Imagine a world where you can meet, face to face, with colleagues, go shopping with friends or even purchase property — without actually leaving your house. It might sound impossible, but it is the future offered by the metaverse — a future at our fingertips.
The concept of the metaverse as a technology that spans the gap between the physical and digital worlds, creating a kind of hybrid universe, is not new. First coined by Neal Stephenson, his novel “Snow Crash” depicted a dystopian world in which users’ avatars are proxies for their social status and wealth.
The real-life version of the metaverse is far less ominous, assuming it will be created on top of Web 3.0, where data is fully decentralized and under each user’s control, thus avoiding Stephenson’s nightmare scenario. This contrasts with today’s Web 2.0, where only a few centralized platforms collect and store most data.
The metaverse — forecasted to reach $1.5 trillion by 2030 — has the potential to transform the way we live and work fundamentally by supporting remote work, improving online education, and facilitating more natural virtual interactions.
Picture it as a shared online space where people from around the globe can collaborate and exchange ideas, giving rise to new creativity and innovation.
We are already starting to see some of the possibilities offered by the metaverse made real.
For instance, consumer brands have started to actively collaborate with simulation games to test products like “The Sims 4.” This demonstrates the metaverse’s potential to allow companies to construct digital twins in order to test and iterate new products.
Projects like Saudi Arabia’s Virtual Black Stone Initiative — which makes it possible for Muslims to virtually touch the Black Stone at the Kaaba — and NEOM’s digital twins coming on board — enabling citizens to purchase property in XVRS, a digital version of the smart city based in the metaverse — may sound like the stuff of wild sci-fi imaginings, but soon will be a reality for all of us.
Is the Kingdom ready to take advantage of all this has to offer?
The Kingdom has made an enormous investment in the metaverse: The $1 billion funding of XVRS is part of a larger $64 billion in future technologies which is expected to accelerate the country’s digital transformation.
Coupled with the youthful age of Saudi Arabia’s population, this means that the stage is set for smooth adoption.
Typical citizens of the metaverse are called metazens, with 39 percent of them between 25 and 34 years old, 40 percent with a bachelor’s degree and 77 percent living in urban areas.
With 65 percent of Saudi Arabia’s population under 35 years old, mostly living in urban areas and highly educated, there is a very good reason to believe that the Kingdom will become a trailblazing metaverse hub.
However, new challenges are certain to arise out of the metaverse. For example, the decentralized structure of the metaverse may lead to the elimination of business intermediaries. Banks or brokers will no longer be needed to facilitate P2P transactions. As a consequence, data monetization businesses will be rendered ineffective as individuals will have control over their own data.
Moreover, ‘real-world’ regulatory frameworks cannot be applied in the metaverse. This raises questions about property rights. If a user created a house in non-fungible token, are other users prohibited from replicating the design? If so, to what extent should new home designs be different?
Governments therefore will have to review their approach to market monitoring.
Current regulatory frameworks are focused on supervising a small number of intermediaries. It is unclear how regulators will regulate the market when users control their data, effectively becoming market players.
As a leader, the challenge for Saudi Arabia is to find its own way around the metaverse, without the advantage of learning from global precedents. The best compass in this unchartered territory is a firm understanding of the benefits and risks created by the metaverse for businesses and citizens alike. This understanding must form the basis of all new policies and regulations.
While many of us are still grappling with the concept of the metaverse, the reality is that it will soon become an embedded part of our lives — which means that the sooner Saudi Arabia uncovers the answers to the above, the quicker it will be able to take the lead.