Potential for a trillion market: fantasy? Facebook’s virtual worlds are more real and closer than many think
The term has been on everyone’s lips ever since Facebook changed its company name to Meta last year and announced the creation of a Metaverse. Many people ask the question: is it just a technical fantasy or is the Metaverse the next stage of the digital revolution, i.e. “The next big thing”?
First of all, what is the metaverse anyway? In his novel “Snow Crash”, published in 1992, the American author Neal Stephenson first sketched out a huge online world designed in space in which people escaped the monotonous real world in the form of avatars in order to reinvent themselves in the virtual parallel world. . Today, 30 years later, this digital fiction is becoming more and more reality.
In recent years, the big online game makers in particular have shown where this is going. Hundreds of millions of gamers now travel around the world in virtual worlds to participate in car races, conquer countries or solve complex strategy games. Players sometimes spend huge amounts of money buying weapons, tuning cars, or simply sprucing up their avatar – their digital alter ego. Payment is made with the applicable digital currency.
Millions of people already attend digital events
For several years, game makers have used their know-how to attract new customers beyond online gaming by broadcasting events, some of which are huge. In 2020, more than 12 million people watched a well-known American rapper’s show on their PCs and smartphones. American hotel heiress Paris Hilton caused a stir with a New Year’s concert. Users could tour a replica of the company’s celebrity Beverly Hills mansion, drive her sports car or tour her celebrity yacht – and even buy virtual clothes or take a ride on a digital jet ski for a nominal fee.
However, such events have relatively little to do with the metaverse of the future. Since it’s hard to predict how the Metaverse will develop (just as it was hard to know what the Internet will look like in 2022), there still isn’t a generally applicable definition of what exactly Metaverse means. Especially since the term does not really refer to a specific type of technology, but rather to an overall change in the way we interact with technology. It’s also still open if there will be a big metaverse. Looking ahead to today, it is very likely that several small metaverse platforms from various vendors will emerge first.
The Metaverse will have it all – and never stop
But it is predictable: one or the metaverse will be a virtual world created and designed by individuals, private groups or companies accessible to all. In this artificial world, there will be everything (and probably much more) as we know it from our real life: streets, houses, cable cars and beach cafes, but also parties, university lectures or fashion shows. We’ll book guided tours of Neuschwanstein Castle, discuss an important operation with a team of doctors, or simply take a walk with a good friend.
The metaverse will never stop. All activities and events will also happen in real-time and there will be no participant limit (meaning there can be any number of people in the metaverse). The metaverse will thus be immersive, which means that users will no longer be content to consume content (as we know it on the Internet today), but to immerse themselves in it.
By following these principles, it’s also clear what the Metaverse is not: it’s not a game with a goal to achieve, it’s not a new app store, it’s not a new social media. Browsing on large platforms can also be a thing of the past. Instead, we will move through environments that belong to their users.
Two different approaches must be distinguished: Augmented Reality (AR) and Virtual Reality (VR). In augmented reality (AR), holograms are superimposed on the augmented reality glasses to complement the existing reality. Attractive discount campaigns can be displayed at the entrance to a department store or accident warnings can be posted while driving. In purely virtual reality, on the other hand, a completely new world is created that has nothing to do with reality. To be able to move around in this world, VR glasses are required.
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However, for virtual worlds to actually emerge from metaverse fantasies, a number of technical prerequisites still need to be created. One of the most important is the development of light and comfortable AR and VR glasses. So far things have been clunky and impractical. Various technology companies are working hard to develop modern and high-performance glasses.
A necessary prerequisite for the future metaverse is that everything and for every user happens in real time. In this context, the introduction of the 5G mobile communication standard represents a milestone for “instant internet”. For data processing, especially with regard to three-dimensional display, immense computing power is needed, for which extremely powerful microchips must be developed. The use of artificial intelligence (AI) is also an important key to the metaverse.
The Metaverse is already within reach – and a potential trillion market
In addition to technical requirements, legal, social and political issues need to be clarified. Because crime and racism don’t stop at the virtual world. Many things such as consumer protection, the right to privacy, the issue of identities (whether for example AI characters are allowed to impersonate humans) or the protection of minorities need to be addressed. regulated.
So-called NFTs (Non-Fungible Tokens) will play an important role for the financial system within the Metaverse. Simply put, they are digital tokens that are inextricably linked to individual assets such as paintings, music tracks, or real estate. These can be real, but also digital assets. Sotheby’s has already opened a purely digital auction house on virtual reality platform Decentraland, in which NFT works of art are exhibited and auctioned.
There can therefore no longer be any question of fantasy, the metaverse is already tangible. And it is foreseeable that huge sums of money will be invested in Web 3.0 – and that there will be a number of beneficiaries. According to market research firm Vantage Market Research, the Metaverse could potentially reach $800 billion in sales by 2028. Morgan Stanley analysts predict an annual market potential of around $8 trillion.
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