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What is the metaverse?

Monday, December 27, 2021

Startup Jedi

We talk to startups and investors, you get the value.

Everyone is talking about the metaverse on the Internet. It seems like bitcoin, Clubhouse and blockchain are no longer trendy, and now everyone is building metaverses. Before joining the construction site of the century, let's figure out what it is. Is it just another trend or a new chapter in our history? We’ll dive deep into this together with the Founders Club.

What is the metaverse?

The term "metaverse" originated long before Mark Zuckerberg announced Facebook rebranding and his plans to launch Metaverse. The Greek prefix "meta" means "after, between." Thus, this is the next stage after the ordinary, material universe.

The term "metaverse" first appeared in popular culture in the novel "Avalanche" by science fiction writer Neil Stevenson in 1992. There, the metaverse is a united digital world where all people are avatars. The metaverse completely replaced the real life for the book characters. While they languished in the material world, in the virtual one turned them into heroes, performing feats and saving the world.

Ready Player One, a novel by Ernest Cline, offers a very similar structure of the metaverse. Steven Spielberg's eponymous film based on the book was released in 2018. Here the main character lives in a world of poverty, overpopulation, environmental crisis and a host of other problems. He basically spends his whole life in a virtual game that replaces reality. Interestingly, the virtual reality there is based on cult books, films and comics of the 20th century, making the fictional worlds from The Shining, Back to the Future and The Terminator come true.

But perhaps the most iconic and famous image of the metaverse is the trilogy "The Matrix". Here, the virtual universe does not exist next to the material one, but instead of it. People live in simulation all their lives, not even suspecting that their reality is just lines of code. However, the real world is not very attractive either: it is impossible to live there after a nuclear war. The "Matrix" raises a philosophical question about the boundaries of reality and the meaning of human life, and is still an important argument in the disputes between opponents of "virtual reality" and technology fans.

In the past few years, the term "metaverse" has been mentioned mainly in the game industry — in Fortnite, Minecraft and others, as well as in the context of the rapid development of VR and AR technologies. In 2021, heads of several leading companies - Microsoft, Epic Game and Facebook — began to talk about creating their own metaverses.

Why is what we have now not a metaverse?

Can current online games or virtual spaces be considered the metaverse? Not yet. The metaverse has several distinguishing features that have been articulated by venture capitalist and visionary Matthew Ball:

1. Unlike VR games, the metaverse exists all the time: it does not end, it does not reset, and events in it cannot be paused.

2. The metaverse works in real time and almost does not depend on external factors (although developers can create certain events).

3. There is no limit to the number of users - anyone can connect at any time and immerse themselves in the life of the metaverse.

4. There is a fully functioning analogue of the economy inside the virtual universe. Users can earn, spend or invest currency.

5. The metaverse unites the physical and digital worlds, as well as all existing platforms into a single whole.

6. The metaverse is filled with what users themselves create — their content, experience and creativity.

7. Different digital worlds are synchronized. Thus, an item from Fortnite can be transferred to Facebook.

What they say about the Metaverse in the IT world

Matthew Ball believes that it will take decades for the real metaverse of the future to emerge. The current virtual worlds are loosely connected with each other, and users only engage in them from time to time.

The founder of the Epic Games studio, Tim Sweeney, also discussed the importance of "seamless transition" between different virtual worlds:

“We need to move from closed economies like Fortnite, Minecraft, Roblox, and tens of thousands of others, into a shared space. We are working on developing this direction, and eventually we will open up our economy. And then other games will do the same. Hopefully in 10 years we can make sure that players play Roblox, Fortnite and Minecraft in the same world and with the same social connections."

According to Sweeney, creating the metaverse will require a new programming model that allows you to create a living and constantly evolving platform where you can move from one world to another.

Mark Zuckerberg believes it is important to create a sense of co-presence in people in virtual reality. In an interview with The Verge, he said:

“People aren’t meant to navigate things in terms of a grid of apps. I think we interact much more naturally when we think about being present with other people. And I think if we can help build the next set of computing platforms and experiences across that in a way that’s more natural and lets us feel more present with people, I think that’ll be a very positive thing."

Zuckerberg also notes that we are not talking about creating a separate virtual reality for each company with the appropriate capabilities and equipment. The whole globality of the plan lies in the creation of a single space with uniform rules:

“Hopefully, if we’re successful collectively in building a system that’s more interoperable, and where you can teleport between things, it should all be the metaverse, each company should not have its own metaverse. Hopefully in the future, asking if a company is building a metaverse will sound as ridiculous as asking a company how their internet is going.”

How the metaverses of tech companies work

Facebook. Within 5 years, Mark Zuckerberg plans to hire 10,000 employees in Europe to develop the metaverse. Basically, we are talking about highly specialized engineers. Now the company is actively investing in the production of VR equipment with about a fifth of its employees working in this direction. Together with Ray-Ban, this year the corporation released smart VR glasses that can take photos and videos, play music, receive calls and upload content to social networks.

The exact metaverse concept from Meta is still being developed. One of the basic scenarios is a virtual "meeting room" where digital avatars accurately reproduce the conversation of people, conveying their movements and facial expressions.

Microsoft. In 2021, the company introduced the Mesh platform, where you can host online meetings, work together in a virtual office, not only with a digital avatar, but also broadcasting an image from a camera. Another step towards a virtual reality is Azure cloud technology. With Azure Digital Twins, you can model objects, while Azure IoT allows you to maintain and synchronize your digital twin.

Fortnite. Today it is the most real prototype of the future virtual universe. The company began as an online battle royale game, but has long outgrown the network game, becoming a kind of analogue of the virtual world now. You can communicate, discuss news, buy goods and even hold concerts here. In 2020, rapper Travis Scott held his concert in Fortnite, which was simultaneously attended by more than 12 million people. There was an interview with the director of the ninth part of "Star Wars" here as well, and various companies use its virtual reality to promote their brand and products. 

Virbela. This platform can also be considered a kind of "prototype" of the metaverse, where a team of users, physically located in different parts of the world, can go on a journey or play football together. Some companies completely recreate their virtual offices there.

Google. Of course, Google cannot stay away from the construction of the metaverse, but it is more of a "hardware", not "software". In May 2021, the company presented Project Starline, a cockpit that allows you to create a full effect of presence next to the interlocutor during video calls.

The Metaverse for Venture Investments

Meta already spends about $ 5 billion a year on metaverse, which is more than Elon Musk invests in space exploration. Major competitors are also trying to keep up. In April 2021, Epic Games announced that it would invest $ 1 billion in the creation of the metaverse. The developer of the game Pokemon Go, Niantic, is also investing $ 300 million to develop the metaverse.

Venture capitalists are also involved in constructing the metaverse. On the one hand, the project is large-scale, long-term and technologically complex, which usually alarms investors. On the other hand, we can already see that users like the elements of the metaverse in Fortnite and they generate profit for brands. VR technologies are one of the most promising and fast growing markets. This year, some funds announced they are ready to invest in the metaverse. Thus, the venture capital division of the KuCoin cryptocurrency exchange created a special fund of $ 100 million for relevant projects. But the main flow of investments will begin next year.

Companies that are not directly related to the venture business are not lagging behind. Nike, for example, is already hiring virtual designers to "translate" the brand's products into the virtual world.

The metaverse is a real "black swan". It is impossible to predict how a single virtual universe will develop after the creation of technology that allows you to move between worlds. Nevertheless, according to the venture capitalist and "metaverse ideologist" Matthew Ball, we can already say that the metaverse will become the reason for the creation of new industries, professions, markets, services, and skills. The cost of these changes is estimated at trillions of dollars.

Summing up: is it the future or a new hype?

The fundamental difficulty in creating the metaverse is to combine all existing virtual worlds into one and create a "seamless transition" between them. It is difficult from a technical point of view, since it requires a new solution, but especially from the point of view of agreeing on uniform rules and coordinating work between corporations that own virtual worlds. Perhaps the XR Consortium, a joint venture between Google, HTC Vive, Microsoft, Facebook and Sony Interactive Entertainment, can help.

Whether it will be possible to overcome all the differences, the personal ambitions of companies and their leaders in order to turn the virtual worlds created by different companies into a single “new Internet” is an open question. If successful, there is a whole flurry of possible consequences that will greatly change the world around us.

Let’s take economics, for example. In virtual reality, people will re-buy their vehicles, clothes, luxury goods, create and collect NFTs in the metaverse — this is a new round of the economy, the emergence of new professions and possibly a solution to the problem of overconsumption (if people focus on acquiring virtual goods and resources).

There’s also a social aspect. Perhaps, the virtual world will significantly reduce social inequality, erase boundaries and help create new communities and organizations. How states will react to this is still unclear, because in fact the metaverse gives rise to virtual states, the main beneficiary of which is corporations. The risks of creating a metaverse, of course, are no less global than the idea itself.

The development of the metaverse also raises a lot of questions. Will people work twice - in the real world and in the virtual one? Who will enforce the laws in virtual reality? Well, and, perhaps, the main question of the "Matrix" is whether such a life can be considered real.

However, chances are that the ambitious plan to unite virtual worlds will not be implemented. It is also possible that even with a "seamless transition" from Fortnite to Meta, they will remain expensive, plausible VR games, each with its own rules and audience.

In this case, it won’t be a new reality (at least for a significant part of the population), but high-quality virtual reality technology will still change a lot. For example, it will speed up business processes. Instead of making Zoom calls, it will be possible to be present in the colleagues’ office, to see equipment, documents, people, and to resolve issues much more productively and faster. This will make the work of distributed teams around the world more efficient, which will be able to gather in a virtual office. And it will simply help people gather more often and see those who are far away.

In any case, the next few years are going to be very exciting!

27 Dec 2021


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