What is the Metaverse? Why Facebook and Others are Betting Big On it?

Mark Zuckerberg may have asserted his power over the social network, but now he’s on to something else. Now, he wants you to live inside a parallel universe. Eat, play and work inside another world that you can, in a way, “teleport” yourself in and out of. (We hear casting bells for another David Fincher directorial!) ;)

We’re talking, of course, about Facebook’s plans to “rebrand” itself from a social network company to a “metaverse company” (not sure if it will entail a change in the company’s name).

What this means is that the company is gradually steering into a future that embraces the concept of metaverse, or an idea that users of the web will soon live, work and lead their lives inside a virtual environment.

And it seems like the company is now pushing into this path full-throttle. Apart from investing heavily in VR (Virtual Reality) and Augmented Reality (AR) businesses, Facebook is also collaborating with governments and other stakeholders to launch these services in the best-suited markets.

Some are calling it the next step for Big Tech, and a giant step for the internet. Others maintain their doubts, speculating that the metaverse venture is merely a distraction from Facebook’s own problems — repeated technical breakdown and rising regulatory crackdown from governments around the world.

Let’s see what it’s all about.

What is the Metaverse?

Quite literally, the portmanteau of the Greek term “meta” (meaning beyond) and “verse” can be used to denote a place that is beyond the world or universe as we know it, but feels just as real.

“Metaverse” first appeared in Snow Crash, a science fiction novel from the 1990s, to describe a merging of the physical, augmented and virtual reality in a shared online space.

Over the years, metaverse has been a recurring theme in sci-fi where users, via their digital avatars, can walk around and interact with each other in real time. For instance, they could sit around a virtual meeting table with remote colleagues. Or they could walk up to a restaurant to meet a friend who lives in another country.

A virtual reality space is not entirely unheard of. In fact, many video games (Fifa, Fortnite, Minecraft, Animal Crossing etc.) employ the use of gadgets or devices to access virtual spaces where the players control the characters and events on screen. Now imagine, instead of sitting at a console and watching the game unfold, the player could be inside the game, participating not from the outside but as a character embedded in it.

The Ultimate Social Technology

The gaming companies may have made the first move into metaverse but the type of virtual worlds envisaged by tech companies like Facebook are expected to be more expansive and inclusive. They/this could entail every aspect of life starting from office, entertainment, relationships etc. where people can interact, communicate and collaborate with each other through a digitised environment.

Facebook, in particular, has had a kick-start in the area by making early forays into the metaverse through big investments and acquisitions. It already has its own in-house products — the Oculus VR headsets, wrist bands and goggles — which users require to enter the Facebook Horizon, an immersive virtual environment. Last month, the company unveiled the Ray-Ban Stories, which many observers interpreted as its first instance of selling the metaverse concept to the public.

And now the company is upping the ante by planning a full-fledged metaverse ecosystem with new protocols, new payment systems, new everything. Mr. Zuckerberg also aims to make it an interoperable tool meaning that the “virtual environment” will be accessible on all devices and headsets eventually, not just Facebook’s.

But how is that going to work?

Into the Metaverse Industry

Companies like Roblox and Fortnite have already created embryos of metaverses on their platforms. Epic Games, the developer of Fortnite has raised close to $1bn as capital towards its metaverse ambitions and is most-primed to profit from its advent.

FYI: In April 2021, Fortnite hosted five virtual concerts by Travis Scott, who appeared as an avatar in the game. The event was followed by more than 12 million gamers.

In fact, Microsoft has revealed its own plans to launch an “enterprise metaverse” due to its unique position and AI capabilities to help companies develop metaverse apps. Which brings us back to the premise that (a) no single company is meant to own or run the metaverse, and (b) Facebook isn’t the only company betting big on it.

The VR market is estimated to grow from $3.1bn in 2019 to $57.55bn in 2027. Plus, the revenue generated from virtual reality businesses is projected to shoot up to $390bn by 2025. But it’s not just the “because money” rationale that is garnering heavy investments from companies on a concept that some might write off as science fiction.

Facebook is uniquely poised with its rich user roster and cross-continental digital presence to bring the metaverse reality onto people’s palms. Social media’s role in amplifying digital presence, in a way, began with the launch of Facebook and it is perhaps only fitting that the company remains instrumental in taking it to the next level.

But it runs deeper than that. One of the things stirred by the pandemic is the need for the growth of remote functionality. Maintaining a virtual presence is no longer a figment of the fantasy movie genre but a necessity owing to social-distancing protocols and other interactive embargoes (travel restrictions, cross-border migration etc.).

This is where the metaverse could augment one’s shared realities. With an increasing number of people spending their time online, there is an expectation that the internet is where people will maintain their continued presence and spend their money. Wherever people spend money is where newer aspects of culture and society and, eventually, the economy will follow.

Virtual reality also develops use cases beyond entertainment such as physical identification — passports, driver’s license, Aadhaar etc. The spatial awareness and digital embodiment of one’s identity will make a crucial play in a society where everyone is interested to know about everyone’s life and choices, be it real or virtual. The gold-standard of real-world identity proof may no longer be necessary for creating authentic user experiences.

The Matrix Downloaded

Although there is still no consensus on any concrete version of what the metaverse may look like, the converging interests of the gaming, tech, software and social media companies in the area is fomenting the idea of a shared and all-encompassing metaverse in the future.

But regardless of whatever forms it takes, the metaverse will require the evolution of technology across infrastructure, consumer-friendly hardware and simplified digital interfaces. And that is where companies like Facebook and Microsoft stand to gain from their early inroads into the industry.

But the creation of a communal cyberspace of this scale also requires standardisation and cooperation among these tech players who are not prone to collaborating with competitors. However, when you think about the scale of the digital economy that stands to be created out of the metaverse, it could be too enticing for companies to shy away from and ultimately enable a massive exercise in cooperation.

Not only that, but its massive implications on society will create new opportunities and challenges for marketing, communications and branding. It’s how the protagonist from Ready Player One narrates:

"People come to the OASIS for all the things they can do, but they stay for all the things they can be."

The OASIS is the 21st century metaverse.

(Originally published October 21st 2021 in transfin.in)