You paid for that Avatar. So why don’t you own it?

Earlier this summer, longtime PlayStation users logged in to discover something strange: PS3 avatars they had purchased were gone.

After two months of silence, PushSquare reported that Sony had begun slowly restoring the missing avatars but only partially, and without offering any clear explanation. It was a reminder that even the most established digital ecosystems can fail to respect what players believe they own.

Ubisoft’s shutdown of The Crew last year wiped out access for everyone, even those who held physical discs. The company’s position was clear: players never owned the game, only a license to use it. That license could be revoked at any time. Across Europe, more than a million gamers have now petitioned for stronger protections around digital ownership.

And now, Microsoft has followed suit. According to IGN and Eurogamer, Xbox shut down its Avatar Editor app on 9th January 2025, ending support for the 3D characters that brought our game personas to life and defined the Xbox social experience. Xbox issued refunds and kept existing avatar profile pictures active. Xbox 360 avatars will still remain accessible on Xbox 360 consoles, but unsupported on future generations.

Unsurprisingly, gamers aren’t happy. Avatars were a virtual representation of their identity, and game career. Many people took great pride in customisations they’d bought or earned over the years. It’s also not just about changing the t-shirt of an avatar. Avatars were closely linked your game history, and in a way your ability. Unlocking certain items by completing tasks took effort and consistency. A great comparable for this would be Xbox killing the long standing Gamer Score that we’ll all been nurturing for decades. There would be a global uproar. Perhaps Microsoft and Sony lost sight of the value in Avatars because they stopped incentivising us to connect with them more and keep them as personification of our game ability, history and identity.

The irony is that the technology now exists to turn Avatars to more meaningful assets that we actually own. Game engines already support interoperable formats and we now have the ability to take our identities into different ecosystems. AI pipelines can generate avatar assets to allow customisation at scale. Just as the biggest longstanding ecosystems shut down digital Avatars we’ve nurtured for years. The technology we dreamed of in the early-mid 2000s now gives us the chance to add more value.

At MSquared, we think it should be different.

Our avatar system is designed around persistence and portability. Avatars are delivered in open 3D formats, rigged for compatibility across engines and optimised for real-time performance . Metadata and customisation are indexed through Atlas, ensuring continuity and verification across experiences . If a world shuts down, the avatar doesn’t vanish. If a player moves to a new space, their identity moves with them.

And this is already happening.

MSquared Avatars powered the BBC Philharmonic’s virtual concert, where thousands of audience members showed up as customisable avatars in real time.

In Jitter’s live Twitch-integrated game, some players swapped default characters for their Bored Apes and Grillz Gang avatars, proving how interoperable assets can be and what collaborations can come from that.

And in Yuga Labs’ Otherside, community-built experiences now run on MSquared’s tech, with creator-driven avatars.

Beneath it all, Etherbase and Somnia provide the blockchain infrastructure that keeps identities verifiable, persistent, and portable across worlds. These tools make the gamer’s dream of using Avatars beyond profile pictures on Xbox 360 and PS3 a functioning reality.

This is about giving players control over the virtual identity they invest increasing amounts of time and money into. Literally, without avatars our digital identity has reverted back to our gamer tag, our Kill-to-Death ratios, which game streamers we follow, our gamer scores, and hours played. It’s about ownership, making sure what you build online isn’t at the mercy of terms of service.

The PS3 incident and Xbox’s avatar shutdown should be remembered as more than glitches or product sunsets. They’re strategic choices in the wrong direction. We have an opportunity to consolidate all the things that make a digital identity into an Avatar that we nurture, grow and take with us through our digital experiences.

We now have the tools to give players what they deserve: avatars that embody our identity, personal achievements and experience that travels with us, and a digital history that grows over time. We’ve customised our avatars, nurtured them, invested hours to get achievements and earn the right to be a real gamer. We’ve earned the right to own them too.