Trillion market Metaverse: Facebook’s ‘next big thing’ is more than just imagination

Trillion Market Possibilities: A Fiction? Facebook’s virtual worlds are more real and closer than many think

The term has been on everyone’s lips since Facebook changed its company name to Meta last year and announced the creation of the Metaverse. Many people ask themselves the following question: is this just a tech fantasy or is the Metaverse the next step in the digital revolution, the “next big thing”?

First, what is the Metaverse anyway? In his novel “Snow Crash”, published in 1992, American author Neal Stevenson first drew a graphic of the massive spatially designed world of the Internet in which people escaped from the monotonous real world in the form of avatars in order to reinvent themselves in the parallel virtual world. Today, 30 years later, this digital fantasy is increasingly becoming a reality.

In the past few years, the major online game manufacturers in particular have shown where this is headed. Hundreds of millions of players now travel around the world in virtual worlds to drive car races, conquer countries or solve complex strategy games. Players sometimes spend large amounts of money to buy weapons, tune cars, or simply make their avatar – their digital ego – look better. Payment is made in the applicable digital currency.

Millions are already attending digital events

For several years, game manufacturers have used their technical know-how to attract new customers other than online games by broadcasting events, some of which are huge. In 2020, more than 12 million people watched the show by a well-known American rapper on their computers and smartphones. American hotel heiress Paris Hilton caused a stir with her New Year’s Eve party. Users can visit a replica of the community’s celebrity mansion in Beverly Hills, drive her sports car or take a tour of her famous yacht – and even buy virtual clothes or ride a digital jet bike for a small fee.

However, such events have little to do with the future Metaverse. Since it is difficult to predict how the metaverse will evolve (just as it was unclear what the Internet will look like in 2022), there is still no generally applicable definition of what exactly the metaverse means. Especially since the term doesn’t really refer to any particular type of technology, but rather an overall change in the way we interact with technology. It is also still open whether there will be a large metaverse. From today’s perspective, it is very likely that many smaller metaverse platforms from various providers will initially appear.

The Metaverse will have it all – and it will never stop

But it is predictable: one or more of the metaverse will be a virtual world created and designed by individuals, private groups, or companies that can be accessed by everyone. In this artificial world, there will be everything (and perhaps much more) as we know it from our real life: streets, houses, cable cars, beach cafes, but also parties, university lectures or fashion shows. We will book a guided tour of Neuschwanstein Castle, discuss an important operation with a team of doctors or just go for a walk with a good friend.

The Metaverse will never stop. All activities and events will also take place in real time and there will be no maximum number of participants (which means there can be any number of people in the Metaverse). Thus, the metaverse will be immersive, which means that users will not only consume the content (as we know it from the Internet today), but immerse themselves in it.

By following these principles, it’s also clear what the Metaverse isn’t: it’s not a game with a purpose, it’s not a new app store, nor is it a new social media platform. Navigating across large platforms may also become a thing of the past. Instead, we will navigate to the environments that belong to their users.

A distinction must be made between two different approaches: augmented reality (AR) and virtual reality (VR). In augmented reality (AR), holograms are superimposed on augmented reality glasses to complement existing reality. Attractive discount campaigns can be displayed when entering a department store or warnings of an accident while driving can be displayed. In pure virtual reality, on the other hand, a completely new world is created that has nothing to do with reality. To be able to move in this world, VR glasses are essential.

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In order for virtual worlds to actually emerge from the imaginations of the Metaverse, however, a number of basic technical requirements must be created. One of the most important is the development of light and comfortable augmented reality and virtual reality glasses. So far, things have been clumsy and impractical. Many technology companies are working intensively to develop modern, high-performance glasses.

The necessary prerequisite for the future metaverse is that everything and for each user happen in real time. Against this background, the introduction of the 5G mobile communications standard is an important step for “instant internet”. To process data, especially in relation to the 3D display, massive computing power is required, which must be done by very powerful microchips being developed. The use of artificial intelligence (AI) is also an important key in the metaverse.

Metaverse is already within reach – and a potential trillion market

In addition to technical requirements, legal, social and political issues must be clarified. Because crime and racism do not stop at the virtual world. Many things must be regulated such as consumer protection, the right to privacy, the issue of identities (whether, for example, allowing AI characters to impersonate humans) or protecting minorities.

The so-called NFTs (Non-Foldable Tokens) will play an important role for the financial system within the Metaverse. Simply put, these are digital tokens that are closely related to individual assets such as paintings, music tracks, or real estate. These assets can be real, but they are also digital assets. Sotheby’s has already opened a purely digital auction on virtual reality platform Decentraland, where NFT artworks are displayed and auctioned off.

So there can be no question of imagination anymore, metaverses are already tangible. It is expected that huge amounts 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, Metaverse sales are likely to reach $800 billion by 2028. Analysts from Morgan Stanley expect the annual market potential to be around $8 trillion.

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