It has taken 30 years since the term was coined in 1992, but big money has now moved into the metaverse—accompanied by big hype. Facebook, which changed its name to Meta Platforms, has promised to invest $10 billion in its Reality Labs operation this year. Microsoft is making a $70 billion bet on a metafuture with its planned acquisition of Activision Blizzard. Venture capital funds poured almost $25 billion into crypto-related investments in 2021.
To understand the pull of the metaverse, it helps to think in terms of the distinct trends that are converging to create it. (See Exhibit 1.) Recall the release in 2007 of the original iPhone—a single device that brought together a camera, computer, mobile phone, and operating system. The technologies involved were not new; the revolution lay in their convergence and the resulting entrepreneurial stimulation of thousands (and ultimately, millions) of app developers, who set about finding ways to put the magical new tool to use.