Second Life was limited in many ways, as far as gameplay goes. Ultimately it failed because it was boring, in my opinion. More modern examples of games that approach this concept are Minecraft or Roblox (public company valued at $45B). Roblox in particular is interesting as it created a platform for others to make game experiences and re-sell them, and it's been very successful. Minecraft, too, has had a lot of staying power and has an active community.
The problem with Roblox, is that it's geared for kids primarily, it's centralized and it also has I believe a 30% fee. You have the same issues as you have with the mobile app stores: an excessive take rate and risk of being deplatformed at any time (like the early Facebook and Twitter apps). You don't really have ownership. But it does underscore the idea that if you create the right environment for shared gaming experiences and creativity it can be very interesting and entertaining.
The crypto metaverse is attempting to use digital property rights represented as NFTs to facilitate permissionless value creation and exchange. Just as real world property rights give owners the stability and framework with which to build long-term investments, understanding they can take risks and potentially reap rewards for those risks, the hope is that digital property rights will do the same.
I think it's still super early days for this stuff. It's likely that a lot of the current attempts will fail, but I believe this concept is going through its 90s dot com phase, and we'll get a few gems out of this movement that stand the test of time.
Ultimately it failed because it was boring, in my opinion.
This, in fact, the real problem. Second Life really is a virtual world, not a game. You log in, and you're somewhere in a virtual world the size of Greater London. Now what? The virtual world itself is completely indifferent to you. You can do nothing, if you choose, and nothing will happen. You will not be attacked by monsters. You will not be destroyed by a shrinking vortex. You can go to an area that's not busy and sit or stand for as long as you want to stay logged in. A car might drive by. The sun will rise and set. Not much else will happen.
You can travel around and look at stuff. You can talk to people. There are games to play if you can find them. You can build stuff. You can sell stuff. But you have to find things to do. There are guides and search tools, but you have to use them. It's a "pull" system like the web, not a "push" system like Facebook.
This totally throws a sizable fraction of new users, mostly those who want a pre-structured entertainment experience. It's great for the fraction of the population that likes to build something from nothing. That small fraction.
The second part of "boring" is that Second Life is really sluggish. This is a fixable problem, stemming from legacy code from the era of OpenGL and single-CPU desktops.
Nobody has really looked hard enough at metaverse client theory yet. You have many of the problems of an MMO client, in that you have to present a real-time 3D environment. And you have many of the problems of a web browser, in that the network throws un-optimized stuff at you and you have to deal with it. The big game engines, UE5 and Unity, don't address that latter problem.
All this looks quite fixable, if you target a gamer-level GPU (even one from 5 years ago), a few CPUs, an SSD disk for caching, and over 100mb/s networking. This is what the average Steam user has. We ought to be able to get up to GTA V level visual quality and frame rate. Second Life has content that good.
A third problem with Second Life is that the social features are terrible. The group message system has been losing messages for a year due to a scaling problem. (It was designed so that you could talk to people in your party, not broadcast to your store's customer base.) The voice system, outsourced to Vivox, is flaky. There's two decades of technical debt and not much will or money to fix it.
Mainstream metaverse adoption may be a problem in the era of the $1000 phone and the $200 laptop.
What we're seeing right now are new low-end virtual worlds that look like games from 15 years ago. Many run inside a browser. This may be why few people actually spend time in Decentraland. The VR headgear people really don't have much more compute power than a phone. Beat Saber, fine. Breakroom, OK. Big virtual world, not so much.
The problem with Roblox, is that it's geared for kids primarily, it's centralized and it also has I believe a 30% fee. You have the same issues as you have with the mobile app stores: an excessive take rate and risk of being deplatformed at any time (like the early Facebook and Twitter apps). You don't really have ownership. But it does underscore the idea that if you create the right environment for shared gaming experiences and creativity it can be very interesting and entertaining.
The crypto metaverse is attempting to use digital property rights represented as NFTs to facilitate permissionless value creation and exchange. Just as real world property rights give owners the stability and framework with which to build long-term investments, understanding they can take risks and potentially reap rewards for those risks, the hope is that digital property rights will do the same.
The NFT space is very interesting and the gaming sector in crypto is evolving pretty rapidly. Some interesting attempts I see at creating these experiences are Sandbox (https://www.sandbox.game/en/), Decentraland (https://decentraland.org/), and Treeverse (https://www.treeverse.net/).
I think it's still super early days for this stuff. It's likely that a lot of the current attempts will fail, but I believe this concept is going through its 90s dot com phase, and we'll get a few gems out of this movement that stand the test of time.