With Citi estimating the metaverse economy will soon be worth trillions, is now the time to get serious about virtual worlds? Or is it all hype? And haven’t we been here before with the enthusiasm for Second Life back in the 2000s?

When Facebook rebranded to Meta in October 2021 to focus on bringing “the metaverse to life”, many corporates were left scratching their heads and wondering how seriously they should take this brave new virtual world.

Now Meta is testing tools for selling digital assets in the metaverse, and other companies are also piling in. Millions have already visited Nike’s virtual store, where they can buy digital trainers. Gucci has already been selling digital versions of its bags and has recently bought land in The Sandbox virtual world. Meanwhile, Microsoft said it was putting the building blocks in place with the acquisition of gaming company Activision Blizzard. And banks are also getting in on the act, with South Korean financial institutions KB and Shinhan, for example, opening virtual branches. Others have also followed, and many more are exploring the opportunities.

Citi recently estimated in a report that the metaverse economy could be worth US$10trn by 2030. And that could be a conservative estimate, according to Ronit Ghose, Global Head of Banking, Fintech and Digital Assets at Citi Global Insights. If a broader definition of the metaverse is used, where it is accessed through personal computers, game consoles and smartphones – not just virtual and augmented reality devices – then the total addressable market could be around US$13trn with up to five billion users.

Citi sees opportunities in various sectors, such as gaming, healthcare, art, advertising and social collaboration. The bank expects that money in the metaverse will have numerous forms, such as in-game tokens, central bank digital currencies and cryptocurrencies.

This metaverse, the next generation of the internet – or Web 3.0 – where users have an immersible experience was originally coined in the 1992 science fiction novel Snow Crash, where it was portrayed as a virtual reality (VR) and augmented reality (AR) version of the internet. So, with all this focus on the metaverse, is it time to get serious about it, or is it all just hype? Or, in the words of Phil Libin, the former CEO of note-taking app Evernote, is the metaverse a “squishscammy word”?

And it’s not the first time that a vision for an alternate has been tested. Second Life, for example, was created by Linden Lab back in 2003. One major difference, however, with this and the metaverse, is that Second Life was created as an escape – a world online where people could exist as someone else, roaming around as an avatar living out a different life. The metaverse, by contrast, is both for virtual and augmented reality, where it is possible to live out your current life but with an enhanced experience – think three-dimensional Zoom meetings where it feels like you’re actually in a meeting room.

Banks also moved into Second Life in the 2000s by setting up branches, and other companies established a presence there – extending their brand into a new domain. To many observers it seemed like Second Life had died a death, but it has actually continued to operate with more than 60 million registered users, and nearly one million of those are active.

The founder of Second Life, Philip Rosedale says that no one has come close to building a virtual world like Second Life. In January 2022 he rejoined the company as a strategic advisor, giving it a renewed boost. At the time of the announcement, he said, “Big Tech giving away VR headsets and building a metaverse on their ad-driven, behaviour-modification platforms isn’t going to create a magical, single digital utopia for everyone. Second Life has managed to create both a positive, enriching experience for its residents — with room for millions more to join — and built a thriving subscription-based business at the same time. Virtual worlds don’t need to be dystopias.”