The Metaverse - When People Live in a Digital World Without Leaving Home. Threats and Prospects.

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The Metaverse is a virtual (digital) reality (VR) that provides an interactive environment to satisfy various human needs, including work, leisure, entertainment, sports, and other activities.

This is no longer science fiction but a reality made possible by the rapid development of technology. The concept of the Metaverse combines elements of augmented reality (AR), virtual reality (VR), 3D spaces, and interactive content. Together, these elements allow users to interact with each other and the digital environment in ways that feel real. It offers unprecedented opportunities for social interaction, business, education, creativity, and many other areas of life, making them more accessible and integrated into the digital space.

One of the significant advantages of the Metaverse is that it can have a profound impact on people's existence, their communication and interaction, work, and education.

The Metaverse opens up new opportunities for interactive learning. Virtual classrooms can provide advanced learning experiences that are difficult to achieve in traditional settings. For instance, students can study history by visiting virtual reconstructions of ancient civilizations or conduct scientific experiments in virtual laboratories. According to the World Economic Forum, the use of virtual and augmented reality in education can increase information retention by 75% compared to traditional methods.

However, society had excessively high expectations for rapid results regarding the Metaverse. This happened because many large tech companies, including Facebook (Meta), were working in this direction.

According to earlier data from Bloomberg, the Metaverse market could grow to $800 billion by 2024, opening numerous opportunities for innovative companies, startups, and entrepreneurs. Investments in virtual and augmented reality would spur rapid growth for startups, providing them with platforms to develop new products and services. PwC forecasts that by 2030, virtual and augmented reality technologies could add $1.5 trillion to the global economy, creating approximately 23 million jobs.

According to research conducted by the consulting firm McKinsey, the Metaverse could increase global GDP by $5 trillion by 2030 due to improved labor efficiency and new economic opportunities.

However, Meta has faced numerous challenges. In 2021 and 2022, the Reality Labs division, responsible for developing the Metaverse, incurred cumulative losses of nearly $24 billion. The company's Metaverse has been widely criticized for its graphics (low-quality visuals deterred users) and many other complaints, including stability issues, numerous bugs, and errors that hindered users from enjoying the product.

The failure with the Metaverse casts doubt on Meta's ability to lead a revolutionary shift in this type of technology. The massive investments in the Metaverse that did not meet expectations pose serious reputational risks for the company.

Following these circumstances, the forecasted metrics for the Metaverse have significantly worsened, and people's interest in the Metaverse has drastically decreased. While Meta failed to create an appealing Metaverse, it does not mean the concept of virtual worlds has no future.

Minecraft, Roblox, and other virtual worlds demonstrate that users are willing to spend time in such spaces if they offer an engaging and accessible experience. For the successful realization of the Metaverse, companies need to find unique solutions that attract a broad audience and provide high-quality content. Therefore, the Metaverse still has considerable potential, it is just at the beginning of its development.

Despite its significant potential, the Metaverse also poses certain threats. One of the biggest issues is cybersecurity. With the increase in data stored in the virtual world, the risk of cyberattacks and data breaches grows. According to Cybersecurity Ventures, global losses from cybercrime could reach $10.5 trillion per year by 2025. Companies and users must be prepared for new threats and invest in protecting their data.

Another serious threat is the problem of addiction. People may lose the balance between the virtual and real worlds, leading to physical and mental health issues: social isolation, technology addiction, and the loss of real social skills.

Research conducted by the Institute for Digital Society found that about 30% of virtual reality users consider themselves addicted to the technology. This can lead to social isolation, anxiety, and other psychological problems.

We believe that the Metaverse has enormous potential in the future and is significantly undervalued today. In the next few decades, the Metaverse, along with artificial intelligence, could completely transform our perceptions of reality and our future. The key is to remember that the Metaverse cannot and should not become a substitute for a full life. It is a tool. A high-tech, unique tool, but a tool nonetheless. And it should be treated solely as such.

Authots:

• Maksymiv Dmytro - Founder of the Instacs platform and CEO;
• Ulyanovskyi Oleksiy - Writer.

References:

1. McKinsey & Company. (2023). The economic potential of the metaverse - https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/value-creation-in-the-metaverse
2. Bloomberg. (2022). Metaverse Market Size Could Hit $800 Billion by 2024. - https://www.bloomberg.com/professional/insights/trading/metaverse-may-be-800-billion-market-next-tech-platform/
3. Pwc.com. Seeing is believing: How VR and AR will transform business and the economy - https://www.pwc.com/gx/en/industries/technology/publications/economic-impact-of-vr-ar.html
4. World Economic Forum. (2021). The Future of Jobs Report 2021. - https://www.weforum.org/publications/series/future-of-jobs/
5. Cybersecurityventures.com. Cybercrime Damages $6 Trillion By 2021 - https://cybersecurityventures.com/annual-cybercrime-report-2017/
6. Institute of Digital Society. (2024). Clinical adoption of virtual reality in mental health is challenged by lack of high-quality research - https://www.ncbi.nlm.nih.gov/pmc/articles/PMC11099044/