The metaverse

Are we at the metaverse yet? Here’s how we’ll know

October 20, 2022 | By Ken Moore
There clearly are great expectations for the metaverse, but to reach its full scale and potential will require years of sporadic steps forward as technologies mature, regulations develop, consumer behaviors evolve and companies and industry sectors experiment and innovate.

Early on, we’re likely to see hybrid applications — digital elements integrated into physical environments — that bring immersive commerce to life across retail, entertainment and sports. As emerging technologies advance, our physical worlds will be more instrumented and interconnected with digital experiences. We’ll leverage AI, wearable technology, sensor-driven IoT, edge computing and augmented and mixed reality to create hyper-personalized intelligent experiences. We’ll see not quite complete immersion, but rather a persistently available digital overlay on our day-to-day physical lives.

Further out, as its underpinnings evolve, the metaverse is likely to develop similarly to social networks. Companies will create immersive experiences and incentives to engage consumers. Then they'll foster communities that connect people based on interests and activities. More brands will participate as more people spend more time in these worlds. Advertising, fulfillment and commerce will follow.

We’ll see success stories gradually emerge beyond the sectors where they’re occurring today — gaming, e-sports, entertainment and fashion — transforming work, education, healthcare, hospitality and more. No one knows exactly how big the metaverse will become, but analysts say it will be a multi-trillion-dollar market by 2030, and tech companies are investing billions to be part of it. Early signals suggest people are open to and excited about the potential. At Mastercard, we’re exploring the nascent metaverse to ensure we create inclusive, trusted virtual ecosystems so people can participate securely and seamlessly in whatever opportunities it may offer in the future.

Here are key markers that will signal that the metaverse has arrived:

The metaverse goes beyond the obvious use cases currently attracting the most attention. One indication that the metaverse is more than hype will be if use cases multiply. Gaming will thrive in the metaverse: Gaming and gamified environments have led the way thus far. So has entertainment, and we can imagine a new generation of digital natives attending concerts and other events in VR. Commerce should also have a bright metaverse future. As for work, immersive meetings are the next step in a logical progression from the virtual meetings we’ve grown used to since the pandemic started. But the metaverse will require more than just a few use cases. When political rallies, job training, medical services, schooling and a hundred other things happen consistently in the metaverse, we’ll have more confidence that it will “stick.”

A governance structure emerges that supersedes tech-company fiefdoms/walled gardens. Will metaverse stakeholders subordinate their short-term interests to make the project viable? There are signs that they will. Summer 2022 saw the Khronos Group, a tech standards consortium, establish the Metaverse Standards Forum under its auspices. The forum includes Meta, Microsoft, Nvidia and Adobe and will promote metaverse interoperability. These tech giants seem to be looking beyond the walled garden. Yet if the metaverse is to reach the most fully realized version of itself, a comprehensive governance layer will have to develop. A new world with its own economy will require equivalents to the institutions that form, steer and regulate the “old” world and its “old” economy. In other words, we’ll need metaverse analogs to the World Trade Organization, the International Monetary Fund, GATT and other trusted institutions.

Sufficient computing power and connectivity come online to create credible immersive environments. In a late 2021 interview, Intel executive Raja Koduri claimed that the metaverse would require a thousand times more computing power than is available now. Koduri also alluded to the connectivity challenges he encounters in the Bay Area. If Koduri has connectivity issues even today, before high-bandwidth VR and other applications come online and in a part of the world synonymous with tech, there’s still a lot of work to do. Regarding connectivity, Moussa Zaghdoud of Alcatel-Lucent Enterprise estimated that the metaverse will require broadband of more than 1 gigabyte, with a latency of 10 milliseconds or less. A gigabyte equals 8,000 megabits. For perspective: Streaming a video today requires 25 megabits of speed and happens with as much as 100 milliseconds of latency. Koduri clarified that he expects to see appropriate computing and connectivity capabilities emerge. When they do, we can all have more confidence in the metaverse.

“Invisible” VR hardware becomes available — equipment we don’t even notice we’re using. One promise of the full-blown metaverse is that our experience of it will be frictionless. That should mean no grappling with cumbersome tech as we enter or leave it. So far, the hardware necessary for the metaverse remains cumbersome. Meta’s Oculus Quest 2 headset weighs more than a pound — a noticeable weight. Haptic gloves bristle with wires and themselves can weigh about a pound each. Some haptic suits resemble body armor. Smart glasses still look like smart glasses rather than regular glasses that happen to integrate smart technology. When the market furnishes hardware that’s as easy, or almost as easy, to put on as our regular clothing, we’ll have another sign that the metaverse is coming.

— Andrey Slivka


The metaverse

The potential for the metaverse is immense, with billions of people visiting millions of always-on virtual environments to play, socialize, shop, work and learn. Explore the opportunities enabled by the metaverse and how we can overcome the challenges in bringing these worlds to life in the latest edition of Mastercard Signals.

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Ken Moore, Chief Innovation Officer, Mastercard