Metaverse dreams shattered? Netflix acquires Ready Player Me, services to be shut down in 2026.

Streaming media giant Netflix announced the acquisition of the Metaverse identity platform Ready Player Me, which is supported by a16z. This Estonia-based virtual avatar creation company has previously secured $72 million in funding. However, after the acquisition is completed, Ready Player Me will cease operations on January 31, 2026, and the entire team of about 20 people will be integrated into Netflix.

Netflix's gaming ambitions and the stark reality gap

Netflix's investment in the gaming business is not a new thing, but the acquisition of Ready Player Me signifies its strategic shift from content expansion to infrastructure building. This streaming giant has made several game-related acquisitions in recent years, including recruiting new employees, launching party games and narrative games for TV and mobile devices, and developing interactive features such as real-time voting. The virtual avatar technology of Ready Player Me is seen as a solution for persistent identity across games, theoretically allowing users to maintain a unified digital character across different games and sessions.

However, data shows that user engagement in Netflix's gaming business is extremely poor. According to Apptopia estimates, in September 2023, less than 1% of Netflix's approximately 247 million monthly active users played its games. Even during the user peak in January 2023, only 2.7 million participated, meaning the peak penetration rate was only about 1.1%. This low engagement raises a core question: Is investing in virtual avatar infrastructure misguided when the vast majority of users do not play games at all?

Netflix did not disclose how many users play games on TV and how many users play games on mobile devices in its acquisition announcement. This lack of transparency makes it difficult for outsiders to determine whether a TV-centered virtual avatar meets actual demand. If most gaming participation occurs on mobile devices, the logic of investing in cross-platform virtual avatar technology for the TV gaming experience weakens. The more fundamental question is whether virtual avatars can really improve user retention rates. In the absence of motivation for users to even enter the game, a pretty virtual avatar is unlikely to change the situation.

The ironic twist of the Metaverse concept from open to closed

Ready Player Me's core value proposition is openness and interoperability. The platform had over 25,000 developers using its tools before the acquisition, coming from various fields such as gaming, virtual reality, and social platforms. Ready Player Me provides a toolkit built for widespread third-party use, allowing users on different platforms to carry a unified virtual identity across multiple applications. This is precisely the core promise of the Metaverse concept: an open, interconnected digital identity system.

However, Netflix's acquisition has completely overturned this vision. Ready Player Me will shift from an open platform to an internal tool for Netflix, serving its closed gaming ecosystem. This shift to a closed setting may significantly reduce the flexibility and appeal of the technology. The virtual avatar technology that could originally be used on dozens of platforms will now be locked into the Netflix gaming environment, which has less than 1% user engagement.

Three Major Signs of the Metaverse's Broken Open Commitment

Loss of Technical Interoperability: The cross-platform portability of virtual avatars originally supported by Ready Player Me will be terminated, and users will no longer be able to carry the same virtual avatar across different games and applications.

Developer ecosystem collapse: Over 25,000 developers relying on the platform will lose tool support and be forced to complete migration or rebuild the virtual avatar system by January 31, 2026.

From Decentralization to Centralized Control: The concept of the Metaverse emphasizes that users own and control their own digital identities, but Netflix's acquisition locks these identities within a single company's walled garden.

This shift from openness to closure precisely reflects the compromise of the Metaverse concept in the face of commercial reality. Tech giants verbally support openness and interoperability, but their actual actions are to incorporate valuable infrastructure into their own closed ecosystems.

2.5 million developers' migration challenges and market opportunities

Ready Player Me will shut down on January 31, 2026, leaving less than a year for over 25,000 developers to migrate. These developers face not only the challenge of technical migration but also potential disruptions to user experience and increased development costs. For games and applications that have deeply integrated Ready Player Me, switching virtual avatar systems may require redesigning user interfaces, rebuilding database architectures, and even affecting existing users' virtual avatar data.

However, crises also mean opportunities. Studios and virtual avatar technology companies can propose alternatives that provide cross-platform avatar portability, filling the market gap left by the departure of Ready Player Me. Key advantages include a simple integration process, retaining the technical advantages of the original platform, and offering more favorable pricing or licensing models than Ready Player Me.

Enterprise software vendors in the gaming infrastructure space can also bundle virtual avatar tools with their development services. Taking action early allows them to become a comprehensive alternative before the 2026 deadline, capturing the developer market that has been displaced due to the acquisition by Netflix. For game engine providers like Unity and Unreal Engine, integrating native virtual avatar solutions could become a new selling point to attract developers.

Netflix team integration and the choice of Ready Player Me founders

After the acquisition is completed, the approximately 20-member team of Ready Player Me will join Netflix, but it is noteworthy that only the CTO Rainer Selvet is the sole founder joining the company. This selective integration has sparked various interpretations. One possibility is that the other founders lack confidence in Netflix's strategic direction and are unwilling to see the open platform they created turn into a closed tool. Another possibility is the role allocation during the acquisition negotiations, where the CTO is responsible for ensuring the smooth transfer of technology, while the other founders leave after receiving financial compensation.

From the investor list of Ready Player Me, this acquisition may be an awkward exit for early supporters. Notable figures such as Roblox co-founder David Baszucki, Twitch co-founder Justin Kan, and GitHub co-founder Tom Preston-Werner initially invested in Ready Player Me, likely valuing its vision for an open Metaverse. Now, this platform has been integrated into Netflix's closed ecosystem, contradicting their original investment thesis.

Netflix has made several adjustments to its gaming business strategy, including the acquisition of game studios and changes in leadership, indicating that it is still exploring this field. The acquisition of Ready Player Me may be another trial and error; if the virtual avatar feature does not significantly enhance user engagement, this team and technology may be marginalized or completely abandoned within a few years.