2022’s Metaverse In a Nutshell
The metaverse is the latest technology trend and is a hot topic for industry leaders and policymakers alike. Those with their fingers firmly on the pulse are fascinated by the emerging possibilities that a persistent virtual world such as the metaverse brings. The race is on to build what people are calling the future of work, life, and pleasure, but we are still trying to figure out what the metaverse will be. Major tech players such as Meta (Facebook), Microsoft, and Apple, are all quietly building their own versions of the metaverse and staking their futures on the promise of the next great technological paradigm shift.
The term ‘metaverse’ was first coined by Neal Stephenson in his 1992 science fiction novel “Snow Crash.” The years that followed saw rapid technological innovation that tested the limits of the human imagination. We embraced the internet, developed Web 2.0, and used collective innovation to build worldwide economic growth.
McKinsey states, “Across a range of large and developed economies, the Internet exerts a strong influence on economic growth rates. Our research shows that the Internet accounts for, on average, 3.4 percent of GDP across the large economies that make up 70 percent of global GDP.”
Now think about the next logical step for the internet and what that might entail? Nowadays, people want more immersive, realistic, and meaningful online experiences, especially post-pandemic. The pandemic inadvertently accelerated the move towards an online-everything culture that coincided with the natural emergence of Web3. The digital shift left us looking online for experiences that were difficult, dangerous, or even impossible to obtain in the real world. For most, it forced us to rethink and reimagine how we can use and experience new technologies in our daily lives.
This ideological change was the driving force behind Mark Zuckerberg’s decision to rename Facebook to Meta in 2021. Although this wasn’t the first iteration of the term metaverse, this rebranding marked a seismic shift toward a new digital frontier, one that seeks to expand beyond a centrally controlled platform. Meta's movement in this space elicited a counter-movement from the Web3/crypto space that wanted the future to be decentralized and not owned and controlled by a few tech mega-corps. This idea is much closer to the notion and eventual implementation of Web3 and brings with it a whole new can of regulatory worms.
A few months later, Microsoft boldly affirmed its intention to purchase Activision Blizzard for a whopping $68.7 billion in the face of multiple workplace misconduct allegations, C-level executive resignations, and a dwindling stock price. If the Federal Trade Commission doesn’t intervene, the acquisition will make Microsoft the third-largest gaming company (after Sony and Tencent). Smash hits such as World of Warcraft, Call of Duty, and Overwatch could all be added to Microsoft’s comprehensive roster after they purchased Bethesda back in September 2021. But, as hardy gamers and tech enthusiasts already know, this investment is more centered around the metaverse than gaming itself. Gamers are a core target market and a foundational element of the burgeoning metaverse and will undoubtedly be the early building blocks that construct the new virtual worlds around us.
Most people are still figuring out what the metaverse is, its benefits, and the promises it aims to deliver. On a purely conceptual level, the metaverse is being marketed as the next generation of the internet (Web3). It promises to equip us with the necessary tools that seamlessly integrate our physical and virtual lives. It’s thought that the convergence of several emerging, innovative technologies will enable us to create, live, and experience real-time digital immersion.
Yet, given these ideas don’t encapsulate any specific technology, the vast majority of the public finds it almost impossible to conceptualize the potential future social interactions related to metaverse platforms. Several new technologies are converging to form something new. Blockchain/crypto/NFTs, AR/VR/3D, AI, and 5G/high bandwidth internet are blurring the lines between the real and virtual worlds. We tend to latch on to what we can see, so everyone thinks of the metaverse as AR/VR when it requires many other components too.
Developers should lay the foundations of the metaverse to facilitate positive experiences that benefit the many, not just a few. As far as we know, the metaverse will be a hybrid assortment of virtual reality (VR), augmented reality (AR), and extended reality (XR) that merge to create a digital layer of abstraction above our physical realm that intertwines with our daily experiences.
Some techno-enthusiasts predict that the metaverse will spark a paradigm shift that will reinvent society's occupation of digital spaces. Others believe the metaverse will usher in a new era of immersive internet that intertwines real and virtual experiences that enhance our daily life. We don’t quite know how it will happen, but one thing is for sure–exciting times are most definitely ahead!
Entrepreneur and game designer Jon Radoff has offered one of the most substantial visions of the architectural components and layers of the metaverse. He describes the seven layers essential to any successful metaverse as experience, discovery, creator economy, spatial computing, decentralization, human interface, and infrastructure.
These seven layers build upon one another to create an end-to-end value chain that is specific and unique to each metaverse within which they are used. The seven layers describe different stages in the value chain of the metaverse market. Radoff’s explanation means that distinctive experiences dematerialize known physical spaces and untether graphical spaces and social immersion to allow content to be created by people and by artificial means. Radoff believes a common framework is necessary for the metaverse to thrive.
He writes, “And while there will be many proprietary (and very fun) theme parks in the metaverse, I’m even more excited by the opportunity in the Switzerlands: a metaverse powered by a robust creator-economy enabled through decentralization.”
Even though it's simple, it’s a methodical approach to describing the framework of the metaverse. The hope is that future metaverse experiences will be progressively livelier, socially driven, and continuously evolving. Breakthroughs in spatial computing and immersive architectural design enable 3D spaces, integrate data feeds from multiple devices, and recognize voice and gesture controls to expand the more traditional aspects of interactional boundaries.
Decentralization utilizes technology like blockchain to enhance value exchange between two different entities. Human interfaces such as virtual reality headsets merge the human body and computer systems to become a consolidated interface for navigating the metaverse using virtual avatars. Metaverse infrastructure delivers an intrinsic and foundational technology layer and is made possible by the cloud, 5G, next-generation mobile, AI, and wearable tech.
Nearly all of the essential components of this layered architecture are available right now. But some still need development, which means that certain aspects of the metaverse may be here sooner than others.
The burgeoning metaverse will be created, fueled, and defined by content creators with an overarching aim to construct seamless virtual environments such as casinos, concert venues, theme parks, and sports arenas by utilizing digital assets.
Modern social media has transformed the content creator model and has heightened existing content generation by enabling more people to contribute with shorter form content, video-based content, and universal mobile access. Without creators at the forefront, the metaverse will be nothing more than a tech-enabled platform. Think about how useless Instagram or TikTok would be without their top creators.
The most important takeaway is that content creators could retain ownership of their audiences in the metaverse and monetize content by creating NFTs and other innovative digital ledgers. This is a progressive idea that allows content to leave the two-dimensional space and enter into the realm of immersion and interaction. This means that, in the future, the metaverse will not only provide and cater to large audiences but will be jam-packed full of niche and individual worlds centered around personalized experiences and social connections.
There will be a significantly lower barrier to entry for artists and content creators alike, who will be able to utilize new technologies to build environments and performances directly and instantly without depending on the global distribution and technology companies that control the market today.
NFTs (non-fungible tokens) are all the hype right now and yet aren’t fully understood by the masses. NFTs are digital certificates that prove digital asset ownership and are stored within a blockchain. These can be in the form of videos, photos, music files, and even digital art. More recent use cases show that NFTs can be used as concert tickets with an ingrained, personalized access token, like a specific time to take part in a meet and greet with a recording artist.
The first NFTs were a collection of PFPs (Profile Pictures) designed to be used as social media avatars. CryptoPunks, created by Larva Lab, were among the first designs to become actualized in 2017 by Matt Hall and John Watkinson. The pair created 10,000 punk portraits generated entirely by algorithms. The first “CryptoPunk” NFTs were given away for free–anyone with an Ethereum wallet could claim one. The NFT boom in 2021 saw the value of the CryptoPunk NFTs increase tenfold. In March, CryptoPunk #7804, one of nine “alien” types, sold for $7.57 million. In May, Christie’s auction house sold a collection of nine Punks for an estimated $17 million. In June, Sotheby’s sold CryptoPunk #7523, an alien type sporting a mask, beanie, and earring, for over $11.7 million to a buyer called Sillytuna.
Since then, multiple NFT marketplaces have cropped up throughout the digital sphere, allowing users to mint, purchase, and sell digital collectibles. OpenSea was among the first digital marketplaces that catered its services around NFT creation, and others are following suit, with over 20 key marketplaces emerging last year alone. With its vast copyright ownership, the entertainment industry has capitalized on the emerging NFT industry. Musical artists such as Eminem, Snoop Dogg, Mick Jagger, and Tom Brady are now offering unique private party passes, personalized memorabilia, and exclusive event tickets to take advantage of this new technology.
Nonetheless, the ongoing problems that NFT markets face are issues around privacy and how to assure and certify the assets being minted. The whole point of an NFT is its unique asset identity and the fact that they are supposed to be impossible to reproduce. But, artists can and have created multiple NFTs for the same asset (art, music, etc.) while marketing and selling them in different ways. This, as you can guess, creates a whole host of problems and challenges that are yet to be ironed out. Another big challenge for NFT marketplaces is securely storing large assets that are kept off-chain at present.
The role that NFTs will play in the metaverse is still not established. But, their presence will undoubtedly grow and develop by leveraging smart contracts for transactions, such as virtual real estate purchases. With NFTs still in their early stages, their future is somewhat volatile. As processes become more defined, they will move away from being collectible items and denote a diverse set of financial instruments such as insurance, real estate, stock options, and loans.
The metaverse is still a relatively new term that will likely have those who aren't directly involved or affiliated with the technology industry scratch their heads in confusion—and the same can be said about Web3. For those unaware, Web3 is expected to become the new iteration of the internet, emphasizing decentralization and data privacy at its core. The 'metaverse' and 'Web3' are terms sometimes used interchangeably, but they mean two completely different things.
Web3 can be described as the next logical step of the current iteration of the internet (Web 2.0), which was coined in 2004 when websites became more interactive, responsive, and user-oriented. Web3 brings a decentralized system with open data standards, which is a massive shift away from today’s ecosystems that are generally walled off like Facebook, AWS, and Google. Web3 emphasizes user-generated content and allows these users to distribute and monetize said content safely and securely without needing to pay a share to a centralized provider.
Web3 aims to utilize open platforms by putting control back into the hands of end-users instead of the big corporations we have become accustomed to. The hierarchical structure of closed platforms such as Chrome, Safari, and Firefox are missing components (e.g., transparent development and community-based support) that will undoubtedly make using open platforms more appealing.
For example, Brave is an open-source Chrome-based application that enables users to interact with websites, utilize web apps, and display online content in a number of new and contemporary ways. Brave also allows users to surf the web safely and securely while eliminating online ads that target its users. The lawless frontiers of web3 present an unprecedented opportunity to bring freedom, creativity, and transparency back to end-users. Web3 may represent an end to a worldwide web governed by one-sided power structures. Open source platforms are the catalyst for those who want freedom and adventure in prospective cyberspace.
Social networks such as Facebook can be accessed and navigated by applications such as Steemit, a blockchain-based social network that puts control back into the hands of users. Personal information, content protection, and ownership stakes are all at the heart of decentralized Web3 solutions, with a growing emphasis on the security of content creators.
Web developers and content creators who seek to not only create content for the internet but also create and build the space it permeates can breathe a sigh of relief knowing that blockchain-backed web3 facilitates an environment prone to widespread collective contribution.
At the moment, the current iteration of the metaverse is a conceptual vision for experiencing a more immersive version of the online world. When you are inside the metaverse, either for work or play, time continues regardless. This means that the metaverse creates a more in-depth and innately creative experience that is currently being built on various technology platforms utilizing Web3. The key here is whether the different iterations of the metaverse will be interoperable and compatible with each other. Time will surely tell.
The metaverse has actually been around for some time in a primitive form. The gaming industry has been building core metaverse components and ideas for many years, with open-world games like GTA Online and Fortnite. The latter (Fortnite) is a pioneering example of the future metaverse world, and it continues to evolve with each new season, despite recent legal knockbacks from Apple and Google. Fortnite utilizes reflective events that mirror the real world to keep users interested in their shared universe.
Another example is Roblox, an online gaming platform and storefront where users can gather to play various games created by its developer ecosystem. Roblox isn’t a game itself, but more of a virtual environment that enables cross-functional in-house gameplay, developed for and by its users. Roblox is one of the most successful metaverse gaming platforms and has, on average, 47 million daily active users and 9.5 million developers actively building new gaming experiences.
The last example of how the metaverse may operate in the future is Minecraft. Minecraft aims to create online communities and different versions of reality that can be steadily built upon layer by layer. The core idea behind Minecraft is that anyone, no matter their technical knowledge, can build an interactive world on their computer or mobile device. Minecraft worlds are fully immersive and don’t require expensive AR/VR headsets to experience them. The real driving force behind the experiences in Minecraft is that it provides an open platform with a robust set of building blocks and in-game "physics" that enable players to build almost anything they can imagine.
The flexibility of online games such as Minecraft opens the doors for many other use cases. For example, Reporters Without Borders specifically chose Minecraft as its venue for publicly censored documents, seamlessly archived into a 12 million-block library built in-game over a couple of months. This demonstrates the absolute power of gaming platforms such as Minecraft, which could go on to win the race to construct the first true metaverse.
The music industry has experienced multiple transformations in the last twenty years and has had to keep up with technological innovation. The introduction of peer-to-peer file sharing clients such as LimeWire and Napster created a massive problem for the music industry, which fought tooth and nail to hold onto their valuable copyrights. Advancements in the capabilities of the internet meant that people could now share and download music online. Pirating music no longer required burning CDs or recording mixtapes. For the first time in history, file-sharing platforms allow people to download virtually any song for free.
This caused music industry revenues to decline drastically and paved the way for paid distribution platforms like iTunes to transform the monetization of digital downloads. More recently, streaming platforms such as Spotify have changed how music is consumed by introducing paid subscription services. Now, the music industry is in the midst of another transformation to secure its future in the metaverse.
Travis Scott was one of the first musical artists to participate in a virtual concert inside the videogame Fortnite in April 2020. He performed as a digital avatar on a massive mechanical eagle suspended in midair. This was an innovative approach and solution during an industry-wide concert shut down due to the pandemic.
Another example is Hatsune Miku, one of Japan’s most famous pop stars and a hologram. She has already released over 100,000 catchy songs and was created by Crypton Future Media using innovative technology from Yamaha and taking voice samples from actress Saki Fujita. The Vocaloid software that CFM used for Hatsune Miku continues to grow in popularity as more and more virtual music stars are explicitly devised for the metaverse.
The metaverse is a driving force for the music industry to innovate rapidly. Current trends indicate that people are changing their habits as they become more accustomed to online consumerism. Musical content and live concerts can now be effortlessly streamed, using virtual reality (VR) and augmented reality (AR) to create new immersive experiences. This creates an opportunity for the music industry to capitalize on merchandising and digital memorabilia opportunities within the metaverse.
Many high-profile brands are experimenting with the metaverse and the endless possibilities that come with it. Nike, for example, launched Nikeland, a new and immersive virtual world created with the help of Roblox. It’s a new concept that merges sports and gameplay functionality into a unified experience. Real-life motions help to translate virtual world movements into several unique experiences. This is a prime example of Nike trying to connect with a younger audience through immersive gameplay.
Hyundai Motors is another example of a multinational company getting involved in the early stages of the metaverse. They launched a new concept called Metamobility, which utilizes robotic tubes as a bridge between the physical and virtual worlds. The ultimate goal is to expand the reach of humans and allow us to see through a virtual world while actively making changes to the physical world. An example could be allowing doctors to steer virtual experiences while interacting with a robotic avatar that navigates the physical world. The best use cases for this type of innovation are intricate medical surgeries that require precision.
The fashion industry is another metaverse use case utilizing virtual digital spaces to sell its goods in online stores. GucciGarden is probably the best showcase for this and enables its users to adapt and personalize unique textures and patterns for their digital avatar to purchase and wear. They have created an immersive and individual experience for each user and can generate one-of-a-kind creations that you can’t find anywhere else.
Lastly, Microsoft recently announced Mesh capability in its video collaboration platform (Microsoft Teams), enabling users to create a digital overlay for mixed-reality applications. Holoportation lets you project your likeness using a realistic avatar, delivering an unmatched experience to users, and making them feel like they are really there. This is where the recent acquisition of Activision-Blizzard makes sense among Microsoft’s array of business applications.
At the moment, many of the applications mentioned above are still experimental. But, they give us an idea of how future metaverse experiences could take shape and evolve into the new normal.
The technology industry is on a mission to create the next iteration of the internet that will incorporate and utilize decentralized architecture. Putting control back in the hands of end-users is a core element of Web3.
While current metaverse applications and concepts are still in their early phases, the next age of the internet will be of era-defining importance for the growth and expansion of the metaverse. The metaverse of today isn’t defined but is more of an overarching concept for the future.
Looking back over major technological trends of the past, it's hard to gauge the exact outcome. The metaverse of today will undoubtedly reflect the metaverse of tomorrow, but no one can say for sure what it will look like or encompass.
The beauty of the metaverse lies within the unknown and its possibilities.