Metaverse- Potential for Business and Relevance to Society
What is Metaverse and Where it’s going?
Metaverse, since the term, refers to a digital universe, but within the metaverse, there are countless worlds popping into existence by companies like Sandbox, Epic Games, and Decentraland, which means each company or person may have a different view to the metaverse and the capabilities once inside their world.
Despite too much confusion, one thing’s for sure; it will provide a unique internet experience that merges new technologies such as AR, VR, and MR to create an immersive experience.
The metaverse will allow our physical and digital lives to twine together, allowing users to feel present and use expressions with avatars.
The notion of copyright leads us to another important aspect. We are currently observing a type of ownership developing in the virtual sphere. This contradicts the usual understanding of digitality as a material with the potential for infinite duplication. However, facilitated by non-fungible tokens (NFTs) based on blockchain technology, there are now countless examples of unique owners being assigned to digital objects. Digital artists, for example, are selling virtual works based on NFTs. This development, too, must be taken seriously.
NFTs will play a pivotal role in an exchange and building a viable economy in the metaverse because their key features are transparent trackability and high security. However, the blockchain will not contain all the stored data, including images, photos, videos, audio, and text, but only the transactional data and smart contracts.
Current State of the Metaverse
We are now at the very early phase of the metaverse ecosystem, but it can do some great things. All necessary things needed to access the internet had then been available, including hardware, software, and servers. Even in the early days of the internet, people had some ideas and visions about what the internet and the web would bring. But some happened, others didn’t and many things even turned out very differently from what was expected at the time.
Similarly, the metaverse can be seen as the next logical step of the internet, a 3D internet that is permanent and happens in real time. On the one hand, they will exist in a completely virtual form and will be highly immersive. The virtual and analog worlds will continue to fuse. We will use augmented reality/virtual reality to interact with digital content in our real world.
The current state of the metaverse become increasingly intermixed because real objects, like clothing, will have a digital counterpart in the virtual world. Users will have the same avatar as they look and wear.
Digital twins will create a direct connection between the real and the virtual world, for example, when training rooms and hospitals and their operating modes are mirrored in the virtual world. Users will be able to access them there and control daily operations. Another key feature of the metaverse is that it will give rise to new forms of user-generated content, especially in the form of 3D objects. 3D objects in the metaverse will be interoperable, transferable, and tradeable. This is one of the significant differences to the digital equipment that can be purchased in computer games, the availability of which is limited.
To facilitate real ownership of virtual objects or even plots of land, the blockchain plays a central role, particularly in NFTs. These points to another characteristic of the metaverse in its ideal form: It is decentralized. Unlike today’s internet, there are no closed platforms.
Technologies that Power the Metaverse
Artificial Intelligence (AI)
AI can process a large amount of data at high speed. Combined with machine learning, AI algorithms can learn from previous and continuous iterations and can work accordingly.
Within the metaverse, AI can be applied to non-player characters (character in a game that is not controlled by a player) in different scenarios. With AI’s processing abilities, NPCs can be placed across the 3D spaces to facilitate real lifelike interactions with users. Unlike a human user, an AI NPC can run on its own and be used by millions of players at the same time.
Internet of Things (IoT)
IoT is a system that takes everything in our physical world and connects them to the Internet through sensors and devices.
While IoT will allow the Metaverse ecosystem to learn and interact with the real world, it will also serve as a 3D user interface for IoT devices. This enables the creation of real-time simulations in the metaverse. Both the Metaverse and the IoT will assist organizations in making data-driven decisions with minimal mental effort.
Extend Reality (XR)
XR (Extended Reality), is an umbrella term encompassing virtual reality (VR), augmented reality (AR), and mixed reality (MR).
VR works similarly to the metaverse concept; it generates an entirely computerized virtual environment. Users can then explore it using VR headsets, wearables, and sensors. AR uses digital visual elements and characters to morph the real world. It’s more accessible than VR and can be used by any smartphone with a camera. Mixed Reality (MR), blends the physical world and the digital world closely together.
All three technologies use three-dimensional objects and place them in a space, both physically and virtually. This allows one to interact with these objects and touch, move, and even edit them depending on their programmed functions.
One of the challenges for the metaverse is to create a virtual environment that comes out as close to our real world. With the help of 3D modeling, it can create realistic virtual spaces. Using special 3D cameras, we can take our world online by furnishing accurate 3D photorealistic models of real objects.
3D Spatial Data
The practice of leveraging physical space as a computer interface is known as spatial computing. The 3D spatial data and 4K HD photography are passed to computers to process and generate a virtual replica in the metaverse for users. These virtual replicas of physical world objects can also be referred to as digital twins.
Blockchain is a decentralized distributed database with some unbeatable features. Using redundant data storage and a consensus mechanism between the participants of the block network can ensure that no single party can change or control the saved information. This has made it possible to create digital assets that cannot be controlled by a central party and cannot be duplicated or deleted.
Business models in Metaverse
Business models in the metaverse are highly dynamic. How money can be made with the metaverse will, from the companies’ perspective, continuously change over time, i.e., change according to the development of the metaverse. We know such developments from the platform economy and the new economy. There are numerous models and guidelines in the literature for developing new business models.
The expected business models:
Marketing in the metaverse
One of the great things a metaverse is capable to do good is facilitating great advertising initiatives that set the trend in the marketing industry. Many businesses right now look into marketing strategies that work well with the metaverse, as you can do almost anything you want in this virtual world there is no limitation.
Currently, the key to carry out an efficient business model related to advertising is knowing the taste of the generation that’s most actively connected to the metaverse.
Ownership in the metaverse is possible through NFTs, as they are unique, incomparable, and have well-defined ownership, characteristics normally resemble to real objects. Each NFT may represent a virtual asset or a real asset, and they are all unique identification code that makes it impossible to replicate.
With the metaverse, one will be able to market their clothes on the platform by creating virtual twins of them that customers can try on their 3D avatars. It is an interactive, efficient, and cost-effective way for business owners and marketers to test new products and concepts before spending money on production.
Major brands such as Gucci, Nike, and Reebok have started using the metaverse as a platform to market their products.
If we look back metaverse evolved from online gaming itself. Long before any of the previously mentioned business models were introduced to the metaverse, it was already used by the community of gamers in the space to communicate, trade, and earn money indirectly by selling game assets like gear, weapons, potions, and, ammunition.
Nowadays, the rise of play-to-earn (P2E) game models has paved the way for users to earn even more money by playing games.
Use cases of Metaverse
Banking and Finance
From the perspective of banks and other financial service providers, the obvious option is to provide customers with secure access to the metaverse (wallet, identity) and to securely store assets in the metaverse, making them purchasable there, and to use them for payment purposes. Banks, specifically, must ask themselves which processes, ranging from payment, and identity services to finance, they could facilitate as a “metaverse bank” in the future. Virtual bank offices and consulting could be a new form of interacting with customers – with the potential of fully integrating a digital experience, including identity, consulting, signing contracts, and payment. From an asset management perspective, investment products can be developed for metaverse assets, ranging from digital property to works of art. The possibilities are endless, and some banks are already exploring this field.
Hybrid shopping and remote retail with sales staff
Shopping experiences in the virtual world result in product experiences and services in the real world. Products and services can be examined virtually, bought, and then used in the real world. Sales staff in the metaverse can advise their customers and motivate them to buy either in real-time or by using pre-produced content. Other customers can share their experiences. In the hotel industry, for example, the metaverse would contain a digital copy of any hotel. This would enable those interested to get a realistic but virtual impression of a hotel room or other relevant hotel areas like the lobby, the restaurant, or the gym, on a 1:1 scale. The same principle can be applied to the restaurant industry. This use case is therefore ideal for intensifying the customer journey during the selection and booking phase
Hybrid tours through museums, cultural hubs, and destinations
The metaverse can facilitate live guided tours that are also hybrid, either remotely or on location. Real people as well as people represented by robots together experience museums, cultural institutions, and other destinations. The metaverse could make it possible to spawn into different rooms much like teleportation. This would enable people to experience remote but enticing destinations realistically and in real-time as well as react to real events from the comfort of their own home. This use case is very helpful in view of the inclusion of people with limited mobility, to create access to places and experiences that either wouldn’t be accessible to them or only with disproportional effort. This use case also applies to the attendance phase of the customer journey.
Concept development for hotels or restaurants together with the community
New hotel and restaurant concepts can be jointly developed in the metaverse’s creative hubs, enabling different stakeholders and interest groups to get involved or track this development and creation process, either continuously or selectively. This process may include, at an early stage, experts, specialized planners and other specialists, thus facilitating high planning security, improved overall quality, and early cost analysis. This use case can be applied to the entire process along the customer journey.
Digital concerts in the metaverse
Building a metaverse to reinvent live events with game engine technologies and to use them for live events in sports and music – is the goal of a joint project between the real-time 3D platform Unity and Insomniac Entertainment, the electronic dance music division of Live Nation. The aim is to create a persistent metaverse world for fans of electronic music.
Relevance of the Metaverse for society
Opportunities for equal collaboration
Leaps in innovation on the path to the metaverse not only create new jobs and generate growth but also expand entrepreneurial and social opportunities. Wherever people network and interact, be it for professional or private reasons, new opportunities for inclusive products and services arise. They give people who were previously excluded for a variety of reasons access to social and economic participation.
AR and VR appeal to our senses much more directly than mere text. They are also capable of portraying complex issues close to real life. Realistic simulations will thus be accessible to the broader population. Immersive technologies offer new accessibility. Shared activities using VR applications, hybrid concerts, or virtual trade fairs and exhibitions are just a few examples of a wide range of exciting possibilities that are changing our everyday social lives and that have the potential to break down the barrier between distant places.
Metaverse is a collaborative project that many companies, developers, and organizations around the world are currently working on. All the stakeholders doing so carry a special responsibility to develop and implement these novel technologies responsibly. Companies and developers can only create trust and broad social acceptance if digital innovations are secure, transparent, and inclusive.
Developing hardware, apps, and security standards for the metaverse will require accessible, inclusive, and intersectional thinking. This facilitates taking into account the individual needs of the users and avoiding possible barriers to use and participation right off the bat. The extraordinary opportunity to design the metaverse as a space for everyone, which enables participation, creativity, and social involvement, should be used.
Building a culture of safety and respect
Users must be able to identify the added value of the innovations in their everyday lives. Above all, this entails secure and transparent applications that consider their needs. Responsible innovation encompasses more than adapting technologies in their development to the necessary conditions of the present. Evaluating and developing them is an ongoing task, one that is necessary to face up to current challenges. This includes, for example, establishing joint feedback forums, in which developers and users can exchange their experiences to learn from undesirable developments. Issues like hate speech, cyber mobbing, or disinformation have rightly and increasingly been put in the focus of the public eye in recent years. The immersive merging of the real and virtual worlds creates new experiences that are particularly new for young users. Issues of youth media protection as well as data protection must be considered. We now have the opportunity to address the developments from the outset, allowing users to decide for they how they want to configure their digital sphere according to their own ideas.
Simply taking community-created assets without giving would quickly result in the abandonment of metaverses created by businesses, especially if people’s needs like recognition, reward, or utility are not found there. We recommend promoting the creativity of the community and involving them in decisions (e.g., regarding product development, events, etc.). Moreover, digital platforms facilitate the development of innovative ideas and applications worldwide and not just in a few countries with the appropriate research budgets.
A common path to the metaverse
Today’s exponential growth in the use of digital and immersive products and services will only accelerate in the years to come. On this path, social and economic inclusion must be safeguarded and brought together to comprehensively assess opportunities and challenges.
For social players, the integration of immersive technologies into our everyday lives creates a duty to be aware of their economic and social responsibility. Private companies, in particular, must draw up guidelines that institutionalize a continuous improvement process for their products and applications. At an early stage, they must leverage synergies, bring in feedback, and tackle problems to make sure that the metaverse is a secure and enabling space. Creating the right conditions for this remains the task of every company co-designing the metaverse. Users, too, must be able to contribute. All stakeholders, creators, and users bear responsibility for an inclusive and secure internet of the future. Now is the time to come up with ideas and be vocal about problems or shortcomings. This is the only way that we can make sure to unleash the full potential of the immersive metaverse and do right by our aspiration to create a metaverse for everybody.
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