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The State of the Metaverse


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A user in VR headseat prepares to access the metaverse.

Is there a metaverse out there?

Credit: Shutterstock

After its ascension as one of the tech darlings of 2022, the metaverse took a major backseat to generative AI and ChatGPT last year. Yet, while still in a nascent phase, enterprise projects are occurring, and industry observers say the metaverse this year will bring more efficiencies and collaboration.

The metaverse, a three-dimensional (3D) virtual immersive environment where users are represented by avatars to interact, has the potential to generate up to $5 trillion in value by 2030. This makes it too large for companies to ignore, according to McKinsey, which also found that 15% of corporate revenue is expected to come from the metaverse in the next few years.

Thanks in part to more sophisticated AI tools and digital twins, which simulate real-world objects in detail, now it is the metaverse's time to shine.

"Like all emerging technologies that have come before and will come after, the metaverse has exited out of the hype part of the hype cycle and now, real value creation is taking place using the metaverse to solve real business challenges,'' says Domhnaill Hernon, global lead for Ernst & Young's EY Metaverse Labs.

The industrial metaverse and other use cases.

The metaverse already has gained significant traction in the consumer space, specifically in online gaming, where it has "hundreds of millions of monthly active users," Hernon notes.

In a business context, the manufacturing industry has taken the lead in utilizing the metaverse. Ninety-two percent of companies are experimenting with or implementing at least one metaverse-related use case, and on average, they are running six or more, according to the 2023 report "Exploring the Industrial Metaverse in Manufacturing," from Deloitte and the Manufacturing Leadership Council.

The report also notes that amid tech layoffs, the implementation of the industrial metaverse in manufacturing is creating new opportunities for tech-based manufacturing jobs that may not have existed previously.

John Coykendall, a vice chair at Deloitte and leader of its U.S. industrial products and construction practice, says strategic initiatives are underway in the industrial metaverse to enhance production, customer engagement, supply chain efficiency, and talent development. Citing the report, he notes that key metaverse initiatives rooted in smart factory concepts (modern technologies used to analyze data and drive efficiencies through automated processes) are making significant strides, in areas including data analytics (91%), cloud computing (86%), the Internet of Things (78%), 5G (59%), and Artificial Intelligence (62%).

"Because of the scope of what the industrial metaverse can offer—connection to data-rich, immersive 3D environments from anywhere there is a broadband internet connection—its potential value stretches far beyond just the production ecosystem,'' the Deloitte report observes. In some instances, manufacturers are building on their smart factory momentum and implementing industrial metaverse use cases, the report says.

The Siemens and MIT Technology Review report "The emergent industrial metaverse" goes further, saying the industrial metaverse has arguably, the greatest potential for immersive, interactive spaces.

Like Deloitte's study, the report says that integrating technologies such as high-fidelity simulations, extended reality, AI, machine learning, the Internet of Things, blockchain, cloud, and 5G/6G will drive the industrial metaverse to offer fully immersive real-time and synchronous representations of the real world.

Although it is still immature, momentum is growing in the enterprise metaverse, which "represents a shift in how employees communicate, collaborate, and co-create in online 3D digital spaces,'' according to Hernon. "The biggest tech companies in the world are investing in technology to deliver the enterprise metaverse."

Health sciences and financial services are using the enterprise metaverse to either attract new talent or to engage people in different ways, Hernon says. "In the industrial metaverse, automotive, pharma, and energy are leveraging VR for training and prototyping, and also leveraging digital twins for improved productivity and efficiency."

The metaverse is also flourishing in pharma and air transportation, notes Mat Kuruvilla, chief innovation architect at global IT services firm UST. "We always believe the power lies in the enterprise to use the metaverse to conduct better collaboration, better design, and better training, especially when many people work virtually,'' Kuruvilla says. "It's really a great mechanism to interact and bring real-world experiences and synthetic world experiences together."

UST is developing a virtual pilot project for a major airline interested in rebranding its terminals at several hubs for better flow. There are simulations for signage placement and navigation through the check-in, baggage claim, and gate areas. The idea is for users to immerse themselves in the different scenarios travelers experience when they arrive at the airport to help make better redesign decisions, Kuruvilla explains.

The project, dubbed "airline's immersive," can be experienced on a PC, headset, or in a 180-degree immersive room with a PC connected to a projection system on three walls "that all have the experience going on and it's wrapping around you'' in an anamorphic display that works with a gaming hand controller, he says.

UST's development team used Unity as its virtual reality platform for development and Stable diffusion, a deep learning, text-to-image model.

Key concerns and considerations

But with increased implementation comes added risks. Some 72% of manufacturers are most concerned with the cybersecurity risks associated with implementing metaverse-enabling technologies, according to the Deloitte report.

Kuruvilla says companies need to think about how to control access to various devices, especially given that "today, many of the devices don't have good policy management.'' Head-mounted devices, in particular, are a challenge, given that "the security model is still not very clear for headsets,'' he says.

In the industrial metaverse, organizations also will have to consider connectivity, computational power, interoperability, and how to create "extremely high-fidelity" digital twin models, according to the Siemens/MIT Technology Review report.

"Blockchain may be a key metaverse ingredient to ensure greater security and privacy,'' the report says.

Yet, despite these issues, the Deloitte report notes that "most companies believe the value the industrial metaverse will deliver outweighs the risk, especially with the right mitigation strategies in place."

Additionally, because virtual and augmented reality are new technologies, there is a learning curve for those who are not gamers, Hernon points out. "Hence, we are very careful and purposeful about how we launch our metaverse experiences and how we onboard new users, taking great care to make them as comfortable as possible."

Expect to see more investments in the metaverse

Some of EY's biggest clients are investing in a range of metaverse use cases including attracting talent and new employee onboarding, as well as delivering better learning and development, Hernon says.

Kuruvilla believes a lot of simulations will be done in the metaverse and content created around training this year. Apple's Vision Pro, launched in February [*DUE IN FEBRUARY 2024] will dramatically improve how people work with a spatial computing device, he says.

Hernon hopes that "the negative sentiment" around the metaverse—which includes concerns over potentially addictive behaviors as users become increasingly engrossed in virtual worlds, and new forms of harassment, bullying, and hate--will dissipate and that more and more examples of real value creation use cases emerge.

"Every day I read a new article stating the 'metaverse is dead,' and those articles are written by people that don't actually build, deploy, or invest in the technology,'' he maintains. "Transitioning out of the hype cycle is part of the maturation process of any emerging technology. The reality is that substantial investments are being made in this technology by all the largest companies in the world and we are seeing some consistent use cases emerge with strong ROI."

 

Esther Shein is a freelance technology and business writer based in the Boston area.


 

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