My opinion is nothing to do with interest rates and everything to do with COVID lockdown and (by 2023 and 2024) people getting bored of computers and reducing their spending on computers.
On the contrary, I expect most tech companies to not be profitable especially in ZIRP era, unless they're big and public for many years (or small boutiques).
If one is looking to work only at profitable companies, the pool of employer shrinks significantly. You can almost kiss goodbye to the vast majority of VC funded companies. It's not as bad nowadays but in ZIRP times, it's not the norm for growing tech companies to be profitable.
The severance package looks decent, but damn, I wouldn't want to be a developer in such a niche market space looking for new work. I wish the best to everyone getting the short end of the stick here.
I would hardly say the platform is dead. Apple just launched the Vision Pro. That's not a silver bullet but I'm sure they are looking for more apps and games. I hardly think VR is going away.
Not at all saying it's dead! Just a vastly smaller market space than say, doing crud stuff or ML in the year of our Lord 2024. I'm a huge VR enjoyer and I hope the medium flourishes.
I’m pretty sure they’ll be fine. I can’t imagine a CRUD agency being like “VR? No transferable skills! To the breadline with you!” Realtime state management is a highly sought after skill.
VR is just standstill on PC. Steam VR is not dead but not
having in any movement at all. In typical Valve fashion their
own efforts were one-and-done (Index and HL Alyx). VR is
not a gimmick but a niche and relatively expensive hobby sub genre. Like building your own cockpit with controls for Flight Simulator or a racing game.
I’ll still respect Valve for clearly CARING so much about what they do, in a world full of garbage people selling out beloved properties for a quick dirty buck. I’m not super hopeful I’ll ever get what would have been the amazing follow up to Alyx (really, episode 2), as yeah, VR didn’t explode. I never expected Alyx in the first place though so… maybe will be surprised in 10 years! I’m super happy for them about the Steam Deck success, this thing is legitimately awesome.
2, they ruined gaming foerever with lootboxes pioneered by TF2 and enabled the whole illegal digital gambling system with CSGO which is going for more than a decade
now. They could shut it
down but they don’t because they also benefit from it and the ship has now sailed. And it’s a billion dollar unregulated black market.
3, they ruined gaming forever with the whole battlepass system pioneered by Dota 2
Seriously, the pass Valve gets from allowing a gambling empire to piggyback on their API and profit from the lootboxes that fuel it is crazy to me. "Yeah they might have a pseudo-monopoly but their product is good, I think the 30% cut is fine." would be laughed at in most other sectors. They barely even try for their market position, people just rejected competition and scream it's not Steam because "I don't want multiple launchers"
Valve just has a lot of goodwill, they don't feel the need to comment on every social issue, they censor less than the competition, they are very indie friendly, they'd rather just not put out a sequel than churn out yearly releases, the tech they have put out has been (mostly) innovative and still retains popularity.
They also have the goodwill for helping make gaming on linux practical enough that there can be a handheld gaming console that runs linux (plus, of course, popularizing that entire new market segment).
They also don't constantly change large parts of Steam. Point is, people like that Valve is relatively stable, and that's why they insist on sticking to it. The industry is otherwise such a shitshow. The stability is an especially important value for a platform that holds, in many cases, thousands of dollars worth of games for people.
> "Yeah they might have a pseudo-monopoly but their product is good, I think the 30% cut is fine." would be laughed at in most other sectors.
In most other sectors the bar is higher. They've earned their near-monopoly fair and square (unlike Apple, they don't do anything to block competing marketplaces - they're not even preinstalled) by being head and shoulders above their competitors in terms of quality - the fact that that's due to those competitors all sawing their own legs off doesn't change that.
You are glossing over how every other launcher is a piece of crap written by the lowest costing bidder to spy on me even when I'm not playing a game from it. "They barely even try for their market position." Not one launcher comes anywhere close in terms of feature set. Valve alone is the reason gamers aren't shackled to windows anymore, only Steam gives disabled people the ability to forcibly remap controllers so they can play games, only Steam offers gamers in every country the opportunity to refund games after they bought them in client without any back and forth, library sharing, functional reviews independent of developer moderation, open access to developers, robust community features, even the steam overlay is amazing. Even with Fortnite and free games every few weeks, Epic is struggling to gain market share because of how GOOD Steam is and how fairly Valve treats its customers.
I’d not give Valve credit for lootboxes when Pokémon and baseball cards surely were the direct parents of lootboxes. Not would I credit CSGO for creating the digital item economy when Diablo 2 and Diablo 3 were doing that much earlier on.
Valve likely played a role in normalizing lootboxes in Western markets, but they definitely didn't invent the idea. MapleStory was doing lootboxes years earlier, and EA's Fifa was doing P2W lootboxes prior to TF2.
Their model of cosmetic-only lootboxes is also far less obnoxious than the P2W form that has taken over mobile gaming. Many mobile games today are designed to be as obnoxious as possible in the hopes that the player will crack open their wallet for a shortcut.
> Valve likely played a role in normalizing lootboxes in Western markets, but they definitely didn't invent the idea.
My first thought was that lootboxes were a natural development of Japanese gacha toys, and Wikipedia's article does cite them as a precedent for lootboxes.
Not that it was a pay-real-money-to-spin situation, but Legend of Zelda: Minish Cap had a gacha-based minigame mechanic in the game, and that came out several years before TF2, let alone TF2's shift towards free-to-play mechanics.
If you wanna go further back, magic the gathering booster packs are just lootboxes. Old arcade games were pay to win via extra lives/tries for more quarters
I remember laughing at the lawsuits claiming that Pokemon cards were promoting gambling to children. In retrospect they were right and I wish they'd won.
I disagree that they care. The Index is outdated and overpriced compared to the competitors, and they haven't released anything new since. It came out around the same time as the Quest 1.
The recent #SaveTF2 fan campaign shows how little they care about that game, except for releasing new skins to sell every couple of months. https://www.save.tf/
I don't even expect a Steam Deck 2 now that every other manufacturer is making x86 handhelds. At release their main competitor was the Switch, which didn't run Steam. What's the point of making a new one when all the competitor devices will have Steam installed anyways? They haven't even released a generic SteamOS 3 install
This is all speculation, but I get the sense that Valve understands better than anyone that 1) the VR market is a long game, 2) there are a number of minimum requirements for a VR system which are not ready to be commercialized yet (120hz, 10+ million pixels, eye tracking,
etc) so no one is going to “win” in this round, 3) the developer platform and general developer relations matters just as much as the hardware.
It’s not so much “build it and they will come” it’s “build it, and the market, and the developer community, and land them all at once and they will keep coming”.
Valve has the luxury of having absolutely no one to answer to for their cost structure, so they really don’t have to show any particular traction metrics, nor do they have to put on any annual developer conferences to impress their shareholders. They can just focus on goals that won’t bear fruit for 10 or 20 years and they’ll be totally fine.
Valve is the definition of skate to where the puck is going not where it currently is.
I think it's better explained as "Valve is willing and financially able to keep tinkering with lots of things that will fail over a long time in hopes one of them pans out" than "Valve understands this exact set of assumptions of when VR will take off and is waiting for them to hit the trigger". One thing I do agree on is we don't know whether Valve is really "done" with releasing new VR products to consumers and, to be honest, I don't think Valve knows either at this point.
I'm not saying they're wrong. I am saying I've never once seen a situation where adding more managers would improve velocity. I can imagine that such a thing exists and I have nothing whatsoever against the notion of leveling up their leadership. I just haven't personally seen it.
> Some different roles and expertise are needed for the next part of our journey.
Yes, starting from the CEO. He was the one who built a company structure that wasn't equipped to meet its needs. It's clear their senior leadership isn't as good at their jobs as all those newly unemployed ICs were at theirs.
Velocity is a vector: it includes a direction component. Management is putatively good at getting everyone to go in the same direction so that the sum of the IC vectors don't cancel out. That wasn't one of the problems in the email, though. The CEO failed to choose that direction, or to recognize that they were lacking one and that they needed to hire someone to help them find it.
Regarding velocity I echo that I've never run into such a situation either and that it is plausible but odd if really the root problem.
Regarding when you chop upper leadership... if a company is run by sitting around waiting to fire someone the instant they do something that causes a loss/underperformance instead of comparing the relative long term expected performance of their options for the role then you're going to fire a lot of amazing employees (of any type) and hire a lot of employees focused on lowering their short term risk instead of maximizing the business's long term growth. A company I work at had to lay off 10% one year despite having the best CEO I've ever run across - things just didn't line up, things fell through, and for the first year we had -10% revenue growth instead of 30+% revenue growth. If they had started with laying off the CEO because of that not only do I think the company would have had a hell of a time in the next 2 years instead of restabilizing its growth I also think myself and a few others would have straight up left as a result. It would have been clear the company had no clue how to properly gauge and set its long term direction by taking such an action in response to the first growth impacting mistakes made by the guy.
Now I don't know VRChat as a company and I certainly don't know anything about Graham. Perhaps he's complete shit at the role and really does need to be fired for more than what's covered in this email. What I do know is I strongly disagree with that kind of generalizing logic about how management must need to go the instant employees are let go the same way as I disagree when upper management gets protected long term from or golden parachuted out of solid reasons to get fired. Upper management isn't a magical layer where you must find people that never fail the same as it isn't a magical layer that should be protected from any negative repercussions. It's just another layer of the business where you need to see how you want to place your best bets for the long term performance of the company.
The main thing from this email that rubs me a bit in the wrong way from is all of the recent over-hires only get 3 months of severance. This could make everyone finding new things a bit tough given the current VR market and need to branch out into other areas. At the same time, I'd much rather someone hire me for 2 years and then find out they need to get rid of me with some semi decent severance and health coverage than someone be afraid to hire me in the first place because some risk model said something like it's a 50/50 what will happen. By taking a job I'm not expecting you are betting your position on me still being there 2-3 years later, just don't be a dick and fire me a few months after hiring me because you wanted to keep the layoffs a secret or some other poor reasoning.
You raise good points and I don’t disagree. It’s just that the tone of the letter seemed to me to be, hey, we made a whole series of bad decisions, so now we’re getting rid of the people who weren’t in charge of making decisions. He went on about how great the ex-employees were while explaining how the problems were due to mismanagement.
In a flat company, the CEO must be willing to shoulder the responsibility for making those decisions (or not making them). If they’re not, they’re missing a fundamental job requirement.
Is there a better alternative way to shoulder responsibility that will not just have the tone "and 10 years in because I made a bad bet and we had some negative growth for the first time I'm excusing myself/being excused from the company. Good luck with the 2nd best choice being thrown in to try and fix it" instead? This of course assuming the upper echelon of management has the majority of their real compensation set via ownership value, performance based bonuses which are now severely minimized, or that kind of typical outcome based thing rather than mostly from direct salary equal to last years (there's not really a reasonable way to take a massive payday for tanking the business for the year to the point you have to fire people. Places that do that are, IMO, severely misaligned as well).
It's one thing to empathize with someone that gets let go for no fault of their performance, even if it's because data entry clerks were replaced by electronic records technology rather than an erroneous business strategy bet pinned to a single person, but it's another to actually have an answer which provides a better outcome to the situation and health of the business vs saying there is a best candidate for fall guy which meets some definition of "sounds nicest" and leaving it at that.
Interesting points again. But still, the end result was that management executed so poorly, in ways they enumerated, that they had to fire a third of their staff. That’s very often the death knell of a company. Of the remaining 70%, how many want to stick around to see if their turn is next? A lot of the most experienced staff are likely to look for more stable roles, as that’s typically how such things play out. And who’d blame them? Are there other systemic problems that are going to bite the remaining staff in the rear, and will anyone know before it’s too late?
Outside severe outside happenings, layoffs are ultimately failures of leadership. I don’t know how many times we let those leaders make the same life-affecting mistakes.
I agree the end result was not good, I don't really think that's a point of contention to anyone, but this kind of answer still does not even attempt to explain why then immediately firing leadership on that fact alone is supposed to always be the best thing for the remaining employees/company or even a responsible next step. A huge forecasting miss like this is a clear bad mark on leadership's track record but there still needs to be a link to why that means leadership must immediately be let go for the business to do right by the interest of all employees. If the business has already received a likely death knell then it's only that much more important to understand what the best choice for the business is instead of a purely reactionary choice.
Whether leaders make life affecting mistakes is a red herring. As immediately appealing as it sounds to say "we only ever let management that haven't had to do a layoff before run the company!" it really makes no sense when you think deeply about it. Even the greatest CEOs may have to do a layoff in their careers so you're not preventing layoffs at your company by perfect selection. Even decent CEOs that just play it safe can cause more life-affecting impact by not hiring people out of an overabundance of caution (impact not only in those not hired but those at the company who missed out on a lot of growth/the business falling behind competition willing to take reasonable amounts of growth risk). Even some of the crappiest CEOs may not need to do a layoff multiple years in to stagnating the business and letting employees naturally attrition so you're not guaranteeing this selects and rewards only good management options. When you look at upper management and whether they should be replaced the only real consideration is "do I think someone else can deliver more to the business in the next x years". If you've had to lay off people 3 times in the last 10 years but you don't think there is anyone else that could handle that goal better then you let those leaders make the mistakes 3 times because it's the best option for everyone. If you've never had to lay anyone off you still might think it's worth replacing the leader anyways, again because it's the best option for everyone.
Nowhere does a connection with firing leadership because it sounds like the most self caused reason to get rid of someone with a layoff actually help employees. Well, with current proposed reasonings at least. It's perfectly possible there are other reasons not listed that I haven't considered yet.
I have to admit that I agree with you. The letter gives many reasons for the decisions made but it seems to me like the most salient one is their funding situation.
When funding was plenty, people didn’t need to worry about it too much. In todays market, the situation has changed and they need to make themselves “palatable” to investors. Thus management.
Management is absolutely terrible at improving velocity. While they might occasionally provide leadership, Ive seen a lot more cases where decisions are made for egotistical reasons rather than technical ones. Not that ICs are angels, but most decent ICs will recognize good work and promote it whereas with management who don’t actually build anything its a lot more abstract.
It sounds like they are a lot bigger than I would have expected. This isn't an email you write to 5 people. Perhaps that is a sign of the problem.
I worry that VRChat has worked its way into a local optimum that may be hard to get out of. They've appealed very strongly to niches - people with alternative lifestyles who enjoy the freedom to express themselves in unique and interesting ways. I think it's wonderful but it actively inhibits me from wanting to use VRChat because I don't identify with that. So how do they grow to 10x their current user base without alienating their existing loyal users? This is going to be a classic business dilemma for them I think.
AI allows people to 'express themselves in unique and interesting ways' far more than VR does. Text and image generation allow people to create worlds completely tailored to themselves, this time unlimited by the need for other people to play along.
So AI competes with VR both for users (The type willing to pay for cutting edge consumer tech experiences) and investment (AI is the big thing, VR is so 2022), and labour (How many researchers want to work in VR over AI?)
The social aspect of vrchat is what makes it popular. None of what you described has any relevance to that.
Fittingly, the equivalent projects started by the companies currently trying to stuff generative AI into everything fell completely flat.
People don't care about having AI generate exactly the world they want. People want the "wild"-ness and spontaneity that VRChat offers (finding a cool world someone made, running into real, interesting, people and hanging out with them). The issue being that as VRC grows/grew, they had to start taming that wildness (because it also allows for a lot of things not really compatible with monetization), but that slowly brings them closer to the over-sanitization problem that killed all the competitors.
> The social aspect of vrchat is what makes it popular. None of what you described has any relevance to that.
I bet chatting with Replika or Character AI is satisfying the same needs as VRChat for many of the people that either appeals to. I think that's what they were getting at.
I guess they could be saying that. I don't really see the appeal of Replika/Character AI, while I do of VRC, so I'm obviously not in the target audience for the point they're making.
To make these “unique and interesting ways” somewhat more explicit:
AI isn’t going to let you hang out with your friend who is presenting as a nine foot tall naked dragon lady made of gummy candy, and experience getting pulled into one of her orifices and digested. It’s not going to let you pretend to be turned into her horny parts, either. With or without the experience being enhanced by various Bluetooth-connected toys. And AI’s not going to hang out with you in the flesh at a convention later on based on the good times you had in VR and make a lifelong connection, either.
As someone working in the social avatar space for >10 years, you sound like someone who has worked in the social avatar space for >10 years. :)
Once it comes time to flip on the monetization switch, you have find a way to bring the users along for the financial security ride (ala Roblox). The alternative is user base revolt and then rejection.
I remember years ago thinking "Man someone needs to make some sponsored / actually branded content on here. There's so much room for fun, whimsy, and etc."
Next think I know my son is playing a game and him telling me "No dad, this is official. <X> company made this."
I love tech and the idea of VR and I was struck by how … NONE of those things interest me.
I wonder how much existing VR just caters to the existing audience, less so others.
I recall a story that ages ago the NHL realized their core fanbase was men, and a lot of them boozing it up. They wanted to appeal to families and more fans and realized and knew it would upset their core fans if they started cleaning up the game … and fans, but they chose to do so.
As a longtime hard-core NHL fan, toxicity of the "core" fanbase is pretty irritating.
E.g. the recent controversy over noise about the league mandating protective neck gear. Fans and players didn't like the aesthetics of it (re they were worried about looking less cool/tough)
Any attempt at broadening the appeal of the game is met with revulsion by the angry traditionalists.
Yeah and I think some tech or topics or businesses get stuck in that hole more than others and it's brutal to get out.
I remember the really old NHL, late 1970s / 1980s. Everyone drinking it up in parking lots before the game, in game fights and hits could be nasty. Different atmosphere. The idea that you might discard your entire existing audience for a hopefully larger one must seem like a mountain to climb. Still, it seemed to work for the NHL. It's a completely different vibe now.
I bought a Quest 3 last week. I have no interest in VR avatars but the games are mindblowing. And I'm getting a serious workout playing them. I don't think VR is the future of social interaction, but it's the future of exercise.
Absolutely 100% would buy again. I can't believe the amount of technology packed into the small box strapped to my face.
It's truly incredible isn't it? And when you add in that this device is barely more than the cost of a midrange phone, it's all the more staggering.
The novelty will wear off after a while, and the games that are purely based on that are not as exciting. But exercise is definitely one of the enduring uses of it that lasts beyond the novelty wear-off phase. I wouldn't exercise any other way now.
VR and video game based exercise isn't a scratch on real world training. Most people either drop off the bandwagon once the novelty wears off or they move onto more effective stuff (resistance training for anaerobic, cardio for aerobic).
Hopefully some people are not deluding themselves about infinite growth, because trying to appeal to an audience 10 times larger than the current user base would really mean sanitizing the platform and losing what made it successful in the first place (and the users who cared about it).
> trying to appeal to an audience 10 times larger than the current user base would really mean sanitizing the platform and losing what made it successful in the first place (and the users who cared about it).
This hasn't stopped any media company I'm aware of
As long as they successfully capture a larger audience than the original diehard users that cared about it, then the original users can go pound sand
Of course this generally winds up being "we captured a 3x larger audience for a while and have steadily dwindled since then" while the original 1x sized audience would likely have remained relatively consistent forever
Had they gone the route of open development, modder would have, and had been, developing a lot of functionality for the platform for free. Instead, they slapped Easy Anti-Cheat and killed the modding community.
Close walled platforms will always wither sooner or later. They had massive potential back in 2021, when VRChat felt like the start of a new internet. Instead of letting the communities flourish, they were tempted by VCs and their unsustainable business model.
>Close walled platforms will always wither sooner or later.
There are just so, so many cases where this hasn't happened, and where walled gardens have thrived. And also many examples to the contrary, in which open platforms have failed.
I appreciate the candid letter, but honestly this sounds like a bad leader. Not an evil one, just a bad one. The lack of strategy, and lack of alignment, and praising what management brings... this is someone that is asleep at the wheel.
I can't imagine a company that's been flat for 10 years is going to welcome management with open arms. While they've given themselves more runway, hard to see them not get sold off or close up in the future.
But they do reference “product” alongside “management”…
If you just have a bunch of engineering a design ICs “doing stuff” and no one is doing any form of project management (making sure you’re building things you can afford that customers will pay for) or product management (making sure they team is building what they said they would), that is, in fact, a recipe for disaster.
And saying “we hired some product people and project managers and we think that will correct our course” is not a bad hypothesis IMO.
I hope it isn't dying. The basic tech is no longer out of reach, and closed ecosystems aren't make or break, but there are other issues.
1) marketing vr for games and productivity is a waste. in those roles its just a novelty, and the limitations irritate enough to make use short-lived.
the focus should be on social and media. it's a bigger market and the value proposition is more obvious. there's a few video players, but other than vrchat i can't think of anyone pushing the boundaries on social use.
2) the desired hardware isn't really here yet, and too few want to invest in that eventual payoff
Most of the headsets have the same old strap mechanism, lens limitations, and almost no integration of body tracking past your hands and head.
Tue quest pro is expensive, but its form factor and tracking integration is novel and convenient. I hope to see more such innovation.
3) tracking and movement convenience and time-to-content needs improvement
Carmack has said it all before. You can't get VR to the masses if it requires too much voodoo to operate. A quest 2 isnt hard to use, but it isn't the desired hardware either. Full body tracking is currently limited to just nerds because they're the only ones who will put up with the requirements and limitations, yet, you need that for good social interaction. Hand tracking needs to be better. You need to be able to walk around freely. And omni-directional treadmills will never get adoption if they even ever get properly made.
There is one thing I wanted out of VR... TO BE TRANSPORTED... That's what all the initial hype was about. You go in VR, and you supposedly get this feeling of presence that blows your mind.
Instead the whole thing seems to have gone in the direction of lofi social stuff - which only the relentlessly computer bound will ever desire. I don't get the argument at all that this is THE mainstream path to mass adoption. Who thinks that if they really succeed in siphoning off a significant portion of REAL world interaction into this simulated lofi hell that this is going to be a great way to live? I mean really.
There is only one VR experience that really blew me away. It was a free demo of Deckard's apartment in blade runner. You could go out on the balcony and see the city with a flying cop car going past on a loop. Vangelis playing in the background... It was breathtaking. I setup my area so I could sit on my couch, on this balcony, with a glass of whiskey in reach, watching that cop car fly past for ages.
Not surprised but still concerned that eventually the good times will be over.
vrchat right now feels like a place not yet touched by eternal summer (or the modern equivalents of... eternal bots, ads and ai?), full of real people, diversity of experiences, and talent.
It's also a wild place to see the most obscure hardware of vr in use such as face tracking and haptic suits. And some people even have adult peripheral integration.
For me it's my motivation to learn 3d art. Don't think I'd continue if I didn't have a place to share it.
I don't want the inevitable enshitification, but there's no way it will be a free ride forever. EAC was already a blow to the community. I just hope it retains some charm when it reaches some stable state of monetization.
And I hope it inspires more VR-as-a-social-tool programs, since I think games are far more of a novelty in VR than being able to meet people at events without leaving my house. It seems like a natural evolution of meeting people over chatrooms.
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[ 3.5 ms ] story [ 147 ms ] threadIf they are, huge bonus points. If they aren’t, ask them more about how they run their business and how they plan to fund it over time.
If one is looking to work only at profitable companies, the pool of employer shrinks significantly. You can almost kiss goodbye to the vast majority of VC funded companies. It's not as bad nowadays but in ZIRP times, it's not the norm for growing tech companies to be profitable.
VRChat is literally just a Unity game. They'll be fine
Edit: Deleted the Twitch VR Chat part cause seems like they reverted the policy changes https://x.com/twitchsupport/status/1799589284367696213
1, companies are not our friends
2, they ruined gaming foerever with lootboxes pioneered by TF2 and enabled the whole illegal digital gambling system with CSGO which is going for more than a decade now. They could shut it down but they don’t because they also benefit from it and the ship has now sailed. And it’s a billion dollar unregulated black market.
3, they ruined gaming forever with the whole battlepass system pioneered by Dota 2
They also have the goodwill for helping make gaming on linux practical enough that there can be a handheld gaming console that runs linux (plus, of course, popularizing that entire new market segment).
They also don't constantly change large parts of Steam. Point is, people like that Valve is relatively stable, and that's why they insist on sticking to it. The industry is otherwise such a shitshow. The stability is an especially important value for a platform that holds, in many cases, thousands of dollars worth of games for people.
In most other sectors the bar is higher. They've earned their near-monopoly fair and square (unlike Apple, they don't do anything to block competing marketplaces - they're not even preinstalled) by being head and shoulders above their competitors in terms of quality - the fact that that's due to those competitors all sawing their own legs off doesn't change that.
When you've tried the others and then been denied playing your game because of their crappiness... it gets old quick.
Their model of cosmetic-only lootboxes is also far less obnoxious than the P2W form that has taken over mobile gaming. Many mobile games today are designed to be as obnoxious as possible in the hopes that the player will crack open their wallet for a shortcut.
My first thought was that lootboxes were a natural development of Japanese gacha toys, and Wikipedia's article does cite them as a precedent for lootboxes.
Not that it was a pay-real-money-to-spin situation, but Legend of Zelda: Minish Cap had a gacha-based minigame mechanic in the game, and that came out several years before TF2, let alone TF2's shift towards free-to-play mechanics.
The recent #SaveTF2 fan campaign shows how little they care about that game, except for releasing new skins to sell every couple of months. https://www.save.tf/
I don't even expect a Steam Deck 2 now that every other manufacturer is making x86 handhelds. At release their main competitor was the Switch, which didn't run Steam. What's the point of making a new one when all the competitor devices will have Steam installed anyways? They haven't even released a generic SteamOS 3 install
This is all speculation, but I get the sense that Valve understands better than anyone that 1) the VR market is a long game, 2) there are a number of minimum requirements for a VR system which are not ready to be commercialized yet (120hz, 10+ million pixels, eye tracking, etc) so no one is going to “win” in this round, 3) the developer platform and general developer relations matters just as much as the hardware.
It’s not so much “build it and they will come” it’s “build it, and the market, and the developer community, and land them all at once and they will keep coming”.
Valve has the luxury of having absolutely no one to answer to for their cost structure, so they really don’t have to show any particular traction metrics, nor do they have to put on any annual developer conferences to impress their shareholders. They can just focus on goals that won’t bear fruit for 10 or 20 years and they’ll be totally fine.
Valve is the definition of skate to where the puck is going not where it currently is.
I'm not saying they're wrong. I am saying I've never once seen a situation where adding more managers would improve velocity. I can imagine that such a thing exists and I have nothing whatsoever against the notion of leveling up their leadership. I just haven't personally seen it.
> Some different roles and expertise are needed for the next part of our journey.
Yes, starting from the CEO. He was the one who built a company structure that wasn't equipped to meet its needs. It's clear their senior leadership isn't as good at their jobs as all those newly unemployed ICs were at theirs.
Not everything is about velocity, you also need focus in the right areas.
Regarding when you chop upper leadership... if a company is run by sitting around waiting to fire someone the instant they do something that causes a loss/underperformance instead of comparing the relative long term expected performance of their options for the role then you're going to fire a lot of amazing employees (of any type) and hire a lot of employees focused on lowering their short term risk instead of maximizing the business's long term growth. A company I work at had to lay off 10% one year despite having the best CEO I've ever run across - things just didn't line up, things fell through, and for the first year we had -10% revenue growth instead of 30+% revenue growth. If they had started with laying off the CEO because of that not only do I think the company would have had a hell of a time in the next 2 years instead of restabilizing its growth I also think myself and a few others would have straight up left as a result. It would have been clear the company had no clue how to properly gauge and set its long term direction by taking such an action in response to the first growth impacting mistakes made by the guy.
Now I don't know VRChat as a company and I certainly don't know anything about Graham. Perhaps he's complete shit at the role and really does need to be fired for more than what's covered in this email. What I do know is I strongly disagree with that kind of generalizing logic about how management must need to go the instant employees are let go the same way as I disagree when upper management gets protected long term from or golden parachuted out of solid reasons to get fired. Upper management isn't a magical layer where you must find people that never fail the same as it isn't a magical layer that should be protected from any negative repercussions. It's just another layer of the business where you need to see how you want to place your best bets for the long term performance of the company.
The main thing from this email that rubs me a bit in the wrong way from is all of the recent over-hires only get 3 months of severance. This could make everyone finding new things a bit tough given the current VR market and need to branch out into other areas. At the same time, I'd much rather someone hire me for 2 years and then find out they need to get rid of me with some semi decent severance and health coverage than someone be afraid to hire me in the first place because some risk model said something like it's a 50/50 what will happen. By taking a job I'm not expecting you are betting your position on me still being there 2-3 years later, just don't be a dick and fire me a few months after hiring me because you wanted to keep the layoffs a secret or some other poor reasoning.
In a flat company, the CEO must be willing to shoulder the responsibility for making those decisions (or not making them). If they’re not, they’re missing a fundamental job requirement.
It's one thing to empathize with someone that gets let go for no fault of their performance, even if it's because data entry clerks were replaced by electronic records technology rather than an erroneous business strategy bet pinned to a single person, but it's another to actually have an answer which provides a better outcome to the situation and health of the business vs saying there is a best candidate for fall guy which meets some definition of "sounds nicest" and leaving it at that.
Outside severe outside happenings, layoffs are ultimately failures of leadership. I don’t know how many times we let those leaders make the same life-affecting mistakes.
Whether leaders make life affecting mistakes is a red herring. As immediately appealing as it sounds to say "we only ever let management that haven't had to do a layoff before run the company!" it really makes no sense when you think deeply about it. Even the greatest CEOs may have to do a layoff in their careers so you're not preventing layoffs at your company by perfect selection. Even decent CEOs that just play it safe can cause more life-affecting impact by not hiring people out of an overabundance of caution (impact not only in those not hired but those at the company who missed out on a lot of growth/the business falling behind competition willing to take reasonable amounts of growth risk). Even some of the crappiest CEOs may not need to do a layoff multiple years in to stagnating the business and letting employees naturally attrition so you're not guaranteeing this selects and rewards only good management options. When you look at upper management and whether they should be replaced the only real consideration is "do I think someone else can deliver more to the business in the next x years". If you've had to lay off people 3 times in the last 10 years but you don't think there is anyone else that could handle that goal better then you let those leaders make the mistakes 3 times because it's the best option for everyone. If you've never had to lay anyone off you still might think it's worth replacing the leader anyways, again because it's the best option for everyone.
Nowhere does a connection with firing leadership because it sounds like the most self caused reason to get rid of someone with a layoff actually help employees. Well, with current proposed reasonings at least. It's perfectly possible there are other reasons not listed that I haven't considered yet.
When funding was plenty, people didn’t need to worry about it too much. In todays market, the situation has changed and they need to make themselves “palatable” to investors. Thus management.
Management is absolutely terrible at improving velocity. While they might occasionally provide leadership, Ive seen a lot more cases where decisions are made for egotistical reasons rather than technical ones. Not that ICs are angels, but most decent ICs will recognize good work and promote it whereas with management who don’t actually build anything its a lot more abstract.
I worry that VRChat has worked its way into a local optimum that may be hard to get out of. They've appealed very strongly to niches - people with alternative lifestyles who enjoy the freedom to express themselves in unique and interesting ways. I think it's wonderful but it actively inhibits me from wanting to use VRChat because I don't identify with that. So how do they grow to 10x their current user base without alienating their existing loyal users? This is going to be a classic business dilemma for them I think.
So AI competes with VR both for users (The type willing to pay for cutting edge consumer tech experiences) and investment (AI is the big thing, VR is so 2022), and labour (How many researchers want to work in VR over AI?)
Fittingly, the equivalent projects started by the companies currently trying to stuff generative AI into everything fell completely flat.
People don't care about having AI generate exactly the world they want. People want the "wild"-ness and spontaneity that VRChat offers (finding a cool world someone made, running into real, interesting, people and hanging out with them). The issue being that as VRC grows/grew, they had to start taming that wildness (because it also allows for a lot of things not really compatible with monetization), but that slowly brings them closer to the over-sanitization problem that killed all the competitors.
I bet chatting with Replika or Character AI is satisfying the same needs as VRChat for many of the people that either appeals to. I think that's what they were getting at.
AI doesn't have the sort of cutting edge consumer tech experience of even a basic FPS it's a non-stater here.
AI isn’t going to let you hang out with your friend who is presenting as a nine foot tall naked dragon lady made of gummy candy, and experience getting pulled into one of her orifices and digested. It’s not going to let you pretend to be turned into her horny parts, either. With or without the experience being enhanced by various Bluetooth-connected toys. And AI’s not going to hang out with you in the flesh at a convention later on based on the good times you had in VR and make a lifelong connection, either.
Once it comes time to flip on the monetization switch, you have find a way to bring the users along for the financial security ride (ala Roblox). The alternative is user base revolt and then rejection.
Am curious what your involvement is? (if you are up for disclosing here)
Now I work as a producer for a creative agency where we make Roblox games for brand clients, including Roblox.
I remember years ago thinking "Man someone needs to make some sponsored / actually branded content on here. There's so much room for fun, whimsy, and etc."
Next think I know my son is playing a game and him telling me "No dad, this is official. <X> company made this."
Years ago John Carmack complaining about not being able to present in front of large VR crowds, and discussions about avatar quality:
https://arstechnica.com/gaming/2022/10/carmack-wants-a-250-v...
I love tech and the idea of VR and I was struck by how … NONE of those things interest me.
I wonder how much existing VR just caters to the existing audience, less so others.
I recall a story that ages ago the NHL realized their core fanbase was men, and a lot of them boozing it up. They wanted to appeal to families and more fans and realized and knew it would upset their core fans if they started cleaning up the game … and fans, but they chose to do so.
Any attempt at broadening the appeal of the game is met with revulsion by the angry traditionalists.
I remember the really old NHL, late 1970s / 1980s. Everyone drinking it up in parking lots before the game, in game fights and hits could be nasty. Different atmosphere. The idea that you might discard your entire existing audience for a hopefully larger one must seem like a mountain to climb. Still, it seemed to work for the NHL. It's a completely different vibe now.
Absolutely 100% would buy again. I can't believe the amount of technology packed into the small box strapped to my face.
The novelty will wear off after a while, and the games that are purely based on that are not as exciting. But exercise is definitely one of the enduring uses of it that lasts beyond the novelty wear-off phase. I wouldn't exercise any other way now.
..for a certain demographic.
VR and video game based exercise isn't a scratch on real world training. Most people either drop off the bandwagon once the novelty wears off or they move onto more effective stuff (resistance training for anaerobic, cardio for aerobic).
This hasn't stopped any media company I'm aware of
As long as they successfully capture a larger audience than the original diehard users that cared about it, then the original users can go pound sand
Of course this generally winds up being "we captured a 3x larger audience for a while and have steadily dwindled since then" while the original 1x sized audience would likely have remained relatively consistent forever
Close walled platforms will always wither sooner or later. They had massive potential back in 2021, when VRChat felt like the start of a new internet. Instead of letting the communities flourish, they were tempted by VCs and their unsustainable business model.
There are just so, so many cases where this hasn't happened, and where walled gardens have thrived. And also many examples to the contrary, in which open platforms have failed.
I can't imagine a company that's been flat for 10 years is going to welcome management with open arms. While they've given themselves more runway, hard to see them not get sold off or close up in the future.
An expert in a specific niche builds something, and against all odds, it takes off!
But now they need to jump into the pit of commerce and figure out how to be a business person; a much different skill.
Sometimes they can make the leap, most of the time they don't.
The most self-aware bring in an outside ceo before the growth curve plateaus
But they do reference “product” alongside “management”…
If you just have a bunch of engineering a design ICs “doing stuff” and no one is doing any form of project management (making sure you’re building things you can afford that customers will pay for) or product management (making sure they team is building what they said they would), that is, in fact, a recipe for disaster.
And saying “we hired some product people and project managers and we think that will correct our course” is not a bad hypothesis IMO.
Tech is way out of reach for regular consumers. It’s clunky. UX for games and applications is difficult to use.
The locked in ecosystems with various devices doesn’t help as well (Apple vs Facebook/Occulus).
"Out of reach" isn't true though, if we're talking about developed nations. An Oculus Quest is similarly priced to a game console.
1) marketing vr for games and productivity is a waste. in those roles its just a novelty, and the limitations irritate enough to make use short-lived. the focus should be on social and media. it's a bigger market and the value proposition is more obvious. there's a few video players, but other than vrchat i can't think of anyone pushing the boundaries on social use.
2) the desired hardware isn't really here yet, and too few want to invest in that eventual payoff
Most of the headsets have the same old strap mechanism, lens limitations, and almost no integration of body tracking past your hands and head.
Tue quest pro is expensive, but its form factor and tracking integration is novel and convenient. I hope to see more such innovation.
3) tracking and movement convenience and time-to-content needs improvement
Carmack has said it all before. You can't get VR to the masses if it requires too much voodoo to operate. A quest 2 isnt hard to use, but it isn't the desired hardware either. Full body tracking is currently limited to just nerds because they're the only ones who will put up with the requirements and limitations, yet, you need that for good social interaction. Hand tracking needs to be better. You need to be able to walk around freely. And omni-directional treadmills will never get adoption if they even ever get properly made.
Instead the whole thing seems to have gone in the direction of lofi social stuff - which only the relentlessly computer bound will ever desire. I don't get the argument at all that this is THE mainstream path to mass adoption. Who thinks that if they really succeed in siphoning off a significant portion of REAL world interaction into this simulated lofi hell that this is going to be a great way to live? I mean really.
There is only one VR experience that really blew me away. It was a free demo of Deckard's apartment in blade runner. You could go out on the balcony and see the city with a flying cop car going past on a loop. Vangelis playing in the background... It was breathtaking. I setup my area so I could sit on my couch, on this balcony, with a glass of whiskey in reach, watching that cop car fly past for ages.
Rights holders made the demo maker take it down.
It's also a wild place to see the most obscure hardware of vr in use such as face tracking and haptic suits. And some people even have adult peripheral integration.
For me it's my motivation to learn 3d art. Don't think I'd continue if I didn't have a place to share it.
I don't want the inevitable enshitification, but there's no way it will be a free ride forever. EAC was already a blow to the community. I just hope it retains some charm when it reaches some stable state of monetization.
And I hope it inspires more VR-as-a-social-tool programs, since I think games are far more of a novelty in VR than being able to meet people at events without leaving my house. It seems like a natural evolution of meeting people over chatrooms.