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What is the Metaverse and Why Should We Care?

Facebook’s recent announcement that it will adopt the brand name Meta signifies a new effort by the technology industry to race towards the next stage of the internet- what many are calling a “metaverse.” But what does that metaverse look like, and how close is it to becoming a reality? In this piece for Insights@Questrom, Questrom School of Business Professor of the Practice Peter J. Howard, who also leads the Digital Business Institute, tackles these questions with contributions from Artemis Huang, a research assistant, investigative reporter, and graduate student at the Boston University School of Journalism.

Peter Howard

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Arguably one of the hottest topics in the digital world right now is the concept of the metaverse. With the renaming of Facebook to Meta and its stated focus on developing products and applications in the space, we could be seeing the tipping point of a new paradigm in how we experience the internet. Business leaders should be thinking about opportunities (and imperatives) to enhance their customer and employee digital experience and preparing their companies for the pivot to new interaction models.

Consider how the online user experience has evolved over the past 30 years. From the start, with simple text and hyperlinks, we moved to a graphical user interface and the mouse in the 90s. The introduction of Flash in the late 90s opened up a more robust user experience, enabling websites to be much more interactive. Responsive web design in the 2010s enabled a seamless experience between our laptops and mobile devices. And of course, broadband advances have enabled us to immerse ourselves into the web with streaming content, shopping and social interactions. The Metaverse could be the next generation of our continuously evolving online experience.  

What is the metaverse? Adi Robinson and Jay Peters summarized the idea at its most basic as a “successor to the internet” in the July 2021 edition of The Verge. Many people trace the origin of the term to Neal Stephenson’s 1992 novel Snow Crash, where it referred to a 3D virtual world inhabited by avatars of real people. While there is no fixed definition or any “thing” that is the metaverse, some of its attributes have been widely recognized:

  • ​​Feature sets that overlap with older web services or real-world activities
  • Real-time 3D computer graphics and personalized avatars
  • A variety of person-to-person social interactions that are less competitive and goal-oriented than gaming
  • Support for users creating their own virtual items and environments
  • Links with outside economic systems so people can profit from virtual goods
  • Designs that are well-suited to virtual and augmented reality headsets, even if they usually support other hardware as well

Matthew Ball’s articulation of seven qualities of metaverse are also compelling and useful at this stage of development of this nascent idea. These are: (1) persistence (sense of continuity); (2) synchronous (living experience in real-time); (3) presence (allow for participation without limitations); (4) functioning economy (opportunity for value creation and capture); (5) richer experience (spanning physical and digital domains); (6) interoperable (across different independent, proprietary protocols); and (7) widespread participation (by individuals and enterprises).

According to Meta/Facebook, the “metaverse” is a set of virtual spaces where people can create and explore with other people who are not in the same physical space as them.  “You’ll be able to hang out with friends, work, play, learn, shop, create and more. It’s not necessarily about spending more time online — it’s about making the time you do spend online more meaningful,” Facebook Reality Labs Vice President Andrew Bosworth and Facebook Global Affairs Vice President Nick Clegg wrote in Facebook’s open statement.  

To realize its vision of building a metaverse, Meta has hired more than 10,000 employees working on augmented and virtual reality projects in its Reality Labs division. It also plans to hire 10,000 more in Europe soon. “We are committed to bringing this long-term vision to life and we expect to increase our investments for the next several years,” the company wrote in its third-quarter earnings release on Oct. 25. Meta sees AR and VR as being core to “the next generation of online social experiences.”

AR and VR technologies are getting closer to broad consumer application. According to Statistica, unit sales of virtual reality (VR) headsets worldwide are forecast to be 6.1 million units in 2021, bringing the total installed base to 16.44 million units. By 2024, the cumulative installed base of VR headsets is expected to surpass 34 million. Apple reportedly has been working on AR and VR technologies like “Apple Glass,” and some say that it might launch its mixed-reality headset in 2022. Chinese company Nreal has already shipped its AR glasses and put them into the consumer market in collaboration with Korean companies Samsung and LG.

Aligned with the metaverse vision, the concept of Web3 has become a heated topic in discussions of the future digital world. Web3 refers to a set of decentralized internet services where users retain more personal control over the data they put online. New technologies like cryptocurrency and non-fungible tokens (NFTs) are considered to be some enablers of the metaverse and Web3 visions.

Some NFT designers are already generating and selling avatars like Cool Cats, Bored Ape Yacht Club, Bones & Bananas and the Doge Pound. While these products are mainly used as 2D social media profile photos at the moment, their services already show metaverse-style features. Creative development studio Polygonal Mind, for instance, features services such as metaverse Builder and CryptoAvatars, with which users can create virtual spaces and personalized avatars to bring new experiences to their audiences.

The metaverse could be the next evolution of the web, bringing significant new opportunities for companies to innovate for customers, employees and society. The metaverse will be a platform to enable and accelerate the adoption of a new digital experience.

Business leaders should be paying attention now to developments in this space. They should be reviewing their customer journey maps to identify experience points that could be enhanced with the metaverse. Imagine a shopping experience in an immersive, 3D virtual setting. Shoppers will take virtual walks through product departments, immersed in the colors, sizes and features of products, instead of simply clicking through website taxonomies. And they will be doing so with their online communities. Features like website self-help could become more satisfying interactions with AI powered company avatars. 3D virtual product repair guides and manuals will be the norm.

While the actual design and deployment of the metaverse will evolve just as the internet did beyond its original articulation by Sir Tim Berners-Lee, today’s leaders must consider metaverse to be a key force shaping the future of their industries, business models and organizational architectures. The metaverse is not just for entertainment but has broader implications for the future of global society.

And the old saying goes, the only constant is change.

Peter Howard is Professor of the Practice in Marketing, and Executive Director of the Questrom Digital Business Institute. Pete brings over 35 years of executive experience to Questrom, and is focused on advancing research, learning agenda and community engagement around digital business transformation.

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