Image source @ Visual China
Text | Light Cone Intelligence, author | Zhao Jiangyu, Wang Jiapan, Xie Chenxing
Although it's been a few months since Facebook changed its name to Meta, the discussion about metaverse is still hot. On January 18, 2022, Microsoft announced the acquisition of video game giant Activision Blizzard for a $68.7 billion cash deal. Microsoft CEO Nadella said that the game "played an important role" in the development of the metaverse, and Activision Blizzard CEO Kotick told employees in an internal letter that the game 'metacosmization' was the main reason for the company's acceptance of Microsoft's acquisition.
At the moment, there seems to be no concept that is grander, more abstract, more ambiguous, and more suitable for hype than the metacosm. We vaguely feel that the metaverse seems to represent the digital future and the next form of the Internet, but what is the evolution path of the metaverse and the shape of the endgame, I believe that many readers still do not have the answer to convince themselves.
After referring to a large number of Metavalse related materials, Scale Partners will share our understanding framework and related thinking on the concept of Metavalse. We strive to eliminate the false and the true, delete the complex and simplify, help readers understand the most critical element of the concept of metaverse, and improve the recognition of various metaverse themes or concept discussions.
This report was jointly published by Shisheng Capital and Light Cone Intelligence, and this report was written in December 2021
The connotation of the metacosm
Giving the next boundary of the metacosmum a clear definition is as difficult as describing what the mobile internet is. Nevertheless, we need to first clarify what the metacosm is. The famous philosopher Zhao Tingyang's analysis from the word Metavalse itself is very enlightening: Verse in English can be understood as "version", and Meta has two meanings: one is "another field outside of something", and the other is "something more fundamental behind something". Since the idea of the metacosm ultimately requires the energy of the real world to support, the metacosm should not be a more fundamental universe, but more likely to be another world outside the real world, that is, the metacosm is more like a "super-world".
Here we take the description of the metaverse by Chen Xu, founder of MetaZ and former chief consultant of the MIT Technology Review Chinese edition, and give our understanding of the metacosm: the metacosm is not a virtual world that is separated from or parallel to the real physical world, but a digital world in which people participate and live in digital identities. Here are three key points for the reader:
a. "Digital Identity" vs "Digital Account". Digital accounts are only part of a digital identity, recording only a part of what each of us has. Each digital account itself is attached to someone with a real identity. In the metaverse, each person can have multiple digital identities;
b. "Participation" means "free participation". The metaverse does not belong to any country or enterprise, does not have any pre-written plot, has no characters that have been formulated, and does not have a terminal or main clue like the game clearance. Everyone in the metaverse has the right to participate in the formulation of rules and to create their own world;
c. "Life" is not the same as "watching". The form of interaction and experience in the metacosm is different from the way we use computers or smartphones, and in Zuckerberg's words, the metacosm is an "internet in which we participate and can be immersed," a world in which all sensory experiences are digitized.
If you accept the above discussion, then I believe that readers can easily conclude that VR/AR, various games, UGC platforms in 3D virtual worlds (such as Roblox), NVIDIA's Omniverse platform, etc. are not metaverses, just like smartphones, mobile apps, vibrato and other video UGC platforms, application development tools, etc. are not mobile Internet.
Metaversms in both the broad and narrow senses
The reason why many current discussions about the metaverse appear to be "more different than consensus", in addition to the inconsistent understanding of the connotation of the metacosm, is also related to whether the metacosm is "narrow" or "broad" version that the author has not explicitly discussed. Therefore, it is necessary to understand the metaverse of the "two versions":
l Narrow metacosm:
The physical world offline is completely mapped into the digital world, and online and offline are integrated. Who people are in the real world is who they are in the metaverse. It can be seen that the narrow metaverse essence is a more fully mapped and complete virtual world than it is now, which can be understood as a situation in which the digital twin is pushed to the extreme.
l Generalized metaversm:
The metaverse in a broad sense is not satisfied with fully mapping the real world to the digital world, or even requiring that the digital world need to embody all or part of the elements of the real world. Therefore, in theory, there can be an infinite number of generalized metacosms. The generalized metaverse, if pushed to the extreme, is in some ways what humans living in matrix see in Matrix (we have no intention of discussing brain-computer interfaces here).
One unavoidable question about the generalized metaverse is: If there really are multiple metaversms, how can the same person interconnect between the metaversms? You know, the problem of enterprises building their own sphere of influence has not been well solved even in the current situation of strong administrative intervention, in the metaverse, who has the ability, willingness, and qualifications to solve this potential problem?
The value of the metacosm
If we think about it carefully, more than 90% of the discussions about the value of the metacosm are essentially analyzing the value of the VR/AR industry. So what is the value of such a grand narrative concept as the metacosm? Here are the results of our reading and reflections:
1. Give people the opportunity to create the world they want, build or better maintain relationships, and experience a sense of being human.
It should be said that the metacosm makes it possible for people to land their ideas about life, which is embodied in:
In the metaverse, people establish rules, define values, and realize their own ideas, so as to better identify with themselves and gain a sense of existence.
b. It is human nature to position oneself through interaction. The metaverse may help us build more relationships with others, and may lead to more positive experiences.
2. Breathe new life into the slowing development of the Internet, while addressing the threats that AI and robots may pose to humans:
a. At present, in the field of visual (text, pictures, video, live broadcast) and auditory (audio), the development opportunities of the Internet have been better extended between different social classes. In the future, the metacosm will realize the digitization of human senses from the five sensory dimensions of vision, hearing, touch, smell and taste, breaking the situation of large companies rolling up competition under the background of the current traffic dividend peaking.
The large-scale application of AI and robots in the future is likely to cause a series of problems (such as a large number of people losing their jobs), and the metaverse may produce new employment models, employment models, and even new occupations, allowing people to create new values and thus provide solutions to real-world problems.
Metaverse Three Elements and Core Supporting Technologies
For entrepreneurs and investors in the primary market, how to judge whether the project has anything to do with the metaverse? Combined with the discussion of the connotations of the metacosm in part one, we believe that the following three elements are crucial:
1. Hardware devices that provide immersive, hard-to-tell experiences: The most intuitive embodiment of the metaverse is a virtual world in which all sensory experiences are digitized. Therefore, the importance of hardware devices that can provide users with a real and comfortable experience is self-evident.
2. Identity system: There needs to be a proper separation between the identity system in the metaverse and the identity in the real world. In order to make everyone's digital identity independent and long-term, no one in the metaverse has "super privileges" to manage or delete digital identities.
3. Value system: including operating rules and economic systems. The rules of operation in the metacosm are not preset in advance by centralized institutions, and the economic systems in the metacosm may represent entirely new social relations and production relations.
Obviously, from the perspective of practice and landing, blockchain is undoubtedly the core supporting technology of the metaverse: on the one hand, the identity system needs to maintain its independence with the help of the decentralized characteristics of the blockchain; on the other hand, the blockchain-based NFT (Non-Fungible Token) can realize the inseparable and non-replicable characteristics of objects (games, works of art, collectibles, digital music, etc.) in the digital world (thus solving the problem of object uniqueness). And trace the ownership of the information of this item or thing, so that people can exchange and trade digital items.
Supplement: Cryptocurrencies on the blockchain are divided into two categories: native coins and tokens (tokens), the former represents Bitcoin, Ether, etc., has its own main chain, using on-chain transactions to maintain ledger data; tokens are attached to the existing blockchain, using smart contracts for ledger records. Tokens are divided into two kinds of homogeneous tokens and non-homogeneous tokens, the former can replace each other and are close to infinite splits, while the latter is inseparable and replaceable, unique.
The six major investment landscapes of the metacosm
Metacosm could be the second huge opportunity for integrated innovation after smartphones. From the current point of view, the difficulty of realizing the metacosm may be on the same order of magnitude as the difficulty of building the entire Internet world in the 1980s. We have compiled six major investment maps of the meta-universe to facilitate entrepreneurs and investors to better identify and seize opportunities.
1. Hardware and operating system
The immersive nature of the metaverse requires devices to provide three-dimensional information presentation and interaction solutions, while electronic devices such as smartphones and tablets isolate people and the information world through a screen, so that we can only interact indirectly with the external environment. As a result, the hardware opportunities under the metaverse concept are focused on VR/AR/MR devices that deliver excellent immersive experiences and simulations. In the future, the all-in-one XR device may be equipped with more accessories to better give users the five senses of visual, auditory, tactile, taste and smell.
The operating system is the interface between the user and the hardware, controlling and managing the entire hardware and software resources. From historical experience, the operating system competition intensity of XR devices will be much higher than the competitive intensity of XR hardware itself. In the battle for operating systems, time is a factor that cannot be ignored, and whoever can better balance the creativity of developers and the consumer experience has a better chance of winning.
2. Back-end infrastructure
2.1 Communication Networks
To ensure that a large number of users can interact in a virtual environment in real time, shared, and persistently, it is necessary to ensure that large amounts of data can be sent and received smoothly, and 4G networks obviously cannot handle such a large-scale data load. 5G networks enable the smooth transmission of high-definition images, videos, massive amounts of data and other information in the metaverse. At the same time, the characteristics of immersive experience and application scenarios also put forward high requirements for the latency of communication networks, and the low latency characteristics of 5G networks can meet this requirement.
2.2 Computing Power/Cloud Computing and Edge Computing
Since the information in the metaverse is presented in a three-dimensional form, and a large number of users will participate in it flexibly and personalizedly, the realization of the metaverse will bring the largest demand for sustained and stable computing power in history. Solving this terrible computing power problem is likely to rely on major breakthroughs in quantum computing.
In addition, limited by factors such as network bandwidth, computing throughput, and for the sake of protecting data security, it is an inevitable choice to combine cloud computing and edge computing at present: cloud computing is responsible for global, non-real-time, long-term big data processing and analysis, and can play an advantage in long-term maintenance, business decision support and other fields; edge computing is more suitable for local, real-time, short-term data processing and analysis, which can better support the real-time intelligent decision-making and execution of local services.
Note: Edge computing refers to a distributed open platform that integrates the core capabilities of network, computing, storage, and applications at the edge of the network near the data source. It can serve as a bridge between the physical and digital worlds to connect smart assets, smart gateways, smart systems, and more.
3. Underlying architecture
3.1 Blockchain
As we covered in Part IV, blockchain powers the identity and value systems of the metaverse. Although blockchain technology has been used in some scenarios for many years, we must recognize that it is difficult for blockchain technology to support a wide range of applications (such as retail-level payments) due to high data storage requirements and poor scalability. There is a lot of innovation in this industry and a Practice of Libra-style "hierarchical hybrid technology route combining centralized distributed processing architecture and blockchain technology line" deserves our attention.
3.2 Digital Twins
We mentioned in the second part that the construction of a metaverse may require mapping all or part of the real world to the digital world. In this process, digital twins are an essential technology. Digital twin refers to the twin of physical entities in the digital world, emphasizing the unity of the digital world and the physical world, and was first applied to the field of industrial manufacturing. At present, the technology of forming a data point cloud, identifying and extracting product models by scanning the environment by the device has gradually matured, and the ultra-large-scale three-dimensional reconstruction at the city level has also entered the application stage.
3.3 Engines and Development Platforms
In order for everyone to have the possibility to participate in the construction of the digital world and thus build an open metaverse, we need to have low-threshold content creation tools (such as engines, development and design tool platforms, etc.) for ordinary users. In this regard, overseas related manufacturers have taken a lead: For example, Unity has repositioned itself as an "interactive content creation engine" and expanded its engine applications to other industries such as animation, film and television, architecture, and manufacturing.
4. Artificial Intelligence
In the future, in order to reduce the time and labor cost of building the metaverse, compared with PGC, PUGC or UGC, more and more content or services generated by AI for human consumption will be generated; on the other hand, it is no longer practical to rely on the existing way to process data in all metaverse scenarios, and we need to rely on AI with autonomous learning and decision-making functions to assist, thereby reducing the cost of supporting and maintaining the operation of the metaverse.
5. Content and Scenarios
It is expected that the content consumer side of the metacosmic era will generally experience the following stages of development:
[1] Entertainment and social content first, grab users' attention: Games have the highest comprehensive readiness compared to other content fields, and are the starting point of metaverse content. The XR device fully reflects the advantages of the meta-universe in terms of socialization, attracting a large number of users to use;
[2] Many areas of production and life are infiltrated: people will gradually get rid of the impression of the "high-order game form" or "high-order social form" of the metaverse, such as the formation of a closed-loop virtual consumption system, virtualized services that are connected with the physical world, etc. will gradually rise;
[3] Emergence of new content and applications: Manufacturers of houses, homes, cars and other items may also appear in the metaverse, and traditional activities such as games and art exhibitions may have new content and forms of presentation... We can even imagine how the financial system built on digital assets will work.
6. Synergists
The metacosm is likely to spawn many new markets and new formats, giving birth to new great enterprises. In this process, some technical solutions and service providers will fully benefit from their own endowments, or form a new ecological cooperation system with other enterprises before the new competitive pattern is determined.
Metacostem investment evolution logic
In the previous section, we analyzed six major investment landscapes under the metacosmonic concept. Considering that the various sectors will not develop in tandem, we need to have a general judgment on the evolutionary logic between these fields, so as to help entrepreneurs and investors grasp the right time to enter the market:
a. Hardware and content first. The growth momentum of XR hardware in the next few years has been relatively clear, and the content supporting the hardware has formed a positive cycle of mutual promotion with the hardware (we will release VR/AR industry research reports in the future to further explore this point). In the future, the production, operation, and interaction of new content/scenes will need to rely on the vigorous upgrading of the underlying architecture (game engine/tool integration platform, etc.), and the underlying architecture will also enter the fast lane of development in this period
b. With the upgrading of the underlying architecture and the continuous enrichment of content and scenarios, back-end infrastructure and artificial intelligence will play a huge role in data processing, content synthesis and other fields. We will see AI replace or assist humans in doing constructive work as the core productivity of the metaverse
c. Compared to other sections, the content and scene sections have the greatest variables. New content, new scenarios, and new formats may reshape the scale and competitive landscape of the content industry. At the same time, in this process, there will be a large number of technical collaborators and service collaborators who prosper the entire ecosystem to develop and grow together
The development direction of the Chinese and dollar universe is predicted
To some extent, paying attention to the metacosm is to pay attention to China's future in the field of world science and technology. At present, China and the United States are leading the development of the global metacosm, followed by Japan, South Korea and Europe. In the short term, the endowments accumulated by countries in the era of mobile Internet will affect the direction of countries' efforts in the field of metaversics. Here we briefly discuss the general direction of the development of the us dollar universe in the short term:
The United States: It has obvious advantages in the three sectors of hardware and operating system, back-end infrastructure, and underlying architecture, and at the same time has strong competitiveness in the field of artificial intelligence. From the application level, American companies have made certain achievements in entertainment scenarios for C-end consumers, and are also at the forefront of the world in industrial design and other B-end empowerment scenarios
China: The sheer size of its population base, its vast geographic disparities, and its unique socio-historical stages are all reasons to believe in China's enormous imagination in content and scene innovation. We expect Chinese entrepreneurs to create world-class content and innovation in the process of realizing the vision of the meta-universe, just as they transformed the fields of social networking, travel, and payment in the mobile Internet era, and give birth to a new collaborative ecology
In the medium to long term, there are many variables, and it is too early to talk about the endgame. At present, China also has a certain accumulation in the underlying structure sector and is gradually narrowing the gap with the United States. Coupled with China's willingness and intensity to invest in infrastructure construction, we are optimistic that there will be opportunities for China to overtake in the field of artificial intelligence and back-end infrastructure in the future. It is expected that in the future, China will gradually surpass the United States and lead the world in the historical stage of the development of the meta-universe.
Important players and practices
Combined with our discussion of the "Three Elements of the Metacosm" in Part IV, we believe that the focus should be on companies with "blockchain technology applications", "digital content creation" and "consumer hardware capabilities". Here we will select and introduce several companies worthy of attention at home and abroad, and explain our reasons:
1. Facebook（Meta）
At present, Facebook is the only company in the world that has made achievements in the three aspects of "blockchain technology application", "digital content creation" and "consumer hardware strength":
Provide VR hardware through the Oculus product line to solve the problem of immersive experiences;
Has launched applications such as digital wallet Novi as a reserve for blockchain technology;
Accumulated experience in operating blockchain transactions and plans to develop NFT products;
2. NVIDIA NVIDIA
If we compare the metacosm to a whole new "gold rush" with infinite possibilities, then in addition to some companies as "lucky gold diggers" who are winners, the companies that provide tools to the metacosmphical gold diggers are also winners.
Nvidia provides productivity tools for developers in the metaverse, such as through graphics cards and AI technologies, simplifying the difficulty of 3D modeling and image rendering. Here's a focus on NVIDIA's Omniverse platform: software that can be downloaded to devices with Nvidia graphics cards. On the basis of Nvidia's graphics card calculation and rendering of realistic images, the Omniverse software platform has added a lot of Nvidia's self-developed and third-party software toolkits to help people better design things in the metaverse, or for digital twins in some scenarios, such as simulated industrial manufacturing, autonomous driving, virtual buildings, etc.
3. Tencent
Tencent's investment in Companies such as Epic Games, Spotify, snaps, and its own resources in the social field can be seen as Tencent's key layout for the meta-universe. In 2020, Tencent also proposed to spend $70 billion in the next 5 years to strengthen its capabilities in the fields of cloud, AI, blockchain, 5G, and quantum computing. However, we also see that Tencent has obvious shortcomings in the field of consumer hardware, and Tencent's investment in foreign companies is likely to face greater policy uncertainty.
Of course, we can also judge the layout of large companies in the metaverse concept according to the investment map provided in Part V. Here we list some companies and the results of their analysis for your reference
Controversy and concerns surrounding the metaverse
In this section, we'll start by enumerating some of the debates surrounding the metaverse idea. Both proponents and opponents of the metaverse believe that it is necessary to think about these issues, because these discussions are crucial to forming a consensus of values in the process of metaversmonic construction.
Will the metacosm bring human civilization to a standstill?
It's easy to worry that the metaverse will immerse large numbers of people in virtual content. If fewer and fewer people spend time and energy focusing on the real world, the speed at which problems in the real world are solved, or the progress of further exploration by human civilization will be affected.
The other side believes that the development of metacosmities and the exploration of outer space, such as activities that push human beings forward, are not either-or, because metacosms can help us better understand problems (such as using VR devices to stimulate children's enthusiasm for exploration of astronomical knowledge and learn knowledge), and can also provide solutions for practices that are limited by physical conditions in life (such as simulating various ideas with the help of digital twin technology, and finally obtaining reliable solutions and then applying them to real urban construction).
Will the metaverse make people completely lie flat in the real world?
If everyone can easily immerse themselves in a false good life scenario through VR devices, it is easy to have the worry that the metaverse may lose the motivation to change real life. However, in response to this argument, the opposing side argues that the metaverse will not lead to such an outcome, because people in the metaverse also have to pay a price (time, creativity, etc.) to be able to exchange what they want. Opponents further argue that people can monetize their abilities by participating in the creation of new forms of economy and possibly bring the value created in the virtual world back to the real world, thus providing an opportunity for the "losers" in the real world to change their destiny.
In addition to the above two main arguments, there are two other concerns that the current proponents of the metaverse have not responded well to. We will also briefly introduce it here to facilitate the discussion:
Will the metacosm bring a huge energy burden to the real world, and even affect the survival of human beings on the earth?
For the metacosm to function, it needs the physical world in which we live to provide it with a stable and continuous supply of all energy, including electrical energy. So the question arises: if the metacosm cannot prove that the value created by the resources seized from the physical world exceeds the opportunity cost of these resources, then who can guarantee that the metacosm will also operate stably or develop further, without being "unplugged"? In addition, even if the metacosm creates great value, we are bound to conduct a cost-benefit analysis to determine whether the pressure exerted by the metacosm on the earth's resources and the human environment (such as carbon emissions) can be offset.
How to design mechanisms or build value consensus in the metaverse?
As mentioned earlier, the metaverse does not belong to any country or enterprise, does not have any pre-written plot, has no characters that have been formulated, and does not have a terminal or main clue like the game clearance. To put it simply, the metacosm is developed and grown in the process of user co-creation. The question is, how can this metaverse, which gives maximum support to fairness and creativity, guarantee basic order? How can we believe and guarantee that the metacosm will not move toward what Hobbes discussed as a "war of all men against all men"?
In the current discussion of the metaverse, there is not much discussion about the risk that the metacosm may amplify the anonymity of the Internet age, thus bringing more moral and ethical issues, and the discussion of the form in which the authorities in the physical world will exist and perform their duties in the metacosm are very limited, which cannot help but make people wonder whether the metacosm is just a concept that carries a beautiful imagination, and its assumptions must be partially or completely disappointed.
Supplementary News: During the Horizon Worlds test, a female tester reported that she was sexually harassed in the virtual world. The tester said a stranger tried to "touch" his virtual character in the square. "This (uncomfortable) feeling is stronger than being harassed on the internet," she writes. See MIT Technology Review report: https://www.technologyreview.com/2021/12/16/1042516/the-metaverse-has-a-groping-problem/
Some opinions and ideas
In this section, we will share some of our thoughts and opinions on the metaverse concept itself and the discussion of the metaverse for your reference. We have no intention of endorsing these ideas, but we find them extremely inspiring and hopefully inspire readers to think deeper about the metaverse:
1. If we comb through the timeline, we find that the interpretation and discussion of the metaverse is mostly focused after Facebook announced that it had changed its name to Meta. We need to judge the business logic of Facebook's renaming of Meta, which helps to improve our discernment of all kinds of discussions about the metaverse.
2. Considering that Facebook has invested real money in the metaverse (planning to invest more than $10 billion), there is probably no other company in the world that has more influence on the concept of metacosmology than Facebook. In a way, Facebook has the power to interpret the concept of metacosmity. In the short term of 3-5 years, if entrepreneurs want to take the metacosm as the direction of struggle, it is meaningful to keep an eye on Facebook-related actions.
3. The metaverse seems to be "a basket" today, into which any ideas, facilities, plans, tools, etc. about the future of humanity can be packed. But we must clearly understand that the development of science and technology has its objective path and speed. Instead of talking about the metaverse itself, it is better to go back to the roots and focus on the technological evolution and industry development that underpin the story.
4. Zhao Tingyang believes that the metacosm is the direction of human beings' efforts to turn a possible world into a real world for the first time. The metacosm differs from literature in that although a literary work describes the possible world, it actually thinks about the problems of the real world. The metaverse will compete in a new form for the resource that everyone has a rigid constraint on - time (or lifespan), which is likely to have a "siphon effect" on the real world, which is a "either-or" thing from the result: the more attractive the metaverse, people will gradually relocate to the metaverse and experience what cannot be done or changed in the real world.
5. It is difficult for people with "subject uniqueness" to carry different identities and everything that is closely related to each setting (social relationships, behavior patterns, resources at hand, etc.). If we have multiple identities in the metaverse that are difficult to unify or even contradictory (such as being both a man and a woman), then according to Zhao Tingyang, "the end result may not be that we have multiple identities, but which identities are not us." From the perspective of maintaining the self, the idea of multiple metaversities is ultimately for each person to cut and enlarge different aspects of each person's identity, so that we can "dash around" within a certain range.
*Some of the pictures in this article come from the Internet
Appendix: Metacostem Company Ecosystem
In 2021, the Newzoom.com released the "Metacosmectron Ecology Map". We have attached the atlas here for your reference:
(Original credit: Newzoo's 2021 Global Games Market Report |.) Into the Metaverse trend report, quoted from the Metasymological Report 2021-2022)