Home Metaverse What is the metaverse—and what does it mean for business?

What is the metaverse—and what does it mean for business?

by admin

No official definition yet exists for the metaverse, but companies can’t afford to wait until one does or the metaverse fully evolves to start experimenting and investing in it.

No one quite agrees on how to precisely define the metaverse, but there is no denying that we are already seeing glimpses of it and what it might become. In this episode of the At the Edge podcast, Cathy Hackl—foremost futurist, metaverse expert, and author—joins McKinsey’s Mina Alaghband to share her informed take on what the metaverse is, how it’s currently manifesting, and what it might evolve into in the future. She also discusses the potential opportunities—and responsibilities—for businesses as the metaverse develops.

An edited transcript of the discussion follows. For more conversations on cutting-edge technology, follow the series on your preferred podcast platform.

Podcast transcript

The metaverse is here. And evolving. Is your business prepared?

If you wait a year and a half or two years to do something, to have a clear strategy, and to start testing these assumptions, it might be a little bit too late.

Cathy Hackl

Mina Alaghband: That’s Cathy Hackl, tech futurist and metaverse expert. She’s a sought-after advisor to luxury brands, a prolific writer, and she headlines many of the leading conferences on the metaverse. She joins me today.

This is the first of a three-part series on the metaverse. I’m Mina Alaghband. Welcome to At the Edge, a production of McKinsey’s Technology Council.

Cathy, thank you so much for joining us for our inaugural episode. Let me start by asking you, what is the metaverse?

Cathy Hackl: I think it’s important to state that there is really no agreed-upon definition right now. Every morning—it’s become a bit of a ritual—I go to the Merriam-Webster dictionary and type in the word metaverse. And every day it says this word is not in the dictionary.

But if we needed to define it, I tend to have a pretty expansive view of what the metaverse is. I believe it’s a convergence of our physical and digital lives. It’s our digital lifestyles, which we’ve been living on phones or computers, slowly catching up to our physical lives in some way, so that full convergence. It is enabled by many different technologies, like AR [augmented reality] and VR [virtual reality], which are the ones that most people tend to think about. But they’re not the only entry points. There’s also blockchain, which is a big component, there’s 5G, there’s edge computing, and many, many other technologies.

To me, the metaverse is also about our identity and digital ownership. It’s about a new extension of human creativity in some ways. But it’s not going to be like one day we’re going to wake up and exclaim, “The metaverse is here!” It’s going to be an evolution.

Mina Alaghband: Can you paint us a more specific picture? For example, what might a young woman’s life look like in the metaverse ten years from now?

Cathy Hackl: I envision that she wakes up and starts her morning routine thanks to her voice adviser. She goes to her closet and looks at her volumetric version of herself, which is like an avatar or hologram of herself, and starts trying on clothes virtually using that volumetric version of herself that has all her measurements, and then selects what she’s going to wear that day. And the actual clothing she then puts on her physical self has a digital component to it. She can alter what her outfit looks like depending on who she’s with virtually, or maybe her lipstick has digital haptic nanoparticles embedded in it so she can greet her partner who is traveling in another country and feel his embrace.

Much of what we’ve read about the metaverse from sci-fi has been pretty dystopic, but I do think we need to envision what it will look like so we can build toward a more positive view of the future. We don’t want to escape reality but rather embrace and augment it with virtual content and experiences that can make things more fulfilling and make us feel more connected to our loved ones, more productive at work, and happier people.

Mina Alaghband: The players that are in the metaverse today are really going to shape and define what the metaverse becomes over the next ten years as it matures. What are some experiences that you’re seeing that might bring to life what the early metaverse looks like?

Cathy Hackl: What we’re seeing right now are a lot of glimpses of the metaverse, or what I call metaverse moments. I’ll give you a personal example. The first concert I went to was in a stadium. For my son, who is ten years old, his first concert was Lil Nas X, who performed in Roblox during the pandemic. And just because it happened in a virtual space, it didn’t make it less real to him. During the pandemic, we hosted a Roblox birthday party for my son, and the way his avatar showed up at that party was very important to him. Just as if you were going to a physical party, you would probably think about what shirt you would wear.

So it’s this evolution in how we separate what we do in the virtual space from what we do in the physical world that’s further converging. A big thing I’m seeing in business right now is how commerce is evolving as we head into these new virtual spaces and shared experiences, both in the virtual and physical world.

You also have virtual-to-virtual commerce, which has been happening for decades in the gaming space and now is something that a lot of people are interested in. For example, a Fortnite player uses Vbucks to buy a skin within the game. I’m interested in exploring beyond the virtual-to-virtual to the virtual-to-physical component. I may be in a virtual experience and purchase something that could arrive physically at my home. And then there’s the opposite, where I am buying a physical item or a physical experience that unlocks something for me in a virtual space. I’m really interested in looking at how those business models and new commerce models evolve, and other new commerce models that have yet to be created.

Mina Alaghband: You mentioned this idea of gaming being the earliest iteration of the metaverse. How is the metaverse different from gaming? How is this not just gaming 2.0 or gaming with VR instead of a console?

Cathy Hackl: I see gaming as the on-ramp. When you talk about some of those enabling technologies or the infrastructure that’s needed, you can’t escape talking about game engines, like Unreal Engine or Unity. A lot of these virtual experiences are built on those game engines, so they’re linked, but they’re not the same thing.

I would also argue from an anthropological standpoint that there’s a really interesting shift happening in the idea and the concept of work. There is an evolution where work is starting to be, for some of us, less physical and more mental, and because of the tools that we’re starting to use, it’s becoming more fun and sometimes more gamified. I see this with my children. When I think about what jobs they’re going to have in the future, they’re going to be very much tied to creativity and building, but not building in the physical form—rather it’s building in these virtual spaces.

I always use a phrase: in the metaverse, we are all world builders, and now is your time to build. I’m not saying that we’re going to get rid of physical labor, because we are still physical beings in a physical world, but I do think that the concept of work is expanding, and gaming is a part of that future.

Mina Alaghband: There is debate about whether the metaverse is a billion-dollar economy, or a trillion-dollar economy. What are those economic opportunities that are emerging in the metaverse? What does a trillion-dollar or billion-dollar vision of this look like?

Cathy Hackl: When you start to think about how much is being spent on what I call the direct-to-avatar model, which is a new direct-to-consumer model, I think the estimates are $100 million dollars spent in 2021 inside gaming platforms for virtual goods, and that’s a number that’s going to keep expanding. So I see these projections as being very possible. When someone says $800 billion or $1 trillion by 2024, that’s possible, especially when you start to look at commerce beyond just virtual-to-virtual commerce but thinking of physical-to-virtual and virtual-to-physical commerce and unlocking those at scale.

That’s why a company—for example, Apple—is going all in on what they’re calling augmented reality and potentially leading us to whatever comes after the mobile phone. What I am seeing in the work I am doing is that there are massive opportunities to take these new commerce models and do them at scale, which unlocks huge opportunities.



You may also like

Leave a Comment

* By using this form you agree with the storage and handling of your data by this website.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More