Stéphane Monier | Chief Investment Officer | Lombard Odier Bank | mail me |
A virtual space race to the ‘metaverse’ has begun. What does this immersive online future hold, why is it important, and where do we find value? As investor interest surges, we weigh up the short-term hype and long-term opportunities.
When Facebook changed its name to Meta Platforms in October, the word ‘metaverse’ moved from the domain of tech geeks to the mainstream. Surging interest reflects the intrinsic draw of thematic investments, especially within the technology sector.
Despite the long-term attractiveness of the metaverse concept, we believe we are currently in ‘over-hyped’ territory: a common phenomenon that we also saw with the advent of 3D printing, various stages of 3G/4G/5G wireless technology and the ‘Internet of Things’. Yet while investors tend to overestimate the short-term impact of new technologies, they also tend to underestimate the long-lasting influence on the competitive landscape of such a tectonic shift.
We examine the possibilities and likely impact.
What is the metaverse?
There is no single definition of the metaverse, which is a portmanteau word combining ‘meta’ meaning ‘beyond/after’ in Greek, and ‘universe’.
It is a hypothesised iteration of the internet. The most common description of the metaverse is a virtual-reality space, or an alternative economy or world in which users can interact with other users within a persistent computer-generated environment.
Users are most often represented by avatars: a digital icon or figure representing a particular person. The metaverse can be accessed using a collection of technologies, for example computers or smartphones, but more typically – and immersively – via augmented or virtual reality glasses. For investors keen to have a preliminary glimpse into what a metaverse might look like, we suggest watching Steven Spielberg’s movie Ready Player One.
One of the most advanced companies on this front is Meta Platforms (formerly Facebook). Its Virtual Labs division offers virtual reality headsets (Oculus Quest), which from 2022 will also include early-stage mixed reality with face & eye tracking technology. The firm also offers development tools (SparkAR) that enable creators to build new virtual experiences. An interesting use-case is represented by the SuperNatural app, part of its Virual Labs division, which is an immersive, virtual reality fitness service for the Oculus Quest. The app offers new workouts daily that transport the user to the most stunning destinations in the world, while working out with real fitness coaches.
What are the key building blocks of the metaverse?
We have illustrated below the seven layers needed to build the Metaverse ecosystem.
These include the backbone infrastructure and tools required, spanning connectivity, computing, and the user interface and virtual environment. The 3D environment and geospatial mapping form the Extended Reality fabric, representing the combination of mixed, augmented, and virtual reality.
Most of the required technologies to create this ecosystem already exist, while others are still work-in-progress. On top of these, many services will evolve to build out the content (the creator economy), market it (commerce) and make it discoverable (search). The final expression of the metaverse will be through experiences, encompassing games, social interactions, shopping, education, and live events like sports and concerts.
At this point in time, we only have …
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Read the full article by Stéphane Monier, Chief Investment Officer, Lombard Odier Bank, as well as a host of other topical management articles written by professionals, consultants and academics in the February/March 2022 edition of BusinessBrief.
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I do believe the metaverse will have a big rol to play in the future.
Imagine a word where covid or any other disease rules the world and we cant move around freely like before …
The metaverse will have a positive impact on our lifes.