Metaverse – The full story behind the hottest buzzword in the tech scene

Table of contents
  1. No Snow Crash, no Google Earth?
  2. Facebook sees metaverse potential in Oculus
  3. Required reading at Facebook
  4. Epic Games on its way to metaverse status
  5. Epic Games collects USD 1.78b in funding
  6. Disney, Marvel and others keen on cameos in Fortnite
  7. Potential reach of virtual concerts
  8. Is 5G the key to the metaverse?
  9. Facebook’s metaverse may be on the Horizon
  10. Dark horses in the metaverse race
  11. Even if it fails, “it will generate billions in value”

It seems that whenever the world’s tech elite starts talking about their vision of how the internet of tomorrow will be, there’s one term they’re apt to drop: “Metaverse.” The term first appeared in the 1992 science fiction novel titled “Snowcrash,” which has left a lasting impression on the founders of Google, Amazon and Facebook. Today, we’re breaking down what the term means on the surface, what it means moving forward, why it’s in vogue again and which industry players are tapped to pull off creating a metaverse.

‘Snow Crash’ was really ten years ahead of its time. It kind of anticipated what’s going to happen, and I find that really interesting”, said Sergey Brin in an Interview from the year 2000. The Google co-founder lists the science fiction romp as one of two books that had a particular influence on him.

No Snow Crash, no Google Earth?

Snow Crash (here’s a brief synopsis on Wikipedia) paints a bleak, dystopian future dominated by technology, in which the State has almost entirely retreated from the fore. The world is run by mega conglomerates and inequality is extreme. “Hiro Protagonist,” the novel’s protagonist hero, delivers pizzas and ends up getting tangled up in the search for an enigmatic drug called Snow Crash.

Author Neal Stephenson says he never really saw himself anticipating the future. The book was “just me making shit up,” he told Vanity Fair in an interview in 2017. Nevertheless, Stephenson’s prognostications not only struck a nerve across Silicon Valley, but several products, concepts and circumstances predate the digital age. The term avatar, for instance, now firmly entrenched in popular usage, was a novelty at the time. Then there’s an ingenious piece of technology featured in the book called “Earth,” which can only be described in a manner eerily reminiscent of “Google Earth,” which has been around since 2001—nearly a decade after Snow Crash first hit shelves.

Facebook sees metaverse potential in Oculus

Another central concept to “Snow Crash” is that of the aforementioned metaverse: a kind of parallel digital world, in which people flee from the bleak reality of the present. A world that exists in permanent parallel and entirely independent to the real physical world and complete with its own currency and economy, where people can communicate and interact with one another simultaneously and in realtime.

Google co-founder Sergey Brin is not the only A-list tech founder influenced by the concept. While Facebook founder Mark Zuckerberg has never publicly mentioned “Snow Crash,” he did tease the concept in a March 2014 post on Facebook. In it, he announces that his company recently acquired VR glasses manufacturer Oculus and lays out his vision for the company moving forward. Two editors at Bloomberg and a journalist at Forbes all pen responses to the post that Zuckerberg has designs on building a metaverse.

Required reading at Facebook

Even prior to that, “Snow Crash” was an apparent source of inspiration for Facebook managers. At the beginning of the decade, it was even required reading for Facebook’s management Team, like Dean Eckles, active at Facebook from 2010 to 2015 in the central data science team, among other areas, posted in his personal blog.

Amazon founder and multi-billionaire Jeff Bezos is apparently friends with Neal Stephenson. After watching a film together in 1999, the “Snow Crash” author is reported to have inspired Bezos to found his aviation company Blue Origin. Stephenson was the first member of staff at Blue Origin and remained at the company until 2006. It’s not Stephenson’s only direct contact to Silicon Valley: From 2014 to May 2020, Stephenson was active as “Chief Futurist” at AR company Magic Leap.

Epic Games on its way to metaverse status

Skeptics would argue that there is no evidence suggesting that the idea will have any success. They could be right. Just look at Second Life, a virtual world whose massive popularity at the turn of the decade quickly faded. Or the failure of AR and VR glasses to break through to the mainstream despite being touted as the next big thing for years. So why is the term back in vogue?

A major reason figures to be Tim Sweeney, founder and CEO at Epic Games. His company developed the Unreal gaming engine, operates the “Epic Games Store” and last, but not least, is behind the hit game Fortnite (The official OMR portrait from back in the day, in case you’ve been in a coma). Sweeney, it seems, has been fascinated by the metaverse concept for some time. For years, he’s spoken publicly about the concept, held presentations at industry events and recently gave a 47-minute interview on the subject. In 2019, Sweeney told Business Insider, that his goal with Epic Games is to build a virtual, social world that’s “something like the Metaverse.”

Epic Games collects USD 1.78b in funding

In early August of this year, Epic Games announced that it received an additional USD 1.78b in funding. The company is currently valued at USD 17.3b. The fresh injection of capital would figure to accelerate Epic Games’ efforts to build “a new kind of digital ecosystem using real-time 3D technology, services that connect hundreds of millions of people, and a digital storefront that offers a fair business model,” Sweeney said in an official statement at the conclusion of the round of funding. Companies who have invested in Epic Games include Chinese behemoth Tencent, private equity firm KKR and investment corporation Blackrock.

To get a feel for the potential successfully pulling off a metaverse could have, look no further than the success Fortnite has enjoyed the past two years. First off, the game has massive reach: In March 2019, Sweeney estimated the number of active users to be 250 million. Second, Fortnite has since transcended the confines of being just a game: for many users, Fortnite has become a place of social interaction (in the aforementioned press release on funding Epic Games mentions “2.5 billion ‘Friend connections'”). And third, the massive reach and user intensity have made Fortnite an attractive content platform for external companies and brands.

Disney, Marvel and others keen on cameos in Fortnite

That list is led by some of the biggest names in the entertainment and media industry, who are now willing to share their tightly protected intellectual property with Epic Games. Disney, for example, has already engaged in several co-ops with Epic Games to promote Star Wars releases and products within Fortnite, including exclusive skins (popular characters from the film that can be used as Avatars) and letting players watch previously unreleased clips from the film “The Rise of Skywalker” in the Fortnite movie theater.

Entertainment company Warner has also cooperated with Fortnite: After showing a first trailer to Christopher Nolan’s newest movie Tenet, this past June, Fortnite’s in-game movie theater also had full-length showings for three full films by Nolan. Then there’s the NFL, which repeatedly has released official team skins in Fortnite. And lastly, for the upcoming Fortnite season (the game follows a schedule similar to a TV show or a pro sports league for new content) players will be able to play as some of the most popular Marvel comics characters.

Potential reach of virtual concerts

Apart from the movie and sports industry, there’s music as well: Superstar DJ Marshmello gave a virtual concert in Fortnite back in February, which was taken in by 10.7 million, according to what Epic Games told The Verge. In April 2020, rap star Travis Scott gave five separate concerts, which Epic Games said maxed out at 12.3 million simultaneous attendees and had a total of 27.7 million.

For the time being, Fortnite users can only experience the concerts in groups of 100, meaning there is plenty of work to be done by Epic, before it reaches true Metaverse status and enables millions of people to simultaneously interact with each other. Nevertheless, the traction the events gained and the success they enjoyed figures to have piqued the interest of investors and recharged faith in the idea of a metaverse.

Is 5G the key to the metaverse?

There are some new technological developments on the horizon that could pave the way for a true metaverse. First, the increase to the data transfer rate that the new 5G standard is supposed to bring will enable internet in realtime, meaning virtual concerts can be experienced by tens of thousands of persons simultaneously. Then there is the overall acceleration of technology as a result of the corona crisis and its impact in further reducing apprehension of digital experiences among broader segments of the population. The workforce today is frequently forced to ply their trade remotely and is used to interacting with colleagues on Slack and Microsoft Teams and attend virtual meetings on Zoom and Google Meet. Privately those same people are trading in a social life “AFK” for escapist romps in social games, like Fortnite and Animal Crossing, where they can connect with friends and even tie the knot. As such, the idea of a digital parallel world no longer seems so far flung and is more likely to be met with widespread acceptance than it would have been pre-pandemic.

Facebook’s metaverse may be on the Horizon

It’s therefore not all that surprising that Epic Games is not alone in its efforts to construct a metaverse. The events of the past few weeks indicate that Facebook has never lost sight of this goal. Just a few weeks ago, Facebook unveiled its virtual world “Horizon” and opened up beta testing to invitees for users with Oculus glasses. Prior to that, Facebook invited several “creators,” to create several “worlds” and games within Horizon. According to CNBC, these creations range from escape-the-room-esque games to gameshows.

A possible indication that Facebook intends to more closely integrate Oculus into the mother platform and thus increase the focus on the AR/VR segment is the most recent press release informing Oculus users that it will be mandatory to have a Facebook account to use the glasses in the future. Then there is the developers conference Oculus Connect, which Facebook rebranded as Facebook Connect.

Dark horses in the metaverse race

Another player experts are tapping to potentially erect a metaverse is Microsoft. Thanks to Xbox and the “mixed reality” glasses Hololens, the company already has the technical infrastructure in place; and the continued popularity of sandbox game Minecraft makes it an obvious candidate for the content and community hub. As far as a critical mass of users is concerned, look at the pool of hundreds of millions of registered users of both Microsoft Office and LinkedIn.

One more player with the potential to become a “metaverse” maker is Tencent. The Chinese internet conglomerate may very well be the world’s biggest gaming firm. They are not only an investor in Epic Games, but also in Riot Games, the brain trust behind League of Legends. Furthermore, Tencent has a minority stake in Spotify and Snapchat. Tencent also has an additional, proprietary asset in Wechat, a “2D metaverse,” as ex-investment banker Packy MacCormick dubbed it in his newsletter “Not Boring.”

Even if it fails, “it will generate billions in value”

In the US-tech scene, Matthew Ball, a venture capitalist at VC firm Makers Fund, has become the leading voice and mind on metaverse subjects. Ball is in the process of establishing a metaverse conference. In a well-received in-depth essay on the topic, he does not only attempt to define the term and discusses which companies he sees as most likely to be involved in a metaverse one way or the other, but also argues that in the future the metaverse “the Metaverse becomes the gateway to most digital experiences, a key component of all physical ones, and the next great labor platform.”

Companies that are instrumental in ushering in this development or are agents of its rise, figure to reap incredible economic rewards. According to Ball, “Even if the Metaverse falls short of the fantastical visions captured by science fiction authors, it is likely to produce trillions in value as a new computing platform or content medium.”

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