Archived: Money in the Metaverse

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Anna Wiener writes about the metaverse, and how the use of money is developing in a space that combines virtual reality, augmented reality, the Internet, entertainment experiences, gaming, and remote work.

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Years ago, while on vacation in the Northwest, my husband and I rented a room in the home of a middle-aged couple, one of whom had recently retired. The house was old, beautiful, and cozily laden with objects that signalled domestic inertia. It sat on a lush, wild sprawl of farmland that immediately inspired fantasies of leaving San Francisco and our tech jobs, foraging for mushrooms, administering to septic systems, and turning over soil.

One morning over breakfast, conversation shifted to our host’s retirement. He was glad to have more time at home with his wife and their dog. He was baking a lot. He was spending hours playing FarmVille.

“FarmVille?” I asked, half awake, spreading honey over a slice of toast. Through the picture window, we could see mist rising from the evergreens. The dog nosed around in the vegetable beds. FarmVille, our host confirmed pleasantly—it was a game, a farming simulator, played by tens of millions of people on Facebook—before asking if we might be interested in some eggs. We were. The eggs were fresh. The sun was emerging. Our host seemed very happy with his lot.

It is hard to know what anyone else really wants, and I think of this man often. I thought of him most recently while watching Mark Zuckerberg deliver an hour-long presentation on Facebook’s rebrand—it is now called Meta—and its newfound focus on building the “metaverse”: a vast and integrated virtual world. Watching Zuckerberg stroll through a blandly monied virtual set, appointed, as if from a drop-down menu, with books and trinkets and unused-looking sports equipment, I wondered if there were people who wanted this, or would find this vision exciting. Then I reminded myself: FarmVille. I think it is useful, in attempts to forecast the future, to be humble about the enormous mystery of other people’s desires.

In recent months, the metaverse has been described as a kind of online place, combining virtual reality, augmented reality, the Internet, entertainment experiences, gaming, and remote work. The key idea is that, no matter what you’re doing in the metaverse, or where you are, your identities and assets will be multi-platform and transportable: you’ll be the same “you” at work and at leisure. As the concept of the metaverse has snaked into the discourse, predictions about it have seemed mainly to reflect the desires of the corporations that are setting the terms of the conversation. (The term “metaverse” itself, which has its origins in dystopian science fiction, has been aggressively promoted by companies with worlds to sell.) Reading about the metaverse, I’ve often had the uneasy feeling that I am taking something far too seriously—giving credence to the wrong things, internalizing the wrong logic—simply because a small number of world-historically wealthy people have told me to.

What they are saying is incredible, not least because it is entirely speculative. They suggest that the metaverse will be a “massively scaled and interoperable network of real-time rendered 3D virtual worlds which can be experienced synchronously and persistently by an effectively unlimited number of users” (the venture capitalist Matthew Ball). They offer that it might enable companies “to embed computing into the real world and to embed the real world into computing” (the Microsoft C.E.O., Satya Nadella)—and that it could make “the virtual world more real and the real world more rich with virtual experiences” (the Tencent C.E.O., Pony Ma). Tim Sweeney, the C.E.O. of Epic Games, has said that the metaverse may be “a multi-trillion-dollar part of the world economy”; Jensen Huang, the C.E.O. of Nvidia, thinks that it could create “a new economy that is larger than our current economy.” The over-all point is that it will be simultaneously a place for connection, community, and so on, and also a forum for transaction and extraction. For its makers, the metaverse will be stuffed with money—in every dimension, all the way down.

If the metaverse materializes, it will probably look and behave like a video game, at least for a little while. For millions of people, video games already serve as everyday, immersive virtual experiences; gaming companies provide infrastructure for Hollywood films, spatial visualizations, and live performances. Aesthetically, the metaverse could have the gauzy realism of 2019’s “The Lion King,” the anesthetized cheerfulness of The Sims, the pixel-art graphics of the sixteen-bit era, or any other vibe. Physically, it will probably be accessed through headgear—V.R. headsets, A.R. glasses—or simply a computer screen. Financially, it could look something like FarmVille, in which players spent millions of dollars on virtual windmills, fertilizer, farm animals, and water, tending to what Alenda Y. Chang, an associate professor of film and media studies at U.C. Santa Barbara, has called an “ecologically absurd” landscape, in which dying crops could be revived by “unwither” spray, and sheep produced wool sweaters after eating tomatoes.

The gaming industry’s business models tend to evolve on the heels of technological development. In the early two-thousands, premium games were sold as standalone products; like blockbuster films, they came with large marketing budgets, vivid advertising campaigns, and hotly anticipated release dates, around which the bulk of revenue was collected. But as personal computers grew faster and more powerful and the Internet became more reliable and ubiquitous, the model began to shift. Some games were no longer stored on disks or cartridges but in the cloud; often, people accessed them not on gaming consoles but through their smartphones. Massively multiplayer online games, such as World of Warcraft, brought small-scale, in-app purchases—known as microtransactions—into the mainstream. Microtransactions were most common in “free-to-play” games. These cost nothing to download, but grew increasingly complex—and, crucially, more fun—with every additional expenditure. Now game companies could charge for new levels, new features, and new things to buy, pushed directly to users’ devices.

Alexander Bernevega and Alex Gekker, researchers in Amsterdam, have described this transition as the “assetization” of top-tier video games—a shift toward what Jathan Sadowski has called “new rentier capitalism.” The future of the industry, Bernevega and Gekker write, will be one of “fully assetized gaming,” in which “gamers will own neither the games nor the consoles” but pay for seasonal “battle passes” or owe subscription fees. At the same time, the logic of ownership will live on inside the games themselves, in the form of customizable skins for avatars, character attire weapons, tools, and so on, acquired through microtransactions. “This is what makes the modern blockbuster game a highly productive asset,” the authors write. “By combining the rent-based and commodity-based models,” the games “are able to continually draw income.”

As in-game economies grew, they generated robust black markets for virtual items, with players buying and selling everything from ordinary game elements (armor, weapons, gold) to the equivalent of collectibles (a limited-edition party hat). Because players were accustomed to spending real money on virtual goods—or, in some cases, real money on digital currency, which could be spent on virtual goods—these black markets could be lucrative. Real-money trading, or R.M.T., began with one-to-one exchanges on sites like eBay, but was quickly scaled up and professionalized. Some players, usually in places with limited economic opportunity, took up gaming full-time in order to rack up in-game loot, treasure, and bonuses, selling those assets for profit, outside the game, to other players—a practice known as “gold-farming.”

In 2004, the president of Internet Gaming Entertainment—a virtual-asset-trading startup, established in 2001, that relied on the labor of low-wage players—estimated that the market for virtual goods and services was about eight hundred and eighty million dollars a year. By 2009, as many as a million “farmers” worked in China, many of them in tightly packed, open-plan computer labs, under conditions that were often compared, in the media, to sweatshops. In 2011, the Guardian reported that prisoners at a Chinese labor camp were being made to play online multiplayer games, “to build up credits that prison guards would then trade for real money.” Reading about people who played games for profit reminded me of “Games of Empire: Global Capitalism and Video Games,” a seminal work in video-games studies published in 2009, by Nick Dyer-Witheford and Greig de Peuter, academics working in media studies. The authors argue that video games are the “paradigmatic media of Empire”—a totalizing regime of “planetary, militarized hypercapitalism.”

Massively multiplayer online role-playing games fell out of fashion in the early twenty-tens, eBay banned the sale of virtual goods, pushing it to smaller, more ephemeral Web sites and marketplaces. Game developers, sometimes under regulatory pressure, tried to crack down on off-platform sales, which were almost always against their end-user license agreements and terms of service anyway. But in recent years, real-money trading has seen a minor resurgence. Old School RuneScape and Tibia, online multiplayer games set in fantasy worlds, have attracted players from Venezuela, who have found that their in-game currencies are more valuable and stable than the bolívar. (The games are popular in part because of their retro graphics, which can run well on older computers with slow internet connections.) In 2019, when Venezuela was hit with widespread power outages, there was an immediate economic crisis in Old School RuneScape.