Mark Zuckerberg unveiling the concept of the “metaverse” at a live-streamed event last week

Facebook risks missing the point of the metaverse — and a coming shift in consumer behaviour — if it fails to permit digital ownership, according to some of the virtual world’s pioneers.

The social media giant made waves last month by changing its name to Meta Platforms and announcing a focus on the buzzy “metaverse”. However, with few details beyond the rebrand, metaverse participants doubt it is ready to embrace the spirit driving creativity and profit in the space.

“What Facebook is doing with meta … is a ‘fake metaverse’, unless they actually have a real description as to how we can truly own it,” said Yat Siu, chairman and co-founder of Animoca Brands, an investor in and builder of metaverse platforms, speaking on a panel at  the  Reuters Next conference.

“Until then, it’s just Disneyland. It’s a beautiful place to be, but we probably don’t want to really live there. It’s not the kind of place that we can actually build a business.”

The metaverse refers to an array of shared spaces accessed via the Internet. Some use augmented reality, via smart glasses, though current platforms often look more like the inside of a videogame than real life.

Serious money is sloshing around in there, with a patch of “real estate” in an online world called Decentraland changing hands for the equivalent of US$2.4-million last week.

Such plots and other virtual objects typically transact blockchain-based assets called non-fungible tokens (NFTs), sales of which topped $10-billion in the September quarter, according to market tracker DappRadar.

Turbocharged

Facebook’s entry has further turbocharged interest in the space. It had no immediate response to an e-mailed request for comment on Wednesday, and has not previously responded directly to criticisms of its metaverse plans.

But Siu said ownership is the bedrock for improvements and new paths for products and commerce, much like car ownership gave rise to baby carseat makers or how home ownership drives demand for furniture and businesses like Ikea.

For fellow metaverse pioneer Benoit Pagotto, co-founder of virtual sneaker company RTFKT, digital ownership makes room to change the roles of brands and consumers.

“It’s a huge shift in (the way) the relationship between business, creativity and consumerism is working,” he said at the Reuters Next conference. “A product is not a one-off thing. You need to think of how you can continue to update it,” he said.

“It’s very, very much more fluid. I think the real world will soon be overwhelmed by that because the possibilities of interaction in a digital world are so much deeper.”

In the meantime, there has been a scramble to catch up, both by brands wanting a slice of the action and lawyers trying to pin down what digital ownership really is.

NFTs are largely unregulated and fraudsters lurk. Anybody can create and sell an NFT and there is no guarantee of its value.

“It is causing a little bit of headaches to people in the legal profession trying to reconcile the vocabulary with what’s happening in fact,” said Sophie Goossens, a partner specialising in technology and media law at Reed Smith in London.

You don’t need to be a hardcore gamer to be embracing and playing with this new technology. It’s going to be for everyone

“Ownership in legal terms means something … (generally) a monopoly over a resource that is enforced by the state,” she said. “The type of rights that you are being granted on digital ownership of an NFT are slightly different. You may not have the right to control fully the asset that you own as an NFT.”

Still, that does not appear to be holding back the metaverse’s reach into the mainstream, especially for young people who are already video game or fashion consumers.

“I think we’re going to see a blend of digital assets seamlessly fitting into our real environment,” said Natalie Johnson, founder of Neuno, a forthcoming marketplace for fashion brand NFTs, as tech firms launch augmented-reality glasses.