The Metaverse is Becoming the Way We Will Live and Work Online

Has the metaverse dissolved? The answer depends on your preferred flavour of virtual world.

Certainly, the idea of a consumer metaverse as an actual destination (the social media model) - rather than a way of digitally interacting (the AR/VR model) - is on the nose.

The limitations of first-generation metaverses like Decentraland have been thoroughly exposed - its much vaunted digital property boom having turned to bust, with valuations having fallen 90 percent in 14 months.  valuations having fallen 90 percent in 14 months. That’s a function of the fact that almost no one goes there - its owner concedes it has few as 8-10,000 visitors a day.

Likewise, Mark Zuckerberg’s Jetsons-like cartoon landscape where largely legless avatars bounce around doing very little is in full retreat, with Meta shifting its focus to AI and augmented and virtual reality.

Meta is not alone. Microsoft revealed it is closing its social VR platform called Altspace, and Disney reportedly eliminated its 50-person Metaverse team as part of an initial wave of layoffs earlier this year.

VCs poured investments into metaverse in 2021 but there has been a steady decline since then (in the same way VCs have retreated from other tech markets). Crunchbase says the firehose of investments is more like a garden hose now, having dropped from $2.2bn in the last quarter of 2021, to just $526m in the most recent quarter.

But just when it seemed like it might be time to flick the virtual off-switch on the metaverse, Apple breathed new life into the world of digital augmentation with the release of its Vision Pro, a mixed reality headset, at its 2023 Worldwide Developers Conference. General availability is expected next year.

Meta likewise announced the launch of Meta Quest+, a virtual reality subscription service that will be compatible with its Quest 3 headsets, due to launch in the US in the third quarter, and which it announced just days before the Apple news. 

These developments mark an important switch in thinking about the metaverse - no longer a destination, but rather a way of enhancing online interactions, blending the real with the virtual.

With AR and VR playing an increasingly important part in Meta’s plans, even the Zuck’s metaverse vision is aligning much more with the augmented experience model rather than the 3D social network he was pushing only a year or two ago.

The gathering turf war over AR/VR hardware and applications signals a more robust future for a much wider idea of what the metaverse is or could be - a place where our experience of the world of real things is augmented by digital technologies like Meta’s Quest 3 or Apple’s Vision Pro. It can also involve more traditional devices such as desktops and smartphones, where we are likely to increasingly encounter digital twins, especially in the industrial world.

So, while the metaverse as a concept has rapidly traversed both the Peak of Inflated Expectations and now the Trough of Disillusionment in Gartner’s famous technology life cycle, history tells us to expect a longer, slower, but ultimately more profitable rise as it begins its journey towards what Gartner calls the Plateau of Productivity. Right now however, the research firm’s view is that metaverse use cases are plagued by low adoption.

The signals are there if you look for them - the technologies that blend augmented and virtual reality with immersive highly graphical environments to solve real-world problems will probably be the way for investors to play the metaverse game.

The creative world remains transfixed in the ongoing hunt for younger audiences where URL is as important as IRL (in real life for anyone over 40). Last month for instance, an Accenture agency won one of the advertising industry’s top awards in Cannes for “digital nation” a campaign that recreated the Pacific island nation of Tuvalu in the metaverse. The project also uploaded historical records and cultural material onto the cloud so that Tuvalu as a nation might be preserved even as its land is swamped by rising sea levels (New Zealand has offered its citizens residency for when that happens.)

Indeed, look closely and you find quite a rich vein of metaverse investments and developments elsewhere in the APAC region.

A great example is publicly traded Indonesian company WIR Group, which brings together two of the most disruptive and transformational technologies for the next decade - augmented and virtual reality, and artificial intelligence.

WIR has a growing portfolio of patents for the kinds of technologies that will shape the immersive digital experiences likely to prove the hallmark of the emerging landscape of multiple metaverses. Its stack powers a well-established technology offering including an IoT platform (DAV), an e-commerce platform (Mindstores), a mobile game similar to Pokemon Go (MINAR) as well as advertising and project-based solutions.

WIR is a key metaverse builder of the future. Listed on IDX, it’s the kind of picks-and-shovels style infrastructure business that B2B and B2B2C metaverse builders will increasingly rely on. Despite Web 3’s annus horribilis last year, in the FY to 31 March 2023 WIR reported sharp increases in revenue and profits (yes, you read correctly - it’s profitable).

Meanwhile up in Thailand, surprising things are also happening in the metaverse - where Thai media and real estate conglomerates T&B Media Global and MQDC recently launched Translucia Metaverse, another SEA contender for leadership in the metaverse stakes.

Translucia has been building infrastructure and capability around the region, announcing a USD$100m investment in a Metaverse R&D centre in Melbourne in the middle of last year. In March this year it launched LightLink Protocol, essentially a blockchain-based interoperability play which will enable commerce between multiple proprietary metaverses.

Turning to Down Under, it’s not widely understood that ASX is home to several companies developing metaverse capabilities. For example, Vection Technologies is developing a 3D content creation framework for the metaverse to help organisations develop their own immersive environments, XReality Group is looking to tap into the demand for digital training and simulation environments, particularly in defence and law enforcement, and Playside Studios - which is among the country’s largest independent game developers, and has a pedigree in the world of AR and VR gaming. While their share prices reflect the sharp and deep corrections seen across almost all tech companies globally, these companies are in a strong growth cycle.  

In summary, as Crunchbase noted in a recent report, it’s too early to write off the metaverse - but there are many years of investment ahead to develop the core infrastructure required. APAC’s innovation community is building strong capabilities in the kind of technologies that will augment and ultimately conflate the real and digital lives of the children of today’s Pokemon Go-inspired, gaming-addicted, and ever-online digital native generation.