Tens of thousands of people from the technology world descended on Las Vegas this week to see electric cars that double as gaming hubs, live-streaming ovens, even a self-driving pram.
Away from the intriguing offerings, however, one concept lurked in the background: the metaverse.
Steve Koenig, of the Consumer Technology Association, an American trade body that runs the CES conference, said this year there would finally be “substance forming around this trend of metaverse”.
He was careful to add a caveat. “Any dialogue around metaverse is very likely to be met with scepticism,” he said. “And that’s OK, because we’ve seen no shortage of marketing spin. The metaverse as a term is still a speculative one.”
As the largest annual tech conference came to an end, it was worth assessing what had the upper hand in the metaverse, substance or spin?
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In its simplest sense the metaverse is an immersive and interactive 3D experience. This could be total immersion (virtual reality) or partial immersion (augmented reality, or AR).
Deep pockets
For the average person, the metaverse means little because they need to strap on an expensive headset or early stage AR glasses to enter it. Paolo Pescatore, an analyst at PP Foresight, said: “There’s no demand among consumers to fork out so much money for a clunky device without a strong content offering.”
The research company NDP Group said sales of VR headsets were down 2 per cent last year. Plenty were still on show in Las Vegas. HTC, a Taiwanese company, launched its Vive XR Elite on the market at £1,299. A demonstration for The Times showed a fitness game that tested boxing speed and a 3D drawing app used on a floating canvas. For business, there was the Magic Leap 2, an AR headset that starts at $3,299.
The US start-up OVR presented a headset that allows users to smell in the virtual world through an odour-filled cartridge that pairs over Bluetooth with gaming systems.
Microsoft’s HoloLens2 is an AR device aimed at industry and the military, which starts at $3,500. One feature allows the wearer to change brake callipers using the 3D training on a headset.
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TCL, a Chinese company based in Hong Kong, unveiled prototype glasses that can give simultaneous translation.
Absent-minded
There were two elephants in the room. Meta, the biggest player, was not in Las Vegas, preferring its own launches, and Apple’s entry into the market is still just a rumour.
Leo Gebbie, a principal analyst at the research company CCS Insight, said: “The lack of metaverse discussion at CES partially stems from the absence of Meta. The social media giant is the cheerleader behind the idea of spending more time in virtual worlds. Without it none of the other technology leaders seem keen to take up the baton.”
Meta’s voice is still loud — a $10 billion-a-year bet that has spooked investors and hit its share price. The money has enabled it to bring out a cheaper headset, the Quest 2 for £400, which has sold 14 million units, according to estimates before Christmas. Only Pico, a Chinese company, can match that price.
HTC, whose headset costs £800 more, is keen to point out why. Thomas Dexmier, HTC country manager in Australia and New Zealand, said: “Data privacy has a cost. We’re trying to educate the market to understand that your Quest 2 is heavily subsidised by Meta. The loss they can make on the hardware, they make up by using your data to send to advertisers. This is a very different philosophy to us . . . delivering the best possible experiences and hardware to customers at a price point that is the actual cost of the headset. Right now nobody is questioning, ‘What’s the cost of an iPhone Pro Max?’ ”
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The answer was £1,199. And as CES started there was another leak of the headset Apple is developing that would enable the user to switch between AR and VR, like the HTC model.
Gabbie said: “There’s no doubt that if one company could transform the metaverse market overnight, it’s Apple. It has a hugely loyal fanbase. If Apple were to launch a device we expect that it would perform very well.”
Down to business
Although the consumer has yet to embrace the virtual world, businesses are keen. Meta’s launch of the $1,500 Quest Pro this autumn was aimed at the white collar worker. Many metaverse companies have followed, aware that the mass market is not quite ready. Magic Leap closed its consumer division in 2020 and hired as chief executive Peggy Johnson, a former Microsoft executive.
Daniel Diez, chief marketing officer of Magic Leap, said: “Meta’s [Pro] announcement is validating what we did two years ago: pivot the company into the enterprise space. At the moment, it’s businesses who can get the most value.”
He highlighted the collaboration with Brainlab, a German company. “It does unbelievable 3D images so you can take a scan from an MRI and blow that out to look at a patient’s anatomy.” Its most celebrated use was training surgeons in the US to separate conjoined twins.
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Diez cautioned against seeing the metaverse as purely virtual. “With augmented reality you can still see your physical world around you and we can integrate or merge that digital content into the physical world,” he said. “That’s the ultimate promise of the metaverse. It won’t be a complete and total escape. It’s going to be this merging of the physical and digital where that digital content lives as part of your regular life.”
For that to come true, AR glasses must fit all the technology into a frame with decent battery life. Most ventures are primitive or prototypes. The main hope is that faster mobile speeds with 5G and 6G will enable much of the computing power to sit in the cloud, to make the glasses lighter.
Back to reality
Koenig defines metaverse widely to include “an online experience that has an elevated sense of immersion”. He really means shopping, where retailers are starting to embrace AR. But the metaverse section at CES was small compared with the displays of TVs and cars. Gaming has been the other success.
Sony unveiled its PSVR 2, a Playstation headset for £530. The analysts Enders said one of the most profitable companies was Roblox, an online gaming platform that pays out $150 million to developers each quarter.
“In reality these latest developments were expected,” Pescatore said. “Even Hollywood has moved on from the early failed attempts in VR.”
