Some say the metaverse is the next big technology revolution, which will change the way we work, play, and socialize, just like the internet and smartphones did. Others claim that it’s vaporware - a bunch of niche gimmicks not to be taken seriously. Without a functioning crystal ball, it’s impossible to predict the future of the metaverse, but for businesses trying to decide whether to invest, “who knows?” is not a useful answer. What we can do is try to understand where the metaverse is today, the different directions that it could go, and the opportunities that exist for early adopters.
According to some definitions, the metaverse is already here, or at least its precursors are. Semantic debates over what “counts” as a metaverse are unhelpful, so let’s focus on what we know. There are already plenty of people playing, socializing, and shopping in online 3D worlds including Roblox, Minecraft, VR Chat, Horizon Worlds, and Decentraland. Each of these is built, owned, and controlled by a different company, with no meaningful connections or standardization between them. And they each have highly distinct cultures, often with goals and philosophies that differ at a fundamental level.
There is no single metaverse that can be invested in today - instead there are several proprietary platforms vying for attention, each of which may or may not exist in a few years time. Deciding which to invest in is a judgement of which platform’s vision is most compatible with your business, if any.
Web3 and the metaverse
One of the loudest voices in the march towards the metaverse is the “Web 3” crowd - enthusiastic adopters of cryptocurrency, NFTs, and other blockchain tech. Their thinking is largely influenced by a techno-libertarian strain of thought, arguing that a metaverse built on blockchain will enable a decentralised society that is free of government and corporate control.
It’s not easy to sort fact from fiction in this space. Many crypto advocates hold investments in speculative crypto assets, which means they have a clear financial interest in making the arguments with the enthusiasm they do. Regardless of the extent to which proponents are driven by ideological or financial imperatives, this version of the metaverse is ultimately a hyper-capitalist one, in which the system depends and thrives on artificial scarcity.
Although this vision of the metaverse is polarizing, it’s unsurprisingly the one that is attractive to many corporate players. At a very basic level it opens up the possibility of a whole new asset class, a new way to sell to customers and monetize engagement and interest. Typically, they’re welcomed by crypto advocates with open arms, even despite their stated goal of freedom from such big corporations. For these advocates, corporate involvement in the space lends legitimacy to their projects, and increases the value of their crypto assets.
The benefits to corporates, meanwhile, are less obvious but might be understood as emerging from an anxiety about the future — in terms of both missing out on the “next big thing” in tech, and of a need to build new market opportunities in a perilous global economic environment. Strictly speaking, there are still no clear uses for blockchain — apart from crime. This means that many are simply playing the useful part of the greater fool.
As a key takeaway: brands tempted to get involved in a crypto-based metaverse should be extremely cautious about what they are associating with.
A metaverse that people actually like
There is another, far less-documented vision of the metaverse, currently manifesting in VRChat private spaces. It’s been called “the metaverse people actually like”, and while it may share the crypto-verse’s anti-authority streak, it lacks all of the “get rich quick” baggage.
These are genuine communities focussed on connection and self-expression. It’s a return to the “be whoever you want to be” days of the early internet, where people can discover new places, new friends, and new versions of themselves. People spend time in VRChat because they enjoy it, not because they hope that the thousands of dollars they spent on virtual property will someday be worth millions.
The problem for mainstream investors is that these people do not want to be sold to. For them, the mass corporatisation of their fledgling metaverse would perhaps be a worse fate than it ceasing to exist altogether. While it may be possible for a symbiotic, non-zero sum relationship between these metaverse inhabitants and companies who want to sell them things, it would require the latter to have a genuine understanding and connection with the community, and not merely a desire to extract profit from it.
Meta’s metaverse ambitions
Somewhere in the middle sits Mark Zuckerberg and Meta Inc. Like the first group, they are investing in the metaverse because they think it will be profitable. However, unlike the crypto-verse, there is genuine potential for utility in the technological innovations they are pursuing. Their metaverse will require advances in 3D graphics, optics, motion tracking, machine learning, image processing, and more.
While crypto does feature in their pitch for the metaverse, it isn’t front and centre. They envision a metaverse that people participate in because it’s enjoyable or useful to them, and that businesses participate in because it lets them connect with their customers in new ways. Of all the visions, this is probably the one most compatible with mainstream businesses. Unfortunately, the metaverse they are striving for simply does not exist yet, and probably won’t for years. Meta also carries a lot of baggage; customers are understandably hesitant to embrace a world where everyone lives and works on “VR Facebook”.
How do we replicate the success of the web?
As others have pointed out, in all of this there are echoes of the early days of the internet. It’s a new technology with the potential to change how we live, so of course there are competing ideas of what it should be. Just as is happening with the metaverse now, companies in the early 90s tried to get everyone on their private, controlled networks (see: AOL, MSN). Ultimately those private networks failed, and the web succeeded, because of open standards and platforms that opened up participation and innovation to all. The biggest question facing the metaverse today is: how do we replicate that success? What would an open, standards-based, controlled-by-no-one metaverse look like, and how do we get there from today’s landscape?
There are no clear answers to these questions, which again poses a big problem to those looking to be early investors in the metaverse. It is likely that most of today’s metaverse investments will be thrown away in the coming years, having never broken even. A few may get lucky by betting on the right thing at the right time. Along the way, brands will be tarnished from having been involved in un-moderated, ethically-questionable platforms that ultimately fail. The key will be to know the signals to look for which may indicate that the balance is shifting.
Businesses should continue to keep a finger on the pulse of the many burgeoning metaverses, looking for signs that something real is about to take off. It will be time to evaluate it more seriously if we start to see: open standards instead of proprietary platforms; use cases that are about customer value instead of hype or speculation; or mass participation enabled by cheap, consumer-grade hardware. Ultimately, the biggest thing to watch for is if your customers are entering the metaverse, with or without you.
Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.
