The metaverse is imminent. The metaverse is over. The metaverse is being overshadowed by AI. The metaverse will be turbo-powered by AI.
In recent years it’s been hard to know what to believe when it comes to the much-hyped yet much-ballyhooed Web 3. More recently, however, the metaverse is showing signs of exciting and uncontested life. AI indeed speeds efforts to create lifelike avatars and ever more realistic online environments. And Apple’s groundbreaking Vision Pro headsets—which include “EyeSight,” allowing users’ eyes to be seen while they’re wearing the goggles, and finger tap-activated command controls—debuted last month. The question no longer seems to be, will the metaverse happen? But rather: When will it happen, and how?
Enter Shurick Agapitov, the author of Once Upon Tomorrow: Harnessing the New Opportunities the Metaverse Creates (Forefront Books). He is also the founder of Xsolla, a global video game commerce company. Part memoir, part visionary manifesto and part how-to for consumers and entrepreneurs who want to engage early with and in the metaverse, the book reflects Agapitov’s business savvy and passion for predicting the digital future.
First off, Agapitov notes, Meta and Mark Zuckerberg got a few things wrong about the metaverse. Prominent among them: The idea that pricey, unwieldy, and sometimes uncomfortable VR goggles will be the primary means of accessing it. In fact, Agapitov writes, such a view “represents a severe limitation to the technological capabilities of [it]—which extend beyond one screen to multiple ones,” and include screens on cell phones, televisions, desktop monitors, digital projectors, and more.
As such, the metaverse is more democratic and accessible. It will also be more lucrative. Instead of the $1-3 trillion VR/AR hardware market alone, Agapitov cites $8-13 trillion as the aggregate value of multichannel hardware markets. When sources of potential metaverse revenue like advertising are added to the figure, it will total between $10 and 30 trillion. It will also be, frankly, more fun than Zuckerberg predicted. Meta famously trumpeted legless avatars attending virtual office meetings and engaging in pedestrian leisure activities as the metaverse’s future. “Do you want to sit on a friend’s couch and play checkers with their digital avatar?” Agapitov writes, contrasting his vision with Zuckerberg’s. “Or do you want to stand inside the Sistine Chapel, look up, and see God’s hand touching man (all from your living room, and all without needing a Meta Quest headset)?” Finally, and the biggest Meta error as Agapitov sees it: Zuckerberg tried to pedal the idea that his company was the metaverse. “It’s very silly,” Agapitov says, citing the company name change from Facebook in 2021. “It’s like saying, ‘I can call my company the internet and become the CEO of the internet.’ It doesn’t work that way.”
How does it work?
Central to the actual multiverse, Agapitov posits, will be the next iteration of personal and business websites. He calls these “metasites.” Such sites will engage customers in more immersive, personalized, safe (in terms of data and financial protection), and creative ways than ever before. Again, how? Agapitov says much of the technology will come from the video game industry. “A metasite is basically a 3D version of a website…Technically speaking it’s going to be video games for every brand or everybody who’s doing business on the internet.” At least that’s the basis of it. Such sites will not be fully gamified, he notes, but strategically employ – and thereby create the deeper customer relationships engendered by – interactivity. “When I play video games,” Agapitov explains, “I’m the central character. I can make the decisions. I can make the terms and choose the path forward. So it’s a next level of engagement.” Essentially, metasites will “distribute” this intensely involving experience beyond video games. Agapitov sees metasites as no less than “a new storytelling device.”
In customer terms this will be more satisfying, and in business terms it offers expansive opportunities. Again Agapitov points to video games as a model, and the industry’s profits are impressive. (At $200 billion in annual revenue, it trumps the film, publishing, and music businesses combined.) Key to video game industry success, Agapitov says, is the fact that it embraces the 80/20 principle, positing that 80% of profit comes from 20% of customers. This idea makes sense across the economic board: Surely, some superfans would be willing to spend more than, say, the two-tier subscription plan offered by a company like Netflix. Agapitov says that not only are other industries failing to take advantage of this principle, but it will be even more effective with customers engaged on immersive levels, as many metaverse users will be.
To meet the needs of these uber-engaged customers, Agapitov points to an array of possibilities. Some of these strategies would be in their infancy when applied outside of gaming. Xsolla, for example, is a leader in facilitating in-game purchases players make in video games. These range from services a customer can buy—say, paying to skip a level – to clothes their avatars can wear —a $425 virtual T-shirt with “Balenciaga: Fortnite” emblazoned across it, anyone? (Yes, the latter found customers.) Such purchases, sometimes featuring collaborations and revenue-sharing models, could be replicated in any metasite environment, and exist alongside more traditional e-commerce opportunities.
Advertising will remain a part of the metaverse landscape, in Agapitov’s vision, but it too will be more satisfying for customers. Rather than being powered by data collection, he envisions a more privacy-focused and voluntary business model. In it, customers will be “compensated for their attention” with “digital items.” Agapitov explains: “So right now, every time you go to a website you accept cookies that mean you’re being tracked by advertisers.” In the metaverse, “You will instead be offered items as a token of appreciation for your attention”—say, a piece of athletic gear for watching a sports ad. It’s a win-win, he says. “If I learn about your products, I get the free stuff.” In many cases, it will also further bring online and offline, virtual and real worlds together. (Some of these digital gifts will be for web use but many, like discount codes, could be for real world purchases.)
Agapitov says there is still much to refine. Blockchain will provide the primary means of payment in the metaverse, he believes, as well as be the primary way to store digital items in “backpacks” users will carry with them across the web. (The privacy and speed it affords are unparalleled.) Revenue-sharing will not only be a means of achieving profitability, but enable more decentralization than the Apple, Meta et al.-centered Web 2 affords. Even smaller but significant strategies like loyalty programs will reach new heights. The changes, challenges, and innovations go on.
But what is indisputable, Agapitov says, is the opportunity the metaverse offers to all. How does he know? A few decades ago he was a poor kid in Siberia watching MTV and dreaming of creative satisfaction and economic prosperity. The CEO of a billion-dollar tech company today, he wants to help others fulfill a similar promise. And he believes that “Web 3D,” as he calls it, is their best bet to do so.
Shurick Agapitov is an innovative leader in gaming, Metaverse, Web3 and Fintech, as well as the founder of Xsolla and XLA. To order and learn more about his book, please visit www.onceupontomorrow.com/.
