In June 2021 Mark Zuckerberg announced a new Facebook project called the metaverse in an interview with The Verge. Since then, there has not been a lot of new information regarding the project. This changed a couple of days ago when Facebook released a blog post that they are going to hire 10,000 employees across the EU to build the metaverse. Then today Facebook made an announcement about the rebranding of their company, with the intention that people are going to see them as a metaverse, instead of a social media company. It looks like Facebook is really going to fire up the metaverse hype train now.
What is a Metaverse?
Although you might have never encountered the term metaverse, it is highly likely that you know what it is, since it is a common concept portrayed in fictional literature and movies. The metaverse is seen as a future iteration of the internet, where persistent and shared 3D virtual spaces are linked into a perceived virtual universe. Probably the most commonly known depiction of a metaverse is the one in the novel Ready Player One by Ernest Cline and its film adaptation directed by Steven Spielberg. In the novel, humans have created the metaverse OASIS, which they access with virtual reality headsets and wired gloves.
For a detailed explanation of the metaverse and ideas about its implementation, I can highly recommend the nine-part essay ‘The Metaverse Primer’ by the entrepreneur and blogger Matthew Ball. In the following text, I will summarize a few of the key aspects of the essay.
According to Ball, the last iteration of the internet was the mobile internet, which was first introduced by the iPhone. It revolutionized the way people were interacting with the internet. Instead of using a computer at home, the internet was now accessible everywhere, with a device that fits into a pocket. The metaverse will be the next evolutionary iteration of the internet. It will alter the role of the internet and computers in our life. While the smartphone gave us continuous access to the internet and computation, the metaverse will embody humans inside the internet and therefore will constantly be within it.
Ball defines the following key characteristics for the metaverse
- massively scaled network
- interoperable network
- consists of real-time rendered 3D virtual worlds
- synchronous
- persistent
- effectively unlimited number of users
- continuity of data, e.g. identity, history, entitlements, objects, communications and payments
It is important to differentiate the metaverse from virtual worlds, like Second Life, because they do not fulfill all the above-mentioned criteria. For instance, they lack continuity of data and interoperability, mostly forming enclosed spaces within the internet instead of resembling the entire internet. Though, they come pretty close to the idea of the metaverse and are thus often designated as proto-metaverse, meaning they are an early and primitive form of a metaverse.
What is Facebook’s take on the Metaverse?
Facebook does not only own several social media websites but also Oculus, a virtual reality headset manufacturer. Facebook wants to leverage the knowledge of this company division to create its metaverse.
According to Mark Zuckerberg, the metaverse is not something that one company, i.e. Facebook, is going to build but instead, it will require a partnership of many companies. Facebook states that the key feature of the metaverse is openness and interoperability. This still does not exclude that Facebook probably wants to have major control over the network; why else would they be interested in developing the metaverse and sinking billions of dollars into the project?
When Mark Zuckerberg is describing the metaverse, he mostly uses the previously mentioned definitions by Matthew Ball. He adds that virtual reality will be an important part of it, as it would deliver the clearest form of presence in the metaverse. Though, it will not only be limited to virtual reality and augmented reality devices but also be accessible for regular devices. The description he gives is still very vague though. He doesn’t go into technical details and mostly describes use cases, like joining a virtual 3D concert from your phone.
Why is Facebook changing its name?
Mark Zuckerberg’s plan is to transition Facebook from a social media company to a metaverse company within the next five years. The first public milestone for this journey will be the rebranding of the company coming next week.
In the past, we have seen a similar move from Google, where they formed the holding company Alphabet Inc., which became the parent company of Google and several of its former subsidiaries. Over the last years, Facebook has come into a similar situation, where the company not only consists of the social media website but further acquired Instagram, Whats App, Oculus, and other subsidiaries. So from a business perspective, rebranding is only a logical step to emphasize that they are more than a single company, but instead a conglomerate.
Additionally, the word Facebook carries the implication of a book’s two-dimensionality. Since pages, physically or on the web, are just flat surfaces with text and pictures on them. The metaverse though is going to be a three-dimensional space. So they might want to go with a name that implies openness and endlessness.
Further, there is a lot of negative press associated with the name Facebook, which took a huge toll on the brand name. So why not start with a clean slate?
We do not yet know the new name of the company but my best guess would be Horizon Inc. because they just recently rebranded their virtual reality game creation system from Facebook Horizon to Horizon Worlds. This might even be the tool they imagine us to use for creating virtual worlds in their future metaverse.
What do you think will be the new name of the company?
Are there any serious Competitors?
Tim Sweeney, the founder of Epic Games, is gradually building their online game Fortnite towards a metaverse. In 2019 the DJ Marshmello held an exclusive live concert inside Fortnite, which was attended by eleven million people within the game and several million more through YouTube and Twitch. This shows the massive potential of Fortnite and Epic Games. Sweeney continuously routes for an open metaverse. He wants to build an open standard, that is controlled by everybody, before somebody else, e.g. Facebook, builds a closed one. According to him, the case is clear, Zuckerberg wants Facebook to create the first metaverse, such that they can have full control over it.
Sweeney wants to make the metaverse a free and fair economy, which should make it appealing for companies. He supports this claim through the legal case with Apple regarding Fortnite in-app purchases. While Sony and Microsoft made a lot of revenue through selling consoles for Fortnite, Apple sued Epic Games because they were not using their payment system for in-app purchases, which would have charged them a fee for each purchase. He claims that due to the network effect, every company would be better off in an open system rather than in a closed one.
Although I generally support the idea of open standards, I disagree with Sweeney’s argument about free markets. We can currently observe that closed networks, like Facebook, Whats App, and Instagram, all have a high market share, while open standards are mostly unknown to the average user. Most importantly it is about establishing a large network first, together with easy accessibility and a good user experience. An open standard, backed by a majority of the industry, will not automatically win the race. Instead, society will decide which system will prevail and they will choose the one with the highest benefit, mostly defined by the above-mentioned criteria. A network, which is just open, provides little to no benefit to an average user. If there is already a closed network established, companies might be better off playing according to its rules rather than sinking money in an open network that nobody uses, e.g. through creating content for it, with the hope to increase the value for the user. I think that in fact the free market just supports closed networks, and regulations like breaking up the Facebook monopoly could finally help open networks to thrive again.
Of course, Microsoft also wants a piece of the metaverse cake with their Microsoft Mesh. It will further extend the capabilities of their augmented reality device HoloLens but also claims to be accessible by all devices. Where Facebook and Epic Games clearly have their focus on entertainment, Microsoft tries to appeal to enterprises, a domain where they are already leading. Their technology is built upon AltspaceVR, a virtual reality social network they have acquired back in 2017. In a tech demo, they showcased mixed reality meetings as an addition to their already wildly successful collaboration platform Teams.
Conclusion
It is fairly certain that the metaverse will be the next big thing, the next iteration of the internet, but which companies are going to establish their standard of the metaverse is still impossible to predict. It is likely that we will see multiple platforms with different approaches coexisting at least for a while. Both Facebook and Microsoft are heavily invested in VR and AR, which I think will be key technologies in accessing the metaverse. They are also the two companies who have advanced the most in development, whereas we have yet to see any specifics or demos by Epic Games. I expected that Facebook will release more information about their project with the upcoming name change.