Cryptocurrencies and the metaverse have been named among the disruptive technologies driving innovation and growth in coming years, according to the Activate Technology and Media 2022 Outlook.
The report also identifed gaming and esports, streaming, NFTs and ecommerce as some of other technologies to watch over the next five years.
Globally, Activate expects technology and media spend across the board to surpass US$2T in 2021 and balloon to US$2.5T by 2025.
Now in its seventh year, the report predicts cryptocurrencies will disrupt consumer finance and gaming, although there are still numerous obstacles to its wider adoption.
In Australia, cryptocurrency hit the headlines last week with the release of the Senate inquiry report that called for tax reform and a licensing scheme for exchanges to make it easier for businesses and investors to transact in digital assets.
In other predictions, gaming could emerge as an industry powerhouse, with it anticipated to be the fastest growing sector that could see an annual growth rate of 8%, with the industry growing to be worth more than US$220B in the next few years.
There’s also likely to be substantial gaming acquisitions in 2022 as ‘Big Tech’ realises it must bolster its gaming strategy to stay competitive and will look to add gaming services to existing platforms.
The sale of virtual goods and skins will also likely surge with the continued rise of gaming and it’s expected to be a significant driver of cryptocurrency and NFT innovation and proliferation.
Reform needed for cryptocurrency possibilities to be fully realised
One in six people in the US have already transacted with cryptocurrency for either investment or speculation, the report found.
While consumers have primarily used cryptocurrency for trading rather than payments or other crypto use cases, many of the promised use cases of cryptocurrency have faced headwinds limiting adoption.
Australia may not be at this place yet, but we have an opportunity to take a global leadership position and compete with the United States, Singapore and Switzerland, according to associate professor Chris Berg, who is the co-founder of the Blockchain Innovation Hub at RMIT University.
Berg said policy change is much needed to provide regulatory clarity to the industry and that regulation of crypto assets present an opportunity to attract jobs, investment and innovation into the country. The Senate report is “a compelling roadmap for how Australia can lead the global blockchain industry,” said Berg.
Hosing down the metaverse hype
One of the most hyped new technology trends right now is the metaverse, with Facebook pushing into this area and even looking to change its name in line with its new priorities.
The Activate report said conversations – and claims about the potential opportunities – is reaching fever pitch.
Locally, tech analyst Paul Budde has raised concerns about the metaverse, suggesting we can’t be technology neutral and must address issues already apparent in social media (disinformation, hyper-partisanism, algorithmic bias) before moving into creating a virtual internet, which will be far more intrusive into people’s lives.
“As we are becoming more aware of the dangers of certain technologies, it is up to us to ensure that these developments are guided in the right direction,” he said.
Despite the hype around the metaverse, the only companies that can succeed in the metaverse are gaming companies, the report said.
“The only viable path to the metaverse is through gaming platforms. Anyone betting on a metaverse platform other than gaming is betting on the wrong horse,” it said.
This means the real potential is where gaming meets the metaverse; in particular, with multi-platform gaming franchises dominating and gamers participating in non-gaming activities within games, which will build the foundation for the metaverse.
According to Activate, gaming with its huge engaged user based, gamers already engaging in some of these virtual events and the existing technology requirements to build out metaverse applications (AR/VR integration and game mechanics) put it in the box seat to drive metaverse take up.
Despite Facebook’s grand plans, no one company will dominate the metaverse and, in fact, there will not be one single metaverse platform.
One of the obstacles to dominance and wider take-up will be interoperability and it “will not be resolved any time soon, although third-party applications (messaging, payments, audio) will provide functionality and experiences across metaverse platforms,” the report said.
The creation of digital twins, virtual replicas of real-world objects and spaces, are well on their way, the report found. However, even though many of the foundational elements for the metaverse are already here, achieving the full digital twin of the physical world is many years away.
And NFTs will play a critical role in metaverse economies as a means of authenticating ownership of digital goods.
“Purchases in the physical world, such as a designer handbag, will come with a digital twin for your virtual avatar to wear, and purchases in the digital world will result in a tangible item delivered in the physical world,” the report said.
Across the enterprise space, hyperscaling, edge computing, 5G, quantum computing, open source hardware and software, and public cloud services will push innovation and create “breakthrough capabilities” and usher in the “next wave of user experience and productivity improvements”, it said.