The metaverse is poised to be the essence of Web 3.0, which means that telecoms need to determine their role in this evolution.
There has been a recent surge in the interest for the metaverse ever since Facebook rebranded to Meta in October 2021, with the search term for metaverse peaking at an all-time high on Google search trends between the 7th to the 13th of November 2021. However, this is not an isolated incident and is in fact a symptom of a much larger trend towards Web 3.0, the next internet revolution where the internet is decentralized and users are able to own and create digital assets in a peer-to-peer system where openness and transparency are key characteristics.
The metaverse is envisioned as the evolution of the internet to a virtual world where people can interact, work, create, and transact value in. With immersive technology including Virtual Reality (VR) headsets, haptic gloves, and vests, which allow users to feel sensations of pressure and touch in the VR world, the metaverse is primed to be a very customer-centric experience. Communication Service Providers (CSPs) are not ignoring this trend. While some CSPs are taking a ‘wait and see’ approach, many CSPs have been actively on the move in developing new services revolving around the metaverse. This includes SK Telecom launching a virtual meeting platform called ifland in August 2021 as part of its metaverse portfolio alongside Jump Studio and Besttone, a China Telecom subsidiary, developing a 5G Extended Reality (XR) platform to host multiple metaverse worlds. In November 2021, China Mobile inaugurated the metaverse industry association alongside China Telecom and China Unicom.
Metaverse: Revolutionary or Rediscovery?
The metaverse concept is not a new one. The idea goes back decades, with the term first being coined in a science fiction book by Neal Stephenson called Snow Crash, where he envisioned a virtual reality world as a setting for his novel. In the book users interacted with others in the metaverse through virtual reality goggles that were either portable or tethered to a single location. Fast forward three decades and the idea is coming to fruition with increasing public interest and commercial investment. The development of the metaverse is not a monolithic one and there have been many successful predecessors.
For one, Linden Lab’s Second Life released in 2003 is one of the few prominent proto-metaverses that gained traction and fulfilled many of the functions that the metaverse hopes to achieve. Second Life not only allows users to participate in the virtual world through customizable avatars, but also create and manage digital assets in a low-code or no-code environment. Participants can handle and create digital assets such as clothing, virtual homes, and real estate for real-world money, with corporate entities participating in the economy by advertising their products on billboards at certain virtual locations with the most virtual footfall and traffic, and lifestyle companies allowing users to try virtual versions of their products such as clothing and accessories.
VRChat, a Virtual Reality (VR) game launched on Steam in 2017, is the leading VR platform which has seen almost up to 30,000 concurrent users at its peak, with a steady increase in users over the last two years, signaling that there is already a ready and available market of users who own Head-Mounted Display (HMD) VR units and are keen to participate socially in a metaverse environment.
The Metaverse is a Paradigm Shift, not a Label
While the COVID-19 pandemic undoubtedly had a role to play in pushing corporate entities in thinking about how to re-engineer the working environment and thus sparking interest in the metaverse, it is important to tie down the fundamental value drivers of the metaverse. If not, companies such as telecoms who want to leverage on this opportunity will find themselves eventually questioning the difference between their envisioned metaverse products and many already existing virtual worlds in the market.
The metaverse is ultimately a virtualized world that spans multiple functions including social, commerce, study, work, etc., much like the internet. However, the main difference is that it will include the features and concepts brought about by Web 3.0, such as decentralization of asset control, user creation and ownership, and the ability for users to handle value in a transparent and open manner. This will be one of the main differentiators of the metaverse compared to all previous iterations of virtual worlds and current existing virtual worlds and games. Furthermore, with the development of Augmented Reality (AR) and VR technology, these virtual worlds will become increasingly more immersive as participants would be able to interact with the virtual world not just through stereo 3D and headtracking in HMD, but also through touch by haptic accessories, smells through multisensory VR masks, and even influence the virtual world using their thoughts through Brain-Computer Interfaces (BCI), which have already been implemented for some VR games such as Skyrim VR.
As such, while many companies are building their own metaverses, the likely winners or relevant builds are those that will be built on top of blockchain, ensuring a transparent and open ecosystem where users are able to exercise their autonomy and authority as to how the metaverse will develop, as opposed to allowing a single authority or group of companies to decide. As such, there have been many metaverse coins such has Sandbox, Atlas Star, and Decentraland taking off recently. It is thus important for telecoms to understand that the metaverse is not just a label to be plastered on top of AR and VR applications, but it is a paradigm shift away from how we currently access the internet. As such, telecoms will also need to engage in this paradigm shift and focus on transforming their services towards this new shift.
This includes focusing on their core strengths and services of providing connectivity to end users participating in the metaverse, as opposed to creating metaverse platforms without the underlying blockchain infrastructure and Web 3.0 philosophy. This is a particularly important distinction as the metaverse in the Web 3.0 context brings power to the user and away from the centralized authority. An antithetical example of this idea would be when Linden Lab changed their terms and conditions for virtual homeowners in Second Life in 2010, which made it so that virtual property which was owned by the users instead became services provided by the company, much to the indignation of users who were once told that they would own the virtual assets themselves. The metaverse built on blockchain ensures that this will not happen, as such decisions are made through an open and democratic process based on the coin holders’ decisions.
As such, telecoms should instead now focus on partnerships with metaverse-related hardware and software providers including VR/AR accessories, HMD, etc., and package their connectivity services with these solutions which will no doubt become much more in high demand as the metaverse takes off. Furthermore, telecoms must innovate new pricing packages for consumers entering the metaverse. For example, while the metaverse can have high barriers to entries (e.g., VR headset, strong internet connection, additional subscription fees or investments into cryptocurrency) before being able to participate or purchase in the digital world, telecoms can partner with VR hardware and software providers to create pricing schemes for different segments of users of the metaverse. For example, casual users can have a much lower price point entry whereas invested users can be priced higher and provided performance connection which includes 5G features such as ultra-reliable low latency and enhanced mobile broadband for the full VR experience, and heavy-duty workloads including content creation and gaming.