Imagine being able to walk around and “physically” explore the internet via a virtual reality headset. Each web page, its own virtual world with things to do and see. This is the promise of the Metaverse.
The Metaverse is a “collective virtual shared space, created by the convergence of virtually enhanced physical reality and physically persistent virtual space, including the sum of all virtual worlds, augmented reality, and the internet.”
We don’t know exactly what the Metaverse will be like, but we do know it’s coming.
Facebook is Leading The Race
It’s no surprise that the behemoth Facebook is involved in numerous verticals other than its core social business, but not many are aware of just how close Facebook is to creating a truly massive Metaverse. Facebook’s acquisition of Oculus in 2014 marked the beginning of a series of organizational choices and acquisitions that positioned them as a leader in the race. Below is a timeline highlighting the moves.
Oculus launched its VR headset and software project after raising an impressive $2.4 million in Kickstarter.
Facebook acquired Surreal Vision, a 3D scene mapping company.
Facebook acquired Eye Tribe, an eye-tracking startup.
Oculus Research was formed from Facebook’s various VR and augmented reality (AR) projects.
Oculus Research turned into Facebook Reality Labs, a project currently creating life-like virtual avatars, ultra-realistic reconstructions of real-world spaces, and pushing the boundaries on VR/AR technology.
Facebook’s Metaverse Building Blocks
Out of Facebook’s various projects, LiveMaps and Facebook Horizon seem to serve as the building blocks to Facebook’s Metaverse. In essence, LiveMaps is creating a 3D copy of our physical world to be used as the base layer for augmented reality gear that Facebook will launch in the future. The below video gives an explanation of LiveMaps:
Users in Facebook Horizon can socialize, play games, and even create their own experiences. Although other similar virtual worlds and games already exist, like Minecraft or Roblox, Facebook has the largest amount of active users. If even a small percentage of Facebook users engage with Facebook Horizon it will be one of the largest virtual worlds in existence. At first, Facebook Horizon will only be accessible through Oculus VR headsets, but I assume they will build browser accessibility and other device accessibility in order to bring on as many users as possible.
Facebook’s Digital Currency, Libra
Facebook has some of the world’s most intelligent people working on both hardware and software for the Metaverse, so what more could they do to strengthen their first-place lead? Enter Libra, Facebook’s now famous (or infamous) digital currency project planned to launch in 2020. Note that Libra’s launch might be pushed back, or cease altogether, since it has come under such heavy scrutiny from many, including the US government.
Libra will be built on a permissioned-blockchain controlled by several corporate entities and its value will derive from a basket of different world currencies. This basket will be made up of the US dollar, euro, yen, British pound and Singaporean dollars. The currency backing the Libra will be held in the Libra’s governing association bank accounts, this way there is always some asset (different world currencies) backing up the value of the Libra. The purpose of pegging Libra’s value to a basket of real-world currencies is to diminish the volatility that many digital currencies experience. Unfortunately, the US government seems keen on stifling much innovation in finance so the launch of the Libra looks less likely every day. Were the US government encouraging towards innovation then Facebook would be able to launch the Libra almost immediately. While I somewhat agree with the government’s concerns with currency being partially controlled by private corporations, this technology is so transformative it will happen with or without government approval. If not Facebook’s Libra, then another project will take its place and at least Facebook is an American company where the government and regulators would have much greater input (versus a Chinese company for example).
Libra would enable an independent virtual economy to exist within Facebook’s Metaverse. Users could create content, games, and experiences and be paid in Libra and then exchange it for whatever fiat currency is used in their country. Users could even earn a living completely virtually. Although the project has recently lost some steam if Libra is successful Facebook will gain massive headway on their journey to building a true Metaverse.
Facebook Can Bring The Metaverse Mainstream
Facebook has the users, income, and talent to bring the Metaverse to the mainstream. With currently 2.41 billion monthly active users, a net income of $22 billion dollars, and over 35,000 employees, they have the tools to accelerate Metaverse development by years, if not decades.
Although Oculus itself is still not profitable from its 2014 buyout, Mark Zuckerberg has clearly stated that Oculus is building a virtual reality ecosystem that he intends to pay dividends in the future. Once Facebook Horizon is launched in 2020 it could instantly become the most valuable virtual world if even a small fraction of Facebook’s user base starts to engage with it. The objective with Horizon is multifold, they want to make the user experience to be easy, fun and engaging. Accessing Horizon will be via a VR headset but I expect them to add access via a regular browser in order to bring all of the users into Horizon. When users first enter the world they are taken to a public town square where you can meet and socialize with other people. This town square has access to other virtual worlds and environments with the Horizon ecosystem. At launch, these other virtual worlds and environments will be created by Facebook but they intend on opening up the world and have the users create new content and games. By allowing users to create their own content and experiences it will bring in millions of more users because there will be so many more options for things to do.
Autocracy vs Democracy
Since Facebook is a centralized entity with the ability to mobilize a massive amount of resources and connections, it is more likely to effectively create the Metaverse compared to a loose network of startups. There’s no doubt that startups have a huge role to play in contributing to the Metaverse, and we will likely have many interconnected Metaverses ultimately, but startups will not become dominant players until Facebook has paved the way. An appropriate analogy is to compare China and the United States. Both countries are economic powerhouses, but China is far better at completing things with speed. Simply put, enacting change is more cumbersome in the US due to the democratic system. The combination of states, legal processes, and regulations purposely impede people from moving fast and breaking things (this is a good thing in many instances) China, on the other hand, is an autocracy that can immediately implement rules and regulations. While this has obviously worked to China’s benefit (they have the fastest growing economy and lifted 850 million people out of poverty) it is clearly terrible for individual rights.
I foresee a similar situation playing out between Facebook’s Metaverse and others that are more open. Facebook will be the first entity to create a massive Metaverse with millions of users, but as other more “free” Metaverses are created they will slowly start to attract more users. Perhaps Facebook Horizon will enact rules and restrictions, like the right to ban users or seize virtual assets. People will likely choose options with more autonomy and “legal” rights.
Facebook will be the first to create a widely used Metaverse because they can effectively organize their vast resources towards a singular goal. Over time, users will trickle away into more independent Metaverses. Facebook’s centralized Metaverse will greatly accelerate the emergence of the “true” Metaverse, numerous interconnected virtual environments where users have a high degree of freedom and can live, work, socialize, game, and more with few limits.
Does The Metaverse Already Exist?
You might be wondering if other companies are working on Metaverse-type environments. One could argue that games like Fortnite, Minecraft, and Roblox are all in the race: they are virtual environments where users can meet others and create games or experiences. Roblox is actually most similar to a Metaverse-type environment because of its vast network of different games on its platform. Roblox users can develop games and experiences directly on top of the Roblox platform and have instant access to Roblox’s 90m monthly active users. They also provide users with in-world builders and the ability for players to code the physics of their worlds. So one game within Roblox can be in low gravity space or another game could be a race between supercars. I expect more games to head towards this platform Metaverse type model. No direct overall objectives but allow the users to create and monetize experiences. The game that is most similar to a Metaverse today is Second Life. Launched in 2003, Second Life was the first to achieve massive success in creating a Metaverse-type environment. Second Life is a virtual world where users can live, find jobs, start companies, create content, etc. This type of open sandbox environment with no direct objectives is ideal for the formation of a Metaverse because content and experience are almost completely dependent upon the users. These examples of Metaverse are all browser-based experiences which is fine but a deeper Metaverse needs greater immersion than simply interacting through a computer. Being able to enter and engage with a virtual world through a virtual reality headset is far more immersive. Examples of Metaverse-type environments that use VR include VR Chat, High Fidelity, and Sansar. While deep on immersion, these virtual reality Metaverses do not have the users of something like Roblox of Fortnite. This is where Facebook’s Horizon enters because it will be a combination of a large number of users with a deep immersion from virtual reality. Once there are multiple competing large Metaverses we could hope for them to allow seamless connections between them, thus creating a truly massive Metaverse.
My biggest concern with Facebook’s participation in creating the Metaverse is the potential misuse of data. As briefly mentioned, Facebook acquired CTRL Labs, a non-invasive neural interface platform that deciphers brain motor functions in order to remotely control machines. This technology could enable users to do things like type by simply thinking about typing. There is no question that this is an incredible technology that has immense applications, but neural signals are a powerful thing for a corporation to have access to.
In this video at 6:12, CTRL Labs Founder, Thomas Reardon, explains how neural signals are the best identifier for people that exists today.
CTRL Labs will have access to almost unlimited amounts of capital, some of the smartest minds in the world, and Facebook’s 2.4 billion users. Will they use our neural signals for mind-control and turn everyone into zombies? Let's hope not but we know we all realize that there are often trade-offs when it comes to technology ease of use and privacy. For example, most people still use Google even though Google collects swaths of our data. Facebook or not, it’s worrisome that entities may, even accidentally, abuse the possession of neural signals.
Will Facebook’s Metaverse Be Open?
I expect Facebook’s Metaverse will be more like the intranet rather than the internet. At least at first.
The early internet was actually a network called ARPANET and only consisted of a few entities. It was a closed system, or intranet, comprised mainly of universities to allow information transfer. It wasn't until the system opened to other participants that the network’s usefulness expanded at an immense pace. The intranet became the internet as we know it today where anyone can simply connect, share, and transfer information to one another. Facebook’s Metaverse will likely be similar to an intranet: closed and restricted. Unfortunately, Facebook has no current incentive to build an open system that can easily connect to other virtual worlds. By controlling their Metaverse, they can extract maximum value. An open interconnected system allows for users to migrate to and add value to other worlds, which is not in Facebook’s economic interests. Facebook has not disclosed the structure of its potential Metaverse, but we cannot fault Facebook for wanting to increase shareholder value.
Facebook As The Gatekeeper
Does this setup allow Facebook to become gatekeepers into the Metaverse? I think Facebook will have a huge impact on the larger Metaverse ecosystem. Most people will enter Facebook’s Metaverse before exploring others, which in some sense, makes them a gatekeeper. While some may view this as worrisome, consider that even the internet has gatekeepers and we still find it useful. Google has a monopoly on search which gives them immense power, but overall the experience using Google is amazing. Amazon can show you their own products first before non-Amazon products and we still find Amazon useful. Similarly, Facebook may control vast portions of the Metaverse ecosystem but the ecosystem as a whole will be better off. Unlike Amazon and Google where they are focused on niche use-cases (search and shopping), the Metaverse is more like the web itself, there is no singular purpose. This means that there will be a plethora of Metaverses that are created. Facebook simply can't create a different game, user-experience or environment for everything, even with their users creating content. Facebook will likely open up their system and connect to other environments as they realize it actually strengths their world. Their gatekeeper status will diminish as the overall Metaverse ecosystem becomes more robust. Facebook will understand that an open Metaverse is like an open internet.
Ever since its acquisition of Oculus, Facebook has been leading the race to build a Metaverse. Facebook will likely be the first to create a large scale Metaverse through the use of their:
The Facebook Metaverse will serve as a foundation to enable other virtual worlds to be created. As more users, capital, and talent enter the ecosystem, existing Metaverse environments will flourish. While there are major concerns that Facebook will play a central role within the Metaverse, their involvement will likely accelerate the entire ecosystem forward and will be a massive value add for the Metaverse.