Metaverse platforms in Asia (South Korea, in particular) have performed better than services in other regions and could reflect how the buildup to a future metaverse will accelerate. South Korean services like ifland and ZEPETO have expanded to international markets and represent the largest user bases among the new metaverse platforms. Most notably, the user age demographics skew younger than other social and entertainment platforms, pointing to potential changes to user behavior and preferences for user interfaces, as this younger audience matures, enters the workforce, and starts families of their own. These younger generations could represent the key inflection point for the buildup to the metaverse and point to how Media & Entertainment (M&E) markets and work will change through the lens of the metaverse.
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ifland, ZEPETO, and Metaverse Seoul Represent the Best of the New Metaverse Efforts
While Meta’s Horizon Worlds reportedly lost 100,000 users from its peak of 300,000 Monthly Active Users (MAUs) by late 2022, SK Telecom’s ifland platform hit a user base of 12.8 million spread across 49 countries and Asia’s largest metaverse platform, NAVER’s ZEPETO, eclipsed 340 million by late 2022 (more than 20 million MAUs). In January, South Korea launched the first phase of its Metaverse Seoul project to the general public through an app available to Android and iOS platforms—phase one offers mini games, tax assistance, e-books, tourism, and other city services within a Three-Dimensional (3D) environment and user-based avatars.
Further updates are planned through two additional phases, which will add additional services, locations, and features, culminating in its final vision for a city-based metaverse by 2026. The metaverse project is part of South Korea’s broader Seoul Vision 2030 plan, which focuses on urban policy guidelines through 2030. In total, South Korea’s Ministry of Science and ICT has earmarked US$183 million to create its national metaverse ecosystem.
In other news, an Artificial Intelligence (AI)-generated song (emulating artists Drake and The Weeknd) went viral in April 2023 because the track sounded authentic, but again, Asian markets appear further along this adoption curve because VAVA, Thailand’s first AI artist, released her first single in January 2023. VAVA, a collaboration between T-Town Digital Studio, PRO-toys, and Drive iGency, maintains a presence in social media and appears in videos (rendered as a digital human), including an accompanying music video to the first single. AI-generated music is not new, but again, the examples coming out of Asian markets are both more extensive and a better fit for an immersive future when looking through a metaverse lens.
Younger Generations May Represent the True Inflection Point for the Metaverse (Consumer and Professional)
Many casual observers continue to assess metaverse market conditions and outlook through the activities of Western market tech behemoths like Meta, Google, Apple, and Microsoft. Using these companies as a metaverse barometer seems reasonable when you consider the large investments made (Meta), releases of early platforms and hardware (Meta and Microsoft), and the anticipated “game changing” hardware and services from these companies (Apple and Google, in particular). From this vantage, however, the metaverse appears to be stumbling with tech layoffs (including metaverse-related groups) and seeming pivots to new areas like AI; note that AI is a critical technology for the metaverse, which Meta and Mark Zuckerberg finally reinforced recently in public statements. This barometer, however, only reflects part of the landscape.
In many instances, the most significant steps toward a future metaverse and the most anticipated releases from these companies have tended to be hardware-centric. In fact, the most successful metaverse platforms from Western markets, to date, predate the metaverse hype cycle and were previously viewed only as video game companies (e.g., Roblox, Epic Games/Fortnite, etc.). While there are certainly metaverse elements here, the platforms and services launched in Asia offer a better leading view into what is coming.
ZEPETO offers a better view into what the future virtual goods markets could look like within a social, immersive environment, while Metaverse Seoul presents glimpses into how governments and organizations can approach these virtual spaces and, in time, create digital twins of city centers that make resources and services more accessible. The example of the virtual AI artist speaks to the Media & Entertainment (M&E) industry, but more importantly, it should draw attention to how AI and digital humans can more broadly impact other industries within the context of the buildup to a future metaverse. The popularity of ChatGPT, for example, did result in significantly more interest in digital humans from companies like UneeQ.
Most importantly, these services point to what future generations may come to view as their normal. Among the most successful consumer “metaverses,” the age demographic of users has skewed younger than typical social media users and gamers. This implies that younger generations will be increasingly comfortable with immersive experiences or, at minimum, Three-Dimensional (3D)-based social environments. In time, these users will enter the workforce, carrying a penchant for these types of interfaces, and start families of their own, eventually passing on these preferences to future generations.
These same younger individuals will have a different perspective on the value of virtual and social experiences, and different expectations for areas like self-expression when they enter the workforce. Younger generations will also have greater exposure to updated Extended Reality (XR) hardware, putting the spotlight back on the tech players who have been investing heavily in advancing the tech, largely behind closed doors. These changing demands, therefore, suggest that what today are two independently developing metaverse ecosystems (consumer versus enterprise/industrial) will eventually have more crossover points.
Consumer and Enterprise/Industrial Metaverses Distinct, but Not Separate
While distinctions between future consumer and enterprise/industrial metaverse will remain, these ecosystems will influence each other more as markets develop and evolve. Younger generations will define the future of work. Therefore, companies targeting enterprise and industrial metaverse applications should keep an eye on developments within the consumer markets to evaluate current solutions and future planning. Referring to the original three examples, here’s how enterprise metaverse companies should view these developments:
- Growth of ZEPETO and ifland (and established players like Roblox) that skew toward younger demographics:
- Examine how future generations of workers will view self-expression, preferences for user interfaces and Communication & Collaboration (C&C).
- Evaluate the development of markets for 3D content. Look for ways to leverage existing assets and work to repurpose content (product configurators, training, customer interactions, etc.).
- Metaverse Seoul and similar initiatives that virtualize services:
- Determine how to establish a virtual presence for customers (Business-to-Business (B2B) and Business-to-Consumer (B2C)) to access information, speak to representatives, and receive assistance/service.
- While it is too early for enterprises to widely deploy these types of experiences, companies can watch the market to determine when the appropriate technologies (devices, quality of experience, cloud/edge resources, etc.) are available and ready for deployment (e.g., virtual offices for hybrid work and/or customer engagements).
- AI and digital humans:
- AI for content creation already has an established foothold in the enterprise and industrial markets (e.g., neural graphics to create 3D assets, generative Computer-Aided Design (CAD) tools, etc.), but these use cases can expand to other areas like creating digital twins (e.g., fixed cameras and AI for volumetric capture/scanning of factory floors for readily updatable digital twins).
- Digital humans require significantly higher computational resources than regular chatbots (up to 10X higher), but results are already promising with positive Returns on Investment (ROIs). As users become increasingly comfortable interfacing with AI and virtual entities, these returns will grow in parallel.