Ever since I did my ”Enter the Metaverse” lecture at Gather Festival back in 2019 it seems like the internet has been completely flooded with information on this macro-trend and it is officially the buzz of all forums (awareness bias?). Even Facebook has since changed their name to ”Meta” and with the current movements in society and Omicron wave, we will likely see even more focus on this from companies in the near future. Unfortunately as often with trends and forums we see people trying to boost their own portfolios by making things sound more complicated than they are to underline how ”bullish” they are about the topic. It’s the same when you ask a someone to explain Artificial Intelligence to you and rather than taking a step back to ML they go full on robot takeover.
To help shine light on this movement and the technology powering it, I thought it would be befitting of my first blogpost on my own website to detangle the different terms which power this move to digital. I really love writing and doing analysis on movements in society and spend a lot of time diving into different trends (mostly in game dev/tech as that is my own area of expertise) so writing more pieces like this is a way for me to spend more time doing something I love. It ties together my worklife experiences very well too, so it’s a way for me to keep learning.
However: I want to point out (in particular important as I work in the finance industry) that while I will mention specific companies in this blogpost and some of them are listed, this is in no way a recommendation to buy stocks and I am not a financial advisor in any way. Always do your own research if you want to invest in the stockmarket.
What is the Metaverse?
If I try to put it in very general terms, I would say the Metaverse is the fully immersive embodiment of the internet. Over the years of the internet era we have moved from communication in text, to powered by photos and now the media we consume and share most online is videos. We already spend heaps of time walking about open-world games such as Fortnite, Roblox or WoW. Taking a physical step into those videos/video game worlds is what the Metaverse boils down to and it seems like an intuitively rather natural next step if you have been spending time online. By doing that, one of the main benefits in my own opinion is that we connect people bringing us together across platforms in spite of our physical distance. We might meet people we never would have met otherwise and they might enrich our lives tremendously.
And sharing with each other will be even greater, experiencing education vastly more interesting and appealing to those who learn not only through reading and the world will become stronger and more resilient as a result. Just imagine history class being you and your classmates on site during great happenings. Or if you miss your babies first steps, you will actually be able to witness them in the room as a playback experience, not just a video on a screen. It’s almost like a second world within our own and with the development of avatars we don’t have to be limited by our physical appearance – we can add arms, horns or whatever it is that we would like to look like there in the digital space. And while we’re not there yet, many of the foundational building blocks are falling into place.
Why do humans want to move into a Metaverse?
Since the beginning of time humans have been explorers and travellers. As NASA explains it it seems like this will to discover is something in our genetic fabric, as we have been doing it for hundreds and thousands of years. Many times when we have pushed the boundaries of our society we have been able to enrich and provide benefits to our own tribe, unfortunately also by taking from others. The result in any case is often discovery – discovery to improve our life. Reasons why we go to space may differ depending on who you ask – but things like ”to improve security on earth” or to ”improve healthcare” might come up as examples. Bottom line, the world is never enough for us as we are dreamers constantly in search of something more – and the Metaverse offers us a platform for those explorative thoughts.
What do we need to make the Metaverse happen?
As made clear earlier in this post, though we see a lot of progress we are kind of not there yet – as there are many things that need to come together before we can be truly immersed in an interconnected digital universe. I’m bringing these up not in any particular order now – as they are all somehow a part of that ecosystem. There are a bunch of other things that need to fit together (storage, advertising, dev tools etc.), but to make sure I don’t write a novel I have picked out the main ones I think about.
Worlds: To enable people to build worlds like those in open-world-games today we need the toolsets to create environments. Many times, creative people don’t necessarily have the skillset to set something up like that – so we need to empower them by democratising the development of worlds and spaces. To simplify this a lot I could compare it to Habbo Hotel and oldschool chatroom where you could decorate your space with digital assets you acquired with real money. Habbo was founded in 2000 and this way of thinking isn’t really new to games either – but there has been a need for society, pheripherals etc. to come up to speed before we could do this at a full scale. Companies like ILP and Embark Studios are showing us just how far graphics and rendering have come – and engines like Unity are empowering the creativity of the masses. Our ability to feel present in the Metaverse will likely depend on how ”real” the environment” feels to us – something game devs and VFX studios have a leg up on as they have been working with physics in digital spaces for quite some time.
So the question isn’t will we be building worlds in the Metaverse – it’s more so ”which world will we want to immerse ourselves in” where it comes down to the question of IP rights as well. We see companies like Disney moving into the space – already owning a lot of great IP and with the power of nostalgia they are likely to create some pretty cool spots in the Metaverse. Imagine hanging out in the Deathstar?
Software: Why are Facebook moving into the Metaverse? To understand this we need to take a step back and look into what Facebook has built. Facebook owns a database with somewhat updated affiliations and relationships between people across all of the world. Data shows about 1/3 of the human population on earth are already on Facebook and the company needs to find a way to 1) Increase the Average Revenue per user (as we know users are worth different amounts in different parts of the world with regard to their ability and willingness to spend currency digitally) 2) Not be seen as evil anymore (we all remember the hearing).
While everyone else is building worlds, Facebook (now Meta) I believe are aiming to be the connector of your avatar across all of those worlds. To simplify: how do we know that the you on Fortnite is in fact the same you in Roblox? We need a way to validate that and we need to know the community.
In addition there are a number of peripheral ecosystem challenges we need to solve like communicating on the blockchain (check out Mailchain, explaining why that is a hassle) and shared protocols for blockchains to co-exist and operate together at scale. The Web 3.0 is challenging us as a dev community and while this for sure is not my subject of expertise, I see a spectacular platform filled with opportunities for new startups to take smaller chunks of the puzzle and become leaders in their own subsegment – either for growth/co-creation of the future or simply as an opportunity to sell their solution to one of the bigger companies trying to do the big plays.
Hardware: There is still a need for hardware to enter into digital worlds. Rendering and displaying them takes a toll on our computers and we are reliant on companies like NVIDIA or ADM to build the physical aspects that allows us to go digital – think about all the datacenters as being multiple computers tied into a network, and all cloud providers who hows software solutions having multiple such across the world. In addition, there is the consumer side of having accessibility to VR worlds where headsets like Oculus (owned by Meta) are required for you to feel part of the Metaverse. While there has been a lag of households adopting VR headsets we do see it increasing over time.
Cloud and streaming – for democratization: Being able to stream digital content rather than downloading it to your device will democratize the complexity of the game or world we are allowed to enter without limiting us based on our hardware (i.e. rich people can do cool shit – sort of the reason why SWE were ahead in FPS esports for so long, we had computers and state funded internet). Rovio owned Hatch Entertainment are a quite interesting company in the field and there are multiple others but in short, someone needs to get the latency low enough to empower the Metaverse. To some extent this also relies heavily on how well the 5G net (or 6G at some point) will be able to cover the world to support these efforts.
A way to track ownership: Finally, we need a way to track who owns ”me” and ”my stuff” in the Metaverse. Enter blockchain technology building on the digital contracts agenda making it harder than ever to steal from someone, change, hack or cheat the system. Basically it’s about recording information in a way that is safe. Happy to do an entire blogpost on this in the future, but if we connect it back to Meta they have launched their own cryptocurrency Diem and while Bitcoin and Ethereum are still the largest two coins, we see new ones pop up on a weekly basis. Moreover, we are already used to buying digital assets such as skins in computer games, but with the rise of NFT it will likely become common to decorate your house in the Metaverse by buying NFT furniture or art. In addition to skins in League of Legends and CS:GO, I’ve owned cryptokitties since 2019 which were my first dabble into NFTs.
What are some potential challenges with the Metaverse?
Although we are already ahead in thought, there are a bunch of things which need to happen in order for someone to truly be part of a Metaverse experience. I hope companies can collaborate on this as it shouldn’t really be a race but rather an ecosystem play. With high hype and low adaptability one of my main fears is that people will run in to invest too quickly and get disappointed or inflate values of companies and see them fall. We have experienced this in VR/Esports a couple of years back, where investors tried to be early on the ball – the investment didn’t go all too well and then the industry itself was blamed for their own sucky analysis. To iterate my message earlier once again – if you don’t understand an industry DON’T INVEST IN IT.
To put this into numbers, Facebook had sold round about 5 M VR headsets from 2016 to 2020. We are getting there, but we need more household hardware and the price points need to go down.
There’s also a bunch of bs about gaming disorder from WHO which will likely scale into it’s own field of tech agnostic haters trying to make a point. While I do agree we need to help people who become addicted to digital experiences, problematising the forum will not help – rather the opposite. You can read more about that and why I think it’s bs here and here. Happy to write more on the topic too, just comment below.
There’s also deep fakes – but seeing as they are not Meta-only and likely could be a post on their own, I’m not going to dive into them here.
Will we leave the physical world behind?
Many people have seen the movie Gamer (2008) or Inception (2010) and are scared we will enter into a world we cannot back out of. It’s anyones guess really, but I think we won’t leave the physical world – we will rather use it for something else. Maybe we work in the Metaverse and gather for different purposes IRL.
Let’s see what happens! I don’t know about you, but I for one am excited about the future.
Please let me know your thoughts on this piece and give me feedback!
Great insights, thanks for sharing.
Since you’ve been in “the space” (i.e esports, gaming, biz analytics etc.) for many years, would be great to get more of your personal experience and reflections around it.
Cool – do you mean investments wise or more tech wise (what I’ve seen). I think I could comment on both, just need to double check contracts so that I don’t do something illegal.
Great piece Andjela! Really fruitful for someone that’s not very into the stuff you address but still interesting for industry savvy’s. (Statement done with risks of sounding like a douche…🤷🏻)
Not at all douche, I appreciate it! Please let me know if I could have improved or spend more time on any of the topics.