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Imagine a three-dimensional online world where you teleport from your London office to a meeting room in Singapore, shop at a digital replica of your favorite clothing store then join a friend for a round of virtual golf. To some, this aspirational version of the internet known as the metaverse is the future of human interaction. Facebook founder Mark Zuckerberg changed the company’s name to Meta Platforms Inc. and is pouring billions of dollars a year into efforts to dominate this “next frontier.” But it’s unclear what a unified virtual universe would look like, or whether people really want it. 

1. How would the metaverse work?

It would combine technologies including video-conferencing, games like Minecraft and Roblox, crypto tokens, email, virtual reality, social media and live-streaming. Just as you might create a document in Microsoft Word and send it via Google’s Gmail to a colleague to read on an Apple iPad, items in the metaverse would be able to move across an ecosystem of competing products, holding their value and function. A digital work of art bought as a non-fungible token, or NFT, from Company A, say, would be displayable on the virtual wall of a house in a game made by Company B. 

2. What would you do there?

Work and play. An example: “Jane” creates a 3D avatar — a digital representation of herself — within Facebook or Microsoft Teams and uses it in virtual office meetings. After work, Jane has tickets to a virtual concert with friends and all their avatars appear among the hundreds of heads in the audience. The music finishes and the band says, “Don’t forget to buy a T-shirt!” Through her avatar, Jane browses the designs at a stall just as she would on Amazon, Asos or Taobao today, pays for one with cryptocurrency and wears it at the virtual office the next day. A colleague asks to borrow it for his daughter to use that evening in a Roblox game, and Jane lends it to him. This scenario involves corporate communication tools, live-event streaming, e-commerce and sharing something of value. It only works if each provider builds its system in a way that makes assets such as avatars and shirts compatible and transferable.

3. When can I enter the metaverse?

Not for several years, if ever. You can already use crypto tokens to buy “land” in browser-based virtual worlds like Decentraland, attend conferences in VR using vFairs or use Sizebay’s 3D dressing room to try on clothes. But these products are far from being the cohesive, interoperable world envisioned by Zuckerberg and others. While there’s no shortage of investors betting the metaverse will come into being, the biggest checks are being written for chipmakers, video game studios and other companies whose products can thrive whether or not it happens. Microsoft Corp. CEO Satya Nadella said in January the company’s planned $69 billion takeover of game maker Activision Blizzard Inc. will help to build “the next internet.” But, he added, there “won’t be a single centralized metaverse and there shouldn’t be.” The metaverse would also need ultrafast internet that can handle hundreds of concurrent streams of data, and most of today’s wireless connections can barely support multiplayer games like Fortnite.

4. Is there demand for it?

It’s proving hard to persuade people to hook a VR headset to their face and hang out with cartoonish versions of their colleagues and best friends. Zuckerberg was widely mocked in August when he posted a primitive “selfie” from the metaverse to promote Meta’s VR platform, Horizon Worlds. There’s not a great deal of evidence that people working from home want to switch from regular Zoom calls to meetings in VR. For some, the benefit of feeling “in the room” is offset by sensations of dizziness and nausea that can come with the constant motion. When social media platform Snap Inc. announced layoffs in September, people working on technologies that could play a role in a future metaverse were first to go. Meta’s VR division has been making headsets since 2014 and has reported heavy losses, and revenue that’s only a fraction of Meta’s core ad-funded business. Many exchange-traded funds and mutual funds specializing in metaverse-related businesses have plunged in 2022 as rising interest rates sent investors in search of firms with more predictable revenue and tangible profits. 

5. What if the metaverse succeeds? 

It could be a technological leap forward similar to the web’s transformation in the 1990s from static text and images on a page to a place to buy a book or watch a movie, and then into a way to attend college lectures and collaboratively design products. It might change how people congregate, interact and spend money, creating a distinct virtual life experience. It’s the kind of future imagined in science-fiction novels such as Neal Stephenson’s “Snow Crash” and movies like “The Matrix” and “Ready Player One.” Each of those, it should be noted, depicted a form of dystopia.

(Adds detail on metaverse-related funds in fourth section. A previous version of this article corrected the spelling of author Neal Stephenson’s name in Reference Shelf section)

More stories like this are available on bloomberg.com

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