Facebook made headlines around the world when they announced the Metaverse, a virtual reality world in which owner Mark Zuckerberg claims we’ll live, communicate and do business with each other in the not too distant future.
Whether this sounds exciting or dystopian to you probably depends largely on your attitudes towards technological change, the increasing levels of digitalisation of the world around us and the control that gives companies such as Facebook and Google. But for businesses it does also throw up a whole host of questions.
If we are to live in the Metaverse in the not too distant future, how do we adapt our companies? What opportunities exist for them and how do we safeguard our interests in this new, digital world?
The idea of the Metaverse as a social platform is an interesting one. Up to now, VR experiences have been more akin to a game with a beginning, a middle and an end. You put your VR goggles on, play the game and then take them off again – with minimal real-world consequences.
But the move to the Metaverse will see a never-ending, ever-evolving world being developed. And the scale of this opportunity will only become truly evident in the fullness of time as the technology has chance to mature and build a stable user base.
What is clear is that businesses are likely to find themselves navigating an entirely new regulatory framework as we embark on this switch into the digital world. Perhaps the most concerning part of this shift could be the dangers to intellectual property in a world in which users all around the world can recreate products.
NFTs are becoming increasingly popular globally, and their development brings with them a whole host of questions about online intellectual property – who owns what and how can businesses really control the use of their brand in this online world.
Equally how will financial reporting work in this new, globalised, virtual world. Can our traditional currencies keep up or will we need a whole new currency, or cryptocurrencies, which are highly volatile to manage transactions in the Metaverse?
Supply and demand
On the flip side, these NFTs offer a real opportunity for businesses. Values of certain NFTs are exploding and some companies are already experimenting with selling NFTs before allowing them to be exchanged for real life products – you can think of it as a digital pre-order system. This can help with supply and demand in the real world, while providing something of value in the digital world.
However, again customer protection must be taken into account here. How can consumers ensure what they are buying is kosher and not a scam? What’s to stop people from recreating popular products and using this to make a profit in the Metaverse, with the end user being short changed when they come to cash in the item?
Opportunity or gimmick?
My initial message to businesses is not to panic. If we think about the rate of adoption of new technologies, such as the smartphone, it often takes a number of years for a new development to reach mass adoption – going through rounds of refinements and enticing early adopters before ever really making it’s mark in the mass market. To this end, the Metaverse will, initially, be a more marginal product – but one that companies should be monitoring and exploring.
Facebook are, right now, attempting to move early in an arms race to monetise the virtual world, but it will be our children, and our children’s children, who will most likely engage fully with the Metaverse. However, the wisest of businesses will be thinking about how this technology might impact on their company in the long term – the opportunities it will create and the challenges that may surface along the way.
By Dr Sin Wee Lee, Deputy Head of the School of Computing at Arden University.