Hardware: the bottleneck and accelerant of the Metaverse
The importance of hardware technologies to the development of the Metaverse
Hardware as the gateway and foundation of the Metaverse
The development of hardware is crucial for the advent of the Metaverse. As the gateway for users to access the Metaverse, hardware devices significantly influence the user experience of the Metaverse. Take the Metaverse platforms as an example, the current battery life of VR headsets limits the time that users can stay on the platforms such as VRChat. And, Web 3 Metaverse platforms such as Decentraland require computers with certain computing capabilities to run the platforms smoothly. Not to mention the importance of IC chips to the Metaverse — without the right GPUs and CPUs, it is impossible to run the 3D technologies on the AR/VR glasses.
No matter how well the software applications are built, if the hardware technologies are not there, users cannot experience the full potential of the Metaverse. As the result, improving hardware technology is a key issue for many companies now.
Bottleneck: a capital intensive investment
Many see the hardware technology as the bottleneck of the Metaverse development. According to Raja Koduri, the Senior vice president of Intel, the computing, storage, and networking infrastructure, today is simply not enough to enable the vision of Metaverse.
Unlike software technologies which can be developed and built by a handful of developers, the innovation of the hardware technologies requires a lot of capital and human resources and usually take years to happen.
It is complicated and time-consuming to build a hardware product – companies have to hire multiple engineers to design the products (and even the components) and look after the manufacturing process. Moreover, they have to manage the supply chain, dealing with tech suppliers and factories to build the prototypes. Once the prototypes are built, the companies have to test and make sure the quality of the products meets the regulations of their target market. After all the details are defined, the companies can then mass-produce the products. Every step mentioned above needs capital to fund the development.
The newer the hardware technology is, the more expensive the development is. Companies have to pay high Non-recurring engineering (NRE) costs to research, design, develop and test a new product. And, if some components are not commonly used in the market, companies even have to pay more to the suppliers. That’s probably why in October 2021, Meta announced that it will invest $10 billion in Reality Labs, its metaverse division for AR/VR technology development.
Considering the time and resources involved, adding up the unpredicted demand of the consumer market, and the actions that the competitors may take along the road, hardware innovation is indeed a huge bet.
The Metaverse brings new momentums to the tech supply chain
Though the hardware technologies right now have a lot to improve, numerous important players in the hardware field have shown their interest to develop the metaverse hardware technologies because of the business opportunities that the Metaverse can bring.
For ODM/OEMs, the Metaverse will bring new momentums and a more diverse product mix to their business. According to Young-way Liu (劉揚偉), the Chairman of Hon Hai Precision Industry Co., the world's largest contract electronics maker, Hon Hai has the ambition to play a critical role in the metaverse by developing the hardware applicable to the metaverse ecosystem. From his perspective, the Metaverse is a tech trend that will happen “naturally” and is a big thing for the company's future development. On the other hand, Barry Lam (林百里), the chairman of Quanta Computer is also optimistic about the Metaverse. He particularly said that the platforms created by Meta and Microsoft will be the leaders in this field.
Leading tech commodity suppliers also have the incentive to support the development of the Metaverse – once the Metaverse happens, the demand for high-performance commodities such as displays, cameras, and GPUs will significantly increase. Chip giant Qualcomm launched a $100M Metaverse fund, investing in Extended Reality (XR) technologies. Samsung launched 837X on Decetraland. Nvidia released a strong signal to support the development of the Metaverse and they launched NVIDIA Omniverse Enterprise, an easily extensible platform for 3D design collaboration and scalable multi-GPU, real-time, true-to-reality simulation.
Once the Metaverse comes, the overall demand and number of buyers in the hardware market will increase, and the suppliers will have more bargaining power to secure their margins. As the smartphone, PC, and smartwatch technologies are getting mature, tech suppliers need to find a new wave to create more profits.
Moreover, as the Metaverse becomes a hot topic in the capital market, companies that support related technologies can have a better valuation from the investors and stock market. As a result, compared to years ago, ODM/OEMs and tech suppliers are more willing to support and invest in XR technologies and speed up the development of the Metaverse.
Probably, that’s the reason why Mark Zuckerberg changed the name of Facebook to Meta in 2021 — the name change successfully spurred more capital flowing to the Metaverse field. As a result, tech partners such as ODM/OEMs and component suppliers are more willing to cooperate with the Metaverse companies though the volumes of their orders are not as high as the existing hardware leaders like Apple.
Hardware devices can be an accelerant of the Metaverse
As hardware technologies keep progressing, the Metaverse experience will improve at the same time, and good hardware devices can help accelerate the penetration rate of the Metaverse among mainstream users. Looking back on the history of the Internet, smartphones significantly increase the usage rate and the time people spent on the Internet. The same logic applies to the Metaverse, with good hardware technology, mainstream users will be more willing to try and spend time on the Metaverse.
The improved configuration of hardware will increase the quantity and quality of the content creation on the Metaverse. The more content the Metaverse has, the more likely that people will spend time on it. Think about the time before and after the prevalence of smartphones with high-resolution cameras — the mobile device significantly increased the volume and quality of the pictures and videos on online platforms such as Youtube and Instagram.
The trend is already happening now — in the past, most the Metaverse creators were using personal computers and mobile devices to create content. Now, with the progress of VR headsets, people can build worlds and objects on platforms such as Rec Room and Horizon Worlds. With this change, users without coding capabilities can also participate in generating the content. In the future, with the improvement of hardware devices, there will be more ways that people can generate content for the Metaverse.
The future may come faster than we expect
There is no clear timeline for when hardware technologies will break the limit and let people see the full potential of the Metaverse. But, the future may come faster than we think. With all the capital and interests involved, it is possible that the future will come faster than we think.
Comparing the first iPhone launched in 2011 and the iPhone 13 that we have right now, it’s hard to believe how many innovations have happened in the past 10 years.
(The above picture is iPhone 1. Source: wikipedia)
(The above picture is iPhone 13 Pro Max. Source: Apple.com)