Immersive, 3D, virtual spaces have existed for close to 20 years. A generation of gamers have grown up in these worlds, exploring, creating, bonding, and spending real money on digital goods. These virtual worlds have economies, politics, and even their own pandemics. So, by some definitions, metaverses have existed for a long time, even if few people have ever entered one. And yet these precursors are a far cry from Meta Inc.’s vision of a network of virtual spaces connected into a single federated metaverse, complete with portable identity and photorealistic rendering, a place that blurs the lines between physical and digital. That sort of metaverse is still many years away, and will require “about a dozen major technological breakthroughs”.
Definitions aside, the metaverse and its supporting Extended Reality tech (XR, an umbrella term that unites several immersive techniques) is front of mind for many. If the 2000s were the decade of the web, and the 2010s were the decade of mobile, then the 2020s may well be the decade of XR. While each of those technologies existed before those decades, innovations in hardware and software drove adoption to the point where businesses risked obsolescence if they weren’t ready to meet their customers in those new digital formats. Digital-native millennials engage more strongly with businesses who provide high-quality digital services, so perhaps the next generation of virtual-natives will choose similarly.
In such an emerging and unpredictable space, the big question now is how much to invest in the metaverse, if at all. For those who wish to be at the bleeding edge, now is the time to participate. If and when a true metaverse emerges, it will be defined by those courageous enough to embrace it in its infancy. Early adopters will have a competitive advantage in their ability to meet their customers in the metaverse before anyone else. However, establishing that position will take a lot of investment, which will not see any return for a long time. It may never see any real return if the metaverse fizzles.
What about those who are interested in the space, but aren’t prepared to speculate on a metaverse that currently has almost no one in it? How can businesses prepare to meet their customers in the metaverse if and when it exists, without risking money and reputation on gimmicks? The answer is to start building useful XR experiences today.
Even if there is no metaverse yet, many of the required technologies are already mature and widespread enough to start getting value from them. While specific implementations and platforms will come and go over the next decade, organisations that start building now will have a headstart on claiming market positions and customer mindshare. Early adopters will also grow the underlying technical, cultural, strategic, and design capabilities needed to deliver high quality immersive experiences. These experiences must be valuable to their users, and should provide return on investment to their creators. Such a strategy demands the best of both worlds - embracing emerging technologies in preparation for a future revolution, without engaging in pure speculation.
When XR makes sense
It’s important that businesses take care to not get swept up in hype and FOMO, and invest simply because others are. Businesses should decide to invest in XR based on whether it has a return and provides real value to their customers.
The core usefulness of XR is in creating new types of immersion, interfaces, and interactions that were not previously possible. XR lets us transport people to different places or situations, bring products to life digitally, visualize information in new ways, and gives users new ways to engage with brands. For businesses that trade in physical products, places, and experiences — from retail to real estate to travel — XR visualizations have helped customers purchase with confidence. In industrial and B2B sectors too, XR has been deployed for everything from virtual training to remote collaboration.
However, the key point remains: any venture into XR must be customer-centric, focussing not on the technology itself, but on how the technology helps customers or employees do something that they couldn’t do before. Solutions that are simply “the same as today but with a headset” should be re-examined.
Multiple realities
Putting aside those very early adopters who decide to bet on the metaverse now, there are three options under the XR umbrella: Virtual Reality, Augmented Reality, and Mixed Reality.
Virtual Reality (VR) immerses the user in a purely digital space, using a full headset. Arguably the most powerful XR experience, it allows the user to be transported anywhere, to be shown anything. Homebuyers can inspect property that’s thousands of miles away, or doesn’t even exist yet. Engineers, pilots, and surgeons alike can be safely trained on any number of procedures in a lifelike environment. Tourism can be made more sustainable and accessible by letting people experience other places (and times!) from their own homes. Employees can collaborate remotely without being constrained to a flat screen.
The main limitation of VR investment is access to hardware. Very few people currently own a headset, so other than products targeting only that small customer segment, successful VR ventures need to provide both hardware and software. This includes B2B or internal products where the hardware and software are provided as part of the product. In the consumer space it may include retail, art, education, or other on-site experiences where the customer physically comes to the provider to use their hardware.
Augmented Reality (AR) involves overlaying digital elements onto the real physical world, usually with either a smartphone or special glasses. AR glasses, like VR headsets, are not yet widespread, so applications requiring AR glasses are subject to the same constraints of access to hardware. Smartphones, however, are ubiquitous, which makes AR much more accessible than VR. AR allows businesses to bring their products into a customer’s real space in three dimensions. Not only is this more engaging and realistic than buying a product off a screen, it enables experiences like virtual space planning and virtual try-on. In industry, AR can provide workers with context-sensitive, just-in-time information and feedback as they work, increasing employee effectiveness. AR can also be added to stores, museums, venues, or any other physical space, giving customers an enriched, interactive, engaging experience.
Mixed Reality (MR) is a blending of VR and AR. MR experiences include a combination of places and objects that are both physical and virtual, and allow them to interact with each other seamlessly. MR is less developed than VR and AR, but is seeing use in education and gaming to allow users to learn and play in new and interesting ways.
While MR applications can run on common hardware like smartphones, specialized hardware like headsets and glasses are usually used, due to the superior immersive experience. Not having to hold a phone also means that users’ hands are free to interact.
Choosing a reality
With so many competing approaches, sensible XR investment will be different for everyone. What is true for every business though, is that decisions should be made based on customer and business value. Ask how a user could benefit from being transported to a totally virtual space. Or how a customer could benefit from seeing a product in their home before buying it. Or how an employee could be more effective with extra information laid over their work. The best XR products should leave people wondering how they ever managed without it before.
Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.
