Metaverse – is there anybody in there?
Everyone is talking about the metaverse. But what exactly is happening there, and what are the opportunities and risks?
When asked what they can imagine doing in the metaverse, people said they would use it for travel experiences, attending virtual meetings or going to a concert. How many have actually done any of that, though? Nine out of ten consumers worldwide are interested in the topic, but only a few have actually immersed themselves in a virtual world (Capgemini, 2022).
That being the case, it’s even more remarkable that there are so many virtual worlds – 154 were counted in the second quarter of this year (Metaversed, 2023). Each has different functions and environments.
Virtual spaces are not only known among gamers; companies are also developing their own virtual locations there. But is anyone giving it a go? If so, how? We asked the visitors at Hannover Messe 2023 and filmed their responses.
Benjamin Krug and Timo Bergold attended Hannover Messe 2023 for this survey.
Who were the forerunners when it comes to creating the metaverse?
The term "metaverse" was first mentioned in 1992 in the science fiction novel "Snow Crash" by Neal Stephenson as a 3D visual successor to the internet. In 2003, what was considered the first virtual world, "Second Life" allowed users to create an avatar and interact digitally with others, watch movies, play games, as well as buy and sell products, such as clothing. Other, similar platforms were developed after that, including IMVU in 2004 or Roblox in 2006, followed by Minecraft in 2011.
Ten years later, the interest in virtual worlds among the wider population skyrocketed. This was triggered by Facebook renaming itself Meta and launching its own virtual platform, Horizon Worlds.
Which virtual worlds are leading the way?
Second Life was way ahead of its time and today it attracts 200,000 people per day, which is roughly how much Meta's Horizon Worlds manages per month. Gaming platforms, however, are still the most visited (We Are Social & Meltwater, 2023).
Fortnite tops the list with more than 250 million players per month, followed by Roblox, Minecraft, and Axie Infinity. In comparison, platforms like Sandbox and Decentraland have significantly less traffic. There, the aim is to trade cryptocurrency, for example, to buy and sell so-called NFTs (non-fungible tokens). Many companies currently are also buying properties there.
Due to the diverse definitions of the metaverse, there are no absolutely reliable user figures, but the existing ones definitely indicate trends.
In which countries are double lives most common?
Emerging countries such as India, Peru and Mexico love the metaverse, whereas developed countries such as the USA, Germany and the Netherlands are more likely to question it. Globally, the metaverse is perceived as positive on average, with China, India and Peru being most open to it and Canada, the UK and Japan most critical.
For example, China is heavily engaged with the opportunities and risks of the metaverse. Shanghai plans to build 30 attractions in the metaverse by the end of 2025 – as part of the city's "smart tourism" strategy. In addition, Chinese regulation plays a role; users there cannot trade NFTs and the use of cryptocurrency is prohibited.
Private or professional?
According to a study by McKinsey & Company (2022) a total of 80 percent of respondents who are in the metaverse enjoy spending time virtually with family and friends, followed by attending virtual work meetings, concerts and training sessions. They are also open to other new offerings, such as shopping, exercising and dating.
Companies are also beginning to see the metaverse as a new way to engage with their customers. Many have already invested in its development and are experimenting there to engage customers as well as employees. They market themselves there, train employees, hold meetings, host conferences, and develop products in virtual collaborations but they also believe that the metaverse is also a place for leisure activities.
Which industries rely on the metaverse?
Companies are often quoted as describing the metaverse is "the future," "a new way of doing business," and "full of new opportunities". For this reason, companies around the world have invested in its further development - most frequently from the IT, education, finance, marketing and healthcare industries.
According to data from McKinsey & Company, more than 120 billion US dollars were invested in the metaverse in 2022 - more than double that of the previous year. Major corporations such as Epic Games, Unity, Meta, Microsoft, NVIDIA, Google and Qualcomm have been at the forefront. On average, metaverses are projected to add up to 8 trillion US dollars in economic value by 2030.
The biggest potential economic driver is e-commerce, as the metaverse is expected to combine conventional shopping in real stores with online commerce. Forecasts put this sector's market share at up to 2.6 trillion US dollars. Other potential economic drivers are from the gaming, healthcare, labour and education sectors.
What are the risks?
The metaverse is often praised for its openness, interconnectivity and rapid technological advancement. However, it is still prone to risks.
A briefing by the European Parliamentary Research Service (EPRS) lists possible risks, ranging from data protection to security in various areas such as financial transactions, to health risks, especially for minors, and discrimination against minorities. Anyone who spends 20 minutes in the virtual world leaves behind data – one estimate puts the number of "data points" at up to two million. These can be turned into money - but also be misused.
Currently, there are discussions about the adaptation of current regulations and the improvement of data protection of data sharing, blockchain regulation and content moderation.
… closely follows the ever-evolving realm of digital media in order to know more about its opportunities, impact and risks. She believes the metaverse is the place where creativity and innovation come together to change the way we live, work, and interact.
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