Axios AM Deep Dive: Inside the metaverse

National

Axios AI+

The metaverse — the virtual dimension the tech world sees as the next big thing — won't have one big grand opening. Instead, it's coming to life in pieces all around us, in research-lab breakthroughs as well as within products available now.

Why it matters: These early glimpses give consumers, activists and legislators a chance to weigh in now on what they like and don't like, shaping the digital future alongside the companies building it.

Catch up quick: Most visions of a metaverse imagine a persistent, immersive digital space shared by many companies and individuals. 

Meta executives Mark Zuckerberg and Andrew Bosworth have described the metaverse as "the embodied internet." That typically involves putting on a headset and completely immersing yourself in a virtual world. 

But that won't be the only way to experience the metaverse.

Another is via augmented-reality glasses, ideally as light as standard glasses today, with digital objects appearing over a view of the real world.

Other devices that could usher us into the metaverse include everything from contact lenses to gloves.

The gadgets we use today won't disappear. For reasons of convenience, affordability or personal preference, people will also engage with this more immersive world through their laptops and phones as well.

While some of the needed technology is available and other parts are working just fine in labs, breakthroughs are still needed in display technology, miniaturization and battery life to create headsets that are comfortable, affordable and able to run for more than a couple hours at a time.

The big picture: As these pieces of metaverse tech get designed and tested in real life, the industry will discover unforeseen new uses for them — and discard some of our present visions as impractical.

Both the tools' evolution and users' experiences will shape which metaverse future comes true: remote workplace, vast digital playground, utilitarian information source, or something as yet unimaginable. Or all of the above. 

Yes, but: Today's metaverse tech is evolving in pieces in another sense: So far, we're getting a bunch of competing proprietary worlds rather than the grand vision of a single shared dimension.

Competing virtual worlds today include everything from venerable pioneer Second Life to Meta's nascent Horizon Worlds, as well as more youth-oriented environments such as Roblox and Minecraft.

The broader idea of a single, interoperable metaverse — one where you and your stuff can easily travel from one company's turf to the next — remains theoretical.

Some companies have pledged to support that goal, but few have begun working it into their plans or developing the connective tissue of protocols it would require. 

1. Pieces of the metaverse

It won't magically land a decade from now. It's being developed in front of us.

Illustration of hands reaching for each other over a desert landscape.

Deep Dive - Metaverse

Metaverse, VR and AR

The metaverse — the virtual dimension the tech world sees as the next big thing — won&#x27;t have one big grand opening. Instead, it&#x27;s coming to life in pieces all around us, in research-lab breakthroughs as well as within products available now.Why it matters: These early glimpses give consumers, activists and legislators a chance to weigh in now on what they like and don&#x27;t like, shaping the digital future alongside the companies building it.

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

The most immersive metaverse experiences all require new types of display technology to put images directly in front of the eye.

The big picture: Replacing computer and phone screens as the primary window onto a digital world won't be easy, thanks to limits on miniaturization and battery capacity.

We're likely to end up peering into the metaverse using three broad categories of display:

1. Immersive headsets: There are plenty of VR headsets on the market, ranging from inexpensive options like Meta's Oculus Quest 2 to far more expensive devices, including models from HTC Vive and Varjo. 

But today's offerings are bulky, run out of power fast, and induce motion sickness after prolonged use. The best models still cost thousands of dollars, while more affordable choices provide less sharp displays.

Another disadvantage: You can't see the real world while using them — though some devices are beginning to offer "pass-through" features. 

2. Augmented reality glasses: These lighter-weight devices layer digital data over a lens that lets you see normally. 

Microsoft's HoloLens 2 has been a popular entry in the current generation, but others with products in this area include Magic Leap and Snap.

Like the bigger headsets, these glasses are still expensive, heavy and prone to run out of power. Also, right now, they provide only a narrow field of view where digital objects can be placed.

3. Smart contact lenses: A device worn in your eye could be lighter and less cumbersome than the alternatives. 

But making that work will require even greater miniaturization and battery wizardry than headsets or glasses. 

These devices also raise big privacy concerns, since it wouldn't be obvious when you were using them.

None has yet reached the market. One prototype I was able to try, from Mojo Vision, has a very basic monochrome display and still requires a nearby computer pack to do most of the heavy processing.

2. The optics of the metaverse

The devices that exist now tend to be cumbersome and expensive.

The most immersive metaverse experiences all require new types of display technology to put images directly in front of the eye.The big picture: Replacing computer and phone screens as the primary window onto a digital world won&#x27;t be easy, thanks to limits on miniaturization and battery capacity.

Immersion in a digital world depends on sound as much as on vision. Developers are banking on spatial audio as the key to making that work.

It places audio in three dimensions, so when you turn your head, sounds change direction and volume just as they do in real life.

State of play: Spatial audio is very much here today and finding its way not only into VR headsets but also into standalone earbuds, including Apple's AirPods Pro.

Spatial audio adds another dimension — literally — to all kinds of experiences, from gaming to watching movies to online meetings.

It's particularly impressive when applied to large groups, such as video conferences. On a traditional call using Zoom or FaceTime, every speaker is roughly the same volume —  and when two people talk at once, it's impossible to hear anyone.

Spatial audio changes the equation. It allows people to sound nearer or closer to one another. One person can even whisper something to a neighbor without disturbing other participants listening to the main speaker.

Be smart: The sound is often the most impressive part of today's VR and metaverse demos. 

Because spatial audio can be implemented by combining software with relatively traditional earbuds, it doesn't face as many technical hurdles as other pieces of the metaverse.

3. Spatial audio: The soundtrack of the metaverse

Three dimensional sound is very much here today.

Illustration of an ear over a crashing wave

Immersion in a digital world depends on sound as much as on vision. Developers are banking on spatial audio as the key to making that work.<ul><li>It places audio in three dimensions, so when you turn your head, sounds change direction and volume just as they do in real life.</li></ul>

Holograms allow the display of a high-quality, three-dimensional digital representation of a person without the need for viewers to wear a headset.

State of play: It's more real than you might think. There are a variety of holographic display systems on the market and even more impressive technology within tech companies' labs.

How it works: Also known as 3D video or volumetric video, holograms can be captured either by using an array of cameras or by capturing a light field array of the subject. The images can then be recreated using projectors or on special holographic displays.

One I saw was a system by ARHT Media that has telepresence holograms set up in WeWorks across the country, including San Francisco. You can see a video of that system in action here.

Earlier this year, my colleague Jennifer Kingson tried out a rival system, known as PORTL.

Google showed an even more advanced video hologram booth, dubbed Project Starline, at its Google I/O developer conference last year. Employees have been trying the technology, but Google has not announced any plans for public testing.

Microsoft has also been showing holograms, beaming its executives onstage at various events, including last year's Ignite conference.

4. Holograms: Another gateway to the metaverse

More real than you might think, there are a variety of holographic display systems on the market.

Illustration of an overlapping layer of photos of a woman with rocky cliffs in the background.

Holograms allow the display of a high-quality, three-dimensional digital representation of a person without the need for viewers to wear a headset.State of play: It&#x27;s more real than you might think. There are a variety of holographic display systems on the market and even more impressive technology within tech companies&#x27; labs.

It could take eight to 10 years for the metaverse technology to become a mainstream reality. Now is the time to decide: What is the digital world we want? What do we want to bring over from today's internet, and what do we want to leave behind?

5. Video: What we're watching with the metaverse

Now is the time to decide what we want in the new digital world.

It could take eight to 10 years for the metaverse technology to become a mainstream reality. Now is the time to decide: What is the digital world we want? What do we want to bring over from today&#x27;s internet, and what do we want to leave behind?

Crypto

Axios Crypto

If the metaverse becomes a popular way to hang out online, it could be a sort of hybrid of an open-world video game and 3D hangout, supported by entry fees or maybe ads.

Or it could be something very much powered by and in the spirit of cryptocurrency: a place with digital land that users truly own. 

Users already own digital land in various worlds. In Q2, $800 million of virtual land was sold across multiple worlds according to the team at Parcel, a sort of Zillow for the metaverse real estate. 

Why it matters: It's long been an investor adage that land is the one thing they aren't making more of, but, if the digital world turns out to be a valuable place, there might be a lot more land — at least in cyberspace.

Look for early speculators in such lands to be the future's mega-landlords if the digital property thesis plays out. 

How it works: Land is sold as a non-fungible token, or NFT, in the metaverse. If you enter a crypto-based world with an NFT that signifies you own a certain parcel of land, you have privileges over that hunk of digital space.

For example, you can build on it or create rules around who can visit it. 

Lots of crypto worlds have land. Decentraland and Cryptovoxels are two of the oldest. Bored Apes creators Yuga Labs made over $300 million selling land for its world, Otherside. 

Axie Infinity, which generated over $1 billion in revenue in 2021, has always had land, but it's only now building out utility for it. 

Illuvium, a game that many crypto investors are excited about, launched a big land sale on June 2. 

Of note: The same technology can be used to track anything that someone might own — anything from game vehicles, items, clothes or gear to titles or permissions to access different parts of the game.

There's some chance that some titles may choose to keep those things centralized, since they aren't very useful outside a given game. Land, however, is always likely to be something people will want to truly own.

What they're saying: "We think that in the short term, digital land projects that are directly tied to crypto games that are actually fun to play stand the best chance of seeing adoption and surviving a bear market," Michael Anderson, co-founder of Framework Ventures, told Axios via a spokesperson.

Yes, but: Kirk Finkel, the metaverse architect known as untitled, xyz, told Axios that all this land grabbing is misguided. "There's an illusion that it's scarce, it's really not. Nor should it be. Virtual land should be equal to if not more accessible than a website," Finkel wrote.

If the metaverse is blockchain-ified, lots of things are likely to be tracked in a crypto-fashion, but land seems to be the one fundamental thing you can guarantee will be there.

The bottom line: "I wouldn’t judge the long-term future prospects of the digital land sector based on how it performs this year, as the metaverse is still in its infancy and we anticipate the web3 gamer demographic could grow significantly over the next half-decade," Anderson cautioned.

6. Crypto's contribution to the metaverse: digital property

The metaverse could be a place with digital land that users truly own.

Collage illustration of hands holding a key and door knobs, against a mountain landscape.

If the metaverse becomes a popular way to hang out online, it could be a sort of hybrid of an open-world video game and 3D hangout, supported by entry fees or maybe ads.<ul><li>Or it could be something very much powered by and in the spirit of cryptocurrency: a place with digital land that users truly own. </li></ul>

Tech Policy

Metaverse builders will have to try to maintain safety across a virtual landscape even larger than today's internet.

The catch: So far, the technology is only blurring the lines of who is responsible for policing it.

The big picture: Regulation failed to keep up with technology as the internet became a dangerous place for many people — most often women, LGBTQ+ people and people of color. 

Government rules are even less likely to emerge for the metaverse, putting the onus for now on tech companies to make their products safe.

Privacy: The U.S. still doesn't have a comprehensive data privacy law, and it's not clear how existing privacy regulations would apply to the metaverse and protect individual data from commercial exploitation or personal abuse.

Loneliness: Metaverse promoters see the new environment as a way to connect people. So did the internet's early proponents — then some studies found online life made people feel lonely and isolated.

Similarly, the metaverse could become a valuable social channel for people with disabilities or illnesses who cannot attend events in person.

But overuse of the technology is likely to prove alienating, and today's complaints of "screen addiction" could morph into tomorrow's "metaverse addiction" scare. 

Security: Bad actors will try to duplicate every kind of internet exploit and scam in the metaverse. 

Companies will need to figure out strategies to prevent fraud, intimidation, identity theft and impersonation in a disorienting new environment.

Harassment: Being harassed in the metaverse is a real threat some are already seeing play out. Since avatars and headsets create a "you are there" feeling, the environment can be scarier and more physically threatening than conventional online spaces.

Last month, a researcher studying user behavior in Meta's Horizon Worlds said her avatar was raped "within an hour" of putting on her VR headset, per a report from advocacy group SumOfUs. 

Metaverse builders have created a variety of protection features, including "boundaries" that make it impossible for other users to touch you. (In the case of the SumOfUs researcher, "another user encouraged her to disable the personal boundaries setting," according to the organization's report.) 

Misinformation: Online services find limiting mis- and disinformation by scanning written text a tough enough problem. In the metaverse, where more communication will be audiovisual, that job will only be harder.

Between the lines: There's still time for companies and organizations to agree on ground rules for a nascent metaverse that could put it on a healthy trajectory before too much of it is coded into being. 

Venture capitalist and political strategist Bradley Tusk, in an op-ed earlier this year, advocated the adoption of an "intellectual framework" for regulating the metaverse now, before its foundations have hardened. 

The bottom line: Preventing the metaverse from descending into dystopia will be a tall order. 

Yes, but: Everyone building this new world can draw on 25 years of internet experience to seek a better outcome this time.

7. Pitfalls of the metaverse

The internet's current shortcomings could be exacerbated even as new problems arise.

Illustration of a skull masked by a triangle pattern over a stormy sky.

Metaverse builders will have to try to maintain safety across a virtual landscape even larger than today&#x27;s internet.The catch: So far, the technology is only blurring the lines of who is responsible for policing it.

The optics of the metaverse

A pixelated butterfly against a cityscape.