Did you know that immersive technologies like digital twins & metaverse can help manufacturing firms improve productivity and prevent incidents in many ways?
Target audience: Decision makers (CXOs/Directors) of IT consulting, automation, renewable energy, manufacturing & allied firms; Investors (Venture Capitalists, Private Equities, Investment Bankers), management consultants, business strategists, innovators, and curious people.
Reading time: 5-10 min.
The term ‘Metaverse’ is a combination of two words. ‘Meta’ stands for “beyond” and ‘Verse’ for “universe”. In other words, it describes a possibility in which virtual 3D spaces merge with the real environment.
This technology is closely associated to ‘artificial intelligence’ (AI), ‘augmented reality’ (AR), and ‘virtual reality’ (VR). Augmented reality technology allows a person to embed virtual objects into the physical environment (real world). Virtual reality technology uses 3D computer modelling to create an environment with scenes and objects that appear to be real to the user. A person can use a Virtual Reality headset or helmet to experience this mixed-reality environment.
In 1932, the term “virtual reality” was introduced by a French dramatist Antonin Artaud in his essay, “The Theatre of Cruelty (First Manifesto).”
In 1992, an American fiction novelist Neal Stephenson introduced the term “metaverse” in his science fiction novel, “Snow Crash.”
From 1992—present, emerging technologies to support virtual reality & augmented reality grew as the PC & mobile gaming market expanded from single player (offline) to multi-player online games. The growth of collaboration technologies like Blockchain (including NFTs & Cryptocurrencies), and Cloud & Edge computing technologies partly depend on the evolution of metaverse.
Current & Future Trends:
As per Emergen Research, the Global Metaverse Market was valued at $47.69 billion in 2020. This value is expected to reach $828.95 billion by 2028, at a CAGR of 43.3% over this forecast period (2021—2028). The largest region is North America (2020), and the fastest growing region is Asia Pacific led by China (2021—2028).
The major players include Facebook, Inc. (Meta), Tencent Holdings, Byte Dance Ltd., NetEase Inc., Nvidia Corporation, Epic Games, Inc.
In 2020, the gaming market accounted for the largest revenue share (application), while the hardware segment accounted for the largest revenue (component).
As per Grand View Research, the Global Augmented Reality Market was valued at $17.67 billion in 2020. This value is expected to reach $340.16 billion by 2028, at a CAGR of 43.8% over this forecast period (2021—2028). The largest region is North America (35%, 2020) led by Google LLC (Alphabet), Microsoft, and Apple, Inc. The fastest growing regions include Europe (German gaming market), and Asia Pacific (45%, 2021—2028) led by China & Japan (online adoption in many sectors), and India (manufacturing & healthcare sectors).
The demand for digital commodities like NFTs, Cryptocurrencies, and Extended Reality (XR) are expected to drive the Metaverse market. Extended reality segment incorporates immersive technologies—augmented reality, virtual reality, mixed reality, and other possible realities. The use of XR technologies involves use of IoT based hardware like Head-Mount Display (HMD) and smart glass, in conjunction with the associated software. Apart from PC & mobile gaming, these technologies can be easily customised to provide a memorable experience to the end users (customers) in multiple segments.
Given the multiple waves of infection in this pandemic, many B2B and B2C segments can effectively use metaverse technologies to differentiate themselves, to retain existing customers/employees and draw the attention of potential ones. For example:
- In the aerospace & defence sector, XR technologies can provide multiple scenarios (battlefield simulations) for advanced training, and prevent design & manufacturing problems.
- Design engineers can use XR technologies to virtually develop components/products (digital twins) and evaluate potential pitfalls, and for reverse engineering of parts.
- Better management of entire value chains by key stakeholders (using metaverse & associated technologies), including predictive factory maintenance, quick turnaround time, small production batches, better supply chain visibility, higher number of product designs (mass customisation), and reduced quality failures.
- Factories can use metaverse simulations to train labour to operate machinery or detect faults (recreate incidents), real-time production monitoring, and design ergonomic strategies (safe working conditions).
- In the medical sector, physicians can train staff to perform medical procedures, and physiotherapists can train patients on recovery exercises.
- Furniture retailers can provide a preview of a living space with new furniture to customers, while architects/construction companies can provide a similar preview of a living space or the exteriors of new projects.
- In the services sector, event organisers can use augmented reality to provide unique experiences for clients interested in performing arts like concerts, theatre, opera, etc.
Every new technology provides some opportunities for growth, along with the numerous possibilities. Below are important opportunities for improvement.
- Ownership, Inter-Operability Standards: As a consumer, most of us cherish our freedom to change service providers. As of today, most big players in the metaverse market create a closed ecosystem to retain their customers for long periods. Even if a consumer shifts from one platform to another, they cannot seamlessly move and transfer their virtual assets and experiences. Consumers and policy makers should collectively define a set of rules and regulations for metaverse providers to avoid unfavourable situations—Monopoly or Duopoly.
- Privacy, Data Security, Copyrights Ownership, Cybercrimes: Consumer preferences have become the largest goldmine to service providers, user data helps them provide tailored experiences, and higher revenues per person (ARPUs).
- Leading metaverse companies with a mass appeal (customer base) can control markets, and user preferences (psychological manipulation). In some cases, such firms can destabilise governments or disrupt fair election processes.
- In real life, we can easily avoid people if we are not comfortable around them. Blocking such people is also easy in leading social media platforms like Instagram, Facebook, etc. Unfortunately, in the case of metaverse, uninvited individuals can effortlessly enter a person’s virtual space and violate her/his personal boundaries. In an industrial metaverse, such intrusion can lead to industrial espionage or copyrights infringement too.
- As the case with most emerging technologies, metaverse is also prone to malware & spyware. This can result in spying on organisations and/or exposure of users’ personal information. In the art world, it can lead to forging of NFTs—replicas minted by cybercriminals may be used to dupe art collectors. It is often tough to win a copyright infringement case for digital content owners. For instance, an AI system cannot be named as an inventor on a patent (USA).
Addressing privacy issues requires a consensus by various consumer segments to specify rules on ‘Privacy Invasion’. Policy makers and metaverse developers should work together to develop robust ‘Consumer Redressal Systems’.
- Virtual Currencies, Harmful Online Activities: A German study suggests that use of social media and video games by children aged 12 to 17 years has increased by 60% in 2020 over 2019. Use of digital currencies for payments in metaverse are not restricted by rules and directives by central banks across the world. This freedom encourages unlawful activities like underage sexual acts or paedophilia. A proactive approach by policy makers and metaverse developers is crucial to develop proper guidelines and rules for activities on metaverse by children/young adults (12 to 17 years).
On a concluding note, Metaverse and the associated technologies (AI, VR, AR, Blockchains, NFTs, Cloud & Edge computing) provide limitless possibilities for many sectors. Developers and end users should explore small & iterative projects (agile methodology) and scale up as opportunities arise. Many privacy concerns, safety issues, and legal issues need to be resolved with a sense of urgency. This involves coordination of multiple stakeholders to ensure everyone has a safe and enjoyable experience using these technologies. Given this situation, investors can obtain good Return on Investments (ROI) for their investments in these technologies, even if it fails to serve the intended market segments (pivots).