The Myths of the Metaverse  

S. Schuchart

Summary Bullets:

  • The metaverse should be divided into the consumer metaverse (CMV) and enterprise metaverse (EMV) segments for discussion.
  • Metaverse proponents must get past over-enthusiastic, get-rich-quick thinking and provide real value, particularly in the EMV segment.

The inaugural report on the metaverse from the enterprise technology group at GlobalData is now available to subscribers.  Discussion centers on not only the origins of the term ‘metaverse,’ but also hype, pitfalls, value, and the need to divide the market, at least at a high level.  GlobalData subscribers can read it here.

The metaverse can be logically divided into two macro parts: the CMV and the EMV.  At the time of this writing, momentum is coming from the CMV, where companies like Meta Platforms (Facebook) are driving interest, money, and attention.  The vast majority of the hardware is also coming from the CMV, at least for now.  This is one of those rare occasions when the technology flows up into the enterprise from the consumer space.

However, with all of this money and attention, there is the inevitable hype and pie-in-the-sky use cases.  Most of the use cases GlobalData is seeing involve replicating the physical world in the digital universe – concepts like digital real estate, avatar-filled meeting rooms, and digital stores that mirror their brick-and-mortar counterparts.  These concepts seem innovative on the surface, but when you dig down, there are huge flaws revealed.  First, replication of the physical world into a digital space singularly lacks imagination.  Half the reason people use online shopping such as Amazon or Walmart is because they don’t have to wander around the store, looking for products.  They can just search, read the details, and add it to the cart.

Digital real estate is predicated on the idea of charging rent for spaces that for all intents and purposes are not only infinite, but replicable.  This is the angle the blockchain/cryptocurrency crowd is coming from.  They want to make the fungible into non-fungible (that’s not going great with NFTs even now) and charge for the use.  The use of blockchain and cryptocurrency as part of the scheme simply complicates things and makes it harder for people to understand that this is an attempt at creating artificial digital scarcity.

The example of the avatar-filled meeting room is equally nonsensical.  We do not yet possess the technology to bring micro expressions or add value to what we would get out of a normal video conference.  That’s really where the rubber meets the road and provides a way to gauge claims about the metaverse.  Does this add real value or is it just a cool-seeming idea?  Buying digital real estate seems cool, but at the end of the day, it provides little to no value, as there is no benefit in restricting digital spaces with real-world constraints.  Artificial scarcity is a trap that will slow the growth of the metaverse.

Not all is lost.  The concepts of augmented reality and virtual reality are, unto themselves, very interesting and will have a long-term future.  In the EMV, the real value-add use cases will come from augmented reality, at least for the time being.  Development of those use cases is lagging the consumer market, but will catch up.

We need to realize that we are not on the precipice of widespread rapid adoption à la the Apple iPhone.  We are at the base of a mountain of use cases and needed technological improvements that extends far into the future.  Our collective vision of the future is akin to Victorians positing that everyone will use personal lighter-than-air balloons to travel in the future.  They couldn’t see the actual future, and reality is far different from their 19th Century visions.  With concepts like digital real estate, corporate fear of missing out, and unwanted crypto/blockchain distractions, we are similarly blinded.  But like the Victorians, we know that one day we will soar on VR winds in the metaverse.  It is just a matter of time.

What do you think?

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