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The metaverse has set the commercial landscape ablaze. Expectations are through the roof, and not even the sky seems to be the limit. August institutions such as CB Insights and JP Morgan see the metaverse becoming a $1tn annual market, while Goldman Sachs and Morgan Stanley expect this market to reach $8tn annually.
Using a very wide definition of metaverse-related opportunities, CITI puts this number even higher – at between $8tn and $13tn. And many of these market observers emphasise that they expect the market to reach these numbers by the end of the decade, in 2030 – just over seven years from now.
Opportunities certainly abound, even though the size of the market is up for debate. But concerns are manifold, too. Identifying potential problems quickly could help providers and users avoid many of the mistakes that were made with internet applications early on and – currently very much in public discussion – with social media applications.
At South by Southwest (SXSW) in March 2022, a discussion on topics related to the metaverse, From Buzz to Reality: Metaverse Now and Tomorrow, brought to light concerns and problem areas of the emerging computing environment.
The perspectives of interface manufacturers, industrial users, metaverse designers and infrastructure providers were provided by: Geoff Bund, head of software partnerships for headset manufacturer Varjo; Vesa Koivumaa, head of growth for industrial equipment provider Wärtsilä;, Miikka Rosendahl, founder and CEO of virtual-world creator ZOAN; and Leslie Shannon, head of ecosystem and trend scouting at Nokia.
Shannon compares the increasing use of the metaverse – or the diffusion of new technologies generally – to the adoption of automobiles. Automotive transportation technology transformed cities and entire economies, making commercial activities more efficient and providing people with new-found personal freedom. However, such advances also came at a high cost, with currently more than 35,000 deaths from automobile incidents in the US alone and countless more globally.
Problem areas exist
“We have a spectacular capacity to make trade-offs when the benefit is big enough,” says Shannon. She acknowledges that such a cost-benefit analysis is callous, but also highlights the good that such new technologies can bring. She concedes that problem areas exist with the use of any new technology.
“With new technologies, you don’t know where the edge of the cliff is until you run of the cliff,” she says. “But once you do that, then you know where to put the fence up. As we develop these new areas, we’re going to run over the edge of a lot of cliffs before we know where the fences need to go.”
Koivumaa expresses the hope that providers and users can identify the edge of such cliffs ahead of time to deal with issues before actual damage occurs. He stresses that while users can make mistakes in the virtual world without serious penalties – when learning to fly a plane, for instance – reality is less lenient when mistakes occur. “The blurring between the real and the virtual world is one of the challenges I see,” he says.
Referring to cyber security issues, Koivumaa says security is always a challenge in the digital world, but he underscores that security solutions and approaches are constantly getting better.
Rosendahl agrees that cyber security issues should not be the biggest worry. There will be theft of virtual objects and other infractions, he says, but more serious concerns exist. He highlights the effects of technology use on humans and the environment in the pursuit of profit. Addiction to apps and handheld devices is a serious issue, as well as the environmental impact of cryptomining.
Rosendahl also points to a non-fungible intelligence (NFI) combining the concepts of non-fungible tokens (NFTs) and artificial intelligence (AI). Fluf introduced its NFIs at SXSW, showing how they can find use in art and applications that benefit from intelligent ownership.
Read more about the metaverse
- Extended – augmented and virtual – reality is capturing the imagination of media and investors alike. Use cases abound, and market opportunities proliferate as more and more companies discover applications that might help their operations or serve their customers.
- The metaverse will make it easier to access an increasing wealth of information, but it will also make it more difficult to distinguish real from fake, accurate from wrong – and that goes for information as well as the information sources themselves.
- Will the metaverse create a $1tn revenue market? Who knows? How long will it take to reach this lofty potential? Who can tell? Will people invest across this emerging landscape of speculative riches? You bet.
- As it develops, the metaverse is almost certain to become a highly competitive commercial playground, if not battlefield. It will likely not only establish highly profitable markets but also lead to high-profile failures.
But Rosendahl also foresees potential problems. Users of metaverse environments might prefer interacting with such avatars to establishing human contact, because AI avatars can cater perfectly to users’ interests and moods.
Such NFIs – or even non-intelligent but carefully designed and targeted avatars – could make any virtual environments more appealing, perhaps even irresistible for some audiences. Younger generations already tend to see the metaverse as a valid, potentially preferred, alternative to real life.
An April 2022 study by Razorfish and VICE Media Group – The metaverse: new study reveals surprising gen Z insights – found that of members of generation Z, aged between 10 and 25, “52% feel more like ‘themselves’ in the metaverse than IRL [in real life]” and “65% believe that their online relationships are just as meaningful as offline ones”.
It is conceivable that some individuals will restrict their real-world interactions or even cocoon themselves in virtual environments to avoid realities that they find unpleasant. Social isolation and withdrawal are not a new concept and don’t necessarily relate only to digital technology. But among younger generations, the phenomenon is a concern.
In Japan, the issue has been widely acknowledged – socially withdrawn people are referred to as hikikomori. The topic is a worry outside of Asia, too. Back in 2010, researchers at the University of California published Hikikomori, a Japanese culture-bound syndrome of social withdrawal?, which said: “Like hikikomori in Japan, internet addiction has been widely studied in South Korea, and the country considers it one of its most serious public health issues.”
Naturally, privacy of users is another consideration. Varjo’s Bund identifies the likes of eye-tracking and micropayments as technologies that can not only support and improve many applications in the metaverse, but can also see use as tools to extract behavioural data. He wonders whether there could be a way “to enforce an altruistic lens on data collection”.
Bund cautions about a hyper-capitalist approach to the developing markets of the metaverse, but he is hopeful that more responsible minds could inject ethics into the development of related technologies and applications.
Rosendahl stresses the importance of ethical considerations. He believes Finland and its companies will provide valuable contributions because the country is known for its high ethical standards. The World Economic Forum, for instance, placed Finland in second position globally in that respect.
Commercial drawbacks of ethically problematic conduct exist, too. Some metaverse environments have already become ghost towns because they became places of speculation rather than communal centres that would support a thriving commercial marketplace. The potential of the metaverse “should excite us and shouldn’t focus our attention on how to get rich fast”, says Rosendahl.
Shannon emphasises individual responsibility as an important factor when using new technologies and appeals to communal support. “All of us need to call out when we see something wrong,” she says, adding that responsible use of new technologies starts at the individual level and involves parental advice and control too, for instance.
Shannon’s argument implicitly points to the impossibility of governments or law enforcement regulating, monitoring and controlling illicit and problematic behaviour in an all-encompassing way. The call for individual responsibility applies to all areas of public life, but needs to be put forward when countering calls for restrictive limitations on the emerging metaverse’s use and capabilities.
Martin Schwirn is the author of Small Data, Big disruptions: how to spot signals of change and manage uncertainty (ISBN 9781632651921). He is also senior advisor, strategic foresight at Business Finland, helping startups and incumbents to find their position in tomorrow’s marketplace.