The Metaverse: How the Internet’s 3D Universe Could Shake up the Business World

The metaverse is the internet in 3D – a dynamic, open and interoperable space where people can meet, work and play through their avatars using virtual reality (VR) headsets. It’s fair to say that when Mark Zuckerberg revealed his new universe back in 2021, it was met with a lukewarm response from tech enthusiasts. Metaverse users were up in arms about their avatar’s lack of legs and investors were more excited about the possibilities of generative AI.

Despite the metaverse not getting the same hype as AI, which has been compared to the development of the internet and is already being used in many businesses (like professional services, banking and retail), some industries are showing the virtual universe some love as they seek to enhance operations and improve cost efficiencies.

The Association of British Insurers expects the industrial metaverse to grow into a US$100 billion (£79.2 billion) market by 2030.

A range of industries from healthcare to defence are already using the metaverse, making the most of applications like the digital twin. This creates a digital replica of a physical object, process or environment, allowing companies to simulate situations that would be difficult to imitate in real life.

Although widespread adoption will take some time, many businesses are seeing the benefits that the metaverse could bring to areas like marketing and customer engagement through the interactivity it provides.

However, though the metaverse could shake up the way companies operate, it comes with a raft of challenges that both businesses and consumers must overcome if the virtual universe is to reach its full potential.

What industries are leveraging the metaverse so far?

Marketing

Marketers are very excited about the opportunities the metaverse brings – and it’s easy to see why. Although being in a virtual world where you can be reached anywhere at any time sounds slightly eerie, it’s a marketer’s dream. Being able to create advertising personalised with immersive experiences without interrupting the metaverse session is the perfect way to engage a customer.

With the format being digital, marketers have complete freedom in how they want to interact with users, allowing them to adopt an approach that best suits their audience. They can choose to market things that tie in real-world experiences or parallel what the brand already does in the real world. Another key way marketers can leverage the metaverse to engage customers is with collectibles – some companies have hidden limited-edition items that can only be found in the metaverse.

The Gucci Garden experience on Roblox allows people to collect limited-edition Gucci items in the metaverse.

The metaverse won’t appeal to everyone, though – especially not the older generations. Most likely, the digital universe will consist mostly of millennials and Gen Zers, at least in the short term, as older people take their time to adopt to such a huge technological change. It’s key for marketers and other companies using the metaverse to bear this in mind and make sure they target the appropriate audience. That being said, we’re already seeing some nursing homes offering VR to give their patients the experience of travelling around the globe.

Logistics

Logistics companies have had a tough time in recent years, trying to navigate intense demand and supply volatility. The metaverse has the potential to provide them with a much-needed break in this area, most notably when businesses need to rapidly expand or rein in their stock of physical assets, which is a complex process with lots of moving parts.

Businesses can now implement digital simulations and expert-level interactions in the metaverse that can help inform the development of flexible supply chain infrastructure. The use of the digital twin also allows for the rapid increase in staffing levels, with businesses using virtual tours of different supply-chain ecosystems for quick onboarding and training. Logistics businesses that fail to keep up with these risk being left behind in the long run.

What challenges need to be overcome by metaverse users?

Security challenges

The most glaring issue that springs to mind is security. With the creation of the metaverse comes large amounts of data that risk being breached. Although the platform is subject to the same cybersecurity risks, like malware,  as modern organisations, the seamless nature of the product where users can do anything within the virtual world brings with it new vulnerabilities. Someone could hack into an account and gain access to personal messages, bank information, photos, avatars, NFTs and other digital assets.

According to Arkose Labs, metaverse businesses faced 80% more bot attacks and 40% more human attacks than other online businesses.

So, before Meta expects businesses with sensitive information to join its digital universe, it needs to do more in convincing companies that their security is up to scratch. However, businesses can still do their part to make the metaverse safer, such as adopting AI-enabled security tools that detect anomalies and behaviour-based threats. This allows for the identification of threats and prevents attacks before they even happen.

Privacy challenges

The metaverse has the potential to upend the way we carry out our lives. Although this is exciting to some, many find it incredibly daunting. For those that have read "Ready Player One", their biggest concerns lie with people sitting in their rooms stuck in their own virtual worlds. Other predictions sway more towards George Orwell’s classic, "1984", making comparisons with Big Brother, an autocratic leader that carries out 24-hour surveillance and looks to instill control on the populace.

Although it’s unlikely for Zuckerburg’s face to be plastered around the world convicting people of thoughtcrime, these privacy concerns aren’t unfounded. Businesses will have the ability to operate within the metaverse and gather lots of user-provided personal data. Concerns lie with how this information will be used.

Regulators have already confirmed that the GDPR (the EU’s data privacy regulation) will apply to the metaverse. However, enforcement frameworks remain worryingly underfunded and short-staffed. Nevertheless, businesses wanting to leverage the metaverse can still reassure users by implementing data protection and regulatory compliance laws to strengthen data privacy and limit data collection.

Where’s the excitement for the metaverse?

Since Zuckerberg announced his vision of the digital world almost two years ago, there’s been an uncomfortable silence from onlookers that question whether it’s really the future they want.

A survey of more than 6,000 people in the UK, USA, France, Canada, the UAE and China commissioned by law firm Gowling WLG found that 37% of Brits wouldn’t take part in the metaverse.

Although the metaverse has made some ground in convincing people there’s room for such a development in the future, getting them to use the platform is another challenge. The most glaring issue is the equipment. Currently, it requires the use of the Oculus headset, a bulky, unflattering and very expensive piece of equipment.

That being said, Meta unveiled its new Codec VR avatars on a podcast hosted by Lex Fridman in 2023; they use 3D models of the user’s face to provide a photorealistic experience. This is a sharp contrast to the company’s original avatars, which were mocked for their legless and cartoonish appearance. Although not being marketed as a video game, people are making the comparison nonetheless. Improving visuals and aesthetic will go a long way in drawing people into the metaverse.

What’s to come?

Currently, there are many unknowns when trying to predict the trajectory of the metaverse. However, with its potential to generate up to US$5 trillion in value by 2030, according to McKinsey and Company, the metaverse is too big for companies to ignore. This is especially true for those in financial services, healthcare and manufacturing, who are particularly interested in augmenting customer experiences and improving operations using the metaverse.

Investors have noticed this and are bullish, taking a long-term approach and being undeterred by the fact that broad adoption of the metaverse is years away. The majority of venture capital and institutional investors are even planning to ramp up their metaverse investments over the next five years, as revealed in a KMPG survey. All this funding will aid companies in overcoming barriers to widespread metaverse adoption, which have included a lack of proper technology, extensive development costs and wide employee skill gaps.