to break down walls and build more connected virtual worlds. We definitely see that’s starting to happen.

We launched our partnership with Mini Royale and Faraway a couple of weeks ago, for example, where for the first time ever, an avatar from their game came out of the game and now is usable in thousands of other games. This has never happened before, which is kind of crazy. Why has this never happened before? There are a lot of technical reasons and a lot of business reasons of course, but these things are just now starting to happen. That was two weeks ago, where for the first time ever, an avatar that originates in one game goes to thousands of other games, or even any other games. That’s crazy.

They have hundreds of thousands of avatars that people own. They’re NFTs, although they don’t have to be. These particular avatars were. People that own those assets can now connect through Ready Player Me and use them in our entire network. The Ready Player Me avatars themselves are already adaptable, but this is an example of a game exporting their existing avatars and allowing them to be transported to other places. Now all the avatars they’ll sell in the future have more value because they’re usable not only in their game, but across thousands of different games.

GamesBeat: You mentioned this example of sneakers. If you buy them in one place–

Tõke: Right. As a user, would you rather pay for sneakers that work in one game only, or that travel across thousands of virtual worlds? What we see in our data and what we believe is true, at scale especially, is that people will spend more, or more people become spenders, for interoperable assets, for sneakers that work in a dozen games versus in one game.

GamesBeat: Openness is another interesting topic to get into. I think of what we saw happen with cross play in online games. Fortnite was the prime example of how the market could change. We never used to have games where you could play on a Nintendo platform against someone on a Sony platform or the PC or the Xbox. You could only play with the people who were on your platform. The interesting thing with the success of Fortnite, as it became the game that everyone wanted to play–Epic Games had the interesting problem of lots of people saying, “I want to play with my friends. My friends don’t have a PlayStation. How can you make that happen?”

Epic developed a lot of market power. They had a game that was so popular, making billions of dollars a year, and everyone wanted to play it. They went to the platforms and said, “If you want Fortnite on your platform, then you have to enable cross play.” Microsoft was willing. Sony was willing. Nintendo maybe thought it wasn’t the sort of thing they do. But if Epic could say, “The others are going to do it, and if you don’t, you won’t have Fortnite anymore,” that market power could enable cross play, which was a more open form of gaming that could benefit everyone.

To me that’s an example of how you can force a market to be more open. I wonder if there’s some lesson in that for how the metaverse could become more open.

Tõke: That’s a major change in the market. It’s easier for games to become social networks now because you can play with your friends on the phone or anywhere else. The data that came from that is that every platform ended up making more money. More people played. More people met with their friends. More people were willing to buy stuff. That’s a good example of opening up a market benefiting everyone involved, commercially as well.

To the question, the moment we’re driving toward is working with partners who are open-minded. We want to prove to the rest of the industry that commercially, it’s a no-brainer decision to build an open avatar system, for example. You can sell sneakers, like we discussed, that work in a thousand games, which makes you more money. Once we can prove that at a sufficient scale, companies don’t have to be open-metaverse-minded to join the network and build a more open game. It just becomes a no-brainer business decision. Why would you build a closed avatar system, spend all your time doing that, set up your metagame, and only three percent of people end up buying anything, in a case where with an open system you could have 25 percent of people buying things?

It just needs to become that no-brainer decision. When it does, we’re no longer talking about becoming philosophically aligned with the open metaverse. It doesn’t have to be that way. It’s just practical to do that. I think that’s the only way it’s going to happen at scale. That’s what we’re trying to do as a company. We want to make the value so practical that it’s very clear why people need to open up, rather than the decision being philosophically driven.

GamesBeat: How much of Ready Player Me is built on open standards – open source, non-proprietary – so that Ready Player Me doesn’t end up owning everyone’s avatar in the metaverse?

Tõke: Right. Break down the walls and then build the walls back up around us. We’re going to try not to do that. We use open formats like glTF. We have open source SDKs. But the weird thing is that interoperable avatars are only possible because we’re kind of centralized. We build avatars to different specifications, whatever way the avatar needs to be, and deliver that depending on the game. We’re a centralized service that makes that happen. As a developer you need an avatar for your Unity game in the right format, the right measurements, the right animation rig, the right LODs and resolution. For an Unreal desktop game we can do the same.

It’s hard to make that core service open source. It’s probably possible to turn it into a decentralized service eventually, with some token stuff, but that’s not something we’re very focused on now. Right now we’re focused on creating a great end user experience where people can go between games, and game developers can have a great avatar system. Therefore we also speak very publicly about our values of trust and be trusted, breaking down walls. When we start building wills, people can call us out for it.

GamesBeat: You mentioned glTF. This is a 3D graphics format for the internet. You can think of it as being good for things like e-commerce. But there is no group that’s declared that as the standard yet. The Linux Foundation acquired the Open Metaverse Foundation, and they’re committed to bringing a lot of standards and a lot of programming talent behind that. They’re putting some real muscle behind the words about wanting to have an open metaverse. There’s the Khronos Group as well, which is going to collect a lot of companies together to establish open standards. Nvidia with their Omniverse is backing Universal Scene Description, USD, as a way to share 3D assets around. In some ways there’s competition between glTF and USD. We’ll see how that plays out.

You’re running a company, though. Do you have time to wait for these standards to be worked out?

Tõke: USD, for example, can be complementary with glTF. It’s more for scenes and bigger models and worlds, things like that. glTF is better for single 3D objects. We’ll probably support USD at some point. But we’re not waiting. There are no standards right now. There are some very small beginnings of standards for avatars, very niche formats that specific games use. We support different file formats. We support maintenance standards, or any custom systems that games want to use. You can use a custom rig, a custom topology, whatever you want for your game. That’s what makes Ready Player Me powerful. That’s what makes interoperability possible in a world where there are no standards. That’s the centralized service that delivers avatars with different specs, different standards essentially.

That’s how we work through that. We support a lot of different things. We try to give the developer exactly what they would get if they built it themselves. It’s not perfect, but we do it as specifically as possible given different styles of avatars. It’s still a work in progress.

GamesBeat: I don’t know how much everyone knows about the process of creating technology standards, but groups like the Khronos Group have done this for many technologies over many years. One thing that’s always part of it at some point is you kind of have a bake-off. What are all the different things we can use as the standard for doing this particular task? In the bake-off people show up with their hardware or software that does what it’s supposed to do. In this case it would be displaying 3D graphics very quickly in any kind of screen you’d use to view or access it, whether it’s VR or your phone. If it works then it’s a candidate to be a standard. You can wind up with working technology in a competitive market with something that could become a de facto standard.

I imagine that this is what you would hope for. That whatever you’re creating for avatar standards becomes a de facto standard. Everybody in the market likes it, wants to use it, and you win.

Tõke: Yeah, totally. I think one part of it is the file, the standard in that sense. The other part is the platform. With a file format, avatars will be fully standardized and you can upload any asset to any game. But there’s still a problem with the economic side, the business part of interoperability. You need a service to manage that. When you buy assets in game A but spend all your time in game B, should game B get a piece of that? If you buy a $1000 asset or a $10 asset and you want to use it in a game–the thing that makes the asset valuable is the fact that you can use it in a game. Games need to get paid for allowing assets to enter their worlds.

Standards in the sense of a file format won’t really change that. They won’t solve that problem. What we’re attempting to do is build a standard, but also build an end to end service platform that solves all those different problems with interoperability. On one end you have the technical standards, but on the other hand you have the business problems that come with interoperability. Or what if there’s a brand that wants to sell their assets in some virtual worlds, but not in shooters? How do you manage that? If there’s an open standard where you can just upload any asset, that wouldn’t work. There’s a level of business complexity that needs to get solved on top of the file format.

We want to be the solution for all of those things combined. We want to make interoperability happen, whatever it takes on the technical side or the business side, and figure out a model that benefits all the different parts of the market. Users, developers – developers are the most important thing we’re focused on right now – brands, UGC creators. We’re trying to get to a system that benefits all of them. It’s not easy to figure out what that business model is exactly going to be without that existing yet.

GamesBeat: What are the challenges that stand in the way of an interoperable metaverse? Do you see anything else that we haven’t mentioned so far when it comes to what’s hard about this?

Tõke: What’s hard about this is–people are already used to certain things. The only group of people right now who know how to build interesting virtual experiences are game developers. A lot of people are trying to figure that out, but this is the core market that knows how to build those interesting experiences.

Building a game is hard. It has a high failure rate. The industry is generally pretty risk-averse. You don’t want to build an open economy and just see what’s going to happen. If you’ve built 10 economies before that are all closed, walled gardens, and you know what’s going to happen when you do this or that, you’re going to keep doing what you’re doing. You’ll keep building those closed worlds and you won’t change, because why would you?

That’s one challenge. It’s not even technical. It’s just a matter of getting people to go to the other side and open up their avatars, for example. It’s happening, but it takes a leap for most companies to change their ways. Those walled gardens are the way they know how to build things. Pushing them to open up is hard.

GamesBeat: It’s a question of self-interest versus collective interest. “We have this great technology in the iPhone. Why would we ever need anything else besides the iPhone? Why don’t we just standardize around that?” And yet something else came along to give us some choice and competition there. Google’s Android arose as a counter-force in the market to stop the world from being completely built around a single company’s technology.

I do think that lesson in the market is what informs the strategy of a lot of companies that are going to be interested in the metaverse. We know something has to be coming from Apple. When they drop it in the market, it’s going to be like the Lightning connector versus USB. The self-interested choice, perhaps, the easy thing to do, is to make your game for the iPhone. You don’t have to worry about all the other kinds of Android phones out there in the market. But how do you think we get from the self-interested choice to something more like collective interest?

Tõke: How we think about it is very practical. It has to be better for the game. It has to be profitable for the developer to open up. There need to be enough early adopters that are willing to do that, to build in a new way, that can show the rest of the industry that this is a better way of doing things. This is a better end user experience. This is a better way to run your business. That’s what is going to change people’s mindsets. Along with that, you can educate end users, the people that use avatars, that play different games, and create some pressure from that side to think more openly. That’s also one way you can get there.

We fundamentally believe that this is going to happen and that it’s going to be beneficial for everyone involved. It’s going to be beneficial for game developers. We see that in our network now. When people have cross-game avatars, they can acquire people from the existing network where they already have an avatar, where they’ve bought a branded asset or an NFT or something. They can get a revenue share from that. They can now sell stuff in their game that works in thousands of games. It’s clearly valuable already. It just takes time.

It takes time to build a game as well. A lot of the things we’re working on now will be launching in a year or two years, the bigger games. It just takes time for the industry to change, for more data and proof points to be out there, and for more game designers to understand how to build things around open systems.

GamesBeat: Do you see the metaverse being adopted by B-to-B companies, and if so, what are the key use cases that will drive that adoption? I have an answer on this. I mentioned Nvidia and Omniverse. Nvidia’s GTC conference is next week, where I’ll be moderating another session on the metaverse, and that’s the wider world of technology, really. Not just games.

The Omniverse is Nvidia’s tool for collaboration, collecting all the different tools you can use to make different things for the metaverse, whether it’s Maya, 3D Studio Max, Unreal Engine, Unity and so on. They’re targeting the enterprise metaverse, really, and companies that are way outside of gaming. They’re starting to use game engines, but for example, BMW is using this to design factories. They call these digital twins. They’re going to design a factory – they have one going up in Hungary in a couple of years – and they want to perfect the design of this factory in the Omniverse, in the industrial metaverse. They create a digital twin of the factory, and then build the physical version of that in real life. They will then instrument this factory with enough sensors so that it collects real-world information that tells it whether or not the design in the digital world is a good one. If the data coming in says that this or that has gone wrong, they can go back and refine the design of the digital twin and change it. This loop of information is extremely useful for anyone manufacturing anything. All factories could be designed this way going forward.

That’s an example. Nvidia has also brought up that their GPUs are going in supercomputers. One of the biggest problems in the world right now is to create a way of predicting climate change. They want to create this digital twin of the Earth, using all the supercomputers in the world to figure this out, and try to predict climate change for decades to come. In order to do that, it has to be accurate to the meter level in the construction of both the atmosphere and everything on the planet as well. They have to create a digital twin of the Earth, which is crazy, but it has this use. There are also multiple uses for this kind of thing. You could use this to test self-driving cars in a digital world, because you can’t test these cars on the streets. There are these dual-use technologies that could bring the metaverse a lot closer.

There’s a game developer out there, Brendan Greene, who is the creator of PUBG, PlayerUnknown’s Battlegrounds. He’s the pioneer of battle royale in games. He’s creating something he calls Artemis, which is basically a digital twin of the Earth, and he wants to use that for a game where you just go in and create your own games. The interesting thing that the CEO of Nvidia said about this, when asked–when you create this digital twin of the Earth, are you basically going to get the metaverse for free? And he said yes. You take that and give it to Brendan Greene and he creates his game world. That’s where companies in the space don’t have to do it all themselves. They could get the metaverse for free.

Tõke: The game industry really likes to build things from scratch. But the trend lately is that teams are building bigger games, and so they want to do less of that work from scratch. They want to focus on the experience that comes out of it rather than reinventing everything.

On the B-to-B question, we work with a lot of companies that do things like virtual training, for example. There’s a nuclear plant they’re building where you do virtual training to operate the plant. There are maybe 50 to 100 companies in our network doing things like that. Similarly, you have education and other things like that. But when it comes to B-to-B, virtual training is the biggest part of it.

GamesBeat: What do you predict to be the trajectory of avatar aesthetics?

Tõke: We think that people want different aesthetics for different types of use cases. You might want a fully realistic avatar for a telepresence type of experience. When you want to speak with your family over long distances, for example, you might want an avatar that’s as realistic as possible. When you play with your friends and you’re riding a unicorn in a mystery forest, then you may not want to have a fully realistic avatar. It’s like your Instagram profile. There are going to be different things. But we think that most experiences are going to be using either an augmented version of the self or a realistic avatar.

When we started nine years ago, we were scanning people to make a very realistic avatar. People fucking hate that. They don’t want to look exactly like themselves. There’s probably always going to be some kind of augmentation. But things will get more realistic over time. We might create some more realistic styles.

GamesBeat: Here’s the question about whether NFTs are on a road to nowhere, or if they’re going to be the onramp to the metaverse. Do you have any plans to let people use NFTs to build their avatars?

Tõke: Yeah, totally. Generally, the web3 space, if I can offer a comment on that, it’s definitely pushing the world toward a more open metaverse. On the one hand, it’s a set of technologies that will enable the ownership of assets on those platforms. If there’s a pair of sneakers and you want to own it in 10 different games, then there needs to be some kind of database where you store your ownership of that asset. It can be a centralized database like Ready Player Me is today, or it can be a decentralized database like blockchain. If you want a pair of sneakers that work in thousands of experiences, then blockchain is a great way to manage the ownership of that asset. Every game can tap into it. It’s a great way to do that.

That’s the technical side. The other side is the philosophical side, which we spoke about before when it comes to companies wanting to open up. That space has a very open mindset. It’s coming into gaming and making some new game companies that are more open. That’s very big.

When it comes to NFT avatars, NFT PFPs, we’ve done some stuff. We built a project with Cryptopunks where you can create a 3D version of your punk and use it with Ready Player Me and all the different games that we’ve worked with. This will probably be a part of what we do, one item you can use, an NFT avatar. The problem is that the communities are so small. There might be 10,000 PFPs. It’s not very practical for a game company to build a custom integration for a 6,000-person audience, unless it happens to be a very high-value audience, which Bored Apes for example are.

We definitely want to support those avatars on the platform. We don’t want to be the only avatar in the metaverse. We want to be the avatar network or the avatar rails that make other avatars travel as well. Whether they’re from a game or from an analytical engine, it doesn’t matter.

GamesBeat: We mentioned that Google Trends was showing the metaverse going way down in searches. The thing that’s going way up, as everybody knows, is ChatGPT and generative AI. When you put this user-generated content trend that you guys are riding on, where everyone wants to create their own thing, together with generative AI, then what do we get? Do we get professional-quality user-generated content?

Tõke: That’s something we’ve been looking into a lot recently. We believe that can change how games are built and how avatars are built. Generative AI allows anyone to use their imagination and create prompts and use images to create assets. Right now the 2D part of that is really good. 3D is not there yet. Something we did recently is we launched an AI-driven avatar creator, where you could use a hoodie or a different kind of asset as a prompt to create whatever you want. My avatar is wearing a hot dog pattern hoodie with a black background right now, for example. You can give people a way to create 2D assets that they weren’t able to otherwise, which opens up new ways to create UGC.

It’s just 2D pictures and 2D models right now. But we think 3D with decent quality is going to happen within the next 12 to 24 months. More people are going to be able to create assets and sell them, which will lead to new ways to create avatars.

GamesBeat: The question then becomes, do we need 10 times or 100 times or 1,000 times more things created by users, or do we just need better games created by professionals?

Tõke: There are examples of both working. Roblox is a very compelling experience or game or platform, and it’s built by non-professional developers. The games, that is, the games and assets are built by non-professional developers, while most of the game engine is very much built by professionals.

More assets, more 3D models, won’t change much. It just creates more noise. What’s more important and more valuable is interesting virtual experiences where people want to spend time with their friends and with other people. If game production becomes cheaper and cheaper, especially with generative AI making it a lot easier to build a game, there will be more game modes. People will be less risk-averse. Smaller teams will build bigger games that are more interesting. There will be more experimentation. That can lead to new kinds of gameplay, new kinds of social experiences in virtual worlds, and that’s what’s going to be the most valuable part. It’s cool to be able to create 3D assets, but it’s just one part. Ultimately experiences are what matters.

GamesBeat: How do you guarantee ethics in the metaverse? What happens when you have this open space with no regulation?

Tõke: It’s going to be a mess. Ethics is a wide topic. The more open the space is, the more crazy things will go down. Platforms themselves will enforce some rules. AI can be very helpful with those things. Hate speech and all those things will be a lot easier to manage with AI. They already are. But otherwise, no idea. If you want a fully safe space, that’s a fully closed space. If you want an interesting space it’s more open. It’s like Disney World versus New York. I like living in New York more.

GamesBeat: Do you believe that in the future we’ll have copyrights for avatars, so I can’t create an avatar that looks exactly like a celebrity?

Tõke: I mean, you can do that now. Any 3D artist who’s good enough can take an image of a celebrity and create an avatar of that celebrity. But who knows? What we’re focused on right now is creating a great end user experience for our customers and building great developer tools. Then we’ll address problems like that as they arise.

GamesBeat: We’ve talked about gaming a lot. What about the film business is leading the way to the metaverse?

Tõke: Well, we discussed this a bit yesterday. I remember that you have a point of view on that.

GamesBeat: The interesting thing that I see is that the film universe and the gaming universe are becoming one. It’s one entertainment ecosystem. You get things like The Last of Us on HBO out of that ecosystem. I think that should be encouraged. It’s a great thing. And I also feel like that’s what leads us to something like the metaverse. You have these intellectual properties and franchises that then are accessible in different ways, whether it’s through comics, through streaming media, through games. You can get to something like the Walking Dead in whatever way you want.

Tõke: You might be a fan of a movie, of an IP for a more general audience, and that can also be put into a game. We work with a lot of brands. For example, Tommy Hilfiger is building a webstore where you can buy virtual assets and bring them into games. You might be a fan of an IP or a brand and that’s what brings you into the metaverse. Then you might start liking it and come back.

GamesBeat: How many avatars can you create in Ready Player Me, and how innovative are they?

Tõke: Innovative, I don’t know. How many avatars have we created? Something like 12 or 13 million. Typically people stick with their real appearance. It depends on the context of the creation. In a professional app, 95 percent of people are making an avatar from a selfie. In something like VR chat it’s more like 45 or 50 percent. It really depends. If you play with your real friends, it’s more likely to be similar to yourself. If you go into a more crazy virtual experience it might be less like yourself.

GamesBeat: What impact can an open metaverse have on the future of commerce and entertainment?

Tõke: The amount of money people spend on virtual assets is connected with the amount of time they spend in virtual worlds. That number is going to go up over time. The open metaverse allows more brands and more individual creators to take part in that economy, to set up a store and sell stuff that works in dozens of games, instead of having to go to a single game developer and convince them to add your stuff to their store. Or a brand, for example, if they work with us they can focus on creating assets and selling them to their community, to their people. We make sure that it works in all of our games. The open metaverse will let more people take part and more people will benefit from it.

Disclosure: Ready Player Me paid my way to SXSW, where I moderated the session. Our coverage remains objective.