The Future of the Digital World Opened Up by the Metaverse

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At Meta Platform’s fourth quarter 2021 financial results briefing, CEO Mark Zuckerberg and others mentioned Metaverse 11 times. 1 Microsoft mentioned the Metaverse seven times on its earnings call, and Nvidia five times. 2 But they are not alone. Over the past six months, companies around the world have used the term “metaverse” more than 240 times during earnings announcements. 3Why are so many companies obsessed with this term? That’s because many expect the Metaverse development to emerge as a game changer for the Internet, creating a multitrillion-dollar revenue opportunity for today’s major platforms and tech giants. Four

By the way, what exactly is the Metaverse? Why is it considered promising as the next-generation Internet? Which segments are most lucrative to benefit from this evolution? In this article, I would like to explore and delve deeper into how the Metaverse will reshape the future of the Digital World and how we experience it.

Important point

• The Metaverse is a situation where users enter the Internet and exist virtually. The Metaverse features real-time persistence, economic systems, communities, digital avatars, and accessibility across multiple devices.
• Investors see great potential in early versions of the Metaverse that are already out there and have had a short but successful track record. Metaverse based on a distributed open architecture platform that utilizes blockchain technology is expected to be the most successful in the future.
• As the Metaverse continues to develop, it will bring revenue opportunities to companies in various industries, especially those involved in building hardware and software for VR (virtual reality), AR (augmented reality), and MR (mixed reality). It seems.

Metaverse definition

In today’s Internet, digital platforms typically support real-life activities. For example, buy something from Amazon and have it delivered to your home, share a photo from your last meal out on Instagram, or buy tickets online for a concert at Madison Square Garden with your friends. I go out to work.

In the Metaverse, on the other hand, digital platforms primarily support experiences in the digital world. Virtual reality headsets allow you to dive into highly immersive spaces where you can work, play video games, buy digital items, socialize with friends, and consume media. increase. The Metaverse is not a technology per se, but a vision of new ways of interacting with our world. Meta Platform’s Zuckerberg succinctly describes the Metaverse as “a virtual environment where you can spend time with others in a digital space.” Five

Broadly defined, the metaverse has six characteristics:

• Identity: Users can use their avatar to represent whatever they want to be while existing in the digital space of the Metaverse. To quote the line from the sci-fi movie “Ready Player One,” which depicts an infinite metaverse called “The Oasis,” “Everyone can do anything, so they come to the oasis. And they can be anything, so they stay. Tall people.” , beautiful people, scary people, different genders, different creatures, live action, anime, it’s all up to you.” 6
• Multi-Device: A key feature is the ability to access the Metaverse from anywhere, including smartphones, PCs, and tablets. One area where significant progress is expected is in immersive VR experiences that allow users to enter computer-generated environments and interact with virtual objects using head-mounted displays. On the other hand, we believe that a simplified version of the metaverse using conventional screens and devices will also survive.
• Immersive: A truly immersive experience stimulates all human senses: sight, hearing, touch, smell and taste. Currently, VR is centered on surround sound and images. Next-generation VR devices, such as haptic bodysuits and omnidirectional treadmills, provide physical sensations through electrical stimulation as users move freely through digital environments.
• Economic System: A fully developed Metaverse has a functioning economic system that allows users to earn and spend using digital and fiat currencies. Early metaverses with online economic systems include the gaming platform ‘Roblox’ and its currency ‘Robux’. Users who purchase Robux can use it to purchase experiences and items for their avatar. Developers and creators can create engaging experiences and items that users will want to purchase and earn Robux, which can be redeemed for fiat currencies such as US dollars.
• Community: At Tavers, users are never alone. Users interact with others and share their experiences. Looking at early forms of the Metaverse, video games, enabling social experiences seems to be a core feature of popular titles. According to Rob Kotick, CEO of Activision Blizzard, players who come in groups with friends spend three times more time in-game and spend roughly three times more money in-game than other players. Pour into the content. 7
• Real-Time Persistence: The Metaverse Development solutions persists in real-time and the experience cannot be paused. That is, it continues to exist and function even after the user leaves. Unlike other digital experiences, it focuses on the continuous development of the virtual world itself rather than the user.

Potential Revealed by Early Metaverses

The Metaverse is not a concept about the future world. An early version already exists. At Epic Games’ Fortnite, virtual concerts of Ariana Grande and Travis Scott were held, and users participated as digital avatars. The success of such events is staggering, attracting millions of fans far beyond the live show.

As companies invest more in building metaverse-related initiatives, they should remember that what is called the “metaverse” is not necessarily a centralized monopoly. As the Metaverse develops, the current experience is more centralized and specialized, but ultimately we aim to be fully decentralized. In the Metaverse drawn by “Ready Player One”, we have abandoned the real world in search of one infinite virtual world, but unlike this, in the world we live in, multiple Metaverses are expected to emerge. .

Metaverse Expected to Move from Closed to Open Architecture

Currently, the Metaverse experiences provided by companies mainly use closed-architecture systems, and their respective software and hardware are not compatible with other companies’ platforms. Platforms are often designed with different primary use cases in mind, such as gaming, work, shopping, and social.

Ultimately, the most successful Metaverse platform is expected to evolve into a more open architecture in which many, if not all, users, developers, and businesses can participate on an equal footing.

An example of a truly open metaverse is a decentralized virtual reality platform powered by blockchain technology. Such concepts already exist in Decentraland, Somnium Space, Sandbox, etc. built on the Ethereum blockchain. Unlike other virtual worlds and social networks, no single agent has the power to change the rules of the software, land and currency economies of these virtual worlds. Community members can create, experience, and monetize content and applications. Community members may also be able to buy/develop/sell land, but as in the real world, land is finite and its value goes up.

Users only need a VR set, a smartphone or PC, and an internet connection to participate. But the next generation of hardware, including haptic bodysuits, omnidirectional treadmills and brain-sensing wearables, will make virtual worlds more realistic.

Haptic Bodysuits: Wearables that provide tactile sensations to users in VR and AR environments through electrical stimulation and vibration motors, such as full-body, vest-only, or gloves. These suits mimic sensations such as hugs and raindrops, giving users a deeper experience.

Omnidirectional treadmill: Allows users to walk, run, and jump in any direction, allowing users to bring physicality to their VR experience. Today, even the best-in-class omnidirectional treadmills are only capable of walking. However, we believe that advances in technology will allow for a more immersive experience.

Brain-sensing devices: Devices that analyze, interpret, and convert their own neural signals into digital commands could finally allow users to control virtual environments in real time. In some advanced devices, machine-learning algorithms decode brain activity and recognize active visual focus, allowing the focused object to move within the virtual world.

Metaverse could be a trillion dollar business opportunity

Given its history, the metaverse could create a wide range of revenue opportunities across multiple industries. This trend will be particularly noticeable for companies involved in building hardware, software, semiconductors, platforms for creators, and economic systems related to VR, AR, and MR. If you include advertising, social commerce, digital events, hardware, content creation and development, and more, the opportunity could exceed $1 trillion. 9 Below, we list some of the fastest growing areas of the metaverse and some of the companies that are leading the way.

AR, VR, MR, and Spatial Computing: Companies involved in developing hardware and/or software for experiencing and interacting with augmented digital reality. Companies involved in VR (immersive simulation), AR (extending the real world with computer-generated information), MR (hybrid display that allows you to experience and operate the real world and virtual world at the same time), etc. These technologies can simulate or relay visual, auditory, tactile, and motion information.

An example of a VR set is Meta Platforms’ Oculus Quest. Combined sales of Oculus Quest 1 and 2 devices launched in 2019 and 2020 are estimated to reach over 10 million units. 10 Meta Platforms believes that exactly 10 million devices are needed to have a sustainable and profitable ecosystem for developers, so this sales figure is notable. 11 App development in the VR ecosystem lags far behind other types of devices such as smartphones, and there is currently a lack of quality content. As the number of VR users increases, the incentives for developers will also increase.

Conclusion

The Metaverse is still in its infancy, just like the Internet used to be. However, the underlying infrastructure for the Metaverse is in place, and many companies are becoming more and more willing to participate, both verbally and in the form of capital commitments, in driving it forward. Consumer appetite for this next-generation Internet is expected to grow as each one is perfected and becomes more accessible. I believe that the key to developing the Metaverse development services is to spread awareness that it is an immersive real-time sustainable economy. The Metaverse can be a place for leisure and entertainment as well as a place for economic development. While it will be years before a fully immersive metaverse experience becomes ubiquitous, Global X believes early-stage investment opportunities are already emerging.