Making the metaverse useful

Executive Briefing Service

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Although the metaverse has been engulfed by a wave of scepticism, there are some compelling consumer and enterprise use cases for interoperable virtual environments rendered in 3D. Over time, these use cases will drive demand for connectivity and other telco capabilities.

The metaverse: A double edged sword

For the telecoms industry, the metaverse is something of a double-edged sword. If it were to take off in the way its proponents advocate, the metaverse could generate far more traffic than today’s telecoms networks could cope with. It would also require very low latency connectivity that could require telcos to make major investments in edge computing capacity. Yet, if the metaverse proves to be a mirage – as many critics now claim – telcos could find themselves with a lot of excess capacity.

If people rarely use 3D environments, then it is hard to justify residential connections with a throughput of more than 100Mbps – a single 4K video stream only needs 25Mbps. Although a family of four could conceivably be watching four 4K streams at once, in most scenarios, an average throughput of 50Mbps will likely be sufficient.

Yet in many developed markets, such as France, average download and upload speeds on fixed-line networks are now well over 100Mbps. The global averages are lower – 42Mbps downlinks (10Mbps uplinks) for mobile networks and 79Mbps (35Mbps uplink) for fixed networks, according to Speedtest. But even these global averages are more than enough to streamline 2D content.

Median throughput speeds in developed markets

Source: Speedtest

In simple terms, most fixed-line networks in developed markets are now too good for 2D, but not good enough to live stream 3D/virtual reality (VR). If the online environment remains predominantly 2D (Netflix and Zoom calls in 4K, for example), fibre-to-the-home (FTTH) connections will be overkill. If the online environment goes predominantly 3D (with much of it live streamed), then FTTH will be crucial, supplemented by edge compute, 5G mid-band/mmWave and Wi-Fi 6 and Wi-Fi 7, particularly in the business market where the metaverse could be used for important applications, such as collaborative design and training staff.

When the concept of a metaverse rose to prominence 2021, the telecoms industry was understandably energised – here was a major new driver of demand. Since then the mood has changed. There is growing cynicism as commentators highlight the formidable technical challenges involved in creating compelling 3D experiences. They rightly note that most people will not want to spend a great deal of time immersed in a clunky virtual world in which the graphics are either low resolution or fail to respond quickly enough to eye and head movements.

With interest rates rising and investors getting more cautious, some major players in the technology, media, and telecom (TMT) sector have cooled on the metaverse concept – Disney disbanded its metaverse division in March 2023, not long after Microsoft (reportedly) closed down its industrial metaverse unit. Meanwhile, both investors and the media are getting very excited about the potential of generative AI – artificial intelligence systems, such as ChatGPT, that can quickly produce content and code, potentially boosting productivity.

In the broader TMT community, the consensus seems to be that the metaverse is going to be a big part of the future but is not a near-term priority. In a late October 2022 survey of 767 TMT executives by KPMG International, six out of ten respondents said the metaverse will have a “huge impact” on consumers and businesses. At the same time, the majority said their companies are investing less than 5% of the total technology budget on the metaverse.

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Generative AI: Friend or foe?

With generative artificial intelligence (AI) in the spotlight, many tech companies are positioning themselves to benefit from the interest and hype around that technology. Some commentators believe the rise of generative AI will draw resources away from the metaverse. But that is a rather narrow perspective – they are actually complementary concepts. The metaverse is essentially an application, while generative AI (like connectivity) is a foundational technology that will be used for many, many purposes, such as writing the code that will help build virtual worlds and ultimately a broader metaverse.

In fact, the rise of generative AI will surely make the construction of a metaverse more cost-effective. Moreover, much of the negative commentary misses the fact that many mini-metaverses are being widely used today. The success of Fortnite, Roblox, Zwift and other multiplayer online games and fitness platforms demonstrate that people like interacting with (and competing with) each other in a 3D environment. Although these environments are currently self-contained and will continue to be for some time to come, they may become interoperable in the future, just as organisational networks gradually connected to the internet. For the digital economy, the metaverse is the logical end point for a journey that the tech and telecoms industry started more than a decade ago with the advent of digital twins.

Still, some of the scepticism is justified. Clunky and expensive technology means metaverse-hosted events are unlikely to be a satisfactory substitute for attending a concert, sports fixture or play in person during this decade. There will need to be major advances in VR technology before most people will want to spend more than a few minutes wearing a fully enclosed headset.

But that does not mean the metaverse is not going to have a major impact in the medium-term. From planning and design to education and training, there are many practical and valuable applications for 3D virtual environments, which can be visited and manipulated without the expense and risks that would be associated with real in-person visits. Crucially, these applications do not necessarily require the user to spend a lot of time (or even any time) wearing an enclosed headset. In fact, most practical use cases do not need to be immersive – users could just navigate a 3D environment on the screen of their laptop or TV (similar to the way in which people play Fortnite or Minecraft).

Fortnite shows that metaverses do not necessarily need VR

Source: Fortnite

By enabling people to “travel” cost-effectively through time and space, virtual environments can help boost productivity and efficiency. While a VR meeting may offer little beyond a Zoom call, 3D simulations that enable users to view and manage the real world in real-time clearly have value – digital twins are gaining traction and becoming increasingly sophisticated, as explained in the STL Partners report: Digital twins: A catalyst of disruption in the Coordination Age.

The combination of 360-degree 8K cameras, 5G or Wi-Fi 6 connectivity and real-time stitching software has made it feasible to transmit live footage of a real-world environment from multiple viewpoints to a remote location. These cameras are small enough to be mounted in a wide variety of locations and viewpoints (see figure below) and can easily be moved around by robots and drones.

Furthermore, the cost of this equipment is falling. High-definition 360-degree cameras equipped with Wi-Fi can cost as little as US$100. Models with a built-in cellular connection and good optics will cost more. For example, the weather-proof Farmstream 360-degree camera, which is equipped with 4G and a 30x optical zoom, costs £350 in the UK (that is £50 more than the Wi-Fi version of the same camera). Designed for use on farms, the online retailer advises buyers that they will typically spend £6 per month on data and potentially upwards of £10 per month in very busy periods (for example during lambing or calving). For telcos, that represents incremental revenue.

8K 360-degree cameras are small enough to be widely used

Source: Insta360 website

Table of Contents

  • Executive Summary
  • Table of Contents
  • Table of Figures
  • Introduction
    • The metaverse: A double edged sword
    • Generative AI: Friend or foe?
    • The advantages of interoperability
  • Practical consumer applications
    • The role of telcos
    • Virtual reality: To be deployed judiciously
  • Use cases for live virtual environments
    • Training for activities and tasks
    • Education
    • Designing/managing a building
    • Speciality shopping
    • Virtual tourism
    • Live events
  • The movers and shakers
    • Meta’s strategic pivot towards mixed reality
    • Roblox: User-generated 3D
    • Microsoft prepares for a new computing platform
    • Nvidia: Riding the automotive transition
    • Apple intervenes
    • Google: Making maps more immersive
    • Siemens: Manufacturing in the metaverse
  • China seeks to build on the IoT
  • Conclusions

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