What is Metaverse?
Metaverse means the ultra universe where all the systems are connected. Meta means “beyond” or combination of separately functioning systems. Verse in this context stands for universe. Meta can also be thought as the systems of the systems. For instance, in social sciences an analysis of all the existing past analyses is called the meta-analysis.
Mark Zuckerberg claims that the new metaverse will allow people to bring physical things to the cyberworld and take things from the cyberworld to the physical world.
He claims his platforms will allow people to live in the cyberworld and physical world simultaneously with the help of Oculus VRs, Nazare AR glasses, and the platforms that allow developers to create hyper interactive platforms like Horizon Home or Poroject Cambria.
2nd life, Roblox, Animal crossing
Is metaverse new, is it a new concept? Absolutely not. Creating avatars to interact with others goes back to the early days of the internet. This book from 1997 talks about “how people can create digital representations of themselves and travel to virtual worlds from cityscapes to fantasy worlds where the laws of physics are repealed.”
2nd life, which was founded in 2003, had at one point had 1 million active users where people could study, sell and buy things, join religious activities, interact with brands, watch live performances and so many other things.
Secondlife by Linden Labs (Vickers. et al)
Nowadays, Roblox, Fortnite and Animal Crossing games also allow participants to live and socialize in the virtual worlds. Anyone can buy or sell virtual land and real estate on Sandbox by using cryptocurrencies.
Sandbox virtual real estate website
The fact that 2nd life started declining after a few years, brings up the question whether this is just a marketing gimmick or a new groundbreaking technology…
There is news in the mainstream media that Facebook is changing its name to not to the negative PR created by the recent whistleblower claims. But is it really so?
First of all, a google news search shows that the number of negative news about facebook was way higher after the Cambridge Analytica Scandal where Facebook allegedly allowed 3rd parties to get private information about every single user and then show them political ads. Not now.
Also, in the past 15 years, there have been so many critics who claimed Facebook would collapse and its users would leave the platform because of privacy issues or policy violations. However, all these turned out to be false predictions. This news story explains how almost a dozen times nothing happened after the serious negative press coverage on facebook. People quit Facebook but then come back because of the network effects since most of their friends are there.
NBC news story on how the user backlash didn’t work against Facebook
This NYT piece also highlights the fact that Facebook’s ad revenues were not impacted even though more than a thousand companies protested the network by joining the #StopHateForProfit boycott in 2020.
Google search trends also indicate that “delete Facebook” and “delete Whatsapp” searches are decreasing even though the total number of users is higher now.
So, we cannot claim that Facebook is changing its name solely because of the negative press coverage.
Rebranding and Stocks
Portfolio companies that are traded in the stock market often tend to merge under a new name. Some examples would be Google and Android becoming Alphabet and Apple Computers becoming Apple. But is it good?
The analysis of 215 stocks showed that rebranding usually has a positive impact on the market value.
Another study also found that brand equity and brand attitudes are also usually positively associated with rebranding.
Additionally, we know that Facebook was an umbrella name for 4 distinctive brands but it was not growing as fast as before and did not seem like the “coolest” social network since it is the oldest. So, it makes sense to merge the sub-brands under a new theme where no other brand is positioned. No other brand is associated with metaverse and it is an emerging concept.
Research on VR & AR
Watching Mark Zuckerberg’s presentation, one would notice that the video looks like a commercial for the Oculus headsets and the Nazare AR glasses. However, these concepts have been around for a long time. But do people really like AR and VR?
First of all, both AR and VR look like hypes rather than things consumers stick to after the first trial. Even though the VR sets were invented 50 years ago and have become more and more available, people who stick to this kind of experience seem to be very low, around 3%, probably most of those being heavy video game players.
VR sets also clearly have many problems such as simulation sickness, cyber sickness, nausea, locomotion issues and dexterity issues. This study found that 60% of students who participated in the VR experience quit the experiment because of cyber sickness even before the 10-minute experiment finished. Additionally the control group who used PCs performed better than the VR group when performing the simple digital task.
I also personally conducted a focus group study on AR in my research seminar when Domino’s Japan introduced the Hatsune Miku campaign where scanning the pizza box allowed viewers to watch an AR dance show on the box.
It was the first hands-on augmented reality experience of all the participants. They all got excited but indicated that they weren’t sure if they would search for these kinds of experiences again and complained about the time lapse between scanning and viewing the performance.
I personally believe all these problems can be easily solved by technological advancements by time (not now). However, given the fact that AR and VR startups seem to be the worst performing startup categories in tech makes me conclude that immersive virtual experiences will not be mainstream soon.
Cryptocurrencies and Metaverse
The metaverse concept was not invented or introduced by Facebook. Metaverse seems to be very popular among the crypto community who value decentralized financial systems and deregulation.
Currently, the most popular non-game related metaverse search topic on Google, besides Facebook, is “metaverse NFT.” The cryptocurrency enthusiasts believe that the proof of ownership of digital or physical goods recorded on blockchain is a must to establish a virtual world in the future.
Two strong proponents of Metaverse are the Winklewoss twins who believe the future will be immersive digital experiences where people could use digital currencies to buy/sell digital goods or estates.
Sandbox defines NFTs or Non-Fungible-Tokens as “virtual tokens minted on the blockchain for digital scarcity, security, and authenticity. They are unique, indivisible, and non-interchangeable – allowing true digital ownership of in-game assets.”
What is NFT (Sandbox)
However, we have to remember that all major economies are planning to issue their own digital currencies and it would be inconvenient for people to pay for things by bitcoin or Ethereum which have very expensive transaction rates and require advanced computer literacy (capability of operating a digital wallet). Additionally, it is difficult to imagine that governments will not audit these exchanges and allow them to be tax-free and regulation-free.
Human Biology and Metaverse
Those who presume humans will live dependently on AR & VR in the future, may be missing the point that humans are genetically programmed to move around, get vitamin D from the sunshine and maintain a certain type of posture throughout the day. For instance, so many old people would practically lose their ability to walk, if they do not use their leg muscles for a certain time.
Below is a clip from the movie Wall-E which shows all kids would be fat and social life would be odd if people change their usual socialization habits.
Metaverse and the future
While we know things will be more digital in the future (grocery shopping, banking, legal affairs) and after the pandemic people now consume up to 7 hours of cyber content a day, claiming that everyone will live like those who are in a prison without moving anywhere or interacting with their friends only digitally, would be denying human nature.
Lastly, we should also not presume that everything will be made by robots in the future so that no one has to work again. Robots are ideal for repeating simple tasks but become impractical if the task is performed occasionally or complicated. For instance, while most car factories have been utilizing robots for more than 40 years, but nobody would want to have surgery performed solely by a robot or have 20 different kinds of robots in the kitchen..
We have to remember that the world’s best selling robot is a vacuum cleaner which took 30 years to build because so many other robots simply didn’t work or were not sustainable, scalable or fundable.
While the tech predictions about the communication technology (video phones, ubiquitous internet, cheap and fast broadcasting) have come true, the predictions in other tech areas (robots, AI, energy) have been way off.
It is yet to be known if the name change would improve the image but we for sure know that the metaverse or the immersive internet will not replace the PCs and mobile phones soon.
Regarding the adoption of new hardwares, we know that certain factors such as trialability, compatibility and observability are important predictors.
When it comes to the mass adoption of new social media platforms, usually the factors of opportunities to make money, opportunities to get a romantic partner, opportunities to become famous impact the decision making process. The effects of exclusivity (e.g. invite only) and the celebrity appeal tend to be short lived (E.g. Google+, Clubhouse, etc.).
PS: Images used in this blog posts were collected over the internet with the intention of fair use. Fair use is defined as ” a doctrine that permits limited use of copyrighted material without acquiring permission from the rights holders. Examples of fair use include commentary, search engines, criticism, news reporting, research, teaching, library archiving and scholarship. It provides for the legal, non licensed citation or incorporation of copyrighted material in another author’s work under a four-factor balancing test.”