"Metaverse" is one of the most popular topics in the tech community and in the VC world right now. In 2021, the term drew a lot of attention from investors and the market due to the IPO of Roblox and the name change of Meta (former Facebook). However, this word is not new – in Neal Stephenson's novel "Snow Crash" which was published in 1992, the "metaverse" has been used to indicate a 3D virtual world that is the successor to the Internet.
The term has been there for almost 30 years, but there is no unified definition of what the 'metaverse' is. Looking into the tech companies that are building the metaverse right now, we can clearly see that different companies have different visions about what metaverse should be. In the following paragraphs, we would like to analyze different imaginations of the metaverse right now in the market.
Web 2.0 vs Web 3.0 metaverse
Separating the metaverse platforms by Web 2.0 and Web 3.0 is a useful framework to understand different imaginations about the metaverse. For leading centralized tech firms, a.k.a Web 2.0 companies, metaverse refers to "Embodied Internet" – it is the next generation of the Internet that will bring people an immersive approach to interact with the content on the Internet and in real life. In Facebook Connect 2021, Mark Zuckerberg pointed out that, with 3D and AR/VR technologies, metaverse can break the limit of current Internet and mainstream hardware devices (e.g. PC and smartphones). And, we can connect with others in a totally different way on metaverse.
With AR and VR technologies, the boundary between the digital and physical worlds will be more blurry. AR will give users an enhancement to the reality they live in, and VR will let users access an immersive virtual world that is way beyond their living environment.
However, many users have concerns about metaverse built by traditional tech firms. Just like what the movie Ready Player One depicts, a closed metaverse virtual world managed by one tech company is a scary concept. The issues about data privacy, single-sided and manipulated content, and improper monetization approaches are especially concerning to users.
As a result, there is an increasing market demand for Web 3.0 metaverse – "an open and secure virtual world which allows users to decide the direction of the platform development, own their data, and enjoy the decentralized economy." Companies such as Decentraland, Somnium, and Cryptovoxels have released their version of decentralized metaverse platforms. Users can transact and display their NFTs and other collectibles in virtual art galleries. Moreover, they can invest in the native tokens released by the decentralized metaverse platforms.
The picture is taken on Somnium, a Web 3.0 metaverse platform. Credit: Jane Lu
Jane Lu's avatar in Horizon Worlds, a Web 2.0 metaverse platform. Credit: Jane Lu
Economy-oriented vs people-oriented
Another useful framework to understand different platforms' visions of Metaverse is to put those platforms on the spectrum of "economy-oriented or people-oriented". Generally speaking, Web 3.0 platforms are more "economy-oriented" – they mainly focus on the blockchain and trading-related functions (ex: cryptos, NFTs, and virtual real estate) that investors can use on the platforms while Web 2.0 platforms are more "people-oriented," focusing on attracting and maintaining general users. The core technologies for the Web 3.0 platforms are decentralized technologies such as blockchain, crypto, token, NFT, and DAO. Though users can access some decentralized platforms by VR headsets, extended reality technologies seem like a "good-to-have" element for those platforms.
Of course, this framework is not a rigid dichotomy – there are some Web 2.0 platforms that are more focused on the economy. For example, on Roblox, creators can charge users by the game they designed, and it is common that users will get charged multiple times just in a world in Roblox.
The common ground: Interoperability and inclusivity
The overall development of metaverse requires tremendous resources and is hard to finish by one single tech player. Players with different visions about the metaverse will collectively shape how metaverse looks in the future.
However, regardless of all the differences, there are some common grounds that those platforms shared – they all want to build a virtual world with great openness, inclusivity, and interoperability. Users nowadays are more aware of the interoperability across different platforms. Instead of locking into one closed system, they want to have more flexibility to experience different content on metaverse. As a result, developing a platform that is inclusive is crucial to engaging mainstream users, not just gamers and investors.
Something in between
Different metaverse companies will eventually work together to fundamentally change the world by building metaverse products. It's too naive to say Web 3.0 will take over Web 2.0 in all aspects. And, a mature metaverse platform will likely cover user-oriented functions and economy-oriented functions.
A more practical imagination about the future of the metaverse is to imagine something in between – we have a "Web 2.5" Metaverse in which users can simply enjoy their time on it while having all kinds of transactions. To encourage more creators on their metaverse platforms, Web 2.0 companies may introduce systems that empower the blockchain economy. On the other hand, companies that are working on Web 3.0 metaverse may cooperate with Web 2.0 to bring in extensive reality technologies that can significantly optimize the user experience, attracting more users and increasing the time people spend on their platforms.
Bio of Jane Lu:
Jane Lu is a board member of the North America Taiwanese Engineering & Science Association (NATEA) and an MBA candidate at UC Berkeley, Haas School of Business. Before MBA, she has years of working experience in the tech industry, covering UI/UX, tech supply chain, business operations, digital transformation, and tech strategy. She has worked for firms including McKinsey, Facebook Reality Labs, and Dell. During her MBA, she was selected as a venture partner of Berkeley Haas Impact Fund, which invests in early-stage impact-oriented startups and organizations. The topic of her MBA independent study is "The Future and Business Strategy of Metaverse."
Editor's Notes: The article was originally published in "Metaverse Research," an independent study initiated by Andrea Chang and Jane Lu, as part of their Berkeley Haas MBA program.
