Every day the concept of the Metaverse continue to be a source of fascinating discussions to many internet users and tech enthusiast today. Metaverse is that totally immersive version of the internet where, instead of just viewing and listening to content, users feel as if they are in it.
According to Harding Loevner, the term “Metaverse” was originally coined by Neal Stephenson in his 1992 novel Snow Crash. In the novel, users entered this original “Metaverse” via a pair of goggles onto which a 3D world was holographically projected with a blueish beam of light. In 2012, shockwaves were sent through the tech industry when Google co-founder Sergei Brin arrived at an event in San Francisco wearing a pair of goggles with a laser-like spot covering his right iris. Google’s consumer AR goggle product, called the Google Glass, within a space of about two years, would become the company’s highest-profile failure for several reasons. So many companies have stumbled and added to the list in the process of creating AR/VR products that can deliver the metaverse experience. Magic Leap, a much-hyped AR company is one of them because it has repeatedly fallen short of its soaring ambitions to, among other things, create a humanlike virtual assistant or city-sized holographic overlay. And forecasters have continued to overshoot projections, in 2016, according to reports the AR and VR market was projected would reach US$150 billion in 2020—they were off by US$117 billion.
Several tech companies have shown intense focus on the Metaverse, many of these companies are going all out looking for the next big thing to change the game. Earlier in the year at a Microsoft event, CEO Satya Nadella spoke about Microsoft’s interest in Metaverse, which will allow customers to create live always-on simulations. Google has heavily invested in major hiring of staff to beef up its engineering arm for augmented reality (AR) search. Apple is also not stopping, the company has quietly been involved with buying up early-stage AR and virtual reality (VR) startups in areas from advanced optics to virtual events. All these companies have a major goal, to create an indelible mark in the Metaverse with tech products that match all others yet are different and profit massively from it.
Of the large-cap players looking to profit from Metaverse, Facebook and its CEO Mark Zuckerberg seem to be the most publicly all-in on the concept, the company has projected in the future that people will associate Facebook more with the Metaverse than with social media. This had led to the company pledging a major increase in capital expenditures to ensure that this is achieved. No wonder in October, the company went as far as changing its name from Facebook to Meta just to reflect the seriousness of the Metaverse ambition to the world. A time when the physical and virtual worlds blend into one has never felt more possible.
Currently, the ability to interact with Metaverse has been made possible, thanks to bulky devices that come across as inches-thick blindfolds—something many people may struggle to find comfortable wearing while getting work done or in the comfort of their homes. To date, gaming seems mainly to be that industry championing VR adoption. Recently tech captains have taken VR’s practical applications like remote work. According to reports, Meta’s CEO Mark Zuckerberg conducts more meetings via the company’s VR platform called the Horizon Workrooms. Such a meeting in the Metaverse with Zuckerburg must have been done as an avatar. VR has not only contributed to meeting remotely but having to also share a sense of space with other people. The exact next step for consumer tech compatible with Metaverse is still up in the air, but a number of futurists in Silicon Valley believe that some combination of devices and platforms can deliver the ultimate sense of “presence” compatible with Metaverse.
The essential precondition of the next stage of development of Metaverse is the ability to achieve body scanning, processing speeds, high-resolution cameras, and lens/displays capable of real-time photo-realistic image generation. Streaming capacity is also an essential need that will be expanded. In April 2020, at the height of the pandemic, video game makers and software developers- Epic Games hosted a massive rock concert called Travis Scott’s Astroworld within their online game, Fortnite. The concert was attended by more than 27 million avatars, all reported to have been putatively beamed into the same venue in the Metaverse. In actuality, today’s technology may only be able to handle avatars meeting in their hundreds and thousands at once, however, reports say that a technique called “sharding” is required to bring together thousands of these avatar groups to create a mostly identical and near-simultaneous digital experience. In other to create an avenue for billions to move about freely at the same time in the Metaverse, the shards will have to be infused to deliver that in-presence experience to all.
For now, the Metaverse remains far from a unified phenomenon, rather it comprises a loose collection of devices, digital environments, and related technologies. So many works still need to be put in by the tech giants to replicate that in-presence experience they have talked about. Microsoft has sold the idea of its Digital Twins as an “enterprise Metaverse.” Google, as it happens, never fully abandoned Google Glass. It has continued to develop and sell eyewear for enterprise customers. Somnium Space is clearly a Metaverse, but so is Decentraland, where, earlier this year, parcels of digital land were going for the cryptocurrency equivalent of hundreds of thousands of dollars. Some users experience Decentraland in VR, but most simply choose to use the 2-D interface of their tablet or smartphone.
For the Metaverse to become the grand parallel economy, devices compatible with the Metaverse will need a level of capabilities, just like smartphones that have become essential tools to most consumers. Technology companies on the other hand need to demonstrate the power of the platforms they have created so that they can attract developers to build experiences that draw in customers. Metaverse is at a common juncture in the development of new technology.
According to Harding Loevner, Igor Tishin an Information Technology analyst at Harding Loevner stated that Metaverse’s biggest winners may likely be Facebook and Apple. Compared to Facebook, if you noticed Apple has been relatively discreet about its plans which in a subtle way suggests some form of seriousness, says Tishin. Apple is that type of Tech Company that has the expertise and control over the entire technology stack to solve a number of engineering challenges in creating a viable Metaverse. From chips to concepts, the company has powerful resources that can deliver viable devices. These devices, running on Apple’s own operating system, form an ecosystem with over one billion users. And Apple has a straightforward business model for the Metaverse: to replicate in 3-D the same experience of using an iPhone.
Today, the iPhone alone generates annual revenue of about US$200. In five years when Apple has added the business selling goggles and glasses with AR/VR augmentation whose revenues will be just short of what the iPhone generates today—call it US$150 billion a year. Modeling the value of Facebook’s future in the Metaverse comes a little more complicated. During the name change to Meta, Zuckerberg suggested that his company will commit over US$10 billion to the development of Metaverse in 2021. So far, the only significant revenue those efforts are generating (annualized at US$3 billion in sales) is from its Oculus headset, regarded as the leading VR gadget on the market. Facebook in a partnership with Ray-Ban, recently unveiled its “smart glasses,” which are presently only smart enough to take photos, record videos, play music, and answer phone calls, but according to the company could soon deliver on some very rudimentary aspects of the Metaverse in a stylish, user-friendly form factor. Zuckerberg has been careful to note, though, that none of the new hardware will necessarily change the way the company earns its profits—through advertising.
So how much is the Metaverse potentially worth to Facebook? Applying the same logic that he does to Apple—that in time the company will have a separate Metaverse-related business comparable to the size of its core business today—and accounting for a similar level of cannibalization, Tishin figures that in five years Facebook could be generating 50% more in ad revenues than it would be without the Metaverse. But he also thinks Facebook may be playing down the full scope of its monetization plans. “What if its platform becomes one of the main places where hundreds of millions of people around the planet are working, buying virtual tennis shoes, spending the afternoon in Paris? Wouldn’t it want to start taking a cut of developers’ revenue for bringing those experiences to people? In which case, the revenue opportunity could increase by an order of magnitude.”
As we watch the big Tech players take on themselves with technology and strategies to win the metaverse race, more surprises are expected to unfold while other recognized tech giants also join the race.