Episode One: Metaverse Hype Trends

Transcript of the episode

Eric Chevallet: Hi everybody, this is Eric Chevallet with BearingPoint, and you are listening to 5 Minutes Ahead. Today, I have the pleasure to have with me Alex Gibson. Alex, how are you doing?

Alex Gibson: How are you, Eric? Good to hear from you.Eric Chevallet: I'm doing OK, thanks. Alex, today I wanted to talk with you about the Metaverse and what we see. But first, can you tell us a little bit more about yourself?

Alex Gibson: Yes, so for people who don't know me, I'm working in an academic context. Head of Digital Marketing at Technological University Dublin, where I oversee undergraduate and postgraduate courses in the broad area of digital marketing. We also run executive education courses.

Prior to working in the marketing function academically, I had spent a long time in the tourism and hotel faculty and my industry experience involves working with companies such as Holiday Inn, Nabisco, and a company that I know will be very familiar to you, Eric, namely Danone, the French multinational Food Group. I've had a particular interest for more than a decade now in augmented and virtual reality, particularly how they interact with marketing.

I've been researching and writing in that area and also produce and curate an annual conference called ARVR Innovate, and I'm delighted to be able to say that BearingPoint is working with me as a gold sponsor this year, so that's something very much to look forward to later in May.

Eric Chevallet: OK, so I guess, Alex, I don't need to ask you if you have experience in the metaverse or in metaverse-like experience. What can you tell us about what's happening and what are the trends you're seeing in that field?

Alex Gibson: I mean, my experience goes back a long time. I suppose when we talk about how we conceived the metaverse today, we can see the genesis of the idea going back into Second Life, which some listeners will be familiar with.

I certainly was and spent a bit of time in Second Life. In fact, my alter ego, which was called Locon Ulysses, I think he still levitates above the famous Virtual Irish pub in the Second Life environment, and that certainly piqued my interest in the idea of working in a parallel universe, as it were, to the real world. The concept of being able to work and move in a cyber manifestation, namely an avatar, and interact with people in real time who may share a similar interest. At that stage, it was not drinking real Irish beer, for which I would thoroughly recommend people to try, but it was the social dimension and also the fact that there was live music in the event.

Fast forward to the last couple of years in my academic work, I've taken a keen interest in how virtual spaces can be used for sharing information for learning. The COVID experience was a catalyst for me with my own students. So, for example, we moved from working in Zoom and Teams, which we still do with students and other virtual learning environments. One of the biggest successes I had in the early days of COVID was working with some of our first-year groups in a platform called Mozilla Hubs where students could make presentations on virtual screens, show their PowerPoints, and they could be in a virtual Amphitheatre, and they were able to, as it were, move around that virtual Amphitheatre, see groups in different areas presenting to each other, and that was a real eye-opener for me in terms of the power of this.

Perhaps one of the most surprising things, Eric, was how people used or played within the Metaverse. It was a surprise to me. To me, there was a little learning there in the sense that a lot of it replicated what you're trying to do in education, maybe not quite as well, but students really did engage with the fun side of this. For example, many students were enthusiastic about creating different types of avatars for themselves, and they were often found flying or levitating around the lecture room or writing graffiti in the air. When I talked to students about this, they said it was a refreshing change from their lived experience of working and studying in a small bedroom on a 2-dimensional screen.

This lesson of how we interact with each other in the digital environment and how it can be much more in a 3D context stuck with me and has led me to continue exploring how the Metaverse can be used, in what context, who's using it at the moment and where we're seeing immediate opportunities and returns. We probably get to some of those in our conversation, I guess.

Eric Chevallet: We will discuss that further, but first let me ask you: Do you think they were learning better or remembering more by working like this, or was it the fun part of flying and tagging things on the roof that interested them the most?

Alex Gibson: That's a good question. Obviously, there is a lot of academic research on this topic, some of it dating back 40-50 years. One idea is that you learn better by doing rather than just reading or seeing. I could see that to some extent with the students.

We didn't conduct any scientific assessments, but my conversations with them were interesting. They expressed feeling engaged and able to focus on the activity without as many distractions as they would have had with a traditional desktop setting. It's important to note that most of the students experienced this on desktops, not VR headsets, although some did have VR headsets and found it to be a great way to focus on specific learning points or activities.

Eric Chevallet: That's true, and in our work with clients, we've seen that VR training can be much more time-effective compared to traditional methods. For example, a 2-hour classroom training can be achieved in 45 minutes with e-training, and in just 29 minutes with VR training.

Alex Gibson: That's interesting.

Eric Chevallet: Yeah, the fun part of that is the emotional connection to the learning content. In a classroom or e-training, the engagement rate is estimated between 4 and 5, but it reaches, in VR training. It's four times better in terms of the connection you have with the training.

Alex Gibson: Yeah, we didn't conduct that type of research, but that echoes what I've heard. I have a quick question for you, Eric. Do you see a distinction between training and education? Because we often lump them together, but I think there's a difference.

Eric Chevallet: What do you mean by that?

Alex Gibson: Well, I mean that training can be specifically focused on encouraging people to enhance their skill sets in certain areas or processes, for example, while education may be more directed at knowledge sets. In a lot of academic contexts, the focus has traditionally been on education.

Eric Chevallet: I see what you mean. Yeah, actually, the way we are looking at it is a lot broader than that because education, learning, or change management is about how people interact and what they learn or how they remember the positive aspects of that interaction and what they take from it. So, when we talk about interaction in a metaverse-like experience, whether it's one or the other, what matters is the level of interaction you have with your peers and what you extract from it. Therefore, we categorize it differently in various formats, content, or designations. But at the end of the day, we are convinced that at the heart of it is what happens between people and the connection you establish with the content.

Alex Gibson: Yeah, I agree with that. And have you seen this in your own experiences? For example, I'm working on initiatives with students to improve their oral presentation skills.

We're collaborating with a software provider, and currently, the training is somewhat linear and individual, even though there may be representations of avatars in a contextual setting. It's not particularly dyadic or group-oriented. I do wonder if there was more interaction, the learning experience would be even better. So, with your clients at BearingPoint, are they using VR as a training tool where multiple people can be in the same 3D environment?

Eric Chevallet: Yes, we are, and they aim for that because it's what enriches the metaverse-like experience. The fact that you can have several people in the same room, even if it's a digital room. Also, about the avatars that we discussed earlier, some clients told us during our research that when using avatars that are like bots without real facial expressions, they summarized that as being on a Teams meeting without your camera on. So, avatars have a significant role to play in the level of interaction and how they connect with people. At least they can say, "Oh yeah, I know this person from Teams, and now I see them. I'm with them," even though it's a cartoon representation through their avatar. But it still works better.

Alex Gibson: Yes, that's one of the things I think surprises people. Unless you get into that environment, as I was with students or as you are with clients, it's very difficult to convey the idea to people that you do have a sense of presence. Even though you're interacting with an avatar over a short period of time, you forget that and engage in a more natural type of dialogue with the person.

Eric Chevallet: True. You know, we are currently having discussions with some companies about behavior training in a context where they need to train their workforce to face client aggressiveness. How do you teach people what it means to interact in such situations? As an illustration, I experienced it with a client. We were in different physical locations, wearing headsets, and we met in VR, in a Metaverse-like experience. She was about 1 meter 20 centimeters away from me. We were having a natural discussion, face-to-face sort of speak. Suddenly, someone else in the meeting put on their headset and joined us in the experience. However, that person wasn't comfortable with the controller, so he ended up standing right between us, facing the screen but perpendicular to our conversation. She felt the person's presence, like he was just 30 centimeters away from her face. She reacted like, "What are you doing? Get out of my space!" That's how emotional connections are formed, allowing for various behavioral training opportunities.

Alex Gibson: I noticed that even in the example I mentioned earlier, where we're working with students on improving their oral presentation skills. Even in that relatively one-dimensional type of training, where there's no interaction with other people, you can still deduce a lot from hand movements and body orientation. That can be part of the feedback loop in that specific type of training.

I want to ask you about the current state of the metaverse in terms of clients. My sense is that there was a massive hype about it six months ago, and now we're in a context where we are on two levels. First, the hype is predictable to decline. The Gartner Hype Cycle tells us that. But there's also another catalyst, which is the massive rise of interest in artificial intelligence in recent weeks.

Eric Chevallet: Yes, I think two years ago, the hype was high when Facebook became Meta, and everyone started talking about the metaverse. Like every trend or hype, it needs to be replaced by another one. Currently, AI is a big one, and we don't hear much about the metaverse.

What people need to understand is that the metaverse, as described in Snow Crash or Ready Player One, a universal digital space where we can meet everyone as if we were walking down the street, doesn't exist today. Replicating the real world in a digital world barely makes sense. What we see, though, is two types of people. Some still don't understand or perceive the real value behind it, while others are already convinced of its value. Those who see the value have more specific use cases in mind. They know what they want to do and are now focusing on scaling it rather than figuring out what it means or what they can do with it. One clear trend emerging is the rise of the “intraverse” (internal metaverses) within companies. These metaverses will offer various experiences such as learning, product showcases, or exploring new offices. There are many things that will come but, limited to the company's scope and not necessarily open to the public.

Alex Gibson: Yes, I agree. I mean, do you think that a factor behind this is that, you know, as we move out of COVID, companies are encouraging and more open to travel within the organizations? But that, in turn, is making them conscious of just how big the travel budget is, and they are looking for new ways of reducing that. In particular, for internal meetings, there will be more focus on intraverse, as you describe it.

Eric Chevallet: Well, actually, there's a combined factor behind it because I think that, first of all, we saw during COVID that we could stay home and still carry on business. That's a fact.

We also saw that Teams was okay, but 8 hours a day on Teams or Zoom or whatever, it's kind of annoying. So, you need to have that presence and that physical meeting. Meanwhile, there's another trend unrelated to the Metaverse that appears, and all the companies are focusing on it: it’s sustainability. And when you talk about sustainability and traveling, you see that it has an obvious impact in terms of CO2 emissions. Meanwhile, when we talk about VR, with the fact that it is a new device, it also has a huge impact. It's seen as a negative impact on sustainability. But the real question is, how do we make sure that we counterbalance this because the world is becoming more and more digital. That's a fact. We can fight against it, but it will be hard to go against that. How do you counterbalance that with potentially less travel or more efficient communication between the team without being face-to-face? And certainly, last year, everyone saw a jump in terms of travel costs because people had to meet; they were missing it. How do you balance it in a way that is sustainable and responsible, basically?

Alex Gibson: I don't know how much you can share with the audience in this podcast, but you know what introduced me to BearingPoint, first of all, was a visit to your offices here in Dublin, where I was really enthralled with the work that you had been doing with the Leinster Rugby. And I mean, that's work that's ongoing, but it's also work that you're using as a sort of sandbox to test out some of your own theories or frameworks or some of the points that you've just made there.

Eric Chevallet: But you know, actually, the key thing about that, and I'm pretty sure we're going to have a podcast dedicated to that topic soon. But the main reasoning that Leinster had at the beginning was to say, "Okay, my audience was actually coming to the stadium and generating my revenue. They are coming less and less, and post-COVID, it's harder to motivate them to come, and on top of that, it's a niche crowd." So instead of fighting all over the place to say, "How will I get more people in the stadium?" They were more focused on, "How do I bring the stadium to them where they currently are, in the digital. And the younger generation? That's where they are." And on top of that, Leinster, being in Dublin, you will be more sensitive to that than I can be, but basically, their fan base is not only in Ireland; a lot are in London, a lot in the northeast US. So, they don't travel to come to a game. How do you bring that to them? And I think that was really the reasoning behind it. And that's why we had the Aviva Stadium, and that's why we showcased what we could do with that to test and learn how people would react in this kind of experience.

Alex Gibson: And I won't steal your thunder because I think you're right. It does deserve a separate podcast. But we've given people a taste of what it will be, and I know it would be a fascinating case study. I mean, Eric, you mentioned it there a moment ago, but you know that the audience is being on digital and increasingly digital. And as we look at Gen Z and Gen Y, we definitely are seeing that, aren't we?

Eric Chevallet: Yeah, we are, I mean, I just have to look at my children and how much time they spend looking at stuff on their phones. We're not talking about VR headsets yet, but you know that it's a way they communicate. It's the way they interact, and it's usually the first contact with anything new that goes through their phones, that's a fact. So how do you make sure you can capitalize on that? We see a lot of brands currently exploring, from a marketing standpoint, what can happen in metaverses like Roblox. This is because they want to engage them with their brand. They don't necessarily want to sell right away. But how do you work on the marketing side and how do you touch those new generations in a different way?

Alex Gibson: Yeah, I think that's so important, this idea that, you know, by connecting, as you say, not necessarily in a commercial way, but in a way that's building brand trust with some of these audiences. You know, brands, well, the smart brands, they're laying the foundation for the future. I was reading that, at the end of 2022, the Roblox player count was as high as 58 million daily users. So that's an enormous market that's growing up almost, you know, seated in a 3D environment, isn't it? And that's why brands, I suppose, like Vans, Sunsilk and Spotify, have already engaged with a brand like Roblox to work with them on gaming context, for example.

Eric Chevallet: Absolutely, but you mentioned in your introduction, Alex, that you had a focus on marketing. What do you think the metaverse could bring, or metaverse-like experiences? Because when we talk about Roblox, it's not immersive yet. It's a 2D metaverse, but what's your take on the marketing story?

Alex Gibson: Well, I think you have to look at push and pull factors here, Eric. In the sense that when I talk about it as a sort of a push factor that's pushing companies like Meta, it's obviously the challenge that they face in terms of their current revenue stream and business models around advertising.

So, they are looking at where the audience is likely to migrate to and, therefore, how do we play in that space? And they've made a big gamble, obviously, a billion per month, seemingly, for a long game that even by their own admission, is a 5 to 10 year play. And I think that's important to state. I think a lot of, maybe one of the reasons that we were in the hype cycle is there might have been a degree of naivety among some commentators in terms of how the metaverse, and when we say the metaverse not saying “the” as a singular metaverse, might evolve.

Personally, I do think a lot of brands are going to look to play in this space. The obvious ones would be some that I've mentioned who may be in the fashion space, brands that are very clearly oriented around Gen Z and Gen Y audiences who they don't need to convince in terms of engaging in the space.

Obviously, a big factor still is form factors. You're quite right, Eric. Most of these people are engaging in it in a 2D context for most of them. But you know, if we take a medium to long-term perspective, I do think form factors like the next generation of VR headsets or mixed reality headsets will be a game changer. It's realistically going to take a time for that to happen and the B2C market that we're talking about. Obviously in the B2B market, and you guys play in that space, there's a lot of things happening right now, whether it's training or whether it's meeting spaces, hazard training, manufacturing, prototyping, lot going on right now. But in terms of the B2C opportunity, which is huge, it's probably a little bit away yet in terms of what we need as form factors that are going to be easier for large audiences to access, I think.

Eric Chevallet: Yeah, we will. And on top of that, we need to make sure that we're not creating a negative impact from a sustainability standpoint. Going back to my comment on having a new device. And if the mass experience is on the cell phone, we are conscious of that. Meanwhile, we also need to look at whether it's better for the planet to buy a skin for your avatar, which opens the door for the fashion industry to extend their offerings without negatively impacting sustainability. So, there's a lot of angles to be done to combine both topics.

Alex Gibson: And we didn't even get into the discussion around, you know, the ethical or privacy and data and all of those things. They are hugely important dimensions to this too.

Eric Chevallet: But that's going to be a podcast on its own as well. Alex, I see time is ticking. One question for you. What do you think we're going to see? Because you said earlier that at the end of May, you have the ARVR innovative show happening in Dublin. What do you think we will see this year? Can you tell us a little bit more about what's to come?

Alex Gibson: So, first, I am delighted that BearingPoint is working with the conference this year. I think it's a fantastic partnership.

I think one of the big challenges that a lot of delegates face these days, Eric, and I know it's something that you're very well placed to talk about, is how to move from AR/VR being a pilot within the organization. We have a lot of delegates who are in innovation labs, and I think the challenge they face is taking it to the next stage, scaling up. I hope that's something that yourself and the BearingPoint team will be able to give them some good advice, and I'm sure...

In terms of where I see things evolving in terms of the conference, we're excited about the expanded nature of the conference this year. We have delegates from seven countries, including yourself coming over from Paris, from the Immersive Lab, and sharing your insights. I think this year, for the first time in a few years, there will be a strong marketing panel. I do think that the marketing community is now getting engaged in this space and is more receptive to it, as we mentioned earlier. We will have good case studies and speakers in that area.

We have speakers from the Augmented Reality Enterprise Alliance who have been regular participants, and they always run a great panel on how to use AR in an enterprise context, particularly in manufacturing and industrial sectors. Those areas are, as you know, Eric, ones where VR and AR are currently being deployed at scale in many big companies, such as plane manufacturing, pharmaceuticals, and computer chips. Those areas actively use these technologies.

In terms of where we're going to be in the next six months, who knows? I mean, the big topic of the conference, obviously the main theme for most people, will be how artificial intelligence interacts with these tools, and that could be another very good podcast. I'm sure it's just how it's going to play out in terms of things like avatar creation, for example, virtual world simulation, a whole host of natural language processing models. It's a huge topic, so I know delegates will be interested in understanding that and how it can help them deploy more at scale.

I guess there's a huge interest, and you're as well placed as I am to say, "Well, what will Apple do in the market?" But there's much interest in what Apple will or won't do or announce this year, and that could be significant. Obviously, whatever form factor they release is likely to be relatively expensive, relatively niche, maybe enterprise-focused, but the entry of a company like Apple into this market, I think, will be very significant.

Eric Chevallet: Yes, I'm sure they will have an impact. And there's one thing for sure that we need to remember from Apple is that they never use the word "metaverse."

Alex Gibson: That's very true. They will never know.

Eric Chevallet: It's a confirmation that we are talking about features or metaverse-like experiences, but the metaverse as such is still a long time away from that and there's a lot on the path to build, only within the B2B space or in the travel space, basically.

Alex Gibson: Yes, there's a lot to discuss in what's happening in the future, but also in the present. So, I do hope that lots of people will make it their business to come and meet you, Eric, and the BearingPoint team in Dublin on Friday the 26th of May, and people can get tickets. The early bird tickets are still available at ARVRInnovate.com.

Eric Chevallet: And that will be the opportunity to actually have a real Irish beer, not in VR. Okay?

Alex Gibson: That's so true.

Eric Chevallet: Thank you, Alex, for the time, and we shall talk soon. To all, bye-bye.

Alex Gibson: Au revoir.