The Metaverse : towards a new reality ?

Since the announcements from Meta (formerly Facebook), one term has been on everyone’s lips : the metaverse. Although this word carries a multitude of promises and expectations, the concept embraced by many prominent figures in the tech world remains unclear. Some call it the next evolution of the Internet, while others argue it has already existed for years : what is the metaverse ? Who is using it today ? And what about the world of tomorrow ?

What is the metaverse ?

Let’s first go back to the origins : the term metaverse (or “métavers” in French) was coined by Neal Stephenson in 1992 in his novel Snow Crash, combining “meta” (beyond) and “universe”.

Unlike “virtual reality”, which is imaginary, personal, and ephemeral, the metaverse is defined as a persistent virtual world, shared by all users and accessible to anyone with an internet connection.

Although the metaverse refers to a broad set of possibilities, three key defining criteria can be identified :

• The metaverse is based on the real world, without being an exact replica. It adopts the main rules of reality (gravity exists, days last 24 hours, etc.) ;
• The metaverse is accessible to everyone, provided they have the necessary technological means ;
• The metaverse is persistent : it continues to exist even when a user logs off.

An extension of presence in virtual spaces

With the rise of remote work, more and more people rely on virtual spaces and digital communication tools such as videoconferencing to interact online. These virtual meeting environments, enabled by applications like Zoom and Teams, have already become part of our daily lives.

In the professional world, these virtual spaces are already expanding beyond simple video calls, also encompassing informal and social environments, as illustrated by platforms such as SpatialChat. The metaverse could be seen as an extension of these tools, with initiatives such as Horizon Workrooms introduced by Meta. Other players, such as Microsoft, are actively moving in this direction, and many companies are likely preparing to send their employees into metaverse environments.

Beyond the professional sphere, the metaverse has been present in gaming for decades (Fortnite, Second Life). Today, decentralized games within the metaverse (The Sandbox, Decentraland…) incorporate economic models that allow users to play to earn. These games enable users to buy, sell, and trade in-game assets in the form of non-fungible tokens (NFTs), unique tokens that ensure the identity of a digital object and link its ownership to an individual. In addition, the concept of avatars exploring vast virtual worlds remains highly appealing to players.

Finally, the metaverse is also expected to expand into social media. Meta’s leadership believes that platforms hosted within a metaverse will offer users a more immersive experience. This evolution of social networks will bring new forms of interaction, combining familiar elements such as participation, e-commerce, and live events with immersive experiences based on virtual and augmented reality.

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A new world made possible by technological advancements

As the concept of the metaverse is still relatively new, most of its functionalities are still under development. To deliver an immersive virtual experience, companies are integrating cutting-edge technologies to drive the growth of this new metaverse. These technologies include blockchain (notably NFTs), augmented reality (AR) and virtual reality (VR), 3D reconstruction, artificial intelligence (AI), and the Internet of Things (IoT).

Blockchain and NFTs provide transparent solutions for digital proof of ownership, digital collectibles, value transfer, governance, and more. Meanwhile, cryptocurrencies enable users to transfer value while working and socializing within 3D digital environments.

As for virtual reality and augmented reality, these technologies have significantly improved in recent years, both in terms of functionality and ease of use, while their costs continue to decrease. These two factors are driving the adoption of VR and AR applications in businesses. This level of quality also opens new opportunities for luxury brands, as appearance can be rendered truly distinctive and the value of design more tangible.

Regarding artificial intelligence (AI), its role in our daily lives has continued to grow in recent years and will remain central in the metaverse. It can notably be used for avatar creation: AI technologies can analyze 2D images or 3D scans to generate more realistic and accurate avatars. To make the process more dynamic, AI can also be used to create different facial expressions, hairstyles, or even clothing, enhancing the virtual characters we design.

Who is using the metaverse today ?

Since Meta’s announcement, a new ecosystem of metaverse players has begun to emerge. Among them are well-known names such as Meta and Oculus, which are leveraging the metaverse to give new momentum to their activities and capitalize on the acceleration of technology adoption and this new wave of popularity.

Other, more recent companies such as Decentraland (2015) or The Sandbox (2012) are developing their own virtual worlds and democratizing access to the metaverse. The Sandbox, a French company specializing in virtual real estate investment within the metaverse, is attracting a growing number of major corporations such as Carrefour, Ubisoft, and HSBC. Its next fundraising round is estimated at $400 million, potentially valuing the company at nearly $4 billion.

As for the users of these metaverse platforms, they are currently mainly luxury players or companies seeking new communication channels, aiming to leverage the growing popularity of the metaverse to revitalize their brand.

Brands such as Gucci, Balenciaga, Nike, and many others have organized events in Roblox’s metaverse or sponsored concerts on Fortnite. They are the early explorers of this new world, experimenting with use cases as the technology evolves.

Other players, such as Carrefour or HSBC, are taking a more defensive approach to the metaverse. They are investing in virtual real estate to establish a presence in what they still consider a risky market, one that remains far from use cases aligned with their core business.

Finally, other potential entrants have not yet found their place in the metaverse but could benefit from this wave : players from the sports industry such as FIFA or the Olympic Games, as well as those from NeuroTech…

Ultimately, only the market and the adoption of this technology will determine whether this trend proves sustainable, as it still faces several key challenges. Changes in consumer behavior, the search for viable use cases, and the miniaturization of the hardware required to access the metaverse are already three essential hurdles to overcome in order to make this vision of a new world more realistic.

In the meantime, it is wise to start preparing. Bloomberg estimates that, once these barriers are lifted, the market could exceed $800 billion by 2025.

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The world of tomorrow : between regulations and standards

Since the metaverse has not been created by a single company but rather by multiple players, the question of governance and regulation in this virtual world remains unclear. Many laws in modern societies have emerged as a response to specific incidents. So how can decision-makers anticipate regulations for a secure metaverse before issues arise ?

Intellectual property disputes will almost certainly be among the key legal challenges. In fact, Web3 projects have already led to several such cases. As early as 2018, several well-known personalities and celebrities filed lawsuits against Epic Games, the developer of Fortnite, accusing the game of using their dance moves without permission. However, enforcing intellectual property rights in virtual environments has generally proven to be difficult.

Similar challenges are expected in the metaverse. Digital assets, such as NFTs, may fall under traditional financial regulatory frameworks, including securities laws, banking regulations, money transfer rules, and commodities laws. The application of securities regulations, in particular, would trigger a complex set of rules governing sales, exchanges, and other activities.

At this stage, it remains unclear what the metaverse will ultimately become. However, it undoubtedly holds the potential to redefine what we call “the new reality.”

Ariel Cohen Codar, Simon Georges-Kot

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