"Metaverse" must occupy a place among the hottest new words in 2021.

"Pretentious mystery", "nonsense" - but when it comes to this high-frequency concept, the public's evaluation seems quite complicated, which is in sharp contrast to the craze of Internet technology companies investing heavily in the "metaverse".

In early December, Meta (formerly Facebook)'s VR world "Horizon Worlds" was officially opened to people over the age of 18 in the United States and Canada; not long ago, Baidu released the metaverse product "Xiran" and held an AI developer conference in the metaverse... Tencent, ByteDance, Xiaomi Group, etc., almost all well-known Internet technology companies are seizing industry opportunities.

The government has also incorporated the "Metaverse" into its development plans. On December 30th, Shanghai announced it would strengthen forward-looking R&D of the core technologies underlying the Metaverse. Overseas, the Seoul Metropolitan Government in South Korea has also been quite proactive, announcing in early December that it would develop "Metaverse Seoul" by the end of 2022 to provide public services to citizens.

Is it a once-in-a-lifetime business opportunity or a speculative fad? Despite such hype, will the Metaverse be a flash in the pan? Recently, reporters from the National Business Daily interviewed mobile phone manufacturers, internet companies, VR (virtual reality) and AR (augmented reality) industry players, and venture capital firms. Industry insiders believe the Metaverse's popularity stems from its perceived role as the "next generation of the internet." While the Metaverse's interface may not be the familiar VR headset, Apple's quietly developed glasses could also represent a hardware breakthrough.

The Internet needs the Metaverse

Just like the rise of the internet, the storm began in Silicon Valley. In March 2021, Roblox, the "first Metaverse stock," entered the capital market and received widespread acclaim. Since then, Facebook has changed its name to Meta, Microsoft has launched the Enterprise Metaverse, and Nvidia has continued to invest in Metaverse technology.

Although Apple CEO Tim Cook dismisses the term "metaverse" as a buzzword, preferring to refer to it as augmented reality (AR), he has stated that AR will be Apple's next "node" and has a bright future. He even suggests that Apple's AR headset could replace the iPhone within a decade. Apple has already invested nearly 1,000 people in R&D to explore this new field.

In the domestic market, Tencent has invested intensively in several companies related to the concept of the metaverse. Ma Huateng has also publicly stated that Tencent has a lot of technology and capabilities to explore and develop the metaverse; NetEase will focus on investments related to virtual humans, and has registered trademarks such as "NetEase Metaverse".

In addition, ByteDance has successively acquired the game developer Code Qiankun, the "Chinese version of Roblox", and VR hardware equipment manufacturer Pico; SoReal, a VR company co-founded by Zhang Yimou and others, recently received investment from Xiaomi and Intel affiliates; Baidu, while rushing to launch the metaverse product "Xiran", emphasized to the outside world that it is currently version -6.0, and it will take several years of iteration before the product is officially launched.

Image source: Photo Network-500487422

The metaverse is a highly interconnected virtual world parallel to the real world. To understand the reasons for the metaverse's explosive popularity, we must return to the familiar internet.

"From the perspective of the pace of technological development, there is an iteration about once every ten years. PC-based Web 1.0 and mobile-based Web 2.0 are both limited to 2D space." Lin Qiong, founder of Xvisio Technology, which is deeply engaged in the field of VSLAM (visual navigation) technology, said that the technology industry's pursuit of the "metaverse" comes from people's desire for "interaction". "The industry's pursuit of the "metaverse" comes from people's desire for "3D interaction" because it is more realistic and immersive. Human beings' demand for 3D has never stopped, but there has been a lack of very good highly immersive experience platforms and equipment to achieve 3D interaction."

Both the industry and the capital community are eager to find a technological outlet for the "next generation Internet platform". The epidemic has become a catalyst, and the metaverse came into being.

In fact, a technical analysis of the Metaverse reveals that it's not a new concept. Virtual reality, blockchain, and 5G are all well-known technologies. However, with the evolution of display devices, the lower cost of computing power, and the integration of devices and the cloud, the Metaverse has found a suitable environment.

"The evolution of various technologies has made certain progress in the past period of time. Although it is still some distance away from the final state, in the next one or two years, we will gradually see the rise of industrial applications and consumer applications. There are consumers willing to pay for them, and some technologies have passed the critical point of input-output ratio." said Wang Guangxi, partner of Lenovo Capital.

"We tend to overestimate the impact of a new technology in the short term and underestimate its impact in the future. This applies to VR, the metaverse, and all new technologies." Wang Xiaohui, managing partner of Shengjing Jiacheng, believes that metaverse-related industries are experiencing the Gartner curve (maturity curve of emerging technologies). "We must keep an eye on market developments, otherwise we will not be able to catch up when the market explodes."

VR is "revitalized," but the venture capital market is no longer crazy about it

From an outside perspective, the emergence of the Metaverse, as a gateway, has revitalized the long-dormant VR industry. Shipments of the VR device Meta Quest 2 are expected to exceed 20 million units in Q3 2022. PwC predicts that by 2030, VR and AR technologies are expected to contribute $1.5 trillion to global GDP growth, contributing 1.81% to global economic growth.

But in the opinion of industry insiders, without the dormancy of the VR industry, there would be no basis for the metaverse to be so popular.

Wang Guangxi believes that driven by the epidemic and the consumer end, various growth points in the VR industry chain have converged into a snowball called the "metaverse". As more elements of sensory interactive experience are incorporated, the snowball is getting bigger and bigger. Compared with the VR industry, the long-term positioning of the "metaverse" and the speculation about the final outcome have not changed much. The core differentiating point is still the immersive virtual experience.

Although the first VR/AR wave came and went quickly, it catalyzed capital and industry investment in VR technology.

In 2016, during the initial wave of AR/VR, Lin Qiong and several partners founded Xvisio Technology in Silicon Valley, focusing on core algorithms for spatial perception and interaction and their chip-level deployment. "At that time, we saw AR/VR as a future technology platform. We deployed a high-speed, high-precision VSLAM end-processing and interaction solution for AR/VR. Everyone believed this was an all-powerful platform for the post-mobile phone era, and both the capital market and the industry were ecstatic."

But after entering the market, Lin Qiong quickly realized the huge gap between ideals and reality. "Both the interactive experience and the application scenarios were very immature." Because of this, the industry quickly calmed down, and the VR industry was caught off guard by the cold winter.

Fortunately, in 2018, one year after Xvisio Technology returned to China, with the endorsement of Intel, Xvisio Technology won AR glasses system customization projects from several well-known industry benchmark customers, thus laying the foundation for Xvisio Technology's AR core technology and product delivery.

Xvisio Technology founder and CEO Lin Qiong

Lin Qiong explained that the company also experienced a period of "looking for nails with a hammer"—possessing the technology but lacking a well-suited application scenario. Earlier, leveraging the deployment capabilities of module-level VSLAM technology, Xvisio Technology also ventured into robotics, AGVs (Automated Guided Vehicles), drones, and sweepers. Later, they landed a home companion robot for a Japanese company and established sustained, large-scale mass production and shipment.

"The implementation of this (companion robot) scenario does not represent the ultimate capability of our technology platform. Our original intention was to build a perception and interaction technology platform centered around the popularization of wearable devices in the future." Lin Qiong said that Xvisio Technology's current solution delivery is based on an intelligent perception unit called SlimEdge XR, which undertakes the end processing of high-performance XR perception and interaction tasks.

"It is precisely under the impetus of capital and the continuous investment and development of major companies including Facebook and Microsoft that the industry has achieved growth from infancy to adolescence and laid the foundation for the formation of today's metaverse concept," said Lin Qiong.

While the frenzy has returned, the venture capital market hasn't revived the frenzy of five years ago. "Capital is calmer now, unlike in 2016 and 2017, when investors were swayed by the mere mention of a term. Market participants have become more educated and calmer, and are now focusing on what will provide core value in the future and what exit paths are available," said Lin Qiong.

"It is true that many projects are now rising in value, but as investors we still have to keep our eyes open." Investor Wang Xiaohui has invested in VR industry companies such as Guanghui City and NOLO. She said that under the current circumstances, investors must carefully judge which products can be "monetized" and which still need to wait for further maturity of technology. They must also pay attention to the development space for startups under the platform's positioning.

VR may not be the only solution to the dizziness problem

"We'll officially launch this product in about 2,000 days." On December 27th, Baidu held its AI Developer Conference at XiRang, a "metaverse product." The Möbius-strip-shaped Creator City drew attention. Earlier, during preview sessions, Baidu Vice President Ma Jie repeatedly told the media that XiRang was still in its very early stages.

Feedback from on-site experience also confirmed the "early days" - after "walking" in the world of the metaverse for 20 minutes, many participants still reported a strong feeling of dizziness.

Children experiencing VR equipment. (Photo by Lan Suying, National Business Daily)

"The main bottleneck is that the computing power that wearable devices can provide is far from meeting our pursuit of experience. In addition, human-computer interaction devices, such as AR display devices, are still in a very early stage in the long run. We are still in the Warring States period, and multiple paths coexist." Lin Qiong introduced that the low cost of VR equipment has become a way of "entry". Although the effect is poor, it gives people the opportunity to experience it.

Currently, most aspects of wearable devices that impact the user experience have clear theoretical or technical paths. VR headsets, if they use a multi-lens combination, can reduce distortion and dispersion and provide a good user experience, but the cost is prohibitive. Furthermore, Lin Qiong explained that foveated rendering, based on human visual habits, is a promising technology. This technology aims to blur areas outside the gaze point, while rendering the gaze point with high precision. However, this technology relies on eye tracking, and its cost is far from affordable enough for widespread adoption.

The development of technology and product breakthroughs is a tortuous process.

Wang Guangxi took the development history of smart touch screen mobile phones as an example. Before the emergence of smart touch screen mobile phones, IBM combined the functional features of mobile phones and PDAs, and launched the "Simon" in 1993, which was the first to have a built-in touch screen. Subsequently, mobile phone manufacturers such as Motorola, Samsung, and HTC launched many transitional mobile phones in their search for a touch screen design that was truly suitable for mobile phones. However, these intermediate products could only be promoted among a small number of people. It was not until 2007 that Apple launched the iPhone with high resolution and multi-touch functions that the standard for touch screens was truly established.

As the entrance to the metaverse, VR headsets may be the most familiar to people at present, but they are not the only option.

"From a technical perspective, I think the emergence of the metaverse must require something revolutionary in human-computer interaction, and I don't think VR is the right approach." Kingsoft Office CEO Zhang Qingyuan is concerned about the difficulty of promoting VR and believes it will be difficult for it to become the mainstream entry point for the metaverse.

Lin Qiong believes that AR may have even greater vitality. "VR provides us with an immersive visual experience platform, achieving an upgrade from 2D to 3D. AR, on the other hand, offers us a brand new 3D human-computer interaction tool, which, like the PC, can provide value across various industries. AR's ability to combine virtual and real presentations is the foundation for humans to efficiently connect the real and virtual worlds. We firmly believe that AR will be a mainstay in the future development of the metaverse and may become the ultimate platform."

Many in the industry share this view. "In 2021, through the experience of various AR devices, we've seen some improvement in content, but it's still some distance away from truly being a reality in everyday life or a major commercial success, and we still need continued investment in technology," said Zhou Wei, Vice President of vivo and Director of the vivo AI Global Research Institute.

AR is no less technically difficult than VR. Zhou Wei gave an example, "Put a bottle of water on the table. The physical world can perceive it, but in the digital world, you need to know the plane and line. In other words, things in the physical world must be mapped to the digital world, and the points, lines, and surfaces must be relatively accurate. It will take several years for current technology to reach a state of accuracy and usability. In addition, the greater obstacle and challenge is that related content and services cannot keep up."

"It took the industry seven years to reach the turning point of VR's commercial explosion, and AR's turning point may take another three to five years. AR is considered to be one of the most challenging technologies in the next 10 years." Lin Qiong believes that AR may not really take off until the maturity of 6G technology, which is characterized by the combination of perception and transmission.

Are glasses the future? Consumer-grade hits are yet to be unlocked

Image source: Visual China

No matter what form the Internet takes in the future, it will require entry devices, which is the next epoch-making opportunity for consumer hardware.

"History doesn't repeat itself, but it does reappear in different forms." Wang Guangxi believes that, similar to the mobile internet and PC eras, a relatively powerful player's innovative business behavior will become the explosion point for large-scale popularization. A product that can lead industry development needs to go through at least three generations of iterations before it can truly become an industry pioneer and gain widespread public acceptance, thereby driving the accelerated development of the entire industry and the innovation of business models.

Many interviewees believe that glasses are a more likely entry device, while mobile phones are the more natural computing power support at present.

"Taking advantage of the current large-scale mobile phone stock market and the computing power of mobile phones to build a 3D immersive experience based on the mobile phone ecosystem may produce quick results in the short and medium term. In the long run, mobile phones may be replaced by AR, or mobile phones and AR glasses may share the world, and AR glasses may become an independent hardware platform in the future." Lin Qiong believes.

Although Apple has never exaggerated the metaverse, the outside world has already outlined its strategic route from its actions, and the device it is betting on is glasses.

Earlier this month, Shenwan Hongyuan analyst Luo Siyuan predicted that Apple's AR/VR glasses might be released alongside the iPhone 14 in 2022. Luo believes Apple's delay in releasing the glasses is largely due to significant room for improvement in overall lightweighting and component modularity. Given the current challenges of cloud computing, if Apple wants to release a thin, lightweight AR/VR pair, the iPhone, iPad, and MacBook could become the computing power behind the glasses, adopting a local computing solution. Therefore, Apple's AR/VR glasses might be released alongside the iPhone 14.

Although Apple has yet to release AR smart glasses, it has already launched a number of AR applications, including RealityKit 2, Object Capture, and AR Maps. Apple's official website states: "We have the world's largest AR platform, with hundreds of millions of AR-enabled devices and thousands of AR apps on the App Store."

In the industrial process leading to the metaverse, the technological gap between China and abroad has narrowed compared to the PC and mobile phone era, but in comparison, my country's greatest advantage lies in its industry reuse capabilities.

"In the manufacturing and production links, in the era of PCs and mobile phones, China has established a commanding position as the world's factory," Wang Guangxi believes.

Wang Xiaohui holds a similar view. She believes that compared to foreign tech giants, China's VR/AR industry chain layout advantage lies in product iteration. China's large population base means that new products released to the market quickly generate a lot of feedback, which undoubtedly provides the greatest boost to manufacturers in promoting product and technology optimization and upgrades. Furthermore, China also has strong integrated manufacturing capabilities and content development capabilities.

As for core fundamental technologies like display chips, my country has yet to break through the limitations of foreign patents, a key area of focus for the future. On December 30th, the Shanghai Municipal Commission of Economy and Information Technology issued the "14th Five-Year Plan for the Development of Shanghai's Electronic Information Industry," which outlines strengthening forward-looking R&D in the core technologies underlying the Metaverse, promoting the development of new terminals that deepen sensory interaction and systematic virtual content development, and exploring industry applications.

Wang Xiaohui said that with the guidance of the country's "specialization, precision and innovation" policy, the arrival of a new round of core hard technology outbreak time and the maturity of the C-end business model, more and more teams will be committed to the "hard technology" field in the future.

(Reporter Ke Yang of China Business Network also contributed to this article)

Reporters: Li Shaoting, Wang Jing, Intern Niu Yingbo, Editor: Chen Junjie, Visual Designer: Liu Qingyan

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Source: Meijing Headlines
Original report link: Looking forward to the "metaverse": the technological critical point gives birth to a wave. In 2022, how far are we from the consumer-grade blockbuster products?