Get Ready Player One, the Metaverse is coming!

Pretoria East November Newsletter 2021

But what is the metaverse and why should we be bothered?

The term “Metaverse” first appeared in the 1992 science fiction novel, Snow Crash, where people could interact with each other in a virtual world through digital avatars. A more recent pop culture reference would be the 2018 Film Ready Player One, directed by Steven Spielberg, where people in the not-too-distant future seek to escape reality through a virtual entertainment universe called the OASIS. Thus, in its most simple form, the metaverse can be described as a shared virtual universe where people can interact, work, attend class and even play sport against one another. According to futurist, Ray Kurzweil, virtual reality will be totally realistic and compelling by 2030 and we will spend most of our time either working, socialising, or even relaxing in the Metaverse. According to Bank of America, the metaverse will be a US$390 bn market by 2025, while Ark Invest states that this market has the potential to grow by up to 16% annually up to 2025 (see figure 1 below). Back in the early 2010s, the mobile internet started taking over from the traditional fixed-line internet of the 1990s, and by 2030, the three-dimensional metaverse will have taken over from the two-dimensional internet that we know today. This next version of the internet will transform traditional industries, such as tourism, banking and even sports.

The idea of socialising and having experiences in a metaverse is also not an entirely new concept. In 2019, Epic Games hosted the first virtual live concert, which took place within the game Fortnite. 10.7 million gamers attended American DJ, Marshmello’s concert inside the game. Last year, 12.3 million attendees logged into Fortnite to watch rapper Travis Scott perform live, also within the game.

The metaverse is not limited to games and social media; it also has the potential to transform how we work. During the pandemic, we all had to learn to work from home and get used to Zoom and Microsoft Teams meetings. Earlier this month, Microsoft revealed that it already has its own corporate version of the metaverse that will launch in 2022 through PowerPoint and Microsoft Teams. This will enable people to attend business conferences virtually, as well as to have meetings, and even a virtual office environment, in this virtual world.

The metaverse concept, however, is not without its concerns. Former Google CEO, Eric Schmidt voiced his concerns on CNBC this month, following Facebook’s rebranding to Meta Platforms. He said that he is looking forward to the innovation that could happen in the metaverse, but that he is unsure if a company under so much regulatory scrutiny should be piloting the idea. This brings us to some of the main concerns. If we are all connected to the same metaverse in which we socialise, work, and play, by which country’s laws and regulations must we abide? To which authority do we pay tax? What currency do we use? Does a transaction in the metaverse lead to a cross border transaction? If I have a business that is situated in the metaverse, is it incorporated in South Africa? What about privacy? The more connected we become to the internet, the more of our personal and essential information is out there to be used against us. Can you imagine being locked out of your virtual profile and not being able to work or socialise because a hacker stole it?

Clearly, there is still a lot to discuss and work through when it comes to bringing the metaverse to life, but one thing is certain; it’s on its way and it will have a profound impact on society. Welcome to the start of the 5th industrial revolution. Get ready, Player One!

The opinions expressed in this document are the opinions of the writer and not necessarily those of PSG and do not constitute advice. Although the utmost care has been taken in the research and preparation of this document, no responsibility can be taken for actions taken on information in this newsletter.
PSG Wealth Financial Planning (Pty) Ltd is an authorised financial services provider. FSP 728.