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Welcome to the metaverse - virtual worlds where you can work, play and own property

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The metaverse, VR headsets, virtual worlds, Zoom (illustration)
The metaverse, VR headsets, virtual worlds, Zoom (illustration)

For the first time in more than a year, I am sitting at a boardroom table. My interview subject, a Facebook executive called Mike LeBeau, gesticulates as he explains the social media giant’s latest invention, drawing on a whiteboard to illustrate his point.

The company’s public relations representative sits to LeBeau’s left, silently taking notes on a computer. I am wearing a pristine blue suit, and feel decidedly overdressed in the presence of hoodies and jeans. We are at least all maskless, despite Facebook’s policy requiring face coverings in the office.

In reality, the three of us are sitting in different homes, with a virtual reality helmet strapped to our heads. LeBeau is demonstrating Horizons Workrooms, Facebook’s online space for virtual reality meetings that has been developed by a group at the company’s London offices. Even if we are represented by cartoon avatars that hover around the room, the meeting certainly feels closer to real life than staring into a Zoom video call.

A virtual meeting taking place in Facebook Horizon with avatars
A virtual meeting taking place in Facebook Horizon with avatars

LeBeau knows this more than most. Horizon Workrooms was built partly out of frustration at dialling into video meetings with colleagues in California, a problem even before the pandemic. He says up to half of his meetings now take place in VR. “We were thinking, ‘We’re eight hours away from California, how do we still have the same kind of impact from this distance?’”

From social media to the metaverse

For Facebook, which expects around half of its staff to work from home in the next decade, these meetings might become the norm. It is also one of the first efforts the company has made to move virtual reality beyond the world of video games, having ploughed billions of dollars a year into the technology seven years after purchasing VR company Oculus.

But some technologists say it is also a step towards a bigger idea; the concept not just of virtual meeting rooms but of virtual worlds: living, always-on parallel universes with their own economies, properties, laws and people who break them. The virtual world has been a science fiction trope for decades, the concept behind films such as The Matrix and Ready Player One. More recently, another name for it has captured the tech industry’s attention.

The “metaverse” – a term coined by the author Neal Stephenson for the simulation in his 1992 novel Snow Crash – has become Silicon Valley’s argot of the year (Stephenson, somewhat bemused at his new status as a Nostradamus, has since told an interviewer he was “just making s--- up”). Google searches for “metaverse” have risen ninefold since the start of the year, and executives are falling over themselves to own the term.

Roblox game scene
Roblox game scene

“In the coming years, I expect people will transition from seeing us primarily as a social media company to seeing us as a metaverse company,” Mark Zuckerberg, Facebook’s chief executive, recently told investors, using the word 21 times over the course of an hour.

Roblox, the company behind the wildly popular children’s video game of the same name, was valued at $38bn earlier this year on a promise to deliver the metaverse.

Money to be made

Epic Games, the video game giant behind Fortnite, in April raised $1bn from investors including Sony to fund a “long term vision for the metaverse”. Its chief executive, Tim Sweeney, spent much of his time on the stand in the company’s recent lawsuit against Apple laying out what that meant, describing it as a “virtual world for socialising and entertainment”.

Every executive has a different definition of the metaverse – imagine describing the internet to the uninitiated four decades ago – but they can at least agree that there is money to be made.

Broadly, it involves moving much of everyday life and work into an online and 3D space, unbound by the real-world inconveniences of distance and physics. Board meetings, rock concerts and sports tournaments would take place there.

Virtual reality is a potential gateway, but not a necessary one. Today, the most vibrant metaverses are accessed through smartphones and consoles: video games such as Fortnite, where this month millions tuned in to a virtual concert featuring the popstar Ariana Grande, and Minecraft, where players congregate in a Lego-like open world.

Fortnite players can attend Movie Nite in game film screening events
Fortnite players can attend Movie Nite in game film screening events

Already, these virtual worlds turn over huge sums. While Fortnite is free to play, users spent $3.7bn (£2.7bn) on virtual items such as special characters and clothing in 2019. Roblox took in $924m last year from gamers spending money to access extra features.

If people are indeed willing to spend hours in virtual worlds, it might follow that they might value digital items as much as physical ones. This year saw a frenzied rush for non-fungible tokens, or NFTs, digital collectibles such as pieces of art or unique footwear designs. Unlike most digital material, NFTs cannot be infinitely copied and pasted, granting an air of exclusivity that gives them purported value.

The latest rush is for virtual land – digital plots that eager citizens of the metaverse plan to make their home. June saw the priciest auction to date for a slice of virtual real estate, when an investment fund focused on the area paid more than $900,000 for a patch of Decentraland, a virtual world based on the blockchain technology that underpins Bitcoin.

Edward Saatchi, a technology entrepreneur in San Francisco, says he recently paid several times the value of his car for his own piece of digital paradise. “Rather than getting my Mini replaced, which I use every single day and is falling apart, I decided to spend multiples of that amount on digital land. But I’m more and more in that realm.” Saatchi says the investment has, however, paid off: the digital property is now worth several times what he paid for it.

‘The metaverse is already here’

If the concept of moving life to a digital simulation sounds ludicrous, it might have sounded more so 18 months ago, before Covid subjected the world to days and evenings of Zoom calls, virtual quizzes and online gaming. “What happened in the last year would have taken a decade otherwise,” says Jamie Burke, the founder of Outlier Ventures, a London venture capital firm dedicated to technologies that will power the metaverse.

“People spent more time in games and they started to think about how they express themselves digitally. A lot of this had previously been a weird subculture. Now, depending on the generation, it’s pretty mainstream.”

 People wearing virtual reality headsets - Shutterstock
People wearing virtual reality headsets - Shutterstock

Not everybody is convinced. The metaverse, with its science fiction connotations, smacks of the sort of grand idea that captivates much of Silicon Valley, while the execution is harder.

Virtual reality has gone through several false dawns, enough to wonder if it is not so much the technology as the idea of strapping a computer to one’s head that is wrong. Second Life, the online virtual world founded in 2003, was hailed as the future of socialising until the hype died down.

‘The question is who will control it’

Saatchi says the success of games such as Fortnite and Roblox, and the millions spent on NFTs demonstrates that the metaverse is already here. “I don’t think anything material has improved. Everyone’s just like, ‘Oh my God, there’s a lot of money here’.”

That is perhaps what has attracted the likes of Facebook to the space. Burke, whose venture capital fund is dedicated to “decentralised” technology that purports to provide an alternative to control of key technologies by a few companies, says the question is less about whether the metaverse will happen than who will control it.

Owning much of today’s internet is one thing, but controlling a metaverse where people might work, live and run businesses is another.

“If you look at the web as it is today, it’s either a monopoly or a duopoly. The idea that we would allow these monopolies as they are today to just extend those business models is clearly not acceptable. That is incredibly dystopian”

In Stephenson’s Snow Crash, the novel that coined the word, the metaverse is operated by an megalomaniac telecoms monopolist called L. Bob Rife, seeking to use his creation to control the minds of a compliant population. Plenty of Zuckerberg’s critics might be all too willing to make a comparison.