Is the Metaverse the Next Major Phase of the Internet?

And what does it all mean for the ‘real world?’

Dec 21, 2021 · 6 min read

By Irving Wladawsky-Berger

on’t mock the metaverse,” said The Economist in a November 20 article.“There are good reasons to take the metaverse seriously. One is historical: as computers have become more capable, the experiences which they generate have become richer. The internet began its life displaying nothing more exciting than white text on a black background. Flat images were added in the 1990s. Video came to dominate in the 2010s. On that reading, a move into three dimensions is a logical consequence of the steady growth in computing power.”

Can these concepts really materialize and impact the overall economy? The article claims they already have.

“The metaverse is already here. It’s just not evenly distributed,” the article added. “The video-game industry — the only type of entertainment fully exposed to the compounding power of Moore’s law — has been selling virtual worlds for years.” Online games like World of Warcraft, Fortnite, and Roblox have hundreds of millions of users, and their gaming companies have valuations in the tens of billions — evidence that immersive virtual worlds can be popular and profitable.

“It is hard to argue that an idea will never catch on when, for millions of people, it already has.”

Expanded Applications

3-D virtual environments have had limited success beyond the video-game industry. But this could change. Leading technology companies have announced plans to expand their use in business, education, social media, and other so-called serious applications. On October 28, Mark Zuckerberg announced his commitment to a metaverse strategy by rebranding Facebook as Meta Platforms. A week or so later, Satya Nadella shared Microsoft’s metaverse plans, starting with enabling users of Mesh for Microsoft Teams to interact and collaborate in 3-D immersive workspaces.

I got interested in 3-D virtual environments in the mid-2000s when IBM launched an exploratory initiative on the topic. Coincidentally, I had started writing my blog around the same time and posted a number of entries on virtual environments over the next few years. I went back and read some of these entries to remind myself of my thoughts at the time. They feel belatedly relevant, so let me share some of what I wrote back then.

In July of 2005 I wrote: “One of the most exciting areas of innovation is emerging around what I’d like to call 3rd Generation User Interfaces or 3G/UI. 3G/UI, inspired by game players, promises to bring highly visual, interactive interfaces to all sorts of applications in health care, education, science and business. The reason this is such a huge deal is that every time a new paradigm emerges in the way people interact with computers, we’ve seen all kinds of new applications begin to appear, qualitatively better and different from anything before. Furthermore, innovation in user interfaces soon gives rise to innovation in the programming and computing models needed to develop and run the new round of applications that they enable.”

“Video games are particularly important in this regard, because in addition to their very realistic visual images and great sound, they are also highly interactive and increasingly collaborative, and thus a good launchpad for thinking about how people should best interact with all kinds of computer applications as well as with each other in the future.”

“The timing for such a new round of applications with innovative user interfaces could not be better,” I added in what now feels a somewhat naive expectation. “First of all, both Microsoft and Sony are expected to come out with new game consoles, the new Xbox and PlayStation 3 respectively, that promise an order-of-magnitude improvement in performance for highly visual, interactive applications. … Efforts are already underway to adapt the underlying capabilities of the Xbox and PS3 for non-game applications.”

“While these advancing technologies are the enablers of the move to 3G/UI, the real innovation will come from the many thousands of application developers — and, increasingly, users themselves, from gamers, to medical technicians (and patients), to educators (and students) — who will compete in re-thinking how to best integrate these new kinds of visual interfaces into existing applications, as well as come up with whole new kinds of applications that we cannot even envision today.

Our brains are wired for sight and sound. It is about time for computers to finally be able to deal with us on our terms.”

As part of these efforts, IBM conducted a number of experiments on Second Life, a platform that allowed its users to develop a wide variety of virtual world applications. We built several workplace environments on Second Life, where we held virtual meetings, online events, museum tours, and other such applications. But, we found no virtual world killer apps beyond video games. And in September of 2008 I wrote that “Despite our high expectations, the number of virtual world applications in serious areas like education, business, and health care remains small. The promise is there, but it remains to be realized.”

A Decade in the Making

Has the time finally arrived, 13 years later, for the promise to be realized? It’s quite possible. The intervening years have seen major advances in digital technologies, along with the continuing digitalization of the economy and society. Moreover, COVID-19 has had a huge impact in the deployment of online applications.

The pandemic has now made the case for accelerating the digital transformations that economies and societies were forced to make to cope with the crisis. For years, companies found all kinds of reasons for not embracing work from home, virtual meetings, online learning, telemedicine, and other online applications. But not only have these digital applications worked remarkably well, they offer a number of important benefits, like not having to travel for hours or days to participate in a 45- minute meeting.

In the coming years, we can expect major innovations to improve the user experiences of such online applications, including the use of 3-D virtual, immersive environments.

If that’s indeed the case, how is the metaverse likely to evolve the next decade? Let summarize the opinion of Matthew Ball — managing partner of EpyllionCo., an early stage venture fund — who has written extensively about the Metaverse. His Metaverse Primer is available online, and his book, The Metaverse And How It Will Revolutionize Everything is scheduled to be published in July of 2022.

What to Expect

“Just as it was hard to envision in 1982 what the Internet of 2020 would be — and harder still to communicate it to those who had never even ‘logged’ onto it at that time — we don’t really know how to describe the Metaverse,” he wrote in this recent article. However, he added, the Metaverse will likely have the following attributes:

· Persistent — it never ends, just continues indefinitely

· Synchronous and live — events will happen, just as they do in “real life”, a living experience that exists consistently for everyone in real time

· No cap to concurrent users — everyone can participate in a specific event/place/activity together while maintaining their individual sense of “presence”

· A fully functioning economy where individuals and businesses can create, own, invest, sell, and be rewarded for “work” that produces “value”

· An experience that spans both the digital and physical worlds, private and public networks, and open and closed platforms

· Interoperability of data, digital items/assets, content, and so on across each of these experiences

· Populated by “content” and “experiences” created and operated by a wide range of contributors.

According to Ball, the Metaverse is best understood as a major phase in the evolution of the internet. “The fixed-line internet of the 1990s and early 2000s inspired many of us to purchase our own personal computer. However, this device was largely isolated to our office, living room or bedroom. As a result, we had only occasional access to and usage of computing resources and an internet connection.”

Then came the mobile phase of the internet — built on and co-existing with — the original fixed-line architecture. We each now carry around own powerful personal computer. 4 billion mobile internet users around the world have continuous access to a wide variety of services and applications.

“The Metaverse will be similarly transformative as it, too, advances and alters the role of computers and the internet in our lives.”

“Metaverse iterates further by placing everyone inside an ‘embodied’, or ‘virtual’ or ‘3D’ version of the internet and on a nearly unending basis. In other words, we will constantly be ‘within’ the internet, rather than have access to it, and within the billions of interconnected computers around us, rather than occasionally reach for them, and alongside all other users and real-time.”

MIT Initiative on the Digital Economy

The IDE explores how people and businesses work, interact…

MIT Initiative on the Digital Economy

The IDE explores how people and businesses work, interact, and prosper in an era of profound digital transformation. We are leading the discussion on the digital economy.


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Addressing one of the most critical issues of our time: the impact of digital technology on businesses, the economy, and society.

MIT Initiative on the Digital Economy

The IDE explores how people and businesses work, interact, and prosper in an era of profound digital transformation. We are leading the discussion on the digital economy.