Metaverse Report

We are very excited to release our metaverse report, in collaboration with our partners at Newzoo, the international consultancy for games and esports analytics and market research.

What is the metaverse? This is by no means a simple question. In sci-fi literature it is referred to as a convergence of physical, augmented and virtual reality in which users can interact with a computer-generated environment and other users. Although this would seem to be a simple definition, it is one that has complicated layers in practice. Matthew Ball, a venture capitalist who wrote an influential essay on the metaverse in 2020, set out several key characteristics of what a metaverse needs to include, namely:

• Scaling (ability to increase the size of the metaverse).
• Persistence (unlocking technical limitations to improve the immersiveness of the metaverse).
• Interoperability (the merging of different virtual worlds and systems).
• Economy (allowing for trading across the metaverse).
• Identity (evolving current online identities for avatars for a stronger connection to the user).
• Digital and physical (spanning across many aspects of life).
• Multiple contributors (content from all sorts of stakeholders from individuals to commercial organisations).

As you can see from these characteristics, the concept of a metaverse is a complicated one.

Understanding the metaverse requires looking at the world differently. Like many modern-day technological advancements, the metaverse was conceived in science fiction, but the games industry has always been a driver of new technology. While the metaverse has yet to live up to its true potential - and will take some time to do so - there are already early signs of the metaverse all around us. These early-stage metaverses, or proto-metaverses, take many forms, including games embracing blockchain technology and online games hosting non-game social events, such as live musical performances. The early metaverse is already here, and the sector (and its underlying technology) is already attracting considerable investment. The development of the true metaverse is no longer an "if" but a "when."

In this report, we examine how the video games industry has already started to shape and embrace the metaverse. We analyse the related legal issues from three separate viewpoints: the user, the metaverse make-up, and regulation.

We hope you find the report interesting. If you'd like to discuss any aspects of it, please get in touch with your usual Osborne Clarke contacts, any of the authors, or Newzoo.