The Metaverse: What It Is and Why Innovation Leaders Should Care in 2022

Odds are, in recent months, you’ve heard the term “metaverse” more times than you can count.

Facebook unveiled its new parent name, Meta, alongside a bid to pursue the development of its own metaverse. A number of companies followed suit, describing their plans for this as-yet-unmade virtual realm. As a result, it’s hard to escape the word in the headlines.

Of course, the most basic questions are sometimes easily lost in all this commotion—questions, in this case, like “What is the metaverse?” and “Why should I care?”

That’s why we’ve created a comprehensive guide to this hot-button topic and its place in the future of innovation. Below, you’ll discover:

  • A brief history of the term “metaverse”
  • Illustrations of how the metaverse might impact a range of industries
  • An analysis of how it might change the way you get work done

Table of Contents

What Is the Metaverse?

In some sense, no one knows exactly what the metaverse is. After all, it doesn’t actually exist yet.

Still, the term and concept of a “metaverse” long predates Facebook and this recent rush of news. It was coined in 1992, in Neal Stephenson’s sci-fi novel Snow Crash. The metaverse concept also turned up in the popular 2011 Ernest Cline novel, Ready Player One, where it was presented as a sort of virtual utopia, free and open to everyone.

Nevertheless, a shared vision of what a future, real-life metaverse might look like and entail is quickly developing as the idea becomes closer to reality.

As an example, take Facebook’s definition of “metaverse”:

“The “metaverse” is a set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you. You’ll be able to hang out with friends, work, play, learn, shop, create and more. It’s not necessarily about spending more time online — it’s about making the time you do spend online more meaningful.”

What emerges from explainers like these is an image of a world of endless, interconnected virtual communities. In them, people can do many of the things they enjoy (or make a living) doing in the physical world—but they can do so “alongside” people who aren’t actually in the same physical space as them by using virtual reality headsets, augmented reality glasses, smartphone apps, or other devices.

From the perspectives of both businesses and consumers, it’s crucial to understand that this world is not just Facebook’s. Much like the version of the internet, it will build upon—and much like the physical world itself—the metaverse will be composed of countless entities, including consumers and businesses of all stripes.

The Technology Making the Metaverse Possible

Of course, interacting with others in a rich virtual space will strike many as far-fetched. After all, thinking about the prospect of meeting with colleagues via personalized avatars, it’s easy to think—how will it even be possible?

And, sure, though it might seem a little space-age, many of the technologies that will make the metaverse possible over the next 10-15 years are already here.

At the heart of the metaverse concept, you’ll find a cluster of technologies known as extended reality (XR) tech. Effectively, XR is a combination of capabilities you may have already heard of: augmented reality (AR), mixed reality (MR), and virtual reality (VR). Empowered by improvements in mobile computing and connectivity, these technologies have the potential to seamlessly connect people in the virtual space of the metaverse.

Equally important to business and interactivity in the metaverse is the rise of digital currencies and blockchain technology. NFTs, or non-fungible tokens, are digital certificates proving ownership of virtual assets. Typically purchased with cryptocurrencies like Bitcoin, NFTs are making it possible for people to own a piece of the metaverse.

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The Metaverse in Action

The rise of NFTs helps illustrate that, ultimately, just like the internet itself, the draw of the metaverse isn’t purely social. Naturally, a space that fundamentally transforms how people communicate with friends and family will also make way for a revolutionary revisioning of how businesses and consumers interact.

Tech companies are already betting big on the metaverse as a space for commerce. Beyond Facebook’s rebrand, Microsoft is investing in metaverse-friendly versions of its stalwart Office apps, and Apple is developing its own mixed reality headset. Ultimately, though, the metaverse will affect businesses of all types, not just tech giants.

Here’s a look at how certain industries might take advantage of the metaverse.

Music and Entertainment

If you weren’t in town and at the venue with a ticket, you couldn’t see the show: Not so long ago, that’s how it worked for every concert or event. However, the pandemic has pushed many creators and hosts to explore other methods of broadcasting and sharing entertainment experiences.

As a result, virtual events have gone mainstream and appear to be here to stay—metaverse or no metaverse. According to one study, 88% of those who attended virtual events during the pandemic planned to continue doing so.

But what if, instead of viewing a show on the computer screen, music fans could feel as though they’re truly at the show? The metaverse might deliver on that, opening up new streams of revenue for entertainers and venues in the process.

Already, video game platforms Fortnite and Roblox have hosted virtual concerts with acts like Lil Nas X. Rather than hundreds or even thousands, these shows attracted tens of millions of virtual attendees, making clear the game-changing potential of the metaverse.

Video Games

Image source: Roblox

Even beyond these concerts, it’s clear that the gaming world is among the industries leading the charge toward a more engrossing and complex metaverse.

In April 2021, Epic Games, the developer of Fortnite and other popular games, announced the completion of a $1 billion funding round to help achieve its vision of the metaverse.

Meanwhile, Roblox, a gaming platform founded back in 2006, is growing in stature. In 2020, more than half of US children under the age of 16 played a Roblox game. But it’s not the number of users that’s shedding light on the metaverse to come—it’s what they’re up to on the platform.

Roblox is a platform that hosts games. But not just any games: every game on Roblox is created by its users. While these games are free to download, and so is the Roblox platform itself, there are incredible opportunities for creators to monetize experiences, with some developers making millions per year from their creations.

And now, brands are beginning to get in on the action, showcasing the potential of metaverse as a marketing tool. For example, Nike recently unveiled Nikeland, its own Nike-themed virtual world on the Roblox platform. Virtual visitors to Nikeland can play a variety of themed games, design their own games and, of course, deck out their avatars in Nike-branded gear.

Roblox users aren’t limited to athleisure looks, however. In June, Gucci unveiled a limited “Gucci Garden” experience, echoing real-life Gucci Gardens in cities around the globe, in which users could purchase NFTs of Gucci-branded virtual products.

Travel and Hospitality

In the metaverse, visits won’t be limited to these fantastical sorts of Gucci Gardens. Everyday consumers might be able to get away for a brief vacation—or at least test a potential trip idea—as the travel and hospitality industry puts new technologies to use.

While the metaverse could take such experiences in untold new directions, we’re already getting glimpses of what the future of the travel industry might look like.

For instance, outdoor clothing brand Patagonia has created a range of experiences for users of the Oculus Rift VR headset, which is owned by Facebook. Users can take virtual hikes to hard-to-reach destinations and experience the world as only experienced mountaineers can but from the comfort of their own homes.

Meanwhile, travel agent Thomas Cook trialed an immersive virtual travel experience, which included virtual tours of destinations and hotels. According to the company, just a 5-minute experience led to a 190% lift in bookings.

Similar virtual tours will also have valuable applications in both residential and commercial real estate settings, enabling customers to immerse themselves in a new property by visiting the space virtually.

Conclusion

Preparing with the help of this guide’s insights is a great start.

Our analysis shows that while the exact form the metaverse will ultimately take is somewhat unclear, its potential to upend the way organizations do business in a wide range of industries is still readily apparent.

By staying on top of these evolutions to the ways businesses and consumers interact, your organization can keep pace with the rapid rate of change. Plus, it will be better equipped to future-proof its success by developing new ways of reaching its target audience.

To learn more about how Runway can help you ensure a bright future in our digital world, explore our corporate innovation services today.

About Runway Innovation Hub

Runway is a Silicon Valley-based innovation company accelerating the success of global innovators and entrepreneurs. We help corporations through results-focused innovation consulting and power the growth of startups through acceleration programs, mentorship and coworking services. Since 2013, we have has accelerated the innovation efforts of 40+ global companies like Fujitsu, Lenovo and IBM through customized innovation strategy services. Learn more about how we can help you do the same here.