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Article | 04 October 2022 | Investments
The metaverse - what’s the big story?
The internet, once so revolutionary, has become a part of everyday life, a familiar tool on which we all now depend. So what then is the metaverse and what will be its impact on internet users? Put simply it can be imagined as the next phase of the internet, only this time it’s all in 3D. Digitally created virtual worlds can simulate the real world, with virtual reality or VR technology giving an immersive experience.
But the metaverse can also create worlds beyond, where a user could potentially interact with an infinite number of other devices. The benefits are obvious, creating widespread communities with no physical or geographical barriers, via digital connection only. Individuals are represented by avatars, which can have any appearance they choose, perhaps helping to end prejudice or discrimination. Advocates have described the metaverse as a tool that can ‘elevate the good you’re already doing’.
Proposed applications for this 3D worldwide web include enhanced work productivity, including remote meetings in the same virtual space, interactive learning, ecommerce, real estate and fashion. It is clearly an excellent medium for closely-targeted advertising. Facebook founder Mark Zuckerberg is so convinced of its potential that he sees the metaverse as the future. So much so, that his company has been renamed Meta Platforms. But investment required to develop this new reality will be huge. Meta Platforms lost $10 billion due to these development costs last year and many more billions are forecast.
It's possible that the vision behind the metaverse is still way ahead of the reality. In practical terms, widescale adoption is dependent on the rapid development of VR technology. Interoperability between competing platforms, from Microsoft, Meta Platforms, Roblox and Qualcomm for example, is also a major issue. Concerns about privacy and transparency fuel a reluctance to allow access from one platform to another. So the $4,000 virtual Gucci handbag, purchased recently by a Roblox avatar, might never make it to another platform.
Crucially, the systems necessary to run real time access for billions of people simultaneously do not yet exist. Indeed, a senior vice president of Intel recently said that this ‘would require 1,000 times increase in computational efficiency from the current state of the art’. Nonetheless, the opportunity exists to learn from mistakes made when the internet was originally created. Negative aspects, such as cyber bullying and harassment, disinformation, phishing and the familiar scams, could perhaps be avoided. But with the share price of Meta Platforms down 60% so far this year, there might be a distance to go before the metaverse becomes an investable reality.