The term “metaverse” was coined by Neal Stephenson in a science fiction novel almost 30 years ago. “Metaverse” is currently a major buzzword in the world of tech, business, and finance, and like all buzzwords, its definition is fuzzy and contested and means different concepts to different people.
Metaverse is a vision of a highly immersive and interactive shared world inhabited by avatars of real people that will enable billions of people to work, play, collaborate and socialize in entirely new ways. It will be driven by real-time, globally interconnected virtual- and augmented-reality environments and digital experiences that will make you feel that you’re really there, and feel like other people are really there with you, too.
Available individually and concurrently: Everyone can be a part of the Metaverse and take part in a specific event/place/activity simultaneously and with their agency in the Metaverse. Avatars are 3D representations of players. In the metaverse, users create customized avatars that can take on any physical characteristics and personalities they want. Your avatar can interact with other players, as well as with the platform.
For online game makers, social networks, and other technology leaders, the metaverse is the next big technology platform in computing after the world wide web and mobile. Mark Zuckerberg revealed in July 2021 that the company intends to construct a more maximalist version of Facebook that includes social presence, office work and entertainment. Facebook changed its name to Meta on October 28, 2021, reflecting its more significant commitment to creating a virtual environment known as a metaverse.
There are a few factors that have catapulted it to the forefront of the tech industry’s thinking in the past few years. Today we already have many of the different components that could make up a metaverse (like virtual shopping, games, casinos, and concerts), but we don’t have a platform that brings these pieces together and allows us to move around the entire “world” seamlessly, with the same avatar, explains Bernard Marr a world-renowned futurist.
The metaverse will also be persistent. It never “resets,” “pauses,” or “ends,” — it just keeps going endlessly. Players would be capable of doing virtually anything they want in the metaverse, they can start playing game together, stop and do something else and come back later to finish the game.
In the metaverse, everything needs to be interoperable. Digital assets, content, and data need to carry over from area to area and activity to activity. If you obtain a car in Porsche’s virtual store in the metaverse, you should be able to drive that car throughout the virtual world. Today’s digital world operates as if it were a shopping mall, with each store having its own money, unique ID cards, proprietary units of measurement for items like shoes or calories, and various dress rules, among other things.
The right technology is a critical part of creating a great metaverse experience. Few technologies closely associated with visions of the metaverse have matured. Now we have high-quality virtual reality headsets, better computers, augmented reality, and faster networks that are continually being improved to provide better metaverse experiences.
The metaverse requires compute and processing infrastructure that can support both big data flows and low latency. This includes chips & processors, 5G, cloud infrastructure, and edge infrastructure, vital to creating a seamless, lag-free experience in the metaverse. Intel claims that the metaverse will necessitate a 1000x increase in computational efficiency, including advancements in 5G and hybrid edge-cloud infrastructures.
Cloud infrastructure will enable metaverse companies, especially those hosting virtual worlds and experiences, to store and parse through the vast amounts of data they generate. They will require cloud computing to aggregate, store and analyze petabytes of data being generated from its applications.
Clouds alone will not able to provide real time low latency required for metaverse applications, such as utilizing hand-tracking sensors on a VR headset or processing commands during competitive gaming. Edge computing will be used for metaverse applications that depend on real-time responses, such as AR/VR and gaming. Edge computing enables data from low-power devices to be processed closer to where it is created — i.e., at “the edge.”
Companies are now providing hybrid cloud edge computing services. While cloud infrastructure handles workloads that do not require minimal latency, such as loading out-of-sight objects in a game, edge infrastructure handles inputs that need a very quick response, like player movements.
Another is the blockchain leveraging nonfungible tokens (NFTs) and cryptocurrencies to create blockchain-based metaverse startups. People can buy virtual items and real estate and create their own settings within the metaverse. One can take a virtual trip, buy digital clothing, go to a virtual concert in the crypto metaverse projects. The unhackability and immutability of blockchain are critical properties for any virtual reality technology to gain broad adoption. Hacks and data breaches are common, but if people are supposed to operate in an entirely online and virtual environment, the underlying platform on which they will be operating must be secure.
5G is the latest iteration of cellular technology that is providing seamless coverage, high data rate, low latency, and highly reliable communications. 5G wireless tech will power high-resolution metaverse applications — such as immersive worlds or gaming — by supporting reliable, flexible, and low latency networks for connected devices.
Access/interface (hardware): This layer includes hardware devices that allow people to experience the metaverse. Headsets (VR): These companies are developing VR goggles — currently considered the main entry point to metaverse applications. These devices provide visual and audio content to users to immerse them in a digital setting.
New metaverse-focused hardware — e.g., virtual reality (VR) headsets and augmented reality (AR) glasses — is being designed to support intense workloads related to high-fidelity graphics and artificial intelligence (AI) on smaller, lightweight devices. Varjo, for example, uses lidar and computer vision to bring depth perception, eye-tracking, and hand-tracking to its VR headsets.
Smart glasses (AR): Companies here are developing glasses or contact lenses with AR capabilities.
Haptics: Haptic startups are developing technology to bring the sense of touch into virtual worlds. Some startups, such as HaptX and Sense Glove, are developing gloves that grant virtual objects tangibility. Bridging micro-vibrations, pneumatic systems for force resistance, and motion tracking, this technology can give the impression that digital objects have texture, stiffness, and weight. In the future, haptic technology may extend well beyond a person’s hands. Scotland-based Teslasuit is developing complete bodysuits to provide whole-body haptic feedback and climate control in virtual environments.
Holographics: These companies use light diffraction technology to project 3D objects into physical spaces. These holograms, like augmented reality, bring digital experiences into the physical world. Base Hologram is using the tech to bring popular artists like Whitney Houston and Buddy Holly back to the stage, while Israel-based RealView Imaging renders holograms of a patient’s internal organs to help with surgical planning.
New chips will also be required to power these critical low latency computing networks. Qualcomm chips stand out in this arena — the tech giant claims its Snapdragon chips have been used in over 50 AR/VR devices, including popular VR headsets like Meta’s Oculus and HTC Vive. Qualcomm also recently announced the launch of its $100M Snapdragon Metaverse Fund, which will invest in the extended reality (XR) space.
The metaverse could represent a $1T market by the end of the decade, according to CB Insights’ Industry Analyst Consensus.
The global Metaverse revenue opportunity could approach $800 billion in 2024 vs. about $500 billion in 2020, based on Boomberg analysis and Newzoo, IDC, PWC, Statista and Two Circles data. The primary market for online game makers and gaming hardware may exceed $400 billion in 2024 while opportunities in live entertainment and social media make up the remainder.
The primary Metaverse revenue opportunity for video-game makers consists largely of existing gaming software and services market as well as rising sales of gaming hardware, based on our analysis. Within this primary market opportunity that may reach $412.9 billion in 2024 vs. $274.9 billion in 2020, software and services revenue as well as in-game advertising revenue accounts for about 70% of the total market size.
Online game makers including Roblox, Microsoft, Activision Blizzard, Electronic Arts, Take-Two, Tencent, NetEase and Nexon may boost engagement and sales by capitalizing on the growth of 3D virtual worlds.
The ability to bring live events such as concerts, film showings and sports into 3D virtual worlds represents additional opportunities for game makers as they elevate online experiences into 3D social worlds to capitalize on the Metaverse opportunity. Game makers including Epic Games and Roblox have hosted concerts inside of their games already, while Unity is investing in opportunities to bring live sports content and tools into its 3D development kit.
Revenue from live entertainment businesses that can become part of the Metaverse concept – films, live music and sports – may exceed $200 billion in 2024, roughly flat vs. 2019, as these businesses slowly recover from the Covid-19 pandemic, based on our analysis and data from PWC, Statista and Two Circles.