What happened to Clubhouse? Remember that social-audio app that blew up during the peak days of the pandemic-induced lockdown — the one where Elon Musk opined that Bitcoin was “on the verge of getting broad acceptance among finance people?” By mid-2021, the app dubbed “Zoom with a community” had vanished from the social media landscape, and its success was considered a pandemic-driven fad.
The consensus was no one needed a virtual gathering space now that they could once again meet at parks and cafes. But that line of logic doesn’t add up, not when a few months after Clubhouse’s decline, an entire industry based on virtual spaces sprouted up in its wake.
By 2021, the metaverse entered our digital consciousness, and more than 92% of companies that had previously invested in the metaverse believe COVID-19 accelerated the development of its technologies, a March survey revealed. And they are right. But as cases of the virus continue to decline and in-person events ramp back up to pre-pandemic levels, what factors will help the metaverse avoid the same fate as Clubhouse?
Out with Web2, in with Web3
Clubhouse’s 15 minutes of fame came and went in part because it manifested as a Web2 app at the dawn of the Web3 revolution. The metaverse industry, by and large, is made up of blockchain-based decentralized platforms, like Sandbox and Decentraland. The revolutionary next iteration of the internet is centered around blockchain technology and its decentralized characteristics that enhance privacy — as compared with Web2’s domination by Big Tech and profiting from data collection.
As such, analysts predict the metaverse will approach $800 billion in 2024, a 13% annual growth rate since 2020.
As a burgeoning Web3 use case, it’s difficult to predict how and to what degree the metaverse will disrupt our economic, social and work lives. Some 72% of executives surveyed in a recent Accenture study believe the metaverse will have a positive impact on their organizations, with 45% believing it will be a “breakthrough or transformational” industry. With some more time, those figures will likely rise.
In support of these executives’ claims, the metaverse isn’t merely a VR entertainment or gaming experience. It also represents an entire ecosystem capable of hosting a digital economy. By leveraging both augmented reality (AR) and virtual reality (VR) tech, metaverse platforms can help ecommerce brands by enabling customers to interact with their product offerings more effectively in digital spaces. For example, consumers are 11 times more likely to buy a piece of furniture after having the opportunity to view it in their home environment via AR, according to an Apple report [subscription required]. This provides real value for furniture retailers, whether in a pandemic or not.
AR/VR is the future internet
The metaverse currently exists as an overarching category for all virtual worlds. Within that category, AR and VR are facilitating fully-immersive and interactive metaverse experiences. Through headsets, goggles and other AR/VR hardware, the metaverse is becoming more and more accessible and increasingly advanced.
Despite only recently entering into the mainstream lexicon, AR and VR technology were long on their way to becoming mainstays in our lives before the pandemic hit, with many claiming AR will be an integral part of the future of the internet as early as 2017. A Grandview Research analysis estimates the AR market size will reach $38.56 billion this year, ballooning to almost $600 billion by 2030, a 40.9% compound annual growth rate. Likewise, the VR market is also expected to see consistent growth, estimated at $28.42 billion this year, and expected to soar to $87 billion by 2030.
As AR and VR adoption continues to expand over time, with more use cases, coinciding with the metaverse’s push to become a trillion-dollar industry, AR and VR will be the prime driving force behind the metaverse’s truly disruptive potential.
Anyone thinking that the metaverse hype is simply a result of the pandemic-era lockdowns doesn’t recognize that the Web3 revolution is already upon us. The ongoing advances in AR and VR tech will further solidify the metaverse’s impact in our increasingly digitized lives. The momentum the metaverse has built up is simply too strong to be affected by any outside factors. Needless to say, the future of the metaverse is looking quite bullish.
James Wo is founder and CEO of DFG.