Investors brace for metaverse, the next big thing in tech

As the Big Tech, including Apple, Microsoft and Facebook parent Meta Platforms, is racing to build out the metaverse, the immersive digital world is being touted as the future of interactive digital technology.Investors are already interested in the commercial potential, so much so that Facebook announced on October 28 that it had changed its name to Meta.Of late, Nike has joined the wave of brands buying into excitement over virtual goods as the sportswear giant announced it has bought RTFKT, a company that makes digital sneakers. The hype has led even to feverish predictions of a virtual reality future to bet big on digital real estate.In early December, New York-based company Republic Realm announced it had spent a record-breaking $4.3mn on digital land through The Sandbox, one of several virtual world websites.And days before that, Barbados announced plans to open a “metaverse embassy” in Decentraland.Going forward, in a wider sense, the metaverse will soon be a place to not just buy virtual goods and meet avatars, but to get essential public services, as governments prepare to enter the rapidly expanding digital world.The city of Seoul and the island nation of Barbados earlier this month said they will enter the metaverse to provide administrative and consular services.Other cities and countries are seen to follow suit if the technology becomes more mainstream.The metaverse is a virtual world that blends aspects of digital technologies including video-conferencing, games like Minecraft or Roblox, cryptocurrencies, e-mail, virtual reality, social media and live-streaming.In simpler terms, the metaverse promises to be more immersive and visual than online shopping is today. Instead of looking at a pair of pants or shoes on the phone screen, you (or your digital avatar) could try those clothes on and see what you look like before buying them. For investors, the potentials are seen immense.Roblox’s (an online game creation system developed by Roblox Corporation) tripling of value from its March listing to Facebook’s name change to Meta Platforms have showed the metaverse is the next big thing in fast-evolving technology. The Roundhill Ball Metaverse ETF, an exchange traded fund focused on the theme, surpassed $500mn in assets under management on November 17, having doubled in just two weeks.“Over the coming decades, the metaverse has the potential to become a multitrillion-dollar part of the world economy,” according to Epic Games CEO Tim Sweeney.The global metaverse market is expected to reach about $6bn this year and nearly $42bn by 2026, according to research firm Strategy Analytics.On the flip side, there are caveats too.Tech companies’ mostly dismal track record on personal data and policing offensive content has long been under scrutiny.True, metaverse is in its infancy, but industry watchers are raising alarms about whether the nightmarish content moderation and data security challenges already plaguing social media could be even worse in these new virtual- and augmented reality-powered worlds.“Cybersecurity, freedom and protection of information, and online safety are issues that governments are already interested in, and this list can be expected to grow if and when the metaverse becomes an everyday experience for people,” according to Steve Benford, a professor of computer science at the University of Nottingham.