Is the Metaverse just about to invade the universe?
Author: Mohamed Sayed Fathy – Chief Information Officer, IT Department at EFG Hermes Holding
Metaverse is the buzzword nowadays. The Google search engine states that the word “Metaverse” was one of the most searched terms during 2021. Does the Metaverse have real potential, or is it only a fad that will vanish soon? People started to pay more attention to the Metaverse topic when kids game Roblox jumped to USD38 billion market capital on March 10th, 2021. Then when Jensen Huang, the Chief Executive Officer of Nvidia, announced that his company’s next step is to create a metaverse (SHAPIRO, 2021). And finally, when Mark Zuckerberg reported on October 28th, 2021, that he would rebrand the company with the new name, Meta. Since then, some people have started to voice that the Metaverse is not a straightforward concept; it’s only a place where kids can have some fun outside the actual or physical world. Others saw the Metaverse as the next significant evolution already underway (LEE, 2021).
To understand the concept of the Metaverse, we need to explore the evolution of the internet and how it emerged throughout the last forty years. In the late 80s and early 90s, the read-only Web was created, founded by Tim Berners-Lee to access the studies and documents stored on other researchers’ computers. A billion records were listed over the internet at a later stage, and people could access them in a read-only format, thanks to the World Wide Web. In the 2000s, web version 2.0 was created to allow bidirectional access to documents and information. During that time, and until this moment, people could access data, programs, and software. They connected through different programs started by MSN, Yahoo messenger, ICQ, moving recently to utilizing Facebook, Twitter, Instagram and LinkedIn. The following iteration form of the www will be web 3.0, and it will run on blockchain seeking more decentralization, trustless and permissionless platforms where the Metaverse will evolve.
Now we should be ready to answer what the Metaverse is. The Metaverse is our second universe; a three-dimensional virtual world inhabited by avatars of real people, coined by Neal Stephenson in his novel Snow Crash since 1992 (Kim, 2021). We can define the Metaverse in several ways, but you can imagine the Metaverse as the 3D version of the current web content. You can think of the Metaverse as not only a virtual space, but the interaction between our tangible and digitally-generated world. In the Metaverse, people/users will have their respective avatars live and experience an alternative life in the virtual space very close to the real life we live today in our physical world (LEE, 2021).
No single entity holds the Metaverse as a platform or even as a name. However, there are several cooperative ways where virtual environments and 3D web tools and objects are vital to our environment and have become constant elements of our natural life.
To go deeper and to have a better understanding of the Metaverse, let’s shed light on the technology pillars and the ecosystem of the Metaverse:
- Technologies that are mostly considered as enablers to the shift from regular Internet platforms to the Metaverse:
- Artificial Intelligence (Automatic Digital Twin)
- Extended Reality (Projection & Hologram, augmented reality, mixed reality, virtual reality)
- Computer Vision. (Localization, draw maps, body tracking, processing of images)
- Blockchain. (Storing, sharing the data, open / distributed ledger)
- Robotics. (Human-Robot interaction)
- Edge/cloud computing,
- Internet of Things (IoT, connected vehicles )
- Networks (5G, and all the network innovations)
- User interactivity. (mobile inputs, headsets, telepresence)
- Ecosystem and concepts like:
- Avatar ( The virtual self-appearance, look, and feel)
- Content creation (Authoring, multi-user creations)
- Virtual economy m-commerce or the Metaverse commerce. Digital objects trading, NFTS)
- Social Acceptability ( Privacy threats)
- Security & Privacy (Deep-fakes, the protection of my digital twin).
- Trust & Accountability (Auditing and governance)
The possibilities that are going to be introduced by the Metaverse are endless, and here are some examples that give you a glimpse of the Metaverse and where it is going to be:
- Second life is the same concept as Fortnight, but it is not a game. It’s a space that allows users to create their digital twins (An avatar), explore the world, interact with others, and trade services and goods using digital currency.
- Roblox is an online platform and storefront where users play games. Roblox however is not a game in itself; it is a place where people play games made by other developers. In this sense, it is more similar to the PC streaming platform than it is to any online children’s game.
- The Sandbox is a virtual universe that allows users to own and monetize their in-game experience. In the Sandbox, users can buy and sell land and assets using Non-Fungible Tokens (NFTs). NFTs are digital tokens minted on the blockchain network; they’re characterized as unique, indivisible, and non-interchangeable, proving your ownership with a specific digital asset (Howcroft, 2021).
- Decentraland is a type of Metaverse built on blockchain, where people visit buildings and meet one another virtually through their avatars. They buy and sell digital real estate like what happens in real life. Users spend millions of dollars trading digital assets in this virtual world using the Decentraland digital currency “MANA.” A land plot was sold in Decentraland last November in the fashion street at around a half-billion MANA, nearly equal to $ 2.5 Million. Some rumors disclosed that this plot would eventually be used to host several fashion events and concerts digitally. (Howcroft, 2021).
- Activision Blizzardis the world’s first third-party game development company producing and publishing titles for other companies’ platforms like Call of Duty, Warcraft, and Candy Crush. Microsoft announced the biggest acquisition in its history, acquiring Activision Blizzard at $ 68.7 billion.
Multiple brands are taking their first step on the Metaverse like, Facebook Meta, Disney, Hyundai – Roblox, NIKE- RTFKT, Gucci- Gucci Garden, Coca-Cola-Tafi, Louis Vuitton- Louis: the game, Balenciaga fashion house, Charli Cohen & Selfridges – Electric/City (UELAND, 2022).
The use cases of the Metaverse are not only related to the gaming or the retail sectors; it can also revolutionize the financial industry and bring unlimited potential across many sectors worldwide. Banks and financial institutions are already being disrupted by blockchain technology, digital currency, and the decentralized finance framework.
Now, ending this on a high note, Goldman Sachs Technology Analyst Eric Sheridan estimates that roughly 33% of the digital economy is being shifted to the Metaverse and expects a 25% market expansion. There is a $12 trillion opportunity in the coming few years.
What is your intake on the Metaverse? We at EFG Hermes Holding would love to know!
Howcroft, E. (2021, November 23). Virtual real estate plot sells for record $2.4 million. Retrieved from Reuters.com: https://www.reuters.com/markets/currencies/virtual-real-estate-plot-sells-record-24-million-2021-11-23/
John Smart, J. C. (2007). METAVERSE ROADMAP Pathways to the 3D Web. USA: Metaverseroadmap.org.
Johnson, A. (2022, January 7). A Digital Identity Fit For The Metaverse. Forbes.
Kim, J. (2021). Advertising in the Metaverse . Journal of Interactive Advertising, 5.
Kiourt, C., Koutsoudis, A., & Kalles, D. (2018). Enhanced Virtual Reality Experience in Personalised Virtual Museums. International Journal of Computational Methods in Heritage Science, 2(1), 23-39.
LEE, A. (2021, August 4). With the Metaverse hype cycle at full blast, experts take the long view. Retrieved from DIGIDAY: https://digiday.com/marketing/with-the-metaverse-hype-cycle-at-full-blast-experts-take-the-long-view/
Lee, L.-H., Braud, T., Zhou, P., Lin, A. W., Xu, D., Xu, D., . . . Bermejo, C. (2021). All One Needs to Know about Metaverse: A Complete Survey on Technological Singularity, Virtual Ecosystem, and Research Agenda. Journal of Latex Class Files, 1-66.
Lui, T.-W., Piccoli, G., & Ives, B. (2007). Marketing Strategies in Virtual Worlds. Database for Advances in Information Systems, 38(4), 77-80.
Management LabourNet. (2021, September 28). Retrieved from Management LabourNet: https://www.labournetblog.com/post/2018/02/13/strategic-human-resource-management
SHAPIRO, E. (2021, April 18). he Metaverse Is Coming. Nvidia CEO Jensen Huang on the Fusion of Virtual and Physical Worlds. Retrieved from TIME: https://time.com/5955412/artificial-intelligence-nvidia-jensen-huang/
UELAND, S. (2022, January 25). 12 Examples of Brands in the Metaverse. Retrieved from PracticalEcmmerce: https://www.practicalecommerce.com/12-examples-of-brands-in-the-metaverse