Metaverse: Harmful hype or fantastic future?

In the metaverse, hailed as the future Internet, you interact through a character or an avatar you create. Everything down to the avatar's face shape, eyebrow, skin colour, eye colour, hair style and even gender can be personalised.

Your avatar can buy land or goods in the metaverse using digital currencies, live in a big mansion and sport quintessential Balenciaga or Prada looks. With a wave of your hand, motion-sensing technologies built into a connected virtual reality headset or haptic suit you wear will transport you to exotic destinations and on exhilarating adventures.

Speaking into the headset will allow you to interact with other avatars. The haptic suit will allow you to feel the touch of another avatar.

That is just the beginning.

Citibank has forecast that by 2030, opportunities in the metaverse could be worth up to US$13 trillion (S$18 trillion), with real use cases in commerce, entertainment and media, training and manufacturing. Citibank has also predicted a user base of five billion people, or around 60 per cent of the world's population, by 2030. Comparatively, there were some 4.95 billion Internet users at the start of this year.

Can the metaverse deliver as promised? What are the pitfalls? Already, reports of molestation in the metaverse have surfaced.

How people warmed to avatars over decades

The term "metaverse" was coined by American author Neal Stephenson in his 1992 science fiction novel Snow Crash. The book is set in a dystopian future where people hang out in a virtual world called the metaverse. American author Ernest Cline's science fiction novel Ready Player One also carries the metaverse theme.

Second Life, launched in 2003 by San Francisco-based Linden Labs, is the first known attempt of a metaverse. Second Life's creators were emphatic that it was not a video game, as it had no gameplay mechanics or win and lose conditions, but a virtual world where people could explore spaces, interact with one another and exercise their creativity. The platform also had its own virtual currency, the Linden Dollar, which is exchangeable with real world currency. The platform did not take off; some people said it was too early for its time.

More recent attempts of metaverses include multi-player video games Fortnite, Roblox and Minecraft, where players interact in a shared virtual space. These games are still being played. Other popular ones include The Sandbox, Decentraland, Voxels, Somnium Space and Meta's Horizon Worlds. There are now more than 50 different providers of worlds within the metaverse.

In 2019 and 2020, Fortnite hosted virtual concerts featuring the avatars of American DJ Marshmello and American rapper Travis Scott. Fortnite belongs to Epic Games, whose founder Tim Sweeney is himself a big metaverse proponent.

Big brands venture into the metaverse

The term "metaverse" only became a household phrase last year after Facebook chief executive officer Mark Zuckerberg announced the firm's name change to Meta, along with plans to build an immersive 3D virtual community for social and workplace collaborations.

Since then, many companies have created digital replicas of their physical office spaces. Some have architects create entirely original spaces specifically for the virtual world.

Luxury brands are among the first to pop up in the metaverse. Ralph Lauren set up a store in Roblox last Christmas allowing people to buy digital clothing for their avatars from the virtual Polo shops.

Nike created a virtual world, called Nikeland, on Roblox using its world headquarters as the backdrop. Visitors can style their avatars in Nike gear and play games such as Tag, The Floor Is Lava and Dodgeball on the platform.

Entertainment media giant Walt Disney Company also looks set for metaverse-infused theme parks with its newly awarded patent for Virtual World Simulator, a technology that can track mobile devices belonging to park visitors to create personalised 3D overlays on walls, spaces and objects. The technology removes the need for virtual and augmented reality head-mounted displays.

Closer to home, Singaporean tycoon Kwek Leng Beng's Millennium Hotels and Resorts launched a new virtual M Social hotel, which occupies a prime spot in Decentraland.

Visitors can jump from floating staircases to floating beds as they take in the sights and sounds of the various M Social hotels located around the world.

Some say virtual worlds are the way of the future

Proponents of the metaverse say these virtual worlds will soon become ubiquitous, with real business use in commerce, marketing, entertainment and media, training, manufacturing and healthcare.

The digital twin of a real manufacturing plant or hospital operating theatre could be a testing ground for making a new product or practising a new operating procedure.

The metaverse could be the 3D extension of videoconferencing platforms like Zoom and Microsoft Teams, for training or meeting people in far-flung destinations.

Millennium Hotels and Resorts is looking to the metaverse as a marketing tool.

Visitors can receive "virtual surprises" that can be used in the real world, a spokesman said.

Nike witnessed some early success in marketing. Around 6.7 million people from 224 countries have visited Nikeland since the locale's launch in November last year.

They are "driving energy" to virtual products, Mr John Donahoe, Nike's chief executive officer and president, reportedly said in March.

The company now considers selling Nike-branded non-fungible tokens (NFTs) a key revenue strategy. An NFT is a collectible digital asset that acts as a unique digital certificate of authenticity and ownership for a physical or virtual item.

In April, Nike released its first collection of virtual sneakers, called Cryptokicks, comprising 20,000 NFTs. One of these NFTs, designed by Japanese contemporary artist Takashi Murakami, was sold for a whopping US$134,000.

Proponents of the metaverse also believe that virtual spaces have inherent value similar to how real estate is valued in the real world. The closer one is to a popular destination, the higher the value of the land.

"Location, location, location. This principle seems to apply just as well in the metaverse," said Associate Professor Damien Joseph, Nanyang Business School's associate dean of undergraduate academics.

"And what determines location: who is there, what is there, and whether people really want to be there."

Case-in-point: one NFT collector spent about US$450,000 last December on a plot of virtual land next to American rapper Snoop Dogg's virtual estate in The Sandbox.

Others worry about sexual assault and costly mistakes

Critics of the metaverse have also warned against what seems to be a gold rush.

Professor of marketing Scott Galloway at New York University's Leonard N. Stern School of Business, told the BBC earlier this month: "What we are seeing now is a speculative bubble around virtual real estate and other metaverse assets."

Alluding to possible financial casualties, he added: "When speculative economics emerges in a space, it tends to take it over and drive valuation and interest until the bubble bursts."

Professor Robert Stone, chair of interactive multimedia systems at Britain's University of Birmingham, echoed these views.

"Buying virtual real estate 'on spec', or based solely on the over-hyped marketing ploys of online vendors, is a sure-fire route to disappointment and wasted budgets.

"There are con artists out there, and, as the market is largely deregulated, mistakes can be costly," he told the BBC.

Crime is another area of concern. A 43-year-old woman in London was reportedly groped by three male characters in Horizon Worlds within a minute of her joining the platform late last year.

Mrs Nina Jane Patel, vice-president of metaverse research for tech firm Kabuni Ventures, told The Daily Mail earlier this year: "I am a mother of three daughters and a son and I have many concerns about letting them go into this seemingly fun, inviting area only to encounter dangerous and damaging behaviour."

Since reports of molestation in the metaverse surfaced, lawyers, academics and psychologists have questioned the adequacy of current laws in reining in crime in the metaverse.

Data ownership and protection is another area that needs to be sorted out. Nanyang Business School's Prof Joseph said: "Current data ownership laws seem to favour platform operators, and there is no cross-platform sharing of data."

This means that a brand with a virtual setup in Decentraland cannot interact with visitors and other brands in The Sandbox, and vice versa. Similarly, avatars who wish to wear Prada or Balenciaga can do so only on Meta's Horizon Worlds. Avatars who wish to don Nike have to visit the Roblox platform.

Said Adjunct Professor David Lee from the Department of Finance at the National University of Singapore's Business School: "The metaverse may just be an experiment that may fail or take off depending on the user experience. "At the moment, it is like the punch card or DOS era before the more user-friendly Windows era. All technology goes through the hype cycles and metaverse is no different."

 

Source: The Straits Times