A selection of avatars. Clockwise from top right: Lensa, Tencent QQ Show, Ready Player Me, Meta Horizon, VTuber, Nvidia MetaHuman, Minecraft, The Sims 4, Fortnite, Avakin Life, Grand Theft Auto V, Bitmoji
In November 2022 AI-generated portraits suddenly flooded across the internet, created using a 4-year old photo editing app call Lensa . These whimsical photos were enabled with generative AI, allowed users to create high quality digital art versions of themselves in minutes (and for $7.99). Two thoughts went off in my head, the first was that my local central park caricature artist was soon to be out of a job, and the second was that these were not just photos these were rudimentary avatars, avatars that I have seen my whole life within virtual worlds.
The word avatar derives from the Sanskrit word for “descent” ,and refers to the descent of a deity to the human realm. In today’s world of technology, avatar generally refers to the digital representation of a user (the self ) i
However, avatars can be more than just identity markers . Analogous to the mouse cursor in a PC operating system, the avatar is also a critical enabler of human-computer interaction – they are what enable us to interact with and change digital worlds.
Avatars are the critical link between the user and the digital world
Within digital worlds, avatars often function as both an extension of your controller and as your digital identity: how users view themselves and project their identity to others. These two use cases can be one or the other or increasingly, both:
To lifelong gamers, the blurring of identity between the physical and virtual world should come as no surprise driving up avatar adoption rate, particularly among people who did not previously consider themselves denizens of virtual worlds. In this way, avatars may be a gateway drug,
Psychology of Avatars
Over the years, there has been numerous studies in the psychology behind avatars , but the major effects to note is the Proteus Effect behavior of people is changed by characteristics of their avatar an avatar not only impacts the digital world but also impacts the action of its user as well (a feedback loop). Users with avatars that are more similar to their real-world self also report a greater sense of immersion in the digital world.
In real life , the presence of one’s physical body in social encounters prevents people from claiming identities that are inconsistent with their physical attributes or is inconsistent with what others already know about them. Basically, you can’t easily get away with self-deception or deception of others in real life. However, in the digital world, you can live out any fantasy life you choose. Forgetting that you are living a lie.
In the digital world , thanks to disembodiment and pseudo-anonymity instead of a digital copy, you can be a “possible self” instead. Oftentimes, this results in embellishments in one’s existing talents or physical appearance, but can also include changing the job/role you play in life (GTA V Roleplay You become who you want to be, as least for the moment.
This explains why Lensa and other AI-powered avatar generators provides users a dopamine hit a fanciful version of you , allowing you to imagine the version of “you”
In summary, personalized avatars can help:
Create a greater sense of self-presence and immersion in virtual worlds Encouraging self centeredness. Make user happier about themselves Self-Deception does not make you better. It is just illusion. Stimulate creativity (“I am no longer bound by the limitations of my real-world identity Only in the digital world – is that where you want to live?
Industry Size
Avatars is already a major business In 2020, the avatar industry was worth ~$50B, ~$40B is in gaming (this is about 20% of the entire gaming industry’s sales!), primarily comprised of in-game cosmetic sales .
We expect the avatar market to outgrow the rest of gaming, especially as games transition to a GaaS (games-as-a-service) model.
The primary use cases of avatars today is in gaming and social media, although there are emerging use cases in both consumer (e.g., brand marketing, music) and B2B (e.g. chatbots for customer service, healthcare, etc.).
Gaming
The concept of an avatar has been a part of games since the very early days of the industry, starting with the “controller” function. One can argue that the player-controlled cannon in 1978’s Space Invader was an avatar. However, the term was only applied to the modern “identity” function later, with 1985’s Ultima IV: Quest of the Avatar , an early role-playing game (RPG).
Today, gaming avatars have grown in realism, but still take two forms (and functions)
Non-customizable avatars for simulation (FIFA, Red Dead Redemption 2) – prioritize the “controller” functionHighly customizable avatars for role-playing (World of Warcraft, VRChat) – prioritize the “identity” function
While some games do not need avatar customization (generally pure simulation games or narrative-driven games), the general trends is towards greater customization and personalization – towards the “identity” function. This trend is due largely in part to gaming’s transition to become both more social and service-oriented.
Roblox is a good example of the evolution of gaming avatars:
Roblox avatars are growing in realism and trending towards the “identity” function. Source: Roblox, Future of Avatars presentation (2021).
Social Media
It’s hard to imagine in today’s personalized and user data-rich internet, but the early days of the internet (internet 1.0, pre-Google, Facebook) was wild, and users preferred to remain anonymous or at best, pseudonymous. Slashdot , Newgrounds ) and instant messenger applications; in other words, profile picture. In a pseudonymous environment, the avatar was the only way to present your personality to strangers on the internet . This use case is still relevant today (think the PFT NFT craze of 2021).
When Myspace and modern social media ushered in the era of real-name identities in the internet, avatars took a back seat to profile photosin the era of visual-focused social networks (Snap, Instagram, TikTok ), we have seen a trend towards less realism from filters to masks and more recently, full-on personalized avatars such as Bitmoji , TikTok Avatars, etc..
On the more extreme end of the trend, a growing number of live streamers called “vTubers” (short for virtual YouTuber) have fully embraced a new digital-only identity with the aid of motion capture technology. The number of vTubers reached 16,000 as of late 2021, with top vTuber Gawr Gura having over 4M subscribers. San Francisco-based “VTubing” agency Vshojo raised $11 million in 2022.
CodeMiko side by side
Music and Transmedia
Avatars have enabled creators to extend their influence into digital worlds and to experiment with alternative new identities within digital worlds.
The music industry is no stranger to this, with examples like Gorillaz and K/DA League of Legends but voiced by popular artists including Madison Beer and members of the K-pop group (G)I-dle. The popularity of K/DA has boosted the cultural relevance of League of Legends (in addition to generating in-game cosmetic sales), and illustrates a successful case of a video game IP branching into a new media format.
K/DA’s song “Pop/Stars” generated over 525M views on YouTube and was certified platinum by the RIAA – the first female K-pop group to do so
Avatars have also blurred the line between real-life and virtual representations We’ve seen many popular musicians including Travis Scott and Ariana Grande hosting virtual concerts in virtual worlds such as Fortnite and Roblox. Travis Scott’s 2020 Fortnite concert reportedly grossed $20M
Emerging Use Cases
Within B2B, digital avatars are starting to gain adoption as digital brand ambassadors. Lu , the virtual face of Brazilian retailer Magazine Luiza, has gained a large following on social media (6.8 million on Instagram). Avatars is also starting to be used for customer service (e.g., NVIDIA Omniverse Avatar ), and in digital health services.
Lu of Magalu, a digital avatar brand ambassador
The NFT craze in 2021 showcased the potential of avatars being collectibles
Across the horizon, we’re also seeing brand new use cases for avatars powered by generative AI (specifically conversational AI) , including virtual companions (e.g., Replika Inworld AI )
Generative AI helps to solve the several current problems for avatars (and by extension, video games in general), including user adoption, interoperability, and monetization
Not all avatars are created equal. Avatars tend to fall on two axis: 1) level of personalization and 2) whether they reside in the real world or a fantasy world. Generative AI is a driving force towards greater personalization
User Adoption
A mantra among gaming VCs that I often hear is that “everyone will be a gamer”. everyone will become a denizen of virtual worlds . But how do we get there? I think there’s a good chance that avatars will be the tip of the spear
There have been many avatar-based social networks over the years, Second Life and Club Penguin in the early 2000s to IMVU , Zepeto , and Avakin Life in mobile and VRChat more recently. What differentiates these experiences from sandbox gaming platforms such as Roblox , Fortnite , and Minecraft (proto-metaverses) is their primary focus on social interactions (specifically pseudonymous role-playing ) in lieu of gaming. These avatar social networks never grew beyond ~10M active users, significant but still niche compared to broader social networks.
An anonymous world with a completely open avatar system may not be for everyone
To achieve real critical mass (billions of users) , digital identities may have to incorporate more of one’s real-life identity which also require realistic avatars (the form must fit the function) , and that’s where generative AI can help:
Accelerate the avatar creation process While traditional in-game avatar creation systems relies on the use for the heavy lifting of customization, generative AI takes care of the customization for you in seconds (That seems like an oximoron to me. Customization means your are creating the image that you like/want/initiate. Isn’t that the fun in customization of your game character? Using your own creativity?) Ready Player Me Make avatars hyper-personalized, more than “discrete” avatar creation systems ever can With the right training data, generative AI can be a massive boost to avatars personalization, adding imaginative, artistic touches while keeping avatars authentic and individualized Create new use cases to avatars, incentivizing user adoption further With hyper-personalization and on-going refinement, generative AI has the potential to significantly enhance and transform the way that people create and interact with avatars and virtual identities . Your avatar may “live” even if you’re offline .Inworld AI
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Photo Credit: Idolatry is the worship of anything or anyone other than God. Celebrity Nature Family Self Wisdom Deities spacer spacer Thou shalt not make unto thee any graven image, or any likeness of any thing that is in heaven above, or that is in the earth beneath, or that is in the water under … Click Here to Read More
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There have been several generations now (maybe more) who have forgotten how to raise a child up in the way that they should go. God promised that if we would bring them up in the way they should go, when they grow old they will not depart from it. We forgot… and we bought the … Click Here to Read More
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The question is whether social networks will become virtual worlds first, or gaming virtual worlds will grow to have greater mass appeal. Our bet is on the latter .
Interoperability (or Lack Thereof)
There’s been a lot of focus on interoperability of digital assets,
Additionally, users don’t necessarily want to look exactly the same in every virtual worlds, and game developers may not want a character running around that doesn’t fit the environment of their meticulously-crafted world . Completely interoperable avatars remove of the primary benefits of virtual worlds – that “you can be another version of you”. Generative AI can help bring some of the benefits of interoperability (ease of use, scarcity) without its imitations.
Welcome to the multiverse…related but not the same (Lensa AI)
Monetization
In-game cosmetics (already a ~$40B market) is one of the lower hanging fruits for generative AI in games.
However, personalized avatars can also become a new source of monetization. For the majority of free-to-play games today, only 5-10% of users ever pay. Lensa has proven that many users are willing to pay for hyper-personalized digital images.Skyrim or Valorant , that is functional with the game’s existing 3D assets and fits with the theme of its existing game world. This can help reduce developers’ reliance on whales to sustain in-game economies, by turning gamers into content creators (at least for their own avatar).
In summary, personalized avatars, and the shift from a simple controller function to an identity function carries with it an increase in monetization potential.
A couple of predictions on the evolution of avatars:
Avatars will start to blur the boundaries between gaming and social media As social media avatars become more widely adopted and as gaming avatars become more realistic, we see a convergence between gaming and social media avatars:
Personalized avatars will be a major driver of virtual world adoption Personalized avatars will help drive real-world identity adoption within virtual worlds additional monetization opportunities for social networks.
Generative AI will be an important part of the avatar creation process Instead of a cumbersome avatar creation system based on discrete variables, we envision the future avatar creation process (and NPC creation process) to leverage generative AI, and potentially look something like this:
Perhaps in 10 years we will not be logging into internet services with our Google single-sign on , but rather our avatar (or our user data repository). Even the largest game worlds today are in the 10s or hundreds of millions of MAUs , not billions as we see in the largest social networks.
