Everyone is talking a lot about the metaverse these days. What is the metaverse? It’s a progression of how we live. My father used to read books as a kid, and the books would entertain him and come life in his head. I grew up with comics and the illustrations would give me hours of fun imagining that I too could be Spiderman. My children grew up on cartoons that took the comic to the television. My grandchildren are growing up in a world where all of the books, comics and cartoons are now on the big screen in IMAX and XBox. What will their children watch? The metaverse.
That’s the importance of this development. It is the next generation of entertainment, and its inception is now. It’s why Facebook renamed itself Meta, and why it is so important. For example, you might not use an Xbox or PlayStation, but the gaming industry is bigger than movies and music combined. In 2020, the U.S. video game industry grew 27% to $56.9 billion in revenue, says NPD Group, surpassing movies and music. Imagine surpassing this. That’s what Facebook is banking on.
But let’s take a step back. What if you were in a meeting in the 1920s and Walt Disney was in your office. He’s pitching the idea of Oswald the Lucky Rabbit, and needs funding.
“What are you asking for Mr. Disney?”, says the banker.
“I need a loan so that I can make a film about a rabbit”, says Walt.
“A rabbit? Who wants to see a film about a rabbit?”, says the banker.
“Well, I think it will be huge as it is based on a new technology”, Walt replies.
“What technology?”, asks the banker.
“Animating drawings!” Walt replies.
“Get out of here”, says the banker.
That’s pretty much where we are with the metaverse. It will be bigger than movies, music and gaming combined. It’s why Facebook is making the mega-gamble to be Meta. But imagine if you were sitting at the start of a new revolution of industry – any industry – and told the pitcher to get out of here because you didn’t understand it. That’s what’s happening with the metaverse. In fact, a key part of the metaverse is the metabank.
The metabank will bank metacoins, an evolution of cryptocoins. In fact, in a metaverse where virtual reality allows you to live an alternative virtual life, I’ll have an alternative virtual financial market with a virtual currency. That’s a critical point about the metaverse. It may be virtual and online, but it will feel real and personal. It will feel like my other life and, if there is another life available, there will be another economy and economic structure.
This is where Facebook is going with Diem, formerly known as Libra, their blockchain-based payment system. Many of us old world folks may mock these developments but any company of the size and influence of Meta/Facebook should be taken seriously.
After all, imagine if you were the banker who said ‘no’ to Walt Disney.