How do you build a digital city?

Many are following Zuckerberg’s investment strategy, even as some industry experts predict it may take decades for the metaverse to be fully realized. Beyond companies, some cities are already trying to make those worlds a reality by actively developing virtual environments for citizens. Seoul, tied for fourth in an Economist ranking of digitally-savvy cities, invested approximately $3 million in “Metaverse Seoul” as parts of its Vision 2030 plan. While only a smartphone pilot has been released, plans for the service include a virtual city hall and space to host and attend cultural events.

Dubai, which holds the 18th spot in that Economist ranking, in July unveiled plans to become “one of the world’s top 10 metaverse economies” by 2030. The city’s key financial regulator for crypto, the Virtual Assets Regulatory Authority, had earlier announced it was setting up a digital headquarters in a metaverse platform known as The Sandbox.

In the Caribbean, Barbados established a diplomatic embassy on a competing platform called Decentraland. “This is going to change the way the world works,” said Gabriel Abed, Barbados’ real-world ambassador to the United Arab Emirates. “The embassy is a small thing. The big thing is what governments can do together when land is no longer physical land and limitations are no longer part of the equation.”

And long before Barbados, Seoul or Dubai decided to enter the metaverse, Finland’s capital, Helsinki, was already there. “Virtual Helsinki” dates back to at least 2018. Created by virtual reality studio ZOAN and described on its website as a “digital twin of the Helsinki City centre,” Virtual Helsinki allows users equipped with virtual reality headsets to tour the city. During the pandemic lockdowns in May 2020, more than 10% of the Finnish population tuned in for a virtual reality concert, the Guardian reported at the time.

Richard Lloyd, a sociology professor at Vanderbilt University, said that cities today have an incentive to remain open to new tech developments, as city councils don’t want to be seen as unfriendly to disruptors. “The city council understands this stuff, and tech companies have done a pretty good job of sort of subduing, bending leaders to their will because [they] hold the key to your survival,” Lloyd said.

While nothing exists today that holds all the component parts of a city in one cohesive package, individual developers and large corporations are creating metaverse spaces that could function as essential parts. Office spaces are being built up by many teams around the world, such as South Korean start-up Zigbang’s virtual office program ‘Soma’ and video-based teleworking platforms like Gather or Meta’s Horizon Workrooms.

“Imagine if you could be at the office without the commute,” said Meta’s Zuckerberg in an October 2021 announcement that marked the launch of the company’s billion-dollar bet on the metaverse. “You would still have that sense of presence, shared physical space, those chance interactions that make your day, all accessible from anywhere.”

It’s not all work though. There are virtual art galleries in Viverse and Spatial.io, and fashion shows with designers such as Perry Ellis and Christine Massarany in Decentraland, while Gucci and Ralph Lauren opted to showcase their wares in several digital platforms. Bands like the Foo Fighters and musicians like Justin Bieber have held virtual concerts, and a recent Snoop Dogg music video was set entirely in the “Snoopverse.”

But none of these disparate digital experiences quite add up to a thriving virtual metropolis. The metaverse-as-city, despite the hype and the hundreds of millions spent on marketing, hasn’t quite caught on. "The idea of millions of people in a fully customized live environment doing whatever we want significantly outstrips our computational capabilities today," Ball said.

And yet, consultants forecast profitable opportunities. Tibor Mérey, a managing director and partner at Boston Consulting Group, says the biggest obstacle right now for consumers is the clunkiness of most virtual reality devices. BCG predicts that the total AR/VR/MR markets will approach $47 billion by 2025 from $16 billion just last year, with VR accounting for roughly half of that valuation and mass adoption coming by the end of the decade.

Lareina Yee, a senior partner at McKinsey & Co., said that there are consumers ready to migrate despite these product challenges, with nearly 60% of participants in a recent poll of 3,000 global consumers saying they are “excited to transition at least one activity to a virtual world.” The top five activities that consumers preferred in the metaverse include shopping, social events, fitness, dating and education, and the consulting company sees a ‘generational tailwind’ from Gen Z, who are “increasingly an income-earning force to be reckoned with and are more familiar with virtual worlds and lives.”

McKinsey estimates that by 2030, the value of the metaverse could reach $5 trillion, and 95% of executives said that they think the metaverse is relevant and positive, and 25% who think that the metaverse will be a part of their revenue stream in the near future.

This is where the idea of SimCity and other video games returns. Ian Larson,  a Ph.D candidate at University of California-Irvine, points to the importance of socialization and digital community design in gaming. According to Larson, the intentionality around communal points in video games, which can serve as hubs to find other players for cooperative missions and objectives, emphasizes the importance of community rather than retail experiences.

“You can conceivably have a shop pop up to a player at any point, that’s like a thing that you could enable, but there’s a design choice,” Larson said. Instead, “a lot of these games have these places to be the communal hubs. So it’s a choke point for players to go to wherever, interact with other people. They’ll have to continually go back to these places.”

But virtual interactions will only go so far, and at some point, it’s more important to be live and in person, according to Edward Glaeser, an economist and professor at Harvard University. That sentiment was echoed by University of Washington’s Margaret O’ Mara, a history professor who specializes in urban history and technology.

“There’s so many iterations of urban utopias that idealize,” and try to determine human behavior, O’Mara said. “And it doesn’t really work out that way, and I think that’s fine. A virtual space can’t replace a city in a physical space.”