What will property look like in the Metaverse?

The sun sets in the virtual University of Edinburgh, circa 2007.

Amongst many other things, writer Neal Stephenson is famous for having coined the term “Metaverse” in his 1992 cyberpunk novel “Snow Crash”, but he has also written a lot about virtual worlds in some of his later work, particularly the novel “Reamde“, which is a techno-political thriller which introduces a popular virtual world called T’Rain. To me, T’Rain is one of the most interesting depictions of the Metaverse in fiction, it’s an open world MMO that has been designed with geologically-accurate terrain, it is vast, and has an in-game currency that is exchangeable with “real” fiat currencies. The game is designed with scarcity in mind, value is derived from the difficulty in getting things done, from transportation to gold mining, everything takes a some effort, which justifies the economic value of the currency.

As interesting as T’Rain is, I found that there was a lack of discussion of property. It seems evident that, unlike modern MMOs, T’Rain’s developers made no property claims over the goods and assets created in the game, and there was little discussion about virtual property other than that economic assumption. It would have been nice to see more emphasis on this aspect in a fictional world, as I think that the discussion about virtual property will eventually be at the heart of the Metaverse and its potential success. I will be using the following definition of Metaverse here: it is a persistent, virtual 3D space that allows people to interact with one another.

Architecture

So what will property look like in the Metaverse? The biggest issue with discussing property in the Metaverse is that we are dealing with bits and code that exist in someone else’s server. We already have that, cloud computing is all about offering server space and networking power that hosts and processes services and files for others. There’s little question that while some of your content may be hosted in Amazon’s or Google’s servers, the content is still yours. The problem occurs when we consider that for the most part, any content in the Metaverse has to exist also in a platform, and this is run and owned by third parties. So the Metaverse is not only the content that you may or may not own, but most importantly, it relies on some platform which you are at best using under a licence. A gun in Fortnite has no existence outside of Fortnite.

So the property in the Metaverse will rely entirely on the relationship between the user and the platform, and as such will be dependant on the terms of use, in many ways these end user licence agreements operate as the virtual space’s constitution. With that in mind, a platform has three options on how it deals with property:

1. Everything that exists in the Metaverse belongs to the company running the service. This is the most common licensing agreement found in virtual worlds, particularly MMOs and other similar environments. While you may have goods in-game, the terms and conditions of the service specify that these all belong to the service provider. Moreover, sometimes trading on those goods is forbidden.
2. The virtual goods that a user purchases and/or creates belong to them. This is a rare model, but it was one of the main characteristics of Second Life, where land and items could be owned and sold by the user.
3. The platform is decentralised, so all ownership rests with the users. This is the ideal of so-called Web3 projects, where storage, services, and computing power will be paid using crypto-assets, so ownership will be mediated using NFTs and other tokens.

Option 3 is still not a reality, despite the rise of a few “Play to earn” games such as Axie Infinity, which still falls under the second category, despite the addition of NFTs and blockchain. So we will assume that the Metaverse will have to choose from the first two models, at least in the short term.

Models

The first question is which model will be adopted , which depends on what shape will the Metaverse take. The Facebook (sorry Meta) model appears to be centred on complete control by the company, everything in the Metaverse will be owned by Zuckerberg and Co, and users will only get a licence over the things that they create. This is also the standard in most other VR environments and Metaverse-like games, where users are only licensees, and not owners.

Under this model, the Metaverse will be made up of islands of content where each user will have to comply with the terms of use of their own corner of the Metaverse. This vision is more akin to the walled garden Web 2 model of apps, where content is not interchangeable for the most part, and people operate in separate environments controlled by conflicting EULAS.

But there is a more interesting and open vision of the Metaverse as something that will be more expansive, and it will be a virtual and augmented environment that is not the property of a single company, but where users can operate in different virtual environments, and assets can be used and interchanged between those virtual spaces. This ideal is closer to the Metaverse we find in fiction, be it the original Metaverse in “Snow Crash”, or the vast environment in other cyberpunk such as “Neuromancer”, and most recently the OASIS in “Ready Player One”.

This is the ideal Metaverse for me. Vast, interoperable, open source, open-ended. And quite impossible, at least for now, I can’t see vast corporations collaborating in the creation of a single space, much like they have been killing off the World Wide Web with apps and walled gardens. There are some technical reasons why you cannot take your characters and currency from one game to the other, but most importantly, it;s also a business model, it would make it easy for people to abandon your game.

So we’re likely to get the most restrictive version of the Metaverse, the corporate walled garden where they own everything that you create in the virtual space. This however need not be so bad, interestingly Fortnite has a very open policy when it comes to user-generated content. While everything in the game is owned by them, any item that the user creates is owned by them, and they provide Fortnite with a licence to use. This UGC is:

““UGC” includes without limitation buildings, chat posts, character data, game customization, in-game constructions, replays, cinematics, scripts and programs, modes, gameplay, experiences, interactive features, and screenshots, music, sounds, sound recordings (and the musical works embodied therein) audiovisual combinations, musical works, animations, and other types of works (standalone or in combination).”

The Metaverse giant Roblox is adopting a similar hybrid approach, where they own all of the IP in the environment, while allowing users to bring in and use their own copyright works in the games, such as music, chats, text, etc. These are then licensed to Roblox. It is likely that most Metaverse companies will start adopting similar EULAs that provide more property rights to the users.

Virtual space ownership

There is a final thing that I am interested in, and it is the question of actual virtual property, such as ownership of a piece of land in the Metaverse. Second Life’s business model is to sell plots of land to users, around 2007 there was a craze in corporations and organisations buying virtual property in Second Life, spaces that went mostly empty. What was interesting was that these spaces actually corresponded to real size, so the price depended on how much virtual space you were purchasing.

This is a confusing concept to get your head around if you’ve never visited any virtual world, or played MMOs. Distance is tricky in virtual worlds, things may seem far away if you’re just walking from one zone to the other, and small if you’re using some sort of teleportation. One of the most boring (and often dangerous) things you can do in a virtual world is to travel from one city to another unaided, which is why some games develop mounts, flying beasts, or teleportation hubs to get you to where you’re going faster. But in reality, these spaces tend to be small. While Azeroth in World of Warcraft seems vast, it is actually rather packed and small, and someone calculated that it measured actually 113 square Km.

The size of the virtual space will be extremely important because you may want to buy land in the Metaverse, but how big will the world be, and how will you measure that property? Make the world too big, and travelling becomes an issue to be solved, and land is not scarce, make it too small, and not everyone’s land fits.

Games have been dealing with virtual property in many interesting ways. In Ultima Online (which I’m shocked to find still exists) players were able to buy unique houses, which were located all over the map, and where you could teleport to. To my knowledge, only Second Life has a similar system of virtual property equating a real location in the virtual map. The reason for this is simple if you think about it, as a real location can be seen by all users, so you have to decide if you allow everyone access to your virtual house, and what they can do once in that space. In Ultima, everyone could visit a house, and this is where people purchased stuff, but they couldn’t make changes to the space.

Most other virtual worlds used another option, which is to generate an instanced virtual space that is off map, and where you have to teleport to. This means that only the player (and group) can see that version of the property. This is simpler solution, but feels a bit less exclusive. City of Heroes had Super Group Bases, instanced locations off-map where you could go to using a communal entry-point. World of Warcraft didn’t have a housing system until the Warlords of Draenor expansion, which introduced Garrisons, which were all located in the same spot for every player, this made them feel less exclusive, but it was useful to finally have a place that you “owned”. Elder Scrolls Online has a more exclusive system of houses spread around Tamriel, which makes housing feel more exclusive and customisable, and players can own as much property or as little as they wish.

The property system in the Metaverse will make all the difference. I tend to favour unique housing, while admitting that this is a tricky issue, and it is easier to design instanced housing that is unique to each user. In my opinion instanced spaces will more likely exist in Metaverses where the platform owns everything, while unique housing is more justified in virtual worlds where you own everything you create.

Concluding

I have no idea if the Metaverse will take off. I truly hope that the Facebook Metaverse meets the fate of their Libra stablecoin, and is consigned to the dusty annals of failed tech projects (edit: it’s now called Diem). I do want a Metaverse though, some open, decentralised space, or even our own world, but enhanced with augmented reality.

One thing is certain, I suspect that we will be arguing about virtual property whatever may come.