EXPLAINER: Understanding the metaverse

The Metaverse has emerged as another of the many futuristic technology concepts that organizations, large or small, are racing to invest in, anticipating a high return on investment. Whether or not this concept will live up to the hype will be clear in the years to come. For now, let’s look at the razzmatazz of the buzzword, the underlying business opportunities, NFT agreements, and more.

Following Facebook’s announcement about building a Metaverse using its world-leading software and solutions, companies are investing heavily in the concept by assembling blocks (like AR, VR, and MR) needed to build what experts are calling a massive market opportunity.

The virtual realm has promising economic possibilities and could become a $800 billion industry by the middle of this decade, and a $2.5 trillion one by 2030, according to a Bloomberg intelligence report. Given these figures, it’s easy to understand why the large tech giants foresee the metaverse as the internet’s future.

Microsoft’s biggest deal announced today has vindicated a bright start for the Metaverse. The global software giant’s $69 billion purchase of video game producer Activision Blizzard is yet another move to solidify its position in the burgeoning metaverse and put additional IPs underneath the Xbox and Game Pass banner. This acquisition will “accelerate the growth” in Microsoft’s gaming business across mobile, PC, console and cloud and will provide “building blocks for the metaverse,” the company said.

“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” said Satya Nadella, chairman and CEO, Microsoft.

“We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.”

One of Microsoft’s two major metaverse bets is gaming. The other is Office and conference software: Mesh for Microsoft Teams. Microsoft experts already see the communities of players that have sprung up around games like Minecraft and Halo as akin to the metaverse notion. With the acquisition, even larger and more dedicated gaming communities will construct their metaverses.

Let’s go through this concept in further detail and how businesses are using the metaverse to scale their offerings. 

What Exactly is the Metaverse?

A Metaverse is a persistent, digital world connected to many aspects of the physical world, including people, places, and things, thereby enabling shared experiences across physical and digital worlds. Although it appears to be a new and current phrase, it was first used in Neal Stephenson’s science fiction novel “Snow Crash” in 1992. This concept is presented in the narrative as an alternative to a real-world that had turned into a nightmare and whose only way out was a virtual world.

Which companies are betting big on metaverse?

Facebook’s brand overhaul to Meta recently piqued the interest of many tech companies. The company’s new name is an attempt to shift the focus to its goals for the “metaverse” which would blur the lines between the physical and digital worlds.

According to the conglomerate, the purpose of Meta will be to bring the metaverse to life by supporting people in interacting, building networks, and developing their businesses. Meta’s objective will be to assist individuals in connecting, forming networks, and expanding their enterprises, said Zuckerberg during a virtual and augmented reality symposium live-streamed by the corporation.

Facebook has previously announced plans to invest $50 million in the project and intends to create around 10,000 new jobs in Europe as part of its efforts to construct a “responsible” metaverse, which aligns with its metaverse aims.

Other firms have also been developing technologies to deliver the immersive experience that distinguishes a metaverse from today’s internet. Every digital behemoth, from Google and Tencent to Roblux to Epic Games, has been developing metaverse methodologies and tools for a long now. 

Even NVIDIA joined the fray with metaverse software. The semiconductor maker said it would give open-source software to artists and other innovators creating virtual worlds for the metaverse. It has partnered with various marketplaces where artists may sell their three-dimensional work. 

Nike is constructing a virtual environment called Nikeland, which isn’t only for IT businesses. Sensorium, which Russian billionaire Mikhail Prokhorov owns, is developing Motion World, a virtual aquatic world. 

Metaverse and NFTs

People will display digital art forms and possessions in the metaverse, and non-fungible tokens (NFTs) will empower them to monetize that commodity with proof of ownership. 

It’s critical to realize that NFTs are extremely likely to become the metaverse’s leading currency. They will allow people to provide proof of ownership of anything in the metaverse. Suppose there is a land in the virtual world. NFTs will be the medium to carry out the auction of that property. Experts think that NFTs are most suited to metaverse transactions. 

Even Walmart is secretly planning to set foot in the metaverse space, reported CNBC. The retail goliath applied for many trademarks on December 30th, indicating that it intends to begin selling virtual goods viz. toys, electronics, appliances, recreational equipment, fashion, home décor, and more, CNBC observed. There is also a discussion around giving customers a digital currency and allowing them to purchase and sell NFTs.

The integration of NFTs leads us to the question of how companies can optimize NFTs in the metaverse environment? Ben Houston, the founder and CTO of Threekit, shares a few points:

  • Brands need to get comfortable with the concept of “Interoperability”

“Interoperability” is going to be one of the key concepts that businesses looking to excel in this NFT space will need to master. People are going to demand physical assets and NFT interoperability. You already see it in entertainment platforms like Fortnite and Roblox. For example, Roblox gives its players the ability to integrate custom-coded NFTs from major brands such as Gucci. 

  • Product NFT’s are coming 

Allow customers to buy an NFT of their product when they check out 

How it works: 

  1. Customize a pair of sneakers online 
  2. Some platforms produce a glTF or image file used as an NFT.
  3. Take a file to an NFT marketplace to have it minted. Platforms like OpenSea or Rarible API operate in this space, offering you the ability to sell it on an open market. 
  4. Store the NFT or use the actual product in the metaverse 

Eventually, brands will open virtual stores where you can purchase NFT’s and real products in the metaverse.

Should Other Companies Follow the Big Tech Trail?

Enterprises and consumers are already beginning to benefit from metaverse experiences. “As enterprises accelerate their digital transformation, metaverses can help empower employees, optimize operations, transform products, and better engage customers,” a Microsoft spokesperson told Toolbox.

For example, Accenture has created a virtual replica of their physical offices, allowing globally distributed employees to connect as if they are physically together, even when they are not. Similarly, ABInBev has created virtual models of their breweries and supply chain, which are kept up to date with real-world IoT data, the spokesperson added. 

“Using Mixed Reality, front-line operators can overlay contextual information from these models on the brewery equipment and collaborate better with remote experts to optimize factory operations. Furthermore, various consumer metaverse experiences such as games, social environments, and concerts allow us to break down physical barriers and connect in new ways.” 

Speaking on how Microsoft is intermingling metaverse with business, he said, “The Microsoft cloud provides the most comprehensive set of capabilities to power metaverses that blend the physical and digital worlds by connecting people, creating digital twins of places and things, and enabling collaboration in mixed reality using AI-powered experiences.

“Our IoT capabilities enable customers to connect to physical assets and create their digital twins in the cloud. Our AI capabilities help reason on this data and enable natural interactions using powerful speech and vision machine learning models.

“Microsoft Mesh transforms collaboration and connection by creating a shared sense of presence from anywhere, on any device. As we develop for a metaverse-powered future, we have a foundational belief in open ecosystems, where identities and content easily flow between experiences, regardless of platform, and should not be controlled by a platform broker. We believe this is necessary to unlock the promise of the metaverse fully.”

Similarly, other technology businesses can benefit from hardware and software solutions for the metaverse, where the emphasis can be on exploiting business and social aspects.

To service the numerous options the metaverse offers, it will require a whole ecosystem. The prospects for technology companies are vast, ranging from developing AR, VR, and mixed reality products to customizing technological platforms such as Azure or SAP and merging numerous technologies to work together smoothly.

The final call

The opportunities in metaverse tickle another question; should companies eyeing on metaverse strongly start exploring the tech concept right away? The answer is an absolute yes.

The mega-companies like Microsoft, Facebook, and others have already substantiated the eagerness related to investment in the metaverse. Companies must begin to create replicas of physical offices just how Accenture executed or digital twin of factories and stores, just how Walmart is presumably doing.

The tech firms can take a giant leap and get an edge over competitors, planning to follow a metaverse suit shortly. However, it is necessary to do preliminary research and pilot study before jumping into the bandwagon of the metaverse.

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