Ever since the Facebook group was renamed Meta, everyone has been talking about the “Metaverse.” What is behind the buzzword, which business opportunities can be associated with it and who could benefit apart from Facebook?
In a new study, 97% of executives believe that the gaming industry is in the middle of the metaverse development. Also, in a new study by Ernst & Young, 48% said that the gaming business and models would soon be changed by metaverse. As a result, it will build new relationships with its customers by giving them new opportunities.
Especially, around 95% of CEOs said that the many nongaming companies would benefit from how the gaming industry is engaging with the metaverse and will apply to their own companies.
“In terms of the way gaming companies operate, the metaverse could lead to significant changes in their business models, the way they develop their products, the employee skill sets needed – even the way these companies are structured,’’ said Scott Porter, EY America’s west region media and entertainment consulting services leader. “Gaming executives are aware of and planning for these possibilities.”
According to Porter, these executives in the gaming industry plan to increase funding for R&D in the next three years, invest in new technologies and hire new skill sets. “In the next few years, we will most likely see these structural shifts positively affect the quality and scope of what is offered to gamers in the metaverse.”
According to the EY US report, in contrast to recent spikes in mergers and acquisitions in the technology sector, only 15% of executives agreed that M&A would best position them for growth in the next three years. Instead, half of the respondents pointed to increased funding for research and development and 44% to investment in new technologies, focusing on organic growth and innovation, the report said.
Networking and playing together have long been standard in the game world. Players exchange information about moves in real-time and compete in virtual space with and against each other. Due to the corona pandemic, people are now also used to interacting in the digital space in the work environment through video conferences and virtual events. Your avatar roams through a digital exhibition. With MS Teams, all participants can sit together in white virtual armchairs and confer.
Anything but sleeping and eating in the Metaverse?
But the Metaverse goes much further. James Rubin, the co-founder of VR glasses manufacturer Oculus, already claimed the claim in 2018: “The only thing [the fictional meta-user] spends as much time doing as in the Metaverse is working, eating, socializing and sleeping in the ‘MEATverse. ‘” Today, he would probably take socializing off the list. People should also experience everything that can happen virtually there: the avatar goes to the office, to the registry office, to a concert, on trips, to the clothing store.
The expectation of redemption of the Metaverse is correspondingly gigantic. First, from a marketing perspective: When people spend their free time in the Metaverse, they (almost) only see advertising there. Secondly, the hope was that they would build a parallel world: clothing, home, furniture, and travel for the avatar, all digital. The manufacturing costs are almost zero, and the margin is significant. The games industry shows how well this works: players pay a lot of real money for virtual equipment. It may even go so far that real things and experiences are much less in demand: those who perceive the world primarily through VR glasses will ask for fewer real trips, furniture, and clothes. During the lockdown times of the corona pandemic, the demand for jogging pants increased; Shirts and suits, on the other hand, were hardly in demand.
The attraction of the Metaverse
For the Metaverse to work, you not only need VR glasses or powerful computers but, above all, attractive applications. But that is more difficult than expected. It is true that gaming platforms such as Roblox, which allow every user to develop their own 3D applications for everyone, are the forerunners of a metaverse. The goal is countless virtual offers for playing, exchanging, and consuming. The first corporations from the “real world” like Coca-Cola and Gucci are already showing up in the Roblox Verse. Epic, the publisher of the successful game Fortnite, is already working on its vision of the Metaverse and has collected 1 billion US dollars from investors.
Epic (“Fortnite”) was collected from investors for the realization of its version of the Metaverse.
However, other approaches, such as the already mentioned “Second Life,” have been “depopulated” again after a short period of enthusiasm; Google’s “Daydream” platform never really took off and has now been quietly buried. Facebook’s new offer, “Horizon Workrooms,” has met with little interest. The virtual worlds have two fundamental difficulties: On the one hand, expensive hardware such as VR glasses and powerful processors are required. On the other hand, the virtual space still has narrow limits. An expedition to the world’s largest cave in Vietnam using Oculus VR glasses is fascinating but ultimately little more than a movie. Smells, haptics, and temperature are missing for a real “immersion” in the other reality. The experience has quickly worn out. It is also very laborious to merge such complex 3D video sequences with playful and interactive elements such as communication with other visitors in real-time. Only rarely has the feeling of immersing yourself in a new dimension arisen.
It won’t work alone
Experts estimate that it will take another five to ten years to create a true metaverse that seems limitless (as the World Wide Web is today). Metaverse mastermind Matthew Ball calculates in decades. Because for him, the limitlessness is indispensable not only externally but also within the Metaverse: The vehicle designed virtually at Porsche should then be able to be used at Roblox; the weapon purchased from Fortnite can be used in another game. In addition, the boundaries between the real and virtual world are disappearing; Avatars visit the Eiffel Tower together with real people. Ball’s vision: The Metaverse is not only an evolution of the Internet but is structurally thought of completely differently. While today servers communicate bilaterally, the new infrastructure is completely open and constantly fully networked. Even if the Internet streamed and allowed real-time communication, it would be structurally overburdened by a true Metaverse. But what the structure can look like, whether it needs a dominant owner like Zuckerberg’s meta or rather an open-source architecture – all of this is still completely open and controversial.
The only clear thing is that it will be difficult to agree on common standards and protocols. One company alone will not be able to build the metaverse, but at the same time, each builder will try to enforce its standards through a dominant market position. Only when these standards and interfaces exist will it be possible to connect the different worlds of Meta, Epic, Roblox and many other developers. It is still unclear who could do this. Maybe it’s the Roblox or Epic mentioned, maybe Facebook with its huge number of registered users. But Microsoft, with its cloud capacities and experience in the networked professional and gaming world (Xbox), Amazon, or Apple, could also prove to be later standard setters of the Metaverse.