Is the Metaverse really over? The ideal and reality depicted in the Metaverse

The metaverse has been gaining attention since the latter half of 2021. Its concept is diverse and can be broadly divided into three categories: VR/SNS "VRChat" and "Meta", NFT "The Sandbox" and "Decentraland", and 3DCG "EpicGames" and "Unity".

Until now, these different genres have been collectively considered to be the metaverse, and some of its incomplete elements have been criticized.

However, in the latter half of 2022, rumors spread that Fortnite, developed by Epic Games, would be opened up, and in March 2023, it was effectively opened up as "Creative 2.0". The opening up of Fortnite marked a major turning point in the three-way battle for supremacy.

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What will happen when a game with over 400 million users is opened up?

Epic Games develops a game engine called Unreal Engine, which is also used in game development and building and car design.

Opening up is a system called "Unreal Editor For Fortnite," which allows creatives created using Unreal Engine to be transferred to Fortnite. It is no exaggeration to say that this will allow you to enjoy things made by super-major game companies on Fortnite.

It will also be possible to streamline work by using tools such as ChatGPT, which is said to be suitable for coding. There is a possibility that a few people can create a super popular game.

In addition, Epic Games announced "Engagement Payouts." This system allows creators to receive "dividends" in the form of a distribution of 40% of the net profits generated by Fortnite according to their contribution.

This means that the act of raising creativity on Fortnite can be monetized. Like YouTube and TikTok, Epic Games manages the infrastructure such as the database and servers that store creative content, creating an environment where users can focus on creative production.

Fortnite's opening up suggests the emergence of a huge platform that will surpass YouTube and the arrival of the next generation of creators.

Last year, there was a fuss over the number of daily active users of the NFT metaverse Decentraland. DappRadar, which can analyze blockchain data, reported that Decentraland had 38 daily active users, to which Decentraland responded, "Some websites only track users who make transactions on a specific blockchain and report that number as daily active users, but this is inaccurate."

Citing data from September 2022, Decentraland announced that it had more than 50,000 monthly active users. In response, DappRadar acknowledged that some users had not been measured.

As of October 2023, DappRadar no longer displays DAU, but instead displays UAW (unique active wallets) and the number of transactions.

According to DCL Metrics, which was stated in the official Decentraland announcement as the most accurate dashboard for approximating daily active users, there are around 4,000 users per day.

What about The Sandbox, which reportedly had over 1 million daily active users at its peak and has been downloaded over 4 million times?

Since there is no accurate active user data, we will make an estimate based on data from DappRadar and Decentraland.

As of October 20th, when this article was written, Decentraland had 2,692 daily active users.

Both the UAW and the number of transactions are only rough estimates as the specifications differ for each metaverse, but since both the UAW and transactions in The Sandbox are lower than those of Decentraland, it can be estimated that the number is less than 2,600.

This also suggests that there are significant barriers to people all over the world being able to take part in the metaverse. The current metaverse has the following three challenges:

[Metaverse Challenges]

• Advances and spread of devices
• Production and operation costs
• Legal provisions

Advances and spread of devices

Current VR devices have issues in many areas, including price, weight, and quality. Even if people all over the world are attracted to the metaverse, if gadgets, which are one of the gateways to the metaverse, are not widespread, the population active in the metaverse will not increase.

If VR devices become as portable and widespread as smartphones, companies offering metaverse services may start to get serious about them.

Production and operation costs

Meta (formerly Facebook) is said to have invested around $10 billion in research and development of the metaverse. The announced metaverse has met with mixed reviews, but it is clear that development costs are very high. Although some companies have succeeded in monetizing the metaverse, the metaverse requires huge investments in the product construction stage, making it an area with high barriers to entry.

Legislation

There is also no established legal system for activities in the metaverse. Even avatars can have an impact on the real world when they take part in the metaverse. If a crime is planned in the metaverse and the simulation makes it more likely to be carried out, what are the responsibilities and measures the platform will take? In addition, there are many unclear points regarding how current laws will be applied to harassment and interpersonal troubles in the metaverse.

This also suggests that there are very big barriers to people all over the world being active in the metaverse space. In modern times, would anyone even consider using their disposable time in the metaverse? Generally, people have work, housework, and childcare during the weekdays, and on weekends they meet up with friends to unwind from work, so there is no reason to place importance on activities in the virtual space. There are two possible scenarios for the resurgence of the metaverse:

• Attractive incentives
• Autonomous World

Attractive incentives

I think that a clear incentive design like the aforementioned "Engagement Payouts" by Epic Games will be the biggest factor in stimulating the metaverse at this time. What's important is that it's not a revenue model like GameFi's, which uses crypto to redistribute wealth, but rather a fully established revenue model in which activities on the metaverse are additionally evaluated and revenue is distributed.

In fact, if you can earn more by working on the metaverse than you do in your current job, it's easy to imagine many people increasing the time they allocate to activities on the metaverse. Strictly speaking, the "Engagement Payouts" mechanism requires the development of a virtual space, so it's true that there is a barrier to entry at present, but I think there is a possibility that in the future, incentives will be attached to various activities.

Autonomous World

The world that exists in the virtual space operates completely autonomously. Autonomous World, which is said to have started as a full on-chain game, is starting to attract attention, with ETH Global holding a hackathon on the same theme.

By making it on-chain, data management is decentralized, and the built-in logic is automatically executed by smart contracts. As you know, the risk of tampering is extremely low, and wealth will not be stolen by a centralized organization.

In summary, I think it's fine to think that if you create a game on the blockchain, an economic sphere will be created and an ideal world will be created.

For example, at work, you could have yourself in the autonomous world perform tasks that can be answered by a chatbot, and if you're in sales, you might even be able to make appointments. Depending on how you look at it, it could be said to be a new form of metaverse.

When mechanisms like Epic Games' "Engagement Payouts" become accessible to many people, will there really be any room left for cryptocurrencies to be involved in the metaverse?

The only thing I can imagine is that when metaverse A's service ends, people will convert the assets they've accumulated in A into cryptocurrencies and flee to metaverse B or the real world.

This is unlikely, as it is conditional on Autonomous World never seeing the light of day and 3DCG becoming the dominant force in the future.

The Future of the Metaverse: As hardware evolves, choices will be made based on usage

In the field of metaverse, there are metaverses that have their roots in VR and SNS, and metaverses that have their roots in NFT and 3DCG. It seems that the use of metaverses will continue for a long time to come, depending on the purpose.

In terms of work efficiency, metaverses derived from VR and SNS will efficiently reduce downtime such as travel time and waiting time, while in terms of entertainment and new job creation, activities in metaverses derived from 3DCG, such as the efforts of Epic Games, are likely to increase.

We learned that the field of metaverse can be classified by several roots, and will continue to develop by taking advantage of the strengths of each. It is difficult to imagine that one metaverse will be superior in all respects, so we would like to approach it with flexibility so that it can be used according to the purpose.

Image: Shutterstock

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◉Noriaki Yagi
While attending university, he worked in the food and beverage industry. From that experience, he launched a restaurant consulting business and a human resources dispatch business in the amusement field, and became its representative. At the same time, he started using social media to establish his own brand. After achieving a total of 10,000 followers on social media, his recognition increased and he launched his own apparel brand. In September 2021, he joined J-CAM Co., Ltd. After working on YouTube and Twitter, he became editor-in-chief in April 2022. In March 2023, he launched "Iolite".

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