For all of the heat that Mark Zuckerberg takes, he is a proven visionary. He saw the potential that Facebook would create long before most people believed they would ever be spending time creating or updating their social media profiles, much less making them a central part of everyday life.
His new vision is the Metaverse – a VR-based interconnected world with a profound sense of self within an immersive environment. Some suggest its most fundamental difference with the internet is how it changes people from passive viewers into active users of the Metaverse.
Meta has invested heavily to bring Zuckerberg’s vision to life. Meta correctly identified that the Gaming PC requirement was a massive hurdle that had to be overcome for VR to flourish. They found and purchased one of the first good VR headset startups in 2014 (Oculus) and invested heavily for years to ultimately launch the Quest 2 in 2020, the first solid headset that didn’t require owning an expensive gaming PC. Unlike most VR headsets that were often priced around $1k and required a $2k+ gaming PC, Meta was able to retail the Quest 2 at an incredibly low price of only $299 (nothing else required) for over 2 years (it is now $399 and comes with a game), selling around 15m headsets in the process. My suspicion is that Meta has been taking a loss on every headset sold, or at the very least, not taking a reasonable profit margin. This was no small task.
One must assume that Zuckerberg and his team have been under intense pressure to create profits when allocating the kind of capital that Meta has spent developing, marketing, and likely selling Quest 2 headsets. Not only was the technological development a feat in itself, but it was also quite a visionary-based long-term investment, something terribly unbecoming of typical CEOs in our quarterly profit-driven economy. Zuckerberg has almost certainly been advised to reverse course at every step, but instead, doubled down on his vision rather than relinquish it to those pushing traditional economic principles. In defiance of nearly every other large tech company, Zuckerberg has gone all-in and become the number one driving force defining the Metaverse. This heavy lift is already beginning to bear some fruit.
The Metaverse is creating tremendous opportunities for people from all walks of life. Within a few years, we can expect that many people will increasingly replace their usage of the internet with the Metaverse — for commerce, work, recreation, research, education, medicine, and dating.
Currently, the most popular genre of apps in the Metaverse is commonly called social VR, with VRChat leading the pack. Social VR today is similar to the early days of the internet. The content is nearly all user-generated and concerns about privacy, bullying, hate speech, data protection, assault, and other serious issues have been afterthoughts, rather than incorporated from the beginning.
Social VR apps’ business model is to rely on artists and creators to make all of their worlds for them, for free – the same content that they are promoting as the experiences that sell their apps. It is almost like hiring an army of unpaid interns while monetizing everything they make.
Rather than embrace professional developers and artists, social VR apps are trying to get their unpaid users to build the Metaverse for free. Their hope was that they could create an effective set of tools that would enable all users to create their own worlds. One obvious problem with this thinking is that it is really hard to make anything nice on any of the social VR platforms. Unlike making your Instagram or Facebook page, making a quality world in VR requires a lot of skills, creativity, and time. The result is that most worlds are terrible and the few good ones were painstakingly made by uncompensated artists and developers. This leads to another big problem with this model — that the artists and creators should not be treated like unpaid interns while developing nearly all the content that these big companies are selling.
This business model begs the question of what will the future be for these artists and their painstakingly-created worlds? Buried in the terms & conditions of most social VR apps is a statement that outlines that users do NOT own the worlds they create. Everything made on the app is entirely owned by the app. Users spend weeks or months creating valuable experiences and then the app maximizes their revenues by encouraging other users to experience what was made for free. Shouldn’t artists and creators get paid for their work when they make great things? (Of course!)
The development of the Metaverse will likely follow a similar course as the internet. As more investment pours into the Metaverse, artists and creators will increasingly be given opportunities to get paid for their work. Likely, most of the top creators will leave those platforms that are not paying them, further widening the quality between user-created and professionally-created worlds. Within a couple of years, the Metaverse will be covered with incredibly curated experiences created by highly paid professionals.
Planet Theta, the world’s first VR Dating App, is an example of where the Metaverse is headed. Rather than asking their unpaid users to make their worlds for them, they reached out to VR and Dating communities and then hired industry-leading professionals to create their visions. They are also developing tools for users to create things, but instead of keeping all of the value to themselves, Planet Theta is integrating a store to enable artists to sell their creations to other users. Simply put, talent needs to be compensated, and any business model that fails to understand this is doomed to failure.
Zuckerberg seemingly foresaw this issue when creating his model for Meta as a platform. Nearly all of the apps on the Meta platform are highly curated and the people who made the apps, for the most part, were paid professionals. He is not trying to trick unpaid interns and starving artists into making the content for Meta. The format he chose almost exclusively is focused on serious VR developers who are paid quite well. Zuckerberg, along with Meta’s massive investment, will likely be looked back on as the architect of the Metaverse.
Planet Theta Founder and CMO