Metaverse: a Second Second Life?
Are you old enough to remember the incredible amount of buzz and speculative bubble the new hyper-growing virtual world called Second Life generated back in 2008?
In spite of criticism and controversy, many investors and brands saw the opportunity to make money by trading various digital assets, especially very expensive virtual real estate.
Then, what happened to Second Life?
Surprisingly, it still exists and it evolved its virtual economy throughout the years, with ups and downs.
Did you know that?
When was the last time you heard a friend talking about Second Life?
Maybe recently, as mainstream discussions on Blockchain and Metaverse are bringing virtual worlds back to the center of the media attention.
For our purpose, we’ll consider the fact that there was a virtual world many people identified as the new playground for business, entertainment, spirituality, shopping, collaboration and social interactions, that would have become the new norm, but it didn’t. Second Life was seen as a tool everyone would use, given its immense flexibility to accommodate various compelling mainstream use cases, yet, it struggled to cater the killer applications needed to foster a sustainable large-scale adoption.
Many theories have been formulated to rationalize the causes behind Second Life’s shortcomings, including excessive criticism, glitches, vulnerabilities and more. I personally think none of those reasons matter; rather, there is a fundamental flaw that hasn’t been addressed by any virtual world, so far.
Exploration Equals Search Cost
Imagine you are on vacation in a new exotic place; you come back to town from a day at the beach and suddenly, on your way to the hotel, you start feeling your back on fire as if it were on a grill: you forgot to put on sunscreen after your afternoon swim washed off the first coat! You are now in desperate need for a soothing after sun lotion, what do you do?
Do you start exploring the hotel neighborhood looking for a pharmacy, or do you open up your maps app and try to get to that pharmacy as soon as possible?
Let’s say you remembered to put the sunscreen on, you go back to the hotel, have a nap, take a refreshing shower, have a quick bite and head out for the night, looking for adventures and entertainment.
Would you open your maps app, search for a place, pick one, find a cab ride to get there as soon as possible, have a drink and get back to the hotel, or you would walk towards the nightlife district and explore it, letting the flow guide you towards inspiring places?
So far, the big intrinsic disadvantage of a virtual world has been offering new opportunities that require investing time to be pursued.
If you are not in pain and seeking entertainment, you will enjoy an exploration that might resemble a Sunday afternoon walk at the mall. In this case, the benefit of being entertained exceeds the cost of searching for something you don’t need right now to alleviate pain.
If you are in pain, instead, and in need of a fast solution, you will align with the majority of the world population, which is massively adopting more efficient ways to fulfill needs.
Think about online retail. Why is Amazon so popular?
Because it costs much less to invest a few minutes to open your phone and purchase something you need, which will be delivered today or tomorrow, rather than wasting gas and an hour of your time driving to a store looking for the same item, not knowing if you’ll find it.
I am sure you will agree with me when I say that successful products solve problems that are common, urgent to be solved (typically due to intense pain), with willingness to pay associated with their resolution.
In order for virtual worlds to become mainstream, they need to be able to fulfill a set of common urgent pain-killing use cases that compel the majority of the population to join the platform. However, fulfilling pain-killing use cases requires speed, which conflicts with the exploratory nature of a virtual world.
Imagine you are exploring a virtual mall to buy a pair of shoes; now, try to imagine how increasing the speed of fulfilling your need would transform your experience. I bet you will surprisingly envision wearing a Virtual Reality (VR) headset to place an Amazon order… Why do you need a headset for that?
If you think what I said so far makes sense, you won’t have any problem figuring out why the most successful virtual worlds are video games: because they naturally fit with entertainment.
Will better hardware, massive worldwide user base, better software and networking technologies, along with billions of dollars of investment, be enough to provide a set of pain-killing use cases that will deliver more value than leading applications, and thus drive mass adoption?
In the short term, when the cost of joining the Metaverse is still too high for most users, success will be determined by the ability to provide immersive experiences that are an order of magnitude better than in person or mobile-based interactions, for a very receptive initial niche of users. Just “slightly better” experiences won’t be enough to drive positive reviews and word of mouth.
Then, these fantastic experiences will have to be replicated across a multitude of use cases, thus driving larger scale adoption and consequent hardware cost reduction, which will drive prices down and accelerate adoption even further.
However, cost is not the only friction point, and several additional hairy questions will require answers:
- Will people see enough value to overcome the barrier to get AR/VR/MR hardware setup whenever they want to access the Metaverse?
- Will people see enough value to get undressed and wear a haptic suit often enough to evolve the Metaverse to the next level?
- How much time will people be willing to sacrifice to explore the Metaverse?
- To what extent will killer experiences be tied to a physical place? What happens to the occasions of usage if mobility isn’t supported?
- What user segments should be targeted by marketing efforts in order to spark virality and maximize adoption?
A possible niche that could drive the adoption of Metaverse is made by those Blockchain enthusiasts who see the opportunity to build decentralized virtual economies and make easy money by investing in them, for instance, by trading NFTs.
Will the Blockchain hype stick around long enough to fuel the efforts of developing new compelling virtual worlds?
Only time will tell.
For now, Metaverse enthusiasts are depicting very cool Sci-Fi-like evolutionary trajectories that I hope will be realized one day. It will all depend on the ability to solve high-impact/high-urgency problems that will deliver tremendous value exceeding the many adoption frictions.
What about virtual collaboration?
Will a Metaverse meeting ever replace a classic high resolution face to face video conference?
Possibly. I don’t believe purely VR-based meetings will get traction in the short term: they have been attempted in the past on several occasions, and failed miserably due to the learning curve, high cost and lack of personal connection. It may be true that in the future VR will be indistinguishable from reality, however, in the short term, the current technologies are far from that goal, and the traditional limitations of VR-based virtual meetings still apply.
Instead, I see potential in AR-based holographic meetings, where a remote person feels like sitting in front of you and can collaborate with you on a 3D canvas.
So, is Metaverse a second Second Life or not?
At the moment, it is. If new unprecedented resources (including technologies) won’t deliver value that is an order of magnitude higher that people’s current solutions, then, when the next hype will take over the Metaverse one, the virtual world phenomenon will downsize back to serving a few best-fitting industries such as entertainment and creative decentralized financial solutions.