The last year saw the metaverse go from literary text rumination to limitless tech reality. First referenced in a 1992 science fiction novel by Neal Stephenson and then picked up in other sci-fi settings like Ready Player One, the metaverse is an immersive, digital alternative to the physical world, where virtual avatars come together to work, pursue hobbies, shop, play, or otherwise gather to engage in online communities and explore the digital space. The term formally entered the mainstream realm when Facebook rebranded itself to Meta Platforms Inc. (now widely referred to as Meta) in October 2021 in an effort to leap beyond its social media roots and signal a broader agenda around “the next chapter of the Internet”.
The concept remains elusive to both onlookers and industry veterans, not least because the companies that are building the metaverse say it will take years and billions of dollars to realize. This new year, however, will already see the metaverse become more concrete, as it pushes to prove its promised potential. For the metaverse to mature to its next stage of development, players in the space will need to tackle three frontiers: securing skilled talent, making decisive investment moves, and pushing the boundaries on innovative experiences.
Securing skilled talent
Meta is recruiting aggressively from a number of sources, including Silicon Valley neighbor Apple and fellow West Coast tech behemoth Microsoft, from which it has poached most of the 100 people who departed from HoloLens augmented reality headset team last year. Though sales were slow to take off, Microsoft’s HoloLens was one of the first movers in the AR space, making its staffers particularly desirable fare at the metaverse talent market. Meta has also announced it would hire 10,000 engineers in Europe alone to build this next Internet frontier. Making real on their pledge to score AR/VR specialists in a market already starved for tech talent will be a challenge.
Despite being one of the most prominent and outspoken proponents of the metaverse, Meta is by far not the only one. Chip maker Nvidia has turned its focus on the metaverse as well, only they are calling it “omniverse”. With Omniverse Enterprise, Nvidia has set up a subscription service that lets creators, designers and others collaborate in a shared online simulation platform. BMW, for instance, is using Omniverse Enterprise as part of its smart manufacturing efforts to simulate their manufacturing operations. Meanwhile Nvidia’s need for skilled omniverse engineers intensifies, seeing how chips are the lifeblood to power the metaverse, its graphics and animation.
Other candidates for a front-row seat in the metaverse are the gaming companies that have long been pioneering immersive online experiences. Platforms like Roblox and Epic Games’ hit Fortnite have already curated large followings and in-game online economies, positioning them well to capitalize now. The problem lies not in gaming companies’ inability to motivate video game enthusiasts to play, but in their struggle to find skilled talent to hire, exacerbating the recruiting battle.
Making decisive investment moves
Gaming companies have recently hit the headlines with another metaverse-induced trend: moves for consolidation. A few days ago Microsoft announced plans to acquire World of Warcraft and Candy Crash maker Activision Blizzard in its largest all-cash acquisition ever at $69 billion, hoping that bestseller games will help attract skeptics to the metaverse. These news are coming shortly after Grand Theft Auto maker Take-Two announced it would buy Farmville creator Zynga for $13 billion the week prior, and after 2021 saw a record $117 billion worth of gaming acquisitions.
The chipmakers, too, need to make the requisite investments if they are to realize their potential of powering the metaverse. Intel announced a few days ago that it would spend $20 billion on two plants in Ohio, though this investment could balloon up to $100 billion for eight manufacturing plants if things go well.
Institutional and retail investors are gearing up for the metaverse as well. SoftBank announced in late November 2021 that it was investing $150 million in a South Korean metaverse platform. Shares of companies leading the space have surged. A selection of metaverse-focused exchange traded funds have appeared on the scene, with some showing potential. As the vision for the metaverse continues to mature, so will investors’ appetite.
On the more creative side of investments lies the metaverse real estate market. “Imagine if you came to New York when it was farmland, and you had the option to get a block of SoHo,” told the cofounder of digital real estate company Metaverse Group, Michael Gord, the New York Times. Gord and other investors are speculating on plots of land in the immersive online world. Digital worlds like Decentraland and Sandbox allow virtual developers to build and rent out digital malls. One such developer has spent $4.3 million on a property they acquired from gaming company Atari. Transactions for properties in the alternate universe have skyrocketed and the new year will see the competition for location further intensify, though many are wary of digital real estate volatility.
Pushing the boundaries on innovative experiences
When companies have the talent and the money to define and develop a world with no boundaries, imagination can roam wild, as pioneers build the innovative experiences that will make up the metaverse.
The future of work will be redefined by new metaverse experiences. Besides Nvidia’s Omniverse Enterprise, Meta’s Horizon Workrooms and Microsoft’s Mesh are also designed to empower work in a virtual world, both enabling remote collaboration across devices through mixed reality applications. Virtual meetings will move to the metaverse – as quickly as within three years, Bill Gates predicts – and workers will increasingly rely on using VR headsets and avatars at work. Thus, the role of corporate real estate could take yet another hit, empowering multiple generations of people already accustomed to work from home because of Covid to demand yet more spatial flexibility in their work lives, with the metaverse decreasing the need for a formal workplace even more.
School and social life, too, will evolve. Roblox, for instance, is planning to bring educational videogames to classrooms. Platforms such as AltspaceVR enable community-based experiences in the metaverse, allowing people to gather for live virtual events, such as comedy clubs or bar nights. Roblox sees itself as a future hub for metaverse experiences beyond games, such as concerts. (For reference, a Marshmello concert in Fortnite recently attracted 10 million people.)
A new era for commerce may dawn, with stores selling anything from fantastical digital pets to e-pparel. Fortnite has long capitalized on digital skins, and more traditional retailers are following suit. Nike has filed trademarks for virtual gear, shoes and accessories, and luxury labels Gucci, Balenciaga and Luis Vuitton are beginning to sell e-clothes and e-bags. You could also buy a $650,000 digital yacht or NFT art for your immersive mansion. Meta-malls are starting to pop up, allowing you to shop in VR stores and stock up on outfits for your avatar.
While the metaverse cannot advance fast enough for the believers, this may all be moving too fast for the sceptics. The FTC, for instance, is putting hurdles in Meta’s way by extending their antitrust probe of past VR deals. Chinese regulators are saying the metaverse needs to be closely monitored. Expensive headsets may also be a barrier to mainstream adoption, as might an unclear mental and physical health toll of spending large chunks of time wearing a headset and roaming around in a parallel reality. And yet, the tech industry is unwavering in its belief in the metaverse, expecting it will hit $800 billion by 2024 and reach 1 billion people by 2030.
The metaverse was on everyone’s lips in 2021. To[-]take the leap toward to its next stage of evolution, it will need to tackle a number of frontiers in the new year. (Photo by Spencer Platt/Getty Images)