Covering Disruptive Technology Powering Business in The Digital Age

Written by: Martin Dale Bolima, Tech Journalist, AOPG.

The metaverse seems weirdly familiar, doesn’t it?

That is because we have seen it already. We have watched it fail to live up to expectations. It just went by a different name back then: Virtual Reality (VR).

Proponents of the metaverse are sure to despise the analogy. They do have a humongous stake in it after all, right?

Fabio Moioli, Head of Consulting and Services at Microsoft and Member of the Forbes Technology Council, certainly does not buy such a comparison. But he admits the metaverse is a virtual world—one based on open platforms that allow users to develop and share content and applications and earn money and other forms of rewards for them. Moioli also notes the metaverse “is not a single virtual world but a network of interconnected virtual worlds” that enable “an unprecedented level of interaction and collaboration and making it a highly customisable environment.”

For Ulisse Dell’Orto, Managing Director of APJ at Chainalysis, the metaverse has arrived and is now a reality but only for a select few—artists, brands and games. Dell’Orto, however, is speaking about a very specific aspect of the metaverse in digital asset ownership, whose tangibility, according to Dell’Orto, will depend a lot on the metaverse being as immersive and as life-like as possible.

Fair enough. The metaverse is not VR. It is more than VR. But, like VR, the metaverse is teetering dangerously close to being a victim of its own hype.

Just a Glorified VR?

For all the hype surrounding the metaverse, many are not buying it. Among the notable non-believers is Phil Spencer, CEO of Microsoft Gaming and Head of Xbox. Asked at the WSJ Tech Live 2022 conference last October about what he thought of the metaverse, Spencer described it as just “a poorly built video game.”

“If I think about video games, for years we’ve been putting people together in 3D spaces to go and save the world from invading aliens, or conquer the castle . . . Video game creators have this amazing ability to build compelling worlds that we want to go and spend time in.” Spencer elaborated, “For me, building a metaverse that looks like a meeting room, I just find that’s not where I want to spend most of my time.”

Spencer did note that the metaverse is in its “early, early stages.” He also conceded that the metaverse will evolve because “there are engagement models where we can really have productive interaction and get things done in 3-D virtualised spaces.” But the Xbox boss was adamant that the metaverse will “look a lot like video games”—and it ought to learn from them.

The Head of Xbox is not alone. Dr Robert Blumofe, Executive Vice President and Chief Technology Officer at Akamai, shares the same view, albeit for the metaverse in its current iteration. But, unlike, Spencer, he is cautiously optimistic that the metaverse will be much more than just glorified VR gaming—but neither now nor in the near term.

“There has been a lot of excitement about the metaverse and the possibility it has to transform how we socialise, work, and play games. But this will be the year that the hype crashes into reality,” noted Dr Blumofe. “An all-encompassing digital world may exist at some point but that reality is a long way away. In the near-term, the metaverse will look a lot more like highly interactive gaming.”

Blurry Horizons for the Metaverse

The earliest incarnations of the metaverse do look like video games, while some are actually games themselves. Exhibit A is Horizon Worlds by Meta, the parent company of Facebook and arguably the prime mover of the metaverse. Described by Oculus as an “ever-expanding social universe where you can hang with friends, meet new people, play games and attend cool events,” Horizon Worlds has not been the metaverse’s proverbial best put forward, as it has been widely panned—so much that, according to a report by The Verge, “even the team building it isn’t using it very much.”

The report quotes Vishal Shah, VP of Metaverse at Meta, as saying in a memo: “Currently, feedback from our creators, users, play-testers and many of us on the team is that the aggregate weight of papercuts, stability issues and bugs is making it too hard for our community to experience the magic of Horizon. Simply put, for an experience to become delightful and retentive, it must first be usable and well crafted.”

Palmer Luckey, a Co-Founder of Oculus VR, does not think highly of Horizon Worlds as well. “I don’t think it’s a good product,” Luckey said bluntly. “It’s not. It’s not fun, it’s not good. I think actually most of the people probably on the team would agree that it’s not currently a good product.”

Luckey’s blunt assessment is proving prescient, with Horizon Worlds losing monthly users. Meta’s flagship virtual realm reached 300,000 monthly users in February 2022, seemingly indicating a groundswell of support. Since then, that figure has dwindled to less than 200,000, leaving Meta little choice but to reset its initial goal of getting some 500,000 monthly users by the end of 2022 to just 280,000. Reports further indicate that visitors to Horizon Worlds largely do not come back, possibly because they did not find anything worth coming back to.

Meaning, the signature app of the metaverse is a mess. Maybe the metaverse is, too.

Misplayed Hand

Besides, who wants to spend parts of their life in a virtual world anyway? Bloomberg’s Jason Schreier, in an op-ed about the metaverse back in February, argues not enough people want to—because, well, who wants to “interact” with avatars and digital renderings? Perhaps a bigger but equally related question is who will spend hundreds of dollars to truly be part of the metaverse?

Already, Meta’s cheapest Quest headsets cost USD $299–$399, while the best (the Quest Pro) start at USD $1500. Apple’s headsets are set to be even pricier, reportedly starting at USD $2000. There is also the matter of hardware, which needs to be powerful enough to actually run the metaverse. According to Acceleration Economy, one would need a computer with a minimum 4G graphics card, a CPU processing speed of at least 3.5GHz and a strong internet connection. All that, however, is good enough only for 2D experiences, not the immersive, interactive kind the metaverse is supposed to offer.

The barriers to entry, at least for average consumers, are quite high at this point. These barriers are highly likely to keep the metaverse from fully entering the mainstream, where it must be to match the hype that now surrounds it.

“First of all, the metaverse right now, for a lot of the average users, is not that easy to access,” said Emily Parker, Global Macro Editor at CoinDesk, in an interview with Yahoo Finance Live. “The barrier to entry is rather high. So, having larger established players coming in could create more of a mainstream experience. It could open it [the metaverse] up to more users.”

Moving the Metaverse

There is hope that the metaverse will meet the hype eventually. But as Parker points out, that may very well depend on organisations diving headfirst into the metaverse—as many of them as possible. And it appears quite a few are diving in, from Accenture’s Nth Floor, Regan Hotels’ MetaGreen and Zuellig’s ZP Metaverse. But they are doing so at a cost and it might not be sustainable. It might not even be good for business, to begin with.

The ongoing misfortune of Mark Zuckerberg’s Meta is a cautionary tale for organisations investing in the metaverse. Meta is currently haemorrhaging money building its metaverse, having lost USD $9.4 billion this year alone, according to a report by CNBC. It appears Zuckerberg is unafraid to lose more money, committing billions more in what he describes as “a longer-term set of efforts” that is “going to end up working, too.”

Zuckerberg is right in that the metaverse is a long-term venture. He might even be right to invest heavily in something that may yield huge profits in the future. But Zuckerberg and Meta have the resources to take the long-view approach—and maybe some other companies, like Siemens and NVIDIA, for instance, who are both invested in the metaverse as well. Not every enterprise has that luxury. Not everyone can afford to lose billions in the short term in hopes of cashing in the long term.

Billions. That’s how much of an investment the metaverse would be for companies—an investment they should consider making according to Jeff Wong, Global Chief Innovation Officer at EY.

“Maintaining a huge, distributed project will likely require lots of capital—to the tune of billions of dollars, according to recent news reports about the major players. It makes business sense for the big tech companies to pay for building the infrastructure and for users to pay for both client hardware and access to the infrastructure (via payments to telecoms),” noted, Wong, who believes the metaverse will pan out eventually.

Hope on the Horizon?

Maybe the metaverse will meet expectations after all. But for all the hype about it, the uncertainty surrounding it is just as pronounced. Its success, in fact, largely depends on too many moving parts that need to coalesce seamlessly—and that is far from a sure thing.

Put simply, the metaverse at this point is more of a great unknown, which may explain why enthusiasm about it is guarded. Regardless, there is cautious optimism that the metaverse might be revolutionary.

“At this stage, I believe that people don’t yet know what the end state of the metaverse will be or what exactly the promise is,” noted Stas Madorski, Senior Vice-President Blockchain Strategy at WadzPay Worldwide. I do believe once we reach its end state, the metaverse will be ground-breaking and redefine how we perceive reality.”

Again, that may be true. But the margin of error is slim, and a lot needs to go right if the metaverse is to fulfil its promise. Among the first things that must happen, according to Dr Blumofe, is for “significant advances in computing and wearable technology to take place” as they are necessary “before a true metaverse can be built.” Interoperability among the different metaverse projects must also be ensured, said Dell’Orto, while Madorski believes the metaverse needs “one global payment rail that transcends boundaries.”

All that may happen over time. The companies heavily investing in the metaverse might even get things right. But that’s no guarantee the metaverse will strike a chord where it matters most: With the average consumer. It appears the metaverse has been unable to do that thus far. And if that doesn’t change anytime soon, the metaverse will be in danger of being a victim of its own hype.

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