We are still in early days. But what does the metaverse look like? We attempt to describe some of the key players and what their piece of a combined metaverse will be like. It’s very much “a work in fast progress” but it will give us some idea of where we are and where we might go from here.
We wanted to find ways in which we could categorize the different contenders in the metaverse We thought that there were three primary ways we could categorize them”
- Their primary purpose or philosophy – are they primarily entertainment, business, commerce, education or social? There will be hybrids and it’s likely that there will also be specialty metaverses. In some ways, you might divide even hybrids into one of two philosophies. Are they competitive? That’s the traditional gamer model where someone wins and someone loses. Or are they collaborative? There are games that are collaborative, but this opens to a wider group of those who want to socialize, share experience or explore collective challenges.
- How the interface works – this breaks down into immersive virtual reality experiences like those proposed by Facebook/Meta. There is another group that looks at an augmented reality like Apple is reported to be developing. Thirdly, there is a minimalist approach that requires only a flat screen and a laptop, or a tablet and mobile phone area.
- The business model or how they are funded – does the user pay a direct fee or subscription? Or is the model based on how much you can monetize the experience of the user via a marketplace or virtual products. There is a third alternative where you sell the attention of the virtual audience much like Facebook does today.
- Who owns or at least who controls them? Is it a corporation? Are they controlled by their customers? Are they controlled by governments? Are they a collaborative or member driven organization?
Each of these aspects will have a real impact on how these multiple metaverses are built and how they are run. There are no neat dividing lines. No matter how we look at it, there are going to be characteristics of each of the elements we defined above.
But let’s look at the potential “superpowers” of the metaverse. Although everyone is paying attention to Facebook/Meta, there are some other large corporate contenders we cannot ignore:
- Meta/Facebook – an advertising company.
- Apple – more than a hardware company. Apple’s is an integrated ecosystem
- Microsoft is a software, services and content/gaming and to some degree a hardware company.
It might not have gotten the same attention as Facebook, but Microsoft launched its virtual world with its “Mesh for Teams.” If Facebook is talking about a new version of social media, Microsoft’s message is a “new version of the internet” where you can:
- Interact with it
- Work in it, be in an office or walk a factory floor
- Collaborate with co-workers
Although Mesh features the same cartoonish avatars as Facebook/Meta, they have sights on something much more realistic. Microsoft has been honing that training the US military with what one assumes are very realistic battle games. As CEO, Nadella said “The closer we can reflect our physical selves in the digital realm, the more of these barriers we can break down.”
Microsoft has their own VR headset which is at the highest end of the pricing continuum. Their Hololens AR Headset was first developed for training the US armed forces which is a huge “workspace market” and an enormous potential customer for Microsoft. Recently, Microsoft has also been talking about an “industrial metaverse” using the concept to make “digital twins” of entire factories and industrial plants.
Their commercial headset was announced in 2019 at a price of $3,500 – a long way from Facebook’s Oculus set which costs between $300 and $600.
While the difference between Microsoft and Meta/Facebook may seem outrageous, we live in a world where people will spend 1 to 2 thousand dollars on a phone. Also, if their initial focus is on the government and corporate applications, the price becomes less of an issue.
Also, it’s very likely that the price will also come down when Microsoft goes after a wider market.
Microsoft will inevitably extend itself from the corporate to the consumer world if only because of their huge gaming presence. The purchase of Minecraft allows Microsoft the ability to train countless children on how to create content in a relatively open metaverse.
Also, like Meta/Facebook, Microsoft has also been investing in artificial intelligence technology — especially natural language processing — which will be important for no-code/low-code creative tools and virtual beings.
But Microsoft is not only in the corporate collaborative space. As we have noted, they a huge presence in the gaming metaverse.
While Facebook is spending10 billion a year and from recent discussions, trying to cut that back, Microsoft purchased a huge gaming company/platform – Activision for $69 billion. That’s roughly seven times the ten billion that Meta is talking about spending every year.
The purchase made Microsoft the third largest games maker in the world. Clearly gaming is core to Microsoft’s vision of the metaverse. More than that, Microsoft also owns Mojang, creator of Minecraft which is one of the most successful gaming platforms in the world, albeit a largely collaborative one.
This is why CEO Nadella has said gaming “will play a key role in the development of metaverse platforms.” Gaming, regardless of its role in the metaverse is a $180 billion global market. With the Xbox gaming platform, Activision’s games and talent will are core to the competitive battle with Sony’s PlayStation as well as gaming offerings from Meta’s VR platform, Oculus.
Microsoft cannot be ignored. Meta/Facebook may announce its leadership, but Microsoft will not roll over and let others “own” the metaverse.
Not surprisingly, Apple, the company that gave us the slogan “think different” is taking “a different approach”
Apple was the first three trillion-dollar company. It came back from near bankruptcy this got there by being not just a hardware company, but their CEO Cook talks about areas that are at the “intersection of hardware, software and services”. The MacWorld article where this quote comes from notes “you buy the hardware, which subsidizes the software development, and then pay a subscription fee for the service on top” e.g. iPhone, iTunes player and iTunes music or Apple Watch, watch OS and Apple Fitness+
Apple is not going to let its dominance slip through its fingers without a fight. It’s known for its tight management of its “ecosystem”.
When Epic Games – who make the incredibly popular game Fortnite, tried to insist that it’s games could reach outside the Apple marketplace and allow in app purchases which cut Apple out of its take on every sale, it shut Epic out of its market. Epic sued, and Apple countered calling Epic’s suit “a fundamental assault on Apple’s secure and integrated ecosystem.”
Despite the fireworks of that lawsuit, Apple is as calm and laid back in its approach as ever. Apple likes to keep its announcements secret and then blast them to the world. When asked about its approach to the metaverse, Cook’s answer was, of course, tactful. He has, however, pointed out that there’s a lot of interest in this space, and that the company is “investing accordingly.”
But, Cook has given some hints. He has been mildly disparaging of the virtual reality approach of Microsoft and Facebook. Buit the biggest hint came when he mentioned that Apple has “over 14,000 ARKit apps in the App Store.” ARKit is Apple’s augmented reality framework. (MacWorld) Industry observers note that Apple must be working on more than their phones and tablets. These are not the ultimate way to implement Augmented Reality.
Apple is rumoured to be coming out with what they are calling a “mixed reality headset” focusing on “short stints of communication, content viewing and gaming”. The rumours are that what they come up with will be top of the line with 4k cameras and also top price (3,000 in one article but also hints of a much cheaper price tag).
Apple is considering delaying the launch of the AR/VR headset until late 2022 or 2023, and the company’s supply chain partners have been told that it is unlikely to be released until 2023. Apple is, however, pushing vendors to have units available by the end of 2022 MacRumors
This is undoubtedly what is at the heart of their fight with Epic Games. Apple’s model is to dominate an ecosystem.
Their “different strategy” of ignoring virtual reality and focusing on Augmented Reality is bold, but it’s not the first time in its history that the company has lived by the motto “Think Different”.
But augmented reality may not be any less impressive than virtual reality. And it’s had its share of science fiction sex appeal – with movies like Minority Report, shows like Star Trek and others.
Does the parent company of Google actually have a strategy for the metaverse? A more appropriate question might be – can they stay out?
Or is the question not whether, but how they might bridge from their current “search and knowledge” role to have a relevance in the metaverse. Can they “map the metaverse” or the disparate fiefdoms of the metaverse?
The next level of challenge is that Google, like Facebook and others are driven by advertising revenue. How will they make this relevant in the metaverse or shift their multi-billion dollar revenue models without crashing their existing earnings sources?
Google has made some exploratory moves. Their Google Glass trials collapsed. But then they bought a Canadian company called North, who had developed augmented reality glasses. Then they took that company off the market. What, if anything are they planning?
One thing about Google that we can be certain of. They have tons of cash and an incredible investment in AI. They are not always first to market but they are a tenacious competitor.
First settlers and pioneers
Although the big tech companies will all have an enormous impact, we must be cognizant of the fact that there are already companies and organizations that already have staked their claim to the metaverse.
Second Life (secondlife.com)
Second Life is the absolute pioneer of virtual worlds. They’ve been operating a virtual reality world since 2003. They were an absolute media sensation when they launched and rapidly reached a level of a million users – an accomplishment made even more impressive by the fact that they charged a subscription or membership feel.
It is open to everyone. All that is required is a computer and a reasonable internet connection.
Second Life is not a game, although it started as one. In fact, the creation of the world – the terraforming of the landscape was done with gaming techniques including “shoot ‘em up” guns and virtual grenades.
Second Life rapidly moved beyond the idea of gaming to the idea of creating a second world with no goals or objectives. People defined their avatars and were free to explore, meet others, create digital content and trade goods and services with the virtual currency – the Linden dollar. Linden predated any of the crypto currencies popular today and was (and is) exchangeable with real world currencies.
Beyond the basic terraforming and infrastructure the initial members of Second Life literally built the world themselves. The first participants had to even build their own chairs for their avatars to sit in for classes at the virtual events and university classes that established themselves in Second Life.
In the early days, it attracted big name universities and corporations. Microsoft had a presence in the early days. It was assumed, quite rightly, that the initial pioneers would represent a tech savvy group that might make a great workforce in the emerging tech giants. Recruiting offices were set up for those purposes.
Many of the characteristics that we take for granted in virtual worlds were first pioneered in Second Life – avatars, walking, flying, teleporting, concerts, building and selling real estate and more.
Second Life grew rapidly to over a million users in its first year. But despite its early success, Second Life has never grown beyond that initial million users. It has had ups and downs. Its founder left at one point to pursue other ideas, although he has recently returned, vowing to reenergize and Second Life in the face of renewed interest in the metaverse.
Although it has not grown appreciably, Second Life is still and active and viable alternate reality. Members can join for free but are encouraged to subscribe for a nominal monthly fee which generates the funds necessary to maintain the infrastructure and to evolve the platform.
As noted earlier, Second Life founder Philip Rosedale is returning to the company to help build the ‘metaverse’, but one without the need for wearing a VR headset. Whether he can ignite the spark that drove its early growth remains to be seen, but it has endured for almost two decades and has a very loyal following and an appeal to those who might not want the corporate experience or the gaming aspects so prevalent in others or those who simply will not wear a VR headset.
Decentraland is what its name suggests – a decentralized virtual reality platform. Like Second Life, on the Decentraland platform, users can create, experience, and monetize their content and applications.
It claims to be the first virtual world owned by its users. Like Second Life, it is not a game, although the participants can play games, attend classes or simply hang out with friends.
Again, like Second Life, it is accessible via a desktop app.
3D virtual space within Decentraland is called LAND and it incorporates blockchain as its foundation. LAND is a non-fungible digital asset maintained in an Ethereum smart contract. Decentraland has its own currency called MANA but it too is based on the Ethereum blockchain.
Some parcels of LAND are further organized into themed communities, or Districts. By organizing parcels into Districts, the community can create shared spaces with common interests and uses.
You can buy, sell and transfer land though the marketplace using Ethereum as currency. You can build on that land or sell your building to other landowners using the built-in tools. Again echoing back to Second Life, there is an SDK for more sophisticated scenes so that users or inhabitants can help build the virtual world.
LAND mirrors the IRL (or In Real Life) world. LAND is kept scarce by limiting the amount of available land in proportion to the amount of currency. This is much the same way that crypto currencies are limited to preserve their value. Property exists as non-fungible tokens.
This concept for Decentraland and other virtual worlds that use non-fungible tokens (NFTs) have started a small mini industry of land purchasers and speculators. Whether this translates into something real or not, it will undoubtedly have many groups copying this model to build virtual worlds that are a “wild west” full of speculators, explorers, pioneers and inevitably – grifters.
There are some other specialy players and approaches to the metaverse that should also be considered.
Virbella’s mission is to “make remote work a reality.” Virbella claims that its founders have discovered the key to high-performing remote teams: social and emotional connection. Virtual worlds create the deeply social spaces people miss when working from home, learning online, or attending virtual events.”
It’s a “flatscreen world” in that it doesn’t require a virtual reality headset. Although it’s a niche player, it is gaining a real following with corporations exploring the next stage in virtual work.
Is it easier to work and collaborate with an avatar in a dedicated workspace? Is this more acceptable than the on-camera world of Zoom and Microsoft Teams? Can you build a corporate culture with avatars? Can a truly niche player be a viable contender in the coming metaverse. Organizations like Virbella will be the bellwethers to watch as the metaverse grows.
Another niche area might best be described as developing social groups or “tribes.” Religious groups, political and social groups and even movement like LGBT2S+ and others are looking to find their home in the metaverse.
The popular San Francisco-based VR Chat is an example that shows the potential of the metaverse to build communities, albeit largely socially progressive groups at this point.
IMVU is another example of a niche player that is growing rapidly. It’s an avatar based social platform, rated a top10 favourite social app among gen-Z and millennials in 2020. At that time it had 7 million monthly active users (MAU) and 14 billion credits per month changing hands.
IMVU platform currently has over 200,000 active creators and over 1,000,000 daily active users, and it is available as a desktop experience or via an iOS or Android app.
Given the tremendous focus on commerce as a means of supporting many of the new metaverse worlds, it is inevitable that corporations, particularly retailers are watching the developments closely. Will they attempt to define their own world or try to integrate themselves into other metaverse offerings.
One company to watch in this area is Walmart. Walmart was the undisputed ruler of popular retail. It unquestionably missed the ascendance of Amazon as a retail threat and is unlikely to make that mistake a second time.
Walmart venture into the metaverse may involve plans to create its own cryptocurrency and collection of NFTs. The big-box retailer filed several new that indicate its intent to make and sell virtual goods.
We only have early signs at this point, but Walmart has reportedly filed trademarks for the names “Verse to Home,” “Verse to Curb,” and “Verse to Store,” a hint that Walmart may be preparing a virtual shopping experience.
And while Walmart should be on any metaverse watchlist, we shouldn’t take our eyes off Amazon either.
Estonia was one of the pioneers of digital government. In the year 2000, it declared “internet access a human right.” Wired magazine called it “the most advanced digital society in the world.”
Since that time governments around the world have moved forward to provide digital services. They have been prompted by costs and citizen demands. The pandemic has further accelerated their efforts.
Even China, slow to get started in the metaverse is realizing that the economic reality of the metaverse cannot be ignored. Meta’s Oculus headset is banned in China. Despite that more than 1,000 companies including Alibaba and Tencent Holdings have applied for 10,000 metaverse related trademark and more than US$1.6 billion has been invested in metaverse related start-ups and ventures.
But who will be the real early leader? In the same way that Estonia led on digital government, there are, and will be more examples of governments that try to take their services and processes fully into the metaverse. One example of this is Seoul, Korea.
The South Korean capital has invested about 3 billion dollars into the project, as part of the city’s Vision 2030. It aims to make Seoul “a city of coexistence, a global leader, a safe city, and a future emotional city,” the mayor said.
The city announced that in 2023 Seoul will open the “Metaverse 120 Centre” (tentatively named), a virtual public service centre. The avatar public officials in the metaverse will provide convenient consultations and civil service, which was available only through the civil service centre at Seoul City Hall.
In addition, Seoul’s major tourist attractions will be introduced through the “Virtual Tourist Zone”.
From 2023, Seoul’s leading festivals, such as the Seoul Lantern Festival, will also be held in the metaverse so that it can be enjoyed by all people around the world
Seoul will also develop services for the socially vulnerable including safety and convenience content for people with disabilities using extended reality (XR).
If this project becomes a reality, Seoul citizens will soon be able to put on their VR headsets to meet city officials for virtual consultations. They will even be able to attend mass events.
Foundations and infrastructure – the enablers of the metaverse
Most of our focus goes to who is building the new tribes, cities, countries, continents or even worlds of the metaverse. We’ve identified only a few of the major players – many, many more will enter this space in the coming months and years.
But there is a much smaller group of companies without whom, none of these metaverse contenders could exist without. These are the “gaming engines” and virtual reality platforms that will provide the underlying infrastructure of the metaverse. And while others may emerge there are really only two giants at this point in time.
Unity, the largest platform, started life in Denmark as a failed video game. The developers realized that they had created a set of tools to enable game development. They set out with a new mission – to democratize game development and enable it cross platform. That turned into Unity which now powers the most popular games from Pokemon Go to Call of Duty. Unity has the majority share of the game market and went public in 2020.
Unity’s major competitor is Epic Games’ Unreal Engine. Although there are a host of other players, these two companies are the foundation of much of gaming and much of the emerging metaverse.
Who dominates this area and what degree of standards exist will be the answer to whether the different incarnations of the metaverse are standalone and insulated, or if there can be some interaction between the various worlds. That will depend largely on which infrastructure players dominate and ultimately if define standards for interaction.
Given that the only certainty for the metaverse is that there will be an explosion of new worlds developed over the coming decade, the opportunity to provide the building blocks of the metaverse could ultimately be the biggest economic opportunity and create one, two or more world leading companies that would rival or exceed Google, Amazon and other tech giants.
This is the current day “map” of the world of the Metaverses and we have distinctly used the plural.
As there were in the early days of the internet, there will be those who will claim that this all hype. And indeed there will be periods of hype and periods of disillusionment like any transformative technology.
Whether they are akin to tribes, businesses, cities, countries, continents or even worlds, the economic opportunity will push many to enter the competition. Whether they are a series of insulated worlds or whether they integrate or if they offer the ability to travel between them has yet to be decided. The technology that will bring them beyond what we can imagine is still being worked on.
But the metaverse(s) in whatever form they take are inevitable. Indeed, they are not something that is yet to come. They are already here. They represent not one virtual world or universe, but similar to the vision of Snow Crash, they are like a variety of countries. Some are superpowers, some are smaller.
With the rapid developments that will undoubtedly take place, there will be many more new developments that will occur. We’d love to keep updating this map of the metaverse and adding new contenders, examples and learning. Let us know your thought, suggestions and input at [email protected]