What is the metaverse?

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The metaverse stands at the frontier of internet evolution, a concept that both intrigues and baffles. But what is the metaverse, exactly, and what future does it hold? This guide is essential for businesses seeking to understand the implications now.

Envision a digital universe where billions of individuals live, work, shop, learn, and connect with one another without ever leaving their living rooms.

In this digital realm, our current computer screens evolve into gateways to a three-dimensional world that feels as tangible as reality itself, yet offers more expansive and enhanced experiences. Here, digital avatars represent us, navigating seamlessly between diverse experiences, carrying our identities and financial assets across this vast virtual landscape.

Dubbed the metaverse, this concept, despite its buzz, remains a vision not yet realized.

What should business leaders make of this rapidly evolving concept that promises to redefine human existence? TechTarget’s detailed exploration of the metaverse offers clarity on its current state and potential future. The guide covers the supporting technologies and platforms, the advantages and challenges it presents, investment opportunities, its historical context, its significance, and its potential impact on the future of work.

The guide is enriched with links to detailed articles on various topics, including interoperability, digital twins, spatial computing, and Web 3.0, among others, providing a thorough understanding of the metaverse’s foundational concepts.

The Significance of the Metaverse

The term “Metaverse” entered mainstream conversation when Facebook transitioned to Meta in October 2021, committing a substantial investment to this vision. Joining Meta, leading tech corporations like Google, Microsoft, Nvidia, and Qualcomm are pouring billions into developing this concept. McKinsey & Company predicts the metaverse economy could swell to $5 trillion by 2030, with e-commerce as its driving force and significant contributions from gaming, entertainment, education, and marketing sectors.

Presently, “metaverse” refers to a variety of enhanced online environments, from video games like Fortnite to emerging virtual workspaces and beyond, indicating a transition towards a multiverse of interconnected virtual spaces rather than a singular, unified realm.

Despite the enthusiasm, there’s skepticism regarding the metaverse’s differentiation from current digital experiences and the public’s willingness to immerse in digital realms via headsets for prolonged periods.

Yet, some futurists believe that despite early-stage challenges and technical hurdles, the metaverse is poised to revolutionize our digital interaction, marking a significant leap in technology evolution this decade, as Dave Wright from ServiceNow suggests in a conversation with TechTarget’s George Lawton.

A Brief History of the Metaverse

The metaverse concept, envisioned as the internet’s next evolutionary phase, promises a unified, immersive, and persistent 3D space that transcends the limitations of physical existence.

While technologies like VR headsets and AR glasses are rapidly advancing, other essential components for a fully operational metaverse, such as sufficient bandwidth and interoperability standards, may still be on the horizon.

Originating from Neal Stephenson’s 1992 novel “Snow Crash,” the term “metaverse” has been a part of tech dialogues for decades, with ongoing development aimed at realizing this immersive, virtual reality-based internet.

How does the metaverse work?

The metaverse, a concept still in its infancy, represents an ambitious vision for a fully immersive digital ecosystem. It is envisioned to be constructed on a foundation of advanced 3D technology, real-time collaborative software, and blockchain-based decentralized finance tools. The specifics of its operation, including critical aspects like interoperability among virtual environments, data portability, governance models, and user interface designs, largely hinge on the direction its development takes.

Lauren Lubetsky, a senior manager at Bain & Company, during the 2022 MIT Platform Strategy Summit, proposed three potential trajectories for the metaverse’s evolution:

1. Niche Dominance Scenario: The metaverse could end up as a collection of niche applications, primarily utilized for entertainment and gaming, falling short of becoming a ubiquitous virtual reality platform.
2. Fragmented Ecosystems Scenario: It might evolve into a landscape dominated by large, competing ecosystems (e.g., Apple’s and Android’s versions of the metaverse) characterized by limited interoperability between them.
3. Open and Interoperable Scenario: The most optimistic outlook envisions the metaverse as a dynamic, open, and interoperable space, akin to a three-dimensional internet.

Metaverse in popular culture

The metaverse concept has been explored and popularized through science fiction. Neal Stephenson’s “Snow Crash” introduces a dystopian future where individuals’ status is tied to their avatars’ technical prowess and their access to exclusive digital environments. Similarly, Ernest Cline’s “Ready Player One,” which was adapted into a film by Steven Spielberg, imagines a future where humanity seeks refuge from real-world problems in a virtual world called The Oasis, accessed through virtual reality visors and haptic gloves.

Accessing the Metaverse

Two key technologies pivotal to the metaverse’s development and expansion are virtual reality (VR) and augmented reality (AR):

• Virtual Reality (VR) offers a fully immersive 3D experience, allowing users to interact within a simulated environment that mimics the real world. This immersive experience is primarily accessed through VR headsets, which encompass the user’s field of vision, complemented by haptic devices like gloves or suits for a more tangible interaction with the virtual world.
• Augmented Reality (AR), while less immersive than VR, integrates digital elements into the real world, viewed through devices like smartphones or special glasses. Pokémon Go and Google Glass are prime examples of AR, offering digital overlays that interact with the physical world.

The future of the metaverse, whether it will predominantly utilize VR and AR or evolve with different interfaces, remains uncertain. As it stands, many metaverse-like experiences on platforms such as Roblox, Decentraland, and Minecraft are accessible via browsers or mobile devices, requiring only a robust internet connection.

A closer look: How virtual reality, metaverse relate to each other

Virtual Reality (VR) is frequently mentioned in discussions about the metaverse, yet it’s important to understand that these terms are not interchangeable. VR technologies serve as a gateway to the broader and more complex environments of the metaverse, offering immersive interactions within these expansive digital platforms.

VR’s Role in the Metaverse

VR facilitates a wide array of applications within the metaverse. For instance, it intersects with digital twin technology, allowing organizations to craft virtual replicas of physical entities, such as devices, machinery, or processes. These VR-enabled digital twins can simulate various scenarios, offering technologists a powerful tool for analysis and problem-solving, as highlighted by Johna Till Johnson, CEO and founder of Nemertes Research.

Industrial Applications of VR

In the realm of industrial applications, VR and digital twinning emerge as foundational elements of the nascent industrial metaverse. This subset of the metaverse aims to integrate digital twins into a comprehensive virtual environment, encapsulating machines, factories, products, and supply chains. Jim O’Donnell of TechTarget notes the transformative potential of the industrial metaverse in manufacturing.

VR’s utility extends to industrial design, where it enables organizations to explore the implications of design choices and construct virtual prototypes, thus bypassing the costs associated with physical prototypes. This application, as discussed by IT consultant Asim Rahal, signifies VR’s potential within the industrial metaverse for product design and prototyping.

Furthermore, VR finds application in employee safety training, particularly in high-risk environments. Asim Rahal adds that VR training can prepare assembly line workers and emergency responders by providing a risk-free training environment, thereby reducing workplace accidents.

Healthcare and VR

Beyond industrial contexts, VR also sets the stage for a healthcare metaverse. VR training systems, for example, could revolutionize surgical training by allowing surgeons to practice specific procedures repeatedly, shortening the learning curve, as reported by TechTarget’s Xtelligent Healthcare Media division. VR’s applications in healthcare extend to pain management and pediatrics, suggesting the early stages of a healthcare metaverse where VR operates alongside technologies like blockchain and digital twins.

Corporate Training and Development

VR’s impact is not limited to specific industries; it also enhances corporate training across various sectors. VR supports training for complex scenarios, such as astronaut training, institutional knowledge transfer, empathy training for customer service roles, and soft skills development. Notably, a PwC study found that VR can significantly accelerate the completion rate of soft skills training, making participants up to 275% more confident in their newly developed skills. This efficacy is attributed to the immersive learning experience VR provides and the opportunity for learners to practice skills repeatedly in a controlled environment.

Training and development are poised to become key offerings of the metaverse, leveraging VR’s ability to virtualize scenarios that are otherwise too costly or difficult to replicate in the real world. This integration of VR into the metaverse highlights the technology’s pivotal role in shaping future digital interactions and learning environments.

Other metaverse technologies

Beyond Virtual Reality (VR), a suite of emerging technologies is poised to shape the metaverse, a vast, evolving digital realm. The exact technologies foundational to the metaverse remain fluid, mirroring the dynamic nature of both the concept itself and the underlying tools. As Esther Shein elaborates in her exploration of metaverse development technologies, experts hesitate to define a fixed roster of technologies, emphasizing instead the multifaceted and evolving tech landscape.

Gartner frames metaverse technologies around “tech themes,” such as spatial computing, digital humans, shared experiences, gaming, and tokenized assets, while Forrester Research views them as “enablers of 3D development environments,” highlighting the necessity for skills in 3D modeling and IoT, especially for creating digital twins. According to Shein’s findings, seven key technologies stand out for their potential impact on the metaverse’s evolution over the next decade:

1. Artificial Intelligence (AI): AI’s role in the metaverse spans from creating more lifelike digital humans to enabling natural interactions within virtual spaces.
2. Internet of Things (IoT): IoT connects physical objects to the digital world, offering a seamless blend of real and virtual experiences.
3. Extended Reality (XR): Encompassing VR and Augmented Reality (AR), XR technologies provide the immersive experiences that are central to the metaverse.
4. Brain-Computer Interfaces (BCIs): BCIs could revolutionize how users interact with the metaverse, potentially allowing for control of digital environments through thought.
5. 3D Modeling and Reconstruction: Essential for creating the detailed, immersive environments of the metaverse.
6. Spatial and Edge Computing: These computing paradigms support the real-time, location-aware experiences and processing necessary for the metaverse to function smoothly.
7. Blockchain: Blockchain technology underpins the decentralization, security, and digital asset management crucial for an open and interoperable metaverse.

Distinctions Between the Internet and the Metaverse

While the internet is a vast network enabling communication, information exchange, and commerce, the metaverse builds upon and transcends these capabilities. Unlike the internet, which is primarily navigated through browsing, the metaverse offers a space where users can “live” to an extent, providing a more immersive, interactive experience. Innovations in gaming, such as Roblox and Minecraft, alongside tools like Zoom, hint at the metaverse’s potential to offer fully immersive, interactive worlds.

The Metaverse in Current Use

Today, the gaming industry leads in crafting immersive virtual experiences, a precursor to a more integrated metaverse. Massive online platforms like Roblox, Epic Games, and Decentraland showcase early mainstream uses of metaverse-like environments for gaming, virtual world-building, and digital real estate.

In the enterprise sector, the metaverse is beginning to extend virtual applications developed during the pandemic for remote work into more sophisticated realms, such as workplace training. Hospitals, for example, are leveraging VR and AR for medical procedure training, while innovative technologies like the AR surgical system Medivis, approved by the FDA, integrate digital imaging for surgical applications. Beyond healthcare, digital twin avatars and metaverse-facilitated work collaboration tools are emerging, offering enhanced realism for remote interactions and teamwork in 3D virtual environments.

How do NFTs fit into the metaverse?

Non-fungible tokens (NFTs) are poised to significantly influence the functionality and appeal of the metaverse. NFTs are digital assets secured by blockchain technology, similar to cryptocurrencies, but instead of representing money, an NFT can symbolize ownership of unique items such as artwork, music, or virtual real estate. Essentially, NFTs provide a verifiable digital proof of ownership, enabling these assets to be traded or sold within the metaverse.

Integration of NFTs in the Metaverse

The Metaverse Group, which identifies itself as the inaugural virtual real estate company, exemplifies the role of NFTs in facilitating the trade and lease of virtual properties across various metaverse platforms like Decentraland, Sandbox, Somnium, and Upland. Their portfolio spans across a diverse range of virtual spaces, including conference centers, commercial zones, art galleries, residential properties, and casual social spots.

This new digital economy has not only paved the way for emerging companies like Metaverse Group to thrive by dealing in digital commodities but has also attracted traditional businesses. A notable example is Nike’s acquisition of RTFKT, a startup specializing in creating exclusive virtual sneakers and digital collectibles authenticated via blockchain and augmented reality. This move, indicative of Nike’s metaverse-oriented strategy, was further emphasized by its venture into “Nikeland” on Roblox, offering a digital playground where fans can engage in games, social interactions, and customize their avatars with virtual Nike merchandise.

Nick Donarski of Ore System highlights the foundational role of NFTs and blockchain in establishing digital ownership, asserting that real-world identity and ownership will extend into the metaverse, with NFTs serving as the conduit.

Companies Leading the Metaverse Vision

Several prominent tech companies are actively shaping their own versions of the metaverse:

• Meta (formerly Facebook) announced a strategic pivot towards a metaverse-centric vision, emphasizing a shift away from its social media roots. This includes the sale of millions of Meta Quest VR headsets (formerly Oculus) and the launch of Horizon Worlds, a VR platform for users and developers to explore and create virtual spaces. Despite the financial risks highlighted by recent economic challenges, Meta’s commitment to developing the underlying technologies for the metaverse remains steadfast.
• Epic Games has also declared its intention to carve out a space in the metaverse, supported by a significant funding round that included an investment from Sony Group Corp. Unlike Meta’s approach, Epic Games envisions a metaverse that fosters communal interactions free from ad-laden news feeds, leveraging its vast Fortnite user base and Unreal Engine development software.
• Microsoft is integrating metaverse experiences into its Teams platform, offering users the ability to participate in collaborative holographic experiences from different locations. The company’s Ignite conference showcased new AI-powered features for Teams, including avatars and “holoportation,” enhancing virtual meetings. In partnership with Accenture, Microsoft is also developing Mesh-enabled immersive spaces to facilitate the onboarding of new employees through a shared virtual environment, demonstrating the metaverse’s potential to transform workplace collaboration and training.

These developments underscore the metaverse’s trajectory towards becoming a comprehensive digital ecosystem where NFTs play a crucial role in enabling ownership, trade, and interaction within uniquely immersive experiences.

When is a full-fledged metaverse coming?

The concept of a fully realized metaverse, offering lifelike interactions within a vast, virtual online world, remains several years in the making. As highlighted by Bill Gates in his 2021 year-end blog, the widespread adoption of virtual reality (VR) technology, including VR goggles and motion capture gloves essential for replicating expressions, body language, and voice quality, is still not within immediate reach for the majority. However, Gates predicts a significant shift for business meetings, moving from current 2D formats to immersive 3D metaverse environments with digital avatars within the next two to three years.

Impact of the Metaverse on the Future

The metaverse represents a spectrum of possibilities rather than a current reality, with many aspects of its development, governance, and impact on society still undetermined. Opinions on its potential vary widely; some see it as a revolutionary platform that will enrich human experiences beyond the physical world’s limitations, while others regard it as an extension of existing digital experiences, potentially exacerbating current issues associated with social media, such as disinformation, addiction, and violence.

A survey conducted by Pew Research Center in collaboration with Elon University’s Imagining the Internet Center revealed a divided outlook among 624 technology innovators, business leaders, and activists regarding the metaverse’s role by 2040. Approximately 54% anticipate it will become a fully immersive, integral part of daily life for at least half a billion people worldwide, whereas 46% remain skeptical of its realization.

Furthermore, an Accenture survey of 4,600 business and technology leaders showed that 71% expect the metaverse to positively affect their organizations, but only 42% see it as a breakthrough or transformational development.

Preparing Businesses for the Metaverse

For businesses, adapting to the metaverse involves more than transferring physical office spaces and routines into virtual equivalents. Early findings suggest that replicating real-world offices in a 3D virtual environment might hinder productivity and induce nausea or motion sickness due to VR’s inherent sensory discrepancies. Addressing user experience challenges, such as the “screen door effect” seen in VR headsets, is crucial, with high-resolution displays offering a potential mitigation strategy.

Despite these challenges, the metaverse offers unprecedented opportunities for global connectivity, collaboration, and efficiency, akin to the internet’s impact in the 1990s. If implemented thoughtfully, metaverse technologies could enhance remote worker engagement, streamline training processes, reduce physical office space requirements, and generally make work environments more enjoyable. Nonetheless, the transition may also lead to job displacement, necessitating reskilling initiatives for affected workers.

Omniverse and Work Applications

The term “omniverse” might refer to the collective of all possible worlds or, more specifically, to Nvidia’s industrial metaverse platform. Nvidia’s Omniverse is a real-time graphics platform designed for engineers, artists, and developers to create and integrate digital twins at scale, using the Universal Scene Description file format to facilitate comprehensive virtual world development.

Future of Work in the Metaverse

The metaverse promises to revolutionize various aspects of workplace dynamics, including:

• Enhanced Collaboration: Digital twins and immersive experiences could replace traditional in-person brainstorming tools, allowing teams to gather inspiration from virtual visits to locations like the Louvre Museum or collaborate on architectural designs in real-time.
• Accelerated Learning: Interactive simulations and gameplay could expedite skill acquisition, enabling employees to practice equipment operation or sales pitches in a lifelike virtual environment.
• Operational Oversight: The metaverse could simplify managerial tasks such as factory visits or construction site inspections, allowing for virtual interactions and evaluations that feel as authentic as being physically present.

These advancements suggest a future where the metaverse becomes an integral component of workplace innovation, transforming how businesses operate, collaborate, and train their workforce.

Metaverse pros and cons, challenges

The metaverse, with its vast potential and futuristic appeal, brings forth both opportunities and challenges, particularly in the realms of cybersecurity and privacy. The transition into this expansive virtual environment prompts a reevaluation of current privacy regulations and raises concerns over new forms of data vulnerability.

Challenges in the Metaverse

Ashwin Krishnan has highlighted several key issues that underscore the need for robust cybersecurity measures and privacy standards within the metaverse:

• Misapplication of Current Privacy Regulations: Existing frameworks like the General Data Protection Regulation (GDPR) may not fully encompass the unique contexts of the metaverse, necessitating adaptations or entirely new regulations.
• Intrusive Data Collection: The immersive nature of the metaverse allows for more detailed and potentially invasive data collection than traditional digital platforms.
• Data Rights and Ownership: Clarifying who owns and controls the vast amounts of data generated within the metaverse is a pressing concern.
• Exploitation of Minors: Protecting young users in a space as open and unregulated as the metaverse poses significant challenges.
• User-to-User Privacy: Ensuring privacy between individuals within the metaverse requires novel approaches beyond those used in current digital interactions.

Krishnan suggests that businesses engage proactively in developing specific data privacy policies for their operations within the metaverse and collaborate with platform developers and standard-setting bodies to establish comprehensive security and privacy frameworks. It’s also crucial for consumers to familiarize themselves with the security and data privacy policies of both the companies they support and the platforms they use.

Pros and Cons of the Metaverse

TechTarget’s consultations with analysts, consultants, business leaders, and researchers have illuminated both the advantages and potential drawbacks of the metaverse:

Pros:

• Exploration Beyond Limits: The metaverse offers unprecedented opportunities for virtual exploration, allowing users to experience environments as distant and diverse as outer space.
• Enhanced Social Connections: Interactions in the metaverse can surpass the depth and richness of traditional online social connections, providing a more immersive experience.

Cons:

• Amplification of Negative Behavior: The same issues plaguing current social platforms, such as harassment and misinformation, could be intensified within the immersive environments of the metaverse.

This analysis underscores the dual-edged nature of the metaverse: while it promises to revolutionize human interaction and expand the horizons of virtual experiences, it also necessitates careful consideration of privacy, security, and ethical standards to mitigate the risks associated with such a comprehensive digital domain.