Immersive Communications and Virtual Goods - Pointing to a Virtual Future?

Amidst the COVID-19 pandemic and its sheer weight and magnitude on the here and now, it can be challenging to start thinking toward the future and what, if any, of the short-term changes we are currently seeing will carry on when the world returns to a level approaching normality. Comcast, for example. recently sent out a press release discussing some of the network impacts it is seeing as a result of social distancing and the massive shift towards working at home/remote. As one would expect network traffic is up, but still far from causing any significant issues within its access or core networks—Comcast, along with other network providers, built for peak capacity months in advance, which has helped absorb this additional load (along with continued optimizations and network expansions). When the pandemic is over, quite a bit of this additional content demand will end in kind. However, Comcast and others expect some aspects to remain part of the new normal—most notably working remotely and virtual communications.

This is a long lead up to the highlighted news, but it sets the stage as we consider what this segment of the gaming market could mean, in a much broader sense, to social interaction and digital/virtual commerce in the longer-term future. Horizon recently secured an additional US$5 million in funding to develop its Ethereum-powered platform called Arcadeum and a digital card game called Skyweaver that will help showcase the Arcadeum platform. The ultimate goal is to engender a richer ecosystem for digital or virtual items, which in the case of the blockchain shifts more ownership and control to the end users over their virtual goods. Other companies like Enjin and Blockchain Game Partners are taking this a step further and extending blockchain-based gaming across multiple games through their Enjin Multiverse Platform and Gala Network (respectively), which allow for both fungible and Non-Fungible (have unique characteristics) Tokens (NFTs) across different games.

While these gaming applications are still niche, if telecommuting and video communications do in fact become more prevalent, the market for virtual goods could extend more broadly beyond video games.

While a shift toward remote working by itself would not expand the market potential for virtual goods, the increase use of digital communications overall will form the foundation for this market opportunity. Gaming is a natural starting point since it already supports individual markets for virtual goods and microtransactions—the next step is cross platform-implementations such as those being delivered by Enjin and Blockchain Game Partners and eventually extending beyond video games to other areas like social networking. It’s easy to imagine something akin to the movie (and novel) Ready Player One where virtual worlds become regular destinations for many and, like the movie, this “alternate reality” would not be represented by compartmentalized applications or experiences but rather a seamless digital environment. This is a case where aspects of the Internet could start to look like virtual destinations. Virtual goods, like real-world items, could hold different valuations based on scarcity, meaning a separate industry of virtual content creators could arise, much like was seen in virtual worlds like Second Life from Linden Lab. In effect, the same marketing and branding opportunities in the real world could extend to the virtual with NFTs allowing users to own these virtual items/goods.

This level of expression will likely extend to the Mixed Reality (MR) markets as well—for example, users could display their virtual goods in the real world to those with smart glasses, not too dissimilar from the Augmented Reality (AR) overlays used by mobile devices today, just on a wider and more prolific scale. Moving back to the workplace, this virtual society would also support virtual workplaces for coworkers to hold meetings and collaborate and, much like in the real-world office, design will reflect a company’s culture. All of this might sound like a fanciful vision of a very far off future, but there are real-world cases to point to; Exp Realty, for example, is a cloud-based real estate brokerage company that operates a virtual world where agents can meet and receive training. The company uses a platform developed by VirBELA, which also builds tools for virtual education. There have been virtual conferences held in Virtual Reality (VR), like the Educators in VR Summit, which took place in Microsoft’s AltSpace VR; similarly, HTC will hold its Vive Ecosystem Conference (VEC) in China within a virtual word built on ENGAGE’s, which specializes in education and training in VR. More education systems will likely look into new technologies like these immersive platforms to ensure a higher level of engagement—there have already been reports of parents struggling to handle the rigors of home schooling and some children/families have simply ignored lesson plans altogether. 

Digital communication, be it remote working, social networking, or video calling, will play a larger role in society after the COVID-19 pandemic. It might not be apparent when things return to normal, but the seeds have been sown—many new households and workers have been forced to use these types of communication as a result of the pandemic and social distancing and we can expect these tools to see continued use. The spread of virtual good ownership will take longer to develop, as game developers are still creating franchised ecosystems with unique sets of virtual items, but outside of the smaller players we should see some efforts in branding and marketing that could take advantage of virtual goods outside of the game environment. AR in mobile devices presents a unique glimpse into what a MR-enabled future could look like with virtual goods; couple that with VR and virtual events and worlds and we begin to see how productivity, entertainment, and life can begin to intersect within a virtual environment not unlike the real world but with some added eccentricities from the “Internet folks.”

This isn’t a market that will happen overnight—Linden Labs’ Sansar platform, for example, which began as a VR/PC virtual platform and pivoted to music events, was recently sold off due to limited profitability, so this type of future will take time; although eXp Realty is yet again an example where these virtual environments can work, the company generated US$980 million in revenues in 2019—up from $500 million in 2018—and the company cited its virtual workspace as an advantage in the current pandemic. AR and VR are certainly a gating factor, but the market will see more opportunities in the interim as workplaces, educators, and consumers see ways to better communicate with each other in virtual ways. Horizon Blockchain Games’ US$5 million in funding might seem small among much larger deals and all of the news surrounding the pandemic, but it starts to stand out more from a futurist perspective, especially if we do indeed increasingly look to virtual and digital communications.