Welcome to the Metaverse
The metaverse is a shared virtual space created by individuals or communities to share knowledge and value. It has been dubbed “the next step in the evolution of the internet”, and some consider it a point in human history when our ‘digital lives’ transition into being as valuable, at least for many, as our physical lives.
With the internet as a foundation, virtual worlds are constantly connected through networks and servers in the metaverse. In these virtual worlds, Web 3.0 (the next evolution of the internet) will allow for more immersive experiences, making it easier for users to communicate and explore together.
We will discuss what the metaverse is and what it means for our future in this Deep Dive.
Metaverse: What does it mean?
In Neal Stephenson’s science fiction novel Snow Crash, believed to be the first work to contain the word ‘metaverse’, online inhabitants use digital currencies for financial transactions, as hyperinflation has all but destroyed fiat (that is, government-issued) currency. Stephenson wrote this in 1992, and like a lot of the best ideas from sci-fi, the metaverse has made the leap from page to reality.
Consider films like The Matrix, Ready Player One, Free Guy, Tron, Altered Carbon — even in Disney’s Ralph Breaks the Internet or some episodes of Black Mirror, and countless other films and books where some elements are set in virtual realities in which people live, work, and play.
By definition, the metaverse is virtual reality or a computer-generated environment that allows users to interact with one another through avatars, sounds, text messages, music videos, video games, etc.
How is the Metaverse linked to Web 3.0?
Web 1.0 describes the earliest days of the internet with static, one-way sites — you could view a page of information, but your interaction was limited. Web 2.0 describes the period of the internet that emphasizes interactivity and user-generated content; you can interact with websites, transact with digital banking, produce video content, etc. And now there’s Web 3.0 — the next era in which virtual worlds, economies, and entire digital livelihoods in the metaverse use the internet as its substrate and are accessed through your web browser or smart digital devices.
Because of its immersive experience, the metaverse is frequently likened to virtual reality (VR), but it’s vital not to lose sight of the broader picture: it’s not only about games or entertainment, but the metaverse can be used for a variety of purposes, including business, education, and healthcare. There are metaverses that allow users to rent out areas and others where they may purchase and sell goods.
Furthermore, the metaverse is not constrained by time or location, allowing people from all over the world to interact as they would in real life.
As a result, it’s a fantastic area for businesses to interact and network. It also allows teachers to teach pupils from all over the world without them having to leave their homes.
Blockchain technology and the use of NFTs (non-fungible tokens) is a major component of Web 3.0, as NFTs are used to keep track of your things in games and other metaverses.
These tokens can be traded with others in the metaverse, used as a form of currency, or a store of value. For example, an NFT may be developed for trading armor in one metaverse but utilized as money in another.
As software developers continue improving their design skills — the metaverse will become more immersive and realistic over time. For game designers, the metaverse is an amazing opportunity to create another world for their players to explore. This means that our virtual reality experiences will be almost indistinguishable from the real world in the future.
The future looks bright because metaverses promise even more than just immersive gaming experiences — they allow people access to entirely new worlds where simulations could play out before making life-changing decisions.
What should we expect to see in the future of metaverses?
Metaverses will most certainly grow in popularity over time as people are naturally drawn to possibilities.
In his recent annual Facebook Connect event, Mark Zuckerberg must have mentioned the word at least 20 times in his effort to describe the social media company’s plans to begin developing an immersive 3D internet-like experience. Facebook, which reported a record quarterly revenue of $29 billion, is in a very good position to bring such a high-tech, high-concept experience to consumers. Besides having a staggering 2.9 billion active monthly users, the company already sells the Oculus VR headset and Portal smart display screen. It also will be releasing smart glasses in partnership with Ray-Ban.
“This is going to be the successor to the mobile internet,” Zuckerberg told shareholders. “You’re going to be able to access the metaverse from all different devices and different levels of fidelity from apps on phones and PCs to immersive virtual and augmented reality devices.”
Zuckerberg bought Oculus back in 2014 because he recognized that VR was going to become popular fast; and so, it makes sense if he wants his company to lead this movement too (as well as other more traditional internet services).
Oculus has already made metaverses a key part of their business model, as they intend to launch Oculus Home — an online metaverse for gamers to buy games and connect with friends.
Facebook’s metaverse has been focused more on social media than games — implying that you’d use your existing identity (and data) on FB rather than creating new avatars each time you enter another world.
Epic Games also recently announced that they will be releasing their own game engine (Unreal Engine) for free with full source code so that others can easily build on top of it.
Building on top of an open platform like this would allow developers to quickly create metaverses without having to invest too much time or money into building one from scratch.
One key idea is to move away from seeing it as an alternative reality, but instead think about how metaverses could supplement our daily lives in positive ways by giving us access to new technologies such as augmented reality and virtual assistants.
And for consumer products giants such as Nike and Adidas, the metaverse offers unlimited possibilities to position their brand in the virtual world, in addition to the physical world — why would an avatar not wear Jordans rather than just generic sneakers? If these apparel and footwear companies are thinking along these lines, then rest assured that consumerism in the virtual world is about to take a giant step forward.
Why should investors care about the metaverse?
On the tangible product side, hardware and electronics that are more powerful than today’s technology will be key infrastructure pieces. User interfaces and devices to access the metaverse will be an integral part as companies (such as Oculus Rift) will allow users to bring their ideas into the digital world and monetize them.
Metaverses offer a digital landscape that can bring in billions of dollars if marketed effectively. Enterprises like Facebook are attempting to lead the commercial exploration of the metaverse by investing in VR technology, monetizing digital experiences and social media platforms where people spend most of their time. Meanwhile, game developers like Epic Games have also shown interest in bringing this emerging space online to benefit from the massive amounts of traffic and players who would exist within them. Their massively popular Fortnite game alone has brought in upward of $14 billion in revenue since 2018, with 350 million active users monthly, making it one of the most popular games on the planet.
More broadly, metaverses could be a way for brands to become more immersive and interactive. While the industry is still at an early stage of development, investors are beginning to pour capital into metaverse startups such as Crucible (Metaverse infrastructure), WiV (Wine collections as NFTs), Yield Guild Games (play-to-earn gaming guilds), Decentraland (the first fully decentralized virtual world), Varjo (Mixed reality headsets), and The Sandbox (another virtual world where players can play, build, own, and monetize their virtual experiences) to name a few.
The metaverse is currently in its early stages of development, but as Web 3.0 matures and becomes a more functional foundation for concepts like the metaverse, we may expect to see some creative applications of this technology both inside and beyond the game industry.
