Like many innovations, the metaverse is covered in mysticism and skepticism but it has already transformed the way we work, shop, socialise, and play – where our digital and physical worlds increasingly blur.
WHAT WE ARE SEEING
Our shift towards a more digital lifestyle has accelerated, particularly as the pandemic’s impact continues to ripple. The metaverse represents a shift from having daily digital life always accessible with clear boundaries between online and offline, to pervasive ambient computing that blurs the line between the physical and digital worlds.
The metaverse is a vision for the next frontier of computing. While definitions of what the metaverse actually is remain contentious, we view it as a persistent 3D digital space that will enable new experiences across multiple devices and platform providers, including rapidly evolving VR and wearable AR devices.
The most recent tectonic shift in our digital lives has been the move to a mobile-first Internet. That transition radically shifted the landscape across every industry, with new business models unlocking new value, and rapid adaptation required from all players to compete in the “new”. The metaverse is an answer to what might be next—what could our post-mobile world look like?
Independent analysis from both Goldman Sachs and Morgan Stanley predict the metaverse represents an $8 trillion opportunity1. However, it must be noted that much of the analysis currently being conducted by other consultancies tends to use a watered-down definition of the metaverse, i.e. something closer to the brand activations on platforms like Roblox and Fortnite that currently exist.
We disagree with this definition as it refers to simple gaming experiences and fall far short of a persistent, interoperable virtual experience between various platform and technology providers—so take these numbers with a healthy pinch of salt.
Regardless, technology giants Microsoft, Meta, Apple, Google and Amazon are investing heavily in this space — an estimated $80B+2 over the last 12 months. This sustained investment is rapidly solving key engineering and experience challenges across hardware, software and content.
While it’s unlikely people will be wearing today’s bulky VR headsets in public spaces any time soon, accessing the 3D metaverse may become as simple as putting on a lightweight pair of specs (or maybe putting in a contact lens!)3. Apple in particular has been very close-lipped about their metaverse ambitions, however their efforts have largely focused on AR over VR in recent years.
But the metaverse isn’t a single technology and won’t be owned by a single organisation, much like today’s internet. Lightweight extended-reality platforms (VR / AR) may be key interfaces used to interact with the metaverse, but the growing adoption of digital assets as well as advances in networking and identification will also play a major role.
The building blocks are already in place, and the full potential of the metaverse is most likely to take another 5-10 years to unfold. But, that doesn’t mean organisations should wait to develop their strategic position on this wild new technological frontier.
Metaverse vs Web 3.0
Metaverse and Web 3.0 get mentioned almost interchangeably sometimes, but while both technologies are emerging in parallel that are separate initiatives with separate aims.
Web 3.0 is the movement towards decentralisation of assets, identity, governance, and finance, powered by blockchain technology.
Some use cases you may have seen include cryptocurrency, NFTs (decentralised digital assets), but the ambition is to create a new decentralised iteration of the World Wide Web.
While the success of either technology isn’t reliant on the other, ultimately, they could be complementary. Web 3.0 may be a good fit to enable the digital asset economy of the metaverse, and drive new solutions for identity, verification, and governance.
WHAT YOU CAN DO
The standards, governance and experiences that define the metaverse will be shaped over the coming years, causing a transition with the potential to upend the dominant digital order across multiple industries and creating new opportunities for all players.
While the full vision of the metaverse will unfold over the next decade, aspects of it are already in place and widely adopted. Millions of users are engaging through platforms such as Fortnite and Minecraft, as well as virtual worlds such as Sandbox and Decentraland, and brands are using those platforms today to reach those audiences.
Again, we are sceptical that these platforms currently represent an actual metaverse experience, but the potential is certainly there. In addition, Microsoft recently announced that they were banning all NFT and blockchain projects (key enablers of the metaverse) in Minecraft because it defeats the egalitarian ideals of the platform. This should be a strong signal for any organisation looking to play in this space.
There is significant debate about what the metaverse will look like, and whether it’s impact will live up to the hype. While we see the growing user base for 3D experiences and significant innovation and investment in the space pointing towards a mainstream market for the metaverse—even an optimistic scenario will create new risks to be navigated.
Privacy and security will take on a new dimension and ensuring the metaverse can become an inclusive and accessible space remains a challenge. It’s also possible that the vision of an open, interoperable metaverse will be stymied by technical, standardisation and coordination challenges, affecting how partnerships across platforms will work in the future. Ultimately the norms emerging over the next 2-3 years are likely to set the standards we will live with as the metaverse arrives.
Understanding and engaging with these challenges will ensure organisations better design and operate communities, and help the wider industry shape the metaverse to its full potential.
The full impact of the metaverse may not be known today, but captivating content and engaging experiences with utility and purpose must be at the forefront for brands to succeed. Organisations must take a long view, focusing on demand and what motivates users to establish share and remain competitive as the new channel evolves.
This perspective was written in collaboration with Jess Herrington & Leigh Mannes
[1] Morgan Stanley’s Metaverse Research Understanding the Metaverse and Web 3.0
[2] Deloitte: The Metaverse
[3] AR display contact lenses
Emad leads the Creative Technology capability in Deloitte Digital across Australia. He leads a team of Engineers, Developers and Artists at the forefront of Creative and Emerging Technology, finding new and innovative ways to harness their ability to create meaningful and impactful solutions. Emad has led teams who have successfully delivered multi award winning work in the fields of Robotics, Data Visualisation, Machine Learning, Virtual & Augmented Reality and Product Design. His work has been recognised and awarded globally, including two D&AD Black Pencils and the Cannes Lions Grand Prix for Good.
