What is it about the metaverse that has made it such a buzzword in the technology and commercial realms, and what will its worldwide influence and business potential be?
In this article, we take a closer look at what the metaverse is and consider the opportunities it offers to the modern world.
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What is the metaverse?
Wikipedia defines metaverse as “a network of 3D virtual worlds focused on social connection.” But there is no one-size-fits-all definition to which we can turn, as the metaverse is still in its early stages of development. “Talking about what ‘the metaverse’ means is a bit like having a discussion about what “the internet” means in the 1970s,” technology magazine Wired sagely declared.
Metaverse first appeared in Neal Stephenson’s 1992 science fiction novel Snow Crash, which he imagined replacing the internet based on virtual reality (VR).
Three decades on, suggestions and projections of what the metaverse is and could be are beginning to emerge.
Meta gave us a teaser of the concept of the metaverse. “The metaverse is a set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you. You’ll be able to hang out with friends, work, play, learn, shop, create and more.”
VR, which is characterised by persistent virtual environments, and augmented reality (AR), which blends features of the digital and physical worlds, are two key technologies that make up the metaverse.
A significant point to remember is that there is no single virtual world, but rather many virtual worlds forming to allow people to deepen and extend their social relationships digitally.
Various new technologies have come together to make the metaverse vision possible. User experience has improved as VR and AR headsets are more affordable and powerful. Digital currencies and NFTs (non-fungible tokens) are now viable because of blockchain technology. Tokens are helping creators to monetise their work through new methods of transacting and owning digital products.
From a social perspective, communities are formed as immersive virtual experiences develop, and people are sharing values and expressing themselves in more authentic ways.
The metaverse will be expressed in its final form through experiences, including games, social interactions, retail, education and live events such as sports and concerts.
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Opportunities created by the metaverse
The metaverse has become one of the hottest business trends. According to Bloomberg Intelligence, the global metaverse opportunity could reach US$800 billion in 2024, compared to about US$500 billion in 2020.
Data from investment firm Grayscale states that the global revenue from virtual gaming alone may reach US$400 billion by 2025, a 122% increase from 2020.
Tech giants such as Meta, Google and Microsoft have come on board, and investors are helping to fuel the momentum by injecting more than US$10 billion into related startups in 2021, according to data from Crunchbase.
Following the current quick commerce trend, big brands are also hopping on the bandwagon of the metaverse, as e-commerce is sure to accelerate in the coming years as the metaverse develops, merging offline and online shopping.
Auction house Sotheby’s announced last year that its NFT sales had reached US$100 million. Encouraged by a burgeoning interest in the market, it has launched Sotheby’s Metaverse, a virtual gallery in Decentraland – a popular blockchain-based metaverse – that allows potential buyers to view digital artwork.
Nike has also acquired RTFKT, a virtual sneaker startup, to expand its digital footprint. Other fashion brands such as Givenchy, Gucci and Adidas have also held virtual fashion shows in the metaverse.
On the entertainment front, Warner Music Group has partnered with The Sandbox to create its first music-themed world WMG LAND in the gaming metaverse.
A-list artists such as Justin Bieber, Ariana Grande and Lil Nas X have also held virtual concerts in the metaverse, attracting millions of fans all across the world. In Asia, Korea and India have welcomed their first metaverse concerts.
Real estate investments are also becoming more accessible amid the development of the metaverse economy. We have seen celebrities investors like US rapper Snoop Dogg and Singaporean singer-entrepreneur JJ Lin owning plots of virtual land in metaverse sites like The Sandbox and Decentraland.
Over at the banking space, JP Morgan has become the first lender to enter the metaverse, launching a lounge in Decentraland.
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NFTs and the metaverse
The fact that these virtual worlds are created on top of blockchains, cryptocurrencies, and NFTs makes the metaverse interesting for the financial industry.
Supported by blockchain technology, NFTs, or digital tokens that represent asset ownership could create an exciting setting for digital content generation and monetisation in the metaverse. For instance, permitting the use of artworks or the ownership of metaverse animals opens a new door for the new virtual economy.
Recently, Taiwanese singer-entrepreneur Jay Chou’s NFT project has topped OpenSea’s sales chart upon its debut. Chou’s PhantaBear, a collection of 10,000 NFTs was snapped up within 40 minutes after its release, with revenue of approximately US$10 million.
For investors and startups, the metaverse may be your new playground to explore boundless opportunities. Startups from Asia such as Hong Kong’s The Sandbox, Singapore’s Enjin, Vietnam’s Sky Mavis and Thailand’s GuildFi have gained traction and made stellar progress in the past year and are worth keeping a close eye on.
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The metaverse is the way forward
Given the speed with which technologies and businesses are developing creative ideas surrounding immersive reality, it’s only a matter of time before the metaverse becomes a reality, like what we have seen in movies like The Matrix Series and Ready Player One.
As we enter the new norm of social interactions in the virtual world, let’s continue to keep an open mind and let the metaverse inspire us to re-evaluate and unlock real opportunities.
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