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Outlook for Metaverse: Future Applications and Risks

Kevin Chen

1. Understand the Metaverse:


Metaverse has been a trending topic in recent years. The term first appeared in Neal Stephenson’s science-fiction novel “Snow Crash” published in 1992. By definition, the Metaverse is the post-reality universe, a perpetual and persistent multiuser environment merging physical reality with digital virtuality. It is based on the convergence of technologies that enable multisensory interactions with virtual environments, digital objects and people such as virtual reality (VR) and augmented reality (AR).


Currently, the development of Metaverse is still at an early stage, spanning across mainly gaming and live entertainment industries. The Metaverse market may reach $783.3 billion in 2024 vs. $478.7 billion in 2020 representing a compound annual growth rate of 13.1%, based on Newzoo, IDC, PWC, Statista and Two Circles market data. As video game makers continue to elevate existing titles into 3D online worlds that better resemble social networks, their market opportunity can expand to encapsulate live entertainment such as concerts and sports events as well as fighting for a share of social-media advertising revenue. The total Metaverse market size may reach 2.7x that of just gaming software, services and advertising revenues.[1]


However, there’s more to just gaming and live streaming events. The COVID-19 pandemic has accelerated technological advancement. Due to limitations on offline activities, people have been spending more and more time online. Thereby, methods of delivering an online experience similar to the offline world are being explored. Previously, the metaverse only talked about the online virtual world, but today, in the post-pandemic world, it has become a medium that connects the on/offline realms. centering on augmented reality and virtual reality technology.[2] This brand new platform provides the world with endless opportunities for growth. It can be extended to different areas of life, such as urban planning, education, corporates, and even medicine, by leveraging VR/AR/XR technologies.


Figure 1 shows the distribution of the boundaries of the use of VR and AR technologies across different business sectors, and their growth by 2025. Thus, by 2025, the entertainment sector (33%) will still retain a dominant role in the overall structure of the AR/VR market. Further, in second place is Healthcare, and in third place is Engineering, even ahead of the entertainment sphere—live events and video entertainment. As illusrated in the graph, AR/VR technologies and tools are already used now and will be further applicable in the military industry, education, real estate, and retail.[3]

Figure 1: The diverse of AR (augmented reality)/VR (virtual reality) Applications. Predicted market size of VR/AR software for different use cases in 2025 (base case scenario)

Source: Goldman Sachs Global Investment Research


2. Education in Metaverse: a more powerful way for learning


Online learning is becoming increasingly mainstream especially in higher and continuous education. The COVID-19 pandemic accelerated this trend by disrupting attendance-based activities in all levels of education. Remote emergency teaching was enforced worldwide due to health-related physical distancing measures.[4]


However, applications operating in 2D, web-based environments have well-documented limitations and inefficiencies. The daily extended use of synchronous online platforms leads to phenomena such as Zoom fatigue.[5] Asynchronous platforms are often plagued by emotional isolation, a detrimental emotion for participation motivation. Consequently, e-learning courses in the above-mentioned platforms face high drop-out rates.[6] This phenomenon reaches its extreme in MOOCs where typical completion rates have been fluctuating around or below 10%.[7] The use of social media and collaborative applications (e.g., blogs, wikis) can improve active engagement but not necessarily address natural communication and users’ emotional stress.[8] All these problems can be solved by using Metaverse, mainly VR and XR technologies.


PwC found that learners trained with VR were up to 275% more confident to act on what they learned after training—a 40% improvement over in-person classroom learning, and a 35% improvement over eLearning. VR and AR learning experiences have the ability to surpass the passive, tell-and-test, click-through methods that we know lack engagement and efficacy. The dynamic, highly interactive, and often emotionally realistic content created by XR learning professionals reaches users in a more meaningful way. Learning in the metaverse can connect learners from all over the world and empower them to interact in meaningful ways while providing unprecedented accessibility.[9]


As suggested, the integration of immersive, headset-based VR into education can be divided into four primary purposes or use case scenarios in location-based education. First, for rehearsing and practicing dangerous activities such as piloting an airplane or conducting a surgical operation where the stakes of failure are very high with grave consequences. Second, to reenact an inconvenient or counterproductive situation such as managing a problematic behavior in a school or handling a demanding business client. A third use case is to perform something impossible such as internal human body organs observation or to travel virtually back in time to archeological site reconstructions. Fourth, immersive VR is also recommended for rare or too expensive experiences such as a group field trip to a tropical forest or an underwater wreckage.[10]


3. Metaverse for sustainbility: NFTs to aid wildlife protection


Since the dawn of the 21st century, only a small portion of the Earth remains untouched by humanity. As population growth drums up at an unprecedented rate and the need for land and its value soars, less room and resources are left for wildlife. As a result, global animal populations are under threat, making wildlife conservation a critical issue of our time.[11] Biodiversity has intangible value and benefits society through increasing ecosystem services such as the natural control of agricultural pests, and a wide range of economic and recreational benefits provided by wetlands, wildlife and forests. However, a devastating human-induced extinction event is currently underway, with the extinction of species taking place at a far accelerated pace than can be reversed. Species and habitats are largely threatened and destroyed by human activities.[12] Activities such as urban development, intensive water usage, over-hunting, overgrazing and over harvesting drive specie populations to incredibly low levels or in extreme cases lead to their extinction.


One major reason for why wildlife is near extinction is blackmarket trading. People have traditionally placed their money in collectibles that were scarce or rare and had a deemed value, for example wine, trading cards, and comic books. Wildlife has also been collected, bred and traded. People buy and trade endangered speicies, because they persearve exclusivity, which attracts various buys to put large investments into it. It is commonly referred to as wildlife or game farming and investing in wildlife has become a lucrative investment, yielding great returns for wildlife farmers.


A non-fungible token (NFT) is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger, that can be sold and traded.


One interesting characteristic of NFTs is extensibility, which is the ability for one NFT to be extended with another NFT, creating a completely new NFT. This feature allows, for example, a NFT-based wildlife character to breed and create a new NFT-based wildlife character while retaining the properties of a NFT. This extensibility further explores the possibilities that can be done with NFT-enabled digital assets. One such example of these features may be found in the blockchain-based game known as CryptoKitties.[13] CryptoKitties are NFTenabled collectible digital cats that are wholly owned, breedable, and tradable by users for monetary value.[14] In the case of CryptoKitties, which are NFT-enabled collectible digital cats, they have been extended with Kittyhats, which are accessories for users CryptoKitties. Making use of this extensibility could allow for the exploration of new experiences and additional revenue for conservation areas.


Blockchain-based NFT’s could be utilized as an alternative means for wildlife conservation and financing. It contends that, due to the unique capabilities provided by blockchain technology, wildlife can be ‘cloned’ with all their unique characteristics, and preserved on the blockchain. The non-fungible aspect brought by blockchain technology could ensure that conservation areas hosting rare and endangered wildlife could benefit from the sale of their cyptowildlife NFT that would be bred, bought and traded on the blockchain. This could provide an alternative revenue model with a focus on conservation.[15]


4. Potential environment concerns about Metaverse


The volume, variety, and speed of data that will be generated by users of Metavers will require AI applications for analysis. The metaverse will also likely rely on virtual reality (VR) technologies, which already use AI technologies, such as deep neural networks for accurate hand tracking and deep learning for eye tracking.


Data center processing, especially for AI workloads, comes at a huge environmental cost. Researchers at the University of Massachusetts performed a lifecycle assessment for training several common large AI models and found that training a single AI model can emit as much as 626,000 pounds of carbon dioxide equivalent. That is nearly five times the lifetime emissions of the average American car. One study posited that data centers were responsible for about 2% of global greenhouse gas emissions in 2015, which is the same amount generated by the entire aviation industry. Notably, 2015 was before the advent of cloud gaming platforms like Google’s Stadia and Microsoft’s Xbox Cloud Gaming, which studies have shown to be highly compute-resource-intensive. In a 2016 paper, researchers at the Lawrence Berkeley National Laboratory found that the additional energy used in cloud gaming can cause annual electricity use to rise 40% to 60% for desktops, 120% to 300% for laptops, 30% to 200% for consoles, and 130% to 260% for streaming devices.[16]


Cloud services are critical to VR and, in turn, will be critical for the metaverse. According to a 2020 report by researchers at Lancaster University, a scenario in which 30% of gamers have moved to cloud gaming platforms by 2030 would lead to a 30% increase in carbon emissions, compared to gaming as it stands today. The Metaverse is also likely to require very high-resolution imagery, which will further increase energy consumption. This can be backed up by a more recent study by researchers at the U.K.’s University of Bristol. It found that, if just 30% of gamers using 720p or 1080p devices were to transition to cloud gaming by 2030, it’d cause a 29.9% increase in carbon emissions. If 90% of gamers moved to the cloud, it’d increase gaming’s overall carbon emissions by 112%.[17]


5. Conclusion:


Metaverse has been a popular concept in recent years. Some professionals regard it as the next “growth hub”. Indeed, Metaverse can help tackle many problems in real life. In this report, we mainly see the impacts that Metaverse and its product, NFT, may have on our daily life. However, there’s always more to see. From fashion to medicine, Metaverse as a virtual platform which provides instant 3D-alike communications will span across many sectors of business.


Meanwhile, there will be downhills during the development of Metaverse. One major example is how much Metaverse can consumer energies. Although data processing centres mainly use electricity, given current sources of electricity, the sustainability of Metaverse still remains worrying.


As potential investors who are looking into this area, one thing needs to bear in mind that Metaverse is not a sole industry, it is a technological revolution. Like how we stepped into the internet era, once the technologies for constructing a Metaverse are established, an enormous number of opportunities will be unleashed. Therefore, it is recommended to implement certain Blockchain technologies to transform current business and use virtual reality to establish a new work environment.


References


[1]Bloomberg Intelligence. Metaverse may be $800 billion market, next tech platform. 2021. Available online: https://www.bloomberg.com/professional/blog/metaverse-may-be-800-billion-market-next-tech-platform/.


[2]Van der Merwe, D. The Metaverse as Virtual Heterotopia. 2021. Available online: https://www.dpublication.com/wp-content/ uploads/2021/10/41-20250.pdf/.


[3]Zhao, H., Zhao, Q.H. and Ślusarczyk, B., 2019. Sustainability and digitalization of corporate management based on augmented/virtual reality tools usage: China and other world IT companies’ experience. Sustainability, 11(17), p.4717.


[4]Mystakidis, Stylianos. 2022. Metaverse. Encyclopedia. 2. 486-497. 10.3390/encyclopedia2010031.


[5]Bailenson, J.N. Nonverbal overload: A theoretical argument for the causes of Zoom fatigue. Technol. Mind Behav. 2021, 2, 61.


[6]Anderson, T.; Rivera-Vargas, P. A Critical look at Educational Technology from a Distance Education Perspective. Digit. Educ. Rev. 2020, 37, 208–229.


[7]Jordan, K. Initial trends in enrolment and completion of massive open online courses. Int. Rev. Res. Open Distance Learn. 2014, 15, 133–160.


[8]Dunn, T.J.; Kennedy, M. Technology Enhanced Learning in higher education; motivations, engagement and academic achievement. Comput. Educ. 2019, 137, 104–113.


[9]Fast Company. 2022. Available online: https://www.fastcompany.com/90718919/the-metaverse-can-provide-a-whole-new-opportunity-for-education-heres-what-to-consider/.


[10]Park, S. and Kim, S., 2022. Identifying World Types to Deliver Gameful Experiences for Sustainable Learning in the Metaverse.Sustainability,14(3), p.1361.


[11]Abotsi, K.E., Galizzi, P. & Herklotz, A. 2016. Wildlife crime and degradation in Africa: An analysis of the current crisis and prospects for a secure future. Fordham Environmental Law Review, 27(3): 394-441.


[12]Ando, A.W. & Shah, P. 2016. The economics of conservation and finance: A review of literature. International Review of Environmental and Resource Economics, 8: 321-357.


[13]Ordano, E. 2018. The non-fungible revolution of 2018. Available Online: https://blog.decentraland.org/the-non-fungibles-revolution-of-2018-304270525b05/.


[14]Cryptokitties. 2018. Collectible, breedable, adorable. Available online: https://www.cryptokitties.co/.


[15]Mofokeng, Mac & Matima, Tk. 2018. Future tourism trends: Utilizing non-fungible tokens to aid wildlife conservation. African Journal of Hospitality, Tourism and Leisure. 7.


[16]VentureBeat. 2022. The environmental impact of Metaverse. Available online: https://venturebeat.com/2022/01/26/the-environmental-impact-of-the-metaverse/.


[17]Verdict. 2022. Calculating the future environmental impacts of the metaverse. Available online: https://www.verdict.co.uk/metaverse-environmental-impact/.







































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