An introduction to the metaverse

GlobalData defines the metaverse as a virtual world where users share experiences and interact in real-time within simulated scenarios. The metaverse could transform how people work, shop, interact, and consume content.

Although the metaverse is in the early stages of development, it has the potential to be the next mega-theme in digital media. With no standard definition yet, the metaverse means different things to different people depending on the nature of their business. This means most companies can make the metaverse be whatever they want it to be.

Companies are currently building metaverses around their core competencies while pursuing new use cases to expand their offerings. For instance, Microsoft’s Mesh is based on its competencies in cloud computing, artificial intelligence (AI), and augmented reality (AR). Similarly, Meta is focusing on AI and virtual reality (VR). In short, the metaverse is a convergence of several tech themes, and companies are adopting those that suit their capabilities and objectives. In addition, companies from non-tech sectors are investing in the metaverse to engage with customers, expand brand awareness, and identify new revenue streams.

Born between 1997 and 2012, Generation Z (GenZ) is the segment of our population that is aged between 10 and 25. This cohort is our next generation of customers and employees. Their characteristics differ from generations that came before them: they are digital natives – they grew up with social media; they trust computers, not humans. This trust deficit is leading them to favour a decentralised internet.

Their voice is loud and clear on social media – they invented cancel culture. They believe in the sharing economy – they rent, rather than buy. They are impatient and like to do their business on the go. They prefer banking-as-a-service and they believe in crypto.

In fact, they believe in all the technologies shown in the chart above that sit behind the metaverse. This generation is driving the creation of the metaverse. Companies are simply going to have to keep up with them. 

Companies of all sizes are striving to dominate the metaverse. Based on infrastructure and operations, metaverse[1]contenders can be classified into two groups: 

• Walled gardens: A walled garden is a closed platform where all operations are controlled by one company. In the metaverse, a walled garden contains the technologies, audience, and content. It helps the operator of the walled garden to enjoy complete control over everything that occurs on its metaverse platform and secure exclusive user data. Companies that operate walled gardens include tech giants like Meta, Microsoft, Nvidia, Tencent, and Alibaba. 
• Decentralised autonomous organisations (DAOs): This group, which includes blockchain-based platforms like Decentraland and The Sandbox, allows network members to decide how the platform will develop. DAOs are more transparent and collaborative than walled gardens but are immature. DAOs embrace the Web3 concept.

Theoretically, the metaverse refers to a single virtual world. However, in the long run, there will likely be multiple metaverses.

We classify the types of metaverse based on three parameters: end-user, platform, and accessibility. 

• End-user: Metaverse platforms currently under development are focused either on the consumer market or the enterprise market: Epic Games and Roblox, for instance, concentrate on consumers, while Nvidia intends to dominate the enterprise space; Microsoft and Meta are interested in both markets with specific platforms catering to each user group. More companies will follow Microsoft and Meta as the metaverse matures, use cases emerge, and users sign up. 
• Platform: Platforms can be classified as either open or closed based on interoperability with other platforms and governance systems. For instance, traditional games (e.g., Fortnite) are closed as users cannot use avatars from other platforms nor access content generated elsewhere. Alternatively, blockchain-based VR platform Somnium Space lets users port avatars from external sources (e.g., Ready Player Me) and allows users to monetise their creations. User demand for monetisation in the metaverse will likely force closed platforms to allow interoperability eventually. 
• Accessibility: Microsoft and Meta focus on high-end AR and VR devices, while Roblox and Cryptovoxels emphasise software accessible via low-end hardware. Accessibility will determine the future immersivity and use cases of metaverses. High-end devices will support more immersive use cases than low-end devices, but the latter will attract users faster than the former due to their existing installed bases, lower cost, and relative ease of use.