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Reading the signs, no matter what industry sector you operate in, 2023 is the year to get real about the metaverse. By getting real, I mean recognising the reality of where the metaverse is now, understanding the significant potential, cutting through the hype, and positioning yourself today to get value as it develops over the next 5 or more years.
Why should you care?
McKinsey suggests that it could create up to $5 Trillion in value by 2030, with half of that impact in e-commerce. Mark Zuckerberg renamed his universe to suit it and is investing Billions. Microsoft are in the process of acquiring Activision Blizzard for $68.7 Billion to “provide building blocks for the metaverse”. Just days ago news of Apple’s new XR headset was leaked and its launch is widely expected to be this year, with rumours for a spring announce and autumn availability. More on headset technology later, but this is beginning to feel like “the next big thing”.
What is it really?
The term metaverse was coined by Neal Stephenson in his 1992 science fiction novel Snow Crash. He imagined a hypothetical iteration of the Internet as a single, universal, and immersive virtual world. You’ve seen science fiction glimpses of what it could be in movies like Minority Report, and complete implementations of it in The Matrix or Spielberg’s Ready Player One. However, a lot of important people, analysts, and brands are talking about it in the present tense, but let me let me point you to an excellent University of Cambridge policy document by Sam Gilbert for some Science Fact. In his primer on it he says:
The term metaverse refers to the open, persistent, real-time, interoperable, virtual world that could be built using web3 technologies. NFTs, blockchain, smart contracts, and cryptocurrencies are said to provide the payments and legal infrastructure needed to complement virtual reality (VR) capabilities”
but he goes on to say:
However, it is important to note that the metaverse does not yet exist.”
What we don’t have at the moment is an open, persistent, real-time, interoperable, virtual world, but we can taste a slice of it. What we do have are gaming platforms, which is why all those important and learned people are talking about metaverse experiences in the present tense. They are referring to real-time, virtual and mixed reality, “metaverse style” experiences on a particular gaming platform. Gaming platforms are the foundation to build virtual worlds on, but the gaming industry gives us another indication of the metaverse’s scale and potential. More than a billion people regularly play massively multiplayer online games every day. Within those gaming platforms there is an estimated $93 billion of economic activity with virtual goods, happening inside them each year, often using electronic currencies (which may or may not be cryptocurrencies) native to each game. If you google search for metaverse platforms, you’ll come up with a list of gaming platforms that includes Roblox, Epic Games, Decentraland, Sandbox, Efinity, and even Second Life (which was many people’s first experience of this topic back in the 2000s).
All of these different platforms have their own separate vision of what the metaverse could be. There is common ground, but there are no defined standards for how you navigate the platform, how the the user experience works, or how you create your avatar in a particular world, and no way to port it to the next. There is nothing wrong here, as long as people are clear about the facts, the real experience they are describing, and they avoid the hype.
Headsets and Realities
The essence of this concept and its technology have been around for a while. Simulators and virtual reality displays go back to the 60s, immersive arcade gaming machines came along in the 90s, things started to get more coherent and affordable when the Oculus was prototyped in 2011. Headsets, screen technology and interfaces have developed rapidly and got faster and more affordable from then to now, with the aforementioned possibility that Apple will join the party this year. Let’s go through terminology and options. VR is Virtual Reality, giving me a 360 degree view immersing me in a simulated digital world viewed through a headset or head mounted display and spatial technology to position me in that world. AR is Augmented Reality. Virtual information or objects are overlaid over the real world. This enriches my experience with digital details, images or animations viewed through AR headsets, Smart Glasses, the camera and screen of a phone, an iPad or other display. MR is Mixed Reality, where my headset, say a Microsoft HoloLens, shows the real world but places digital objects in the room or the landscape with me, giving me a hybrid reality. XR is eXtended Reality, is the umbrella term for any technology and headset that alters the real world with digital elements, adding man-machine interaction and blurring the line for my experience between virtual and physical.
The Third Wave of the Internet
These extended reality experiences are new ingredients in the evolution of the Internet – contributing to the rise of the next wave of change. Web 1.0 is what we now call the first incarnation of the Internet and Tim Berners-Lee’s World Wide Web, from around 1991 to 2004. The period when companies started to create static websites, search engines like Alta Vista, Yahoo or Ask Jeeves appeared, the dot-com bubble burst, and consumers as well as corporates started to use email. The term Web 2.0 was coined by Darcy DiNucci in 1999, was popularised by O’Reilly Media‘s conference in 2004. The web got interactive, characterised by user-generated content, ease of use, a more participatory culture and interoperability. Three major technology shifts happened simultaneously around 2007. The rise of this more social web coincided with the shift to the Cloud and web apps, at the same time as the iPhone appeared and the rise of mobile computing. Suddenly we were saying “there’s an app for that“. We had ubiquitous access to the Internet in the palm of our hands, and everyone could be a publisher. It saw the rise of blogging, Google, Amazon, Wikipedia, WordPress, Skype, Facebook, YouTube, Twitter. WhatsApp, Instagram and Snapchat. Things going viral. Memes. Influencers. A complete change to the way we collaborate. A complete change to the way people buy. Business done differently with Social Selling. I’d argue that the 2020s are the start of a third incarnation, which will become an even bigger step change.
Tim Berners-Lee talked of the Semantic Web, sometimes known as Web 3.0. He says the goal of the Semantic Web is to make Internet data machine-readable so that our daily lives will be handled by machines talking to machines. We have artificial intelligence, machine learning, natural language processing and voice recognition starting to do a significant amount of that. Web 3.0 is not to be confused with Web3, the term coined by Ethereum co-founder Gavin Wood in 2014. An iteration of the World Wide Web which incorporates concepts such as decentralisation, blockchain technologies, and token-based economics.
I see how decentralised finance (DeFi) and the added trust of blockchain distributed ledger solutions will have a role to play in the new virtual marketplaces we’ll be operating in. New frictionless payment processes will be needed. IoT and Industry 4.0 are key enablers, intelligently linking and analysing data for fast and confident decisions within our manufacturing and operating processes. Digital Twin technology will come in to play to test and then accelerate a firm’s innovation. Add three dimensions, spatial technology and the metaverse to the mix. I believe these things overlap and combine in to an emerging Third Wave of the Internet which changes the interface, changes the user experience, changes the way we collaborate in an extended reality hybrid world. We are moving away from the keyboard and the mouse or trackpad we’ve been using for decades to voice, gestures, vision, and eye tracking. We’ll need to rethink our business models, learn and relearn, without losing the lessons of 1.0 and 2. 0.
What do I do next?
Nike, Burberry, Gucci, JPMorgan Chase, Selfridges, Benneton and ByteDance (TikTok’s parent company) are already “betting big” in particular VR and gaming platforms. Add the Apple Smart Glass rumours, and Q1 2023 is the time to get educated, start planning, investing and experimenting if you haven’t already. Even more than with the switch to the interactive, social web you’ll need to think differently. You’ll need to think end-to-end across your business, and the user experience – internal for your people and processes, and external for your customers, partners and stakeholders. Mixed reality experiences mean a new way of creating, and testing how it works. You’ll need to think in terms of creating human digital twins to test any and all human interfaces. If you want to find out more, if you need help with where to start, or how to make the case, then please contact us. We believe this third wave is an exponential step over the last, with change, disruption and new ways of working happening now, and throughout the rest of the 2020s. Act now.