The term metaverse, first mentioned in the 1992 science fiction novel ‘Snow Crash’, currently refers to a digital world, which is guided by Virtual Reality (VR) and Augmented Reality (AR) devices. To simplify it even further, the metaverse is a network of 3D virtual worlds focused on social connections.
Some of the metaverse components are already available in the video gaming fraternity. In 2003, came a virtual world platform called Second Life which was developed by the San Francisco-based firm Linden Lab. Second Life gives its users features such as creating virtual avatars and user-generated content within the multi-player online virtual world.
Most of the initial projects catered to the gaming community. Games such as Active Worlds, The Palace, Habbo Hotel, World of Warcraft, Minecraft, Fortnite and VRChat all have been catered to the metaverse audience. Microsoft acquired AltspaceVR in 2017 and implemented the avatars and other elements of virtual reality into Microsoft Teams.
Facebook entered the arena a bit late as they launched a social VR world called Facebook Horizon in 2019. Two years later, company founder and CEO Mark Zuckerberg renamed Facebook “Meta Platforms”, with a commitment to developing the social media giant’s own metaverse.
Despite criticisms from Facebook whistleblower Frances Haugen, along with concerns over sexual harassment, Mark Zuckerberg has remained committed to developing the metaverse and pumping more capital into the project, despite facing a loss of over $10 billion in 2021.
While metaverse relies on digital currencies, with assets within the project traded as non-fungible tokens (NFTs), the application areas include workplaces, interactive learning environments, e-commerce, real estate and fashion.
A recent report from “NFTICALLY” cited a study from international consulting firm Analysis Group which stated that a proper 10-year growth path from metaverse will add some 1.7% or $440 billion (€417 billion) to Europe’s economy in 10 years. The study even says that in the best-case scenario, Meta will add some 2.8% to the world’s GDP by 2031.
Although the metaverse is still in the evolution phase, its impact has been felt in the formal economy in many ways.
Evolution in the field of hybrid work culture
While the concept of a formal workplace has a new member in form of a “Hybrid Work Culture” post-COVID, the metaverse is working extensively in this field to change the playbook.
Apart from IT and tech ones, most other businesses are opting for the solution by asking 50% of their employees to work from remote locations, in order to save operational costs. While FaceTime, Skype, Zoom and Google Meet have become the conventional communication channels between employers and employees, another issue has cropped up in form of the feeling of alienation among these remote workers, affecting their mental health and productivity in that process.
Meta has stepped up to this challenge with the concept of a ‘virtual office’, assisted by AR and VR. Here the employees, while working from home, will be able to feel the real-time office atmosphere. Microsoft too has unveiled its futuristic concept on the same topic, while sealing a partnership with Meta. The company’s HoloLens/Mixed-Reality tools will help businesses transition into the AR/VR phase. Microsoft’s Quest headsets, assisted by Mesh, will even allow the professionals to join their team meetings in Horizon Workrooms (virtual conference rooms).
Another innovation in the virtual office field has been avatars, allowing remote workers to virtually interact with their teams, apart from pulling off tasks such as PowerPoint presentations, organizing team meetings and trade fairs, training programmes, and everything virtually.
Not only Microsoft, but start-ups such as Teamflow, NextMeet and PixelMax are also offering avatar-based virtual office models to businesses as well. A Lenovo survey has reported that some 44% of its participating professionals are ready to work in virtual offices in near future. Another PwC study too has predicted about virtual reality being used in 23 million jobs worldwide by 2032.
Leaving imprints in interactive learning environments
As per a report from eLearningindustry.com, educators have the option of using the metaverse to build a virtual classroom and take the concept of online learning to the next level. In that case, students can use their avatars to interact with each other and with the teachers, just like how virtual offices work. Say for science students, a virtual practical lab can be created, where the students can come and put their theories into practice. Study rooms can be built where the students, using their avatars can study, socialize together, share notes, and play games, thereby enhancing the learning experience. By combining VR/AR tools, educational instructors can even create game-based learning activities for the students.
Will change the e-commerce field as well
A report from influencermarketinghub.com gives us the future of the e-commerce industry as the metaverse comes into play. The shoppers will be represented by their virtual avatars. They will have the option of going into digital shopping from the comforts of their homes.
Metaverse marketing will be the future for e-commerce players. Brands are already using augmented reality to showcase their products. With AR’s help, people can even try on clothes, shoes, and fashion accessories. With digital currencies steadily becoming part of the mainstream economy, buyers can use their crypto wallets to buy products in virtual product showrooms. The traders can even hold virtual product launches.
Talking about brands making the best use of metaverse, Gucci sold a $4,000 digital bag on Roblox. Spanish fashion giant Balenciaga, in collaboration with Fortnite, virtual outfits and accessories, catering to the customer avatars.
Coca-Cola and Samsung used virtual billboards within video games to advertise their products.
Even healthcare sector is betting big
Despite Meta being far from reaching its maturity stage, healthcare specialists are betting big on it, given its immediate scope in imparting training and education among workers in this sector, via the virtual route. The doctors can even hone their skills, especially in pulling off complex surgeries, as they can practice the methods in a simulated real-life operation table.
Another immediate application of this concept has been on the telemedicine front, especially for psychologists. Since 2020, due to lifestyle and economic disruptions due to the COVID restrictions, cases related to depression, anxiety, and addictive behaviours are rising. The concept of social distancing is adding more to the misery in form of bipolar disorder and schizophrenia. While it has been a difficult task for the specialists to attend to this large pool of patients physically, metaverse now presents a solution as it can not only help in the counselling process, but also guide the doctors in recreating situations in the patient’s mind, with the use of virtual reality and observe their responses in that simulated environment.
As per a Biz Buzz report, Dr. Daniel Freeman and his colleagues at Oxford University have already developed a VR system called gameChange, to treat various psychosis scenarios. Meta can be used in the telemedicine field in form of a 3D virtual office for the patients, making the whole affair even more personalised, smarter and informative.
AR and robotics are already getting deployed in surgeries. Neurosurgeons at Johns Hopkins reportedly used AR to remove a cancerous tumour from a patient’s spine. United Kingdom-based Latus Healthcare is developing a ‘virtual hospital’, whereas Apollo Hospitals is investing in metaverse too. Another healthcare platform GOQii is launching a health metaverse as well.
How about digital fashion?
A Cointelegraph report recently cited a study which stated that clothing lines with a digital-only presence are proving to be eco-friendly, compared to their physical counterparts, as they emit 97% less CO2 and use 3,300 litres of water less per item. The end result is these innovative businesses reduce their brand carbon footprint by 30%. Before sending the clothing collections into production, they can be used for modelling, sampling and marketing purposes, using digital means. The whole idea is referred to as digital fashion and yes, it’s prospering, if the stats are to be believed.
In 2022 alone, Adidas, Nike and Gucci generated some $137.5 million in nonfungible token sales alone. Italian fashion giant Dolce & Gabbana sold a digital Glass Suit, which fetched the company a record $1 million in 2021. The brand’s NFT sales collected some $6 million in total. Talking about Gucci, its Queen Bee Dionysus virtual bag was sold for $4,000, an amount bigger than the product’s actual valuation.
Explaining the phenomenon, Lokesh Rao, CEO of Trace Network Labs, a project enabling brands to explore Web3 products and services, told Cointelegraph that metaverse’s further growth will be directly proportional to the prosperity of the fashion industry.
While businesses can experiment with the design aspect of the clothes in the virtual world, they can even trade these products in open NFT marketplaces. The customers too can deploy their avatars to visit these virtual stores and compare the products before buying them.
Real estate industry also looking towards Meta
Believe it or not, the entire process of breaking the ground of the new construction to completing the project on time can be done through the use of immersive solutions such as AR and VR.
Entreprenuer.com in one of its articles on metaverse stated that an application can be designed for accurate mapping of the construction sites, enabling engineers and contractors to conduct virtual field visits from their offices. They can also take help from their social network to get inputs on design ideas, floor plans and other project-related aspects, thereby saving daily commuting costs.
Not only the project team can use augmented reality to chalk out floor plans and designs before going ahead with the construction activities, but they can also do accurate virtual modelling, as part of the interior decoration tasks, to visualize how the building will look from the inside. The clients, based on the virtual model, can give their input as well. Colour palettes, furniture, window alignments, and everything can be included in the 3D virtual rendition of the dummy room. A virtual tour of these will even give the consumers the likely impressions of the rooms in various climatic situations.
However, we should not overlook the fact that Meta is creating a sort of its own digital economy as well. Bloomberg Intelligence has predicted that the Metaverse market will reach around $800 billion in 2024. PricewaterHouseCoopers has even backed VR/AR sectors pumping some $1.5 trillion into the global economy by 2030.
Let’s discuss California-based IMVU as a case study to prove the above argument. The avatar-based social network, which has a monthly user base of over 7 million, allows its creators to sell their virtual products for the metaverse and generate around $7 million in form of monthly revenues. The company also has a team of developers, known as “meshers”, who are designing 3D templates, which can be customised as virtual products and sold online.
Is Metaverse recession-proof?
If recent reports are to be believed, Mark Zuckerberg-led Meta Platforms Inc. is planning to close one of its New York offices after scaling back its expansion in the city. While the company looks to restructure its operational teams, along with a hiring freeze to save costs, it will go for a budget reduction this year as well. Its revenue count has gone down by 4% since July, 2022, from $29 billion to $27.7 billion. Meta has cited the global economic slowdown behind the crisis, saying that the client companies were pulling back their digital advertising plans.
Still, Meta has exciting features lined up for this year
As per a recent Accenture survey, 71% of the participating company CEOs backed transformation into metaverse to have positive results on their businesses. Another JP Morgan report says that the metaverse will cover every industry in the next few years, thus creating a market opportunity consisting of yearly profits of over $1 trillion.
There are a series of metaverse trends to watch out for in 2023.
More and more lucrative virtual events
While close to 11 million 10.7M users have participated in Fortnite concerts online so far, Metaverse looks at this avenue as a profitable one, as it eyes yearly $800 billion worth of live events and advertisements from 2023 onwards. While the primary market for online game makers and gaming hardware will exceed the $400 billion mark in 2024, live entertainment and social media events will make up the remainder of the $800 billion profit benchmark. NFT tokens, and digital land plots in Decentraland Metaverse have generated over 75,000 sales for a total of nearly US$25 million so far and this area will get richer as well in the coming months.
Avatars to get sophisticated
While the current range of avatars comes from 2D to photorealistic ones, come 2023, this is to change as well, with Microsoft working on using artificial intelligence and responsive animation to make these avatars cater to various business environments. Apps such as Zepeto and OSUVOX too are working on these solutions.
3D Digital Twin Technology
Another invention to watch out for is 3D digital twin technology, aimed to transform the business and consumers’ experiences. Here an immersive 3D virtual office space will be created and this will be the accurate replica of the exact physical location of the company headquarters.
Consumers, on the other hand, can use the same technology on the digital fashion front, when it comes to visiting virtual clothing lines and trying out their products. Sitting from the comfort of their homes, they can select the clothes or the other consumer products they want to buy, while saving commuting costs.
Growth in NFT crypto projects
This year one can expect growth on the NFT front as well. NFTs or non-fungible tokens, which are tied to the blockchain, are used in a wide variety of crypto projects. A prominent example of it is Decentraland, a metaverse product, where NFT land sales have become a profitable venture. In the coming days, even the growing sector of digital art will get benefited from these NFT projects. Virtual art galleries, which have a market worth $2.4 billion, have emerged as an immersive medium where NFT exhibitions can be showcased for art collectors and admirers, within a state-of-the-art virtual environment.
Even though we can’t dismiss the news reports of Meta feeling the heat of the recession, the fact remains that Mark Zuckerberg has identified the future of his social media empire and despite periodic financial setbacks, is backing metaverse’s potential of changing the global economic landscape. Recent market surveys suggest a similar trend as well. The only thing that needs to be seen here is how the companies prioritize their digital transformation goals, amid an impending economic slowdown.