Editor’s note: In a report titled 2022 Technology Trends and How They Impact Industry 4.0, Education, and Retail, a team of Orange Silicon Valley analysts with deep subject matter expertise looked at five key innovation trends and how these trends will affect the Industry 4.0, Education, and Retail sectors. This report – from Kevin Baker, David Martin, James Li, and Arpan Soparkar – is now being made available for our Orange Silicon Valley website readers in a series of five weekly articles.
This article examines the Metaverse (including XR/AR/VR). Other articles in the series include Data & AI (Artificial Intelligence); the Future of Work; Sustainability; and Cloud/Edge Computing. Each section of the report includes success stories and promising startups that play into each trend. For additional questions or information, please email David Martin.
Trend 1: The Metaverse (including XR/AR/VR)
The metaverse can be defined as a simulated digital environment that uses augmented reality (AR), virtual reality (VR), and blockchain, along with concepts from social media, to create spaces for rich user interaction mimicking the real world.
Bloomberg Intelligence expects the market opportunity for the metaverse to reach $800 billion by 2024, and Crypto giant Grayscale estimates a $1 trillion metaverse opportunity across e-commerce, hardware, digital events, and advertising. The interest will cause the gaming market to reach $400 billion in 2025.
The investor Matthew Ball describes how the Metaverse doesn’t exist today, but today there are “proto-metaverses” that are not interoperable. Ball’s definition for the future Metaverse is, “a massively scaled and interoperable network of real-time rendered 3D virtual worlds which can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments.” Companies will continue to innovate and iterate towards this vision.
Vertical: Industry 4.0 in the Metaverse
Buzz of the metaverse is making its way into manufacturing, though the technology supporting the concept remains nascent. Nonetheless, some have predicted the transition to an ecosystem where data and digital items/assets can be shared and easily accessible via the metaverse. By applying XR and Blockchain, manufacturing floors and tools may have unique digital identities (or digital twins) that mimic their states and functionalities in the real world. Stakeholders throughout the supply chain could and customers alike could use these virtual entities to collaborate on improving manufacturing efficiency and innovate for the creation of next-generation products.
Vertical: Education in the Metaverse
Vertical: Retail in the Metaverse
Today’s popular Metaverses are firmly rooted in social gaming worlds, so the user base is younger and more engaged. Playtime: greater than 60% of Fortnite users play at least 6 hours per week, and 30% play 11 hours or more per week. Demographics: 63% of Fortnite users are under the age of 25, and for Roblox, the demographics skew even younger with 86% under the age of 25 and 55% under 13.
- Developing new audiences: Brands can engage and acquire a new community of users by participating in different “Proto Metaverses” and being a part of the community early in the growth cycle.
- Virtual goods & NFTs (Non-Fungible Tokens): 20% of Roblox users change their outfits daily. While we once talked about retail and eCommerce as distinct channels, the line between physical and virtual goods will begin to fade as virtual worlds occupy more headspace and people’s identity exists IRL and URL (offline and online). There’s a world where users buy a digital item and want the physical item shipped to them and vice versa.
- Try Before You Buy (TBYB): Both AR and VR enable virtually trying on watches, sunglasses, shoes, makeup, clothing, and more.
- Showrooming: Consumers want to shop and have new experiences together online, and many view thumbnail-based eCommerce shopping as mundane. Virtual stores in 3D can now recreate the in-person shopping and discovery experience or even build a new experience that is impossible in real life, such as shopping underwater, in a volcano, or space.
- “Phygital” shopping: Digital can enhance physical shopping with digital mirrors in-store, but also with digital experiences that improve products through augmented reality. One example is the Nike + Snapchat experience of running through a city.
- Brand & scale equalizer: Barbados has recently decided to launch embassies on several Metaverse platforms because they cannot afford to build physical embassies around the globe. The Metaverse is reducing the barriers to scaling for small countries and upstart brands.
Obsess is a Virtual Store platform for experiential e‑commerce with customers including Ralph Lauren, Coach, Christian Dior, AT&T, and Mattel. Note: Orange has invested in Obsess as an LP through the Venture Reality Fund.