The metaverse and virtual reality were the talks of the town in 2021. What are the predictions for 2023 after a challenging 2022?
The hype for the metaverse led the bull run in 2021, with leading tokens like Decentraland (MANA) and Sandbox (SAND) pumping by nearly 100X. The excitement amongst the enthusiasts peaked when Facebook rebranded itself to Meta in October 2021.
Studies have projected the size of the metaverse market to be anywhere between $500 million and $1 trillion by 2030. How would the market develop in 2023?
Multiple Metaverse to Co-Exist
The pillar of the Web3 ecosystem is decentralization. Hence it would be ironic for a single metaverse to have a monopoly in the market.
Think of it like different social media platforms, be it Instagram, Snapchat, YouTube, or TikTok. Each of these platforms offers unique use cases to users. Similarly, multiple metaverses can co-exist, serving special utilities. For example, a platform that gives immersive shopping experiences, another exclusively for gaming activities. Similarly, different platforms might serve the utilities for corporate or classroom activities. The potential is vast for multiple metaverses to co-exist.
The platforms might offer interoperability for users to transfer their assets from one platform to another via bridges. If a person buys hoodies from a metaverse that provides both an offline delivery and hoodie NFT for the online avatar, they would want to wear that hoodie on a different platform wherein they attend university lectures for example.
Businesses Building on Metaverse
The metaverse has attracted attention from leading brands and businesses this year. By November, firms filed around 5,364 US trademark applications for metaverse and related services.
The technology has lured luxury watchmakers like Rolex and footwear brands like Nike, Adidas, and Reebok.
The virtual world might give an exciting ride to car lovers shortly. BMW has applied to trademark its logo for the metaverse. Most recently, Mike Kondoudis, a licensed trademark attorney, tweeted that Mercedes has filed trademark applications for NFTs, metaverse, and related services.
Jason Warnke, a senior executive at Accenture, states, “We believe the metaverse will impact every aspect of every business, including how work is performed, what products are offered, how products are distributed, and how businesses operate.”
Investment firms are bullish because of the interest from businesses in the virtual world. Animoca Brands is preparing to flood the metaverse with a $2 billion fund. It has inaugurated its investment wing, Animoca Capital, to focus on mid to late-stage metaverse startups.
The AI-Powered Virtual Worlds
2022 was a breakout year for Artificial Intelligence (AI) technology, with platforms like DALL-E and ChatGPT making headlines.
Notable metaverse platforms have focused on building user-generated content (UGC) experiences. AI technology can make it possible for those platforms to fulfill their vision. According to a PwC article, AI can make it possible, even for those without technical experience, to create immersive metaverse experiences.
Sam Hamilton, the Creative Director of the Decentraland Foundation, believes that the technology could – and should – be used to create a better metaverse experience. “AI-generated images could be used to create more realistic and immersive virtual environments.” The community affirms that AI will be the metaverse narrative of 2023.
But, critics have raised some concerns about using AI in the metaverse. There are fears of bad actors using AI to commit identity theft in the virtual world. By feeding the data of some pictures of a person to the AI, the criminals may generate a metaverse avatar to commit fraud or other severe crimes impersonating that person. The Chinese government has banned the creation of AI-generated media without watermarks to protect netizens from identity theft.
Metaverse Police to Gain Popularity
With the rise of new technologies, there comes the probability of criminals utilizing them to fulfill their malicious purposes. Before the Internet received mass adoption, very few must have imagined that there would be a need for cybercrime departments to keep the Internet in check.
Similarly, some aspects of society might use the metaverse to commit crimes. As discussed, AI technologies make it easier to commit identity theft in the virtual world. Not just identity thefts, there are reports of serious crimes like sexual assaults.
A 30-year-old South Korean man sexually assaulted children by assuming fake identities in a popular metaverse. In December last year, a woman shared through a medium article that she was sexually harassed and her avatar was gang raped in the metaverse.
The Internet is a hotspot for hate, racial slurs, bullying, etc. Along with providing an immersive experience, the metaverse may intensify hatred or emotional abuse for the users. With the potential of these crimes, there is a need to police the metaverse.
Jamilia Grier told Finance Magnates, “It’s inevitable that some users will take advantage of others and that crimes will be committed, and sadly, we can already see some of those happening now. Just as we have laws to address crimes in the physical world, it’s also important to have laws in place to deal with crimes committed in the metaverse.”
Ajman Police from the UAE has taken the initiative. It became the first police agency to provide its services through metaverse technology.
The Imminent Challenges
After the spike in metaverse hype in 2021, the buzz slowed down in 2022. The data from Google Trends shows a gradual decline in interest over time for the search term ‘metaverse.’
Nils Pihl, the founder, and CEO of Auki Labs, reflecting upon the hype in 2021 and the eventual fad, says, “The hype was entirely based on people hoping to make a profit, and not to inhabit these virtual worlds. Everyone was betting that someone else would be interested.”
Further, Meta laid off 11,000 employees this year, leading to speculation that the metaverse dream is dead in the water.
What are your metaverse predictions for 2023? Will it survive the imminent challenges that the crypto winter brings?
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