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The Rising Costs of the Metaverse

With the cost of living rising steadily, is the metaverse pricing out possible consumers?

In Neal Stephenson’s seminal sci-fi work, Snow Crash (1992), we are shown a snapshot of a future where corporations rule all, currencies across the world are worthless (there’s even a crypto-style currency called kongbucks) and everyone is seemingly ‘goggled’ into virtual reality to exist within the metaverse. In Stephenson’s future we see that the class divide still exists, even within the metaverse, a digital space which should, in theory, level the playing field.

In several sections of the book, Stephenson shows us how stark that line still is. We see Hiro Protagonist, the novel’s central character, entering the metaverse, his avatar replicated in the highest fidelity; while those with little to no money live in storage units, using public terminals to enter the metaverse as fuzzy, black and white images, like an old photocopy.

The metaverse, in our reality, is loaded with potential and possibility. It is harnessed through revolutionary technologies, guided by pioneers in their fields. However, what many seem to forget, when holding up our current metaverse ideals, is that the metaverse as seen in fictions like Snow Crash and Neuromancer, is a dystopia where capitalism, greed and exclusion run rife. It’s a place where money and power are everything, and those without either are left behind.

On the Verge

At the moment, it feels like every mention of the metaverse comes with a price; NFTs are either exorbitantly pricey or the gas fees accompanying them are; blockchain games require expensive buy-in purchases before we can even try the gameplay; and owning digital land within a metaverse platform rivals most people’s yearly rent. Then there’s the possibility of needing to buy high end equipment, like VR headsets.

Where we stand currently, is on a precipice, where brands, publishers and advertisers want as many people as possible to embrace this advent of the internet, and yet it currently feels as if working class consumers are thought of last, shrinking the next digital population greatly.

There’s nothing to say that these more expensive entry points are inherently wrong, after all, people are welcome to use their money however they choose, and creators can charge what they feel is just for their work. This predates Web3 by hundreds of years, but where money pools together, so do classes. 

Rising prices in the cost of living added to the poor job markets means that many are living on a shoestring budget already and will struggle to move on seamlessly. In the UK, inflation is currently at 5.5% and an article from BBC highlights that the cost of living is rising at the fastest rate for thirty years. And, according to a recent article on The Drum, the number of those with careers within creative industries from working class backgrounds is falling rapidly, decreasing from 30% in 2017, to only 12% today.

For most, our hobbies and past-times are our escape. We can open Netflix to watch a film or boot up a console to play a game – even doom-scrolling Twitter can get us out of our own lives – it gives us the chance to forget, for a while at least, the chaos of life. The metaverse, as it is currently marketed, is the definition of escapism; it’s an adjacent reality where we can feel free to express ourselves, or live a totally different life. But, will it be a future open to all?

Standing on this edge gives us a unique viewpoint; we must do all we can to ensure that the metaverse, and to some extent the whole Web3 ecosystem, is open to everyone. Not only the working classes, but those in developing countries and younger users through education programs. To see large adoption rates, we need businesses to support their staff with technology upgrades and make the metaverse feel welcoming to all.

Technology, the Barrier

While technology defines our lives, it can often be seen as a barrier for many; families of children who can’t afford a laptop for education; those who so badly want to be like their peers but who cannot afford the latest phone, tablet or console; centres of learning without the budget to expand their computer suites.

Given the metaverse will be built on emerging technologies, it’s imperative that the technology is accessible to all. This can be achieved by manufacturers and technology leaders reducing the prices of equipment faster than in previous tech cycles.

XTAL 3

We’ve seen it time and again throughout technology commerce, but particularly with items like televisions, computers, phones and VR headsets – all items needed for the possible metaverse. Upon launch, all of these items were expensive. They carried a premium for being new; LCD, Hi-Def, 4K, 3G through to 5G networks, faster processing power and optical video screens. Over time the prices drop, more people adopt the technology.

But the metaverse requires people. It needs bodies. Unlike the market for TVs, it didn’t matter as much if a couple of people in your friendship circle didn’t own an HD TV but what if your friends can’t join you in the metaverse for that must-see concert? What use is it if advertisers all speed into the future of the internet if many are left behind? Who will see the adverts or attend the experiences?

The Class Divide

A lack of capital is a hindrance in the metaverse currently. I recently loaded up Decentraland to explore; I’ve found some great experiences across their vast map of the metaverse. I thought I’d spend some time playing a little poker to see how well it works, possibly for a future article. 

I loaded my avatar into one of the poker areas and was informed I needed to buy an item of clothing, which acts like a membership card to play. A quick click of the mouse took me to OpenSea where I found a pair of glasses to fit the bill. The current price for these glasses, as I’m writing, is 1.948ETH. This currently equates to $5,588.19. Not an affordable requirement for a seat at the table of Play-to-Earn poker.

This has to be seen as a roadblock to new users. To stick with gaming; it’s clear that blockchain games need funding just as every other type of game does, which is often why they use their own tokens or ask you to ‘buy-in’ to play. It’s their way of paying the developers, covering costs of servers and purchasing advertising space. However, it shrinks the possible audience, unless the game can offer a level of service for all via a free-to-play option or a lower one-off purchase, like Blankos Block Party or Splinterlands.

Away from games, the price points of NFTs are currently a steep hill to climb. Because of the 2021 NFT hype train, many collections now are opening with high level floor prices (A floor price is set by  the lowest price in the collection) because they’re more seen as an investment, rather than art you enjoy, an item of cool clothing or a music track by an artist you love.

Sure, we can load into these metaverse platforms and wander around for free. We can explore as our basic avatars, while others stroll the digital avenues with the latest RTFKT sneakers or NFT designs, and it just feels like reality all over again. Those with low capital aren’t able to mint new NFTs on launch as they tend to see floor prices that are simply out of reach. Those with larger sums of capital will lead the way, while others will feel forever as if they’re missing out and being left behind. 

Our Digital Future

The metaverse is already here. There’s no denying that, there are plenty of platforms which offer a metaverse experience. The metaverse, as a picture painted by tech companies, is a place where we can define our experience and take control of everything from our outward appearance, to personal online presence. Until now, our web presence has been defined by Web2 preference, through social media: Twitter, Facebook, YouTube, TikTok. 

Now, metaverse platforms such as Decentraland or Somnium Space are the new social networks and we can own LAND to represent ourselves to anyone and everyone. According to Fortune, the metaverse platforms Sandbox and Decentraland, are selling the smallest chunks of land for 3.7 ether and 3.46 eth, respectively, which roughly translates to $11,717 and $10,957.

Throughout Web2, we never needed to pay for our online persona, unless we wanted to set up a website through a third party company and pay hosting fees. Few people will have enough capital to pay for LAND within a metaverse if this trend continues. This is where companies such as Nifty Islands can benefit all, by offering no LAND scarcity and giving every user their own island to build on.

If a plot of digital land costs us more than our yearly rent, are we not heading in a similar direction to Web2? Where the rich get richer and where several wealthy companies ended up with a monopoly of projects? Surely if we can’t all own a patch of LAND, these platforms will essentially be advertisers and celebrities talking to themselves? Of course, some companies can offer free entry, or give away some NFTs, but this would likely only be limited to the tech giants we already have, removing any ideas of decentralisation. 

Questions Without Answers

At this point, I look back over what I’ve written and wonder what the solution is. Nobody wants the metaverse to become a niche side project of the internet because the potential is too great, and it’s quite obvious from the news that many believe it is the future of communication and personalisation. Personally, I believe in the future of the metaverse, just not how it is currently playing out, as there are too many roadblocks. 

As with all advancement, as I explored above, it will take time for costing to even out. However, I believe that someone has to act soon, or else we lose the point of mass inception. Tech leaders need to examine free entry into more programs, pilot hardware upgrades for those who need it and embrace variety in blockchain technology which opens up lower pricing of NFTs and gas fees, and look at new options for owning LAND.

Photo by © Mundissima – Shutterstock.com

Some companies are now emerging where they facilitate the lending of NFTs and LAND, also offering building services so that LAND can be personalised to your needs and tastes. Others offer consortium purchasing giving options to buy with friends and family. Ultimately, eventuality dictates that the hype dies down, crypto prices stabilise and these reduce prices of entry, so is metaverse accessibility a waiting game?

FOMO (Fear Of Missing Out) is real for many, plenty of people want to embrace new things early and be on the ground floor. Will we miss out on marking out our boundaries, or even grabbing our usernames? Can those from lower classes, poorer backgrounds and developing areas find their entry point? The final question I’m posing is, while we can’t afford to join, can we afford to wait?

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