Gunnar Jaerv is the COO of First Digital Trust, an Asia-based technology-driven financial institution.
When Meta revealed its metaverse, Horizon Worlds, and the features it would unleash for creators within the digital universe, the conglomerate called it a step toward its “long-term vision for the metaverse where creators can earn a living.
It wasn’t long, however, before it sparked outrage from the Twitterverse when it was subsequently reported that the platform would take a 47.5% cut of all sales made in the metaverse, leaving creators with just over half their income, before taxes.
It appears that the same company that vaulted the metaverse concept into the mainstream is now itself culpable for succumbing to the ‘cash grab’ trait that metaverse skeptics have been warning of.
The metaverse, perhaps owing to all the talk of it being the next technological paradigm that is destined to change the way we work, live, interact and play, is susceptible to the bandwagon effect; every day there is another business or brand that has ‘entered the metaverse’. As with any emerging tech that has limitless potential, it comes with a lot of money, and hype, but the output of this devotion remains uncertain.
An ever-mutating concept
The concept of the metaverse appears vague due to its boundless nature – there are arguably things that have yet to be conceived that might form part of the metaverse. On a high level, the metaverse generally refers to the next iteration of the internet.
Often associated with another adjacent buzzword in the tech and crypto world, Web3, it refers to a merging of the online and physical world where real-time infrastructure and network facilitate new modes of interaction (virtual reality (VR) headsets, 3D virtual environments), presence (avatars), and ways to create, monetize and trade.
What can be agreed on as its definition is more of a collective description of things that are mutating over time by virtue of the fact that the possibilities of the metaverse and more importantly – the technology behind it – are seemingly endless. The metaverse is more than a place – it’s an infrastructure that requires thoughtfulness, creative vision, and a disciplined approach beyond what any one company can offer.
As we settle into the dawn of the metaverse, there is a growing realization of a disconnect between traditional companies and crypto communities’ approach to the metaverse, between corporate America and the plausibility of the metaverse in terms of the infrastructure that will be necessary to achieve it.
Mark Zuckerberg’s vision of the metaverse hinges on our ability to build the chips, data centers, and networks to deliver the necessary computing horsepower, at orders of magnitude beyond what we currently have.
Even if the technology does or will exist to bring this to life, there are still ethical and philosophical considerations that are ultimately inextricably tied with the growth and profitability of this industry that no business should ignore.
Maximizing potential or the possibility of the metaverse?
When we talk about unleashing the potential and power of the metaverse, it often has a maximalist connotation to it that may be more detrimental than we think. Indeed, it’s predicted to be a USD 30tn dollar industry over the next decade, meaning there is a lot of money and clout behind this industry.
The sheer amount of money being thrown into the metaverse suggests an almost laissez-faire approach, but as we now know having gone through an entire generation of Web 2 with its ebbs, flows, and downfalls, it may be prudent to apply the adage ‘just because we can doesn’t mean we should’ towards building any emerging tech.
What is this cash creating and what does this mean for businesses devising their own metaverse strategy?
Before any company transforms part of its corporate identity to revolve around the metaverse, there should be a conscious and deliberate effort to understand and consider the risks and implications.
As businesses devote greater attention and resources to this space, they should first and foremost think of the ways it could contribute both to the growth – and the good – of the metaverse.
Are companies adopting the metaverse as a selling point or for its ethos?
Businesses across virtually every sector are interacting with the metaverse in some way, or else inserting themselves into the narrative. We have most commonly seen this in gaming, as the metaverse has catapulted the play-to-earn phenomena associated with NFTs and blockchain gaming.
Sporting giants like Adidas and Nike have adopted the metaverse by partnering with NFT pioneers and gaming platforms such as The Sandbox and Roblox to create new virtual experiences powered by blockchain technology.
Debating the merits of the decentralized vs. centralized approach to the metaverse can continue ad nauseam, and it’s an important one.
But at this point, owing partially to its elasticity and ever-evolving nature of the term, there is nothing stopping major traditional companies from entering the space in their own way – they have the clout and the capital at their disposal to do so.
They are also heeded to do so from a pure demand point of view whereby it is argued that consumers are increasingly moving away from flat social and commercial environments, that the future of the internet is in the metaverse, that the new generation knows no different, and that these virtual, fully immersive 3D spaces are demanded and should be facilitated.
Like it was with the advent of the internet and Web2, we are subtly told that there is a degree of inevitability about it, because the tech compels it to be.
Despite this, it is still possible for businesses to devise a metaverse strategy that aligns with its values, contributes to a common good and a shared ethos of the metaverse, and which makes commercial sense.
Thinking outside the metabox
PwC recently partnered with MContent, a crypto-powered content platform, to produce a documentary on the ongoing Ripple vs. SEC case in a virtual theater in the metaverse. Through MContent’s Cineverse and in conjunction with PwC’s Middle East-based emerging technology team, viewers can experience the documentary through VR headsets or augmented reality glasses.
By bringing Cineverse to a global audience, MContent aims to create a fully monetized content consumption platform from which content creators and viewers can derive sustainable earnings. This is an example of a practical application of emerging technology that converges with blockchain, NFT and extended reality (XR).
Epic Games, the creator of Fortnite, has raised USD 2bn to bridge the gap between the physical and digital world, advancing the metaverse. While they have not yet revealed what technology it will use to develop its metaverse, they have previously shown a pro-crypto, decentralized model stance. Regardless of whether they opt for a centralized, non-blockchain model like Meta or not, businesses are recognizing the need for their metaverse initiatives to have a socially conscious angle, with the CEOs of both Epic Games and Lego calling for the metaverse to help children become good individuals.
Many simply see these moves as ways to remain bullish on advancing the movement, to further mass adoption of NFTs and crypto, however there is growing awareness of the need for businesses to avoid furthering the ‘cash grab’ perception.
By economizing this space in a way that benefits the community as well as sets a precedent for other out of the box efforts, it is contributing to sustainable infrastructure in the metaverse, inch by inch.
Can the metaverse differentiate itself from Web2?
Beneath the hype, dollar potential, and amounts invested are the issues for metaverse’s sustainability and inclusivity. One of the issues with Web2 is that it allowed a few tech giants to dominate every facet of our lives because the technology was possible.
Businesses capitalized on this and we as users became enablers. We witnessed the downfall of this, how the promise of Web2 quickly diminished when growth over safety was prioritized when it came to building platforms.
There are two things working in our favor that we didn’t have in Web 2: The benefit of hindsight and deep expertise in safety, trust, privacy, and building ethical technology. These pillars should be at the core of the vision for building an ethical and inclusive internet, and at the forefront of businesses considering the metaverse. At a time when trust in institutions is low, these are brand differentiators.
We need not only safety and a set of protocols and guidelines to adhere to in the metaverse, we need to secure them through cryptography, not policy.
As we’ve learned in Web 2, tenets like security and privacy need to be safeguarded not through words but by design.
If the metaverse is the phenomenon destined to cause tectonic shifts in our lives, how can we ensure it differentiates itself from Web2? Institutional tendencies and commercialization will challenge this like never before, but there are steps we can take to bend the arc of the metaverse towards a better place. It needs to start now, by leveraging the trend in a disciplined and conscious way.
For the good and the growth of the metaverse
We are witnessing unprecedented funding into this space that will elevate global scalability and mass adoption capability of the metaverse, which in turn further increases funding potential. It is a space that is on everyone’s radar, whether you are an investor, a business owner, or a consumer.
That being said, it is still very early days in an industry that is bound to go through several dips and corrections along the way. New utility and business models will emerge, disrupt and define the evolution of this space. This should be welcomed. At the pace that this is going, it will soon become clear what kind of metaverse strategies have real utility, versus those that are there for the marketing soundbite.
The impact isn’t made through passive participation. Moving forward businesses should ask, ‘Am I investing in the metaverse because it’s a great selling point, or am I embracing it as an ethos and driving economic activity inclusively and for the better?’.