Metaverse? Let's talk! - Interview with Simon Graff

matthias

Hello Simon and nice that you found the time to talk to us about the Metaverse. Perhaps you could introduce yourself briefly.

simon

My name is Simon Graff, I am the founder and CEO of the strategic Metaverse consulting agency FOR REAL ?!!. We explain to people and companies how they can use Metaverse technologies to strategically position themselves in the Metaverse, create connection points and transform products and services. I am also chairman of the non-profit association nextReality Hamburg, which educates about the potential of immersive media and technologies. I like to do a lot of things related to the "metaverse" and the underlying tech.

matthias

Maybe we can start by explaining the general idea. What is the metaverse? Where did the term originate from?

simon

Very simply: the word metaverse comes from the novel "Snow Crash" from 1992, and describes a three-dimensional, virtual, persistent world in which people live, work and so on. The novel certainly describes this as a dystopian escape from the not-so-beautiful reality. Currently, the Metaverse is more of a vision, which of course is not portrayed in such a negative way by any of the current actors.

For me, the metaverse, which of course does not yet exist, is simply the next generation of the Internet: a three-dimensional web layer that we can address with different devices. Whether it's virtual reality glasses, mixed reality devices in the future or, of course, classic screens such as notebooks, desktop computers, smartphones, and tablets. Period.

matthias

I think the topic has a bit of a hype at the moment, which does not mean that it is not relevant for the future in my opinion – quite the contrary. What are your experiences with that?

simon

I can only agree with you. There are of course regular hype topics like Virtual Reality back then. Everybody wanted to do something with virtual reality. How substantial the whole thing was remains to be seen. The same thing happened again with blockchain and now again with NFTs.

The typical thing: attention, mega-hype, inflated expectations, crash, consolidation of the market. Of course, we will experience that here as well. Currently, the metaverse describes a vision.

Of course, there are underlying technologies and trends: Interactions in three-dimensional space, exchanges with people via voice and text chats, autonomous economies, content creation. That gives a pretty good insight into what there is to expect when metaverse platforms become mainstream. But you’re right: That doesn't exist yet. However, it can’t hurt to start thinking about it and develop a – say – spatial strategy. Ask yourself: How can we interact and position ourselves there on the long run in terms of design, products and services, but also content? Because these platforms will not disappear.

matthias

It's exciting that you mention Spatial Strategy. In the blog article I'm writing, I called that 3D Data Strategy. Away from the pure metaverse idea, there are already very real uses of 3D content at various touch points. AR and VR are the most prominent ones, but there are also a lot of other things you can do. I think it's very important to have a good pipeline for your 3D data.

In five to seven years: one metaverse or many different ones? What do you think?

simon

Many! Simply because there is such a multitude of stakeholders on the way, each with their own agenda. The western world alone has big players like Microsoft, Meta of course, Snapchat and Niantic with the Real-World Metaverse. And that's not even including what's happening in East Asia, specifically China: Alibaba, Tencent, Baidu, all of which have their own "Metaverse" solutions. There are so many different approaches, it's perfectly clear that it’ll remain a fragmented market.

matthias

I am an AR enthusiast, but I still believe that the Metaverse will be predominantly VR based in five to seven years. Which doesn't mean we won't get AR overlays in various applications, but I'm assuming it’s going to be mainly VR. What's your take on that?

simon

The separation between VR and AR makes a lot of sense right now, but I think that is one of the biggest fallacies at the moment. We are talking about spatial computing, and whether it ends up being VR or AR will probably be defined by the use case rather than a hard separation between technologies.

For example: I'm looking for a new jogging-route. It's shown to me with AR in my smart glasses, perfectly matches my running habits, I can’t get lost. Then I come home, take a shower, and feel like gaming. I can put on the same device and start a VR application. That is already technologically possible, and it's starting to happen with Meta Quest 2.

matthias

If you look at a user or consumer adoption curve, like a Gaussian curve, where do you think we are in terms of AR and VR headsets?

simon

I don't think we're at the point of a lifestyle product that sparks feelings of "must have" yet. But I don't think we need to talk about use cases that much anymore.

The Meta Quest two is already selling well enough, there is a user base already. People use these things, for everything, just like smartphones: content creation, painting, sports, communication of course, video games, adult entertainment, whatever.

I don't think price is currently an issue. Even though I often hear, "It's still too expensive." Come on! A Quest 2 is €350. That’s the price of a Nintendo Switch but for a device that gets you into the "metaverse".

I actually think what mainly hinders adaptation is still that we're talking about a medium that is very abstract if you haven't experienced it. There's little need for discussion if people have seen it before. And yes, the devices need to get lighter, the resolution still needs to get a little better as well, but there already is a lot to experience.

matthias

What do you say to blanket critics and statements like "isn't this basically just another Second Life?" and "it hasn't caught on, who even needs this..."?

simon

Let's start with Second Life: There are currently more monthly active users than on all the hyped decentralized metaverse platforms. So much for that. One huge, huge difference is that the world we're in today is radically different in terms of computing. Back then, you had to fire up a gray box to log in, maybe even with a modem, only to walk through a world with jerky graphics.

What I want to say is that we live in a completely different world today: permanent connectivity and completely different use habits. Virtuality is a standard, we are always-on. Add to that the ease of use: I can do all sorts of things with my phone: play Roblox, I can connect with friends. That increases the potential user base for these currently emerging platforms – and you can see that impressively.

That's why that comparison is a bit lopsided. The really exciting thing is: What are people really interested in? Many of these topics are repeating themselves now, of course, but what is much more exciting is why they do. Why do value chains exist? Why do people want to buy things? And the answer is relatively simple: Because it all stems from our deeper human needs. I want to own things, I want to individualize myself, I want to set myself apart. All these things come from real life, these are human needs that we can live out in a totally different way virtually. If we take a closer look, Instagram, social media and the like aren't that much different, they're just two-dimensional.

matthias

The topics of consumption and speculation are being discussed a lot right now, anyway. I am also very skeptical about NFTs. Maybe that's simply because I haven't dealt with them very intensively yet. I am currently at an age and in a situation in life where I am fundamentally questioning our consumption a bit. Of course I also consume, and I like to - without question. I’m talking about the value of consumption for mankind. When I then see all the NFT stories, I think to myself: don't we already have enough speculation in the financial world? Is this such a good thing?

And then, of course, I also hear what you just mentioned. I am convinced that there is a human need for consumption and also for possessions and status. So: may it be better to grant that to people in a virtual world, so we do less of that in the real world. What do you think about that?

simon

I'm right there with you. That need exists and ethical and moral consumption across the board, in all walks of life, simply doesn't exist in capitalism. None of us will be able to manage that individually. That would require systemic and structural changes in our society and economy.

Especially when we look at how Generation Z no longer differentiates between online and offline. The question is what balance this will have in the long term and what technological structures we will use. I recently read in a report that said, the server structures we need for the internet already account for 10% of global energy consumption. If we’d rely on renewable energies, this would not be problematic at all – if!

Of course, it gets critical when you're on proof of work blockchains – that's garbage anyways. Every time I hear someone say "soon this will be switched to Proof of Stake" – Ethereum for example – "and then everything will be fine". We’ll talk again. It’s simply disproportionate, you can’t sugarcoat that.

If you can get away from that and move to normal digital infrastructures, then I think there's a chance that consumption stops being such a burden on the environment.

matthias

I am fascinated by the certainty with which people are predicting around in the field. I mean the metaverse topic with all the sub-terms that are floating around in this context, like NFTs, crypto and so on. It's said: there was the World Wide Web then came Web 2.0 and now there's Web 3.0, and I think to myself, "That was all named in retrospect and not before the technologies were even established."

simon

Totally! I do understand the desire for comparability in a business context though. And, of course, the need for investors to know if and how much the market is growing. What does Gartner say, what does Bloomberg say? But it's already starting to happen: Some people talk about "trillion dollar opportunities," while others talk about "four hundred trillion”. In the end, it's just relatively dull coffee-table talk based on a few parameters. Some people try to derive it from elaborate mathematics, but that doesn't change the fact that there are simply a lot of imponderables. To be honest, I also use this data because it can of course provide me with argumentative fodder in certain situations. But you should take it all with a grain of salt.

And of course there are probabilities. If you rely on a certain set of empirical values that you have and with a certain expertise, you can gamble. We'll see.

matthias

Exciting! I'm looking more at the topic of Spatial Web and the possibilities of 3D representation on the Web that already exist today. I see a huge potential for companies to make sales and present products in virtual showrooms. I would just like to hear your opinion.

simon

I can only fully subscribe to that. In that context, we also have reliable real-world parameters. For example, that conversion really works much better for real products via Snapchat filters, for example. There was a study by Shopify that said 40% of users prefer augmented reality enhanced websites, where they can project products like a Peloton trainer into the room to see how it looks and feels. You have to remember that we are three-dimensional, haptic creatures. And looking at four-dimensional cuboids or rectangles in order to open up products is not an ideal situation.

Of course, there is an incredible amount of potential here – even now. Once we're on our way, we can of course think ahead in the direction of purely digital products. Why shouldn't Ikea also sell furniture in the metaverse? Lowe's in the U.S. is doing that now. They are starting to make their products Metaverse ready because that's of course another revenue stream. And that brings us back to Spatial Strategy. If I have these assets, if I think three-dimensionally, work three-dimensionally, then I'm able to act. I am convinced that this will become increasingly relevant.

matthias

Especially in the industry and B2B contexts, however, are currently still full of very big reservations. How do you think companies can overcome their fear of taking the first steps?

simon

Of course, companies have certain structures, guidelines and compliance rules, but often it's also about a dialog on a personal level. At this point, we first have to take away skepticism and make the topics tangible and experienceable. No matter whether augmented reality, virtual reality, metaverse, or NFTs. And then clearly present the added value without completely neglecting said skepticism. There are, of course, legitimate questions, especially in Germany and the EU, where topics such as data security are very present. German companies will probably never operate on Decentraland or other U.S. platforms with critical internal data; it’s simply impossible.

I think it is very, very important to have answers to these, very valid, challenges. The key to all of this is creating space for transparent, eye-level dialog.

matthias

That's a good closing statement. Thank you for your time and this insightful interview, Simon!