9 Megatrends Shaping the Metaverse

Unknown: All right, welcome back everyone.

Jon Radoff: Last time I was defining the metaverse, I said what it is, what it does. It's the next generation of the internet. It's built around real-time activity and it's powered by a huge increase in the number of people creating content for this world. Now this time I want to talk about nine mega trends that are just powering the metaverse that are shaping it, that are going to tell us how we got here and where it's going next. Now one of the things I'd like you to keep top of mind as I describe these nine mega trends is just how much games are informing all of this. So you can kind of look at what's happened with video games over the last 20, 30 years. That's going to tell us a lot about where the metaverse goes next. So what's that first mega trend that I want to talk about? It's virtual mainstreaming and talking about video games. It comes right from that. What I'm referring to here is the idea that your digital identity, it's just as real as your physical identity. In other words, your online reputation, the way you express yourself online and especially the relationships you have with people online, all of that is real. So let's take a look at some of the data behind that. First of all, we got a real look into this through COVID. Pre-COVID, less than 10% of work was happening online. It was remote work. Of course, that peaked at about 60% last year. But now it looks like it's still going to be staying at around 20% even with a return

Unknown: to work.

Jon Radoff: Just that alone should show you that like the online world, it's real. Remote work, it's real. That's the metaverse. Doing things online, it's activities, it's engaging with people, collaborating with each other and being in an immersive social space in real time. All right, what's another step? Six out of 10 teens spend time with their friends online daily. Just look at the next generation to get a view into what the metaverse is going to be

Unknown: all about.

Jon Radoff: Even the Olympics is demonstrating eSports this year.

Unknown: Look at how much of your digital identity is important to you today, right?

Jon Radoff: Whether you are in social media and you're interacting with people there, or you participate in eSports, or if you're just in an online game where you're interacting with people, or you express yourself through some kind of avatar you've created online, all of these are versions of the way your digital identity is becoming as real as your physical identity, which by the way is a change. All right, so I met my future wife in an online game quite a while back, and that was pretty weird at the time. Now it's not even unusual, and this is just an example of how culture is changing around it. And as your identity gets even more and more important where more and more of who you are as expressed online, the metaverse is essentially being built around that identity.

Unknown: All right.

Jon Radoff: The next two trends that I want to talk to, I want to talk about together. It's the challenges of open platforms and the emergence of these walled garden ecosystems. So we should go back to the beginning of the internet. The internet began as a highly decentralized ecosystem, and it still is in many ways. The domain name system, websites, PC software development, open source, the blockchain, all of these are examples of decentralized means of building things. At the same time, we've seen the rise of very powerful platforms like Facebook, Apple, Google, etc. That has made the internet a little bit less decentralized. Today we're seeing metaverses like Roblox that are gaining a lot of power as well, and that's because they provided really great tools for building stuff where you can create things where your friends can come in or even create a whole new means of income for yourself by monetizing it within app purchases, and virtual goods and currencies. Walled gardens do have a big advantage. They can foster communities with certain expectations and standards, but they also can limit expression and can take a lot of the economics away from creators. So I just think of these as two big trends that are technology and their culture and their things to keep an eye on. They're not like one of these is going to win out over the other, but we are going to see a continuation of some very powerful platforms. We're going to see new ones emerge, and we're also going to see open platforms continue to thrive, and that's going to be an important trend as well. In fact, Facebook recently announced that they were abandoning the proprietary Oculus APIs that they were building, and in favor of OpenXR and embracing OpenStandards. So we may even see an intersection between these two, the powerful platform companies alongside of an open environment to build metaverse content on. The next mega trend I'm going to talk about is machine intelligence. Now speaking about games informing the future here, AI found one of its first use cases really in games, whether it was chess and go and all the non-player characters and opponents that you can play within online games and offline games. That's an example of AI, machine intelligence. But a lot of people don't realize just how far machine intelligence has come in a really short period of time. One particular technology I can refer to is GPT-3. So GPT-3 is part of a broader category of technology called deep learning transformers. GPT-3 is capable of really creating very human readable, human understandable texts that almost seems like it came from a human. And that's because it's trained on our language, and to do it, it requires a lot of parameters to do it really well. The parameters that go into the GPT engine or deep learning in general has gone from about 100 million parameters just three years ago. Today we have deep learning language systems with over a trillion parameters. And the result of this is stuff like AI dungeon, for example, a really cool application of machine intelligence in which you have essentially a dungeon master in the form of a computer leading you through an experience. And it's uncanny how interesting it is. You can see the flaws in it. But imagine how much better this is going to get as we continue to add exponential increases in the number of transforming parameters. Now a main use of AI right now is algorithms for optimizing engagement and advertising and things like that. And of course, games, as I mentioned, have AI for opponents and non-player characters. But in the future, you can see the convergence between things like GPT-3 and virtual beings where you're going to not only have non-player characters to interact with, but they're going to be telling stories.

Unknown: They'll even be companions and friends for you online.

Jon Radoff: So AI is critical to more complex forms of input, as well as gesture and voice recognition. That's another form that AI is really helping to inform the future. As we develop more and more systems for the metaverse, AI is going to be very important for predicting how you're using things, eye tracking, again gestures to help interpret your body language into expression online. Machine intelligence. It's not only going to be something that changes the experience, but it's also going to be a way to collaborate. So in the future, the creators of metaverse content are not going to necessarily build all the little pieces in the nitty-gritty details. You're going to be able to collaborate not only with these virtual beings, but virtual creativity platforms built around machine intelligence where they're going to help you make stuff and provide the scaffolding. We've got companies like Promethe and AI, for example, where you can create an entire world space based on your inputs of how you want that space to be. So machine intelligence is going to be one of the huge mega trends that defines the metaverse. Another mega trend is the emergence of low-code platforms and even no-code platforms. So along with some use of AI as a creative collaborator, as I was just referring to, low-code and no-code platforms are going to make it possible to go direct from imagination to the screen. You can create a direct from imagination economy where if you can think of an idea, you can rapidly bring it to life in the metaverse. Now, Gartner has forecast that in the enterprise, half of large companies are adopting low-code platforms already. So we've got a little bit of momentum from the enterprise world, but as large enterprises do this, imagine what this will do for the metaverse because we've already seen this with 3D engines, for example, where 3D engines made it far easier to create world spaces, animations, characters, experiences that have been used in games. Now we're going to see a dramatic increase in no-code and low-code to make it possible to define the rules, the interactions, the social structures, the features of the metaverse experience. And it's going to open up a huge number of people to be able to create content that haven't been able to do it before, and they'll be able to do it in a capital-efficient way with much smaller teams. The rise of cybernetics, basic cybernetics is just humans with tools. It started with flintnapping by our hominid ancestors, but today it's really about removing all the barriers between the human sensory motor system and the machines we use. Good example, joysticks. There we go. It's informed by games yet again. You know, a joystick or a mouse are good examples of cutting down the complexity or the barriers between what's going on in your mind and what you'd like to do on the screen or in virtual space and bringing it to the computer.

Unknown: VR, great example of that.

Jon Radoff: It's bringing the computation experience, the immersive experience closer to us. Wearables and VR with gesture recognition is going to continue that. We're using reality where we're borrowing a lot of the learning from VR, but using it to enhance the world all around us with more information, objects and virtual enhancements to our experience of the real world. This may even be brain computer interfaces down the road. But the rise of cybernetics, I think the easiest way to think of it is we're just cutting down the space from the idea we have in our head to the computer and then taking the computer's output back into our minds. Not unlike what I was saying about no code and low code platforms, it's that direct from imagination experience. This is the direct into the imagination experience. The next megatrend I'm going to talk about is the enormous increase in technologies that let us simulate reality. Once again, games will really lead the way here. We are in the process right now of going from what's called shader programming, which is a collection of hacks and tricks basically to create the appearance of a 3D space, to actually using the physics of light and the way photons bounce around in a space called ray tracing. It's been done in movies for quite some time. Games haven't been able to do it as much because it's very computationally expensive. But in the recent past over the last one or two years, we've made ray tracing accessible to consumer-grade computers and that will only continue. Simulating reality is really about using real physics, real data to inform our simulations in virtual space. AI modules are going to play a role in this as well because they'll help with the simulation of components of this such as fluid simulations and traffic patterns. Good example here outside of games is Nvidia is creating a collaborative metaverse they call the omniverse that all architects, designers and engineers to build spaces together while leveraging these AI modules not only to simulate but predict how they'll operate. There's a legion of companies right now we're building bridges between the metaverse and the physical world. This means creating digital twins of objects that exist in physical space and bringing that data into our simulations. Companies are building that internet of things or what is probably better described as the internet of everything because it's not just the objects and the sensors, it's also people and processes and everything that makes up our world. We're going to be bringing this data into the metaverse in a real time way so that you can then build applications off of it and around it. All right, blockchain adoption is another mega trend that could not be ignored when we're talking about the metaverse.

Unknown: Just to put this in quantitative terms with Ethereum and only four years we've gone from

Jon Radoff: about a million Ethereum addresses to 165 million Ethereum addresses and this is growing an average of about 100,000 new addresses per day. Why does this matter? The big thing with respect to the metaverse is smart contracts and that's where Ethereum really innovated. They created a way for people to, without trusting each other, be able to be anonymous counter-parties to engage in financial transactions. They don't have to trust each other. They also don't have to trust a central authority to do it for them. Why this matters is that in the metaverse, people will be able to create experiences where you can trade virtual property with each other. You'll even be able to add new functionality to someone else's world or someone else's metaverse. A lot of this is going to require smart contracts to govern all of these exchanges, to do it in a way that doesn't come back to simply having very powerful centralized authorities to do it all for you. That means we're going to need a lot more wallet infrastructure, transactional infrastructure, all of that is being built in open source on blockchain technology right now without you needing to build it yourself. That's another reason why this is such a powerful mega trend. It's because it's disruptive. You don't have to build those marketplaces. You don't have to build a digital wallet ecosystem anymore. In the past, if you wanted to make a game or a metaverse where the complex economy around it, you'd have to build all of that stuff yourself. You're not going to need to do that anymore and that's why blockchain adoption in particular is going to be one of the things that shapes the metaverse. The last mega trend I'm going to talk about is accelerating distributed networks. I'm talking about 5G, 6G and beyond. So 5G is going to improve mobile latency, speed and concurrency by an order of magnitude, but it doesn't stop there. 6G is coming after that. 6G will do it by another. 10 to 100x. This is important because the metaverse is about real time interactivity. It's a little different than the mostly transactional activity that happened around looking at webpages or making purchases and whatnot. That means that latency has to be low. You have to have a lot more current connections. The bandwidth requirements to pump this data around is much greater. This also includes taking computing power and putting it closer and closer to you. So today we have cloud computing, which has allowed companies to build stuff out there in the cloud without having to invest in big data center operations. But now we're going to see that cloud pushing a little bit closer to you. It's going to be in your local city, maybe even down the street, maybe in your house, maybe even in your pocket, is where a lot of the distributed computing infrastructure is going to take place.

Unknown: This is really a requirement for all the things I've been talking about in the metaverse,

Jon Radoff: whether it's augmented reality, AI applications that need to do a lot of localized, prediction and analysis. E-sports requires low latency and high speed links. The accelerating speeds of these distributed networks and the increasing distribution and decentralization of them is going to be key to allowing us to build many of the applications of the metaverse here in the future. All right, so in conclusion, an important point to make is the metaverse is already here. This is in a future that we're building towards. The metaverse exists now, but it's accelerating. And all of these trends that I just referred to, it's going to power it forward. And we're going to see enormous change over the next decade.

Unknown: It's a really exciting time.

Jon Radoff: I love talking about the metaverse. And if you enjoyed this, I suggest you check out my building the metaverse blog, or the slide deck I've compiled that goes into more of these details and trends. I'll include links to these resources along with the video. And if you're interested in the metaverse, please do click those subscribe and notification buttons so you can get more updates. Until then, thank you for watching.