What Exactly Is the Metaverse?

You may have heard the term “metaverse” in news about Facebook rebranding to a new name, Meta. Or you may have been a sci-fi fan in the 1990s and read Neal Stephenson’s seminal novel Snow Crash, where the term was first coined.

The metaverse is gaining steam, so it makes sense to find out more about it and figure out when it’s going to start affecting our world. The definition of metaverse is essentially a connected web of immersive social experiences using 3D technology, including virtual reality (VR), augmented reality and artificial intelligence, to participate in virtual worlds.

The goal of the metaverse is social connection in virtual worlds, but don’t be fooled: there will be a heavy commercial focus as companies and brands figure out how to monetize this new thing. Typically, players don an avatar, which is a representation of a person, to enter the virtual world. Players or participants use a headset and gaming equipment that are enabled for virtual or augmented reality.

To be clear, the metaverse doesn’t exist in whole yet, but there are some pieces out there that have been developed. One of the oldest is Second Life which was launched in 2003 and allows players to enter a virtual world. Games such as Fortnite allow multiple players into their virtual world where you have challenges to conquer, and the CEO of Epic Games has a very metaverse-like vision in mind for his company. Facebook’s – or I’m sorry, Meta’s – first attempt toward the metaverse is Horizon Worlds, launched December 9, 2021. But right now, it’s just a game that uses a Meta Platform and the Oculus Quest VR system.

The metaverse should enable people to do pretty much anything you can do in real life. Currency is especially key to the development of the metaverse. Picture people buying virtual accessories (which already happens on numerous kids’ phone apps), virtual pets like unicorns, virtual real estate (check out Decentraland), and more with game-like currency or virtual currency or both.

One vendor that’s farther along than Facebook/Meta is Roblox. It’s an online game-development platform with more than 164 million users (as of August 2020) and 1.3 developers (as of October 2021). Roblox has its own virtual currency, Robux, which can be purchased by real cash.  Developers can earn money from the worlds they develop through participant engagement, participant purchases, and sponsorships.

And here’s where the marketing comes in. Sponsorships and advertising will likely seep their way into these virtual worlds. The platform providers and developers of the Metaverse will be like the platforms and influencers of social media. Luxury brands, sports brands, and celebrities are already taking notice.

There’s also the enterprise metaverse, where the metaverse concept is applied to work. Check out Virbela to see one example of how that’s unfolding; its customer base already includes forward-thinking companies and top universities.

It should be fascinating from a business standpoint to watch how these platforms will begin to knit together or not, which vendors gain traction on their platforms, which developers become superstars in their virtual worlds, which currencies become the most valuable, and what monetization models work the best. From an accounting and tax standpoint, you know there will be additional rules and laws come out of regulatory bodies that we’ll need to absorb and apply to clients playing and working in the metaverse space.

If you’d like to start learning more about the metaverse and its possibilities, here are four suggestions:

  • Become a gamer, or at least try out one of the VR/AR games available
  • Explore one or more of the vendors mentioned above
  • Learn more about virtual currency including cryptocurrencies, NFTs, blockchain, and that world, because it will play a part in the metaverse as well.
  • Take them on as clients – that is, the individuals and business who are developing and monetizing the metaverse. It could be a fascinating niche for forward-thinking professionals.