Businesses might face risks by underpinning their metaverse strategies with a web2 way of thinking.
Metaverse as a term was originally conceived in Neal Stephenson’s 1992 novel Snow Crash, a phrase used to describe a virtual world where characters could escape their mundane realities. Since then this concept has become increasingly mainstream via books and movies such as The Matrix and Ready Player One.
It could be said that the storylines and special effects of these movies may have clouded our judgement as to the likelihood of virtual worlds becoming intertwined with our own reality. As such, the metaverse remains largely a science fiction to businesses and individuals alike, but the blurring of the lines between physical and virtual reality is already happening.
On an almost daily basis, we can find mesmerising real-life examples of how the metaverse is being developed to transform the way we live, learn, work, and socialise. Simultaneously, the hardware and software supporting our transition to these virtual worlds is becoming more powerful, cheaper to access and easier to wear. In this article we will define what the metaverse is and isn’t, the role Big Tech is playing in its development, and some of the risks businesses might face by underpinning their metaverse strategies with a web2 mindset.
World-renowned futurist Bernard Marr defines the metaverse as a ‘virtual world that allows users to interact with each other and engage with apps and services in a far more immersive way,’ whilst Matthew Ball, CEO of Epyllion Industries, describes it as ‘a persistent and interconnected network of 3D virtual worlds that will eventually serve as the gateway to most online experiences.’
Such definitions support why some believe the metaverse points towards the creation of a better version of the internet. However, the metaverse is not an interchangeable term to describe web3, or web 3.0, the official term for the next iteration of the world wide web. The distinction is important, given the latter term has a defined objective of subverting the oppressive ‘web2’ model of our current internet, one which causes our data to be extracted and sold, often at the expense of our privacy. Web3 overcomes this by building on blockchains which enable users to own their data, cut out middlemen and retain the value of the contributions they commit to a network.
By comparison, the metaverse has less of a defined purpose, particularly when we consider the metaverse worlds being developed by Big Tech platforms such as Meta and Microsoft, for example. With an absence of evidence to suggest their metaverse worlds are being built on blockchains, it could be considered by some that they are effectively building immersive web2 experiences which do nothing to overcome the oppressive model of the internet that society already distrusts. It must be noted, however, that metaverse worlds can be built in line with the principles of web3, with immersive, blockchain-based platforms like Decentraland and Cryptovoxels leading the way in this regard.
Irrespective of how centralised or decentralised any virtual world might be, it is important that the metaverse does not become an ideological battleground between centralisation and decentralisation during the early stages of its evolution. Whilst there are obvious concerns of Big Tech trying to take control of the metaverse in the same way it controls the internet, there is a cautionary argument to be made that participation from the household names has done more good than harm so far.
Since Meta was announced at the end of October 2021 for example, the metaverse has exploded into the public consciousness like never before. Ipsos found 38 percent of Americans now report familiarity with the metaverse, whilst Vanson Bourne found 70 percent of organisations were now planning (39 percent) or already implementing (31 percent) metaverse organisation integration plans. Its announcement also correlated to an exponential increase of investment capital flowing in decentralised metaverse projects, with $187m of virtual plots of land being sold in The Sandbox, Decentraland, Cryptovoxels and Somnium Space platforms in November 2021 alone (up from $19.5m the month before).
Whilst such things are all positive, it is Big Tech’s focus on solving the ‘the immersion problem’ by improving hardware, 3D user consumption and the input interface which is its key contribution to date. Overlooked by many, Big Tech investments in solving the immersion problem will eventually serve to enhance all our virtual experiences, regardless of how centralised or decentralised the metaverse worlds which we become part of are in nature. With Gartner predicting that 25 percent of people will spend at least one hour a day in the metaverse for work, shopping, education, social media and/or entertainment by 2026, it’s clear Big Tech investments must be appreciated from all ideological standpoints at this early stage.
Big Tech doing good for the metaverse remains a cautionary argument at this stage and this is something business leaders must consider.
Evidence of the important role this technology might play is easy to find. In 2021, for example, Microsoft unveiled Mesh to enhance its Teams platform. Mesh uses immersive virtual spaces to transform online working and team meetings by unlocking the ‘hallway moments and kitchen catch-ups’ that existing collaboration tools cannot, whilst also surfacing ‘the body language from across the conference room table that says things that cannot be said.’
These moments can define and develop working cultures, which affect how an organisation communicates and conducts business. As the scholar Matthew Hendrith states, ‘non-verbal and verbal cues must be learned for good communication to occur’. Therefore, if the metaverse is able to unlock these cues in the way Big Tech envisages, it will become a key tool for all businesses regardless of their size. The metaverse has the potential to transform how projects are delivered, how businesses operate, how workforce training is provided and how businesses interact with their customers, employees, suppliers and partners alike. Also, when we consider the volume of use cases, it goes a long way to justifying why Citi predicts the metaverse economy could be worth $13tn by 2030.
Businesses must be aware, however, that whilst we are in the early stages of its development, we are already approaching a crossroads moment in the metaverse’s evolution. Whilst solving the immersion problem is good, the next generation VR hardware being developed will be able to monitor our physiological responses and biometric data including our facial expressions, vocal inflections, and vital signs in real time.
Access to this treasure trove of personal data would allow advertisers to market to us in an exceptionally targeted way, which is a concern given how much society already distrusts the manner in which their personal data is being shared and used. Such context forms the basis of why I believe Big Tech doing good for the metaverse remains a cautionary argument at this stage and this is something business leaders must consider.
According to Edelman, society trusts business (61 percent) over government institutions (52 percent) and the media (50 percent). Therefore, business leaders must ‘lead in breaking the cycle of distrust’ and ensure that this leadership and commitment to trust extends into any metaverse strategy they adopt. This responsibility is exacerbated when we consider a study from Gartner which found that whilst 58 percent of respondents have heard of the metaverse, they also do not know what the metaverse is. Consumers, therefore, will need protection.
Mindful of this, businesses must recognise their ethical duty towards tackling the existing problems of data governance and privacy ahead of developing the immersive experiences that bring their customers and their untapped personal data to the metaverse at scale. Indeed, for businesses that might look to recuse themselves from such responsibility in the future by citing a lack of regulation today, there must be a reminder of the option to launch products from metaverse worlds that are underpinned by the decentralised principles of web3.
As British philosopher James Allen states, ‘society rests on the strong basis of truth and if the trust system were withdrawn from commerce, society would fall to pieces.’ This principle applies to the metaverse as much as our physical world and whilst it is still too early for businesses to expect a return on investment from the metaverse or to know which investments or use cases will unlock the most value, no business leader should expect to succeed if the principle of trust is not at the heart of any metaverse strategy they adopt.
Wayne Lloyd, CEO, Smarter Contracts