Authors
Authors
Claire Wallace
Fai Kung
Frederick Knottenbelt
Welcome to the metaverse
Adopting this literal approach to the metaverse means it is a combination of three elements. First, it is a technology that enables the digital content to be laid over the real world. This is similar to augmented reality (AR). A simple example is the popular smartphone game, Pokémon Go, although in the next iteration of a metaverse, this technology would be enhanced. Digital content is combined with the real world. Second, the metaverse applies a hardware device that enables the real world to be interactive. Digital content is applied so that users can control content displayed virtually and interact with it within a real-life space. Third, it is information about anything and everything in the physical world (for instance, an area, a shop, or a product) and knowledge about the user (such as the user’s schedule, location, habits, and interests). This information will be obtained from the Internet and from machines learning about a user’s everyday actions. A simple example of a device learning based on a user’s every day activities is Siri (on iOS) and Alexa (on Amazon). Real-time information is obtained instantly and virtually through the device into the physical space to optimise a user’s experience, while in the background data is being collated and applied.
A less literal but no less relevant approach to understanding the metaverse is the application of real- world characteristics to a purely online environment. In the same way that digital content can be applied to the real world, a metaverse environment can apply real world features to a virtual environment. For example, players interacting in a virtual gaming environment could walk around a virtual London or New York city, seeing digital depictions of real-life streets and buildings. You can visit a virtual Apple store to browse and buy digital depictions of Apple products that can be delivered, in real life, to your actual physical home. In many respects, this would be only an extension of what we know today as traditional e-commerce. However, as visual technology and design capability improves – driven by hugely powerful game engines such as Unreal or Unity – brands can create metaverse environments that not only replicate a real- life experience, but can improve it. There may be no line outside the virtual Manhattan Apple store when a new product is launched.
The idea of replicating real-life environments in the virtual world is not at all new. After all, Second Life still exists. However, modern-day gaming environments have moved the metaverse far beyond the clunky, socially awkward and often avatar-limited 3D block worlds prevalent at the turn of the century into entirely new, ever-evolving creative online habitats. The critical difference between the metaverse then and the metaverse now is a user’s ability to create. Games such as Minecraft, Roblox and Fortnite have changed the way we think about being online. Parents wonder why their children spend so long in these metaverse worlds, and the answer is not that the games themselves are so engaging and the products are so well programmed. Rather, it is because people are interacting, creating and entertaining each other. Whole mini-industries have evolved and exist around these worlds; people are paid in the real world to create virtual products on Minecraft. Real life rock stars fall over each other to create and perform virtually on Fortnite. Millions of people participate in events that happen only in these metaverse environments.
How does the metaverse work?
A device is highly likely to be necessary to connect the user to the metaverse. This device might be a pair of goggles, a head-mounted apparatus with a camera feature, or a new invention we have yet to see. Such devices are not critical to joining in the metaverse, but definitely can amplify the experience. “Wearing” a device will connect the user to the metaverse by integrating all of the elements and displaying the interactable virtual objects in real life. Applying this concept to everyday life, you wake up in the morning, put on your goggles, and you enter the metaverse. Sounds like science fiction? Not really; after all, this is what Google Glass was originally intended as.1 As you walk down the street, virtual information you can see and interact with will appear. It may be that you are walking to the train station and a virtual message notifies you of severe train delays. You can then select to go by an alternate route, which will be quicker – perhaps by bus or car pool. The interaction will mean that you are able to react to the virtual objects; everything is displayed in real time, in front of you, in the physical world. Imagine you are Tony Stark. You talk to your personal artificial intelligence (AI) assistant, who will find and show you the information you need virtually, in the real world. You can then view, click through, or act on those objects.
While such an advanced reality may be disconcerting, the fundamental elements of it are already widely adopted through mobile technology. Your device knows you, it knows where you are, and when. While the visual interfaces may change over time, the underlying capability needed to combine the physical and virtual world has existed for over a decade.
In the purely online world, the metaverse works by offering an escape from reality. Users can embark on adventures within Fortnite, and can – if they so choose – lead an alternate life. The significant shift in recent years has been the introduction of real-life elements into this escapist paradigm. Want to watch a movie within Roblox? Want to buy some sneakers while playing Grand Theft Auto? Want to see the latest live performance by a K-Pop band on TikTok? It is this migration of commerce and interaction online and into virtual environments, and the increasing confluence between virtual and real-life, that drives the metaverse.
What are the commercial applications of the metaverse, and who will benefit from it?
The metaverse will alter the way we act, socialize, work, and live our lives. Just some of the potential commercial applications are discussed here, but there are business opportunities for participants in every sector, from consumer-driven industries, such as retail and events, to manufacturing, construction, and beyond.
Purchasing items can be instantaneous. When you see a product in a store or on the metaverse, you will not need to open an app or even touch your smartphone.
Products can be purchased and prices can be compared through one account and in one place. This increased connectivity means that goods will be more accessible, and businesses will be able to sell their goods worldwide –regardless of the geographic location of the stores.
The reach, immediacy, and interactivity for businesses and celebrities will be significantly increased, with greater opportunity for collaboration. Consumers will be able to interact with brands directly. User engagement will be higher, which is likely to have a positive commercial impact if used properly. Exposure for brands and celebrities will increase, and there might also be the potential to own or sell virtual space in the metaverse.
There will be further emphasis on digital goods and property such as non-fungible tokens (NFTs). Items that can be traded can become more marketable because they are not prone to any wear and tear. For gaming, the players can expect more interactive experiences and connected game worlds. An item or skin purchased in one game may be used in another game or may be traded. Social experience will also change as virtual cinema will enable private viewings with friends. As the way we meet, work, and socialize will change, there will be new ways to monetize for many different industries, in particular, media, social media, technology, and retail. Intellectual property will become an important consideration as there will be different means of creative work.
Ultimately, consumers will gain most from the metaverse as information, products, entertainment, and social experiences are enhanced and more accessible. Hardware technology companies and software development companies will dominate the technology market. The demand to provide hardware and software for the metaverse will drastically increase. Businesses will have the opportunity to create their own place in the metaverse. Brands and celebrities will have more exposure to wider audiences. The capability to offer richer, more targeted commercial promotions and experiences to consumers will increase.
And finally, how could we forget? There will also be a need for legal advice due to the uncertainty of the law and regulations around the metaverse. As we write, there is huge demand for advice in areas such as data protection, privacy, and advertising regulations – and to ensure that commercial enterprise intellectual property assets are protected as the virtual and real world converge. This explosion of interest in ensuring that real- world laws are effectively translated into the virtual world will continue to challenge lawyers and lawmakers for years to come.
Who is building the metaverse?
Perhaps one of the biggest business use cases of the metaverse today is found in the gaming industry. Games like Fortnite and Roblox give us an insight into the potential of the metaverse to change the way that users engage with their digital and physical worlds. It is no surprise then that many of the big names in the gaming industry are also at the forefront of technology and development in this area.
Take Roblox as just one example. The gaming company, which went public in March 2021, set out in part in its prospectus its vision for the company and the adoption of the metaverse. The goal for Roblox – as computing power, high bandwidth Internet connections, and human interface technologies improve – is to create a pervasive human co-experience platform that allows users to connect, learn, play, and work together (and even to build an economy based on its own currency, Robux). This is arguably the next iteration of Linden Labs (creators of Second Life), which also created its own currency and which at one time had a GDP bigger than some small countries.
User experience in this context is just one component. As alluded to above, the word “metaverse” is derived from the prefix “meta” (meaning beyond) and the stem “verse” (meaning the universe). For the proposition of the metaverse to reach its true potential, critics agree that a number of key attributes must exist, including being the following: persistent; able to provide live, synchronous experiences; interoperable; and value creating. Although it is a point of debate, this means that the metaverse is unlikely to have a single entity building it or operating it, with instead many stakeholders (individuals, commercial enterprises, governments, etc.) contributing to its existence – much like the real world.
This makes sense. The metaverse, as with the present day Internet, demands and creates opportunities for new technology, products, service providers, content creators, standards and protocols, rules and regulations, and more, which in turn requires a community of stakeholders to build. Naturally though, many of the giants in the technology industry today, such as Microsoft, Facebook, and Unity, will likely have a (big) role to play – from Microsoft’s AR headset HoloLens, Facebook’s recent investment in VR and immersive technology with its purchase of Oculus VR, or Unity’s significant investment in the concept of digital twins.
There is no general consensus on how the metaverse will definitely work in the future, nor who will build it or who will “own” it (if anyone). But what can generally be agreed on is that it will exist and is no longer just a conception of science fiction. Watch this space, but don’t hold your breath for a big bang – the metaverse will develop iteratively over time as capabilities evolve and synergies are established.
- Google Glass is now largely an enterprise product, but thriving and on its second release.
Authors
Authors
Claire Wallace
Fai Kung
Frederick Knottenbelt