Matthew Ball is the managing partner of the early stage venture fund Epyllion, the venture partner of the Maker Fund, and the author of Metaverse.
In the first six months of 2022, the term Metaverse appeared in regulatory filings more than 1,100 times, according to the SEC report . A year ago, this number was only 260 times. If you go back further, in fact, in the past 20 years, the word has only appeared less than ten times in total. The concept of the Metaverse is mentioned more and more frequently, but no one seems to be able to explain exactly what it is, or what they are trying to build. Even corporate executives who frequently mention the Metaverse appear to be deeply divided on the issue, including the debate over VR headsets, blockchain and cryptocurrencies, and when exactly the Metaverse will be arrival.
Of course, these (arguments) haven’t stopped capital from pouring into this fiery remodel. I’m sure you’ve read a lot about Facebook’s rebranding to “Meta” and the fact that it’s now losing over $10 billion a year on its Metaverse projects. But the other six largest public companies in the world — Amazon, Apple, Google, Microsoft, Nvidia, Tencent — are actually busy preparing for the Metaverse as well. They are reorganizing internally, rewriting their job descriptions, rebuilding their products, and preparing to launch multi-billion dollar products. In January, Microsoft announced the largest acquisition in big tech history, paying $75 billion for gaming giant Activision Blizzard, which will “pave the way for exploration in the direction of the Metaverse.” In the first five months of this year, corporations, private equity firms and venture capitalists made a combined $120 billion in Metaverse-related investments, according to McKinsey & Company estimates.
So far, almost all of the above jobs are invisible to the average person. It’s like “Interstellar” itself. We don’t really have Metaverse products that we can buy, and we don’t find “Metaverse revenue” on the income statement. In fact, to the extent of its existence, it seems to have come and gone. The cryptocurrency market has collapsed. The same goes for Facebook’s market cap, which was as high as $900 billion when the company changed its name to Meta, but is now around $445 billion. Video game sales have dropped nearly 10% this year, in part because the end of the coronavirus pandemic has forced many people out of their homes.
Illustration by Micah Johnson for Time Magazine
To many, it seems like a good thing that the development of the Metaverse concept has been hit hard.These tech giants have already had a huge impact on our lives and the technology and business models of the modern economy. And the internet today has a lot of problems, so why not address them before moving on to what Mark Zuckerberg calls the “next generation internet”?
The answer is actually in the question itself. The Metaverse, a concept that has existed for 30 years but has actually been in the minds of humans for a century, is taking shape around us. Every few decades, there is a platform change—such as the transition from mainframe computers to PCs and the Internet, or the subsequent evolution to the mobile Internet and cloud computing. Once a new era is formed, it is difficult to subvert who will lead it and how. But between eras, these things usually change. If we hope to build a better future, then we must shape it as aggressively as those who invested in building it.
So what is this future? Think of the Metaverse as a parallel virtual plane of existence that spans all digital technologies and even controls most of the physical world. This structure helps explain another common description of the Metaverse as a 3D internet, and why building it is so difficult, but worthwhile nonetheless.
The Internet as we know it today spans nearly every country, 40,000 networks, millions of applications, over 100 million servers, nearly 2 billion websites, and tens of billions of devices. Each of these technologies can communicate and exchange information consistently, people can find each other “on the web”, share online account systems and files (a JPEG, an MP4, a piece of text), and link jumps with each other (think a how news publishers link another media outlet). Nearly 20% of the world economy is considered “digital,” while much of the remaining 80% also runs on the Internet.
While the Internet is resilient, broad, and powerful, it was not built for immersive, interactive experiences involving large numbers of participants—especially when it comes to 3D imaging. Instead, the Internet was primarily designed so that a static file (like an email or spreadsheet) could be copied and sent from one device to another so it could be reviewed or modified independently and asynchronously. That’s part of the reason why a simple two-person video call is so unreliable, even in an age of the “streaming wars” and the trillions of dollars in big tech companies. (Furthermore, there is no consensus on a file format or convention for 3D information, and there is no standard system for exchanging data in virtual worlds. We also lack the computing power to complete our imagined Metaverse. We will need many new devices to make it happen — Not just VR glasses, but devices like holographic displays, ultrasonic force field generators, and, bizarre-sounding, devices that capture electrical signals passing through muscles.
We don’t know in advance exactly how important the 3D Internet might be to our global economy, just as we don’t know the value of the Internet. But we do have some opinions on the answer. As internet connections and computer processors have improved, we’ve moved from a single text to web pages and web blogs, then online profiles (like Facebook pages) and video-based social networks, emojis, and streams of information.The amount of content we generate online has grown from a few message board posts, emails or blog updates every week to multimedia content that encapsulates the details of our lives. It seems likely that the next evolution of this trend may be a persistent, “living” virtual world that is not a simple record of our lives (like Instagram) or the tool we communicate with (like Gmail), but a place where we also exist in Among them, and in 3D (hence the focus on immersive VR headsets and avatars).
Nearly 100 million people now log into Roblox, Minecraft and Fortnite Creative every day, platforms that operate tens of millions of interconnected worlds that support consistent virtual identities, virtual goods, communication suites, and are accessible from most devices . Most of the time on these platforms is for leisure — playing games, going to concerts — but we’re starting to see people start experimenting and exploring more.
Electric Daisy Carnival is the first music festival in Roblox, taking place in October 2021
Education is a classic use case that we have long expected to be transformed by the digital age, but so far there has been little substantial progress. The cost of higher education has grown by more than 1,200 percent since 1983; health care and services, the second-highest cost growth in the United States over the same period, grew at half the rate of education. The challenge we face is that the real thing requires no less resources than it did decades ago, and when moved to a remote computer screen, we lose the human-to-human interaction and the experience of participating in experiments in person, which Definitely not a substitute for Youtube videos.
In the Metaverse, Magical Classrooms are possible. For decades, students have learned about gravity by watching their teacher drop a feather and a hammer, then watch Apollo 15 commander David Scott do the same on the moon. Such demonstrations don’t need to disappear, but could be replaced by creating elaborate virtual Rube Goldberg machines that students can then test under Earth-like gravity, on Mars, or even in the sulfur rains of Venus’ upper atmosphere. Instead of dissecting a frog, we can travel through the frog’s circulatory system, unlike the way we drive through the mushroom kingdom in Mario Kart. And all of this is available anytime, anywhere, regardless of geographic location or local school resources.
In 2021, neurosurgeons at Johns Hopkins University used an augmented reality headset to perform the hospital’s first-ever remote surgery, giving surgeons an interactive display of a patient’s internal anatomy. Dr. Timothy Witham, who performed the surgery, also heads the hospital’s spinal fusion lab, which he likened to having a GPS. This frame of reference is important. We often think of the Metaverse as replacing what we do today—like putting on a VR headset instead of using a smartphone or watching TV—but instead of GPS replacing cars, we’re driving cars with GPS.
Earlier in 2021, Google released its Project Starline device, which uses machine learning, computer vision, a dozen depth sensors and cameras, and a fabric-based multi-layer light field display to create 3D holographic videos without the use of blending Realistic special glasses. Compared to traditional 2D video calls, Google says its Starline technology results in a 15% increase in eye contact, a 25-50% increase in non-verbal forms of communication (gestures, nods, eyebrow movements), and a 30% improvement in recall of conversations.Few of us like Zoom; perhaps some of our unhappiness can be alleviated by adding another dimension.
Infrastructure is another good example. Hong Kong International Airport now operates a real-time digital guidance facility, allowing airport operators to use real-time 3D simulations to determine where passengers and aircraft should be guided. Multibillion-dollar, decades-long urban projects are using these techniques to determine how a building might affect traffic flow and emergency response times, or how its design will affect the temperature and sunlight in local parks on specific days. These are mostly irrelevant simulations.The next step is to bring them online — like going from offline Microsoft Word documents to cloud-based collaborative documents — and turn the world into a massive digital development platform.
However, the lack of precise explanation of what the Metaverse means for society as a whole is the source of some voices of doubt. People are seeing billions being put into what looks like a game, (which is hard to accept). In reality, though, we can think of the Metaverse as the fourth era of computing and networking—the first three were mainframe computers from the 1950s to the 1970s; personal computers and the Internet from the 1980s to the mid-2000s; and The era of mobile internet and cloud that we are living through today.Each era has changed who, when, where, why and how to access computing and network resources. The effects of these changes are far-reaching, but they are also difficult to predict concretely.
Even the biggest believers in the mobile internet have struggled to predict something other than “more people, more online, more reasons.” Having a deep technical understanding of digital networks will not illuminate the future, nor will deploying billions of R&D dollars. Services such as Facebook, Netflix, or Amazon’s AWS cloud computing platform are obvious in hindsight, but their business models, technologies, design principles, etc. are difficult to “accept” in the early days. In this regard, we should recognize that chaos, confusion and uncertainty are prerequisites for disruption to occur.
In addition, there are some specific issues that could be clarified. The Metaverse is often incorrectly described as an immersive virtual reality headset, such as the Meta Quest (Oculus VR), or augmented reality glasses, the most famous example so far being Google’s smart glasses. VR and AR devices may become the preferred way to access the Metaverse, but they are not the Metaverse itself. Consider that smartphones and mobile internet are not the same thing. Genki Universe is also not Roblox, Minecraft, Fortnite, or any other game; these are virtual worlds or platforms that are likely part of Genki Universe, just like Facebook and Google are part of the internet. For similar reasons, treating Chaos World as singular is like saying “The Internet” instead of “an Internet”. Another issue of frequent confusion is between the Metaverse and Web3, cryptocurrencies and blockchain. These three may be an important part of realizing the potential of the Metaverse, but they are just principles and technologies. In fact, many leaders of the Metaverse are still skeptical that cryptocurrencies have a future.
The Metaverse should not be thought of as a big patch to the internet, nor should it be thought of as something that will replace all mobile modes, devices, or software. It will generate new technologies and behaviors. But that doesn’t mean we have to leave the things we love behind. I still write on my PC, and it’s probably still the best way to write long texts. Today, most Internet traffic is generated and terminated on mobile devices, but almost all traffic is carried over fixed-line cables and using the Internet Protocol suite designed in the 1980s.
The Metaverse isn’t here yet (even though some executives will claim it has, or at least is coming). At the same time, the transition has not experienced a “switch flip”. We are in the age of the mobile internet today, but the first cellular phone was in 1973, the first WiFi was in 1991, the smartphone was in 1992, and so on until 2007 year’s iPhone. While it is impossible to say when the development of the Metaverse began, it is clearly ongoing. In mid-2021, weeks before Facebook revealed its intentions for the Metaverse, Tim Sweeney, CEO and founder of Fortnite maker Epic Games, tweeted a preview of the company’s 1998 game Unreal. The code was released, adding that players “can enter portals, travel between [different worlds]…no battles, [will stand] in a circle chatting”. These experiences didn’t make waves at the time for a number of reasons – too few people were online, the tools to create the world were too difficult to use, the devices that could support them were too expensive and heavy, and so on. “We’ve been craving the Metaverse for a long time…” he added a few minutes later, “but it’s only in the last few years that a sufficient number of working parts have started to come together quickly.”
“Unlock the Metaverse” is seen on a billboard in Times Square during the 4th NFT.NYC on June 20, 2022 in New York City
There is also a common misconception about the Metaverse, which is that the Metaverse doesn’t have to be “hysterical.” Because the term Metaverse comes from a dystopian novel, Avalanche by Neal Stephenson.Avalanche predecessors, such as William Gibson’s “Neurodancer” (1984) and Philip K. Dick’s “Bubble Trouble” (1953), also left readers with a Metaverse that made the real world worse. Feel. Drama is the root of most novels, and utopias are rarely the setting for popular stories. But since the 1970s, many Metaverse archetypes have emerged that are not centered on conquest or profiteering, but on cooperation and creation. Every decade, the realism of these worlds improves, as do their functions, values, and cultural impact.
The foundations of today’s Internet have been built over decades through the work of government research labs, universities, and independent technologists and institutions. Most of these nonprofit collectives typically focus on building open standards to help them share information from one server to another, and in doing so make it easier to collaborate on future technologies, projects and ideas. The benefits of this approach are extensive, and anyone can access or build the Internet from any device, on any network, at low or no cost.
None of this stops businesses from monetizing the internet or building closed experiences through paywalls or proprietary technology. On the contrary, the “openness” of the Internet allows more companies to be established, reach more users, and realize greater profits, while also preventing the pre-Internet giants (telecoms, crucially) from taking control of the Internet. Openness is also why the Internet is considered to have democratized information, and why most of the most valuable public companies in the world today were founded (or reborn) in the Internet age.
It’s not hard to imagine how different the internet would be if it had been created by multinational media conglomerates to sell widgets, serve ads, or collect user data for profit.
However, the “enterprise internet” is only the current expectation of the Metaverse. When the internet was born, government labs and universities were virtually the only institutions with the computing talent, resources, and ambition to build a “network of networks,” a commercial potential that few in the for-profit sector imagined. None of this is true when it comes to the Metaverse. Instead, it was pioneered and established by private enterprise.
In 2016, long before corporate executives around the world were seriously considering the Metaverse, Epic Games’ Sweeney told VentureBeat, “If a central corporation gains control of the [Metaverse], they will become more powerful than any government, become gods on earth”. It is easy to find this claim to be an exaggeration. But the Metaverse could generate as much as $13 trillion a year in revenue by 2030, according to Citibank and KPMG. Morgan Stanley estimates both the US and China at $8 trillion, similar to Goldman Sachs’ global forecast of $2.5 to $12.5 trillion; McKinsey forecasts $5 trillion globally. Nvidia founder and CEO Jensen Huang believes that the GDP of the Metaverse will eventually exceed the physical world.
It is here that fears of utopia seem fair rather than alarmist. The concept of the Metaverse means that more and more of our life, labor, leisure, time, wealth, happiness, and relationships will be spent in virtual worlds, not just with the help of digital devices. It will be a parallel plane of existence that sits above and combines our digital and real economies. As a result, the companies that control these virtual worlds and their virtual atoms will be more dominant than those leading the way in today’s digital economy.
As such, the Metaverse will sharpen many of the difficult issues of digital existence today, such as data rights, data security, misinformation and radicalization, platform power, and user happiness. So the philosophy, culture, and priorities of the companies that are leading the way in the Metaverse will help determine whether the future is better or worse than our current moment, not just more virtual or more profitable.
As the world’s largest corporations and most ambitious startups pursue the Metaverse, we – users, developers, consumers and voters – must understand that we still have the power to control our future and to re- shape the status quo, but only if we act now. Yes, the Metaverse may seem daunting, even downright terrifying, but this moment of change is our chance to bring people together to transform industries that resist disruption and build a more egalitarian global economic system.
Much about the future is uncertain, just as the Internet was in the 1990s and early 2000s. But we can understand how and why the Metaverse might work; what experiences might be available when, why, and to whom; what might go wrong and what must go right. As those Internet executives have often reminded us, this is in the interest of trillions of dollars and, more importantly, the future of all humanity.
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