Metaverse Not Ready for Most, but Significant Steps Made in August 2023 Towards This Future

ABI Research views the metaverse through three key pillars: devices and interfaces, Three-Dimensional (3D) markets (and content creation), and converging networks. While all are equally important, the first two require the most attention during these early stages of the progression toward the metaverse or a future like it; converged networks, including distributed computing, will play a critical role in the more mature stages of the buildup to this future. These first two stages ensure that the broadest base of users can access metaverse use cases and provide the groundwork to create the business models and markets necessary to fuel investments and participation in this space. Some may miss ongoing developments to these pillars, their attentions diverted elsewhere after the metaverse hype cycle cooled. The metaverse, however, was always a long-term vision, a future that will take years to build to, but this does not mean there are no opportunities today. Companies are already benefiting from XR training, digital twins, and immersive collaboration – getting the best out of these early opportunities means identifying the right users to target for these metaverse use cases and then viewing these as initiatives for development, rather than just trials or experiments that become orphaned projects.     

While the past months since the metaverse left its hype cycle peak have offered some promising steps forward, August may come to be viewed as an early indicator of a coming inflection point.

• Markets for 3D Content and Content Creation:
  • Early in the month of August 2023, the Alliance for OpenUSD (AOUSD) was announced to focus on the development, expansion, and, critically, the standardization of OpenUSD (Universal Scene Description). OpenUSD, often viewed as a scene description format, represents a wider 3D ecosystem for description, composition, and simulation of 3D projects, and the foundation for 3D products and services. The Alliance, which is part of the Joint Development Foundation (part of The Linux Foundation), was founded by Adobe, Apple, Autodesk, NVIDIA, and Pixar with general members including Cesium, Epic Games, Foundry, Hexagon, IKEA, SideFX, and Unity.
  • NVIDIA released open-source code for Neuralangelo, which is a 3D reconstruction tool to convert Two-Dimensional (2D) videos to 3D models using Artificial Intelligence (AI)—this is like NVIDIA’s Instant NeRF (neural radiance fields) technology, which is used for images/photos.
  • The largest social metaverse platform in Asia, ZEPETO (owned by NAVER), announced ZepetoX (ZTX), which brings in Web3 elements like blockchain, crypto, and, most significantly, content ownership. This expansion pairs with its preexisting social platform (Web 2.0-based and mobile-centric), which has expanded globally beyond its domestic South Korean market.
  • Africarare’s Ubuntuland, which is touted as Africa’s first Virtual Reality (VR) metaverse, made headlines announcing its goal to reach 1 billion users worldwide. Supporting Web3 elements like blockchain (Non-Fungible Tokens (NFTs) and crypto), along with consumer and enterprise elements (e.g., virtual meetings), it checks many of the metaverse boxes, but its reported 1,500 to 2,000 daily page views suggests there is still some hype cycle optimism remaining in the market. Also in the region, Abu Dhabi’s Department of Culture and Tourism, in partnership with Aldar, Miral, twofour54, and Ethara, announced a VR tour of Yas Island on the Roblox platform.
• Devices and Interfaces:
  • Meta announced the launch of its beta test for Horizon Worlds on mobile devices, expanding beyond its Quest VR devices. This effort to expand the user base follows its recent extension of the platform to teenage users.

Interoperability and accessibility are essential ingredients for the buildup to the metaverse and the creation of the AOUSD is a good step forward, pairing well with the activities within the Metaverse Standards Forum, which is working to bring interoperability between OpenUSD and glTF (another key 3D file format). Meta’s decision to finally bring Horizon World to other devices highlights the importance of supporting all devices, not just Extended Reality (XR) within the metaverse context; XR’s time will come, but it will take time for the technologies underpinning these devices to reach a better state of maturity. Reaching broader audiences today is critical to attracting developers and content creators during these stages building up to a future metaverse.

NVIDIA is already a leader within the AI space, and its continued efforts to bring technologies like Neuralangelo and Instant NeRF will help accelerate the creation and adoption of 3D content creation tools. The availability of these types of tools is essential to make 3D content creation accessible and economical for a broader range of users. One of the challenges for 3D within digital twins, for example, is the cost/effort to update models with every change to assets, factory floors, etc.; hence, most of the derived value from digital twins remains in the data and data-driven results of these models. Making 3D more accessible, while simultaneously reducing the cost to create and maintain models/assets, will create more opportunities to make 3D a stronger component of digital twins and the industrial metaverse.

For other markets, there needs to be a stronger affinity or valuation for 3D goods and environments before these types of spaces and experiences extend to broader audiences (e.g., beyond gaming). Content ownership from leading platforms like ZEPETO will introduce content ownership to a broader audience, which could jumpstart the market surrounding these types of marketplaces. If consumers and younger generations continue to embrace immersive applications and experiences, this will diffuse to other areas like workspaces. Younger workers are already more adaptable to (or accepting of) new digital tools within the workplace, so increased metaverse experiences within the media & entertainment markets will only further acclimate users to these types of environments.

It is worth reiterating that the attention and investments in AI should be viewed as a catalyst of the metaverse and not a competitive alternative. NVIDIA’s activities across AI and the metaverse is a clear indication of the synergies between the two, as are other countless other examples. Adobe’s Firefly (generative AI), for example, is a prime case where AI will be pivotal in making content creation more broadly accessible. AI is also essential for handling increasingly complex workflows, managing/analyzing data, fueling digital humans/virtual assistants, etc. Another example, Altis Labs, recently announced a partnership with Bayer Pharmaceuticals and AstraZeneca to lend its computational imaging platform, Nota, for digital twins within clinical trials to manage and analyze imaging data. Nota, in this case, is serving as an AI-based prognostic model to help the companies better predict trials outcomes and determine where to optimally invest resources.

All of these pieces are starting to come together, serving as a growing foundation to continue progressing toward a metaverse future.

While progress will take time, there are many variables and moving parts. There is opportunity to be had today and companies should find ways to seed these experiences and technologies within their organizations. The key word here is “seed” and not widely deploy—the user base (both consumer and commercial) is not ready for mainstream coverage, but for those key use cases and applications where metaverse experiences make sense, these should be deployed and nurtured.

Many companies and consumers have at least trialed or experienced XR or metaverse elements to some degree. Many surveys, for example, paint a picture where the metaverse and XR may appear to be quite extensively deployed or will be within the next 2 years. What many of these findings miss, however, is that most of these “deployments” of XR or metaverse are trials or limited tests. Companies too often either consider these trials as experimental or relegated to a wait-and-see approach, citing the inability to translate these trials to the broader organization (e.g., users don’t like wearing VR gear or find virtual spaces less comfortable). That should be expected, as many technologies and platforms are still not ready for mainstream use, but this does not mean there is no or limited value to certain users within an organization.

Many companies are finding success with immersive training, design, and collaboration, for example. These use cases need to have broader use and acceptance within organizations; in time, employees will come to see immersive experiences and the metaverse more broadly through a different lens. It has already been established that younger generations will be predisposed to these types of environments. This does not mean that companies should or need to invest in virtual real estate and create a digital twin of their office in the metaverse, but again, seeding these types of experiences and nurturing them within the organization will help extend these experiences to more users over time when the technologies, use cases, and applications best suit their needs and requirements. Companies and users will need to evolve and adapt in-line with the buildup to the future metaverse, rather than wait for this future to arrive.