TRENDS Research & Advisory – The Metaverse: Promising Opportunity or Overblown Hype?

The concept of the “Metaverse,” a blend of “meta” and “universe,” signifies an extensive technological landscape that advocates believe could revolutionize how we live, work, learn, and connect. It is characterized as a virtual realm where individuals can engage in an immersive digital life, interacting with others online and experiencing new realms—“even reaching outer space.”[1] In this space, digital entities symbolize human users, merging social networking, online gaming, virtual reality (VR), and augmented reality (AR) to facilitate diverse interactions and activities.

The term “Metaverse” was first popularized by author Neal Stephenson in his 1992 novel “Snow Crash.”[2] Stephenson envisioned users as avatars congregating in various VR interfaces—a colossal digital environment coexisting with the physical world where interactions occur through digital representations.[3] Since then, the Metaverse has been framed in different contexts, such as lifelogging,[4] virtual gathering spots, embodied networks, mirror worlds, and platforms for engagement.[5]

One of the pivotal impacts of the Metaverse lies in its potential to reshape workplaces. While it hasn’t yet transformed work entirely, the union of physical and digital spaces is already occurring.[6] Many companies are exploring the creation of virtual offices within the Metaverse, capitalizing on its ability to mimic face-to-face interactions. This evolution could provide a richer experience for both in-office and remote employees, potentially improving productivity and creating equity between on-site staff and remote workers.[7] With the integration of VR and AR, the Metaverse might replicate in-person experiences, fostering a more organic and intuitive working environment. Yet, this transition raises significant concerns surrounding data security and privacy. For a successful shift, organizations must prioritize advanced security protocols and reassess existing measures to fit the new tech landscape.[8] Only through these precautions can companies fully harness the future of work within the Metaverse.

Industries are increasingly examining how virtual worlds can enhance customer collaboration, streamline product prototyping, and innovate equipment control. Prototypes currently being developed aim to blend real-world hardware with virtual controls, as noted by Duncan Graham-Rowe.[9] This approach facilitates thorough testing and refinement of designs in a virtual setting before physical production. Moreover, tech companies are looking at converting industrial design models into 3D representations for virtual environments, inviting real-time customer feedback. This enables clients to engage with products more interactively, potentially lowering costs and expediting market readiness while improving user satisfaction. Virtual worlds thus hold the promise of transforming how firms design and prototype products.

From a business-to-business (B2B) standpoint, it appears inevitable that technological advancements will significantly alter how companies manage vendor relationships. With innovative supply chain management solutions expected to arise from Metaverse technology, suppliers in retail and manufacturing will likely gain the agility and adaptability required for future B2B operations.

The emergence of virtual worlds also presents fresh avenues for the creation and utilization of virtual real estate. This concept is gaining traction, with many experts anticipating that virtual properties could become highly valuable in the future. Investors are already being drawn to the Metaverse, captivated by the prospect of buying, selling, and renting virtual assets expected to appreciate over time. According to the New York Times, virtual properties are already fetching substantial prices.[10] This trend might profoundly affect traditional real estate markets, as investors could preferentially channel funds into virtual rather than physical properties. Additionally, the Metaverse’s capacity to create unique environments means real estate there might offer possibilities unimaginable in the real world.

Proponents of virtual real estate argue it can serve diverse purposes, such as hosting virtual events, concerts, and exhibitions. The demand for digital land has surged as both businesses and individuals aim to secure a spot in the Metaverse, with established brands already acquiring virtual property for marketing initiatives.[11]

Unlike conventional real estate, virtual spaces are not restrained by physical limitations, thus presenting ample opportunities for exploration in new markets, audience engagement, and revenue generation. Investor enthusiasm remains strong, with almost US$2 billion reported to have been spent on virtual land over the 12 months leading up to November 2022, according to the BBC.[12] This innovative realm is unconfined by geographical boundaries, paving the way for unprecedented creativity and use among businesses and individuals.

Furthermore, the potential for virtual real estate in the Metaverse extends well beyond marketing applications. It can revolutionize education and training, with institutions constructing immersive environments for students to learn and practice skills in a digital context. This integration allows educators to dismantle barriers of space and time, crafting learning experiences that significantly boost student autonomy. Researchers from China noted that combining the Metaverse and education could create “a full-process closed-loop structure, integrating online and offline settings for a multidimensional approach to teaching.”[13]

This approach has the potential to rectify the limitations of conventional 2D online learning, offering an innovative solution for engaging and effective education. The Metaverse also promises to mitigate traditionally high educational costs.[14]

In enhancing educational experiences, the concept of “educational tourism” in the Metaverse envisions a new approach where students can virtually immerse themselves in the cultural contexts of their studies. This immersive learning experience surpasses the offerings of traditional online education, enriching students’ engagement.[15] Students gain the opportunity to interact with local residents, explore streets, libraries, and architecture, experiencing language and culture in a previously unattainable manner.

Naturally, the costs associated with such programs are considerably lower than physically relocating to another country for education, making it an ideal option for students who seek international exposure without the burdens of travel and lodging expenses. Thus, the Metaverse appears to be a practical and appealing alternative for those aiming to broaden their educational and cultural horizons.

Using the Metaverse for practical skill training is another emerging avenue, most visibly in healthcare, where the technology shows promise not just for engaging students in nursing training but also for enhancing academic performance, decision-making skills, and problem-solving capabilities.[16]

As the Metaverse continues to evolve and expand, it raises important considerations about the job opportunities that will emerge in this new digital landscape. Disruptive technologies are introducing various new roles that employers are eager to fill with qualified personnel. As more companies explore and invest in the Metaverse, there will be a growing need for experts in VR, AR, and extended reality (XR).

Professionals specializing in VR, AR, and XR are already in demand by top-tier companies worldwide and are commanding attractive salaries. The increasing adoption of hardware like the Oculus Quest and HTC has led to impressive sales growth since 2020.[17] Consequently, there will be heightened demand for careers such as software developers, design architects, 3D artists, validation engineers, AR/VR maintenance roles, and graphics engineers as brands increasingly embrace human-centered design and innovative technologies that benefit society.[18] Clearly, skilled individuals will be essential in shaping the Metaverse’s advancement.

Nonetheless, the Metaverse introduces a range of new ethical and legal dilemmas concerning user identity and self-perception. On one hand, this new digital environment permits unprecedented freedom for individuals, yet it may also exacerbate existing issues from the physical world, such as impersonation and intellectual property infringements. Recent incidents where avatars were created without consent highlight the emerging legal challenges.[19]

This brings forth crucial discussions around regulating user behavior and ensuring a safe virtual environment. Addressing issues surrounding user regulation and data privacy is essential. This includes safeguarding personal data and respecting individuals’ privacy rights while curbing hate speech, harassment, and other detrimental behaviors that may flourish in virtual spaces.

Therefore, a fundamental question persists regarding who or what will oversee the Metaverse’s governance. Will it be private corporations, public entities, international organizations, or local governments? These inquiries are critical to ensuring the Metaverse evolves in ways that benefit society at large. At the very least, proactive collaboration among developers, regulators, lawmakers, and other stakeholders will be crucial to formulating an international regulatory framework addressing significant risks and establishing suitable guidelines for this new virtual setting.

In summary, the Metaverse holds the capability to reshape how we live, work, learn, and engage with one another. As it progresses, it will generate diverse employment opportunities in sectors involving VR, AR, and XR. Furthermore, the Metaverse promises to transform education by providing immersive experiences that transcend conventional online learning. However, to ensure a secure and orderly virtual environment, regulatory frameworks must be established to tackle issues related to data privacy, the infringement of intellectual property rights, harmful behaviors, and the implications for identity and self-perception. Ultimately, considering who will govern the Metaverse is vital. The Metaverse’s potential is immense, but it brings forward considerable challenges that must be addressed to unlock its full promise. By tackling these concerns, we can work towards developing a Metaverse that serves society positively.