Manish Nigam: Emerging technology trends in the metaverse era
The remarkable growth of the metaverse is creating an evolving framework for asset ownership in the form of non-fungible tokens and challenging brands to meet consumers in virtual worlds. We sit down with Manish Nigam, Head of Global Sector Research, Credit Suisse, to discuss the metaverse ecosystem and why investors should pay attention to this fast-evolving trend.
Metaverse traces its origin back to early video games such as Habitat on the Commodore 64 in the 1980s. Second Life has been around since 2003. These early versions of inter-connected virtual worlds never really made it into the mainstream. What drives this new surge in interest – and investment – in the metaverse concept? Why would it be any different this time?
Manish Nigam: In technology, it is not at all unusual that people get excited about the concept years or even decades before the real nuts and bolts of the technologies that are needed to enable the concept are ready. Electric cars are one example, as is the smartphone. We believe that basic technologies needed for delivering the metaverse era are all coming together now including the computing power, display technologies, network infrastructure and related software technologies. Though, a lot more work still needs to be done.
Will the major tech platforms be able to keep control of their “walled gardens” or will the metaverse be more decentralised than the internet we know today?
Manish Nigam: At the early stages of any major technology cycle, it is always very difficult to predict the big winners. For example, in the early days of the mobile internet and smartphones, in say 2005, Apple’s iPhone didn’t even exist, nor did some of the major big tech companies say from social media. However, it is reasonable to say that the metaverse’s prevalence will mean that current mega tech companies who fail to adapt to the era, will lose out to those that do. It is also fair to predict that there will be completely new mega-tech companies emerging over the coming decade, leveraging this metaverse era.
Blockchain will probably remain central to the evolution of the metaverse, but one needs to wait and watch how the usage of cryptocurrencies develops over the coming several years.
How much more data and processing power will be needed for the metaverse to really take off? What segments of hardware look especially attractive?
Manish Nigam: We are still at an early stage in the development cycle of the technologies relating to the metaverse. Having said that, for certain applications, technologies are already ready – though for significant consumer adoption, price points for some of the products are still quite high. There are several niche applications available for business use as well and those could take off faster as businesses tend to adopt based on total cost of ownership rather than just the upfront cost. At current stage semis catering to high power computing, providers of display technologies that work at very high refresh rates, downstream companies making the few successful augmented reality (AR) and virtual reality (VR) products and select tech companies leveraged to the infrastructure buildout appear attractive.
One of the most exciting metaverse ideas is the ability to transfer value between the physical and virtual world. Do you think the metaverse’s fortunes are tied to the adoption of cryptocurrencies and digital assets?
Manish Nigam: The objective of making metaverse interoperable and decentralised means that there is a natural demand for blockchain based technologies. Currently, given how demand has showed up from say web3.0 use cases and given that cryptocurrencies are one of the more widely available implementations of blockchain, we are seeing a quick adoption of cryptos. While we believe that blockchain will probably remain central to the evolution of the metaverse, but one needs to wait and watch how the usage of cryptocurrencies develops over the coming several years.
The AIC is celebrating its 25th anniversary this year. How will technology change our world in the next 25 years? Do you think we’ll still be talking about the metaverse in 25 years’ time?
Manish Nigam: I wish I knew! I attended the first AIC but could not have forecasted the dramatic innovation and changes that technology has delivered over the 25 years since then. What we can say is that changes and innovations over the next 25 years are likely to be even more dramatic than what we have seen in the last 25 – that's just how the nature of technological development is! Just as we spoke about the internet at the first AIC and are still speaking about it now, we think we would still be speaking about the metaverse in 25 years’ time, though what we mean by the metaverse today will end up being quite different to what we will mean by the metaverse in 2047.