To hear tech CEOs like Mark Zuckerberg or Satya Nadella talk about it, the metaverse is the future of the internet. Or it’s a video game. Or maybe it’s a deeply uncomfortable, worse version of Zoom? It’s hard to say.
It’s been nearly six months since Facebook announced it was rebranding to Meta and would focus its future on the upcoming “metaverse.” In the time since, what that term means hasn’t gotten any clearer. Meta is building a VR social platform, Roblox is facilitating user-generated video games, and some companies are offering up little more than broken game worlds that happen to have NFTs attached.
Advocates from niche startups to tech giants have argued that this lack of coherence is because the metaverse is still being built, and it’s too new to define what it means. The internet existed in the 1970s, for example, but not every idea of what that would eventually look like was true.
On the other hand, there’s a lot of marketing hype (and money) wrapped up in selling the idea of “the metaverse.” Facebook, in particular, is in an especially vulnerable place after Apple’s move to limit ad tracking hit the company’s bottom line. It’s impossible to separate Facebook’s vision of a future in which everyone has a digital wardrobe to swipe through from the fact that Facebook ally wants to make money selling virtual clothes. But Facebook isn’t the only company that stands to financially benefit from metaverse hype.
So, with all that in mind …
What is the Metaverse?
The metaverse is the name we’ve given to what we expect the internet to become: a collision between the physical and digital worlds, when VR and augmented reality bridge the gap between the physical and the virtual to interact intimately.
While this seems a bit vague, metaverse enthusiasts believe it will essentially be a 3D reality overlaying the real world, wherein people can shop, game and conduct business in shared virtual spaces.
For instance, Mark Zuckerberg describes the metaverse as “an embodied internet that you’re inside of,” where “creation, avatars, and digital objects” are central to self-expression and lead to “entirely new experiences and economic opportunities.”
Christina Wootton, the vice president of brand partnerships at Roblox RBLX +0.2%, sees things similarly. While Roblox is famous for their quasi-metaverse gaming worlds, she believes that the metaverse will be “an immersive place where people can come and connect with one another and have shared experiences. They can do things together, such as work, learn, play, shop, and experience entertainment.”
Why does this matter?
There are many potential applications for the metaverse, some of the early ones being online gaming, social networking, enterprise and retail. We’ve seen some recent metaverse events with Lil Nas X doing a virtual concert in the popular VR game “Roblox.” Travis Scott and Ariana Grande also held their own concerts in “Fortnite,” with Scott’s virtual performance drawing a crowd of 12 million and grossing some $20 million including merchandise. Down the line, we could see more businesses moving into the entertainment space to produce events or build platforms and tools for work collaboration.
“By having a massive company like Meta put a lot of resources behind this platform, it creates a jolt across the entire industry,” Kevin Cornish, founder and CEO of VR learning company Moth+Flame, said. “It’s exciting because it has the potential to bring more businesses who may have otherwise thought VR was out of their reach, into the mix in looking for some of the really cool work being done in the enterprise space.”
Andy Tian, CEO of Hong Kong-based social company Asia Innovations Group, describes the metaverse as a virtual world that “interoperates with the real world,” and the consumer applications range from socializing to self-expression. “There are many applications, but perhaps the most important at this moment is that it enables a virtual creator economy. It enables anyone to create anything virtual and be able to get paid for it by other users,” Tian said.
Clark Boyd, head of strategy at AI startup Cadeera, also points to retail as a potential growth area. With the virtual retail world, shoppers don’t have to physically go from store to store to find items — which gives them a lot more variety and saves time. “Right now, brands are selling virtual versions of their physical products in the metaverse. Next, we will see metaverse exclusives of clothing ranges, but there is so much more room for experimentation if we see that the economics of the virtual world are entirely different,” Boyd said.
In gaming, the future metaverse could also be a place for creators and gamers to make money as ambassadors or esports competitors. Many view gaming as the most developed part of the metaverse at the moment. From strategy to shooting games and VR chatrooms to multiplayer experiences, games are already offering an immersive environment that users find familiar.
Will It Be A Good Change?
It’s fair to say that the Metaverse has already created a buzz with tech fanatics and companies around the globe. However, many are still concerned that it may not be the best move, given that we have just come out of a global pandemic, and mental health issues among people around the world are at all all-time high after not being able to interact with friends for a long time. While the Metaverse does create a safe space for interaction, it still isn’t the same as meeting up with friends to play sports or go out for drinks, which could be the main reason why people would just stick to the real world.
However, the progression that it gives businesses is undeniably huge. It will allow for greater customer care, as customers will be able to put a face next to the people that they are speaking to, and will allow companies to get to know their customers on a more personal basis. The buzz has created an awful lot of excitement, and it is expected to shape the way we will live in the future, allowing for a faster-paced lifestyle for those involved.
Experts believe the Metaverse will undeniably be a good thing moving into the future, and could also have a profound impact on those suffering from medical conditions. They believe that physio work that many actively try and avoid after a major surgery could be just a small example. Experts have claimed that doing some light exercise in the Metaverse may be a good alternative for these people, as they will feel the long-term benefits without actually realising that it is part of their return to full health.
What’s the Takeaway?
Today, the metaverse is largely marketing hype – but so were computers and the internet when they first appeared. And in less than a century, humanity has grown from typewritten letters to AI-based marketing and business plans. Once the metaverse arrives, chances are that it, too, will thrive, just like the internet at large has.
But for now, as an investor, the key to profiting off the metaverse isn’t futuristic promises of connection and collaboration. In fact, investing in metaverse companies for the metaverse may still prove a questionable decision at this stage, as it’s likely that many companies will rise and fall to bring such an expansive collective vision to fruition.
Instead, you can invest in the metaverse without saying you’re investing in the metaverse by looking to the companies generating the real revenues: those invested in building the infrastructure and designing practical, real-world iterations.
For instance, Nvidia will likely play a strong hand in designing the artificial intelligence and semiconductors that will power the metaverse, no matter what it looks like. Gaming companies like Roblox and Epic Games may prove the creative minds behind the actual experience we share. And VR ventures run by the likes of Facebook, Microsoft, and Google have already granted us the first tools that bring us tangible access to the metaverse firsthand.
If you’re a big believer in the metaverse – or even if you’re not – the time to jump on the bandwagon to the future is soon, if not now. While some of the hype may die down as companies grapple with the nitty-gritty of marrying reality with the digital, those companies that tough it out and design the underpinnings of the metaverse stand to gain the most.
And when the time comes, their investors will celebrate right along with them.
See Also: Web 3.0