Who wouldn’t want everything in the Metaverse! Even a university for CPC cadres in Beijing is said to soon have a program in which “the party is flexible and robust” can be trained in an artificial reality. According to Chinese media, the virtual reality company Mengke VR has reported this. In the future, party cadres will use avatars to participate in virtual events similar to party congresses and be able to interact with other cadres in the virtual world in 3D.
So far, only a few people have such an exact idea of what the so-called metaverse can be used for. There is talk of virtual 3D worlds in which users can enjoy avatars and consume all kinds of virtual goods. This sounds familiar: Second Life, an online platform from 2003, is celebrating its 20th anniversary next year and is now more of a virtual niche than a virtual world.
For the media industry, the Metaverse is the further development of film marketing through releases and merchandise that has been in practice for decades.
A science fiction author coined the term metaverse: in his 1992 novel “Snow Crash,” Neil Stephenson described a virtual world in which people interact. Although Stevenson’s vision in detail differs from other literary schemes of virtual worlds, it is nothing more than cyberspace as imagined ten years ago by another science fiction author – William Gibson. But cyberspace feels like the ’90s, like shoddy computer graphics, movies like “The Lawnmower Man” and organizations like the National Cyber Defense Center at the Federal Criminal Police Office. On the other hand, the Metaverse still looks fresh.
Facebook, or Meta Platforms, as the group is called since October last year, has been trying to take the market leadership in developing virtual 3D worlds. Meta powers Horizon Worlds, a so-called social virtual world. To enter it, you need data glasses like the Oculus Rift or Oculus Quest and a hand-held controller similar to console games. The so-called arena leads to different virtual worlds that users can design themselves.
The principle of not only offering ready-made products, but also allowing users to build their own virtual worlds comes from the computer game industry. This principle was especially pronounced in Minecraft, which, despite or because of the primitive block graphics, motivated players to build their own virtual worlds alone or in groups and visit each other. In this way, large virtual worlds emerged as part of multiplayer games, while Second Life & Co.
Another influence of the Metaverse is role-playing games, which were originally played with paper, pencil, cards, and pawns and were adapted for early computers. It allows groups to go on adventures together in imaginary worlds. Games plot often takes a back seat. Users transported parts of their social lives to game worlds, where they interacted in the form of their game characters.
It’s the same with many computer games. For example, the online game Fortnite was originally an arena for the so-called Battle Royale competitions in which players compete against anyone else according to the principle of Hunger Games. It still happens, but Fortnite has long been a social space where people meet. There are exhibitions, concerts and events. Part of social life is getting dressed up. In this case, this means specially designing an individual avatar from graphic elements, some of which are graphic – the character that other players look at you. The actual game is free. Epic Games, the company that offers Fortnite, makes their money from players who buy virtual items that are either useful for the game or to beautify their avatar. Basically, it’s about default status icons.
But it’s also about marketing stories. People love to reenact and retold their favorite stories, which Lucasfilm turned into a huge sales machine decades ago with Star Wars characters and related merchandise. Virtual worlds allow you to dig deeper into your favorite stories and help shape the worlds in which these stories take place in ways that were previously only possible through fan fiction writing. So the Metaverse could also be about that. To market computer-generated versions of worlds created in fantasy by reading The Lord of the Rings or the vampire saga Twilight.
For example, a virtual 3D model of a spaceship designed for a movie can be reused in a series or follow-up game, with copies sold to players who can then take the spaceship on a tour of the virtual world. From a media industry perspective, Metaverse will only be the further development of film marketing through releases and merchandise that has been practiced for decades.
However, there is a catch: digital goods, regardless of whether they are works of art, magic swords, or copies of a piece of music, can be copied as much as you like. But in capitalism, commodities have to be scarce in order to have a price. For this reason, attempts are frequently made to provide data carriers or music and movie streams with copy protection. Providers of virtual worlds have relative ease. Since they control access to the world, they can guarantee that a certain virtual good can only exist in a certain number of copies, exactly as it was purchased.
Virtual worlds are platforms and have the typical characteristics: network effects and restricted access. The network effect ensures that users are there because everyone else is there too: there is no getting around Whatsapp because everyone else is also using Whatsapp. As a result, despite its decentralized technical structure, important parts of the Internet are becoming increasingly centralized. However, the resulting shortage is initially unnoticeable to users, after both Whatsapp and Fortnite are free and everyone can participate. While Fortnite controls and restricts access to virtual goods, Facebook controls and limits advertisers’ access to the attention of Facebook users. Since both systems are used by hundreds of millions, it is very profitable. Metaverse is still far from such benchmarks. There are still many small virtual worlds with different standards and rules. Some are simple text-based discussion forums, others are fantasy game worlds, but many other interaction options can also be visualized. Within Horizon Worlds, for example, there is a virtual area for business meetings and teamwork called Horizon Work, which aims to compete with providers like Zoom or Microsoft Teams for the long term.
Meta, in particular, is investing heavily in hopes of creating its own version of the Metaverse as a platform it can control as a company. In 2021 alone, his investment is said to have reached ten billion US dollars. At first it did not pay off, because this division has hardly generated any income so far. Thus, fourth-quarter earnings from last year were relatively meager for Meta at $10.3 billion.
When Facebook rebranded itself to Meta in October and declared itself the Metaverse Company, few were familiar with the term. Some even thought that Facebook changed its name because the old brand name is now notoriously bad. The long-running race was in full swing. While Facebook, Whatsapp, and Instagram have a very wide user base, visiting virtual worlds with huge data glasses you can’t do in between is like peeking at your smartphone. Apple has already launched its own augmented reality platform in 2020, and it wants to offer data glasses soon and iPhone customers hope. But game providers like Epic, who already have many years of experience building and marketing virtual worlds, seem to be better equipped. Nor would it be surprising that there is a renaissance for Microsoft, having recently acquired companies strategically as Facebook did with Instagram, for example, a decade ago; As a result, Microsoft has now achieved a dominant position in the gaming market. But it may also be an opportunity for completely new providers that are still largely unknown.