What Is The Metaverse And Why Is It Important?

The "metaverse" refers to a hypothesized next stage of the internet that incorporates 3D virtual environments, virtual and augmented reality, and other emerging technologies. While still an emerging concept, the metaverse promises to revolutionize the way we interact online.

As defined by Matthew Ball, a leading metaverse analyst, the metaverse comprises:

Persistent – The metaverse exists continuously and in real-time even when you are not actively participating or logged in.
Synchronous and live – The metaverse facilitates shared real-time experiences and live interactions between users.
Without any cap to concurrent users – Millions or potentially billions of concurrent users can interact within the metaverse simultaneously.
Fully functioning economy – The metaverse will have a fully fledged economy where users can create, own, invest, sell and be compensated for their creations and contributions.

In summary, the metaverse aims to evolve today‘s internet into more immersive 3D environments where we can work, play, socialize and transact much like we do in the real world. Tech giants are investing heavily into making this virtual future a reality.

Market Size and Forecasts

While exact figures are hard to pin down for an emerging market, early forecasts predict massive growth in the coming years.

The metaverse market was valued at $47.69 billion in 2020.
JP Morgan predicts the metaverse market cap could reach over $1 trillion in yearly revenues some day.
Emerging data predicts the metaverse market size will reach $828 billion by 2028.

As the technology needed for metaverse experiences improves and usage increases, we‘re likely to see more and more of our real world economy represented with virtual assets, goods and services.

Top companies are investing heavily into metaverse development today in hopes of capitalizing on this future revenue potential.

Notable Companies and Investments

Meta (Formerly Facebook)

In October 2021, Facebook officially changed its parent company name to Meta, signaling its ambitions to advance the metaverse and transition from a social media company. Meta CEO Mark Zuckerberg stated a goal for Meta to reach 1 billion metaverse users within the next decade.

Key Meta investments related to the metaverse:

Investing over $10 billion per year into metaverse technologies like VR/AR and developing its vision for persistent virtual worlds through its Reality Labs division.
Acquired VR headset maker Oculus for $2.3 billion in 2014.
Developing Horizon Worlds as a social metaverse platform where users can explore virtual worlds together.

Microsoft

While Meta captures more headlines for its metaverse ambitions, other major players are investing heavily into the necessary software and hardware for bringing the metaverse to life.

Key investments by Microsoft:

Launched Mesh platform for collaborative AR/VR experiences and holoportation.
Developing a new industrial metaverse platform powered by Azure cloud and Dynamics 365 for virtual factory design and digital twin simulations.
Signed major contract with US Army for $22 billion to supply AR headsets based on its HoloLens technology.

Epic Games

Beyond its highly popular Fortnite game which attracts vast virtual concerts and events, Epic is developing 3D creation tools for powering next-gen game worlds and metaverse experiences.

Epic metaverse plays:

Creators of leading game development engine, Unreal Engine 5 to power immersive 3D experiences.
Raised $1 billion in funding to support long-term metaverse development.
Hosted major virtual concerts inside of Fortnite with over 10 million concurrent attendees.

Roblox

As a shared virtual environment with millions of users and an existing development platform, Roblox provides a blueprint for persistent metaverse worlds that blend gaming, social interaction and now even virtual concerts from real-world artists.

Roblox statistics:

200+ million monthly active users
Avg 76 minutes spent per day by daily active users
1.25 million+ user-created virtual experiences
$5.2 million raised by gaming studio Supersocial to build out proprietary Roblox games

With youth and gaming culture already highly engaged in platforms like Roblox and Fortnite, metaverse technology is advancing alongside internet usage by younger generations.

Metaverse Use Cases and Statistics

Concept videos from Meta and Microsoft paint a picture of a future where real-time collaboration and shared virtual spaces can greatly enhance remote work and long-distance interactions. But metaverse applications are expected to permeate virtual iterations of almost every aspect of our lives.

From collaborative design and manufacturing to classroom education, pilot training programs, virtual tourism, telehealth services, augmented shopping experiences and immersive gaming worlds, the metaverse aims to digitalize huge swaths of human interaction and industry.

Specific use case statistics:

Live Events and Entertainment

Fortnite hosted a virtual Travis Scott concert in 2020 with over 12 million concurrent viewers.
In 2021, over 10 million users attended a virtual Ariana Grande concert inside of Fortnite.
The global virtual events market is predicted to grow from $78 billion in 2021 to $774 billion by 2028.

As major artists and brands continue hosting virtual events to expand their reach, this sector will drive major metaverse platform development and adoption.

Industry Collaboration

Over 50,000 individual creators have joined Nvidia‘s Omniverse platform for 3D design and collaboration during open beta.
Microsoft Mesh enables global automotive companies like Volvo to collaborate on digital twin vehicle designs in real-time within a shared virtual space.

For geographically distributed teams, the metaverse unlocks new levels of immersive and interactive remote collaboration.

Training and Simulation

Microsoft HoloLens headsets are being used by the US military to train soldiers in augmented reality, with a major $22 billion contract from the Army.
Health science students are using AR/VR surgical simulation platforms for replicating patient-specific anatomical models and virtually interacting with digital models.

From medical, military and industrial training programs to architecture and engineering prototypes, the metaverse unlocks powerful potential for low-risk simulations.

Challenges and the Road Ahead

While concepts sound compelling, pundits argue there are still major stepping stones before anything resembling a fully functioning metaverse comes to fruition. Ubiquitous AR/VR wearables with advanced graphics and processing must gain mass consumer adoption before persistent virtual worlds can become mainstream.

Developing seamless decentralized blockchain and cryptocurrency integration for virtual world commerce and ad models supporting millions of virtual experiences require further advancement as well.

However, with so many major corporations pivoting to prepare for an integrated human and digital future, continued rapid innovation seems inevitable. Over $120 billion was invested into the metaverse in the first five months of 2022, more than double the investments seen in all of 2021.

And as emerging generations grow up on gaming worlds and digital environments as second homes, the foundation for mass metaverse adoption may already be laying itself, one virtual brick at a time.