Meta has recently partnered with Realy, who’s tasked with building out the company’s metaverse projects. The image above is their proposed business model. (The Twitter thread of its announcement is full of obvious bots “supporting” the project, funny enough.)

Many folks in the crypto space right now are worried about Mark Zuckerburg (and other Web 2 companies) doing a hostile takeover of the metaverse, using Facebook’s massive reach and resources. How likely is it for this to happen? Well, it depends. Some things to consider:

• Historically, large companies like Meta tend to have trouble innovating because they cannot pivot away from their existing (currently profitable) business model. Facebook has already failed to make Libracoin work and Meta is likely to face similar obstacles and challenges. (Similar challenges will apply to big companies who are currently trying to get into the metaverse space as well.)
• The proposed business model above is basically a 3D/VR version of Web 2’s ad-based model, where content makers pay “landlords” for the “privilege” of being able to promote their works on Meta’s platform. The language used is slightly different but it fundamentally doesn’t really change what the company is already doing. (A race-to-the-bottom model where the creators are treated as customers rather than producers.)
• On its current trajectory, the Zuckerverse has a potential to succeed because existing NFT platforms right now are not actually differentiating themselves that much from what Web 2 companies are currently doing. A few exceptions aside, NFT sales are not yet sustainable for the creative community as a whole -- many of existing NFT startups and platforms are simply recreating Web 2’s “winner-take-all” / “artist as the customer” model. Competing against larger, more established companies playing their own game is futile -- the only way for challengers to win is to change the game itself.
• The Web 3 companies that will succeed will be the ones that have product differentiation -- i.e. business models that tap into the new “reputation economy”, as opposed to the “attention economy” (a phrase popularized by Andrew Yang in 2020) of Web 2.  These models are complex products that are currently being worked on by professionals but are having trouble gaining traction due to all of the loose money in the crypto space right now. The opportunity for these platforms to ascend will probably happen after the ecosystem gains a few market corrections under its belt.

At the end of the day, the metaverse that people will flock to will simply be the one that looks the most fun. A lot of companies -- both Web2 and Web3 -- are going to find out the hard way that throwing $$ at the problem for this sort of thing isn’t going to be enough. They’re going to have to figure out how to respect, foster, and develop the creative communities by giving emerging talent the support and tools needed for long-term success. Web3 creates an interesting situation where creatives -- long treated as second-class citizens -- might actually have real leverage over how things are done in the digital landscapes.

Also known as “artist development”, this has been missing entirely from the content landscape for a while (Web 2 was clueless while Hollywood has allowed apathy and corruption to destroy their own infrastructure) so it’s still anyone’s game as to who takes the cake. Most NFT projects right now are overhyped and probably won’t last -- and most BigCo projects are completely missing the point of Web3 altogether so they’ll probably be wasting a lot of money in the near future on marketing. (But at least it’ll be good “exposure” for them -- the tables have turned!)

Again, the platforms that will succeed are the ones that people simply think are cool, and that’s going to be determined by creatives, not the middle-men. We just need to build our way there, one step at a time. My guess? It’ll probably be some group of people we’ve never heard of before who comes out of nowhere and takes us all by surprise. WAGMI!