The metaverse is a very popular tech buzzword, but it does not have the same meaning to everyone. The general definition of the metaverse pertains to “worlds that deliver a new type of user experience”. In that sense any sort of ecosystem can be a metaverse, like social networks and gaming platfforms. That is at least the more common understanding of it.
Things diverge when we talk about the metaverse in a more technical sense. There appears to be many versions of it, but let us narrow it down to two. There is one from established tech companies and the other from an emerging group of fintechs.
The Mainstream Metaverse
There is the Big Tech metaverse, which follows the idea of Meta (Facebook) and Microsoft. This is an immersive world in the digital realm that requires users to wear a headset. Meta has their own brand called Quest (formerly Oculus), while Microsoft has HoloLens. There are other vendors, like Google, but let's be specific to Meta and Microsoft.
Wearing the headset immerses users in VR (Virtual Reality), AR (Augmented Reality) or both called MR (Mixed Reality). Games and entertainment are the main uses for these headsets, but are now being developed for virtual worlds. Users can interact just like in the real world, and they open portals to new types of experiences. Take for example a virtual theme park where users have a 360 degree view all around them. Users can interact with objects, like virtual roller coaster rides and even chat with other users who are online. Realtors can show off property in a virtual setting by having clients wear the headset. Teachers can use AR to show students how a car engine works in a more detailed way.
This is the mainstream because both Meta and Microsoft are established brands in the tech industry. They have hundreds and millions to billions of users worldwide. Meta is of course a social media giant who own Facebook and Instagram, which have a combined total of 4 Billion plus users (2.8 billion on Facebook, 1.3 billion on Instagram based on available data). Microsoft creates the most popular software (e.g. Windows operating system and Office productivity suite) used by both retail and business. Therefore, the platforms these companies own can target and engage a large user base for their metaverse.
Meta has invested over $10 Billion into their metaverse project. The company has even renamed to Meta from Facebook as part of that objective. Meta has, as of early 2022, not so much to offer from its metaverse platform. Many projects are still under development. Mark Zuckerberg (Meta CEO) wants their metaverse to be the “successor to mobile internet” (from keynote speech). At the moment Meta's metaverse is not fully available, but there have been some snippets of it.
Microsoft's metaverse strategy seems more clear. They have a path into it from gaming on their Xbox platform and into business productivity software like Teams for collaborations. When put into a virtual world, with their HoloLens, users can interact with their games or with each other. It is not just about the immersion of being in a different environment, it also changes the way users can interact. In a game it would be possible to experience playing side by side in a first person shooter with new sensory experiences that allow feeling the action live (with use of haptic devices). Virtual conferences can also be more engaging, allowing users to interact with objects to get information. They also have popular use cases in education and remote operation.
The Web3 Metaverse
The other version of the metaverse is more niche during its conception. It is headed by software developers and VC funding as an enhancement to Web2. This is called Web3, and it integrates with the blockchain to create a metaverse that allows the seamless transfer of assets using cryptocurrency and interconnectivity with various digital worlds (i.e. other blockchains). It is niche because it has the lesser number of users in terms of market size, but it can grow as cryptocurrency adoption increases. They also do not require using a headset, or any peripheral other than a smartphone or computer.
The concept of a blockchain seems to be the least understood by everyone. It does not require wearing a headset, but it does require access to a digital wallet. This functions like a digital ID for the user, when entering a Web3 based metaverse. Digital wallets hold the private key of a user, which authorizes their access to digital assets like cryptocurrency tokens and NFTs (Non-Fungible Tokens). Tokens can be used as a medium of exchange or store of value, while NFTs are digital representation of objects (e.g. art, collectibles, music) whch has verifiable proof on a decentralized database called a blockchain.
The metaverse built on Web3 and the blockchain is also novel, since it has never been implemented in this way before. Using a blockchain is the main feature of this metaverse, rather than the immersive user experience that the Big Tech metaverse offers. Developers offer APIs to allow other developers to interoperate with existing metaverse worlds like Decentraland. While most Web3 metaverses are not immersive, they can be. It is up to how developers create these virtual worlds. Other examples include the Sandbox and Gala Games, which bring gaming with a blockchain-based platform.
Applications for Web3 metaverse are based on tokens and NFTs. Why would you want to use this type of metaverse? It has more to do with incentives rather than just entertainment. With the blockchain, metaverses can allow value to be passed to users from the platform in the form of rewards. You can get rewarded for trying out a virtual world or playing a new game. It also opens up NFT marketplaces, where users can buy many forms of digital content and establish their rights to it. NFTs are like certificates that verify ownership, which helps to prevent fraud and validate authenticity of the content.
The Takeaways
There have already been criticisms about Meta's metaverse. From awkward looking avatars that have no legs to poor graphics rendering. It may take time to develop, but critics also challenge the usefulness and even commercial value of the platform. If it turns away users because of the need to have a headset and the special devices required, then it won't become a successful platform. If it only brings Facebook or Instagram into a virtual reality world, then it is overkill for a social media platform. There has to be other uses besides that.
Microsoft may have more practical uses for its metaverse, but once again, if it requires users to always wear a headset it might be a turn off to some. They can be heavy and user's often sweat wearing them. Wearing a headset just to type a word document can be quite uncomfotable when you just want to get work done. There is a difference between wearing a headset for hours typing a document to playing a game. Perhaps the form factor can change to “smart glasses” when it comes to software like Office since they are more comfortable to wear. I can see their version of the metaverse as being more an option of entertainment with a headset, or productivity wearing smart glasses with business applications.
As for the Web3 metaverse, it is already here and waiting for more users. The main criticisms against this is that it is VC backed and the technology could be soon outdated which can make it useless. It continues to evolve though, and so far it has users from the cryptospace. The good thing about this metaverse is it allows users to bring their digital assets to virtual worlds. This is what adds value to those platforms. With tokens, users can trade in a gamified setting to transfer value while playing a game. This can also be used to make in-game purchases, but in the form of cryptocurrency. While these metaverses are slowly gaining adoption, they are still so new that few people can consider them popular.
Both metaverses do target the mobile user market. This is because there are over 6 billion smartphone users (Statista data 2022) now. Users want to take their apps, games and streaming videos on the go. The best device for this is the smartphone. They have also become more high-end in quality, so the experience can still be the same as a desktop computer. Users can run their app or game on their smartphone and get the visuals from a headset. Digital wallets can also be installed on smartphone to allow users to experience the metaverse.
Synopsis
So which metaverse is the real deal? Please stand up!
The Big Tech giants and the VC funded metaverses can make their claim, but they are all the metaverse. It just depends on the framing of it. There is no standard definition of the metaverse, like you can define a triangle.
They are all a metaverse, and it is all about the implementation of it.
You can have a metaverse that requires a headset or peripheral to participate in, like that from Meta and Microsoft. You experience their metaverse with the headset.
You can also experience the metaverse through the blockchain with apps like Decentraland and the Sandbox. If your interest is in virtual worlds and gaming with cryptocurrrency tokens, then this is the one to explore.
Perhaps there will be a convergence of these metaverses, which makes it even better for users. If they can interoperate across all metaverses, then it becomes just as ubiquitous as computers and the Internet are in modern life.
In the end the market will decide which is the best metaverse. They can both co-exist or converge, it is just a matter of which brings more utility as a GPT (General Purpose Technology).
(Photo Banner Credit: Bradley Hook)
