In December 2021, I wrote an article for the Spectator magazine about the tech trends of the previous and coming years: Meme stocks, NFTs, DAOs and especially the Metaverse.
They didn’t publish it. It was a busy week and they felt it didn’t quite hit home.
I tweaked it a bit in early 2022 but it never found space in the magazine and ended up buries.
Now Ed Zitron at Insider has published an article declaring the Metaverse ‘dead’, I thought I might as well exhume my original analysis of why I thought metaverses would mostly fail, to see how well it holds up.
Why the Metaverse and much of this year’s tech will flop (January 2022)
Years ago, I used to help run a political simulation in Minecraft.
It started off as an experiment, designed to simulate certain specific aspects of the real world: limited resources, the ability to use coercive force (a player could ‘imprison’ another) and some other tools needed to form a society. Hundreds of participants ran their own virtual societies, squabbling over non-aggression, the nature of land ownership and which political system was best.
There was a real-world economy: one player used to sell 40 in-game diamonds, a hard to find resource, for a bitcoin, then worth a couple of dollars. There was drama, tension and eventually a full-scale war when players from a combat-focused Minecraft server invaded, capturing dozens of players and imprisoning them over a period of months.
Today, people would call it a Metaverse.
We like to imagine that advances in technology lead to new physical products: smartphones, robot vacuum cleaners and, one day, Jetsons-style flying cars. But often innovation is little more than giving an old idea a catchy new name. You could download recordings from the Internet before anyone used the word 'podcast'. There were personal diaries online before they started calling them blogs. And there were virtual worlds long before the Metaverse.
Second Life was one of the earliest popular examples, and it's already old enough to vote (it opened in 2003). In Second Life, players shared a 3D world and could design their own avatar, 'own' land, build houses, buy clothes and generally interact with each other to make new friends. Of course, like all new technologies, people used it for sex; it still has a large fetish scene.
More recent examples include the cubist open-world games Minecraft and Roblox.
This year (2022) is supposed to be the Year of the Metaverse. Even Facebook has renamed itself ‘Meta’ to try and claim the label for itself. Apparently, we’re all going to be doing work meetings around VR conference tables, talking to 3D avatars of our colleagues, looking out the fake windows at the fake view while Trevor from Accounting explains that we missed our very real Q4 sales targets.
The trouble is all Metaverse ideas are uninspiring. A video circulated recently of a Walmart shopping concept: you’d walk down infinite rows of virtual aisles, manually picking up virtual products from virtual shelves and putting them in your virtual trolley. It seemed substantially worse than normal online shopping via a supermarket’s website.
Even worse, an advert from Facebook/Meta shows someone using a computer-generated computer and keyboard inside their metaverse, as if the virtual world should recreate all the most tedious parts of an office job.
This sudden rush into metaverses makes sense as a reaction to two years of a global pandemic that made the outside world feel dangerous, while keeping people home isolated from their friends and colleagues. The possibility of a safer, cleaner, more sterile way of working and socialising perhaps feels like an idea whose time has come.
With a massive shortage of computer chips, global supply chain issues and two years of a pandemic, actual products are hard to come by. The PlayStation 5 and X Box X were supposed to be the hot new games systems of Christmas 2020, but more than a year on it can still be hard to find one in the shops. With no hard physical products to sell, technology companies have been forced to turn to the realm of ideas.
Armed with generous furlough benefits or stimulus cheques, but with no travelling, restaurants and entertainment closed and the PlayStation still out of stock, people had money to spend and nothing to spend it on. Cryptocurrencies and Reddit-inspired ‘meme stock’ rushes in a bull market created tens of thousands of newfound millionaires— millennials and zoomers who'd made it big overnight and wanted to show off.
A lot of them bought 2021’s hot tech craze, Non-Fungible Tokens (NFTs). Ignore all the technical stuff about blockchains; NFTs are just digital tokens that can be issued and bought like certificates of authenticity or ownership. They’re supposed to allow people to ‘buy’ digital art, even if the actual art is freely available online to anyone who wants it. Digital artist Beeple made AMOUNT auctioning NFTs of his works. A blocky pixel art image of an ape wearing a bandana sold for more than ten million dollars in December.
Everyone’s getting in on the act, selling NFTs to people who think they’ll make them rich one day: Pizza Hut, Barbie, the Associated Press, football clubs, Paris Hilton… Someone even tried to sell an NFT of one of my tweets, but I don’t think anyone was stupid enough to buy it.
But outside of the small number of hyper-expensive prestige projects like Beeple or the Bored Apes, 99 per cent of NFTs being sold now will be completely worthless in a couple of years. You might well buy an NFT from Paris Hilton, but you’ll never be able to sell it to anyone else. These global brands are taking advantage of gullible people who think ‘crypto’ NFTs might be the next Bitcoin, but it’s the NFT sellers who are getting rich, not the deluded buyers.
NFTs are also supposed to enable ‘Web3’, which is already 2022’s hottest new buzzword. You're going to hear some very enthusiastic people talking excitedly about web3 this year. Don't worry if you don't understand what they’re talking about; nobody else does either.
Web3 is some new conception of the Internet powered by blockchains, NFTs and decentralised ownership — like if websites were tech Kibbutzim but with a lot more billionaires. Its proponents argue that the current Internet is too dominated by a few big companies. The average user doesn’t own anything: Twitter can take away your account because it’s not your account, it’s theirs. Instagram can force your popular business to rename itself when the company decides it wants the name ‘metaverse’ for its new project.
In the web3 future, users will have inalienable NFTs instead, which will let them do… well, that’s not especially clear. One model is the Decentralized Autonomous Organisation (DAO), where holders of the NFTs get voting rights much like shareholders. A DAO raised $47M to buy a copy of the US Constitution at auction. It didn’t win, and is refunding the money.
Most of the web3 babble is little more than wishful thinking. Even Decentralized Autonomous Organisations need leaders; ten thousand people can’t make day-to-day decisions. The problems web3 claims to solve — control, ownership, free speech, authenticity — all persist, just in different forms and with more complicated crypto-woo to make people feel empowered and convince them to open their wallets.
Which brings us back to metaverses. For all the talk about the metaverse, there will be dozens of companies all competing to do their own metaverse-y things in very different ways.
On one side are the established platforms like Facebook/Meta, Microsoft, Epic and Roblox, nudging their combined billions of users to don a 3D headset.
On the other are web3 newcomers who see metaverses as being all about blockchains, and cryptostuff. They expect their users to claim metaverse land with cryptocurrency and buy in-world NFT items like clothes and accessories.
It’s not going to work. These companies have no incentive to cooperate or inter-operate. A user’s avatar on one platform won’t look the same on a rival, and users in different metaverses won’t be able to talk to each other. That £200 NFT Louis Vitton handbag from cryptoverse won’t transfer to Facebook’s Horizon. Far from a metaverse, they’ll end up as isolated meta-islands shamelessly copying each other’s ideas as they fight for users.
But metaverses have a bigger problem. The technology trends of 2021 were a response to the scary outside created by the pandemic, keeping people home and limiting innovation to the realm of the conceptual. The rush to build these metaverses comes from a place of fear: people's fear of Covid and retreat into another world of safe, sterile imagination; Facebook's fear of losing the next generation of users to a rival like TikTok. Crypto-investors’ fear of missing out on the next gold rush.
Fear doesn’t inspire creativity or drive innovation. It tries to preserve. And so we get metaverse boardrooms with metaverse laptops for people to type metaverse memos, and metaverse shopping centres with imaginary aisles.
That's not how people use virtual worlds. They’re an escape from the daily grind, not the grind itself. What’s the point of a Second Life that’s just the same as your actual life? People don't just want avatars that look like creepy 3d versions of themselves; they want to be teenage supermodels, or 9 foot tall with purple skin, anthropomorphic cows or flying fire-breathing dragons. They want to play in a virtual world, not work in one. The companies building metaverses have forgotten that the whole point of escapism is to escape, not more of the same.
The economic bubble that’s buoyed tech stocks and cryptocurrencies is deflating quickly and looks like it might burst altogether. As 2021’s new millionaires look at their portfolios heavily in the red, how many will still drop a quarter of a million pounds on a digital token that says they own a sketch of an ape in a baseball cap?
And as the Omicron wave hopefully marks the end of the Covid-19 pandemic as the virus becomes endemic instead, who will still choose a metaverse to meet friends rather than a bar? Who will choose a metaverse for an office meeting over an actual physical meeting room — or, at least, a Zoom?
Dozens of companies are building metaverses. The majority of them will be expensive ghost towns that never attract a significant user-base. But some of the more creative platforms might find their niches.
And they can always follow Second Life’s example and pivot to sex.
That always sells.