Gaming and social media companies are at the forefront of metaverse development, but enterprises will lead the charge in the next three years. This shift will be driven by the future of work and digital transformation initiatives ongoing across sectors ranging from retail to healthcare and financial services. Big Tech is championing the metaverse, with Microsoft and Meta promoting it as the ideal environment to support hybrid working.
Listed below are the key macroeconomic trends impacting the metaverse theme, as identified by GlobalData.
The metaverse is still largely conceptual, but the growing volumes of investment in it derive from the belief that it is the future of the internet. Bold claims made by companies like Meta, Microsoft, and Epic Games have inflated market expectations. In addition, Web3 enthusiasts took this opportunity to initiate a so-called revolution against Big Tech by promising users ownership of their data and content.
While some metaverse-enabling technologies, such as artificial intelligence (AI), have matured substantially over the years, others are still developing. That said, the push to create the metaverse will boost the maturity of these technologies.
Consumer awareness of the metaverse is currently low, and many perceive it as purely marketing hype. Marketing automation platform Klaviyo surveyed over 1,000 Americans in February 2022 and found that 49% did not know what the metaverse was. Among the respondents who had heard about the metaverse, most were skeptical about how it would develop, with 78% referring to it as hype. The study also highlighted that 45% of 18 to 24-year-olds have no idea about non-fungible tokens (NFTs), and even those who do are not that interested.
Another 2022 survey conducted by Accenture on more than 11,000 consumers in 16 countries revealed that 64% of respondents had already purchased a virtual good or taken part in a virtual experience in 2021. The survey also found that 42% of respondents had visited a retailer in the virtual world to get advice, make a payment, or browse a product when buying a physical item, while 56% plan to do it in 2022.
Advertisements will be a key revenue source for consumer-focused metaverses. Brands from sectors such as apparel and foodservice have already attempted to grab this opportunity. Some brands have partnered with platforms like Fortnite and Roblox to expand their advertising opportunities, while others are buying virtual land in The Sandbox and Decentraland. As a result, advertising firms such as Publicis.Poke, S4 Capital, and Vayner Media are creating departments to understand the metaverse and help brands identify future opportunities.
Enterprises will become the prime market for metaverse developers in the next three years. New use cases will emerge as Nvidia, Microsoft, and Meta strengthen their metaverse capabilities, and start-ups develop solutions around data visualization, collaboration, and training. Companies from different sectors are focusing on augmented reality (AR) and virtual reality (VR) or 3D visualization that will fuel the evolution of enterprise metaverse platforms.
IT services vendors Infosys and Tech Mahindra have launched metaverse platforms to help clients explore opportunities in the theme and support their digital transformation initiatives. While large enterprises legitimize the metaverse, developing use cases will allow more small and medium-sized enterprises to enter the theme in the future.
The future of work
GlobalData’s thematic framework for the future of work includes five main categories: visualization, connectivity, automation, collaboration, and interpretation. Technologies for the future of work such as AR, VR, digital twins, wearable tech, AI, 5G, and collaboration tools are driving the development of the metaverse.
Big Tech companies such as Microsoft, Nvidia, and Meta, and start-ups like Varjo, Virbela, and Spatial, view the metaverse as the next stage of workplace collaboration. While most enterprise metaverse platforms focus on collaboration, some use digital twins to replicate physical places. In terms of adoption, large companies from a variety of sectors such as technology, banking, advertising, and professional services, are entering the metaverse with a focus on the future of work. However, many big companies are taking a wait-and-see approach.
Start-ups like PixelMax and NextMeet are developing virtual workplaces in the metaverse. They allow users to meet their colleagues’ avatars in virtual offices for socialization, collaboration, and gamified learning activities while working from home. Several start-ups are also creating technologies for enterprises that can be used in the metaverse.
Safety is a critical concern in the metaverse. One of the key issues to tackle is sexual assaults, which are rife on existing virtual platforms. Sexual harassment in Meta’s Horizon Venues was reported during trials in 2021. Another challenge relates to children; it will be difficult for parents to ensure that their children remain in age-appropriate metaverses. The platform developers must fundamentally incorporate settings like safe search, profanity filters, and parental monitoring of children’s activities.
The underlying technologies associated with the metaverse, like social media platforms, are already seen as widely damaging to many. Unfortunately, the issues attributed to these platforms will likely be extended or even exacerbated in the metaverse. Not only will it follow a similar ad-based model, but it will be more immersive, integrated even further into most aspects of users’ lives, and will be harder to regulate.
Meta is already working on moderating toxic behavior in its metaverses. It has added a safety feature, dubbed Personal Boundary, to two VR apps (Horizon Worlds and Horizon Venues). The Personal Boundary feature allows avatars to add a bubble around them with a radius of two feet, which stops users from coming into close contact. But there is much more work to be done, given that metaverses are not mainstream yet. Metaverse developers must view moderating behavior as a foundational aspect.
This is an edited extract from the Metaverse – Thematic Research report produced by GlobalData Thematic Research.