Tech

Why small businesses can hold fire on the metaverse (for now)

- June 1, 2023 4 MIN READ

 

There’s a long list of things for small and medium businesses to consider in 2023, but moving their business into the metaverse might not be one of them, writes James Bergin, Executive General Manager – Technology Strategy & Integration at Xero.

According to The Street’s Luc Olinga, Meta CEO Mark Zuckerberg “buried the metaverse” after announcing the company would be focusing on generative AI in a Facebook post.

So is the metaverse now dead in the water?

Not quite. 2022 looks to have been pretty close to peak hype and investment around the metaverse, matched by bold promises from companies like Meta. Many of those projects are now faltering or fading out, and we’re entering what Gartner calls the “trough of disillusionment” in the tech world’s hype-bubble-to-bust cycle.


The jury is still out on whether the actual metaverse will ever be as groundbreaking as once envisioned. The question small businesses should ask themselves is – does emerging technology like the metaverse still have utility and value once you remove all the hype and speculation? Yes. Does it warrant immediate significant investment of time or money by small or medium-sized businesses now? Probably not.

Critical to this is first understanding what the metaverse is and what it isn’t, and what it could be.

What actually is the metaverse?

In science fiction, the metaverse is a form of unified Internet that operates as a blended and immersive virtual environment, powered by a mix of virtual reality (VR) and augmented reality (AR). But it’s important to remember that the metaverse isn’t one singular destination, or ‘world’. Instead, it’s actually a series of different technologies that are combined to blend the digital and physical domains and enable an ‘extended reality’ to emerge.

Businesses and consumers could then experience this reality in multiple ways, ranging from a fully immersive experience where you enter a different realm or universe using VR headsets, to a digital overlay on the physical world using AR glasses that allows the real the real world to still be visible, to interacting with digital twins of material goods in your existing web browser or in an app.


Man wearing VR headset with metaverse graphic on screen

Is the metaverse here right now?

The short answer: not really. Neal Stephenson, the author who first coined the term ‘metaverse’ in his 1992 novel, Snow Crash, recently told the Financial Times:“There won’t be a metaverse that is used by millions of people until it contains experiences that millions of people find worth having, and making those experiences is quite difficult.”

Several of his book’s futuristic ideas are now becoming increasingly commonplace – avatars, virtual-reality goggles, massively multiplayer online games and destructive computer viruses. But as Stephenson suggests, the technological and social advancements required to create rich and fulfilling experiences in a virtual world that millions of people want to have – and for small businesses to have access to – are still on the horizon.

One reason for this is that the rich experiences promised by the metaverse require a huge leap in high-speed internet connections (which still vary across the world today) and computing power. It would also require advancements in VR and AR battery, rendering, display and interaction technologies and hardware (e.g. spatial mapping and haptic feedback accessories), as well as innovation in standards and protocols, to enable deeper immersion in and wider interoperability between different metaverse platforms.

These technology advancements needed to create deeply immersive digital existence are still not widely available at the level they would need to be for the sci-fi vision of the metaverse to emerge.

But the metaverse, in some aspects, is already happening and awakening without the flashy stuff. The blending of our physical and virtual worlds is happening through the rise of hybrid working and video conferencing platforms that have accelerated during the pandemic years to enable more people to connect and work together from across the world.

So, what should small businesses do?

For most small businesses, there is no need to rush off and hire a Chief Metaverse Officer any time soon.

Even the big companies are playing it safe or treading water. PwC surveyed 5,000 US consumers and 1,000 execs at big US companies and found that while large corporations are all aboard the metaverse train, they aren’t planning to provide what consumers want, simply because they can’t yet.

Instead, 42 per cent of big companies are using it for onboarding and training, where everything from formal coaching to casual camaraderie-building is being facilitated by AR tools. Further, only 25 per cent of businesses think they’ll be able to sell digital versions of their existing products in the future. The survey also found that the biggest worry for business leaders is cyber security, and for consumers, it’s privacy concerns. Right now, Australian businesses are finding it hard enough to address this issue when using existing tech.

It’s not to say the idea of the metaverse won’t have huge social, creative and economic potential. McKinsey suggests the metaverse will generate up to $5 trillion in value by 2030, and that 95 per cent of business leaders expect it to have a positive impact on their industry within five to ten years.

But, for all but the largest companies — such as ten leading Japanese firms who recently teamed up to create a metaverse economic zone, or Facebook, Epic Games or Microsoft — there are so many more pressing issues to grapple with until the technology to really take advantage of the metaverse becomes widely available.

For now, sit tight. But keep your eyes on the future as there is certainly more to come.


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