The Metaverse: And How It Will Revolutionize Everything

by Matthew Ball

In the fourth quarter of 2020 and first quarter of 2021, the gaming industry had two of its largest-ever initial public offerings (IPOs) in Unity Technologies and Roblox Corporation, both of which wrapped their corporate histories and ambitions in Metaverse-related narratives.

The dramatic response to the Metaverse reflects the growing belief that it is the next great computing and networking platform, similar in scope to the transition from the personal computer and fixed-line internet of the 1990s to the era of mobile and cloud computing we live in today.

Metaverse has transitioned from the world of paperback science fiction to the front page of the New York Times and corporate strategy reports around the world.

It was with the launch of (the aptly named) Second Life in 2003 that many, especially those in Silicon Valley, began to contemplate the prospect of a parallel existence that would take place in virtual space. In its first year, Second Life attracted over one million regular users, and shortly thereafter, numerous real-world organizations established their own businesses and presences inside the platform. This included for-profit corporations such as Adidas, BBC, and Wells Fargo, as well as nonprofits such as the American Cancer Society and Save the Children and even universities, including Harvard, whose law school offered exclusive courses inside Second Life. In 2007, a stock exchange was launched on the platform with the aim of helping Second Life–based companies raise capital using the platform’s Linden Dollars currency.

By 2005, just two years after it launched, Second Life’s annualized GDP exceeded $30 million. By 2009, it exceeded half a billion dollars, with users cashing out $55 million into real-world currency that year.

For all the success of Second Life, it was the rise of virtual world platforms Minecraft and Roblox that brought its ideas to a mainstream audience in the 2010s. In addition to offering significant technical enhancements compared to their predecessors, Minecraft and Roblox also focused on children and teenage users, and were therefore far easier to use, rather than just offer greater capabilities. The results have been astounding.

By the end of 2021, more than 150 million people were using Minecraft each month—more than six times as many as in 2014, when Microsoft bought the platform. Despite this, Minecraft was far from the size of the new market leader, Roblox, which had grown from fewer than 5 million to 225 million monthly users over that same period. According to Roblox Corporation, 75% of children ages 9 to 12 in the United States regularly used the platform in Q2 2020.

The Roblox game with the most lifetime plays—Adopt Me!—was created by two hobbyist players in 2017 and enabled users to hatch, raise, and trade various pets. By the end of 2021, Adopt Me!’s virtual world had been visited more than 30 billion times—more than fifteen times the average number of global tourism visits in 2019.

By the end of 2021, Roblox had become the most valuable gaming company outside of China, worth nearly 50% more than storied gaming giants Activision Blizzard and Nintendo.

In December 2018, for example, the blockbuster video game Fortnite launched Fortnite Creative Mode, its own riff on Minecraft’s and Roblox’s world-building. Meanwhile, Fortnite was also transforming into a social platform for non-game experiences.

the Metaverse have recently shifted from science fiction and patents to the forefront of consumer and enterprise technology. We are now at the point when these experiences can appeal to hundreds of millions and their bounds are more about the human imagination than technical limitation.

The mobile internet has existed since 1991, and was predicted long before. But it was only in the late 2000s that the requisite mix of wireless speeds, wireless devices, and wireless applications had advanced to the point where every adult in the developed world—and within a decade, most people on earth—would want and be able to afford a smartphone and broadband plan. This in turn led to a transformation of digital information services and human culture at large.

There will be many wars for supremacy in and over this Metaverse. They will be fought between tech giants and insurgent start-ups through hardware, technical standards, and tools, as well as content, digital wallets, and virtual identities. This fight will be motivated by more than just revenue potential or the need to survive the “pivot to Metaverse.”

“This Metaverse is going to be far more pervasive and powerful than anything else. If one central company gains control of this, they will become more powerful than any government and be a God on Earth.”

The foundation of today’s internet was built over several decades and through a variety of consortiums and informal working groups composed 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.

A “corporate internet” is the current expectation for the Metaverse. The internet’s nonprofit nature and early history stem from the fact that government research 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 understood its commercial potential. None of this is true when it comes to the Metaverse. Instead, it is being pioneered and built by private businesses, for the explicit purpose of commerce, data collection, advertising, and the sale of virtual products. What’s more, the Metaverse is emerging at a time when the largest vertical and horizontal tech platforms have already established enormous influence over our lives, as well as the technologies and business models of the modern economy. This power partly reflects the profound feedback loops in the digital era.

The very 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 extended or aided through digital devices and software. It will be a parallel plane of existence for millions, if not billions, of people, 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 likely be more dominant than those who lead in today’s digital economy.

The Metaverse will also render more acute many of the hard problems of digital existence today, such as data rights, data security, misinformation and radicalization, platform power and regulation, abuse, 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.

Yes, the Metaverse can seem daunting and scary, but it also offers a chance to bring people closer together, to transform industries that have long resisted disruption and that must evolve, and to build a more equal global economy.

much of the tech community continues to dispute key elements of the Metaverse. Some observers debate whether augmented reality is part of the Metaverse, or separate from it, and whether the Metaverse can only be experienced through immersive VR headsets or is just best experienced using such devices.

at least thus far—the Metaverse is only a theory. It is an intangible idea, not a touchable product. As a result, it’s difficult to falsify any specific claim, and inevitable that the Metaverse is understood within the context of a given company’s own capabilities and preferences. However, the sheer number of companies that see potential value in the Metaverse speaks to the size and diversity of the opportunity. What’s more, debate over what the Metaverse is, how significant it might be, when it will arrive, how it will work, and the technological advances that will be required is exactly what produces the opportunity for widespread disruption.

Whether you’re a Metaverse believer, skeptic, or somewhere in between, you should become comfortable with the fact that it is too early to know exactly what a “day in the life” might look and feel like when the Metaverse arrives. But the inability to precisely predict how we’ll use it, and how it will change our daily life, is not a flaw. Rather, it is a prerequisite for the Metaverse’s disruptive force.

“A massively scaled and interoperable network of real-time rendered 3D virtual worlds that can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments.”

The purpose of a virtual world can be “game-like,” which is to say there is an objective such as winning, killing, scoring, defeating, or solving, or the purpose can be “non-game-like” with objectives such as educational or vocational training, commerce, socializing, meditation, fitness, and more.

The Legend of Zelda: Breath of the Wild

Super Mario Odyssey,

But neither title wears the crown. Instead, the victor is Animal Crossing: New Horizons,

Adopt Me!, a Roblox-based experience, was developed by only two independent and otherwise inexperienced people in the summer of 2017. Four years later, the game had nearly 2 million players at a single time (The Legend of Zelda: Breath of the Wild has sold roughly 25 million copies in its lifetime), and by the end of 2021, it had been played more than 30 billion times.

In 2019 and 2020, Fortnite was available on all of the major gaming consoles (e.g., Nintendo’s Switch, Microsoft’s Xbox One, Sony’s PlayStation 4), PC devices (i.e., those running Windows or Mac OS), as well as the top mobile platforms (iOS and Android).* This meant that a single player could access the title, their account, and their owned goods (for instance, a virtual backpack or outfit) from nearly any device.

Many imagine that the improvements to 3D virtual worlds and simulations, as well as VR and AR headsets, will fundamentally reshape our pedagogical practices. Students from around the world will be able to strap into a virtual classroom, sit alongside their peers while making eye contact with their teacher,

It is important to emphasize that while the Metaverse should be understood as a 3D experience, this does not mean that everything inside the Metaverse will be in 3D. Many people will play 2D games inside the Metaverse, or use the Metaverse to access software and applications that they then experience using mobile-era devices and interfaces.

I should also note that no part of the Metaverse requires an immersive virtual reality or VR headset. These may eventually be the most popular way to experience the Metaverse, but immersive virtual reality is just one way to access it. Arguing that immersive VR is a requirement for the Metaverse is similar to arguing that the mobile internet can only be accessed via apps, thereby excluding mobile browsers. In truth, we don’t even need a screen to access mobile data networks and mobile content, as is often the case with vehicular tracking devices, select headphones, and countless machine-to-machine and internet of things (IoT) devices and sensors. (The Metaverse won’t require screens either, by the way—more on this in Chapter 9.)

experiences set in virtual worlds require real-time rendering. Without real-time rendering, the size and visuals of virtual worlds would be severely constrained, as would the number of participating users and the options available to each user.

Central to most visions of the Metaverse is the user’s ability to take her virtual “content,” such as an avatar or a backpack, from one virtual world to another, where it might also be changed, sold, or remixed with other goods. For example, if I buy an outfit in Minecraft I might then wear it in Roblox, or perhaps a hat I purchased in Minecraft would be paired with a sweater I won in Roblox while attending a virtual sporting match developed and operated by FIFA. And if attendees of the match received an exclusive item at this event, they could take it with them from that environment into others, and even sell it on third party platforms

The most significant example of interoperability is the internet, which enables countless independent, heterogeneous, and autonomous networks can safely, reliably, and comprehensibly exchange information globally. All of this is made possible by the adoption of the Internet Protocol Suite (TCP/IP), a set of communications protocols that tell disparate networks how data should be packetized, addressed, transmitted, routed, and received. This suite is managed by the Internet Engineering Task Force (IETF), a nonprofit open standards group established in 1986 under the US federal government (it has since become a fully independent and global body).

nearly every computer network globally, from small-to-medium businesses and broadband providers, as well as device manufacturers and software companies, voluntarily embraced the Internet Protocol Suite.

There is no obvious or fast way to establish standards and solutions. Consider, for example, the idea of an “interoperable avatar.”

3D avatars are a more complex question. Is an avatar a complete 3D person with an outfit, or is it made up of a body avatar plus an outfit?

Developers need to understand, and agree on, how they work.

The process of standardization is complicated, messy, and long.

Unpacking the etymology of the term “Metaverse” is helpful here. Stephenson’s neologism comes from the Greek prefix “meta” and the stem “verse,” a backformation of the word “universe.” In English, “meta” roughly translates to “beyond” or “which transcends” the word that follows.

In combination, the “meta” and “verse” is intended to be a unifying layer that sits above and across all individual, computer generated “universes,” as well as the real world,

Some leaders within the virtual worlds space, such as Tim Sweeney, believe that eventually, every company will need to operate their own virtual worlds, both as standalone planets and as part of leading virtual world platforms such as Fortnite and Minecraft.

As Sweeney has put it, “just as every company a few decades ago created a webpage, and then at some point every company created a Facebook page.”

Increasing persistence within individual virtual worlds will nevertheless be essential to the growth of the Metaverse.

we may currently struggle to figure out why World of Warcraft might need to forever remember a user’s exact footprints in fresh snow, but odds are some designer will eventually figure out the answer and not long after, it will become a core feature of many games. Until then, the virtual worlds most in need of persistence are likely those based around virtual real estate, or tied to physical spaces. For example, we expect that “digital twins” should be frequently updated to reflect changes to their real-world counterpart, and that virtual-only real estate platforms would not “forget” about new art or décor added to a given room.

Virtual worlds have higher performance requirements and are more affected by even the slightest of hiccups than any of these activities. Far more complex data sets are being transmitted, and they’re needed on a far timelier basis and from all users.

Unlike a video call, which effectively has one creator and several spectators, a virtual world typically comprises many shared participants. Accordingly, loss of any one individual (no matter how temporary) affects the entire collective experience. And even if a user isn’t lost altogether, but instead falls slightly out of sync with the rest of the call, they lose their ability to affect the virtual world altogether.

This extended description of the challenge of synchronicity is critical to understanding how the Metaverse will evolve and grow over the coming decades. Although many consider the Metaverse to be reliant upon innovations in devices, such as VR headsets, game engines (such as Unreal), or platforms like Roblox, networking capabilities will define—and constrain—much of what’s possible, when, and for whom.

We will need new cabling infrastructure, wireless standards, hardware equipment, and potentially even overhauls to foundational elements of the Internet Protocol Suite, such as the Border Gateway Protocol.