EP16 - The Metaverse - what is it and what does it mean for business and society

Recently I was playing a game in VR instead of reading a book. It was a novel experience. Hello everyone and welcome to the Tech Journal. My name is Marc Vereminnam and I am the digital speaker throughout the Tech Journal. I want to bring you the latest in digital news, uncovering the latest digital innovations and taking a look at what the future may hold. From Second Life real estate and real life virtual spaces to Battle Royale, social spaces selling digital fashion and copyright infringements for Roblox, I aim to look into every corner of the digital world, shining a light on exactly what is going on and taking a close look at what all of these ones and zeros mean for our public and private lives. In this video, I'm going to be exploring more of the world I exist in, the Metaverse, looking into where it was, where it is, and more importantly, where it is going. Hopefully, by taking a closer look at this new frontier, we will get a better understanding of what it means for our professional and personal lives. So let's get right to it. It's time to start today's digital download. The Metaverse. A shared virtual space. A place where our physical world blends with the virtual and creates a new digitalized space somewhere in between. In these spaces, the rules change. People become what they dream about in their daily lives. They express their inner selves through digital avatars and can even bring their digital idols out into this world. Initially, this space was reserved for gaming. But as digitalization becomes ever the norm, the Metaverse is becoming a place with limited possibilities, with fashion shows, movie screenings, concerts, and even digital products. Head of Experiences Product Marketing at Facebook Reality Labs, Megan Fitzgerald describes the Metaverse as a shared, three dimensional and digitally driven space. A space that ultimately combines physical and online elements. Although trying to define the Metaverse is still a risky business. As technologist Peter Gashton puts it, to pin down the Metaverse is not a simple task. I'm always wary of when people say the Metaverse will be this, because in my opinion, nobody is really qualified to make that call yet. The term Metaverse first appeared back in 1992 when Neal Stephenson released his science fiction novel Snow Crash. In that book, humans, as avatars, interact with each other and software agents in a three dimensional space that acts as a metaphor for the real world. Stevenson used the term to describe a virtual reality based successor to the Internet. And this vision was not far off reality. Since 1992, the pace of digitalization has ever quickened, and with it we have seen Metaverse technologies constantly reaching new heights. The Metaverse is currently built on several spheres, with the Internet being the largest. It supports games and social spaces alike, with the 2003 title Second Life being one of the original successful attempts to create a Metaverse portal. VR or Virtual reality, a technology that has always inspired imaginations but could never quite deliver, is now a realistic, albeit alternative to classical computer based Metaverse Portals and shows this with the 2017 title VRChat, which is a good example of a Metaverse portal to a digital social space, AR or augmented reality, which back in 2016 became the most popular. Metaverse portal thanks to the success of Pokemon Go also has plenty of Metaverse centered programs and devices in production, and XR Extended Reality is a cross platform technology that looks to combine VR, AR and the Internet. While the Metaverse and digital spaces in general are largely devoted to gaming, it is in fact software that largely centers around human to human interaction which tends to inspire the most. Titles like Pokemon Go succeeded in creating such a buzz, exciting the whole world because of how much it got everyone together, out of the house and trying to catch them all. Even the most successful title today, Roblox leans heavily on its platform's social elements. Roblox is a platform predominantly aimed at a younger audience, with a main emphasis on player generated content. Players can create worlds or maps and create different games for them. Some maps are peaceful social spaces where building and cooperation are encouraged, while others are competitive spheres and boost a vast array of creative games. The company went public in March and developed a market cap of $45 billion, earning its creators and developers $500 million. And here's the crux of the matter. The potential market size is huge. The founder and CEO of Roblox, Dave Barzewski, even teamed up with author Ernest Klein to help promote and flesh out the story to Ready Player One, a movie set in a dystopian future where humanity spends most of its waking life inside the metaverse, an idea that may not be science fiction as we initially thought. Fortnite creators Epic Games are looking to turn Fortnite into the world's first full Metaverse, a Roblox inspired space where Fortnite players can exist without the need to constantly compete. Spaces like these would need to be filled with something, though. You would undoubtedly watch as these spaces are slowly transformed into areas areas providing services and group entertainment like movies, music and talk shows like the one you're watching now. By the time this tech is mainstream, contactless payments and digital currency will be more accessible too, meaning even small artists could digitally perform in these areas for tips like digital busking. Advertising could also play a big role and take the form of sponsored in game items like all drinks would be coke or food or McDonalds. While this is pretty hush hush right now, Epic Games CEO Tim Sweeney tweeted at the beginning of 2020, Fortnite is a game, but ask that question again in 12 months while Fortnite is still just a game. As Covid and other technical limitations undoubtedly slowed operations, the sentiment shows where the company aims to take their product. The main technological limitation holding the Metaverse back right now is server size. Servers can usually accommodate up to 100 people. This was felt the most during a recent Fortnite Metaverse event where they managed to attract 10 million people to watch a DJ Marshmallow virtual concert. This audience of 10 million needed to be split up into the servers of 100, meaning all who attended would only see 99 other players at the concert. This limitation does look like it has a lifespan though. An improbable Worlds title Scavengers recently experimented with 4,000 players on a single server. While the experiment ended up in utter chaos, the fun kind of chaos where 4,000 players simultaneously charged down the same narrow hill in a race to the finish line, it proved a successful test and a good sign of the things to come. Social interaction spaces seem to be the main focus for many of the digital giants. Facebook's project Facebook Horizon looks to give Facebook users a shared digital space where they can interact, play easy and fun games, and even create. With 20% of the company's entire staff working on these Metaverse VR and AR technologies, Zuckerberg clearly has faith in the potential the Metaverse holds. Niantic is another Metaverse project looking to connect the entire world using one program. Their ultimate aim is to create an AR platform where users from around the world can interact, joining forces to create projects which would otherwise be impossible. Then, in a similar style, Magic Leap is a new device that leans on AR to digitalize training and collaboration. Magic Leap is already used by surgeons when planning complicated procedures, highlighting the diverse possibilities associated with the Metaverse. They are seems to be the main focus of many Metaverse centered companies right now with Quantum Matrix Ltd. A leading Hong Kong based digital humanoid technology company, and and Snapchat being the two other well established digital companies heavily investing in the Metaverse projects. Snapchat Lens, for example, is already pushing the boundaries for open source AR development, releasing their AR development platform Snapchat Lens Studio for free to anyone who wants to use their system to design AR experiences. Snapchat has already seen the platform give birth to numerous groundbreaking AR experiences with utility lenses that let you measure, amount and analyze real world objects educational lenses that show you the muscle under your skin or the word of an object in a foreign language entertainment lenses that enrich concerts, museums and tourist attractions and shopping lenses that let users try on clothes, makeup, shoes and jewelry without needing to even leave the house. Snapchat's Lens Studio represents the dawn of this technology. This then nicely leads me to the next point. What does this all mean for business? Products are going Digital. Digital goods Intangible products only available in digital form like e books or digital apparel have already grown in their short lifespan to be 190 billion dollar market and will only continue to grow. This new frontier represents a new era, a new generation of digitally literate consumers, A type of consumer tapped into a different type of digital consumerism, one which rests far more around an experience rather than a product aesthetic. Digital items, essentially digital fashion, are far more about the experience of buying and displaying the item instead of the quality of the item itself. IMVU, another metaverse portal founded in 2004, had a digital fashion show earlier this year in May 2021. This single event helped revive the dying audience to over 7 million active users and lifted the app into the top five grossing apps in the App Store. This fashion show had over 200,000 creators and saw 50 million items added to their catalog. It is not only dying platforms who are capitalizing on this though. Gucci, one of the earliest fashion brands to understand the potential in the Metaverse, having already added fashion items in the Sims and Pokemon Go recently, we went a step further and created a digital version of their 100th year anniversary exhibition in Florence to Roblox. This digital experience lets users move around the exhibition's seven digital rooms, encouraging them with collectible items along the way, while at the same time enabling them to purchase digital Gucci items. It's not just fashion brands who are getting into the Roblox space either. Recently, Sony Music entered a partnership with Roblox at the same time as paying Sony Music a settlement for music rights infringement. Sony and Roblox entered this mutually beneficial partnership. To date, they have already put on a digital Lil Nas X concert and the Zara Larson launch party where they sold digital merchants for fans avatars to wear during the shows. The platforms have said they intend to unleash a wave of Metaverse experiences. Roblox reached a similar deal with BMG and Warner before as they found themselves in a similar situation, starting with a settlement for rights infringements and moving forward to find common ground. One of the main issues with capitalizing on digitalization is the case of pirating. During the rise of pirate culture, a term used to describe people who frequented the Pirate Bay, many companies have found themselves in a losing battle against the dark, decentralized aspect of the Internet and how easy it is to copy intellectual property. So how can a company ensure that their valuable digital items is one of a kind? This is where NFTs come in. NFTs non fungible tokens are a recent digital method for creating a single unique digital item, which I've covered before in the Tech Journal. The digital item is supported by a blockchain, ensuring its uniqueness and authenticity. NFTs have been making waves in a number of industries, from international trade and fine art to fast food and online forums. NFT art is a recent trend highlighting the impact the metaverse is having on a real world industry previously thought incapable of digitalization. Thanks to blockchain technology, digital art can now be one unique and too traceable more. Unlike the real world, an artist can receive a commission each time the art is sold, an aspect many artists would love but logistically impossible for real world art. Another industry one would not think of when it comes to the metaverse is fast food. Taco Bell, an American fast food chain, recently made tens of thousands of dollars after releasing a series of NFTs. While profits were modest for the well established brand, the case study highlights that if a fast food restaurant can sell NFTs of floating tacos and make money, then other companies definitely can. Reddit, the social platform with over 50 million downloads on Google Play and hundreds of millions of users, is a well digital platform looking to become part of the Metaverse and get into the NFT market. In collaboration with Metamask, a crypto wallet and Gateway to blockchain NFTs, Reddit is launching what it claims will make Reddit history with the launch of Reddit's first NFTs, avatar based fashion items and profile badges, items designed more to be collectible than useful with the obvious intention of being around for at least the next century. The NFTs it releases now have the potential to one day be worth 100 times what they are worth now. Even cryptocurrency was getting involved as Dogecoin hosted its own MII Metaverse party where attendees from all over the world could interact with each other through AR and be showered with NFTs and Dogecoins for just turning up. Imagine as the metaverse becomes a reality and an established part of society as much as sports or theater is now. We are living through the dawn of a new age, an age with giants we have watched grow around us. Facebook, Google, Reddit, even Roblox will stand tall for centuries to come as founding pillars of the metaverse. Gucci's move by itself hosting a digital 100th birthday celebration on Roblox, a platform aimed at the younger generation, shows how much this high end brand believes the future is in the Metaverse. His move shows it aims to keep itself relevant to future prove itself as Taco Bell and Gucci prove, Regardless of the company, product or mission statement, all companies should be thinking about staking their claim in this new sphere or risk going the way of the gramophone with the huge amount of AR devices in production with Google Glass, Snapchat, Glass, Magic Leap, Niantic to name only a handful. The metaverse will only bleed more into the physical world, meaning that even companies refusing to participate online will still exist in the sphere the metaverse touches, meaning they can either get on board or left behind. I can compare this by analogy to a business today without a website. A website has become essential for a business as a storefront, whilst pre millennium a metaverse presence may simply be the next step, a do or die moment for many companies. While businesses that embrace this will stand a chance of beating the test of time, private citizens will have more flexibility on whether they include themselves in this new sphere like I have already done. But again, much is much in the same way. Those who embraced the Internet had an upper hand over those who rejected it. Those who embrace the metaverse and become fluent in its language may have an upper hand on those who do not. Only time will tell. But if history has taught us anything, it is that post industrialization those who embrace the future first thrive. Are you excited about the potential or worried about the implications? Maybe you think I missed something important? Let me know in the comments below. I read them all and with that I will finish today's download here. If this digital download hits you right in your cpu, leave a like and subscribe to the channel. This has been the Tech journal. See you next time. Stay digital.