Need to know: What is the metaverse

Everyone’s talking about the metaverse – but why should it matter to business? We find out

The metaverse is a hot topic. What was once the remit of science fiction, such as in Ernest Cline’s 2011 novel Ready Player One, is increasingly becoming a realistic image of the future.

In October 2021, even the parent company of Facebook changed its name to Meta in reference to the developing technology.

But what is exactly is a metaverse? Is it the future of work, or a short-lived fad? And why is Mark Zuckerberg interested?

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Firstly – what is the metaverse? According to Professor Yu Xiong of the University of Surrey, it is “an environment which enables people to interact with each other in the virtual world, similar to how they did in the real world”.

Currently, the two most popular environments are meetings and retail. Imagine a zoom meeting, but instead of interacting through a tiny window, you sit and have a conversation in a virtual space, represented by an avatar.

This could, in turn, bring back the corridor conversation – the extra layer of social interaction which is arguably missed out when video calling.

Most of us have seen Meta’s offering, with its underwhelming graphical capabilities, and may struggle to visualise ourselves in it. As the technology progresses, however, it will gradually become truer to life.

If you’ve seen 2021’s spy action film The King’s Man, you will have an idea of the future possibility. One day, entering a virtual world could be as simple as putting on a pair of glasses and seeing the people in the meeting as if they were in the same room as you.

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The other major application for business in the metaverse is retail, an area in which we are already seeing uptake among some of the biggest brands in the world.

For example, global luxury clothing brand Gucci has a space within Roblox, an online gaming platform which allows users to create their own games and virtual environments, as it looks to appeal to a younger generation.

The metaverse is moving retail into virtual stores

Going forward it is likely we will see increasing numbers of virtual stores, as Professor Xiong explained: “Many offline stores are moving to online spaces where all the objects inside the VR (virtual reality) shop are an online version of their real-life counterparts. VR allows customers to get a better feel for the actual size of an item, improving the customer experience”.

To make this possible, items in the virtual world must correspond to something in the real world. You may have heard of the blockchain and non-fungible tokens, or NFTs. A blockchain is a digital public ledger, which tracks the movement of virtual items or currency.

“Blockchain integration gives objects in the metaverse a real-world value by ensuring anything traded is accurately recorded; giving to you is a loss from me”

An NFT is just a digital asset registered on said blockchain. It consists of a digital file (such as an image or video) and an encrypted, immutable contract written in code setting out the ownership and authenticity of the item.

To recap, a metaverse is a virtual world created through virtual reality, or VR. To give items within this virtual world a value, they are supplied with an encrypted contract as an NFT, and their movements are tracked through the blockchain.

While scepticism remains regarding the extent to which the metaverse will become integrated into everyday life, as the technology progresses it may well become an increasing part of technology we use to interact.

Last year, Maidenhead-based market insight firm Quocirca found that 68 per cent of IT decision makers in the UK think AR/VR headsets will be used for virtual immersive workplace meetings within the next two years, while 61 per cent are already using at least one application of VR or AR.

AR (augmented reality) overlays the real world with virtual elements. In 2016 Pokemon Go took the world by storm, using people’s smartphone cameras to place virtual creatures into the world around them. It became one of the most used and profitable mobile apps that year and was downloaded more than 500 million times. It popularised location-based and AR technology and was even praised for promoting physical activity and helping local businesses grow as it boosted footfall in retail areas.

Metaverse technologies being driven by Gen Z

Metaverse technologies are also being driven by Generation Z. That same Quocirca survey found 73 per cent of IT decisions makers aged between 18-34 expect AR or VR to be used for virtual meetings in the next two years, compared to only 53 per cent of decision makers aged 45 or over.

One of the biggest questions surrounding the metaverse is that of integration, with some suggesting that too many different offerings with different ways of working (in some metaverses a user can trade with real world currency, whereas in another they are limited to cryptocurrency, such as bitcoin) will limit its uptake in general life.

Professor Xiong sees this as more a question of technology: “Before we developed transportation infrastructure, people lived their entire lives in one city. Once you have the standard in place, like a highway with the cost covered, the world starts to open up.”

Whatever your view, the metaverse – in one form or another, is coming, and is likely to become an increasingly normal part of life. The question business owners should be asking themselves is, “who are my customers, and are they likely to use the metaverse?”. With Bloomberg suggesting the metaverse could be an $800 billion market within the next few years, it’s clear why Facebook founder Mark Zuckerberg is so interested.