 We've all heard about it, but few of us can quite put our finger on what it is. For a number of years now, the metaverse has garnered increasing media attention, not least because it has become the strategic focal point of some of tech's biggest companies. By some estimates, the metaverse will give rise to a multi-trillion dollar virtual economy by 2030. In 1999, there was about a thousand headsets in existence. In 2021, in the United States, about 15 million headsets were sold, just in 2021. So we're on a trajectory here. But between dire warnings about the virtual overriding what's real and the hype around the metaverse's revolutionary potential, it can be difficult to tell what this technology is really capable of. In the metaverse, you can look in a virtual mirror and you can be older. You can have a different body shape. You can have different skin color. You can be a different gender. We use the metaverse for these intense experiences that solve hard problems. Joining this episode of Experts Explain to help make sense of it all is Stanford University's Jeremy Balanson. He's been researching the metaverse and virtual reality for decades. He started Stanford's Virtual Human Interaction Lab and co-founded the VR-focused tech company, Stryver. The metaverse is a term a lot of us are hearing, but we can boil it down to a simple definition, which is people, places, and things. So there's a digital world and in that world, there need to be people. If I'm going to enter the world, I need to have an avatar. So there's a lot of technology and a lot of communities that are building avatars so people can come together in an online world. The next thing is places. There's a virtual world where you have to go and that virtual world has got to be two things, consistent and persistent. Consistent means if you go there and there's a grid and I brought a plot of land and it's next to another person, it's got to stay that way. The next thing it's got to be is persistent. Even if I leave, the world's got to still be there. The final part of the metaverse is things. You have to have 3D objects or 2D objects, just digital assets. And so when we think of things in the metaverse, we often think of NFTs, non-fungible tokens, and these are 3D models or pictures that are digital that we can verify. Right now that market is being driven mostly by collectors, people that just want to have the sword that killed the dragon in a particular video game or have the first tweet from Jack Dorsey. And so currently, there's a genre of people that are doing collecting there. And this is nothing new. There are plots of land that's sold in Second Life 15 years ago for a million dollars. So that's not a new thing, but it's a very niche thing. So how will the metaverse evolve from this very niche thing to a huge virtual economy? A big part of the answer is virtual reality or VR. Combined with the economic framework that allows people to interact with the places and things in the metaverse, VR is already drawing in millions of consumers. People always say, Jeremy, why isn't VR taken off? And I say, when I started doing this work in 1999, there was about a thousand headsets in existence. In 2021, in the United States, about 15 million headsets were sold, just in 2021. The goggles that now cost $300, 10 years ago, I was paying $40,000 for them, and they were nowhere near as good. So the hardware, in my opinion, is amazing. A headset is only one-third the price of a smartphone. So leverage sight, sound, and touch. So you get to turn your head and look around. You get to have spatialized sound. So if you're underwater and there's a corals that are bubbling, you get to hear them in your left ear, and it gets louder when you move towards it. And we have haptic feedback. And our headsets now at Stanford, we've got sent generators. And one of our demos on climate change is that if you're using non-recycle paper, you have to cut down a tree with your own hands. And you get haptic feedback as that chainsaw cuts the tree. And then you get this gasoline smell as the chainsaw emits. It's multi-sensory. We're now doing four senses, sight, sound, touch, and smell. You can put on the goggles, and you can look in a virtual mirror. And you can be older. You can have a different body shape. You can have different skin color. You can be a different gender. And what you then do is you have an experience while wearing another person's body, and you get to walk a mile in that person's shoes. And we've worked with governments and companies and schools all around the world where we are building VR simulations to increase empathy and to do diversity training. Even without a fully realized metaverse, on-the-job training for things like empathy is one of the most widespread and promising applications of VR. The reason we have VR is because of training. People learn by doing. You make mistakes. You get feedback. And then you repeat. And that's how all of us learn. The moment where VR goes mainstream in the United States is actually with Walmart. Over a million associates have now put on the headsets, entered the metaverse, and trained to get better at their job. And we've got incredible data on return to investment. And they train more quickly. They train more effectively. And, of course, they enjoy the training because they're in virtual reality. The whole model of VR training is we do things that if you did them in the real world, it would be hard to do. And one example that's going to stand out is if I've got to give you a bad performance review, that's going to affect you. And if I can deliver that in a way that's more skillful, you're going to respond better. You put the goggles on, and you're sitting across from a person. And you get a prompt. You're working at a company. And you find out that this person has had some problems recently. They've been showing up late. And you get some information about things they've been doing wrong. And you talk to them in a simulation. That person then replies back to you and says, well, there's a reason I was late. And you get that news, and then you iterate. And so that goes on for about 10 minutes where there's a really good conversation. And then you swap. So we've recorded all of your utterances, your audio, and your nonverbal behavior. So then you sit where the employee was sitting. And you then get to watch yourself delivering that news. And you relive the conversation from the employee's point of view. Then after you get that hard feedback, which is watching yourself, you then go back and you repeat it. Great learning has you try something, make some mistakes, and then you do it again. With VR, it's on demand. And employees can just go and get a 10 minute training dose whenever they want. Beyond just training, the metaverse and virtual reality also let people work remotely in ways that weren't previously possible. Where the metaverse earns its keep is when you're doing collaborative tasks that are spatial, where if it's a small group, and it's important that when I look to the left and I point to someone, everyone else sees where I'm pointing. And if I walk up to you, you get a sense of my personal space. Or if we're working on a shared object together, that the spatial aspect matters. And oftentimes when we think about being spatial, we think about vision is a person here, is a person to the right, and looking at them. However, spatialized sound offers an incredible amount of value in terms of social interaction. Naturally, in a real world, if somebody whispers, their voice is lower. And if somebody shouts, their voice is louder. And when you're on a video conference, that doesn't necessarily happen. The same cues we use in the real world to understand people, we get to use them in the metaverse as well. So given the enormous potential of this virtual world, how much time will we actually end up spending in the metaverse? I've been studying the metaverse for 20 years. The metaverse is not going to change your life tomorrow. There was a moment where we thought all of us were going to be in the metaverse, meaning the media was promoting this as an everyday thing. And we're not going to have that for some years. It doesn't mean that the medium isn't being used. What we've learned about the metaverse is we're going to see slow and steady growth. It's going to be driven by use cases that make sense. The medium is great for these intense experiences that solve hard problems. However, for other things, a shared document will suffice. So a lot of things you don't need the metaverse for. The metaverse will creep in when it earns its keep. There's something incredible to do there. And short of that, we should stay in the real world.