The metaverse was supposed to be good for businesses. They remain apprehensive.

Pity the chief executive with a budget to file. In a market awash with all sorts of new software and emerging technology, it can be especially hard for company leaders to decide which platforms to embrace in the name of improved customer service and efficiency.

And they’re nothing if not enthusiastic. A recent survey by KPMG of some 2,200 tech executives, 100 of which were based in the UK, found that almost 40% of respondents intended to invest in cryptocurrencies within the next six to 12 months. Seventy per cent, meanwhile, indicated a strong interest in the emerging field of quantum computing, while 43% of tech executives surveyed from the UK said that they expected to be investing in virtual and augmented reality technologies within the next one to two years.

The business case for using these technologies, said most respondents, was that, properly harnessed, they would gradually improve customer experience, with marketing and customer service departments set to benefit the most from future corporate investment in these technology areas. As such, said the report, the financial services industry has the “biggest appetite for investing in the metaverse within the next year”, with the energy and chemicals market being the least interested in such investments. That bodes well for some of the more avid proponents of the metaverse, who regularly opine that blockchain-powered virtual meetings are just around the corner.

There’s only one problem: the survey indicates little actual demand among businesses to begin transitioning to the metaverse, from above or below. ‘Most respondents,’ reads the report, ‘even the most digitally effective and profitable organisations, admit that they are waiting for either competitors to adopt the relevant technologies or for customers to demand products and services reliant on these technologies before investing themselves.’ Far from leaping head-first into the pool of pioneering Big Tech companies experimenting with metaverse-adjacent technologies, then, most firms seem to be nervously waiting at the margins, afraid of getting splashed.

Metaverse businesses and business for the metaverse

Some observers – including those at KPMG – remain optimistic that the private sector’s enthusiasm for the metaverse will, eventually, translate into a dollar commitment. Paul Henninger, the firm’s global and UK head of connected technology, explains that business’s burgeoning enthusiasm for the space is partly down to a “holistic shift to rethink how different departments and jobs can be recomposed around new business models in a much more agile way”. He adds that the industry is excited to explore how the metaverse can create more effective collaborative environments for employees to work in.

In April earlier this year, for example, EON Reality, a VR-based 3D meeting software provider, was acquired by Arogo Capital for a cool $655m. The consulting giant Accenture also recently revealed its “Nth floor” project which refers to digital twins of its physical offices across the globe, described as a “versatile, scalable solution for bringing a geographically distributed workforce together.”

Others, like Shelly Kramer, founding partner and principal analyst at Futurum Research, are less convinced that this particular vision of the future of work will proliferate beyond a handful of large companies. “I spend a lot of time working with major players in the collaboration space and while many are thinking and working on metaverse-related things, I find they are exponentially more interested in better video and audio tools, as well as intelligent automation, to drive more inclusive collaboration in a hybrid work world,” she says. “Based on what I hear from many, many employees, the idea of collaborating in a metaverse environment is less than attractive.”

Much of this is down to the lingering impacts of online meetings in lockdown known as ‘Zoom fatigue’. Last year, researchers at Stanford University published a paper detailing the ways people can get exhausted through constant video conferences, while a survey by web development agency Virtira found that 49% of workers experience a “high degree of exhaustion” from being required to be on camera during meetings. Kramer adds that while a completely virtual work experience will not replace in-person meetings and video calls, it will play a role in “best-in-class collaboration” once long-standing issues involved in VR headsets are ironed out.

Another exciting emerging technology among businesses, NFTs, seemingly has enough latent controversies to forestall widespread corporate uptake in the short term. While proponents have extolled their potential in transforming everything from art to financial services, deep-seated concerns persist about the security of these blockchain-based products and the platforms supporting them. Earlier this year, OpenSea, the world’s biggest trading platform for NFTs valued at $13bn suffered a catastrophic data breach after an employee at its email delivery service leaked user data. Research published by Elliptic, a crypto compliance company, also indicates that more than $100m worth of NFTs were stolen in the past year.

Another barrier to further adoption is the sheer complexity of NFTs, with most people finding the principles underpinning these products difficult to understand or simply incomprehensible. A YouGov survey published earlier this year, for example, found that almost half of global consumers have never even heard of NFTs, while less than 10% of global consumers knew exactly what NFTs are.

For his part, Henninger believes that NFTs will find their place outside the recesses of the crypto-verse. Rationalising healthcare data is just one area where the analyst believes the products could, in time, see significant uptake. “All of these barriers [to adoption] are things that need to be solved, but the question is whether the solution to these problems is valuable enough to incentivise us to explore ways to do that,” says Henninger. “And I think based on the early returns we’ve seen, the answer is yes.”

Poor omens from Meta

As far as investors are concerned, however, prospects for the metaverse remain dim – and yoked to the ebbing fortunes of its main proponent, Meta. Recent announcements from the company about its metaverse-focused Reality Labs division have proven grim. In the first nine months of 2022, losses from the unit totalled $9.4bn. The announcement contributed to a plunge in the value of Meta’s shares of up to 25% last week, leading shareholders to publicly question Mark Zuckerberg’s plans to sink another $39bn into metaverse-related R&D next year.

Bob O’Donnell, president and chief analyst of TECHnalysis Research, believes that Meta’s disastrous performance provides a window into the future of the metaverse, one that its proponents might not like. “There’s been all kinds of outcry regarding the fact that it’s way too early and they’re spending too much money on a tiny opportunity,” he says. “I think that it is a harbinger of what’s to come, in terms of people’s limited interest in [the metaverse.] There’s an opportunity here, of course, but it’s just not a huge business - more of a side bet.”

Henninger, on the other hand, believes that Meta is making an “infrastructure investment”, drawing parallels to the loss-making nature of large-scale public infrastructure projects and how the businesses interested in the metaverse and web3 technologies need to stay ahead of the curve.

“Our job is not just to wait until technology transforms the way our lives work and then we compose a working group to react to it, which was the model 15 years ago,” he says. “We need to participate in it, and drive it.”

In the here and now, however, Kramer isn’t convinced that businesses are ready to convert their openness to the metaverse into the cold, hard cash necessary to make it a reality – at least, not in the medium term. “I can't find anyone,” she says, “in my immediate circle of friends, colleagues and beyond who actually believe they will spend time in the metaverse any time soon”.

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