Research

An alternative REALITY?

Trying to investigate something that technically doesn’t yet exist is difficult. Luckily, there are already hints of what the metaverse could be, as OPI’s Michelle Sturman finds out…

You’ve likely heard the word ‘metaverse’ mentioned recently, probably related to Facebook as it generated headlines late last year by rebranding to ‘Meta’. According to CEO Mark Zuckerberg, the metaverse is the embodied internet where you’re in the experience, not just looking at it, and you can do almost anything imaginable. He believes the metaverse is the successor to the mobile internet.

In the company’s Q4 2021 earnings call, Zuckerberg said the metaverse – through its Reality Labs division which includes augmented (AR) and virtual reality (VR)-related consumer hardware, software and content – is an investment priority. This will equate to billions in spending.

He added that the focus will be on the foundational hardware and software required to build “an immersive, embodied internet that enables better digital social experiences than anything that exists today”.

Meta may seek to dictate the direction of the metaverse, but as it stands, there is no true definition of the concept because, in reality (pun intended), no one really knows what it will look like or how it will work.

Investopedia offers a pretty good description: “As the metaverse grows, it will create online spaces where user interactions are more multidimensional than current technology supports. Instead of just viewing digital content, users in the metaverse will be able to immerse themselves in a space where the digital and physical worlds converge.”

WHAT DOES IT ALL MEAN?

Undertake any research into the metaverse and you’re likely to come across Matthew Ball, venture capitalist and essayist – well worth reading, especially his seven core attributes of the metaverse – who is often cited by those currently building or investing in this version of the internet.

As such, his definition of the metaverse carries weight: “The metaverse is a massively scaled and interoperable network of real-time rendered 3D virtual worlds which can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments.”

He also notes it is often “misdescribed” as virtual reality, which is actually just a way to participate in the metaverse. Nor is it a user-generated virtual world or a video game. Accessing the metaverse can be done through mobile or online, although the more immersive encounters will require VR and AR.

However, there is already an inkling of what a non-VR, web-based metaverse could be like. Early explorers of the World Wide Web almost 20 years ago will remember Linden Labs’ Second Life – which still survives today – a multimedia platform where you created an avatar and inserted yourself in an online virtual world.

Those with children and/or teenagers will likely be familiar with the user-generated platform Roblox, or the massively popular game Fortnite. The latter is owned by Epic Games which, incidentally, last year announced a $1 billion funding round to support its long-term vision for the metaverse.

REALITY BITES

Virtual reality has been used for some time in gaming and consumer sales are expected to outpace enterprise spending. ARtillery Intelligence, which chronicles the evolution of AR and VR, estimates the sector will rise to $22.4 billion in 2025. Last year, consumer spend was $5.67 billion, driven by gaming, and enterprise was $3.44 billion due to its relatively narrow use.

Originally hitting the limelight through Niantic’s Pokémon Go, augmented reality is currently

The metaverse is a massively scaled and interoperable network of real-time rendered 3D virtual worlds

used for many applications to overlay digital content onto the physical environment. Mobile apps such as Google Lens or Live View in Google Maps are good examples. According to ARtillery Intelligence, today, around three billion smartphones are compatible with some type of AR, which will ultimately be boosted by the advent of 5G thanks to its speed, location accuracy and edge computing (for more on 5G, see Research, OPI January/February 2022, page 44).

As it stands, no company has so far managed to crack the AR glasses market, although this could altogether change with rumours of Apple’s foray into the sector. Those familiar with Apple’s movements suggest a headset will be released first, followed by glasses.

ARtillery Intelligence projects AR glasses spending to increase from a paltry $1.59 billion in 2020 to $17.7 billion in 2025, with enterprise spending constituting the overwhelming majority (89% by 2024).

According to The NPD Group, meanwhile, sales of VR/AR hardware and accessories during the five-week holiday period (21 Nov-25 Dec 2021) in the US soared in unit and dollar sales, up 180% and 153%, respectively, over the prior year. For FY21, growth was only slightly lower, up 163% in unit sales and 137% in revenue.

Ben Arnold, Executive Director and Technology Industry Analyst for NPD says: “As new devices become available, and the consumer base has an opportunity to grow, we expect positive momentum in the year ahead – starting with 32% revenue growth in the first half. The metaverse, VR/AR and smart glasses will be areas to watch in 2022.”

BUSINESS BUILDING

Definitions will change as the metaverse develops and subsequently evolves, but the building blocks and components already exist. Cryptocurrency, blockchain, non-fungible tokens (better known as NFTs), avatars and holograms are all expected to play a part in terms of the metaverse becoming a fully interactive world. This will create social, education, entertainment, commerce, creative and business opportunities.

The metaverse also touches on the online business meeting phenomenon, which has seen so much traction during the COVID crisis. Meta, for instance, has launched a beta version of its collaborative workspace tool, Horizon Workrooms, which works across virtual reality and the web. It offers features such as mixed-reality • Mark Zuckerberg’s keynote introducing Meta and the metaverse: https://www.facebook.com/Meta/videos/577658430179350 • Meta Horizon Workrooms: https://about.fb.com/news/2021/08/ introducing-horizon-workrooms-remote-collaboration-reimagined • Microsoft Mesh: https://www.microsoft.com/en-us/mesh • Watch Ready Player One: Steven Spielberg film based on a book of the same title by Ernest Cline. • Read more from Matthew Ball: https://www.matthewball.vc/allf/ forwardtothemetaverseprimer and https://www.matthewball.vc/all/ themetaverse • Highly recommended read: The Immersive Reality Revolution by T.P.

Ffiske – available as a PDF by subscribing (free) to The Immersive Wire newsletter https://www.immersivewire.com

desk and keyboard tracking, hand tracking, remote desktop streaming, videoconferencing integration and avatars.

Not to be outdone, Microsoft has released Mesh for Microsoft Teams. Mesh “allows those in different physical locations to join collaborative and shared holographic experiences, with the productivity tools of Teams, where people can enter virtual meetings, send chats, collaborate on documents and more”.

PwC’s Seeing is Believing report states that AR and VR have the potential to deliver a $1.5 trillion boost to the global economy by 2030, as business benefits become apparent and the technology advances. 5G will further help to unlock the possibilities of AR/VR technologies, as will the advancement of haptic technology, which enables users to ‘touch’ things in a virtual world.

Breaking it down, PwC believes VR/AR represents a significant opportunity for businesses to create value and reduce cost in five distinct categories: product and service enhancement, healthcare, development and training, process improvements, and retail and consumer.

FUTURE OUTLOOK

According to a Market Research Future report (Global Metaverse Market Information by Component, by Platform, by Technology, by Application, by End Users, by Region – Forecast to 2030), the metaverse reached $21.9 billion in 2020 with a CAGR of 41.7% from 2021 to 2030.

The need for all-encompassing online communities for networking, news, entertainment, gaming, education and dating will boost growth, says the research firm. It also expects the hardware segment (AR/VR headsets, etc) to dominate the market as manufacturers look to improve user experience. Access to the metaverse will be led by mobile while, by application, the gaming segment will capture the lion’s share.

However, the report also cites personal privacy, competition and misinformation as potential restraints over the forecast period, with a warning of further challenges along the way involving, for instance, the threat of cyberattacks.

There’s a lot to figure out to make the metaverse a genuine and commercial reality, but with billions being pumped into its creation, it will happen no doubt. The details remain sketchy, however.

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