Mark Zuckerberg’s announcement to change the name of the company he founded from Facebook to Meta was broad and visionary. Amongst the hyperbole, however, there were details of the intention to build a complete economic ecosystem for creators and users of NFTs and ‘digital items’.
Why it’s important
Zuckerberg announced that his company is planning on investing heavily in metaverse technologies, hardware, and software, over the next several years to the tune of $10 billion. There is also a strong emphasis on commerce and the need for a creator economy, which is required to populate the new environment with digital goods.
- Meta claims there will be one billion users active in the metaverse within ten years, playing games, meeting socially, working and keeping fit.
- Metaverse users are expected to want to purchase digital goods, as gamers often do already. Therefore, the vision includes supporting and encouraging large numbers of third-party creators. In fact, Meta’s business model may depend on them.
- The price of new competitor Decentraland’s coin, MANA, rose by 640% after the announcement according to Crypto Briefing.
The announcements
- Meta’s wider environment is called Horizon World, with Horizon Home for personal use.
- Zuckerberg said that Horizon Marketplace will be where, “creators can sell and share 3D digital items.”
- People will be represented by avatars which can be photo-realistic (for work), stylised (e.g. hair colour, for social) or more exotic (for gaming). Avatars can be further customised, for instance by wearing cross-app clothes.
- Vishal Shah, Head of Metaverse Products, said they are exploring new types of ownership models to, “make it easier for people to sell limited edition digital objects like NFTs, display them in their digital spaces, and resell them to the next person securely.”
Open questions
- The metaverse concept is still very new. The commercial success of gaming suggests it will be popular but, it is unknown how well it will expand beyond gamers.
- Meta’s core revenue is from advertising, so how will that feature?
- Zuckerberg emphasised the need for openness, but it is not clear how interoperability will work with other platforms, marketplaces, launchpads and games.
- There was no mention of play-to-earn (or DeFi), which could potentially be the biggest draw to the platform.
- Google’s ex-CEO Eric Schmidt commented to the New York Times, “The world will become more digital than physical. And that’s not necessarily the best thing for human society.”
What’s next
Zuckerberg’s vision is expansive. He said, “within the next decade the metaverse will reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers.” Keep watching!
