Introduction to the Metaverse: from sci-fi to a 5-trillion-dollar industry
20 experts shared their view
A recent report by McKinsey indicates that the metaverse's economic potential could be up to five trillion dollars by 2030. However, while most people think the metaverse concept only started with Zuckerberg's rebrand, innovators and visionaries have been flirting with the idea since the '80s, first in the minds of cyberpunk novelists (such as Gibson, Vinge, or Stephenson), then in the ones of scientists and philosophers (Gelernter, Chalmers), and, eventually, technocapitalists. However, outside of the inner circle of the "usual suspects," metaverse was a pretty esoteric term before 2021 (as this Google Trends proves). So how has a dystopian novel turned into a trillion-dollar industry almost overnight?
Behind Every Avatar, There is a Person
Metaverse: from sci-fi to a trillion-dollar industry
Introduction to the Metaverse: From Sci-fi to a 5-trillion-dollar industry
The metaverse is the next iteration of the internet that has been decades in the making. Only now that the underlying technologies such as big data, blockchain, artificial intelligence and VR/AR are sufficiently advanced enough to handle a 3D internet, we see the convergence of these technologies into the metaverse. While dystopian novels such as Snow Crash or Ready Player Me depicted the metaverse as a virtual world owned and controlled by a centralized entity, the metaverse can be so much more.
In fact, it is a common myth that the metaverse equals virtual reality and I sincerely hope it will be a myth that the metaverse will be owned and controlled by one single entity. Of course, that is very much possible, but with sufficient dedication and hard work from the Web3 community and sufficient education of the general public, we can create an immersive internet where we control our own data, our (interoperable) digital assets and our identity. If we achieve that, the metaverse will be a multi-trillion-dollar opportunity; an endless blue ocean that could benefit humanity as a whole.
One of the key question is not necessarily WHAT is the metaverse – you don't need to really know what the internet is in order to benefit from its value add on a daily basis – but rather WHEN.
As the saying goes – humans have issues anticipating exponential developments as our brains are biologically hardwired to linear developments. As the metaverse evolves, we will see individual pockets start hitting the “bend” of the exponential curve, or in other words tipping points. But what will drive use cases beyond tipping points, meaning that new metaverse technologies (be it immersive technology like mixed reality, web3 technologies like NFTs or using meta-worlds) will become dominant in a particular use case? It boils down to the value-add. It is not enough to wish for a future, it has to genuinely deliver a value-add beyond the technological friction inherent to a new technology. In order to unlock the trillion dollar opportunity slumbering in the metaverse, we need to have actual decision-takers spending actual money on actual use cases, not only early adopters liking intriguing social media posts. That will only happen if new metaverse technologies unlock significant value.
In a recent BCG report, we outline the metaverse flywheel which will propel us towards this trillion dollar opportunity. Core enablers around infrastructure and cheaper and better technology will unlock user adoption, which in turn lures in experience and content creators. Through existing and new means of monetization a functional economy is then established, attracting more users, completing the flywheel dynamic. Regulation then governs the “rules of the game” of this flywheel.
So where would you expect this flywheel unlock the first pockets hitting tipping points? Regarding immersive technologies, training stands out as an early use case. We might very soon see general training hit a VR-first scenario. Similarly collaborative, immersive digital twinning in industrial processes will soon be the standard for greenfield projects and soon brownfield too. Regarding travel and tourism, “try before you buy” and token-gated experiences are hot candidates for mass adoption too. Again, while the WHAT is quite broad, the WHENs will be quite different use case by use case.
“As technology advances, humanity erodes” – Although I am openly stealing the way we introduce the problem to potential investors in Vault Hill, the world's first human-centric metaverse, I believe it is a phrase that connects very well the Sci-Fi element associated to technological progress (let's not forget that today's cars were science fiction in the pre-Ford era) to the nascent 5-trillion-dollar (or more?) industry, driven by the way humans are making use of these new technologies.
Communication between humans evolved significantly over time. From cave paintings, petroglyphs and smoke signals to postal service, radio, TV and now the internet, humans always needed to deliver a message and what they did is to adapt the message to the new ways of transmission that technology enabled. When was the last time you use your landline? I don't remember either!
We are transitioning from being mere spectators to being part of the internet, the single point of failure for this space that brings together users, content creators and brands from all around the world. The first actor in the space able to enable a circular economy between these actors will unleash this multi-trillion, ex-Sci-Fi but still futuristic industry.
The concept of the "Metaverse" has existed since the 80s, and Full Fledged Metaverses like 'The Sandbox' and 'Decentraland' have been there since 2012 and 2017 alongside Axie Infinity (2018) and of course the oldest mainstream name amongst the bunch Roblox which officially launched in 2006. Many factors have aided in the so called "over-night rise" into spotlight. But in order to understand this Rise, and as is the case with many technologies preceding the Metaverse, one should first understand the chain of events that helped pave the way.
On December 31st, 2019, the first ever case of Covid-19 was recorded in the province of Wuhan, China. Followed by that, the virus developed into the pandemic we have experienced until this very day. With the rise of this pandemic came several measures, with lockdowns being the most notable. With people stuck in their homes with no place to go to, companies closed as their staff couldn't attend, schools closed and pretty much every other urban function halted, there had to be a change. A shift of some sort. Or else, Economies would collapse soon. A shift towards Digitalization was inevitable; and that's what happened.
Soon enough Businesses, Companies, Educational Institutions, Governments and Organizations had all shifted online. Platforms like Zoom, Microsoft Teams and Google Meets had become part of our day to day lives. We used them to learn, we used them to conduct business, we used them to lead and so much more. But it wasn't enough. Small Businesses were still suffering.
So the shift towards digitalization went further, soon, all sorts of Organizations, Businesses and Service providers shifted online. They created their brand identities, went on social media, built their websites and began to serve their customers, creating a remote frictionless experience.
Slowly but surely, people started becoming accustomed to this new online life, and found themselves ready to start trying more immersive experiences.
Then, all of a sudden, and in one of the most visionary strategic moves in modern tech, Facebook announced the rebrand. And regardless of whether we support Meta or not, what one cannot deny is that the rebrand was pivotal, it served as a spark for a population that was now in the process of becoming ready for the discovery of a new realm, A realm in which not only could they do most of their tasks remotely, but rather one in which they could do it as though they were there. A realm that connects people, places and things. A virtual parallel as many like to call it. After the rebrand terms like NFTs, AR, VR, Metaverse and Web3 became some of the most discussed topics amongst both Tech, and non-tech individuals, and with that, came a surge in service providers, companies, organizations and brands who look to capitalize on this new opportunity at hand.
We may currently be in a bear market, the adoption rates are less than anticipated by many experts but the truth is, what is being created is a Realm that knows no bounds and an opportunity for every single industry around the world to create value and be part of the Digital Transformation era.
In my opinion one should not be surprised when companies like McKinsey indicate that the Metaverse has a potential of becoming a 5 trillion-dollar industry by 2030, because the value it creates can go above and beyond.
Gartner states that emerging technologies for 2022 fall under three main themes: 1) evolution/expansion of immersive experiences, 2) accelerated automation of artificial intelligence, and 3) optimisation of technology delivery. In the first area we find the Metaverse, which is positioned in the Hype Cycle in the middle of the upward ramp of expectations, predicting more than 10 years to reach the Plateau of Productivity.
The advantage of technologies like the Metaverse is that they offer individuals the opportunity to expand their range of experiences in virtual places and ecosystems that can be integrated with digital currencies, Gartner points out.
In any case, in order for everyone to truly benefit from (or in) the Metaverse, individuals need to have more control over their identities and data; at the same time, assets need to be proven in the property to which they belong.
Decentralised identity allows an entity (typically a human user) to control its digital identity by exploiting technologies such as blockchain or other distributed ledger technologies (DLT), cryptographic algorithms based on Zero-Knowledge Proof, along with digital wallets.
NFT is a unique programmable blockchain-based digital object that publicly demonstrates ownership of digital assets, such as digital art or music, or physical assets that are tokenized, such as houses, cars or documents. It seems the perfect tool to represent any kind of asset in the metaverse scene.
Having said that, in my opinion the metaverse can reach a '$5 trillion industry' (really in quotes...), but the market for decentralised identity solutions - preferably based on SSI self-sovereign identity -, and NFTs, need to be boosted.
Again, looking at Gartner's Hype Cycle, we can get confirmation for decentralised ID and NFT, both of which are positioned in the initial phase of the downward ramp, just after the peak and close to the trough phase of disillusionment. For NFTs, Gartner predicts 2 to 5 years to reach the plateau, while decentralised IDs need at least 10 years.
NFTs and decentralised IDs are going through the best time to make strategic choices (the depression phase of disillusionment), so everything could match my predictions if the strategy is evaluated properly.
We are at the magic moment when the right decisions, if taken correctly, will allow the Metaverse industry to get into gear. Strategic mistakes, on the other hand, can lead to the worst of failures.
I think various fields have been doing a lot of research for years in AR/VR, and the idea of the Metaverse gives them a great mass adoption use case. There is also the gaming industry that has been creating virtual worlds for ages, Habbo Hotel is happy to say they were the first Metaverse, and any video game could say the same. Finally, what is interesting in all of this is the concept of ownership of digital items that was made possible with crypto and NFTs, because now people can own the assets in the virtual worlds they spend time on regardless of whether the virtual world itself will survive.
So to conclude I think the Metaverse has just been a term that has been used by Facebook, and to which a lot of various players related.
To sum up, there is a lot more to it than the simple term "Metaverse" and it is a lot older than Facebook's rebranding!
I think the recent pandemic played a significant role in pushing the idea of metaverse from dystopian into reality. The nonexistence of physical activities during the worldwide lockdown has made people see any digital forms as an essential alternative. This is obviously seen as a massive opportunity for content creators and tech companies to create a new emerging market, and blockchain technology has come at the right time to "formalize" the use of digital assets!
Up to this date, the word Metaverse is still undefined to perfection. As Snap CEO Evan Spiegel said, the concept of Metaverse is "Ambiguous and hypothetical". To be fair, we have been talking about Metaverse more than we know, we just have been calling it different (3D platform, videogames, virtual reality, amongs others). Now there's something that we didn't have before, someone with top-notch influence and vision that wants to destinate economical and human resources into expanding what we already have, and the technology, though not there already, is improving and taking huge steps making us come closer to the Stephenson's idea of Metaverse. Want an exciting future we have ahead of us.
The metaverse is the inevitable culmination of a series of paradigm changing breakthroughs in technology and computer science, namely artificial intelligence, machine learning, big data and blockchain. The integration of all that innovation together results in not only experiental, multi sensory and multi dimensional experiences but also endless value accretive business opportunities. For me the question is not what will the metaverse be, but rather what won't the metaverse touch in the future? It's difficult to imagine any part of life or society that won't be touched by these innovations. It is all just part of the relentless progress forward.
The exponential growth and increasing momentum of the Metaverse can not go unnoticed. Businesses across different industries are exploring the best practices and use cases of the Metaverse. Governments are investing billions of dollars in the Metaverse. During the Metaverse Assembly this week in Dubai an official from the UAE stated that as we are currently measuring the GDP, in the future we will be measuring the "GMP" Growth Metaverse Product for countries and economies.
Yet, wider adoption is differently required, we need to sell the idea of the Metaverse to a wider audience to drive more traffic and have more daily active users. In order to get there some steps are required by the industry leaders and activists:
- We need to shift the Metaverse space away from the gaming industry, in a sense of the theme and experiences. We need to provide more realistic and professional Metaverse experiences.
- We need to create effective use cases across different industries and successful revenue generation models through Metaverse businesses.
- Lowering down the barriers to enter the Metaverse, and not always associating it with cryptos, buying digital assets, virtual lands, and NFTs. Basically, you can start on the Metaverse without all of that.
One of the interesting interpretations of the Metaverse is that it is an evolution of the internet from a 2D experience to a 3D experience which comes with a lot of opportunities. And we need to sort of translate the web2 terminology to web 3 terminology. So for example, having a Metaverse space is comparable to having a website. Selecting a Metaverse platform is comparable to selecting a domain. The fully immersive retail experience in the Metaverse is an evolution and enhancement of the 2D e-commerce experience. Interoperability is to some extent a fancy web 3 term comparable to integration between different services and websites.
Entering and using the Metaverse is easy, we should not be complicating it and we should not make it sound hard. We should be focusing on building inclusive Metaverses for the people.
Without a doubt, since Zuckerberg renamed Facebook 'Meta Platforms Inc.', rebranding it as a "Metaverse company", the mainstream hasn't stopped talking about it. Although the Metaverse is brand and device agnostic, Meta is playing a significant role in the industry; challenging the existing preconceptions of what we associate with the word Metaverse, which encompasses many trillion-dollar industries in the digital and physical world.
Following the initial hype cycle, the industry is now facing challenging market conditions and investors' conflicting expectations. However, during the last Meta Connect, Zuckerberg revealed his vision regarding the business and the social aspects of the Metaverse. The new Quest Pro is a high-end headset for enterprises and business professionals, integrating eye, face and body tracking, all in a lightweight, standalone device.
Alongside the new headset, Meta announced a new Avatar SDK (Software Development Kit) that allows avatars to be interoperable on multiple platforms. These features will be available first in a platform called Wooorld, which will allow users, with their Meta Avatars, to explore cities, landmarks, natural wonders, and plan a vacation together, all in a 3d rendered immersive world.
I believe the gaming and entertainment industry has pioneered the Metaverse so far, we will see if the business and tourism industries can push this value creation process even further.
I started working within Virtual Worlds in 2019 , it was all very new to me at the time and I stumbled on it whilst I was in India working on a hospitality project. The amount of reports out there at the moment are mindbogling with massive Trillion Dollar, Billion Dollar prices being thrown around all the large financial and reporting companies now have "metaverse officers".
For those of us who have been working in the space of Hospitality Metaverse (Virtual Worlds) we have to think seriously and not just jump on to hype. I have seen some large amounts of money being brandished around and at the end of the day for many the outcome will not have any return on investment. I am lucky that I started from the ground up, I was looking for a solution on how I could train and upskill hospitality associates at scale, giving them the training needed but with out sending in a task force consultant. I talked to people about what I wanted but no one understood, so I taught myself, learnt about AI , Coding, 3D spaces NFTs , Bitcoin I already at this time had 7 years exeperience of it. Lot of learning design, deploy, adapt and repeat,since then we have trained over 3000 workers in virtual worlds and everyday I still keep learning.
Utilizing the latest technology, we are able to bridge real world skills through the use of VR AR WEB 3.0 Metaverse we are able to synchronise the unique values of the brand to ensure their service madates are managed chonerently
Remember behind every avatar is a person, with the virtual worlds and Metaverse you are only limited by your imagination, lucky our group has a lot of this :).
My advice to anyone is ask, and share your ideas, with vision and passion anything / everything is achievable even its needs a little bit of adapting.
One of the factors that has contributed the most to such a surge of interest in the Metaverse is the development of enabling technology. To have an immersive experience of the Metaverse comparable to what we have in our physical world requires a high degree of software and hardware development.
To give one example, the creation and the interaction between Digital Twins (avatars) requires enormous computational power and the solving of nontrivial technical problems.
The fact that so much investment is being poured into the development of the Metaverse and enabling technology, VR, AR devices, etc..., is a very good sign of the potential of this technology.
Once we achieve the technical requirements to create an immersive and fluid experience between the Metaverse and Physical Reality we will unlock endless creation and experience potential.
As an expert on DeFi and DAO what interests me is:
- How will the new economies be managed?
- Will we reproduce the inequalities of the real world or will we be able to create more equitable economies?
- Will the economies of the Metaverse have an impact on the economies of the physical world?
The Metaverse combined with the power of DAOs could be the opportunity we have been waiting for to renew our societies and make them more decentralized and fair.
Let's start by stating that I am not a big fan of the term "metaverse". As probably everybody knows by now, the word comes from a dystopian cyberpunk novel filled with Mafia, drug dealers, mercenaries, and economic collapse. Not really the rainbows, butterflies, and unicorns virtual world narrative some anarcho-capitalists are trying to feed us.
I prefer thinking of the metaverse as "Extended Reality" (or, to be more academic, XR as the gateway to the metaverse), but I guess we have to stick with this moniker.
Back to the topic: how has a dystopian novel turned into a trillion-dollar industry almost overnight? In a word: Convergence. Most of what we call "the metaverse" has been around for quite a long time. Think of the use of VR in crash tests. While a few decades ago, the automotive industry had to destroy hundreds or even thousands of cars during the design of a single model, engineers can now run virtual crash tests while designing new, safer models at a fraction of the cost. In psychology, then, we can find the first Virtual Reality Exposure experiments in the last century. A study on patients afraid of flying and treated with virtual reality (rather than standard exposure) was presented at the American Psychological Association's Annual Convention. And it was not last year, but 2000!
"Metaverse" is just a label we put on different technologies that pre-date Zuckerberg's version of the story. What the metaverse did (or, more likely, will do) is to create a confluence of these technologies by building a new version of what we currently call "the Internet."
I like to compare the metaverse to the first iPhone. If you think about it, nothing was really innovative about Steve Jobs's creation. The genius idea was to place existing and mainstream adopted technologies (digital cameras, iPods, desktop-like web experience. etc.) in one single lightweight, handheld device.
Everyone seems to suffer from "metaverse FOMO" right now. But it's because we gave a cool new name to boring technologies (AR, VR, MR, digital twins, immersive commerce, Business-to-Avatar advertising, phygital marketing, etc.) And, if I have to be brutally honest, there's no such thing as THE metaverse as of today. There are many metaverses and walled garden platforms. More than the metaverse, what I see today is a multiverse, following the same (unhealthy) Web 2.0 paradigm. To build a sustainable metaverse, we should focus a little less on realism and immersivity and more on decentralization and value creation/disintermediation.
Otherwise, the metaverse will be nothing else than "The Sims" on steroids. Still pretty cool, but pretty useless as well.
It is extremely interesting to observe how innovations that until a few decades ago were considered pure fantasy have become in recent years become reality. Of all of them, the impact that the Metaverse has had on our society is astounding. This 'new' digital universe allows us to realise how the need to escape is taking shape in a reality. Anyway, we have to recognize that it is still far from mass adoption.
Therefore, in today's socio-economic scenario Metaverse technology is having a devastating impact. For the first time, the digital instrument becomes 'physical', present and no longer a mobile tool accompanying a hectic and habitual life. We are facing the real possibility of cancelling every geographical, social and political barrier simply thanks to technological innovation.
Moreover, the virtual experience becomes an all-around experience where, thanks to a VR instrument, it is possible to be part of a new world that not only facilitates daily activities but also allows us easy access to experiences or places that were previously unknown for a considerable number of causes.The power of this technology is impressive, not only in terms of innovation but also from social, political and geographical perspectives.
However, many detractors consider the Metaverse a mere excuse to escape from the problems of everyday life: a parallel world where digital alienation trumps the real world.
Is this really the case? We are still at a too embryonic stage to even try to answer this question. However, in the opinion of the writer, the point of view is wrong. In an increasingly global world and in an unstable economic scenario, we should simply ask ourselves whether the final consumer is really ready for such a disruptive product.
In order to answer the question, I need to clarify a few points. I see the (M)etaverse as an extension of the real world into multiple interoperable virtual worlds or (m)etaverses (I use uppercase “M" and lower case “m” in purpose). From my perspective, the (M)etaverse is not yet here. In order to archive that, every world that has been created must be interconnected allowing users to easily bring their virtual identity from a place to another.
I believe that during the pandemic people realized 2 things: 1) It is possible to work, go shopping, socialize, have parties, have meetings, study, meet doctors, directly from home; and 2) Considering ourselves as “Social Animals”, we need to feel the presence of each other.
With that said, it became obvious the need to see those two points (above mentioned) merged. Here is where the (M)etaverse started playing the game and where companies realized that there is a digital “big bang” ready to explode.
As a matter of fact, in Q3 of 2021 we started seeing Bored Apes (BAYC) showing up into parties and social media (some of them owned by famous people like Snoop Dog, Eminem, Jimmy Fallon and Paris Hilton) and Facebook being rebranded into Meta. The hype brought in front of people's daily life new “weird” words (or keywords) like NFTs, Token, Digital Twins, Wearables.
Big brands (mainly from fashion industry) like Nike, Gucci, Adidas started considering the (M)etaverse not only as buzz word but a potential evolution of the internet where people can own digital assets and target new virtual spaces populated mostly by Gen Z (such as Roblox and Minecraft).
With that said, to answer the question, the (M)etaverse didn't become a trillion-dollar industry from a day to another. Technology was already heading into that direction; the pandemic triggered and accelerated the process.
The Metaverse in travel and hospitality is all about amplifying the IRL (In Real Life) guest and passenger experience vs replacing it. ⬅️
The key impact and strategic focus should primarily be providing an immersive, engaging and sustainable path for travel and hospitality entities to, soon seamlessly enable guests, passengers and customers the ability to engage with experiences, pre - present and post -their travel and stay.
With VR we are talking about immersive digital twins of real-life locations, properties, convention spaces and attractions. With AR (augmented reality) and MR (mixed reality), the impact and focus are all about enabling an intelligent value-added and differentiating digital layer of engagement, content and information, over real-world locations, properties and experiences.
With the massive investments by Apple, Meta, Sony, ByteDance and HP (just to list the major global players) the overall Metaverse momentum and more specifically to this audience, the "Metaverse for Travel and Hospitality" train has left the station. We are soon to be experiencing another "smartphone" type paradigm shift similar to 2004, with the immediate impact that the Apple iPhone had on the mobile world.
Now all of us within the global travel and hospitality technology industry simply need to decide how heavily to integrate some level of immersive engagement and virtual guest and staff interaction and impact, within our strategic decisions over the next 2-3 years.
Most logically minded persons would come to the conclusion that the transgression to a digital environment, metaverse, virtual reality, however you wish to call it, is inevitable. The consciousness is only an interpretation of digital signals by our brain, and as technology and human nature converge, why can't that all be recreated by computers? With the increase of social media, digital content consumption, and the co-existing forces of the pandemic with the drive for a greener future, what chance do people have to avoid this revolution?
Without tools, humans are the least efficient animals on the planet, yet place a hammer, or sickle in our hands, and we become the most dominant force. Our digital devices represent an extension of ourselves and without them, we become increasingly obsolete in society and the workplace. The same will happen with XR, without it, you just will not be able to compete. Can you get any more dystopian than that? :)
Metaverse is but a natural progression of the nature of humans to be connected and the digital representation of a societal structure. Just as Internet seeped into our daily lives seamlessly and became inseparable, so will Metaverse, which offers a much immersive experience with focus on persistence and economy apart from other aspects. The economy is a critical piece for Metaverse to be self-sustaining - Blockchain technologies are ripe for implementation here with digital money and digital ownership.
Just as our lives were expected to be physical and digital, but now becoming more and more inseparable, metaverse will create a space of its own and our digital, physical and metaverse persona will have an impact on each other - Be it in terms of social capital, credit ratings or mundane things like attending a conference call, buying grocery or booking a taxi. Just as all physical businesses including hospitality gradually adopted digital solutions, so will they HAVE to adopt metaverse solutions.
Creating a virtual platform that anyone can use allows companies and brands to market their products and services in new ways. The metaverse is still in its early stages, but brands are already making inroads and reaching out to customers via this virtual platform.
The four Ps of marketing are product, price, promotion, and place. The metaverse offers a new place to market as well as new methods of promotion, so it's no surprise that marketing teams all over the world are eager to get started!
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