Long gone are the days when the internet was the “next big thing” — the internet is now almost completely established in our lives. In recent years, virtual reality (VR) has become the new topic of interest in the world of technology. Just as the public became accustomed to the idea of VR, however, the concept of metaverse has emerged. The immersive three-dimensional world of metaverse offers a virtual realm that encompasses existing technologies such as VR and augmented reality (AR). The metaverse is projected to change the world by shattering the barrier between the online and offline world.

As stated in Forbes, the word metaverse is a combination of the prefix “meta,” which means “beyond,” and the stem “universe.” It goes beyond the concept of VR to mean the fusion of the digital and physical world. Although the concept of metaverse is still vague, it is commonly thought to be a convergence of AR, VR, cryptocurrency transactions, physical reality, and the internet. Put simply, a metaverse is an online world parallel to the offline one, which allows one to live through an online replica. Its endless possibilities have led to an investment race, with companies rushing to develop a metaverse of their own.

For now, the concept of metaverse is most closely executed in role-playing games (RPG) where users are represented by a controllable personal character in a virtual world. Metaverses are similar to but go beyond RPG in that they give users autonomy, instead of issuing specific purposes like running a restaurant or obliterating the opposition’s army.

The Application of Metaverses

The game Second Life created by Linden Lab in the early 2000s is often cited as an early metaverse prototype. The game was labeled so because of its independent cryptocurrency, the Linden Dollar, and its functions. The cryptocurrency allowed residents to make transactions as they would in the real world, giving users a sense of autonomy.

Second Life may have been too innovative for its time, especially without the level of technology current society possesses; now, the focus has returned to metaverses in tenfold. Currently, gaming companies are at the forefront of metaverse technology. Epic Games, the creator of the game Fortnite, has shown ambition in the metaverse front with its live virtual events, such as a concert in 2020 by the rapper Travis Scott where users were submerged underwater and taken on a wild rollercoaster ride.

South Korea is not an exception to the trend, with various companies creating metaverses to attract millennials and Generation Z. Collectively called the MZ Generation in Korea, these two generations are incredibly tech-curious, fast-paced, and neophiliac. In order to serve them, companies have been working to mesh metaverse technology into their business model.

One of these companies is the Korean online platform giant Naver. In 2017, Naver, through its subsidiary company Naver Z, launched the application Zepeto, now one of Asia’s leading metaverse platforms. Originally allowing users to create and customize avatars, Zepeto relaunched in 2018 with improvements such as enabling user interaction. According to SK Hynix, Zepeto accumulated over 130 million global subscribers in just a year and a half after its relaunch.

Since then, Zepeto has been working to stay connected to the real world where the public’s attention remains for now. For example, the company partnered with entertainment companies to allow users to virtually meet their favorite Korean pop (K-pop) groups. Furthermore, the company created Zepeto World, where users can wander freely without space-time constraints and purchase avatar clothes with the cryptocurrency Zem. This function has given way to metaverse marketing, with fashion brands such as Gucci, Nike, and Converse partnering with Zepeto to promote their products.

On top of such metaverse platforms, metaverses are being immersed into people’s daily lives in the form of virtual conferences, exhibitions, and lectures. As reported by ET News, in April, the city of Sejong held a virtual conference on “Sejong’s smart future” where the lecturer and audience participated through avatars. Like so, metaverses are expected to alleviate restraints in the real world, opening up a world of infinite possibilities.

Economic Impacts

Enabling users to be operative and economically active inside a virtual world is a unique feature of metaverses. Therefore, various changes will occur along with the development of metaverses and related technologies. Instead of shopping online, users will be able to virtually walk into online stores. This will renovate customer experience and increase the need for innovation and creativity when it comes to promoting and selling products. In response, new occupations specific to metaverses will be created.

Moreover, virtual property will become widespread and normalized. While this provides new opportunities, it raises the critical question of how one would legally claim ownership of digital items. To allow people to gain ownership over digital assets, technology such as NFTs, or non-fungible tokens, are on the rise and are changing the scope of markets. As such, developments regarding security of virtual property are being made in strides along with the emergence of metaverses.

It is also projected that the metaverse trend will lead to an increase in market size as it will churn production and consumption and lure in investments. Therefore, as stated by American Express, financial institutions such as the Signature Bank of the United States (U.S.) are starting to accept blockchain-based methods of payment like cryptocurrency to prepare for the upcoming age of metaverses.

However, financial authorities in South Korea are rather skeptical of accepting cryptocurrencies due to the fear of speculative transactions and capital outflows. Despite such objections, as mentioned by New Daily, financial institutions in Korea continue to invest in cryptocurrency markets. Professor Oh Hye-lim (Business School, Sogang University) provided insight as to why institutions are not backing out. According to Professor Oh, “virtual assets are highly likely to be used as a means of transaction in the future as they lower transaction costs by enabling peer-to-peer transactions. Also, as cryptocurrencies are not linked to particular legal currencies, it is very simple to transfer money to another country and not be additionally charged by the state or central bank.”

In addition, Professor Oh emphasized the growth of metaverses during the coronavirus disease (COVID-19) pandemic. “As people spend more time at home, metaverses will be chosen as the next venue of exchange, providing new services that were previously not possible due to technical limitations.” With new services and opportunities, metaverses will undoubtedly enrich online experiences and satisfy cravings for socialization. In so many sectors, metaverses possess immense potential; there is no doubt that it is bound to take the world for a ride.