Uhe property was worth 4.3 million euros to the American investor Republic Realm. The property is not located in New York or Los Angeles, but in the virtual world “The Sandbox”, where users can play, build and trade virtual goods. By its own description, The Sandbox is a virtual metaverse. This new dimension of the digital world is seen as a potential trillion-dollar market of the future.

The term metaverse is composed of the Greek prefix meta, meaning after or beyond, and verse, which stands for universe. Many CEOs of large technology companies use the term when they talk about their visions of the future. The term is not a new creation of Silicon Valley, but comes from the science fiction novel “Snow Crash” by the American author Neal Stephenson, which was published in 1992. In it, Stephenson describes a world in which people take refuge in a parallel world to escape violence and poverty. In this virtual world, they move around as avatars, i.e. artificial embodiments of the users, in a virtual, three-dimensional space and live their lives there. There is also a currency of its own;

Such a world seemed pure fiction at the time, but in times of rapid technological progress, it could become reality sooner than thought. Facebook founder Mark Zuckerberg also has big plans: “We believe that the Metaverse will be the successor to the mobile Internet.”

More and more companies are presenting plans for the Metaverse, after all, this could become an enormous market of the future. There are different forecasts regarding the economic potential: According to the market research company Vantage Market Research, the Metaverse could reach a potential revenue level of $800 billion by 2028. Analysts at Morgan Stanley predict an annual market potential of around eight trillion dollars. This would be more than twice the German gross domestic product from 2020. With these figures, it becomes clear why many companies, first and foremost the large tech groups, are working on the implementation of the Metaverse, even though the development and widespread usability may still be years in the future

One example is the Meta Group: Zuckerberg changed the name of the corporate holding company from Facebook to Meta Platforms, or Meta for short. For the new focus on virtual worlds, 10,000 new jobs are to be created in Europe alone. With the company Oculus, the Zuckerberg Group already acquired a company in 2014 that manufactures headsets for virtual reality (VR). When using the headset, the real world is hidden and the user is completely immersed in the artificial world by means of VR goggles

Battle of the tech giants

The competition also wants to get in on the action in view of the market potential. Again and again there are rumors that Apple could soon bring out its own hardware in the field of virtual worlds. This could enable the use of augmented reality (AR) in addition to virtual reality

In this “augmented reality”, the perception of the real world is supplemented by virtual elements. Users are therefore not completely immersed in the virtual world, but absorb additional virtual elements through AR glasses or similar devices. For example, additional information about places and buildings could be displayed during a city trip. Many have already had their first, albeit rudimentary, experience with this: the game “Pokemon Go,” released in 2016, allowed users to see and catch the popular pocket monsters in the real world via mobile devices. Suddenly, a virtual Pikachu is sitting in one’s own living room or a Taubsi in the middle of the park on the lawn.

For a comprehensive user experience, strong hardware is needed in addition to extensive software and VR-capable glasses, so that the technical and graphical requirements of the Metaverse can be handled and made usable comfortably. This includes, above all, powerful chips and processors as well as graphics cards. Since the Metaverse is to consist of huge digital worlds, enormous computing power is required to create and use them. The necessary semiconductors and graphics processors could come from Nvidia, for example. However, other companies in the industry such as Intel or TSMC also want to profit from the hardware upgrade necessary for the Metaverse

Enormous financial strength

Given the projected market size, the question is how to make money from the Metaverse in addition to selling VR and AR-enabled devices and glasses. The cornerstone of this lies in the ability to own property in the game-like worlds, just as in real life

This is made possible by the blockchain. This technology acts as a kind of shared database through which information can be transmitted in a decentralized and forgery-proof manner. This also allows the owner of virtual goods to be clearly determined. Such a good is referred to as a non-fungible token (NFT), i.e. a non-substitutable digitally protected good

NFTs can be very different objects, for example crypto art or just an animated cat. The only requirement is that the object must be digital. Users can also make and sell items themselves. Just like in the novel by Neal Stephenson, own currencies are used here as well

For online game worlds such as The Sandbox and “Decentraland” there are cryptocurrencies with the same name in each case, which are based on the well-known cryptocurrency Ethereum. These virtual goods sometimes change hands for horrendous sums: An anonymous user bought a mega yacht in the world of The Sandbox and paid about 150 Ether (coin of the cryptocurrency Ethereum) for it – these had a value of more than 570,000 euros at the time of the transaction.

Game developers will have a big role in the development of the Metaverse. One of them could become Roblox. The US company operates one of the most popular gaming platforms and has 50 million daily users. Its goal is to build a virtual world in which all goods, from land and houses to pets, can be bought and traded. In addition to Roblox, other companies in the gaming industry are also working on developments in the direction of Metaverse.

One of them is the U.S. company Epic Games, a provider of software and games and best known for the global gaming hit “Fortnite”. “Fortnite” and Roblox are among the most popular applications among the younger generation and are used accordingly intensively

The major shareholder in Epic Games is the Chinese Internet giant Tencent, which in turn holds countless stakes in other companies. These include, among others, game providers and the social media company Snapchat, which, according to a study by Goldman Sachs, plays a leading role in the field of augmented reality

Zuckerberg is also positioning his company in the gaming space. Meta recently released “Horizon Worlds” in the U.S., a virtual reality game in which users can not only explore existing worlds, but also create their own elements and team up with other players to experience adventures together, for example. According to the website of Oculus, whose VR goggles can be used for the game, users should not only be spectators, but a part of it all.

Virtual concerts

It is no longer just a matter of playing a game, the possibilities are to go much further. Virtual concert visits by real artists are to become possible. A beginning for it already took place in the present: After the live tour of the US rapper Lil Nas X could not take place due to pandemic, he gave a virtual concert in the world of Roblox, where the audience was transported to different landscapes during the songs

Companies from the entertainment sector are also discovering the potential and aiming for the Metaverse. For example, the Japanese entertainment company Sony is supporting the game developer Epic Games with around $200 million in a multi-billion dollar project for Metaverse development. Sony could then use its Playstation network to distribute the software. However, the Japanese also want to play a role in Metaverse with their own VR glasses

Leisure and work in the Metaverse

Disney also wants to play a major role in the future megatrend. Its strong franchises enable the group to generate completely new forms of entertainment by merging real and virtual elements. For example, a virtual Disneyland or the expansion of existing theme parks to include AR elements would be conceivable. The in-house streaming service Disney+ also offers potential and could be expanded into the company’s metaverse platform in the future

But not only leisure time pleasure is to take place in the Metaverse, also the work could shift there. Conferences are to be held via avatars in virtual conference rooms in the future. Microsoft has already presented an approach for this, which is to further develop the video conferences that became numerous during Corona. The concept is called “Microsoft Mesh” and represents a kind of further development of Microsoft Teams, whereby meetings can be shifted into virtual space. Using VR or AR headsets, the discussion partners appear as avatars in a virtual environment. It will also be possible to use the headsets without them, but then you will only see your colleagues as avatars in the classic video conference view and can interact with them. Compared to visions of the future for the Metaverse, this doesn’t sound that spectacular, but Microsoft Mesh is supposed to be available in the first half of 2022;

The Metaverse could revolutionize social interaction, provided that the developments necessary for it succeed and sufficient acceptance arises. It has the potential to greatly change the nature of work and other social gatherings by mimicking real experiences in virtual form to a large extent. However, it will probably not completely replicate them or even make them superfluous

Vision and reality

Much about the metaverse sounds like science fiction and will probably take years to implement. The market potential is enormous, but it is uncertain whether the developments will offer real added value for the masses and not just for gamers. Companies have recognized the potential and are investing in hardware and the development of virtual worlds. As a result, more virtual properties, yachts and other items could change hands for huge sums in the future.

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