The U.S. Securities and Exchange Commission reports that in the first six months of 2022, the word metaverse appeared in regulatory filings more than 1,100 times. The previous year saw 260 mentions. The preceding two decades? Fewer than a dozen in total. It increasingly feels as though every corporate executive feels the need to mention the metaverse—and of course, how it naturally fits the capabilities of their company better than those of their competitors. Few seem to explain what it is or exactly what they’ll build. The executive class also appears to disagree over fundamental aspects of this new platform, including the criticality of virtual reality headsets, blockchains and crypto, as well as whether it’s here now, might be soon, or is decades in the future.
None of which has constrained investment. Much has been written of Facebook’s name change to “Meta” and the more than $10 billion it now loses each year on its metaverse initiatives. But another six of the largest public companies in the world—Amazon, Apple, Google, Microsoft, Nvidia, Tencent—have also been busy preparing for the metaverse. They are reorganizing internally, rewriting their job descriptions, reconstructing their product offerings, and prepping multi-billion-dollar product launches. In January, Microsoft announced the largest acquisition in Big Tech history, paying $75 billion for gaming giant Activision Blizzard, which would “provide building blocks for the metaverse.” In total, McKinsey & Company estimates that corporations, private equity companies, and venture capitalists made $120 billion in metaverse-related investments during the first five months of this year.
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Nearly all of the aforementioned work has, thus far, remained invisible to the average person. Rather like the metaverse itself. There isn’t really a metaverse product we can go buy, nor “metaverse revenue” be found on an income statement. In fact, it might seem as though the metaverse, to the extent it ever existed, has already come and gone. Crypto has crashed. So too has Facebook’s market capitalization, which topped $900 billion when the company changed its name to Meta, but now sits around $445 billion. This year, the video gaming sales have fallen by nearly 10%, due in part to the end of the pandemic that forced many people inside.
Illustration by Micah Johnson for TIME
To many, it’s a good thing that the metaverse seems to be sputtering. The largest tech platforms have already established enormous influence over our lives, as well as the technologies and business models of the modern economy. It’s also clear that there are many problems with today’s internet; why not solve them before moving onto what Mark Zuckerberg calls “the successor” to it?
The answer is embedded in that very question. The metaverse, a 30-year-old term but nearly century-old idea, is forming around us. Every few decades, a platform shift occurs—such as that from mainframes to PCs and the internet, or the subsequent evolution to mobile and cloud computing. Once a new era has taken shape, it’s incredibly difficult to alter who leads it and how. But between eras, those very things usually do change. If we hope to build a better future, then we must be as aggressive about shaping it as are those who are investing to build it.
So what is this future? Think of the metaverse as a parallel virtual plane of existence that spans all digital technologies and will even come to control much of the physical world. This construct helps explain another common description of the metaverse as a 3D internet—and why establishing it is so hard, but also likely to be worthwhile.
The internet as we know it today spans nearly every country, 40,000 networks, millions of applications, over a hundred million servers, almost 2 billion websites, and tens of billions of devices. Each of these technologies can coherently, consistently exchange information, find one another “on the net,” share online account systems and files (a JPEG, an MP4, a paragraph of text), and even interconnect (think of how a news publisher links to another outlet’s report). Nearly 20% of the world economy is considered “digital,” with much of the remaining 80% running on it.
Though the Internet is resilient, wide-ranging, and powerful, it wasn’t built for live and interactive experiences involving a large number of participants—especially when it comes to 3-D imaging. Rather, the internet was designed primarily so that one static file (such as an email or spreadsheet) could be copied and sent from one device to another, such that it might be independently and asynchronously reviewed or modified. This is partly why, even in the age of the “Streaming Wars” and multi-trillion dollar big tech companies, simple two-person video calls can be so unreliable. (It’s a marvel that online multiplayer games work at all.) Furthermore, there’s no consensus on file formats or conventions for 3D information, no standard systems to exchange data in virtual worlds. We also lack the computing power to pull off the metaverse as we imagine it. And we will want many new devices to realize it—not just VR goggles, but gadgets like holographic displays, ultra-sonic force-field generators, and, spooky as it sounds, devices to capture electrical signals sent across muscles.
We cannot know in advance exactly how important a 3D internet might be to our global economy, just as we didn’t know the value of the internet. But we do have some view to the answer. As internet connectivity and computer processors have improved, we’ve shifted from colorless text to primitive webpages and web blogs, then online profiles (like a Facebook page) and video-based social networks, emojis, and filters. The volume of content we produce online has grown from a few message board posts, emails, or blog updates a week to a constant stream of multimedia content encapsulating our lives. The next evolution to this trend seems likely to be a persistent and “living” virtual world that is not a window into our life (such as Instagram) nor a place where we communicate it (such as Gmail) but one in which we also exist—and in 3D (hence the focus on immersive VR headsets and avatars).
Already, nearly a hundred million people a day log onto Roblox, Minecraft, and Fortnite Creative, platforms that operate tens of millions of interconnected worlds, which support a consistent virtual identity, virtual goods, communications suites, and can be accessed from most devices. Most time in these platforms is spent on leisure—playing games, attending concerts—but we are starting to see people go further.
The Electric Daisy Carnival was the first music festival in Roblox held over several days in October 2021.
Education is a category we have long expected to be transformed by the digital era, but has thus far resisted it. Since 1983, the cost of higher education has grown over 1,200%; medical care and services, which ranks second for cost increases in the U.S. over that period, is up half as much. The challenge is the real thing requires no fewer resources than it did decades ago, and what is lost when shifting to a remote computer screen. Eye contact. Peers. Hands-on experimentation. Equipment. Zoomschool, YouTube videos, and digital multiple choice are no substitute for the real thing.
In the metaverse, the Magic School Bus becomes possible. For decades, students learned about gravity by watching their teacher drop a feather and a hammer, and then seeing a tape of Apollo 15 commander David Scott doing the same on the moon. (Spoiler: They fall at the same speed.) Such demonstrations need not go away, but they can be supplemented by the creation of elaborate virtual Rube Goldberg machines, which students can then test under Earth-like gravity, on Mars, and even under sulfuric rainfalls of the Venusian upper atmospheres. Instead of dissecting a frog, we can travel its circulatory systems not unlike the way we drive the Mushroom Kingdom in Mario Kart. And all of this is available irrespective of geographic location or resources of the local school board.
In 2021, neurosurgeons at Johns Hopkins performed the hospital’s first-ever live patient surgery using an augmented-reality headset, thereby providing the surgeon with an interactive display of the patient’s internal anatomy. Dr. Timothy Witham, who performed the surgery and also directs the hospital’s Spinal Fusion Laboratory, likened it to having GPS. This frame of reference is important. We often think of the metaverse replacing something we do today—such as wearing a VR headset instead of using a smartphone or watching TV—but we don’t drive GPS instead of a car; we drive a car with GPS.
Earlier in 2021, Google unveiled its Project Starline device, which uses machine learning, computer vision, a dozen depth sensors and cameras and fabric-based multi-layered light field displays to create 3D “holographic video” without requiring the use of mixed reality goggles. In comparison to traditional “2D” video calling, Google says its Starline technology leads to 15% increases in eye-contact, 25-50% increases in non-verbal forms of communication (hand gestures, head nods, eyebrow movements) and 30% better memory recall of the conversation. Few of us enjoy Zoom; perhaps some of our displeasure can be alleviated by adding another dimension.
Infrastructure is another good example. The Hong Kong International Airport now operates a live “digital twin” of the facility, allowing airport operators to use a live 3D simulation to determine where passengers and planes should be directed. Multi-billion-dollar, multi-decade city projects are using these technologies to determine how a given building might affect traffic flows and emergency response times, or how its design will affect the temperature and sunlight of a local park on a specific day. These are mostly disconnected simulations. The next step is to bring them online—like shifting from offline Microsoft Word documents to cloud-based, collaborative ones—and turning the world into a digital development platform.
For society, however, exactly what the metaverse means is unclear. This gives understandable pause to some, who see billions invested in what feels like a game. But think of the metaverse as a fourth era of computing and networking—succeeding mainframes, which ran from the 1950s to 1970s; personal computers and the Internet of the 1980s to mid-2000s; and the mobile and cloud era we experience today. Each era changed who accessed computing and networking resources, when, where, why, and how. The results of these changes were profound. But they were also hard to specifically predict.
Even the biggest believers in the mobile internet once struggled to predict more than “more people, online more often, for more reasons.” Having a detailed technical understanding of digital networking didn’t illuminate the future, nor did deploying billions in R&D. Services such as Facebook, Netflix, or Amazon’s AWS cloud computing platform are obvious in hindsight, but nothing about them—their business models, technology, design principles—was at the time. In this regard, we should recognize that confusion, conflation, and uncertainty are prerequisites for disruption.
Still, there are specific issues that can be cleared up. The metaverse is often misdescribed as immersive virtual reality headsets, such as the Meta Quest (née Oculus VR), or augmented reality glasses, the most famous example of which to date is Google’s infamous Glass. VR and AR devices may become a preferred way to access the metaverse, but they are not it. Consider that smartphones are not the same thing as the mobile internet.The metaverse is also not Roblox, Minecraft, Fortnite, or any other game; these are virtual worlds or platforms that are likely to be part of the metaverse, just as Facebook and Google are part of the internet. For similar reasons, think of the metaverse as singular, just as we say “the internet” not “an internet.” (To the extent we identify different internets today, this largely reflects regional regulatory differences.) Another frequent conflation is that between the metaverse and Web3, crypto, and blockchains. This trio may become an important part of realizing the metaverse’s potential, but they are merely principles and technologies. In fact, many metaverse leaders doubt there is any future for crypto.
The metaverse should not be thought of as an overhaul to the Internet, nor something that will replace all mobile models, devices, or software. It will produce new technologies, and behaviors. But that doesn’t mean we leave what we prefer behind. I still write on a PC, and that’s likely to remain the best way to write long-form text. The majority of internet traffic today both originates and terminates on a mobile device, yet nearly all of it is transmitted on fixed-line cables and using the Internet Protocol Suite as it was designed in the 1980s.
The metaverse is not yet here (even if some executives will claim it is, or at least imminent). At the same time, transformations don’t experience “switch flips.” We are in the mobile era today, but the first cellular network call was in 1973, the first wireless data network was in 1991, smartphone in 1992, and so on until the iPhone in 2007. While it’s impossible to say when the development of the metaverse began, it’s clearly underway. In mid 2021, only weeks before Facebook unveiled its metaverse intentions, Tim Sweeney, CEO and founder of Fortnite maker Epic Games, tweeted prerelease code from the company’s 1998 game Unreal, adding that players “could go into portals and travel among [different worlds]…with no combat and [would stand] in a circle chatting.” These experiences didn’t take off at the time for a number of reasons—there were too few people online, tools for world-creation were too difficult to use, the devices that could support them were too costly and heavy, etc. “We’ve had metaverse aspirations for a very, very long time…” he added a few minutes later, “but only in recent years have a critical mass of working pieces started coming together rapidly.”
A billboard reads “unlock the metaverse” in Times Square during the 4th annual NFT.NYC conference on June 20, 2022 in New York City.
Noam Galai—Getty Images
The metaverse is also not inherently dystopic. This a common misconception as the word “Metaverse” comes from a dystopic novel, Neal Stephenson’s Snow Crash. Snow Crash’s forebears, such as William Gibson’s Neuromancer (1984) and Philip K. Dick’s The Trouble With Bubbles (1953), similarly leave readers with the sense that the metaverse worsened the real world. Drama is at the root of most fiction; utopias are rarely the setting for popular stories. But since the 1970s, numerous “proto-metaverses” have emerged that have not been centered on subjugation or profiteering, but on collaboration and creativity. Each decade, the realism of these worlds improves, as does their functionality, value, and cultural impact.
The foundation of today’s internet was built over several decades through the work of government research labs, universities, and independent technologists and institutions. These mostly not-for-profit collectives typically focused on establishing open standards that would 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 were far-ranging. Anyone could access or build on the internet, from any device, on any network, at low to no cost.
None of this prevented businesses from making a profit on the internet or building closed experiences through paywalls or proprietary tech. Rather, the “openness” of the internet enabled more companies to be built, reaching more users, and achieving greater profits, while also preventing pre-internet giants (and, crucially, telecom companies) from controlling it. Openness is also why the internet is considered to have democratized information, and why the majority of the most valuable public companies in the world today were founded (or were reborn) in the internet era.
It’s not difficult to imagine how different the internet would be if it had been created by multinational media conglomerates in order to sell widgets, serve ads or harvest user data for profits.
However, a “corporate internet” is the current expectation for the metaverse. When the internet was born, government labs and universities were effectively the only institutions with the computational talent, resources, and ambitions to build a “network of networks,” and few in the for-profit sector imagined its commercial potential. None of this is true when it comes to the metaverse. Instead, it is being pioneered and built by private businesses.
In 2016, long before the metaverse was seriously contemplated by the corporate executives worldwide, Epic Games’ Sweeney told VentureBeat that “If one central company gains control of [the metaverse], they will become more powerful than any government and be a god on Earth.” It’s easy to find such a claim hyperbolic. But according to Citi and KPMG, the metaverse could generate as much as $13 trillion in revenue per year by 2030. Morgan Stanley has estimated $8 trillion in both the U.S. and China, similar to Goldman Sachs global projection of between $2.5 and $12.5 trillion; McKinsey forecasts $5 trillion worldwide. Jensen Huang, the founder and CEO of Nvidia, which ranked as one of the ten largest public companies in the world for most of the year, believes the GDP of the metaverse will eventually exceed that of “the physical world.”
It is here that fears of a dystopia seem fair, rather than alarmist. The idea of the metaverse means an ever-growing share of our lives, labor, leisure, time, wealth, happiness, and relationships will be spent inside virtual worlds, rather than just aided through digital devices. It will be a parallel plane of existence that sits atop our digital and physical economies, and unites both. As a result, the companies that control these virtual worlds and their virtual atoms will be more dominant than those who lead in today’s digital economy.
The metaverse will thus render more acute many of the hard problems of digital existence today, such as data rights, data security, misinformation and radicalization, platform power, and user happiness. The philosophies, culture, and priorities of the companies that lead in the metaverse era, therefore, will help determine whether the future is better or worse than our current moment, rather than just more virtual or remunerative.
As the world’s largest corporations and most ambitious start-ups pursue the metaverse, it’s essential that we—users, developers, consumers, and voters—understand we still have agency over our future and the ability to reset the status quo, but only if we act now. Yes, the metaverse can seem daunting, if not outright scary, but this moment of change is our chance to bring people together, to transform industries that have resisted disruption, and to build a more equal global economy.
Much about the future is uncertain, just as the internet was in the 1990s and 2000s. But we can understand how the metaverse is likely to work and why; which experiences might be available when, why, and to whom; what might go wrong and what must go right. And we can use this information to shape the future, just as Big Tech is and will. There are trillions of dollars at stake, as executives are wont to remind us—and, more importantly, our lives.