Heralded by Facebook’s splashy name change to Meta, the metaverse is now the hottest topic in tech circles around the world. Put on your virtual reality (VR) googles and dive into a three-dimensional next-generation internet, populated by avatars going about their business doing…what?
Dig into the metaverse buzz, and you’ll find yourself immersed in talk of Web 3.0, virtual real estate sales, NFTs, and other get-rich-quick endeavors of questionable legitimacy. You might come away with the conclusion that the metaverse is nothing but scams and snake oil.
Without the nonsense, however, the question remains: what will people actually do in the metaverse? Why would anybody care? And if we peel away the hype and scams, is there anything left?
How Many Metaverses Do We Need?
People refer to ‘the’ metaverse as though there were only one, the way we talk about ‘the’ internet. Much of the hype around the metaverse indeed suggests that there will be only one, and all the individual metaverse projects that are getting people so excited will somehow connect together into a single virtual world.
Only that’s not what is happening. Every metaverse effort is its own walled garden, from Meta’s next-generation Facebook to the venerable Second Life (which is still our best example of the metaverse, years after most people lost interest in it).
Microsoft acquired Activision Blizzard to build their metaverse, and to be sure, modern gaming is perhaps the most advanced exemplar of the metaverse we have today – think World of Warcraft (WoW) with VR goggles. Or Minecraft. Or any of dozens of other similar virtual world games.
How these virtual worlds would connect, however, is a mystery. Would it even make sense to connect WoW to Minecraft? Even more perplexing, how might Microsoft connect WoW to Microsoft Teams – not to bring Teams into WoW (which might at least serve a purpose), but bringing WoW into Teams (which simply boggles the mind).
Let’s say for the purposes of argument, however, that everyone building various disconnected metaverse projects all got together and agreed that they should all connect to the same global metaverse, allowing everyone’s avatar to roam from one to another as easily as we surf the web today.
The first thing this committee would need to do would be to hammer out a set of open standards they could all agree upon in order to support the functionality necessary for avatars to wander around and interact with virtual items across the metaverse.
Unfortunately, there is little interest in hammering out such standards. The few standards efforts out there are rudimentary, falling well short of the sophistication necessary to build a single metaverse worthy of being the next internet.
Instead, it seems that everyone is rushing to build out money-making opportunities. From selling virtual real estate to more mundane advertising-based business models, the driving force behind the metaverse buildout today is money, pure and simple.
The big problem with this rush-to-the-bucks mentality is that there is hardly any audience for the metaverse – no throngs of consumers to view the ads or fight over virtual square meters of virtual real estate. And without the proverbial eyeballs, there’s little money to be made.
What is the Metaverse For, Really?
Avatars wandering around virtual real estate, interacting with each other, with various objects, all the while viewing ads.
So what? Why would anybody bother?
The answer falls into three buckets: consumer applications, business applications, and scams.
Consumer applications are the most viable. Multiplayer gaming is the obvious starting point, but opportunities for virtual events from music to sports are all well within the realm of possibility.
Would you put on VR goggles and pay for a ticket to join your friends from across the country in a virtual stadium to see your favorite team play without having to leave your living room? Perhaps. At least one might imagine demand for such events.
Business applications, on the other hand, are underwhelming at best. Virtual conventions, maybe? The pandemic era drove demand for such conferences sans-VR, with modest success. But will people see value in attending them with goggles on, especially as in-person conventions resume?
Another popular business metaverse application is the virtual meeting. Instead of the now-mundane Zoom boxes, would you don your goggles to sit around a virtual conference table? Maybe, but once the novelty wears off, I think we’ll mostly go back to Zoom.
There are a handful of other use cases, including training and the like. Some possibilities lend themselves more to augmented reality (AR) than VR, like equipment servicing or driving-related applications. AR, however, leaves you in the real world, so it’s not clear this technology even belongs in the metaverse.
Beware the Scams
As I’ve written about before, much of the hype surrounding the metaverse centers on various scams, including cryptocurrency, Web 3.0, non-fungible tokens (NFTs), and decentralized finance (DeFi).
Because crypto is a Ponzi-like pump-and-dump scheme, the only way to make ‘real’ money with it is to convince suckers (aka ‘greater fools’) to buy into the scam.
As a result, any opportunity to expand the pool of greater fools is the scammers’ primary focus (scammers here including anyone who owns crypto and wants to cash out for a profit eventually). The metaverse is presumably a perfect opportunity for attracting such fools – assuming it can attract an audience at all.
NFTs also have an unfortunate synergy with the metaverse. NFTs are cryptographically unique links to digital assets – think a bookmark that points to a JPEG image.
Only NFTs don’t have to point to JPEGs. They could just as easily point to virtual real estate in the metaverse.
In reality, NFTs are simply bookmarks. That virtual real estate NFT? It’s not real estate. It’s not even virtual real estate. It’s an imaginary street address for a place that doesn’t exist. How much is that worth to you?
The Intellyx Take
The metaverse may simply not survive the #megarug pull – what I call the impending global collapse of crypto and all related scams. It’s not a matter of if. It’s a matter of when. Just ask Bernie Madoff.
There is hope, however. There is nothing about virtual sporting events, say, that depends upon the scam elements of the metaverse – assuming, of course, you pay for your tickets with a credit card instead of crypto.
Even if the metaverse does survive the megarug, it’s still not clear we’ll ever get a single global metaverse, or that it will have business applications beyond a handful of basic use cases.
What is obvious, however, is that viable metaverse business opportunities will depend upon a large population of metaverse denizens interested in what those businesses have to offer – without having to worry about scammers trying to peddle worthless virtual magic beans.
© Intellyx LLC. Intellyx publishes the Intellyx Cloud-Native Computing Poster and advises business leaders and technology vendors on their digital transformation strategies. Microsoft is a former Intellyx customer. None of the other organizations mentioned in this article is an Intellyx customer. The author has never owned, nor does he intend to own, any cryptocurrency or cryptocurrency derivatives. Intellyx retains editorial control over the content of this document. Image credit: Serene Jewell.