The metaverse, from a closed to an open world in 2023?
Introduction:
Did you know ? The metaverse was first named in 1992, in the sci-fi novel Snow Crash by Neal Stephenson where he described a dystopian future world. Dystopia became reality and it is not that bad! We even now have two types of metaverse.
“An open metaverse is a virtual world that anyone can access and build upon, while a closed metaverse is a virtual world that is only accessible to those who have been given permission”, as Beatrice Mastropietro, a cryptocurrency journalist states in her “Open vs Closed Metaverse” guide (1).
When I interviewed Sebastien Borget, co-founder and COO of The Sandbox and President of the Blockchain Game Alliance, last July 10, I discovered the worlds of the metaverse and I decided to take a deep dive into understanding their drivers (2).
In this article, I will first come back to the origins of the metaverse before describing the pros and cons of both worlds.
Key historical facts:
Here is an update of Binance Academy original brief history of the metaverse (3):
History Facts on the metaverse
1838
Scientist Sir Charles Wheatstone outlines the concept of “binocular vision,” opening the way to stereoscopes and VR technology
1935
Sci-fi author Stanley Weinbaum introduces the idea of virtual reality in his book “Pygmalion’s Spectacles.”, where the main character immerses himself in a fictional world using a pair of goggles to make it more real
1938
French poet Antoine Artaud uses the term “virtual reality” in his essays, The Theater and its Double, writing about how to create alternative worlds in theaters
1962
Filmmaker Morton Heilig develops Sensorama, a device that immerses users in a different world between reality and illusion, using moving seats, scents, and 3D screens
1984
VPL Research, Inc. was founded by Jaron Lanier and Thomas G. Zimmerman, pioneers of VR technology
1989
British computer scientist Tim Berners-Lee is first to propose the World Wide Web, allowing global information sharing
1992
Neal Stephenson’s novel “Snow Crash” introduces the concept of the metaverse, where people use avatars to escape to a better alternate reality
1993
Computer scientists Moni Naor and Cynthia Dwork invent proof-of-work (PoW) to prevent denial-of-service attacks and network spam
1999
The Matrix, a movie imagining humanity inside a virtual reality
2003
Linden Lab launches Second Life, a virtual multimedia platform where users connect to shared virtual spaces to explore, interact, and create
2006
Roblox Corporation releases Roblox, a game platform for multiplayer games and user-created content with an in-game store where players can spend their virtual money, called Robux
2007
Google introduces Street View, enhancing its Maps product with real-world representations on all devices
2009
Bitcoin, the first major decentralized blockchain and cryptocurrency, is launched in January 2009 by a presumed group of programmers under the pseudonym Satoshi Nakamoto
2012
Palmer Luckey launches Oculus VR, a VR headset, A 3D virtual world where users can work, socialize and entertain. Facebook acquired it in 2014
2014
Kevin McCoy and Anil Dash invent and mint the first NFT Quantum on the Namecoin blockchain, at a conference hosted by the digital art non-profit Rhizome, offering users to store digital artworks in a blockchain. A major invention to join a new era of digital collaboration
May 15, 2014
Launch of the Google Glasses, even though the sales were suspended
2016
Both first decentralized autonomous organization The DAO, launched on Ethereum, and Pokémon GO (AR-based game), emerge
2018
The Sandbox Metaverse was created by Sebastien Borget and Arthur Madrid. It is based on the Ethereum Blockchain and is a decentralized NFT gaming metaverse
Ready Player One, a film imagining The Oasis a whole virtual world, based on the book from 2011
2021
Facebook rebrands as Meta, signaling a focus on the metaverse concept and launches Horizon Worlds December 9, 2021
2022
Siemens and NVIDIA partner to enable the Industrial Metaverse, connecting hardware and software in real time
November 2, 2022
Launch of the Open Metaverse Alliance to shape the future of the web at the Web Summit in Lisbon
April, 2023
French Government launched a consultation on the metaverse topic to anticipate its technological transition and offer an alternative to the virtual immersive worlds from international giants
June 5, 2023
launch of Apple Vision Pro, a “spatial computing” headset, to switch in a glance from VR to augmented reality, available early 2024
What will be the weight of the market of the metaverse by 2030?:
From the consumer to the employee, everyone is going to be concerned by the metaverse as it will evolve at a blazing speed.
Metaverse the convergence between the physical real world and the digital virtual world, mixing 3D, artificial intelligence and blockchain technologies.
According to a report by McKinsey, the market of the metaverse should drive $5 trillion in value creation by 2030! Huge, nothing short of that! (4)
As we distinguish two main types of metaverse :
- The open metaverse, and,
- The closed metaverse
Here is the good and bad of both worlds.
A definition of the open metaverse:
The open metaverse aims to create an open-source virtual world platform.
Sebastien Borget describes the open metaverse as follows: “We are one of the pioneers in Web3 in building this open decentralized metaverse. We see the metaverse not just like one platform or one world or one place but more as a myriad of virtual worlds and platforms that users can access with their Avatar which becomes their digital identity.
What makes the metaverse open is this idea that now you can take that Avatar and as well as any of your digital belongings like your wearable, your equipment, your virtual land, your virtual house, and you can move across any of those worlds or platforms in total, in a seamless manner, without having to ask the permission to any of the platforms.” (2)
What are the main advantages of this open metaverse?:
- Open code: The code to create metaverse platforms is open source.
- Interactive: Everyone can interact, create a new virtual world, or modify or add features to an existing world.
- Regulated: European Commission’s new regulatory frameworks for European Crypto-Assets, the MiCA (the Market in Crypto Assets) voted in April 2023, will be applicable to be put in place mid 2024.
- Open to the creators’ economy: Users can build, own, and monetize their virtual world independently. Open metaverse is what Sebastien Borget calls “an alternative model where the incentives are more aligned for the players, the developers, the creators and the platform.” 2
- Fees and Blockchain royalties go back to the creators: On such an open metaverse platform as The Sandbox, the users create and earns: “When you buy a content, an Asset from other creators, that creator receives 95% of the revenue generated directly by the blockchain on his wallet”(2) . The 5 other % which he calls the Royalties, are divided into one half helping develop to The Sandbox platform, and the other half being reinvested in their Foundation supporting the open metaverse ecosystem. “ When two users buy an Asset in a peer-to-peer transaction, that’s now possible thanks to blockchain, the transaction fee as well as the Royalty go back to the original creator. So the creator does not earn only the first time an Asset is being sold, but every time two users are exchanging an Asset.“ (2)
- Ownership : According to Sebastien Borget ownership is: “An opportunity to engage in the long term to show the importance of blockchain and NFTs to support the Creator Economy. We want specifically, as these GEN Z and GEN Alpha are more and more consuming virtual content, to remind the importance that any content, even if it’s digital that you buy or you create, should be truly yours. And as such, you should have the freedom to exchange it, to use it, to resell it, anywhere.“ (2)
- Beyond gaming industry: use cases are multiplying in all kinds of human activities (social, entertainment, travel, shopping, art, culture, education, real-estate, etc).
What are the main disadvantages of the open metaverse?:
- No centralized authority: Users cannot shut down an open-source platform.
- Less coordination: Open source should need more coordination as users do not necessarily develop on the same version of software.
- Stability: Less stable as everyone can change the code.
- Cybersecurity, security & privacy: While sharing your information, you might be at risk of hacking or cyberattacks.
- Addiction: Just like social media and video games, users may get addicted.
- Limited to the Creators’ economy and to the entrepreneurs: The metaverse platforms are still more accessible in 2023 to genZ and genAlpha creators and users.
- Energy-intensive technologies (blockchain, AI).
A definition of the closed metaverse:
A closed metaverse is a fixed virtual world infrastructure where the assets cannot be carried over into another. It is controlled by a single organization or government.
Sébastien Borget details the closed metaverse as follows:
“ Roblox, Minecraft or Horizon Worlds are closed walled-garden places that act in silos. When you create content, or an Avatar there, you cannot transfer it to another user or use it across those worlds.” (2)
What are the main advantages of this closed metaverse?:
- Safe: User controlled environment.
- No risk of disruption: From other users.
- Generating revenue: As the platforms can charge the users for the access to the platform or for the purchase of features and various items.
- Control: Closed walled-garden companies such as Roblox, Minecraft, Meta Horizon, Microsoft, Nvidia, Tencent, or Alibaba’s can control all operations from their users, the technologies, the audience, the content and own the users’ data.
What are the main disadvantages of this closed metaverse?:
- Walled-gardens: Users feel trapped as they are not able to move their digital assets and identities across different domains and experiences. There is no interoperability as a virtual asset purchased, for example, on the Fortnite platform cannot be used on Roblox’s. It may not be in the interest of those platforms, but it will be in the interest of all brands in the metaverse.
- Limitations: The owners of the platforms tend to impose criteria such as age, skill level or fees to access their platforms.
- Control: By private industries creating their own version of the metaverse on the hardware entry point that they develop for the users to get access to the metaverse. Among those companies are Meta with Meta Quest, or Apple with Apple Vision Pro, and not to forget back in the old days, in 2014, the Google Glasses which stopped their production last March 2023. Other companies such as Microsoft develop their own immersive world like Mesh for Teams. And so far, Snapchat with their Spectacles glasses, nor Ray-Ban and their Stories glasses have been profitable.
- Expansive and energy-intensive back-end infrastructures: The platforms require enormous back-end infrastructure to run on. As they will grow, cloud services will increase with companies such as Amazon (AWS) benefitting from the metaverse economy.
So, open or closed metaverse?:
Metaverse transcends reality with unspeakable creative and technological opportunities.
We are above and beyond a new era of communication on the internet.
Both open and closed worlds co-exist and will keep on enriching each other.
According to Sebastien Borget, companies working on the topic should open their metaverse in order to benefit the whole community :
“We are not competing with each other for the user’s attention, time and money but we are actually adding value to each other which is essentially how Web3 is different and is more community driven than the Web2 model.
The Sandbox is part of the Open Metaverse Alliance which now counts key actors like Animoca Brands, Decentraland, Upland, Alien Worlds, Spatial, Spaces and other worlds. They use decentralized technology and blockchain, to promote the adoption of the open metaverse.” 2
At the eve of a new era of digital immersive economy, the metaverse attracts more and more major digital companies developing projects that explore the incredible potential of both open and closed metaverse 4 :
- Upland, a property-trading, city-building metaverse designed for players to explore cities, collect properties, and meet other Uplanders.
- Roblox, an online game creator system where the majority of the content is created by “amateur” game creators in Roblox studio.
- The Sandbox Metaverse, a decentralized virtual world that uses blockchain and NFTs to empower anyone to become a creator.
- Yuga labs launch its second trip on the Otherside metaverse.
- Decentraland Metaverse, a fully decentralized metaverse, owned and governed by its users.
- Meta Horizon Worlds, a free app for Meta Quest headset users. A virtual universe with thousands of experiences for users to explore.
- Fortnite, a third-person shooter game where up to 100 players compete to be the last person or team standing.
- Illuvium, the world’s first IBG (Interoperable Blockchain Game) allowing users to search for in-game items and creatures (Illuvials) in the form of NFTs that can be used for activities such as battling, collecting, and trading.
- Somnium, a virtual reality application built on the Ethereum blockchain that allows you to create, experience, and trade digital worlds and NFT assets.
- Nike Metaverse, consists of the new “.Swoosh” platform and Nikeland, a fully-realized virtual world where users can customize their avatars, engage in various virtual sports and fitness activities, and connect with others from around the globe, while also displaying and selling their virtual and physical collections.
- Adidas Metaverse series, created in November 2022, to unveil a highly-anticipated virtual gear collection as part of its community-based metaverse. The Adidas Metaverse series consists of 8 unique wearables utilized by owners of Bored Ape Yacht Club, Mutant Ape Yacht Club or Metahero.
Conclusion:
As we are at the dawn of this incredible new industry, according to the McKinsey report on value creation, 95% of executives managers expect the metaverse to have a positive impact in their sector within five to ten years (5).
So what is next in 2023? In e-commerce, consumers want a bridge between immersive experiences and reality, and claim for value-added products and services they can use, either separately or in combination with the physical world according to McKinsey’s Metaverse Consumer Survey of June 2023 (6).
As Philippe Quéau, Director of Research at the National Audiovisual Institute philosophized: “The virtual is what helps us make what we are not yet. The empire of the virtual seems more sustainable, since it has linked its destiny to that of man.”. (“« Le virtuel est ce qui nous aide à faire advenir ce que nous ne sommes pas encore. L’empire du virtuel paraît plus durable, puisqu’il a lié son destin à celui de l’homme.») (7).
Non-tech companies are investing in the metaverse, looking for more user engagement, for more brand awareness, and for new revenue.
Let’s build this empire together and make the metaverse accessible to all!
To continue the conversation on the metaverse, find me on Linkedin.
Sources:
(1) Open vs closed metaverse complete guide https://www.coinspeaker.com/guides/open-vs-closed-metaverse-complete-guide/
(2) Interview Sébastien Borget, Co-founder & COO of The Sandbox by Aline Reiniche, on July 10, 2023 :
(3) A Brief History of the Metaverse and Crypto’s Role in It
https://academy.binance.com/en/articles/a-brief-history-of-the-metaverse-and-crypto-s-role-in-it
(4) Exploring Metaverses: 10 Leading Metaverse Platforms [2023]The Metaverse Insider
https://metaverseinsider.tech/2023/03/27/metaverses/
(5) McKinsey : “Value Creation in the metaverse”
(6) McKinsey : “Unlocking commerce in the metaverseThank “
(7) Emergence de nouveaux modèles corporels
https://www.lecarreaudutemple.eu/evenements/les-rencontres-de-la-sorbonne-2022-2023-1/
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About the author:
Aline Reiniche is specialized in mobile marketing forging long-lasting, profitable relationships with customers and partners for SaaS companies.
She is used to build transformation and revenue growth for tech companies and is now exploring how metaverse, AI and web3 technologies are transforming the web2 business ecosystem.
