Quick take:
- After recent stories suggesting the metaverse is dead, we asked experts to weigh in on the subject.
- We also managed to get their input on what could be holding the industry back.
- And why optimism is still high based on recent industry reports.
The metaverse was the trendy buzzword between October 2021 and June 2022. And even after that, it continued to dominate headlines up until later in the year, when tech layoffs started to kick in. First, it was Meta, then Microsoft, Tencent and Disney. That list is still growing, and most of the layoffs have been linked to Metaverse divisions.
Coupled by the huge losses that Meta’s Reality Labs, the social media conglomerate’s metaverse division, has continued to report since 2021, critics have come out guns blazing with the unpopular phrase “the metaverse is dead”. But is it?
We posed this question to eight industry experts and they all seem to agree that it is an overstatement. And there are multiple industry research reports to support their views.
In a recent study sanctioned by one of the leading proponents of the metaverse, Meta Platforms, the metaverse could contribute $760 billion, approximately 2.4% to the US GDP by the year 2035. The same report goes on to predict that the metaverse industry could add $45.3 billion to $85.5 billion to the Canadian economy.
If we loop this information together with an earlier report published by Deloitte that focused on Asia, and another one by PwC that focused on the middle-east region, then figures begin to add app towards McKinsey’s 2022 report that forecasted a metaverse valuation of $5 trillion by 2030.
However, like any emerging industry, it was always bound to be a roller coaster ride for the metaverse. The early adopter challenges seem to be playing the role of a sieve, separating true believers from pretenders.
Some got into the industry without understanding what it is — for the hype. But what really is the metaverse?
Without a standard definition, the metaverse is broadly described as a virtual space where people can interact immersively in 3D worlds through gaming, trading and virtual events. It can be built on web2, or web3, a next-gen internet that prioritises decentralisation, community ownership and user privacy.
For the latter, the metaverse has been described as the future of the internet. However, the idea that this concept plays out in the future still divides industry opinion.
One industry expert that believes that “the internet is on a steady evolutionary path towards the metaverse” is XYO co-founder Markus Levin. Levin also thinks that it is too early to claim “the metaverse is dead”.
“Some companies made huge bets on the metaverse and it will be seen if those will pay off or not, but it is too early to tell if they got burned. The idea of improving our networks and expanding what’s possible in the digital realm is alive and well,” Levin told NFTgators.
He also thinks that those who think AI is the new shiny toy that could render the metaverse obsolete are wrong. According to the XYO co-founder, AI and blockchain technology complement each other and are part of the technology stack that will power the metaverse.
“AI seems to be the only way to generate infinite, complex metaverse-realities which allow their users to have unique interactions and experiences. Coupled with blockchain and decentralized networks this would increase user trust,” Levin added.
Gianfranco Lopane, President of Habytat, a platform that focuses on metaverse real estate says that regardless of whether the metaverse is the future of the internet, it is here to stay. For Lopane, the fact that it makes already existing experiences like gaming better and more engaging is one of the primary reasons it is not going anywhere.
Being in the metaverse is “as if you’ve stepped into a movie or video game and become a part of the action, making your interactions in the metaverse more meaningful and appealing,” Lopane said.
Ethernity and Ethernal Labs CEO and founder Nick Rose Ntertsas couldn’t commit to the notion that the metaverse is the future of the internet. He says it is somewhere in between. “For a truly web3 native metaverse experience the industry needs consumers to adopt token-gated ecosystems,” Ntertsas said.
For the Ethernity founder, the next Bitcoin halving could play a crucial role in the mass adoption of users in the metaverse. “We believe post-Bitcoin halving March 2024 onwards will bring in a next billion users and thus making crypto-centric metaverse experiences much easier to access, especially on the web3 gaming front where users can interact with NFTs as assets,” he said.
Jonathan Goodwin, Head of Community for NFL Rivals at Mythical Games thinks the metaverse will not likely be the future of the internet, “but as the tech improves, it’ll be a significant part of the internet where the hyper-online congregate and more casual browsers will pop in for events and specific activities.”
However, Nadia Eldeib, CEO and Co-founder of Ethos says, “If you interpret the metaverse to mean existing or spending time in the digital world in some capacity, whether that’s through a mobile phone or computer, we’re all already in it.”
“If you think about how much of our time is spent online today across devices and applications, from your favourite mobile application to playing a console-based game to checking email in your web browser on your personal computer, we are already spending significant time in our ‘digital lives’,” she said.
Junaid Gulzar, co-founder and CTO of Windfall, a cryptocurrency created to help people buy real estate in the metaverse believes the 3D virtual space is the next phase in the evolution of the digital world. He expects the metaverse to be more than it already is once the required tech is developed.
“With developments in emerging technologies such as augmented reality (AR) and virtual reality (VR), the scope of what can be created, experienced and interacted with is unbound,” said Gulzar.
But to reach its full potential, Animoca Brands co-founder and executive chairman, Yat Siu believes the metaverse must be “an open, decentralized network of systems and environments connected by true digital ownership, interoperability, and community governance.”
“[It] is not about VR goggles or other access interfaces, it’s not about specific virtual worlds or games,” he said.
Brett Martin, President and Co-founder of Kumospace, a virtual office and event hosting platform believes the metaverse could define the future of work, highlighting the key role platforms that facilitate remote work played during the Covid-19 pandemic.
“In our post-pandemic world, remote work is not going away any time soon and Kumospace has found a way to use the metaverse in order to improve that experience, improving communication, efficiency, and experience.”
“Culture makes us think “Ready Player One” is the ultimate goal of the metaverse, with full Oculus headsets and a dystopian community, but the metaverse is already here if we embrace the technology,” says Martin.
So, is technology the one holding the metaverse back? Last year, Meta co-founder and CEO Mark Zuckerberg warned investors that the company was bound to burn more cash before the metaverse began to pay off. We have witnessed that in real-time given Reality Labs’ $13.7 billion losses reported in 2022, and an extra $4 billion for Q1 2023.
The Facebook chief said one of the reasons for the delayed progress is that the technology required to power some of the products and services in the metaverse was not available yet.
Earlier in 2023, Microsoft cited the same reasons for dissolving its industrial metaverse division, while Tencent alluded to profitability struggles when it closed its XR division months after constituting a 100-member staff to run it.
In view of these events, we wanted to hear from the industry experts about what they see as the real obstacles to advancing the metaverse.
XYO’s Levin thinks a lack of stand-out user cases and the inability to interface with the physical world are some of the challenges the metaverse is facing.
“The metaverse has been portrayed too much as a silo – in fact, many companies bet on exactly this, marketing their metaverse offerings as self-contained projects limited to digital versions of their existing products. The key to developing the metaverse is facilitating useful connections between our physical and digital worlds,” Levin said, adding “[It] is chock-full of incredible proof-of-concepts that prove its spectacular potential, but throughout history, we’ve seen that adoption is largely driven by inspiring applications.”
He also thinks there is a lack of understanding when it comes to building the metaverse. Highlighting the need for patience in the development process, Levin said “Some of the steps [the builders of the metaverse] are taking today, such as laying the groundwork for large-scale decentralized infrastructure and building mechanisms to connect the physical and virtual worlds, may seem lacklustre compared to the wholistic virtual experiences portrayed in the media, but they’re essential to making the metaverse a reality.”
On the other hand, Habitat’s Lopane thinks the quality of content and products on offer needs to improve, while limited access also has been a hindrance to progress.
“Some platforms have cartoonish graphics that limit their overall appeal. Furthermore, high entry costs restrict access only to the elite, impeding general acceptance,” says Lopane, also highlighting the costly gadgets required to enter most metaverse worlds.
Ethernity’s Ntertsas seems to agree with Levin and Lopane also citing the gadgets required to access the metaverse as a key boundary to entry.
“Currently the consumer product market fit cycle is stuck in between reliance on mobile 2D interface technology and virtual 3D headset-based tech. A majority of tech consumers have not bought into the excessive need for headsets. And, mixed reality and AR (augmented reality) have yet to be widely available,” he said.
NFL Rivals’ Goodwin shared the same sentiment adding that “most participants are struggling to create lasting value in the metaverse,” while Ethos’ Nadia Eldaib thinks “better user experience that is simultaneously friendly and safe, greater ownership and empowerment through technologies like blockchain, and enabling more people to engage as builders, creators, and end users,” could significantly improve the metaverse.
Gulzar, whose metaverse company Windfall operates in Dubai thinks regulation has been one of the greeted obstacles to taking the metaverse to the next level. The UAE and by extension the middle east region has been one of the earliest adopters of the metaverse, with a clear regulatory framework, which has attracted companies web3 companies to set up shop in the region.
“As the metaverse develops, there are multiple regions yet to establish rules and regulations around areas such as user privacy, digital asset ownership, and intellectual property rights,” says Gulzar.
“Unlike other regions, Dubai and by extension, the UAE, have set up rules to ensure legal and compliant operations in real estate investment and development in the metaverse,” he added.
Animoca Brands’ Yat Siu believes a lack of education about the metaverse is slowing its early adoption. “Most people don’t really understand what the metaverse is or represents, which is the internet of ownership, even though an online paradigm shift from publisher ownership to user ownership is very much to the public’s advantage,” he said.
He also thinks there is a lot of confusion about the industry particularly highlighting Facebook’s rebranding into Meta in a bid to claim the concept of the metaverse. “This resulted in enormous confusion over the concept and, even worse, implied that the metaverse was something driven by large companies who became powerful through the provision of closed ecosystems,” says Siu.
On the other hand, Kumospace’s Martin believes there is a significant misconception that anyone who wants to use the metaverse must be tech savvy, emphasising that his company has made the metaverse accessible to anyone regardless of their tech ability.
“Another thing holding back the metaverse is the requirement that someone is either all in on the metaverse or all out. People are resistant to change and the metaverse, while revolutionary with the power to disrupt how we live our everyday lives, is a big change from our normal day-to-day, putting people outside of their comfort zone,” says Martin.
Overall, while most experts agree the metaverse is alive and well, some think it has been around for a lot longer, while others believe it still has levels to go if certain technological advancements are achieved.
The fact there is no standard definition of the metaverse also comes out, with some experts highlighting confusion and misconception of what the industry entails as major obstacles to progress.
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