Metaverse: Hype or here to stay?

Remember when the internet was an ambiguous, difficult-to-comprehend concept met with skepticism long before it became today’s ubiquitous fiber of society? In case you’re too young to remember, this video gives you a pretty good idea. Much like the early days of the internet, the metaverse is trendy, often confusing and is still working through challenges with accessibility and tech capabilities. The critical question we must ask: Is the metaverse an idyllic dream that has garnered dollars and publicity only to fall short in practice? Or are we witnessing the early development of the next generation of the internet, as the metaverse attempts to fundamentally alter the way we interact, experience and transact with one another?

What is the metaverse?

The term metaverse is broad and encompasses many concepts and components. It includes popular virtual worlds like Decentraland and The Sandbox where users can interact and explore unique experiences. Its ethos draws its principles from the evolution in how we view social engagement. Anyone can cultivate an avatar filled with self-expression to move through the virtual world with more creativity, optionality and ownership than we often have in the physical world. Three components that enable the digital economy, social transformation and interoperability of the metaverse vision are:

1. Extended reality: refers to the combination of both real and virtual environments as well as the interactions that are generated by computer technology
2. Internet evolution: advancement toward a decentralized internet, leveraging the blockchain, that allows for greater participation, ownership and interaction for the user
3. Payment and transaction evolution: progression from online purchasing to cryptocurrency to NFTs

Current state of the digital ecosystem

Sentiment around the metaverse has evolved over the past year. Online searches and engagement skyrocketed after the Meta name change, but we have recently seen the buzz soften. Although believers continue to push forward in development, questions remain on mainstream user adoption. Here are some of the latest developments and considerations:

• Virtual worlds are reportedly experiencing low numbers of daily active users (DAU). Will this persist? Or will experiences become more engaging and draw in more consistent users?
• VR/AR headset sales continue to grow, but issues remain around comfort and consistent usability. Will eyewear/headwear technology improve to the point of being a household item used frequently?
• Cryptocurrencies have come under fire after recent industry scandals and price plummets. Will this affect the metaverse economy and overall trust of the digital world?
• The NFT market is volatile. Pieces of popular art previously selling for hundreds of thousands of dollars are worth a fraction of that now. Meanwhile, popular public figures’ personal NFTs are selling in hours. How will the use of NFTs evolve for celebrities, brands and businesses over time?
• B2C companies continue to host experiences and events in virtual worlds. Each week new and exciting experiences are hosted by name brands aimed at their customers, but will use cases expand to B2B opportunities?
• Development activity on the blockchain remains strong. Even with middling DAU numbers, is this quiet period the launch pad needed to build out better experiences, security and interoperability?

We’re continuing to monitor the development of each point above and we’re learning more about the impacted industries we service. Every technology trend has an adoption life cycle, hoping to cross the cavern to mainstream adoption. Can technology and social desires match the dream of the metaverse? We’ll be watching.