It would be a gross understatement to say that money is pouring into the metaverse. From Facebook pledging $10 billion a year to its Reality Labs metaverse division, to gaming giant Animoca Brands raising a whopping $358 million at the turn of the year, and the ongoing boom in virtual real estate, indicators point to a growing ecosystem that just might usher in a new technological era.
Whether predictions made by the most ardent metaverse mouthpieces will ever come to pass – can our physical and digital lives really converge in the way they claim? – there’s no denying the ideas at its core have captured the zeitgeist in the post-Covid world. The metaverse is where gamers are gravitating to find immersive and rewarding playing experiences; where creatives are deploying their artistic talents; and where investors and hobbyists are busy buying, selling and renting NFTs which represent assets such as crypto-art, avatars, weapons and other collectibles.
Evolution of the Internet
A loosely stitched-together digital landscape that combines social experiences and games, the metaverse has gradually become a venue for users to interact, shop, play, learn, earn and sell. Given this, it’s no wonder brands and advertisers are allocating a percentage of their budget to exploring opportunities in animated sandbox environments like Decentraland and Roblox, the latter of which attracts over 50 million daily users.
According to a recent Gartner report, within five years, one in four people will spend at least an hour a day in the metaverse. And though it’s impossible to determine exactly what those users will get up to, their reliance on cryptocurrencies is less debatable. If fiat is the currency of metaspace, ETH, SOL and other digital monies will represent the greenbacks that power everything from virtual classrooms to metaverse music festivals.
“I am excited about the metaverse as the next evolution of the internet,” says Charles Read, whose web3 investment firm Rarestone Capital has bootstrapped several such ventures. “All the 3D spatial games that are being built online make up the metaverse, rather than being their own ‘metaverse’. Social hubs are interesting but I’m more excited about the infrastructure level which allows these games to be more immersive and high fidelity – and the releases that result from them.”
Read, who admits to spending hundreds of hours playing Runescape and World of Warcraft as a teen, says he winces when regular games describe themselves as metaverses. “Just because you’re a blockchain-based game, doesn’t mean you’re automatically a metaverse,” he explains with a sigh. “Having said that, the definition of metaverse is kind of amorphous so these claims are to be expected.
“At Rarestone we’ve backed some really cool web3 games in the last few months including SpaceZ and FOAD which fit well into this thesis. If, like most people, you still don’t get what the metaverse is, I recommend reading Matthew Ball’s book The Metaverse straightaway. Just go and order it, you’ll be miles ahead of the competition.”
Read is right to point out that the metaverse is ill-defined. While some argue that a metaverse must be navigable via wearable VR/AR technology, others set the bar lower: the ability to communicate, build, quest and transact using cryptocurrency. Indeed, Elon Musk has refuted the appeal of the former, saying “I don’t see someone strapping a frigging screen to their face all day and not wanting to ever leave.”
Last year, Facebook CEO Mark Zuckerberg predicted that the metaverse would be “the successor of the mobile internet,” and the company has since rolled out Horizon Worlds, a social VR world replete with mini-games, comedy clubs, fitness apps, even karaoke bars. Rapper Post Malone lowered the curtain on Horizon Worlds with a VR performance of his album Twelve Carat Toothache, which could be viewed using an Oculus headset.
Adventures in AR
Brands are understandably seeking to increase their presence in these expanding webspaces, mainly through digital kiosks that sell exclusive tokenised goods; see Nike’s purpose-built experiential metaverse Nikeland, which sits within Roblox. From the perspective of a global brand like Nike, pushing into this territory is a no-brainer: it can set the stage for improved engagement with new and existing customers, workshop ideas and designs before physical products hit stores, and build a virtual economy to complement its real-life one.
Plain old entrepreneurs, meanwhile, can earn their crust in a variety of ways, from becoming virtual landlords to creating interactive games and investing in software/hardware. An increasing number of people are also pursuing side hustles in virtual worlds, designing wearables or hosting events. Others are more interested in buying gear for their avatar, influencing a game by participating in a DAO, or socializing with like-minded gamers.
“The modern internet compels us to watch, like, swipe and share,” observes Charles Read. “Without our knowledge, this model enabled us to be monetized for our data and later, when that became apparent, there was a backlash against Big Tech that eventually died down. With the technologies now being deployed, people can be part of a richer, more social experience that makes a mockery of the slave-and-master relationship of old. In the metaverse, empowered users are devising their own monetization models as part of a fair and transparent system, and Big Tech will have to provide value if it hopes to compete.”
With a Big Tech arms race and people’s revolution brewing, the odds of a pervasive and persuasive metaverse emerging seem solid. Ultimately, it will be up to developers and builders – and investors like Read who fund them – to turn a much-hyped concept into a 21st century lifestyle.
