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The future of a post-hype metaverse

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Dive into the metaverse ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 
A drawing of Hamza Khan



ON THE FUTURE OF THE METAVERSE

Why the metaverse still has mojo 


Hamza Khan



The buzz surrounding the metaverse is a bit quieter now compared with this time a year ago. Global online searches for the term “metaverse” are down by about 90 percent compared with their peak a year ago. By some accounts, virtual real estate in the metaverse has dropped by about 80 percent in value from its high point, more than the decline in physical real estate during the same period. Some highly visible decentralized virtual worlds have entered the spotlight for having far fewer daily users than previously expected. Critics might say that the metaverse was merely a bubble, driven by hype and corporate marketing, that has now burst.

The way I look at it is that we’re past the peak of a first hype cycle where there is misalignment between reality and expectations. Indeed, 95 percent of the global executives we surveyed last year said—with unusual consensus for such a group—that they believe the metaverse will have a positive impact on their sectors within five to ten years.

There is still very real traction happening in the metaverse. There are large and growing virtual worlds with tens of millions of visitors, including Roblox, which recently announced that it has 58.8 million daily active users. There are also virtual worlds that are phasing in the technical capabilities to host many simultaneous users in one space, like when the open-world video game Sky: Children of the Light hosted a concert at the end of last year, with 4,000 people watching at the same time (and 1.6 million viewers in total). More metaverse applications are deploying augmented reality (AR) on people’s phones. And more use cases are emerging, including those in the rapidly maturing enterprise metaverse. That doesn’t mean this is the conclusive year where the potential of the metaverse is fully realized. But it’s useful to think of this year as moving forward beyond the novelty factor.

“95 percent of the global executives we surveyed last year said they believe the metaverse will have a positive impact on their sectors within five to ten years.”

One reason people are more tempered about the metaverse right now is that it’s often conflated with technology shifts like Web3 and blockchain—and applications including cryptocurrency and nonfungible tokens (NFTs)—that are currently going through a down cycle. There are some clear areas of overlap, to be sure, but the metaverse is fundamentally different. We continue to believe in our consciously broad definition of the metaverse as the natural evolution of today’s internet—from something that we primarily observe to something that we are more deeply immersed in, whether it’s for gaming and digital entertainment, work, education, or other purposes.

This year, we are likely to see continued advancements in the technological underpinnings of the metaverse, across computing and networking. We will see a range of new immersive-reality hardware hitting the markets and price points starting to inch down. We expect more momentum around standards, including for file formats like USD (Universal Scene Description, a 3-D open standard) and glTF (graphics language transmission format). We may see improvements in content creation tools across the spectrum from platforms like Nvidia’s Omniverse, Niantic’s Lightship, or Blippar’s AR builder, Blippbuilder. We also hope to see more meaningful and compelling brand activations in the metaverse that focus on sustained and repeated user engagement, not just launch-day traction. Emerging standards and increased content creation may also swing the pendulum more toward the “open metaverse.” 

Finally, I hope to see companies moving away from the novelty of the metaverse and focusing more on the sustainability and long-term ROI of their metaverse-related efforts. The question companies should be asking themselves is less: What can we do in the metaverse? The real question is more: What should we be doing in the metaverse to help grow our business and further our innovation strategy? If the metaverse is a new marketing and consumer engagement channel, performance should be assessed against other marketing channels. If it can enable new revenue streams for a company, it needs to be assessed against other growth initiatives. If it’s geared toward operational improvements, it needs to be assessed alongside other similar efforts. And if the assessment is encouraging, companies should start thinking about the capabilities they will need to scale and sustain business impact, including their talent and partnership management models.

Here’s one test that an organization can run when considering its next move in the metaverse: for any public announcement about a new metaverse-related initiative, see if you can draft it without using the word “metaverse.” That may be a good indicator of having identified real business value. 

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