As investment in the tech sector booms and potentially transformative technologies build momentum, responsible business and innovation becomes a focus for companies and regulators alike. In a short series of five articles, we look ahead to five key technology trends to watch in 2022. In this article we look at the metaverse.

Into the metaverse

The metaverse is being hailed as the next generation of digital interaction and e-commerce. Last year, we saw novel commercial forays into the existing virtual worlds that are already a second home for much of Gen Z. The year ahead will see businesses exploring how to build, operate in and expand metaverse microcosms as they anticipate a future where a significant consumer population has digital identities beyond games and virtual hangouts.

This will also mean that 2022 will see us start to explore how our laws may apply, be enforced, and evolve, in the metaverse.

What's next?

• The "direct-to-avatar" economy: As well as augmenting existing business models, the metaverse will provide entirely new markets. Companies will be anticipating an expansion in the provision of virtual services via a customer's online presence (such as online meetings, medical appointments, concerts and exercise classes) as well as exploring the provision of virtual goods to the avatars themselves. We expect to see an increase in companies partnering with digital platforms to sell digital assets ranging from designer clothes to virtual real estate. Ahead of this, brand owners will be giving careful consideration to how to exploit and protect their intellectual property. With aspects of the building of the metaverse being based on new technology (including the application of AI), the question of potential patent protection and freedom to operate will also be important to consider. 
• Fintech meets Web 3.0 and the metaverse: The year ahead will see experimentation with technologies that could impact the development of the internet and the metaverse. Distributed ledger technology (DLT), which has underpinned a booming cryptoasset industry, may provide the building blocks for a decentralised Web 3.0 and decentralised autonomous organisations (DAOs), which will shape ownership, control and commerce. Non-fungible tokens (NFTs), currently prominent in the arts and entertainment industries, could go on to facilitate trade and investment in virtual goods, alongside cryptocurrencies that are becoming ever more mainstream. 
• Making connections: Technology such as 3-D scanning sensors, augmented reality glasses and audio equipment will proliferate, allowing for ever more immersive interaction. Improvements in the Internet of Things (IoT) and 5G technology will speed up data transfer, expanding possibilities for the use of virtual and augmented reality at scale. Companies will also begin to explore how to take robotics to the next level through the metaverse – for example, immersive environments could enable the performance of maintenance on off-shore wind farms or the carrying out of high-precision surgery through robot avatars, regardless of the real-world location of human expertise. • Real-world law in a virtual reality: From employee monitoring to consumer analytics, the metaverse and metaverse-like microcosms represent potentially vast sources of data, some types of which will not have been meaningfully collected before. Data security, privacy, employment and consumer protection law considerations will be high on the list of considerations for companies wishing to tap into user data, be they consumers or workers, particularly as data protection enjoys increasing regulatory attention globally. More broadly, businesses will need to keep everything from antitrust laws, to payments regulations to tax implications in mind when expanding into the metaverse and interacting with the increasing number of firms seeking to collaborate in, and capitalise on, the development of virtual and augmented realities. 

For more, read our articles & briefings:

Co-Branding Partnerships In The Physical And Digital Worlds – A Masterclass From Balenciaga And Fortnite

Non-Fungible Tokens: The Global Legal Impact

Fintech Trends 2022

Watch our international expert panel discussion on NFT – The Rise of the Non-Fungible Token.