Meta wants to be the main architect of the metaverse and one of the leaders of the future of web3. But his vision for the future of technology and ownership is at odds with many true Web3 proponents. Here are some of the challenges the company formerly known as Facebook will face and how it plans its next steps.
Meta, formerly Facebook, is spending billions of dollars to position itself as a pioneering force in the metaverse. But some see the company as the antithesis of everything the Web3 movement stands for. Today, a dichotomy is emerging between the corporate vision for the future of the Metaverse – led by Meta – and the creator-centric vision.
The dichotomy between these two visions can be boiled down to a single question: who controls the metaverse?
In theory, the answer is nobody – and everyone. The Metaverse is based on the blockchain, an immutable digital ledger, which is designed specifically to be decentralized; in other words, not to allow centralized, top-down control by individuals, companies, governments, or any other entity.
At its most basic level, the same goes for the internet. At least that was true when it was first conceived in the second half of the 20th century, when the Department of Defense’s Advanced Research Projects Agency (DARPA) set out to build a decentralized network of computers at through the United States which could remain intact if the country were to be attacked by a nuclear weapon. But as the Internet has evolved over the past few decades, it has increasingly fallen into the orbit of capitalist dynamics. Today, in the age of web2, a small handful of companies control a disproportionate share of the flow of information. Google, for example, may not own the Internet in the literal sense, but that company certainly plays an outsized role in controlling how the average person interacts with it.
This is, basically, the paradigm that web3 – the third evolutionary phase of the Internet – seeks to end. Web3 idealists envision a world in which the closed, data-hungry organizations that have long controlled and profited from centralized control of the flow of information will be replaced by a decentralized community of coders and creators working collaboratively to make information more transparent, reliable and accessible. The metaverse is generally seen as an important part of this vision, a virtual space where people can meaningfully interact across vast geographic distances. Imagine a Zoom call in which all participants actually stand in an immersive digital space as personalized virtual avatars, communicating not just verbally but through finely calibrated body language, conducting business on blockchain-based smart contracts and exchanging currencies not controlled by any bank or centralized authority.
Some of the idealists suspect that Meta aims to implement the same control paradigm it enjoyed in the Web2 era into the burgeoning Web3 world.
The Web3, both as a socio-political movement and a technological framework, has grown rapidly. Today, many companies are trying to join the trend. Meta is obviously particularly bullish on the Metaverse, as evidenced by the company’s renaming last year.
Facebook, the previous iteration of the company, was a major player in the world of Web2. It has become a social media giant, monetizing its rapid global growth primarily through the sale of user data and advertising. Needless to say, this business model got the company into legal hot water, and its founder and CEO – Mark Zuckerberg – in the US Supreme Court. Many believe that the company’s decision to rebrand itself as Meta was primarily an attempt to distract the public from its previous transgressions and give everyone a shiny new object – the Metaverse – to focus their attention on.
“It’s all in the name,” says Amanda Cassatt, co-founder and CEO of Serotonin, a company that strives to guide brands to Web3. “It seems they are trying to create the false impression that Meta is identical to the Metaverse. And in my opinion, they’re probably doing it not only because it’s a lucrative new area and it looks like the future, but also because some of their existing platforms and products were failing. And I suspect they may have wanted to distract investors from the fact that, for example, Facebook lost users.
Meta defines its goals very differently. “Our mission from the beginning has always been to help people connect in better, more immersive and more personal ways…the new name really reflects the direction our company is taking and also our commitment to building the future of social technology,” says Nicola. Mendelsohn, vice president of global business group at Meta.
The company does not claim to seek to monopolize the Metaverse: “The Metaverse is not something that Meta — or any other company, for that matter — will own,” Mendelsohn says. “Our goal is simply to jump-start the ecosystem and accelerate the development of tools and technologies that will help everyone interested build it together.”
While Meta is not explicitly aiming for a metaverse monopoly, it is clearly aiming to be the name people immediately think of when they hear the phrase “the metaverse”. Intentionally or not, this has led to some widespread confusion about the Metaverse itself: according to a recent study, more than a quarter (27%) of US consumers “misperceive that the term Metaverse refers to proprietary technology by Meta”.
Scale has a cost
With its enormous wealth and user base, Meta is able to offer creators – those individuals and organizations trying to sell a product or service in the metaverse – a major advantage: scalability. “They attract a massive global audience of 3 billion people, so they give a creator instant scale,” says TJ Leonard, chief executive of stock media company Storyblocks. “You get instant scale, from day one, and you don’t have that in the bottom-up, idealistic [version of web3].”
Scalability is one thing, cost is another. Just a few weeks ago, Meta announced a new “creator fee” on Horizon Worlds of 47.5% – meaning the company will take nearly half of all profits creators earn on its platform. (Apple currently charges 30% for all transactions on its App Store, a fee that Zuckerberg has publicly criticized.)
Meta’s rationale for its high creator and platform fees is that building the metaverse is essentially expensive – so anyone who wants to play will have to pay. “We believe the fees we charge are competitive and allow us to invest in Horizon Worlds and grow the platform while allowing creators to earn most of the revenue,” a spokesperson said. from Meta to The Drum in an email. In its Meta Quest platform, for example, the company states that it uses “the revenue generated from our store to directly offset the cost of our retail Quest devices. Our approach is to grow the virtual reality (VR) market by shipping affordable devices, and those revenues are critical to maintaining an accessible retail price for headsets.
Meta also indicates that its current pricing structure will evolve with the metaverse itself. “This is the beginning – there is still a lot of work to do and we continue to work closely with our creators and developers to enable them to earn meaningful revenue,” the Meta spokesperson wrote. “We are achieving our goal of ensuring developers have a path to true financial success on our platform. When the web version of Horizon launches, the Horizon platform fee will only be 25%, a rate much lower than other similar world-building platforms. »
Yet the introduction of the new Meta Fees seems to alienate many creators – many of whom are struggling to make a living from their works. The advent of NFTs has certainly marked a major new opportunity for digital artists, but the picture is much less rosy when a major tech company says it will take nearly half of all the revenue you make from selling your tokens on its platform. .
Yes, creators can still choose to leave Horizon Worlds if they are unhappy with the new Meta Creation Fee. But again, scalability matters. The reality of the current state of the Metaverse is that there just aren’t as many platforms that offer the massive audience that the likes of Meta are capable of. The Metaverse is a vast and ever-changing place, and venturing out alone as a struggling artist can be risky.
But after Meta announced its new fees, many artists apparently chose to eschew the company — which they seem to think is deaf to the needs of its community — in favor of more creator-friendly platforms. . Cassatt summed it up bluntly: “The Web3 community collectively vomited in its mouth when Meta announced the 47.5% creation fee.”
Access and cost aren’t the only obstacles that stand between the metaverse and creators looking to monetize their work. There’s also interoperability – or rather the lack thereof. In a Web3 context, “interoperability” is essentially the ability for avatars and assets to move seamlessly between platforms. This is currently a largely theoretical concept, an ideal that many companies ostensibly aim for but which remains, at present, exceptionally difficult to implement due to the immense computing power required.
The metaverse is still in its infancy. As it develops, Meta will face the challenge of proving to the creator community that it is not a web2 Goliath disguised as a web3 David. It’s likely to be an uphill battle: “No one on Web3 thinks Facebook is cool,” Cassatt says. “And in fact all of web3 finds it anathema, and part of the reason we created web3 was to fight against that business model… Don’t confuse Meta with the Metaverse.”