While the metaverse is a comparatively new concept, it’s attracting increasing interest from business and consumers.
NB: This is an article from McKinsey & Co.
Is the metaverse a digital playground for friends? Or is it a commercial space for companies and customers? It’s a little of both. Having entered the popular lexicon in 2021, the metaverse is highly fluid.
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It represents a convergence of new and older digital technology to combine and extend the reach and use of augmented reality (AR) and virtual reality (VR) so that people can interact virtually – in a highly realistic way – with one another in any context (for social or recreational purposes, business transactions, et cetera). And the “enterprise metaverse” may coalesce in a way that unlocks even more opportunity, beyond simply serving as a virtual place where people interact. For all the buzz around the metaverse, its future is up in the air, to some degree, as people and companies explore the possibilities.
Advanced AR headsets – together with new and enabling technologies such as 5G technology and semiconductors capable of delivering mega volumes of data – are helping the metaverse deliver a level of virtual digital experience that is more realistic than the online gaming platforms that have been around since the early 2000s (and were the early forebears of the metaverse), where people could create avatars through which they could have semi-lifelike virtual experiences.
In the words of futurist Cathy Hackl, “Much of what we’ve read about the metaverse from sci-fi has been pretty dystopic, but I do think we need to envision what it will look like so we can build toward a more positive view of the future.” And where might that lead? “We don’t want to escape reality but rather embrace and augment it with virtual content and experiences that can make things more fulfilling and make us feel more connected to our loved ones, more productive at work, and happier people,” says Hackl.
What are AR and VR?
Simply put, AR, or augmented reality, uses technology to add or augment a person’s view of reality with a computer-generated image. If you’ve tried Pokémon GO on your smartphone, you’ve experienced AR. The game lets players catch characters based on their real locations on a map. It’s physical and virtual all at once.
Virtual reality (VR), on the other hand, doesn’t include a physical-world component (besides the handset or other equipment such as a helmet or sensor-laden gloves). In VR, users enter a computer-generated simulation but can interact with it in a way that seems real. You might be familiar with videogames that use VR, but the technology is used in a variety of other ways that go beyond recreation.
Here are some examples of how AR and VR can be used:
- in immersive ideation for product development
- during design-to-value (DtV) exercises
- in the “creative economy” (art, journalism, music, et cetera), by offering opportunities to create transformative experiences by promoting new feelings, skills, and understanding
- in sports and entertainment (fans might watch 360-degree AR replays, for example)
- in retail for “experience design” (creating a “wow” factor in retail, beyond just shopping)
Mixed reality, or MR, is a term you might also see used. That generally refers to situations that combine elements of both AR and VR.
What does gaming have to do with the metaverse?
Many associate gaming with metaverse, but they’re not one and the same. “I see gaming as the on-ramp,” says Cathy Hackl. “When you talk about some of those enabling technologies or the infrastructure that’s needed, you can’t escape talking about game engines, like Unreal Engine or Unity.”
Indeed, the metaverse is expected to go beyond “gaming 2.0.” One example that illustrates the momentum: the amount of money spent on in-game, virtual goods. In 2015, spending on these was roughly $5 billion; in 2021, that figure reached $60 billion or $70 billion, even excluding nonfungible tokens (NFTs).
