Metaverse: 1 year after, fad or future?
Metaverse: 1 year after, fad or future?
It all started when Mark Zuckerberg decided to change the name of Facebook to Meta in October last year.
Suddenly, everyone was excited about the promise of virtual worlds. Never mind that almost 20 years earlier, Linden-Lab had brought us Second Life, an online world where users could hang out, explore various digital spaces, design and trade items using the Linden dollar as the primary currency, sometimes as a means to generate real dollar income through sophisticated trading mechanisms. At the time, the corporate world was already getting in on the act, lured by new possibilities in communication and marketing. In 2007, Caisse d’Epargne was even one of the first banks to advertise on the platform, targeting young people in a cool open-sky lounge by the sea! Despite all this, the website struggled to attract more than a million monthly active users worldwide and subsequently fell into oblivion.
Far from worrying about it, enthusiasts now prefer to believe that the firepower of the flamboyant social network CEO (Zuckerberg is planning to invest $10bn annually in his Metaverse project) will actually make a difference this time..
Sadly, almost 12 months on and the hype is fading fast as suggested by a rapid Google Trends search…
Source: Google Trends
It is of course harder to find interest in virtual worlds when events bring us back to reality so brutally: the Ukrainian situation and the worst inflation choc of the past 40 years naturally take priority over our pixelated selves.
The most common representation of the metaverse is derived from Sci-Fi novels (Snow Crash by Neal Stephenson, 1992, and Ready Player One by Ernest Cline, 2011) or Hollywood’s imagery (The Matrix, 1999, Minority Report, 2002, Avatar, 2009…). It generally involves fully immersive, photorealistic parallel realities accessed through VR or AR interfaces, in which individuals go about their daily lives in the form of digital avatars to transcend the space-time limitations of their physical existence - but there is now rising awareness that this idealistic vision is probably more than decades away…
Experts at Intel claim that the Metaverse will need a 1,000-times increase in computational efficiency from today’s state of the art if it is to enable billions of people to evolve in 3D environments. This will in turn require new algorithms and software architectures to be put in place and more energy efficient materials and data networks to be used. Until then, our metaverse spaces will feel rather empty: fans will have to share virtual concerts and parties with up to 100, perhaps 200 individuals on the same server, far from the excitement procured by real-life crowdedness, as modern technology struggles to manage more. Similarly, animating complex sets of polygons in a massive multiplayer environment will remain hard to deliver when movement can randomly happen in any direction and at any given time…In the current state of our technical knowledge, this means poor quality, sluggish and cartoonish graphics that inevitably reduce the appeal of the proposed experiences in the mind of many potential users.
Beyond entertainment, one of the key premises of the Metaverse is that it can be a decentralised, fully interoperable world of freedom where users are in control of their identity, data, and digital assets. Indeed, the emergence of a blockchain-based Internet opens opportunities in that space but the gradual realisation that decentralisation may just be a form of re-centralisation has led many to question the quasi-philosophical principles of Web3. Interoperability is simply non-existent at this stage and still constitutes a technological challenge of the highest magnitude for developers. Meanwhile, Non-Fungible Tokens (NFTs) gave the false impression that everyone could become a billionaire at the simple push of a button. Graphic designer Beeple selling one of his chef d’oeuvre for $69.3mn certainly lent credence to the phenomenon. Luxury firms distributing virtual clothing items or sneakers worth thousands in a matter of seconds also helped give tangible value to these smart contracts. But it should be remembered that these excesses are often driven by private capital…
“You don’t own Web3, the VCs and their LPs do. It will never escape their incentives”
Jack Dorsey, CEO of Block Inc., December 2021
…and that, if NFTs are unique and rare, they don’t necessarily hold any value:
“For a NFT to be valuable and durable, it has to be found at the intersection of rarity and quality, of rarity and value, and there's rarity for sure in all NFTs, but I'm not sure there's value.”
Strauss Zelnick CEO of Take Two Interactive, November 2021
In some cases, and similar to what was observed last year at the height of the SPAC-mania, the strings are pulled by celebrities: Madonna, Justin Bieber, Eminem, Neymar Jr., Shaquille O’Neal (himself a serial SPAC sponsor) are all showing off their Bored Ape NFTs acquired for more than half a million dollars and there is no doubt that Snoop Dogg will quickly find his money's worth by opening a mansion in The Sandbox to a few privileged buyers of his exclusive tokens. However, this is hardly the definition of a mass market intent on democratising access to music and arts. It is a market driven by speculators and crypto-funds with very specific financial incentives.
With the recent collapse of crypto-currencies, the limitations of the model are becoming more apparent and there’s hoping that the Metaverse can reboot on a sounder footing.
We believe that this will likely materialise in the short term through very concrete applications targeted at the corporate world.
Ready worker one
Beyond the world of entertainment symbolized by video game platforms such as Roblox, Fortnite or The Sandbox, inaccessible collections of NFTs and the mirages of Web3, the metaverse offers boundless opportunities for the business sector.
A revolution in work practices
This parallel, persistent and shared virtual universe offers a more immersive remote work experience with the organisation of meetings in virtual rooms where employees are represented by their avatars. Microsoft has already positioned itself in this collaborative space with Mesh for Teams. The Redmond-based firm's videoconferencing solution features personalised avatars as well as augmented reality (AR) and virtual reality (VR), and will be available in 2D and 3D: each corporate user will be able to create a personal universe, integrating classic software applications (Excel, PowerPoint, Word), also data analysis applications (Power BI) and other collaborative tools.
The metaverse is also revolutionising the industrial sector (aeronautics, automotive, logistics, supply chain, construction, energy, smart city, etc.), with applications that have more operational implications, made possible notably by digital twin and AR/VR technologies.
Focus on digital twins
Digital twins are virtual representations of a machine, a process and even an entire organisation. They are constantly synchronised with the real world thanks to sensors and connected objects (Internet of Things - IoT) and are connected to a firm’s software applications, resulting in a constant, real-time exchange of information and data. This synchronisation with the real world offers an exceptional understanding of the copied object’s modus operandi and, in turn, the possibility to perform tests and simulations (i.e. what-if scenarios) and visualise solutions. For a firm, reducing uncertainty improves decision-making, optimises and automates processes, identifies areas for improvement, allows the scheduling of predictive maintenance, stimulates innovation, improves the quality of the financial data (costs, notably RoI) and, critically, facilitates the ecological transition. A firm can reduce its carbon footprint simply by scaling back travel, but also by using data analysis to improve the resource allocation and meet new environmental regulations. A digital twin allows remote access to all information concerning an industrial facility or a product, encouraging collaboration on projects, maintenance operations and remote training, in complete security and at a lower cost.
Metaverse: AR and VR delivering sensory experiences
While not absolutely necessary, virtual reality (VR) and especially augmented reality (AR) enrich the corporate metaverse by offering a new way of visualising and interacting with data. VR immerses the user in an entirely virtual environment, while AR superimposes virtual elements on the physical world, often via a smartphone or tablet, but increasingly via headsets or glasses such as HoloLens (Microsoft) or Magic Leap, allowing the user to be hands-free and move around with ease. For factory workers, AR will superimpose assembly instructions and advice directly onto a machine, making learning easier and safer. AR can also be used to display monitoring and diagnostic data related to a machine, facilitating repairs or upgrades.
The boom of this new ecosystem
Having a real ecosystem is fundamental for the development of the corporate metaverse, founded upon the combination of cutting-edge technologies (IoT, cloud, big data, data analysis/simulation solutions, 3D design and visualisation, AI, AR, VR) and wide-ranging expertise. There follows that partnerships are needed between big techs and start-ups, with the latter benefitting from the cloud solutions, huge databases, powerful data analysis tools and reputational clout of big techs, also from their vast network.
Challenges to be overcome to accelerate the adoption of metaverse technologies
Adoption of digital twin technology and AR applications does face challenges, notably with regards to data security, data confidentiality, data interoperability, low code/no-code development (for greatly accelerated, facilitated and cost-effective programming) and headsets (designing lighter versions with a better field of vision, longer charge batteries and improved ergonomics, bearing in mind these improvements are less crucial for business users than for the public at large). Huge financial investments are required to accelerate the adoption of these different technologies and put into place metaverse-related infrastructures. Finally, there needs to be efforts to educate the end-user market, notably chief digital officers (CDOs), about the huge possibilities offered by the corporate metaverse.
In coming years, the metaverse can be expected to impose itself as an essential paving stone in the corporate sector’s yellow brick road, i.e. its digital transformation, much as Internet has done over the past two decades.
For additional insight, please consult our various research publications on the topic.