By this time, you’ll already have heard of the metaverse and wondered what it’s about. Is it something as fantastical as Ready Player One, where you get to immerse yourself in different sandbox experiences, own cool gear, and maybe even fall in love? Or is it just an online world akin to The Sims, where you can play as an avatar but are largely limited by the gamemakers’ design?
Talking about the metaverse can be tricky, especially since there’s no ubiquitous definition of what exactly the metaverse is or what qualifies as being a metaverse. In this article, we’ll go with the most basic definition, courtesy of Investopedia:
“The metaverse is a digital reality that combines aspects of social media, online gaming, augmented reality (AR), virtual reality (VR), and cryptocurrencies to allow users to interact virtually.”
Here are some examples for context: The SandBox, Facebook’s Meta (with Zuckerberg’s cringe-worthy explanation), Decentraland, Star Atlas, and Illuvium. They all operate on an open-world concept but are built on the blockchain, compared to video games that have huge maps like Grand Theft Auto or Second Life. The big difference between a metaverse and video games is that metaverses feature real-world currency, and players can “own” part of a metaverse and build upon it to generate real-world value.
So what’s with all the hype behind the metaverse? Well, based on what marketing teams from major tech companies are publicly stating, here are a few:
- An immersive 3D experience
- Better social interactions online
- Improvements to online learning and education
- New opportunities for financial gain
But remember, with all great technology, there’s a tradeoff. Take Google search, for example. We don’t think twice about Googling bolognese recipes or flight tickets to Hawaii—but on the other side of that seemingly innocuous white page, the company’s tracking everything we search and selling our data to brands. That’s how we get targeted advertising.
The metaverse is no different. Built on the blockchain, the metaverse is a goldmine of data and a new way for companies to get rich. And they can do so because metaverses haven’t quite yet fallen under government regulation, and that’s not surprising since these are still early days.
According to Metaverse – Thematic Research, a report produced by GlobalData Thematic Research, “Metaverse developers will have their own data protection policies and prefer to self-regulate in the initial days of commercializing their platforms.”
So why are companies and brands jumping on the metaverse bandwagon? Because according to Verified Market Research, the metaverse market size was valued at USD 27.21 billion in 2020 and is projected to reach USD 824.53 billion by 2030. This dwarfs the eSports market by comparison, which is projected to reach USD 5.74 billion by 2030.
The value comes from the trading that happens within a metaverse. While all metaverses vary, you can be certain that each will have some financial component, such as the need to buy land, purchase an NFT, or hold a certain amount of X cryptocurrency in order to do anything within the virtual world.
On top of that, the biggest goldmine in metaverses is the data. “Oh, but MetaMask and crypto wallets are anonymous,” you might say. And to that, I would say, “yes, but only up to a point.”
These days, Web3 companies are popping up like acne on a middle schooler, with many offering custom APIs and JavaScript codes that can track and compile every transaction a connected wallet makes. They can see what tokens you’re holding, how you trade them, every NFT you’ve ever bought or traded, and what referral link brought you to the site where you connected your wallet. This data might not matter to you, but when metaverse developers have all this data for thousands of users, they’ll know exactly how to keep you in their virtual world, much like how social media apps are designed to be addictive, despite our refusal to admit that they aren’t.
Similar to mobile game design, metaverses are focused on user retention and optimizing revenue using analytics and metrics and not so much on maximizing fun. As much as I hope that tech companies or game publishers will develop a metaverse designed to offer the end-user an enjoyable, stimulating, and cost-friendly experience, I doubt that’s what we’ll get.
The metaverse, and more broadly, thousands of metaverses, are coming. At this point, due to the limitations of technology and a lack of clear direction about what benefits the metaverse will offer, they aren’t really worth using. The graphics are poor, utility is limited, and there aren’t enough active users to justify spending hours a day within a virtual world. But rest assured, developers will eventually solve these pain points, and by then, the question will be: “Is the metaverse worth my time and money, or is it just another avenue for tech companies to treat us and our data as the product?”
All opinions expressed in this piece are the writer’s own and do not represent the views of KrASIA. Questions, concerns, or fun facts can be sent to [email protected].