The metaverse: a mega opportunity
Fancy going for a run with an old friend along the banks of the Seine on a balmy summer’s day? It may be winter, and neither of you live in Paris, but that should not stop you. Welcome to the world of the metaverse, where the physical and digital worlds coalesce across virtual and augmented reality (VR and AR). It is a place that provides a sense of immediacy and immersion – a shared virtual environment that could be the successor to Web 2.0 over the next five to 10 years. The metaverse is best understood as the evolution of the Internet in a more spatially immersive, decentralised, compelling and frictionless 3D web.
The metaverse concept is gaining particularly strong traction among Gen Z – the generation born from the late 1990s to early 2010s, which now represents almost a third of the global population. As true digital natives, this age group is already at home with virtual environments through remote learning, streaming and social media platforms, including Instagram and Snapchat, as well as through video games, like Fortnite and Roblox, where players can imagine and create their own avatars. The metaverse is definitely not a “one winner takes all” model and no one can build it on their own. Many of the big tech companies are also exploring how to enhance their product offering. Broadly speaking, we can consider four key layers of technology required to enable us to access the metaverse, and which have strong potential for further growth and development:
Hardware: VR headsets and glasses put us into an immersive, 3D digital environment. Meanwhile, smartphones allow us to access AR, where digital graphics are overlaid on reality. Smart AR glasses and headsets can also connect us to the metaverse with sensors.
Software: The virtual world covers all aspects of human activity – including socialising, shopping, education and work from anywhere – through software applications. Gaming and online entertainment currently provide the best experience today in the metaverse. Increasingly, there is the opportunity to play, build, own, and monetise the virtual experience through in-game money as well as virtual goods, art, real estate and more.
The Cloud: We need ever more powerful computers to run the software needed to enter the metaverse (powered by ever more advanced semi-conductors). Datacentres are also essential and the largest datacentre providers are well placed for technological advances in the metaverse.
Infrastructure: Better operability of our networks, increased bandwidth and reduced latency will all increase the reliability of the metaverse universe and, above all, the interoperability – across different companies and their platforms.
The appeal of VR and AR tech to the retail industry stems from its ability to make products on a screen more real with images that can be rotated, enlarged, and experienced interactively. Traditional retailers are starting to explore the potential of virtual changing rooms. Similar possibilities include virtual test drives of cars and holiday-accommodation previews.
The metaverse is also giving rise to new types of non-tangible products that only have value in the digital world. The most popular are non-fungible tokens (NFTs) – digital assets that can include art, real estate, sports memorabilia or clothing. Blockchains and cryptocurrencies will play a key role in the metaverse. All layers will impact digital assets, financial technology and services through a number of innovations including the technology that is used to build Web 3.0 – which includes blockchain based cryptocurrencies and NFTs.
Opportunities exist if you separate the volatility of the crypto asset class from the underlying technologies such as blockchain, where the developments in real world applications can be a game changer.
For all this to really take off, improved digital infrastructure is crucial. The biggest challenge will be interoperability to be able to jump seamlessly from one world to another and keep the same virtual identity (i.e. ownership) no matter which world we’re in. Cross-platform play between consoles and PCs already works and exists as proof of concept like iOS and Android for smartphones, or the Mac Operating System (OS) and Windows for PCs.
We have come a long way from the world wide web but for mainstream adoption of the metaverse it still needs a catalyst for it to go to the next level, similar to the “iPhone moment”, where the iPhone showed the world that there was another way to think about the phone. Web 3.0 is so much more than just the metaverse. It may look and feel like Web 2.0 but the ownership, trust and governance with the content creation will significantly differ and above all, will be driven by a generational shift empowering these innovations.
The digitalisation of our world, it seems, is only just beginning.