How many of you can recognize the games behind the images above? Chances are you might have played or heard about Second Life and Habbo, two of the most successful virtual worlds of the last couple of decades. Already in 2010, virtual worlds broke the 1 billion registered users barrier. In this post, we will go deep on virtual worlds and their relationship with the metaverses. We will cover the following points:
The Old-school Metaverses
What is Habbo? History, Building Blocks and Economy
Virtual Worlds Dynamics
The Old-school Metaverses
Virtual worlds are places where the imaginary meets the real.
— Richard Bartle
The most successful virtual worlds, aka old-school metaverses, have been games like Second Life, Habbo, Roblox, Disney Club Penguin or BoomBang. All of them together broke the 1 billion users barrier and 5 billion USD of market cap back in 2010.
In the book Designing Virtual Worlds, Richard Bartle, one of the most respected experts in the industry, defined in 2003 that “virtual worlds are places where the imaginary meets the real”.
Starting as early as the Internet was born, in virtual worlds large groups of people represented by avatars meet and interact in real-time while experiencing a shared sensation of being there together. Players design rooms, play games and trade items that can be purchased with virtual coins, creating a parallel virtual economy.
Wait a minute... this definition sounds familiar to me. In the previous post of this series, we talked about one of the most trendy words nowadays: the metaverse. Let’s recall one of the many definitions of metaverse:
👉 The Metaverse: a persistent, live digital universe that affords individuals a sense of agency, social presence, and shared spatial awareness, along with the ability to participate in an extensive virtual economy with profound societal impact.
— @pierskicks, founding partner at Delphi Digital
Learnings from the past
Raph Koster is a top-notch game designer who has led popular MMORPG virtual worlds like Ultima Online or Star Wars Galaxies and is now building Playable Worlds, a cloud-native virtual world that has raised 10M USD. In his recent video Real talk about a real metaverse, Koster shares his enthusiasm and excitement about the potential of the metaverse. However, he also shares his concerns about not learning from the work done in virtual worlds.
I do think of the metaverse as an evolution of virtual worlds. I do think that we really should be going back and looking at virtual world history when we talk about the metaverse.
— Raph Koster
“I’m here to just share some high level lessons, some mistakes that have already been made, in hopes that it saves you from making future mistakes,” he said. “We’ve had online worlds for 44 years, and any vision of the metaverse is built on top of the idea of online worlds, whether you call them online worlds, MUDs (multi-user dungeons), virtual worlds, social worlds — it doesn’t matter.”
Let’s see his supporting points on what we should know about virtual worlds and the upcoming metaverses.
Technical challenges
Koster supports that the key technological challenges in virtual worlds have been already solved during the last decades. The peak of technological complexity in virtual worlds was between 1992 and 2003.
For example, since 1992, virtual worlds have had higher concurrency rates than Fortnite. The Portuguese Habbo community overpassed the 48.000 concurrent users back in 2010:
The idea of a multiverse, where multiple virtual worlds could interoperate allowing players to move between them with just one client, has also existed since 1992: the InterMUD protocol. It consisted of decentralized worlds, run by volunteers and open-source software.
Real-world connectivity
According to Koster, a true metaverse needs real-world connectivity, and he points out several ways of connecting people in both digital and reality already existed for the last decades:
There have been virtual malls for real stores, since at least 1994.
Virtual concerts with real-time audience interaction, since at least 2006.
The ability to carry avatar identity across different worlds, since at least 2007.
Interactivity with classrooms where users could complete assignments in virtual worlds, since at least 2009.
Challenges are social, not technical
“None of these things are truly new, and the big lesson here is that the key challenges to surmount are social, not technical. This is a list of major dreams that we still have, and we need to look at each of these as something we have failed to deliver on thus far in the history of virtual worlds and metaverses. To enter into this space without seeing these as major unsolved problems with decades of standing is not being aware of our own history. “ —says Raph Koster.
I completely agree the main challenges in virtual worlds and metaverses are social. Koster identifies six social challenges and I gave my opinion on a Twitter thread:
Virtual worlds and web3
Virtual worlds are the web2 equivalent of metaverses in web3. You still don’t believe it? Then, just hear it directly from Mark Zuckerberg’s words talking about Habbo and the metaverse:
Sorry for the parody, but I hope you see how important it is to learn what worked and what didn’t work in virtual worlds in the past in order to create better metaverses in the present. To do that, we will cover how Habbo went from a hobby between two 20ish year-old Finnish students to becoming an international phenomenon.
What is Habbo? History and Building Blocks
Habbo, formerly known as Habbo Hotel, is a virtual world for teens operated by the Finnish company Sulake founded in 2000. Since then, Habbo has expanded to nine online communities (or "hotels"), with users from more than 150 countries. In 2010, Epifanía Pascual, former Senior Director in Sulake, presented on Campus Party conference (video in Spanish) what is the history behind Habbo and what made them reach 178 million registered users, 15 million active users monthly and 78 million EUR revenue annually, among other impressive achievements like partnerships with top brands such as MTV, Fanta or Calippo and VIP events with influencers like Selena Gomez, Justin Bieber or David Guetta.
Users of Habbo, known as Habbos, can do many things in the virtual world including chatting with new people, playing social games and thus building new friendships. Habbo is about socializing with other users, playing mini-games and competitions organised by the Habbo Staff (Sulake’s employees) and participating in activities created by the community itself. The latter was especially important to determine the success of the platform: it was the users themselves who created the community and entertained each other in chatting rooms, parties, competitions and an infinite, unimaginable creative activities.
Easier to see than to explain it:
History
The core value of Habbo is the community and its own history comes along with connecting people digitally in a virtual world.
Mobiles Disco
Habbo stemmed from a hobby project by the creative designer Sampo Karjalainen and the technologist Aapo Kyrölä, originally called Mobiles Disco, a mini-community the founders developed in their spare time for a Finish band called Mobiles.
Opened in November 1999, Mobiles Disco had two virtual rooms — a bar and a dance floor — where you could chat with your own character with other disco players.
Snow War
Mobiles Disco was a success in Finland just by word of mouth. The two young entrepreneurs decided to later create the game Snow War. Similar to Mobiles Disco, there was a room where people could chat but now there was also a mini-game where players throw snow balls between each other. The more you hit the opponents, the more points you got.
In addition, and never seen before in Finland, they started to monetize the game with micropayments via SMS. Players could buy boosts to get stronger snowballs and make it easier to defeat your opponents.
Hotelli Kultakala
Pursuing a bigger vision, Karjalainen and Kyrölä developed a new virtual world released in August 2000: Hotelli Kultakala.
Unlike the Snow War, now users would have their own rooms. Use of the hotel would be free, but you could buy goods to design your rooms via SMS. Making small purchases with a mobile phone was new in Finland at the time. Later named Habbo, a new virtual world was created.
Building Blocks
What is Habbo? Complexity and simplicity. From some basic building blocks around avatars, rooms, and items, complex human and digital dynamics naturally arise. Creativity is the limit, they say.
This is my humble story of explaining what Habbo is with my experience as a player since 2004.
Avatars
The Habbo journey starts with the creation of your Habbo avatar. This was, for example, my user profile:
You can personalize the clothing of your avatar, show off the badges you won in competitions or add your own motto, among other customizations:
People get really crazy about clothing and skins in gaming. In 2020, Fortnite made $5.1 billion in skins sales.
Rooms
Users gather around public or private rooms with other players. In private rooms, users design with virtual items activities, games or simply use their imagination to create incredible buildings:
The concept of rooms have lately evolved to LANDS in metaverses, where a scarce digital asset is sold for real money. Habbo equivalent LANDS were completely free to users, with some exceptions for promotional campaigns inside the game, more on a renting style.
Items
👉 In 2007 the Finnish company Sulake surpassed Swedish furniture giant IKEA in global sales of furniture.
source
Rooms are decorated with virtual items. These furnitures (or how we call them, furnis) are bought using the in-game currency Habbo credits directly from the game catalogue. The price of the furnis range from 20 cents to 5 USD and credits can be bought with micro payments such as SMS and phone calls, pre-paid cards and credit cards.
Users can trade their items in exchange for other items or credits with other players. In fact, some items are more valuable than others due to their scarcity or social value. This creates a digital economy within the game.
Economy
Trading is huge in Habbo and the company estimated the annual volume in transactions between users were more than 600 million USD (!) in 2010. Most of these transactions come from low-price items but there are some scarce and expensive items following standard power law distributions.
The user Mudo is well-known in habbo.es for collecting the most exclusive and valued items for the community. Let’s see a couple of examples from his Rare Trade:
The Infobus is the most expensive item in the game. Around 40 units were awarded during a competition related to online safety back in 2005. As of today, there are only 4 available and costs around 15,000€ each.
The Pink Dragon was released in 2013 as a Limited Rare (LTD). There are 80 units, each of them enumerated from 1 to 80. The average value is around 2,000€, depending on the serial number.
The Habbo Trophies were given and signed by the Hotel Managers as a prize for special competitions. Trophies signed by Habbo employees are really loved by the community and they cost around 1,500€.
Virtual Worlds Dynamics
Designing for social play to create better, stronger communities is a difficult task. The complexity of new gameplays that are unlocked thanks to virtual economies make us believe that understanding the virtual world dynamics is a key challenge when building a new metaverse.
The complex dynamics that naturally arise in virtual worlds have been largely studied in academia such as in Chesney et al (2009), Lehdonvirta et al. (2009) and Mäntymäki & Salo (2011). However, most of these studies were constrained by a short time frame and lack of skin in the game: they could not spend years playing and understanding the complex nature of the metagame and community as a user.
Experts agree that virtual worlds companies are building long-term emotional relationship with the player. And that will require transparency, honesty, and openness. It will require admitting when we screw up. It will require us to see ourselves not as above the community, but as part of it. And it will require understanding the complex game dynamics that are happening within the metaverses.
Fortunately, I have been a top competitive Habbo player since 2004. I have literally spent the entirety of my spare time in the hotel as a teenager, mostly participating in competitions organised by the Staff, collecting and trading virtual items and basically living a second, digital life with my Habbo friends, some of which have become long-term friendships. Now, I will give my point of view of the game dynamics that organically arose in Habbo.
Community Games
Users create their own games and run contests and competitions with other players.
For example, “Habbo Football”, a game where users literally play football, is really big in Habbo and they organise their own leagues and tournaments between other teams:
Or one of the most classic games where the player who cannot find a seat is eliminated until only one survives:
Official Minigames
Habbo has created their own minigames. Users pay a ticket and they compete against other users to win the match. Winners are rewarded with points and at the end of each month the top players in the ranking were awarded with a badge and some exclusive items.
For example, in Battle Ball all you have to do is to bounce over squares arranged in a certain way for each stage. The more you coloured, the more points you get. On the other hand, SnowStorm was inspired by the Snow War, where you need to hit snow balls to your opponent:
Official Competitions
The Hotel Managers organize diverse contests on a weekly basis, generally each month there is a different theme. From pixel art, room building, quests, labs, puzzles, gymkhanas, or any creative contest they can imagine. In addition, for special events such as the Football World Cup or commercial partnership with brands and influencers, they also create special campaigns.
These contests were very competitive and the best players in the Hotel fought to win prizes, badges and social reputation against other users.
Social Reputation
As in real life, social reputation is one of the main drivers in the Habbo community. Users give their best to be the most famous, the richest, the best builder, the best pixel artist or the most skilled in competitions. Sometimes you also achieve fame because of a virtual scandal (like a moderator having a relationship with a user and stealing items for her) or stealing other user accounts.
For example, Habbo ran a competition in 2010 to nominate Habbo's best in-category for various titles such as Habbo of The Year, Builder of the Year or Game Creator of the Year. The own community voted the candidates and the finalists received a trophy and an exclusive badge. Among 5 million active users monthly in habbo.es, I was selected as Habbo of The Year by the community🥳 (go back to my profile and see the first badge!):
Roleplay
Roleplay is an important aspect of virtual worlds. It is a more complex version of community games: they have a complete lore and players usually engage for the medium-long term. Using virtual items and their own creativity, they recreate games and movies in private rooms and then roleplay in community.
For example, in this case they’re recreating Harry Potter. Users have recreated Hogwarts and have created a roleplay where users can take potions class, fight in a spell battles or compete to be the best student:
Agencies
In Habbo, there are agencies that are like real companies. The bosses pay users with credits or furnis to do certain tasks such as marketing, management or finance. This sounds to me like a play2earn or create2earn model, doesn’t it?
Helpers
The helpers are a group of experienced, mature users who's main mission it is to welcome new users to the hotel and show them the Habbo ropes. The company creates official ambassador roles for some expert users that also make sure that public rooms are nice, safe places for everyone to hang out. Ambassadors may also help keep official game rooms blocker-free and host safety-themed events.
Closing Up
Virtual worlds are a source of inspiration and learning to build the next generation of metaverses. From simple elements such as avatars, rooms and furnis emerge a global market of more than $54 billion in sales of virtual objects.
Most of the technological challenges have already been solved and the main problems that remain open are social. The dynamics that are created in virtual worlds are complex, varied and very nice to the functionalities and business model of your metaverse.
In the next article, we will study what made Habbo a successful company, probably ahead of its time, thanks to their virtual economy, promotion of internet safety for teens and the community.