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2.3 Metaverse: merging of the physical and virtual worlds
The term metaverse can trace its roots back three decades to Neal Stephenson’s sci-fi novel Snow Crash. Since then, the term has been used loosely to describe the integration between virtual and physical spaces, building on the growing interest in virtual reality (VR) technology. In its latest iteration, the metaverse now refers to a scaled, virtual fusion of video games, social networking and entertainment that creates new immersive experiences for users. While the metaverse is still evolving, it has been proposed that innovation should be based on three foundational pillars in order for it to function effectively and be accessible for everyone (see Figure 21).
Figure 21 Three key pillars of innovation in the metaverse to ensure inclusive participation
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Decentralised
Community-driven protocols, absent central oversight and surveillance
Interconnected and interoperable
Open standards to enable real-time access to shared virtual worlds for unlimited users
Safe and trustworthy
Ensuring safety, cybersecurity and data privacy from the start and throughout the metaverse
Source: GSMA Intelligence
In some quarters, the metaverse may be viewed as another hype word for augmented reality (AR) and VR. It will also undoubtedly start as a niche service, given the connectivity and device requirements. However, the momentum behind applications seeking to incorporate AR and VR with social media and the cloud is very much real. Further, several leading tech companies have outlined long-term ambitions and strategies in this space. This highlights the potential of the metaverse to attract sufficient investment and innovation to eventually hit the mass market. Meta (formerly Facebook) is arguably the most vocal proponent of the metaverse. The company has earmarked $10 billion, which will be employed to develop the AR/VR headsets and glasses that could provide a dominant access point to the metaverse. Figure 22 highlights some of the recent activities by major players.
Figure 22 Examples of ecosystem activities around the metaverse
Microsoft
Nvidia
Qualcomm
Snap
Unity
Source: GSMA Intelligence Microsoft plans to acquire gaming giant Activision Blizzard in a $68.7 billion all-cash deal. The deal plays into a long-term vision for Microsoft as it aims to be a leading player in the metaverse, with gaming a key component of the future virtual experience.
Nvidia has built its Omniverse platform to be the ‘plumbing’ that can connect rich, shared virtual worlds within the metaverse. It is being used across a growing number of industries for projects such as design collaboration and creating simulations of real-world buildings and factories.
Qualcomm has announced a collaboration with Microsoft to expand and accelerate the adoption of AR in the consumer and enterprise sectors, with initiatives focused on chips and glasses.
Snap, owner of Snapchat, is building custom avatars and AR filters to overlay digital features onto the real world. In 2021, it unveiled the fourth generation of its smartglasses, known as Spectacles, making them available for developers to experiment with creating experiences.
Video game software developer Unity is committed to playing a supportive role in the building of the metaverse and to its content creators. Its acquisition of visual effects powerhouse Weta is widely viewed as a sign that it is exploring monetisation opportunities in the gaming vertical and beyond.
The metaverse has the potential to be wide-ranging, with applications in interactive and immersive use cases, particularly gaming, live entertainment, construction and manufacturing, retail and work. In November 2021, Hong Kong–based gaming platform The Sandbox raised $93 million from investors led by SoftBank’s Vision Fund 2. Meanwhile, Seoul has become the first major global city to develop its own metaverse platform for public services and cultural events, committing $3.3 million to fund the initiative. The platform is expected to be fully operational by 2026.
The role of operators
The metaverse presents a mixed bag for operators. In the 5G (and subsequently 6G) era, the metaverse could provide an opportunity to further monetise high-performance connectivity, in addition to reaping incremental revenue for new services. However, the demand on network infrastructure, especially with mass adoption, could be significant, resulting in additional capex to meet capacity requirements. A number of operators are already taking steps to maximise the opportunity: • SK Telecom has launched a new metaverse platform (Ifland), which provides a more intuitive user interface, allowing users to have a richer experience on Oksusu Social VR (the corporate segment is a key target). • AT&T and e-sports organisation 100 Thieves have collaborated to launch the AT&T Station, an immersive VR space located within the
VRChat platform. • Verizon made an initial foray into the metaverse at the 2021 Super Bowl, offering a virtual 5G stadium in Fortnite Creative. The experience let fans come together and interact with their favourite NFL players via games.
