What we need to build a metaverse (and why we can’t do it yet)

Facebook’s announcement that they would change their name to Meta was the change heard around the world. Soon there were TV commercials with promises that this would be the time for the Metaverse. The word Metaverse is everywhere (often causing it to lose meaning) and some of the biggest investors and most prolific companies in tech and entertainment are clamoring for an early piece of the pie.

But let’s make one thing clear: we are nowhere near the inception of the Metaverse.

I’ve been writing, reading and waxing poetic about XR (virtual, augmented and mixed reality) since 2014, right around when Oculus was bought by Facebook Meta for a whopping $2B. I also made my name in the games world, being one of the first analysts to cover the digital games market. 

The major difference between the two is that XR is the culmination of many different technologies while digital games are the continuation of an antiquated one. Digital games are a new chapter while XR is its own book in a series of technological narratives that include everything from TV to computers to smartphones to the internet. That’s why digital games never had to go through something that XR is struggling through — a hype cycle. But its hype cycle is not like the classic Gartner’s Hype Cycle. 

We will see renewed interest as the technologies that support the Metaverse enter the equation and mature. Part of why the Metaverse has hit a peak is because we finally have the beginnings of many of the puzzle pieces to build it. However, many of those tools are still being developed and mass awareness is low so as they mature, the Metaverse hype will ebb and flow in a unique way.

The XR industry saw this peak 5 years ago and is just starting to dig its way out of the trough, but the Metaverse won’t be beholden to the same cycle

The Metaverse is the culmination of everything that led to XR, and more, and that’s why we are in such exciting times. All the cool parts of dystopian sci-fi fantasies like Tron and The Matrix and Ready Player One are coming to life without most of the icky parts (well… for now.)

We already have small digi-verses that combined can create the Metaverse. Social media, online games, virtual reality, and so on — they all are microcosms that allow us to escape to a digital world where we can be whoever we want to be without sacrificing who we are in real life. Those are building blocks for the Metaverse, but no one piece is the Metaverse.

The Metaverse has been dependent on many media channels to be able to exist, but VR, the vehicle to delivery, is still ramping up

The Metaverse doesn’t exist… yet

Let’s first define the Metaverse. In its simplest terms Casey Newton at The Verge  says it is “a convergence of physical, augmented, and virtual reality in a shared online space.” But that’s like really really simple. It leaves out important attributes like the social, the economic, the gamified and the customizable. So if we flesh it out a bit, the Metaverse is a self-contained virtual world where you can do all the things you do in the real world — and more — as your digital self. By self-contained, I mean it can function largely independent of the real world. You don’t need to be in front of someone in real life to speak to them. You don’t need to have a real piece of land to own a virtual one. And you don’t need to have an actual Playstation to play like you do.

The Metaverse needs 4 things

There are digi-verses everywhere that contain the foundation for the Metaverse (they themselves are not Metaverses because, as Tony Parisi points out, there can only be one Metaverse.) There are sites like Decentraland and Sandbox. There are games like Roblox, Fortnite and Minecraft. There are VR experiences like VR Chat and Horizon Worlds. And there is good ol’ fashioned social media. What they all have in common are at least some of the four things essential to the Metaverse.

1) Social

While social is essential to the Metaverse, we will have to grapple with toxicity and harassment – just like we do in the real world. Credit: Morgan Schweitzer for Reveal

A Metaverse must allow for social interactions, and they must be with other actual people. As with life, the Metaverse is not a single-player experience. Humans crave social interaction – whether it is in person or on social media or over the mic while gaming. The challenge that The Metaverse will need to overcome and that we are seeing now with virtual reality is how people interact when there are no real consequences in their actual life. There is something violently intrusive about harassment in a virtual space where you feel like someone is in your physical space. It feels real and the Metaverse will need to grapple with that as it facilitates shared experiences.

2) Playful

Rec Room’s virtual playrooms make it the most popular game on PSVR

As Johan Huizinga pointed out in Homo Ludens, play presupposes human society as it is inherent to the existence of humans and animals. Basically, we are born to play, and why would that be different in a virtual world? After all, the digital games market is worth roughly $150B worldwide. And one of the most popular game types is multiplayer online games. Rec Room, the most played game on the PSVR, is a virtual reality playroom and shows there is a heavy thirst for virtual, gamified social spaces. 

3) Customizable

The Sims was a pioneer in bringing us customization and it was arguably the best part of the game

One of the coolest things about the Metaverse is the idea that you can be whoever you want to be and live in a different world from the real one. This requires the ability to customize your experience. Every attempt at the Metaverse today has hefty customization capabilities which are intrinsic to the fantasy of living another life. The Sims and Second Life were early testaments to people’s desire to do more than just play a side scroller or an arcade game. More and more people want to feel a sense of presence and agency in digi-verses, and when we feel present we want to feel represented and viewed as our chosen self.

4) Commercial

As we will see with the Metaverse, Nike saw real-world value in RTFKT’s digital-only assets

For a society to function, there needs to be an economy of some kind. The Metaverse is no different. As more people spend time in the Metaverse, digital assets will grow valuable similar to items in real life because you’ll be living with and around it. Your life in the Metaverse will be affected by the things and services you can buy and sell. Perhaps your very existence will be dependent on your ability to earn a meta-living. Permanent, authenticated digital items will be essential to ensuring you have a truly customized and fulfilling experience. But whether we like it or not, the Metaverse economy will fuel and be fueled by the real world. Some users may be die-hard cryptofiles, but critical mass, something the Metaverse needs, will be driven mostly by people who still love cash. Users will inevitably find ways to cash out of the Metaverse and, as we saw this month with Nike’s acquisition of NFT collectibles studio RTFKT, real-world companies will do whatever they can to monetize what’s inside from the outside.

So what will it take to build the Metaverse?

It comes down to awareness, seamlessness and adoption.

If you’re reading this you probably already know a lot of the terminology I’m using. You care about the Metaverse enough to read an article about it. But most of the world doesn’t. For example, less than a fifth of Americans have ever tried VR, a staple in the Metaverse experience, and trying VR is essential to truly understand it. And let’s face it — how many people actually understand what cryptocurrency, blockchain or NFTs are? Don’t just think of you and your friends. Think of your grandmother. Think of your parents’ neighbors. Think of me, like, a year ago (yea, I admit it.) Awareness and adoption go hand in hand. VR is a huge driver of the Metaverse, and it still only boasts around 20M consumer headsets in the world, outside of China. While the experiences have come a long way, it is by no means seamless.

Awareness gets people to try it, seamlessness gets people to use it, and adoption gets people to live it. That’s what makes a Metaverse.