At The Metaverse Society we bring together technologists, businesses, thinkers and academics, regulators and creators to debate and envision the metaverse as a decentralised, culturally and economically empowering space for all.
In recent months we have published major reports on the trends affecting the metaverse, including deep dives into AI and content creation, spatial computing, and how AI and the metaverse are redefining creativity.
We have hosted events across the world and participated in international conferences, while engaging with policymakers and innovators. All the while we have been gathering fresh insights from leading experts in the field, with the aim of conducting a comprehensive investigation into the state of play of the metaverse as we enter 2025.
These contributions from technology leaders, policy makers, researchers and creative innovators come as we begin a pivotal year.
If the resurgence of crypto was one of the big stories of 2024, then what that means for blockchain and the metaverse will be a major theme for 2025. Renewed long-term confidence in cryptocurrencies, the impacts of design and usability improvements during 2024, and marked reduction in overall friction, have combined to drive a sharp increase in the overall appeal of Web3 digital assets. That implies the adoption of blockchain-enabled digital assets across entertainment virtual spaces.
We expect major IP holders – from entertainment to sports – to dive deeper into the metaverse and AI, enhancing the creative process by automating repetitive tasks and empowering creators to push artistic boundaries. We further expect there to be increased noise about the regulation of AI and of crypto, but think global governance frameworks will remain patchy and elusive.
All this and much more is examined in the following contributions. We would like to thank everyone who has taken part in The Metaverse Society’s activities over the past year, and in this latest cycle of interviews in particular. We hope you find them as insightful as we have. They offer a renewed vision of an open, enriching and economically vital metaverse for all.
Founder & Director of The Metaverse Society
Herman Narula
What cultural and social potential and opportunities does the metaverse hold?
Imagine a global stage where every brand, influencer, artist, and individual can genuinely connect with audiences and people worldwide. This is what the metaverse unlocks. Such rich connections are not just beneficial but vital to our wellbeing. In my book, Virtual Society, I delve into self-determination theory, which emphasises our inherent need for fulfilment. This fulfilment fuels our purpose, drives growth, and helps us realise our potential, make meaningful choices, and matter to others. The metaverse expands on this idea, bringing mass-scale virtual experiences that enrich us profoundly.
When hundreds or thousands of people gather simultaneously within a virtual world, new types of cultural value emerge. People can cocreate in real time. Just as individuals have long worked together to found cities in the real world, we’ll see communities build meta versal worlds that capture the genuine essence of what makes human culture exciting.
The metaverse transcends being merely a reflection or evolution of our current culture; it transforms into a thriving economy of participatory experiences that go beyond geographical limitations. This brings the prospect of entirely new jobs, fueled by passion and purpose, and spaces that nurture equality where individuals can be their authentic selves. These vibrant, dynamic worlds will form the foundation for new cultures and communities. Young people will forge connections, and isolated communities will find a voice. Through decentralised, bottom-up approaches, we can replace the negativity that plagues social media with the power of unprecedented shared experiences.
Founder and
CEO of Improbable
This transformation will reshape industries, unlock new avenues for exploration and growth, and enable a more inclusive and interconnected world. It will foster new relationships and communities, providing accessibility for individuals bound by location or disabi lities, creating inclusive social spaces and activities previously unimaginable in the physical world.
For the metaverse and beyond, what do you see as the impact of AI and blockchain technologies for society?
Current technological revolutions point to a radical democratisation of technology, an increase in user empowerment, a newfound focus on collaboration, and a surge in digital ownership. The rapid evolution of large language models and generative AI, combined with a boom in digital assets, is revolutionising how people spend their time and resources. Open-source movements continue to democratise technology, stimulating innovation and competition.
The metaverse, particularly its large-scale immersive experiences, relies heavily on generative AI. This allows us, and developer communities, to scale up, streamline production, and build products and experiences that would otherwise be impossible. Understanding the advantages AI brings to content creation is crucial.
I strongly believe that AI will augment – not replace – human creativity. AI’s role is to enhance quality and reduce iteration, accelerating the creation of new metaverse experiences. Creative minds will be able to unleash their potential in unprecedented ways.
Sharing value between virtual worlds is of paramount importance. Interoperability standards based on next-generation blockchains will form the backbone of a new economy within an open metaverse ecosystem of connected worlds. No longer trapped within walled gardens, users will own their digital goods and identities and take them from world to world. Creators will be empowered to build viable busi nesses within the metaverse. Competing parties will be able to share users, data, and value in a collectively profitable and mutually beneficial way. Existing digital assets will gain utility beyond entertainment, serving as co-ownership in the value created in these worlds.
As technologists, thought leaders, and regulators, it is our responsibility to ensure the development of technologies that empower individuals, foster innovation, and uphold principles of fairness and safety while nurturing a thriving economy with fair competition. Exploring the social and economic impact of these technologies is crucial, as they will reshape industries and open doors to innovation and inclusivity. Engaging in constructive dialogue with regulators is essential to strike a balance between fostering business growth and ensuring this development benefits the greater number.
This is what The Metaverse Society is all about, exploring what makes the right foundations for a virtual society.
50% of millennials and Gen Zs consider online experiences a meaningful replacement for in-person experiences. Digital media trends: Immersed and connected. Deloitte, 2023
Find out more What is the metaverse and what impacts will it have for society? UK Parliament report, July 2024
Herman
A new way of being together
Herman Narula’s book Virtual Society: the Metaverse and the New Frontiers of Human Experience, first published in October 2022, reveals why the metaverse offers users unprecedented opportunities to create, explore and find meaning. The author believes that the societal impact of these virtual worlds will be both profound and positive.
The metaverse:
fostering a new era of freedom
“As technology and its applications continue to improve and evolve, we are approaching a new epoch in human history, one in which the possibilities of our lives will diverge from the limits of our bodies. At that point, the world of ideas will generate actual worlds that we can inhabit: constructed realities that will exist in conversation with the physical world. I want to offer a new way to understand this massive transition toward a virtual society – a transition that, if we manage it carefully and learn from the mistakes of the first age of the Internet, will offer humankind incomparable new dimensions of freedom.”
A new focus for communities: individual needs
“Rather than representing society’s demoralising descent into technological escapism, the emergence of virtual society will mark the beginning of an era in which we will explore new, positive frontiers in psychological fulfilment and mental health; recentre our economy and modes of education around individual needs; forge remarkable new communities built on shared interests and experiences; and bring about a world more humane than the one we are afraid to leave behind.
I hope that a newly empowering, just, and equitable society will sit at the core of our virtual future. I believe that the rise of so-called post-human technologies will soon produce robust virtual societies that will transform the way we live on Earth, while redefining what it means to be human.”
Expanding the possibilities for fulfilment
“The virtual worlds that people like me are working to build will be centred around these sorts of useful and fulfilling experiences. In them, users will be able to interact with their friends, meet new ones, learn valuable skills, have exciting adventures, and participate in civil society.
These worlds will be valuable because they will remake our lives by extending the context of society into new realms, allowing for the transfer of wealth, ideas, identity, and influence – the building blocks of human social relations – between our current reality and the digital ones that we create. The combination of these realities, and the transfer of value between them, will comprise the digital metaverse.”
Dan Nechita
Dan, you have been directly involved in the genesis and negotiations of the EU’s AI Act, the world’s first legislation on Artificial Intelligence. Can you explain how this pioneering regulation will now be implemented?
The AI Act represents a new type of regulation, not only because of its development process but also because it is grounded in the core values of the Union – democracy, individual freedoms, fundamental rights, and more.
Regarding its implementation, the Commission needs to issue guidelines in the coming months to make the legal requirements of the Act more practical. Another crucial aspect involves the work assigned to standard-setting bodies, which will be essential for understanding how to implement the Act at a technical level. However, what’s really important – especially when considering the metaverse and the convergence of various technologies – is the establishment of the AI Office. This office serves as the central European enforcer for very powerful generalpurpose AI models, particularly those with systemic risks, which might be the type of AI deployed in a metaverse environment.
Looking back, it’s interesting to note that the AI Act was initially intended as a product safety regulation, but we ended up focusing on high-risk use cases. This is a powerful approach because it genuinely considers how technology is used and its impact on end users or those interacting with it. We’ve established a flexible governance structure to monitor the frontier of technology, featuring an interactive component with the AI Office supervising the market. Essentially, it acts as a European supervisory authority, enabling flexible enforcement through model analysis and industry empowerment. This gives me confidence that the regulation will be future-proof.
EU Director, Transatlantic Policy Network
Former Head of Cabinet for MEP Dragos Tudorache, 2019-24
A A ^^^::I -!! AII =!!- I^:I I ::....... !!!@@@::....... AI AI
Responsible adoption of generative AI could create $10.3 trillion in economic value by 2038. Navigating the Industrial Metaverse. Accenture/WEF, 2024
We’re not over-regulating; instead, there’s a dynamic interaction between industry and the regulator.
Overall, I believe that policymakers today are responsible for less and less, and it’s the people building our digital future who need to carefully consider their creations. The technology they develop will be with us for a very long time; once it’s here, it won’t disappear. This enduring presence brings with it a profound responsibility. While the potential is enormous, so too is the moral responsibility, for both AI and metaverse developers.
What specific opportunities and challenges do you see being associated with the metaverse.
And are these going to call for regulation too?
While I believe in the potential of the metaverse, it’s important to remember that this isn’t the Matrix; it hasn’t reached societal level integration yet. We shouldn’t scare ourselves unnecessarily or rush into regulation. Currently, regulatory needs address the entire digital environ ment, tackling issues like cybersecurity, identity theft, manipulation, and targeted advertising. These concerns are being managed. However, the tools and capabilities being developed now will shape our digital future, converging to create a new paradigm.
Regarding the metaverse’s opportunities and challenges, you could imagine this is a sandbox for exploring and testing new technologies or systems. For instance, using AI to distribute tokens in a virtual environment might be safer than allocating state allowances to underprivileged families. The metaverse can recreate the real world with different rules, offering a space for human creativity, beyond the limitations of the real world.
Social interaction in the metaverse could also evolve positively. If we can build virtual worlds with better business models than ad-driven social media, we could create environments that foster genuine social connections and community building.
This could be a remedy for the shortcomings of current social media platforms, encouraging more meaningful interactions.
Finally, the metaverse presents complex questions about democracy and individual freedoms. In a virtual world, voting might be blockchain-based, but who sets the rules for voting? Who runs the system? Ensuring that the metaverse facilitates democracy requires vigilance. It could potentially enable a greater extent of democracy than we have today, but this outcome is not automatic. Democracy is a complex system built over centuries, and the same care must be taken to establish its principles in the metaverse.
How will the EU’s new AI Act apply to the metaverse?
Considering the end goal of a large-scale metaverse, it makes sense that the AI behind it would be a very powerful general-purpose model, akin to those currently being trained at the cutting edge of technology. While we hope these models will not be risky or dangerous, they will likely fall under the purview of ensuring their safety, a task designated to the AI Office.
I also believe that in the not-so-distant future, all these technologies – metaverse, AI, quantum computing – will merge and intersect. Currently, there’s a lot of experimentation at these intersections, but eventually, they will work seamlessly together. This integration will unlock new possibilities and foster greater creativity. As I was saying earlier, with this immense potential comes great responsibility for metaverse developers. Find out more AI Act high-level summary. Future of Life Institute, February 2024
Shaïna Silva ART
Co-founder and CEO, Digital Art Week
What impact do you see the metaverse having on the world of art?
The community aspect is exciting. Artists love building communities and supporting one another. They gain inspiration from each other. So having access to a shared space like the metaverse is going to inspire a great deal of incredible art. I think it will act as a catalyst and foster a lot of innovation.
It will also create an incredible opportunity for people from all over the world to experience art. For example, our most recent event was in London. A lot of people would have loved to see the various works and exhibitions, yet if they were unable to travel they would have missed out on the entire thing. The metaverse could enable all those people to experience Digital Art Week just as it happened. This means the metaverse could also give artists more exposure by reaching new audiences.
There are many potential applications too, from virtual exhibitions through to live performances and interactive installations. And all of that art will be persistent. At present, Digital Art Week spends a year creating a week-long programme of 42 events, and it feels like it goes by in a split second. But if we could build all that in a metaverse, people could revisit it as many times as they wanted to.
So our goal is to build our events into metaverse experiences over the next three years. We are now working on choosing the right partners, to ensure those experiences will be comprehensive, accessible, and focused on education. My ultimate motivation is to democratise art. I think art has always been a very closed-off environment for many people, and the metaverse is an incredible opportunity to change that.
In the meantime, how are you planning to integrate next-generation technologies into Digital Art Week events?
Our goal is to use AR, VR, and even AI experiences to transform the ways in which audiences can engage with art. VR and AR installations already enable visitors to immerse themselves in digital artworks in a way that transcends the limitations of physical spaces. Our future exhibits will integrate pop-up moments, where visitors can use their phones to access an AR experience and interpret the art within the cityscape – with AR acting like a portal.
We are passionate about using this technology to create positive moments of serenity. With all the noise and bustle of urban environments, much of my focus is on providing moments of relaxation. I loved what Krista Kim did at Outernet, the big immersive space in central London. We chose a piece called Continuum, whose gradient lights and music offered a real reprieve from the constant noise on one of Europe’s busiest streets. That, to me, is a really interesting way of using the technology.
What role do you see for AI in digital art?
I think the really exciting part is it creates more avenues for artists to explore. The artists we love to platform are creating incredible art, and they all have completely different ways of using technology. Some use algorithms, while others run their pieces through generative AI. This creates more opportunities. AI can even be used in ways where the artist doesn’t really have to interact with the work at all, and yet it’s still art. There are so many ways these tools can be used, and I think many of them are probably quite different from what people imagine.
What effects do you think blockchain technology will have on digital rights and intellectual property issues?
I think it could solve a lot of problems. By making things really clear and seamless, blockchain technology will prevent a lot of the copyright issues that we have seen in the past. Our goal is for people working in this space to feel safe, which is why our main focus is on education: how can we educate and protect these artists? Many of the talks we organised during Digital Art Week were on topics directly related to AI, IP, and digital ownership. What I saw is that once artists found the information that they were looking for, it brought them peace of mind.
With any new technology, there is always a period of trial and error to identify what works and where the holes are. That’s where we are now: holes are being patched, education is happening, and people are really starting to understand where they can go from here.
Find out more Digital Art Coll3cting. ART+TECH Report, 2023
As Chief Digital Officer at Art Basel, do you think the metaverse could enable new cultural experiences?
I think most technology comes into existence to solve a basic human need. But, at some point, we start wondering what can elevate our experiences to the next level. The answer is often some kind of artistic or cultural space that gives us a real feeling of emotional connection.
In this sense, I think the metaverse unlocks an interesting new dimension through artistic and cultural experiences you might not have been able to access before – and that you may be able to engage with more deeply.
Are there artists already exploring these possibilities?
Refik Anadol is a great example. He uses AI in a very interesting way, building what he calls “Large Nature Models” that take in massive amounts of data from the natural world, from which he then generates pieces of art. But there’s a very human angle to all this as well. When creating work based on rainforests, he was in Brazil, collaborating with tribes, learning about global warming, pulling insights into data models, and manifesting all of this as pieces of art that people can engage with.
By educating people about what’s happening in the world through art, Anadol’s work has significant impact. And it shows how digital tools can connect data, technology, and the world to help an artist create something truly meaningful.
Imagine being able to put on a headset and immerse yourself in a world of rainforests, art connecting layers within experiences that just weren’t possible before.
We increasingly hear about how AI threatens artist livelihoods and jeopardises intellectual property rights. What are your thoughts on this?
Artists are worried, but there are upsides too, particularly where these technologies converge with Web3. Right now, we hear a lot about AI models learning from the whole of the Internet – video, images, text. They’re being used to take intellectual property, copyright, and value away from creators.
We can find solutions in blockchain. With artists registering their IP for content they create, ownership would be logged and they could validate their own content at any time. The next phase would be AI systems that recognise these blockchains and reward artists and creators with some form of tokenisation. This means they’d maintain some level of IP ownership – and get paid. I’m convinced this will happen. Find out more
How will the metaverse affect content and creativity?
In June 2024, The Metaverse Society published the report AI and Content Creation, followed in December by a memo looking more precisely at the impact of AI on creativity. The studies explore how large-scale immersive experiences will require substantial use of AI to achieve scale, and how AI and metaverse technologies are fundamentally reshaping creation, creativity, and audience engagement. They provide recommendations for how established media players must recalibrate their content strategies to flourish in this new environment.
Creative industries: the new paradigm
“The shape shifting nature of the metaverse will require creative industries, and many forms of media and entertainment, to think differently about storytelling and immersive experience, and to build new content pipelines to support them.
The first defining change is the elimination of traditional audience silos. Building on the traditional Internet model that layered on direct selling of digital content to consumers for the last two decades, the metaverse adds social interaction and the creator economy as another intrinsic layer.
The second is AI: AI integration will be the only way to provide content that is truly dynamic and responsive in real time, at scale, to highly diverse but also localised metaverse audiences.”
Strategies for success in changing times
“Content owners and creators should look to three strategies to recalibrate their product roadmaps to support the metaverse: expansion and improvement of existing content to new devices and services; bridging across content genres to widen audience scope; and ultimately preparation for revolution, by delivering new, and often highly experimental, content formats into the market, even in test or demo form.
Each of these strategies takes advantage of the fluid distribution model that the metaverse offers, oriented presently toward youth audiences that are less sticky (and less engaged) with traditional media formats, and who therefore require multiple target points for delivery. Content, at a broad level, still continues to lag the technical innovation of the metaverse. With enormous capital expenditure continuing in development of new device types (namely spatial computing) and the AI revolution, the creative industries need to deliver.”
Expanded possibilities for audience engagement
“There is now considerable head-room for delivery of content to growth channels that are metaverse specific. From protometaverses such as Roblox and Fortnite, to immersive video experiences pioneered in MLB Virtual Ballpark by Improbable, and finally the delivery of robust VR hardware from Apple and Meta, these distribution points are experiencing high global audience growth, fuelled primarily by games, but with excellent opportunities for multiple genres of content, and format types, particularly video delivery, music, animation and detailed 3D environments.”
How can we foster open standards in the metaverse?
In October 2024, The Metaverse Society published the report Spatial Computing and the Metaverse. It provides extensive analysis of the current reality and future prospects for AR, VR, and headmounted displays (HMDs). The issues discussed include interoperability and open ecosystems, in a context where two industry giants still dominate the sector.
A bright future beyond the walls
“The metaverse needs a vibrant HMD ecosystem to flourish, with greater opportunities for discovery and interoperability of services, experiences, and a digital economy. Neither Apple or Meta are at that point, as their focus on standalone devices relies on a software stack that maintains high walls and controls tied to the computing limitations of the devices. In an environment of trade-offs and compromises the converse is likely to be necessary – more willingness to work with open standards to allow services to flourish between devices and capture as much audience as possible.
The AI layer on head-mounted displays (HMDs) is set to become a services layer flash point reminiscent of previous bundled services on mobile and PC. The openness, granularity and cost of their usage all present questions for future metaverse services, especially in mixed reality scenarios.”
The tyranny of the giants
“Apple and Meta fit uncomfortably into this picture: each seeks to establish platform power in this new device category, to exert control over the nascent metaverse, putting them in tension with a truly open ecosystem of spatial services and experiences. For Apple, this means tight control of terms and monetisation on a platform integrated into its wider hardware/services model; for Meta, it’s about avoiding the fate it experienced on mobile, where it banged its head against Apple and Google’s restrictions. Meta’s licensing approach to HorizonOS can be viewed in this light: the benefits to potential manufacturers are slight but the decision maintains Meta’s standing to attack Apple’s controlled approach and head off regulatory scrutiny.”
The road to freedom starts here
“With its sophisticated Llama series of AI foundation models providing a more opensource alternative to the profit-focused OpenAI, Meta is using AI services as an important arm of its new platform play. It sees the long lead times involved in building up AI capabilities (at the R&D and training run level) and capacity (at the chips and server infrastructure level) as a strong competitive moat… This is not the future the metaverse and spatial developers need to thrive and power the next generation of HMD experiences. There must be pressure from the start to adopt open standards that enable interoperability, and limit the acceptable platform take rate, to ensure the services of the future are not snuffed out.”
Read the full report on The Metaverse Society website
How have technology advancements led us to the metaverse, and where is it going next?
When sci-fi author Neal Stephenson coined the term “metaverse” in his 1992 novel, Snow Crash, 3-D multiplayer games had simple graphics and supported interactions among only a few players. Today, hundreds or even thousands of players can interact in the same virtual world, and audiences for games number in the hundreds of millions of players.
Soon enough, digital worlds will have lifelike graphics, audience sizes will continue to grow, and people will spend more time in game worlds. High-quality virtual reality headsets will be common. Haptic interfaces that provide physical feedback will make the experience even more realistic. Artificial intelligence will create an abundance of rich characters, worlds, and other content. Blockchains will enable digital property rights and provide the necessary infra structure for an open, decentralised metaverse.
What is the best underlying architecture for a metaverse?
I believe the best model would be an open metaverse made up of composable blockchain networks, which themselves interoperate to form a meta-network. Creators could build applications on top of these blockchains, and set up shops to sell their wares, keeping most of their earnings for themselves. They would have a rich design space to work in, including new elements enabled by blockchains like persistent, transferable ownership and economies that span across networks. Digital property rights would be guaranteed by persistent, blockchain-enforced rules. Governance and moderation would be managed by the community.
How important will the metaverse be to our “real” lives?
As the quality of virtual experiences improves, digital interactions will spill over into the physical world. You might make friends, meet a future spouse, or get a new job in “virtual” reality. As more of the economy moves online, more jobs will exist solely in online worlds. The distinction between work and play will blur. What happens in digital worlds will have consequences and meaning in the physical world, and vice versa. Fostering the growth of an open metaverse built on blockchains would ensure our digital worlds remain egalitarian, democratic, and permissionless. 10%
SYSTEMS
Rob Whitehead
Co-Founder and CPO,
Improbable
Hi Rob, can you describe the technologies of the metaverse and why distributed systems are so important?
The development of the metaverse is a complex, multi-layered challenge that hinges on advanced technologies, systems and models. It relies on a convergence of technologies such as gaming, AI, cloud computing, and opensource standards. Creating a high-fidelity, interactive virtual world requires more computational power than a single computer can provide. This is where distributed systems become essential. Distributed systems enable many computers to work together, sharing the computational load needed for a seamless virtual experience. Unlike websites, where multiple servers handle isolated tasks, virtual spaces need all servers to communicate continuously to maintain connectivity and synchronisation. These systems manage data for simulation, AI, and computation, forming the backbone of large-scale virtual worlds. The complexity and unpredictability of these systems mirror the challenge of coordinating numerous individuals to achieve a common goal. Therefore, distributed systems technology is crucial for the scalability and functionality of the metaverse.
It’s worth mentioning that blockchains are also complex distributed systems – where instead of scaling to increase computational power, they scale for security reasons. We’re finding high-performance distributed system development is also an area of value to this space too.
What do interoperability and composability mean in practice, and where are we at?
Interoperability in the metaverse means people and things can seamlessly be used across different products and technologies.
This is a multi-layered problem – it’s not just enough to know you own something, you need to know what it is, how it behaves, and what it looks like!
- Ownership: Managed by NFTs and blockchain, ensuring that digital assets are uniquely owned and transferable.
- Semantic Understanding: Defining what an item is, such as distinguishing between a hat and a tree.
- Behavior: Ensuring items function consistently across different virtual environments.
- Visualisation: Making sure items look the same regardless of the platform.
Currently, we see progress in visual and behavioral interoperability, with standards being developed. However, economic interoperability, which allows seamless transactions and value transfer between different systems, is still emerging. For interoperability to be fully realised, all these layers must work together effectively. And making the glue is quite challenging.
Composability, akin to Lego blocks, allows different creators to build upon each other’s work, enhancing creativity and economic value. For instance, in blockchain technology, one person creates a token, another builds an exchange, and another develops a marketplace for that token. On TikTok, creators are constantly remixing and stitching together existing content to make new forms of related media.
These interconnected components exponentially increase value by integrating seamlessly. This principle is crucial for creating rich, dynamic virtual environments where diverse contributions can combine to form something greater than their individual parts.
Why is decentralisation so important for the metaverse?
Decentralisation is vital for the metaverse because it democratises creation, ensuring diverse and organic growth. It allows different pieces of the metaverse to be developed independently and then integrated, much like how decentralised finance works on blockchain. Each component, from tokens to marketplaces, adds value by connecting and integrating with others.
It also preserves the open metaverse, preventing monopolies by large corporations from dominating the space. Decentralisation fosters grassroots cultural development, allowing innovative ideas to flourish at the fringes and gradually influence the mainstream. This cultural evolution is essential for creating meaningful, authentic virtual spaces.
Lastly, it supports economic composability. It will enable the economic frameworks of the metaverse to evolve, expand, and integrate new functionalities, enhancing the overall value and utility of virtual environments. This flexibility is crucial for the dynamic and rapidly evolving nature of the metaverse.
To sum up, decentralisation ensures that the metaverse remains open, inclusive, and adaptable. It allows for a diverse range of contributions, fostering innovation and creativity. By decentralising creation and economic frameworks, we ensure a vibrant, diverse, and sustainable metaverse that can grow organically and inclusively.
Find out more Metaverse report- Future is here Global XR industry insight. Deloitte, March 2022
Joachim Schwerin
Joachim, you are an economist specialised in the digital transformation of industry. How do you see the economy of the metaverse developing?
The metaverse represents an ever more immersive convergence of multiple technologies, and its economy is poised to grow in fascinating ways. That is what comes through clearly in The Metaverse Society’s meta trends report, Scaling the Metaverse. This ecosystem is vibrant, teeming with energy, ideas, and projects. We’re witnessing an integration of artificial intelligence, blockchain, quantum computing, and more, all of which contribute to its complexity and potential. The metaverse goes far beyond just digital interaction, it’s a comprehensive platform impacting sports, culture, arts, and industry, like a digital layer of our real lives.
Its economic landscape is equally multifaceted. On one hand, you have significant investments from major tech companies, which is akin to the centralised governance of Web 2.0. On the other hand, there’s the decentralised approach, where smaller entities and individual creators have the potential to drive substantial innovation and inclusivity. That triggers debate about the type of digital world we wish to cultivate – one driven by large corporate entities or a more grassroots, community-driven approach.
Principal Economist DG GROW, European Commission
Does Europe have anything unique to offer when it comes to shaping the metaverse of the future?
Europe holds a unique position in shaping the future of the metaverse, primarily due to the fact that decentralisation, self-organisation and the desire to protect our identity are part of our DNA. The GDPR has laid a foundation for data protection and identity development that aligns well with the decentralised ethos of the metaverse. Historically, the region has seen various forms of cooperative structures and localised governance,
which now find digital expressions in Decentralised autonomous organisations (DAOs) and blockchain technologies, and give Europe a unique opportunity to lead in the development of the metaverse, emphasising inclusivity, diversity, and community-driven governance.
For the past couple of centuries, we have had to rely on intermediaries to create value, and those intermediaries have – in my opinion –largely failed. The financial crisis showed everyone the risk that lies in centralised structures. But we now have decentralised, trustworthy infrastructures on which the metaverse and Web3 can be built. Infrastructures that enable people to engage – safely and at very limited cost – in value creation and value exchange with other people, anywhere in the world.
Interestingly, when it comes to regulation, the metaverse presents a unique challenge. Unlike traditional technologies, the metaverse encompasses a broad array of elements, making comprehensive regulation difficult. It’s not a single technology or business case but a digital extension of our world. So how could you regulate something so diverse? In part, recent EU policy measures and regulations in blockchain and crypto assets have set the stage for more bottom-up, community driven peer-to-peer models. Moving forward, in my view, policymakers need to allow the market more breathing space to adapt and innovate within the currently known framework. Collaboration between the private and public sectors will be essential to drive this forward and allow a better understanding of what is at stake, opportunities as well as challenges.
The global metaverse is estimated to be valued at around $900 billion by 2030, with virtual experiences accounting for nearly two-thirds of that number.
Navigating the Industrial Metaverse. Accenture/WEF, 2024
How do you view the implications of the decentralised system the metaverse is based upon for democracy?
At its core, decentralisation empowers individuals, allowing for a bottom-up approach to governance and community building. The metaverse, with its global reach and ability to connect like-minded individuals, fosters a sense of engagement and activism that transcends physical boundaries. This can lead to more inclusive and participatory democratic processes.
Decentralisation, facilitated by technologies like blockchain, is in my opinion a true social revolution, as it introduces a level of transparency and trust previously unattainable. It offers a trust environment where individuals can interact and transact securely and transparently. This not only democratises access to digital spaces but also ensures accountability through collective, rather than individual, liability.
The concept of collective liability within decentralised systems is particularly intriguing. It allows for legal and regulatory responsibilities to be distributed across the community, ensuring that no single individual is unfairly targeted. This approach aligns with the democratic principles of shared responsibility and collective governance.
Ultimately, the metaverse has the potential to revolutionise democratic engagement. By providing platforms for virtual interaction, it can bring people together, foster dialogue, and drive social change. If that space is used in a creative way, it will enable people to feel much more engaged and active. I think that is fantastically democratic.
Find out more Value creation in the metaverse. McKinsey, June 2022
What does blockchain mean for the metaverse?
The Metaverse Society’s research memo The Network Effects Of The Metaverse And The Economies And Business Models Of Web3 Communities discusses the metaverse as a network-enabled environment for economic activity. Published in May 2023, it provides an outline for metaverse business models and concludes that blockchain technologies are essential components in a fully functioning metaverse.
The metaverse: a new ecosystem for business
“The metaverse is an immersive, social and ideally interoperable and persistent collection of multiple, interconnected, synthetic or virtual worlds. It can combine virtual and physical conditions and provides a space between identity (individual sense of presence) and activity. As such, these worlds can represent a very high degree of complexity. As a result, business activity and value creation can become highly complex compared to traditional digital platforms.
Moreover, the open metaverse is decentralised and allows users to control their identity, enforces property rights, aligns incentives, and ensures value accrues to users, not platforms. It is also transparent, permissionless, interoperable, and composable, among other criteria. The economic exploitation of the metaverse will require network-enabled business models.”
How blockchain enables the metaverse
“Marketing and business development in the metaverse will build on product-led growth and community-led growth models.
The metaverse will rely heavily on blockchain technology, particularly in terms of economic activity. DeFi applications and tokens are used extensively in the metaverse economy. Blockchains and tokens enable networks and ecosystems with more efficient coordination and lower transaction costs, such as:
- Creation and co-creation with large teams or decentralised, bottom-up value creation (cf. “creator-driven commerce”). Consumers turn from passive “network participants” into co-creators, co-collaborators, and co-beneficiaries.
- New incentive systems and alignments through co-ownership and co-creation.
- Composable intellectual property that transition Internet users from tenants to owners of their digital experience.”
How to build a network business
“Thus without blockchain-based solutions, the metaverse is not possible. Digital assets, such as NFTs, will make it possible to monetise all these revenue streams, to trade the outcome, and to store the value. The basic models of network business as mentioned above are:
- Network economics.
- Virtual company model.
- Business ecosystems.”
Julie Dawson
What do you see as the biggest opportunities for identity management in the metaverse?
The metaverse can provide users with the ability to customise their digital representation through avatars, augmented reality (AR) filters, and other digital assets. This enables individuals to express different facets of their identity, ranging from real-world characteristics to entirely imaginative forms. This flexibility in representation may encourage greater self-expression and creativity.
It also generates vast amounts of data related to user interactions, preferences, and behaviours. Artificial intelligence and machine learning models bring opportunities to analyse these data points to enhance personalisation and make interactions more seamless and tailored to individual preferences.
By building on existing digital ID frameworks, the metaverse has the potential to provide interoperable spaces where users move across platforms with their digital identities. This would mean being able to carry digital assets and credentials across different environments, thereby promoting inclusivity and accessibility.
What are the biggest challenges?
Risks to minors are exacerbated in immersive environments. Today, 30% of users online are under the age of 18 and frequently do not all gravitate towards age-appropriate areas, which means they can end up facing risks related to content, contact, and conduct. Additionally, minors are not legally of age to enter into legal contracts – a challenge that is only just beginning to be addressed by regulators.
Chief Policy & Regulatory Officer, Yoti
Another major challenge is user data privacy and security. Data leakage is currently much more prevalent in immersive environments. Potential traceability between digital and realworld identities raises concerns about privacy, identity theft, fraud, and other malicious activities. Implementing robust security measures and privacy-preserving technologies is crucial to protect users’ personal information.
Users may also present different aspects of their identity in various contexts within the metaverse. Managing these multiple identities and ensuring they are appropriately verified and authenticated can be complex. This is especially hard to manage for young people who are still developing and growing. Similarly, challenges exist in maintaining the balance between anonymity and traceability to ensure user safety without compromising privacy.
The representation of identity in the metaverse must also be inclusive and free from bias. Misrepresentation or exclusion of certain groups can perpetuate real-world stereotypes and marginalisation. For example, there is clear evidence women – and in particular women of colour –face disproportionate harm and abuse online. Additionally, there is a risk of digital manipulation and misinformation through fake digital entities, making it essential to establish ethical guidelines and accountability frameworks. Addressing these challenges requires a collaborative effort from stakeholders across various sectors to build a safe, inclusive, and equitable metaverse.
How can blockchain and other new forms of governance play a role in increasing trust in the metaverse?
Blockchain technology is one – but not the only – way to allow for decentralised identity verification, which means no single entity has control
over user identity data. There are also private permissioned distributed ledgers – not built on the blockchain – where the private key from a reusable digital identity is given to each user on the secure module of their device, as with Yoti. These approaches can reduce the risk of identity theft and fraud, because the data is distributed. Users can manage their own identities, granting access permissions as needed, fostering trust in the system.
Decentralised autonomous organisations (DAOs) are another way to leverage blockchain to create community-driven governance structures where decisions are made collectively by token holders. This can democratise control and allow users to have a direct say in the rules and policies that govern their virtual environments. Such inclusive governance models also have a role to play in increasing trust, by ensuring that decisions reflect the will of the community.
Meanwhile, Self-Sovereign Identity (SSI) frameworks empower users to own and control their digital identities without relying on central authorities, selectively disclosing identity attributes as needed. This self-governance of identity aligns with principles of autonomy and user control, while governance frameworks that incorporate privacy-preserving technologies – such as zero-knowledge proofs and selective disclosure –allow users to prove their identity or certain attributes without revealing unnecessary personal information. This protects their privacy while enabling secure interactions.
5 minutes
Find out more Metaverse Identity: Defining the Self in a Blended Reality. WEF/Accenture, March 2024
Privacy, immersive technologies, and the metaverse. Business at OECD (BIAC) and the USCIB foundation, July 2024
Ibán García del Blanco
What steps can policymakers take to ensure that the metaverse is accessible to everyone?
Regardless of where someone lives, they should reliably be able to access the Internet at a reasonable speed. And we must address the massive issue of digital literacy, which is tied to the sustainability of our democratic system. For me, digital literacy is indispensable to the basic equality that is a fundamental building block of European societies. As we become increasingly digital, we must make sure no one is left behind.
Then, through encouragement or regulation, we must make sure virtual worlds are interoperable. We don’t want to create another monopoly in Europe, which is what we are currently headed towards, judging by statistics from the European Commission. More actors need to be involved – especially our own European actors. However, we can only be successful if we manage to cooperate. If not, Europe will not be an important voice in the development of the metaverse.
International Affairs Director LASKER (AI & Digital law, IP rights, culture), Former MEP European Parliament 2019-24, focused on AI and digitalisation
If we could give everyone across Europe equal metaverse access, this would provide many new possibilities to citizens. Which of these gets you the most excited?
More chances for people to work together while gathering them from different backgrounds and localities, in a manner that would be difficult in the physical world due to distance. You could also make specific experiences accessible to everybody, such as exploring a certain landscape or venturing through the halls of a museum. From a democratic perspective, the metaverse would allow political institutions to become more representative through facilitating direct contact with citizens, giving them an accessible and safe space to voice their opinions.
So you believe the metaverse is a good instrument to strengthen democracy?
Absolutely. I’m quite optimistic about the future of technology. I’m quite aware of the dangers as well, but the opportunities it provides us are amazing. I was heavily involved in the regulation of AI, and there I see potential too. We just need to take control of the technology, prevent possible harms, and channel its potential towards what is good.
In the European Parliament, we are working on a project I initiated two years ago, which will give our parliament a space in the metaverse. Once we have this, we can explore how to use the metaverse to better connect with citizens and also execute various other democratic functions of parliament virtually.
What types of commitments would you like to see from industry regarding the metaverse?
A major objective laid out by European institutions is to encourage European industry to become more active in the metaverse. We are currently quite dependent on foreign companies, which is a reflection of the same broader situation in digital industries. Even though we are part of a global economy, we need to have our own actors working on this. One advantage we have is that the metaverse industry is not yet mature, which gives us a stronger chance than we might have in some other fields.
Also, public institutions and the private sector shouldn’t be ashamed to work together. There is a prevalent idea that American entrepreneurs and the private sector there do everything on their own with no support from public institutions, but this is not true. We need to get rid of this complex and leverage our public muscle to take advantage of Europe’s uniqueness – for example, our massive network of universities.
On your last point, what is it that we have in Europe that no one else has? What would add that special European flavour to the metaverse?
I’m certain we will be the ones that push the boundaries on anything related to accessibility and equality. As Europeans, we think about quality in a collective way while pursuing economic opportunities. We can be world leaders in this.
€400 billion
Estimated metaverse contribution to European GDP by 2031. Unleashing European Innovations for the Metaverse. LSE Policy Brief, 2024
Find out more An EU initiative on virtual worlds: a head start in the next technological transition. European Commission, July 2023
Philip Rosedale
Philip, what are the dynamics that have enabled Second Life to be such an enduring virtual world, and what are you most proud of?
Second Life has maintained a very lively, active community for over twenty years. Its biggest dynamic is its ability to enable people to create things that are culturally interesting, sophisticated, and valuable. This creative freedom has driven its longevity. Unlike many platforms, Second Life allows people to make genuinely new things and share them with each other.
What sets Second Life apart is its 3D medium, allowing users to create something of genuine personal value, unlike traditional media such as video, audio, or images. The social aspect is also crucial; people are always together when creating. You could build a house while your friend gardens, and you talk to each other during the process. This collaboration fosters positive interactions, contrary to the general belief that the Internet often makes people angry. Second Life emphasises pseudonymity, not anonymity. Your avatar isn’t tied to your real identity, but it has rich relationships and social ties, making actions have consequences.
Founder Second Life,
Co-Founder High Fidelity
In Second Life, governance is very much bottom-up. As a landowner, you have complete control over your interactions and environment. This contrasts sharply with social media, where conflicts often require intervention from external authorities. You are empowered to manage your immediate social environment directly, which is a fundamental structure that contributes to the platform’s positive community dynamics.
This shared environment fosters respect and understanding, as you recognise that you’re both part of the same world. This is what I’m most proud of: that Second Life somehow makes people happier and richer in their interactions with each other.
How did your perspective on virtual worlds evolve over time?
Initially, I was fascinated by the mechanics of building blocks and the imaginative freedom they offered. However, my interest shifted to the personal dynamics and the impact on relationships within the virtual world. Now, I see the more important aspect as how virtual worlds can facilitate cooperation and collaboration, making us better communicators and more connected individuals.
25% of people will spend at least one hour per day in the metaverse by 2026. Metaverse Statistics. DemandSage, 2024
What would you say are your greatest hopes and fears for virtual worlds and the metaverse?
Loneliness is increasing, and trust in strangers is decreasing, but this is something we can fix. Virtual worlds and online social environments can measurably increase trust and reduce loneliness. If we get the societal rules and technology right, we can use these environments to foster better social interactions.
VR headsets can be problematic because they blindfold users, making them feel unsafe. We’re creating expensive devices for communication, which isn’t sustainable. However, the Internet has been powerful for accessibility. For example, people with physical disabilities live full lives in Second Life in ways they couldn’t in the real world. Additionally, we should use AI to allow people to communicate in their native languages seamlessly.
I once said I wasn’t building a game; I was building a country. Today, with the world as it is, we have the opportunity to use the metaverse to explore alternative social, economic, and democratic structures that can’t yet be realised in the real world. We can prototype new ways of living together online and apply those learnings back to the real world. Complex ideas like different types of democracy or basic income can be tested in virtual worlds and, if proven valuable, deployed in the real world.
Find out more Interoperability in the Metaverse. WEF/Accenture, January 2023
How can we ensure the metaverse provides a safe environment for all?
The Metaverse Society’s report Safety First: Designing a Responsible Metaverse examines the guardrails that will need to be built into virtual worlds from the product design stage. Published in October 2023, it addresses the significant challenge involved in ensuring that children are adequately protected within a context of decentralised platforms.
The metaverse: a safe place for children?
“Children’s harms are where it is most appropriate to regulate and to prioritise safety in design today, tackling: specific harmful content (like violent or sexualised content not suitable for children), harmful interactions (including sexual abuse conducted over online platforms), and vulnerability to advertising and dodgy sales practices.
There is a need for differentiated experiences for children and adults – the whole metaverse can’t just be child-friendly. But most users of platforms like Roblox and Fortnite are young, making safeguarding children an urgent issue. In any virtual world that expands the range of activities users engage in beyond traditional games, there will be different parts of the experience that are more or less suitable for users of different ages – platforms should build in age-gating without sacrificing the seamlessness of the experience.”
A decentralised metaverse: challenge or opportunity?
“In a fully decentralised metaverse, spaces would exist on distributed servers, without central control or oversight of user activity and data. Platform intermediaries are not an essential ingredient: platforms (like Meta or Reddit) don’t need to host the entire service on their servers, or set and enforce policies – that can be done by communities themselves. In a lot of cases this may be sufficient, but it’s not a stretch to imagine issues arising where there is no mechanism for external oversight or appeal.
If there are overarching principles which we would want to be upheld across metaverse spaces (like on children’s safety, or illegal activity), enforcement and oversight would be a real challenge. Some metaverse communities could be isolated and operate outside those principles, and there would not be a central log of activity and data accessible to and overseen by a central entity. Even the basic regulatory aim of making behaviour that is illegal offline illegal online is difficult without clear jurisdictional divisions.”
Is regulation compatible with decentralisation?
“The online world developed relatively unregulated up to now, allowing platforms to set their own terms around user safety. A creeping recognition that this has not led to the best outcomes for users given the incentives at play (platforms may prioritise maximising engagement over maximising safe engagement) has led to regulatory intervention across markets. Going forward, stronger external requirements from governments, and higher user expectations, will be decisive in how some metaverse services, particularly popular live gaming services, develop in the first place – rather than something they adapt to after the fact.
Regulators may struggle to even assign responsibility where decentralised community-driven metaverse platforms emerge without a central platform intermediary. Compliance and enforcement are much more difficult with this model.”
Read the full report on The Metaverse Society website
Michaela MacDonald
What legal challenges in terms of trademark protection does the metaverse pose for stakeholders?
Extending the protection of physical goods and services to virtual spaces is a significant challenge, particularly in terms of jurisdiction and territoriality. This is linked to a defining feature of the metaverse: bridging physical and digital worlds. It requires a rethink of how you determine the scope of protection, when physical goods have representations in a virtual environment, and virtual goods are associated with goods and services in the physical world.
This “phygital” component probably calls for new policies. And in our report for the UK Intellectual Property Office, we highlighted the need for dialogue among multiple stakeholders, including public bodies, authorities, policymakers, rights holders, and users.
What gaps exist in current copyright laws regarding protecting metaverse content?
Defining what qualifies as protectable subject matter remains unclear. Also, it is not yet fully understood how rights holders can manage and commercially exploit their Intellectual Property in the metaverse, particularly the concept of digital exhaustion. Furthermore, existing limitations and exceptions need clarification on how they apply in virtual environments. Questions about detection and infringement will become even more relevant. Although more traditional monitoring techniques to enforce copyright might work in a centralised metaverse, decentralised blockchain-based metaverses will require new approaches.
Lecturer at Queen Mary University of London, co-author of the UK government-commissioned report IP and Metaverse(s)
Could you share examples of successful IP strategies used by brands or creators within immersive environments?
Established brands are looking at how to ensure existing businesses are sufficiently protected. They have begun redefining trademark filing strategies by introducing new classes, and expanding portfolios of registered trademarks in preparation for expansion into the metaverse.
Video game companies – with their extensive experience of managing IP in an immersive, interactive environment – have valuable lessons to offer. Roblox and Fortnite have adopted a hybrid approach to user-generated content, allocating some IP rights to users while simultaneously protecting their own. In Roblox, users can license their creations to the platform, and Fortnite integrates user-generated content into its business model, balancing the creative freedom and property rights of its users with maintaining control over its own IP. Getting that balance right will be hard and depend on each platform.
The most successful strategies understand the notion and value of community. They communicate with members and adopt semi-formal and informal approaches to ensure the platform retains control over its IP without antagonising the community by making unilateral changes to licensing terms or IP strategies. Understanding the community, its motivations and its expectations is crucial for success in these environments.
How do you see blockchain technology influencing IP management in virtual worlds?
Blockchain has significant potential for IP management, but it also presents challenges. The processing power it requires is expensive to set up and run. If blockchain were to become the essential infrastructure for registering and enforcing IP rights, it could create substantial financial barriers for creators.
The tamper-proof design of blockchain could make it difficult to manage ownership disputes or modify agreements and licences. And aligning blockchain-based enforcement with national and international laws could be constitutionally challenging. So although blockchain and smart contracts offer transparency and simplify digital transactions, they cannot entirely replace existing legal frameworks and solutions.
With generative AI increasingly used in virtual worlds, how do you see the creator economy functioning when it comes to IP rights?
Generative AI is having a profound impact on the creator economy, and creating a landscape that will be complex to navigate for users and rights holders. By 2025, it’s estimated that 95% of digital content will be AI-generated, challenging the very notion of human creativity.
With an online space almost entirely created by non-human agents, the existing IP system may become disconnected from how we consume culture. The way in which we determine the boundaries and thresholds for IP protection needs to evolve. As user- and AI-generated content becomes more prevalent, it produces mixed works that combine input from the user and an AI that uses pre-existing content, which might not be protected by copyright or trademarks. These new forms of creation and innovation will challenge traditional approaches to copyright protection.
Find out more Impact of Technology Deep Dive Report II, Impact of the metaverse on infringement and enforcement of intellectual property. EUIPO, October 2024
Axel Voss
MEP, Committee on Legal Affairs
Having now been re-elected to the European Parliament for the fourth time, what would you like to focus on during this legislative term?
Our focus on digital issues in general will involve giving existing regulations life and meaning, not creating new legislation. It’s more about enforcing existing regulations and trying to clarify and simplify them, to bring legal certainty.
However, the metaverse is on my to-do list. Here, I want to continue working in the direction of applying civil law to the metaverse. In the previous term, we adopted a report on the legal implications of virtual worlds. In this report, we wanted to answer questions on matters such as IP and company law issues in the metaverse. However, we ended up with more questions than answers.
The metaverse is becoming a platform where you can own a business, buy and sell, and so on. We need to imagine what is necessary for all these activities – for example, an identification system. We will probably need a kind of legal personality for avatars and bots, and to consider what laws might be applicable and which courts are suitable.
We should also keep in mind the question of inheritance. People are buying virtual properties for a lot of money. Someday, someone will have to decide what will happen to these properties. This touches on several aspects of civil law that exist in the offline world. Can these be transferred to the online world? Will we have to make adjustments?
You mentioned the need for an identification system in the metaverse.
Why do you think this is important?
We created the Internet, and twenty years later realised it’s developing in ways we don’t always like – for example, online hate and crime. It’s hard to catch up with regulation and make corrections later.
I don’t want a “dark metaverse” where organised crime and the mafia can thrive. We must therefore secure the metaverse, which also means we need to come to an agreement on some sort of identification system. Cars have licence plates. When drivers don’t behave correctly, they can be identified. We need to think about how the equivalent can be best done in the metaverse.
But this won’t be easy. We are talking about moving from a largely anonymous Internet to the metaverse in which individuals are identifiable. So we will need to move forward in small steps.
As one of the driving forces behind the EU AI Act, how do you think this legislation will play out as compared to other, potentially competing AI regulation strategies, such as those from the UK and the US?
I’m a little concerned that western democracies are splitting up too much and creating frameworks that might not be compatible. There is already a split between western democracies and states that are not interested in democracy. That is why I think it’s really important that the western world finds common positions or standards. They don’t have to be identical, but they should be oriented towards the same values.
I would like to see more initiatives that contribute to the convergence of these different frameworks, so we have a common idea of how we move forwards with AI and virtual worlds, and to ensure this is based on our fundamental values. This is a big challenge, but I enjoy trying to find solutions – and for those, we need to have discussions. So we must exchange ideas on what might be possible and then find a way forward.
Find out more
The Metaverse and its Impact on Human Rights, Rule of Law, and Democracy. Council of Europe, September 2024
Regulation: from ambition to implementation
The metaverse is anticipated to become a major economic opportunity, potentially reaching multi-billion to multi-trillion dollar valuations within the decade. It represents a cornerstone of the next Internet era, offering new social, educational, and economic prospects. In 2023, The Metaverse Society published a note on the EU regulatory landscape for virtual worlds, assessing Europe’s digital policy, and another providing recommendations for the UK metaverse. Now, we reflect on developments and support for innovation in these jurisdictions.
The EU approach: recommendations and legislation
“Our analysis identified key EU policy areas requiring evolution to address the challenges of a decentralised metaverse, including content moderation, fundamental rights, cybersecurity, platform liability, privacy, and child safety. We also examined the implications of AI’s growing integration into these areas. Shortly after our landscape analysis was published, the European Commission released its first strategy on Web 4.0 and virtual worlds. Alongside sector-specific initiatives, the EU has introduced landmark regulations, such as the Digital Services Act and the Arti ficial Intelligence Act, to modernise the broader digital regulatory framework.”
The reality: how Europe could do better “Despite these advancements, a gap persists between ambition and implementation. Regulatory sandboxes and public toolboxes have yet to materialise. Furthermore, while some challenges of decentralised environments are being addressed, much of the recent regulatory focus – particularly on liability –continues to assume centralised ecosystems.”
The UK: inviting business to the party “Meanwhile, the UK government has adopted a dual focus on supporting business growth and safeguarding public interests. The AI Opportunities Action Plan exemplifies this balance, emphasising legislative support for the AI Safety Institute and increased funding for AI infrastructure. This balanced approach extends to the metaverse, where existing legal frameworks, such as the OSA, DMCC, and FSMA, provide a foundation for proportionality and regulatory cohesion.”
The balancing act: regulation that empowers innovation
“As both the EU and UK continue to evolve their regulatory landscapes, the challenge remains bridging ambition with practical implementation. Success will hinge on fostering innovation while mitigating risks, unlocking economic opportunities, enhancing global competitiveness, and setting a global standard for decentralised and immersive technologies that aligns with their values and safeguards their citizens.
We look forward to contributing to the EU Global Multistakeholder High-Level Conference on the governance of Web 4.0 and virtual worlds, and will continue to engage with regulators and policymakers in Brussels and London to support progress and drive meaningful outcomes.”
Why do you think the broadcast, entertainment and advertising sectors will integrate the metaverse into their business strategies in 2024?
Immersive interactive worlds are becoming the forefront of the entertainment experience for many, particularly the generation now coming of age, who are already natives to Fortnite, Roblox and Minecraft. As those audiences mature the impact will be profound, and a reason for our established media, be it broadcast television, film, or the advertising industry that supports so much of our entertainment ecosystem, to explore and understand what that impact will be.
You have been a vocal advocate for the role of media in a democracy. How do you think the metaverse will affect that?
This isn’t our first technological transition, and in the past we haven’t always protected those things we value most. We know people want, need and value distinctive local content, that is relevant to them. Creative institutions with more than purely commercial objectives, with a mandate for public service, are a vital part of the media ecosystem, helping to promote democracy and the flourishing of humanity. Their presence in these online experiences and on many different platforms is vital.
Where do you think the UK stands in terms of supporting and developing emerging technologies such as AI and the metaverse? Is it well placed to seize the opportunity?
We have seen early experimentation from some businesses in our sectors. Yet immersive inte ractive worlds continue to evolve and grow, so this is the time to figure out what kind of user offerings work, and advocate for plurality, fair access and protections for the values that matter to us. There is opportunity: if we get this right we can build a fairer, more democratic techno logy sector, and bring the world-class entertainment and brands that the UK has to offer to a new global audience.
Find out more What is the metaverse and what impacts will it have for society?
UK Parliament report, July 2024
Jamie King
Chief Marketing Officer at Minutes Network & Minutes Network Token, Co-founder of Rockstar Games
Jamie, as a co-founder of Rockstar Games, you are one of the pioneers of the modern games industry. How do you view the current state of the metaverse and Web3 gaming, and where does it go from here?
The metaverse is already alive and well in the Web 2.0 world with Roblox, Fortnite, and GTA Online. I think they can definitely be called metaverses. But the crucial next step is rolling this out at scale. We need to build the real estate that makes everyone want to come and play.
That requires toolkits and UI infrastructure that make it really easy for metaverse builders to create assets of clear value – and that make other people want to be in the metaverse. AI could well be part of the solution, accelerating the creation of experiences and aiding mass adoption. For one thing, it could help solve the “empty playground” syndrome, by filling up metaverses and making them fun spaces full of interactive 3D NPCs. I also think strategic partnerships and collaborations between metaverses will be important in creating value.
There are other challenges to overcome too. Think about the graphics quality of AAA games and then visualise a metaverse at scale, with all its players, props, and assets.
But I’d say the hardest thing in video games is accumulating the right tools to hook the creative community and make it easy for users to quickly design really fun experiences. That’s what brings in audiences. When such experiences shine, that drives word of mouth. Your friends are playing, so you want to play too. That’s the biggest hill to climb right now in Web3 gaming – we need a high-quality gameplay experience that gets everyone talking. And I think we’ll see that very soon.
What are the fundamental ingredients of Web3 gaming?
How does it change the game?
The main pillar of Web3 gaming is that you can own your own assets. The sums of money that are being spent in traditional gaming are huge: microtransactions now account for $100 billion of the industry’s $180 billion in revenue. But you are only renting those assets, within an ecosystem where you don’t have any control over the rules, and where those rules can change at any time. But in Web3 gaming, you have true ownership and can have decentralised governance and community-driven development. And because of blockchain technology, this ownership is transparent. All transactions on in-game assets are secure, immutable, and unchangeable.
So you have blockchain technology, which gives you true ownership of in-game assets. You also have play-to-earn, which enables gamers to make money via those in-game assets. But crucially, there’s also the idea of community-driven development. If you look at the history of Web3 games, they have always been very community-driven, with community feedback and involvement. That makes perfect sense: if I now own these assets, then I care about this brand, I care about this game, and it makes me more active as a community member.
Why do you find decentralised governance so exciting?
What does it change?
I think that more brains are better than one. No matter how smart your company is – and no matter how smart the people in your company are – there are always going to be a lot of other smart people elsewhere. If you can harness that, it’s like having a team of world-class experts constantly at your disposal.
How is Web3 changing the game?
The Metaverse Society’s report Web3 Games: Freedom from the Walled Garden demonstrates how the gaming ecosystem can move beyond “walled garden” platforms and franchises. Published in September 2023, it investigates the new ownership and economic models made possible by blockchainenabled Web3 games. Founded on decentralisation and interoperability, they are introducing features which may well come to define broader virtual worlds.
Defining the future of gaming – and beyond “Web3 technologies hold the promise of being the next innovation wave in gaming – at both business model as well as game play level. By utilising blockchain technologies, games makers will be able to derive value through the creation, sale, and trading of digital assets, and subsequently up-end their traditional revenue and even capital raising models.”
Breaking free of the walled garden
“The very nature of blockchain separates the existing 100% control and walled garden systems for all live (networked) games. The impacts are profound: digital items can exist outside of a game and players can interact independent of centra lised game control. Decentralisation also makes interoperability of games, players, items and assets far easier, as records on blockchain are accessible, unlike with existing closed platforms.”
Transforming players into owners
“The most compelling and important new state is the “true ownership” of digital assets via tokens. Already well known through the NFT hype cycle of 2022, game assets are a meaningful and important category with real application and long-term value potential. The ownership of digital assets (e.g. weapons, costumes, skins – the list is virtually endless) resides with the player and allows for their usage in game but in any other game that recognises the digital item.”
Enabling a new digital economy
“Ownership of digital assets by the gamer will also invariably lead to trading marketplaces for those assets independent of the game in which they were created or acquired. This important point allows gamers to sell, trade, or even rent items outside of game environments, delivering true peer-to-peer experiences. It also creates the condition set for real money to be used for the acquisition of items outside of game – another enormous change to the existing model. This is not as catastrophic as it may sound to developers, it expands the revenue model from one-off items sales into a richer marketplace allowing for residual incomes on digital assets via rents or taxes in game (the payto-use model).”
Bernhard O. A. & Anita Gademann
President of Institut auf dem Rosenberg, CEO of Pioneer Ventures, Founder of Edu Smart Technologies
Founder of Edu Smart Technologies, Member of the Board & Head of Innovation at the Institut auf dem Rosenberg
What are your thoughts on the metaverse’s role in education and how it can enhance learning for children?
The metaverse has the potential to revolutionise education by offering immersive learning experiences that allow students to engage deeply with content through interactive, virtual environments. At Rosenberg, we view the metaverse as a powerful tool to enhance learning by providing students with opportunities to explore and interact
with subjects in ways that traditional methods cannot. Our commitment to ethical technology use is embodied in the Rosenberg AI Charter, which serves as a foundational document ensuring that AI and digital technologies within the metaverse are used responsibly and effectively. This charter guides our implementation of virtual learning environments, prioritising the well-being and development of our students.
The metaverse supports theoretical learning and practical application. It encourages students to think critically and creatively about
real-world issues, providing a platform where they can apply their knowledge in meaningful ways. For instance, proceeds from NFTs created within this ecosystem are directed towards promoting awareness and initiating tangible action on global issues, linking virtual activities to real-world impact.
As an extension of our innovative ethos, the metaverse aligns with our focus on developing educational solutions leveraging AI, VR, and blockchain. This approach ensures that we remain at the cutting edge of educational development, continuously testing and implementing design fictions. These create suggestive prompts and scenarios that challenge students to envision, test, and shape the future, fostering a dynamic, forward-thinking learning environment.
Can you tell us about your start-up, Edu Smart Technologies?
It was born out of our dissatisfaction with existing technologies available for schools. We were seeking solutions that truly met the needs of modern educational environments and so we took the initiative to develop our own. This effort quickly evolved into a fully-fledged platform that is now central to all our operations and communications. It includes dedicated mobile apps for students and parents, ensuring seamless interaction and engagement within the school community.
For Rosenberg, we have developed a unique platform that streamlines and digitalises all school operations. This innovation allows us to offer a unique blend of future-oriented learning, outstanding exam results, and unmatched individualised education. By integrating various functions into a single platform, we enhance efficiency and effectiveness in delivering a holistic 21st century education.
We are looking into productising this solution for other schools. Our goal is to provide them with the tools needed to offer meaningful, relevant education, enabling them to achieve excellence and prepare students for the future.
Rosenberg student testimonies
Elizabeth B.: Introducing The Rosenberg Meta has been transformative. It’s not just a platform; it’s a vibrant learning environment where historical education meets futuristic technology. Looking ahead, I see this metaverse serving as a global classroom where students worldwide can collaborate in real time, breaking down geographical and cultural barriers.
Pedro F.: Our work with blockchain technology in the metaverse ensures a secure, reliable space for educational transactions and exchanges. I envision these technologies will enable a new form of educational credentials, where achievements and learning milestones are immutably recorded, making them readily verifiable and widely recognised.
Orik G.: The business applications of our metaverse extend far beyond simple transactions. We’re fostering a digital economy where sustainability and corporate responsibility are at the forefront. I believe this platform will soon become a standard for businesses to demonstrate their commitment to social and environmental causes through transparent and engaging methods.
Cosimo M.: From an investment perspective, the educational technology we’re developing is groundbreaking. The Rosenberg Meta can become a sandbox for testing new educational tools and methods, driving innovation in a way that traditional classrooms cannot match. It’s an exciting prospect for any investor looking for ventures that combine profitability with real societal benefit.
Meave R.: As we close each session in the metaverse, I’m reminded of the limitless possibilities it holds. This isn’t just a tool for today; it’s a foundation for lifelong learning and global connectivity. Future generations might one day view this platform as a pivotal development in education technology.
Julian H.: The Rosenberg Meta is more than a technological achievement; it’s a manifestation of our school’s philosophy, which combines preserving important traditions with pushing the boundaries of innovation. This platform not only presents a new way for students to engage with global issues but also serves as a model for future educational endeavours that prioritise sustainability and ethical technology use.
You specialise in urban planning. How do metaverse technologies apply to that field?
I would say metaverse technologies are the next step in what has already been a long journey. This began with 3D mapping, which is a reflection of fundamental source data – a digital capture of a physical space. After 3D mapping, we moved on to 3D city modelling. City models are geometric depictions of cities – at city scale and in 3D – based on captured 3D data. Digital twins subsequently built on city models by incorporating more intelligent and smarter features.
Today, everyone asks what the difference between these things is, and from my perspective, it’s all just the evolution of reality capture. As for the metaverse, it’s traditionally been used to refer to imaginary virtual worlds that do not exist in physical reality. But from my perspective, rooted in urban planning and digital twins, I have great interest in the concept of an accurate real-world metaverse that’s a true reflection of the real, physical world that we know.
The key factor is persistence. The hard part is not so much in creating a digital twin, but in maintaining an up-to-date and reliable digital twin over time. And I think that’s the same for the metaverse.
How are you applying these technologies in Singapore?
When we talk about applications, we always talk about the three S’s. We say it is important for our city to be safe, sustainable, and smart.
In terms of safety, the police use our data in various ways to ensure that the city is safe. When there are events, they will use the digital twin for certain simulations to support operations and planning. The water agency uses the digital twin to work on flood mitigation, which is very important: having a very high-resolution 3D model of the terrain is essential to run an accurate
hydrology model. And, of course, the airport authority needs to know the height of each building very accurately and consistently.
To push sustainability, we work with researchers in green energy and protecting our coastline. Singapore’s main challenge is rising sea levels, and high-quality, accurate 3D datasets are essential. As for “smart”, construction is a sector in which very high-resolution 3D digital twins are used.
How far do you think we are from a fully integrated metaverse?
This will be a journey and we are still at the beginning. Some specific sectors are already further down the road than others. If you’re talking about simulation training for certain machinery, for example, I think the metaverse is already there. So it really depends on the application and the sector that you’re talking about.
From my perspective, I would say the technology is there, but the data often lags behind. The data is crucial. We need to come up with better and faster ways to produce and renew data, especially for certain types of application.
So the real question is about the scale and detail of your metaverse. Is it small-scale, or on a very large scale? We are definitely not ready to go fully nationwide in one go; the roll-out will have to be in stages, because the volume of work is enormous. Our capacities are limited at present, but AI is going to change that. I wouldn’t say that it will remove all the limitations, but it will help a lot in developing large-scale digital twins and metaverses.
Find out more Digital twins: The foundation of the enterprise metaverse. McKinsey, October 2022
Senior Researcher and Metaverse Strategist, Contributor to Finland’s Metaverse Initiative, Active in XR Technologies
In October 2023, you published The Finland Metaverse Initiative Virtual Potential into Real-World Impact, a road map to position Finland as a global leader in the metaverse industry. How have things been progressing since?
We held our kick-off event in Helsinki on 19 April 2023, and we have now created five Metaverse In Action programmes focused around the twin verticals of technology enablers and business networks. Each of the programmes holds weekly meetings attended by a dedicated programme leader, along with companies and stakeholders. They have advanced several project proposals to start making the metaverse a concrete reality, and we are getting companies, consortia, and research organisations to work on them, based on a common idea of the metaverse.
I have also been active internationally, promoting collaboration with different countries to bring a global dimension to the initiative. We want to get countries like the US, UK, Brazil, Germany, and China around the table, to ensure the technologies are as open as possible. It is vital that no part of the metaverse should have vendor
lock-in, otherwise people may not want to invest. But we must also be mindful that companies need motivation and will want to profit from their intellectual property.
So we need a holistic vision for the metaverse, in which different components are the intellectual property of individual companies. But those components need to be interchangeable, to allow for competition. Then the best solution for a practical problem wins – and gets rewarded for its work.
Your vision of the metaverse is founded on the values of well-being, freedom, openness, and trust. How did it come about?
The original idea for the strategy came from Business Finland, the official government agency that promotes trade and investment. The original intention was to focus on foreign investment and exporting technology. But I soon realised we couldn’t base our entire strategy on that, because it would be too narrow. So we started to broaden out from the bottom line, and think about our defining values.
We had five working groups, each exploring different aspects of the metaverse. They were all tasked with identifying Finnish values as well. Some participants came from abroad, which enriched the process with different perspectives. Their final lists were condensed and combined to
produce what we have today. There are a lot of similarities with the EU’s strategy on virtual worlds, but with a Finnish twist. You can see it in the focus on Sisu, a Finnish concept that denotes a form of inner strength and perseverance.
Values are important. We need to think about how we ensure that the metaverse benefits everyone. That’s where real value comes from, in making a change for the better. We need to use the capabilities and potential we have for the benefit of all. Then the commercial benefits will come naturally.
Find out more Metaverse Initiative by the Finnish Ecosystem Virtual Potential into Real-World Impact. Business Finland, 2023
Where does the metaverse go from here?
In April 2024, The Metaverse Society published a trends report for the year – The Next Phase in Scaling the Metaverse. It examines the varied opportunities that virtual worlds currently present, and how technological advances – including AI – are set to fuel growth in the sector.
New experiences for new audiences
“Rich interactive online experiences continue to grab the imagination of billions around the globe, spanning entertainment and communications, with young audiences fast emerging that are native to today’s early stage proto-metaverses. The direction and momentum is moving towards highly dynamic, and more broadly integrated, experiences beyond gaming and entertainment alone, and adding additional layers, such as commerce, as a next step forward.”
How AI alters the landscape
“The continued evolution of the metaverse has already seen 2024 witness a supercharge to its core technology stack by utilising AI to drive scale and reduce cost in the creation of consumer-focused experiences. A combination of better creator tools, evolution of blockchain and AI enabled digital assets, and the renewed interest in large-scale online worlds all bode for a sustained cycle of growth. The games industry is currently restructuring for this shift with new investment pivoting to the area.”
Gaming shows the way forward
“Gaming has clearly become the definitive pathway for cross-over between entertainment, community, and commerce, providing not only the technology backbone but also the design paradigm for metaverse-centric experiences. Its ongoing growth is helpful, albeit at lower rates since the end of the pandemic, but its capture, particularly of Gen Z and a large swathe of millennials as natives, is already demonstrating gravitational pull for franchises, sports, and music within what were previously game only concepts of Fortnite and Roblox. Scaling the metaverse will still require new entrants, and more support from major media and entertainment, but in a form that is aligned to the concepts of game design and community.”
Growth factors: the areas to watch
“Three key areas will be determinant to the success of metaverse implementation in the coming twenty-four months: AI implementation, spatial computing and XR, and the continued improvement of large-scale live service “worlds”, themselves dependent on cloud networks improving their overall capabilities. The developer environment for all three will require continued improvement in 3D engine technology and tools and methods, along with a reduction of friction in the implementation of blockchain-based digital asset models.”
Brochure published by The Metaverse Society – 10 Bishops Square - London E1 6EG – United Kingdom
Publication Director and Editor-in-Chief: Marine Boulot
