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+1,210 @@ +# 2D 视频转 3D / 空间视频市场调研与技术报告索引 + +整理日期:2026-07-22 + +## 项目文档匹配点 + +你的项目文档定位是“基于多阶段深度估计、视图变换与视频修补的双目视频生成系统”,核心链路是: + +`Depth -> Warp -> Inpaint -> 左右眼视频 / SBS / 空间视频` + +因此,这批资料按以下问题筛选: + +1. 3D 电影、XR、空间计算、沉浸式内容、个人消费市场是否有足够市场空间。 +2. 大厂和行业组织是否在推动 AI/云端/自动化媒体生产技术。 +3. 自动化生成、虚拟制作、AI 后期是否有明确节省时间和成本的证据。 +4. 是否存在与 2D-to-3D、stereo conversion、immersive content creation 接近的竞品或产业落地。 + +## 本次新增的可用成果 + +- `market_evidence_matrix.csv`:逐条记录数字、PDF 页码、图表文件、项目用途和引用限制。 +- `report_to_project_mapping.md`:把市场总盘、相邻市场、直接竞品和降本证据映射到项目文档章节。 +- `key_charts/`:从原始报告导出的 26 张关键页,分为市场规模、降本价值、竞品/产品三类。 +- `autodesk_state_design_make_2025.pdf`:包含数字化转型、成本控制和 M&E 的 AI 影响调查图表。 +- `morgan_stanley_ai_entertainment_costs_2025_official_web_print.pdf`:Morgan Stanley 官方文章本地打印件,含媒体约 10%、电视/电影最高约 30% 的降本估计。 +- `pwc_global_entertainment_media_outlook_2026_2030_official_web_print.pdf`:PwC 2026-2030 官方网页本地打印件,含 2030 年 4.2 万亿美元 E&M 和 3040 亿美元 OTT 预测。 + +其中两个 `official_web_print` 文件用于保存官方网页内容,不是厂商发布的原生 PDF,引用时应链接原始官方网页。 + +## 最建议优先引用的近年资料 + +### 1. Netflix Q2 2026 Earnings Call Transcript + +- 文件:`netflix_q2_2026_earnings_call_transcript_ai_cost.pdf` +- 年份:2026 +- 类型:大厂财报电话会文字稿 +- 适合引用点:Netflix 管理层提到 `American Experiment` 中 17 分钟 AI-enhanced footage,以“两倍速度、半成本”完成。还提到 AI 已用于 set references、pre-vis、VFX、sequence prep、shot planning 等制作环节。 +- 项目对应价值:可支撑“AI/生成式后期技术能缩短内容制作周期、降低单位内容成本”。虽然不是 2D 转 3D 专项报告,但和本项目的 Inpaint/VFX/后期自动化价值最贴近。 + +### 2. Deloitte - The Future of Content Creation: Virtual Production + +- 文件:`deloitte_virtual_production_future_content_creation_2024.pdf` +- 年份:2024 +- 类型:影视制作技术/商业价值报告 +- 适合引用点:报告指出 Hollywood 传统制作方式接近效率上限,虚拟制作可带来显著时间和成本节省;高预算电影重拍常见,可占最终制作成本 5%-20% 甚至更高;高预算科幻/奇幻片 VFX 成本可达总预算 20%。 +- 项目对应价值:可用于论证“减少原生 3D 拍摄、重拍和复杂后期的人力/周期成本”,与 2D 存量视频自动立体化的成本价值直接相关。 + +### 3. WEF - Artificial Intelligence in Media, Entertainment and Sport + +- 文件:`wef_ai_in_media_entertainment_sport_2025.pdf` +- 年份:2025 +- 类型:国际组织产业报告 +- 适合引用点:报告系统整理 AI 在内容创作、资产管理、商业化、受众体验中的机会,并明确讨论 GenAI 提升生产力、降低成本。 +- 项目对应价值:可作为“媒体娱乐行业正在把生成式 AI 纳入生产流程”的权威背景材料。 + +### 4. Prime Focus / DNEG Investor Presentation + +- 文件:`primefocus_investor_presentation_jan_2026.pdf` +- 年份:2026 +- 类型:竞品/产业公司投资者材料 +- 适合引用点:Prime Focus/DNEG 声明其服务能力覆盖 Stereo Conversion、VFX、Immersive & Experiential、Production、Post-production 等;材料还提到 2030 年超过 1300 亿美元的可寻址市场机会。 +- 项目对应价值:这是最像“竞品/产业落地”的材料,可证明 stereo conversion 仍是大型 VFX 公司商业能力的一部分。 + +### 5. MovieLabs Industry Forum Spring Summit + +- 文件:`movielabs_industry_forum_spring_summit_2026.pdf` +- 年份:2026 +- 类型:好莱坞行业组织技术论坛材料 +- 适合引用点:包含 2030 Vision 在 AI 时代的落地、专业媒体创作模型训练、真实部署案例;其中云端制作案例写到 30%+ cost effective、85% lesser IT staff。 +- 项目对应价值:可作为“好莱坞技术路线正在转向云端、AI、自动化工作流”的产业依据。 + +### 6. PwC Global Entertainment & Media Outlook + +- 文件:`pwc_global_entertainment_media_outlook_2025_2029.pdf` +- 补充文件:`pwc_global_entertainment_media_outlook_2026_2030_official_web_print.pdf` +- 年份:2025 +- 类型:娱乐传媒市场报告摘要 +- 适合引用点:全球娱乐传媒收入预计 2029 年达到约 3.5 万亿美元。PwC 2026 官方网页还进一步给出 2030 年 4.2 万亿美元预测。 +- 项目对应价值:支撑“电影、长视频、OTT、广告、沉浸式体验属于万亿级内容经济的一部分”。 +- 直接下游数字:全球电影票房预计 2030 年达到 395 亿美元;全球 OTT 收入预计达到 3040 亿美元;Sphere 2025 年收入 7.81 亿美元并包含 4D 电影放映。 +- 2026 网页来源:https://www.pwc.com/gx/en/issues/business-model-reinvention/outlook/insights-and-perspectives.html + +### 7. Morgan Stanley - How AI Benefits—and Threatens—the Entertainment Industry + +- 文件:`morgan_stanley_ai_entertainment_costs_2025_official_web_print.pdf` +- 年份:2025 +- 类型:投行行业分析官方网页打印件 +- 适合引用点:估计 GenAI 可使媒体行业成本下降约 10%,电视和电影最多约 30%;还讨论动画、VFX、数字/虚拟制作和减少重拍。 +- 使用限制:这是广义 GenAI 行业估计,不是 2D 转 3D 产品实测。 + +### 8. Autodesk - 2025 State of Design & Make + +- 文件:`autodesk_state_design_make_2025.pdf` +- 年份:2025 +- 类型:大厂全球行业调查报告 +- 适合引用点:5594 名行业领导者调查,包含数字化转型改善幅度、成本控制优先级及 M&E 的 AI 影响图表。 +- 使用限制:调查覆盖多个 Design & Make 行业;“50%+”是受访者报告的改善分档,不应写成已审计财务收益率。 + +## 市场规模背景资料 + +### McKinsey - Value Creation in the Metaverse + +- 文件:`mckinsey_value_creation_in_the_metaverse_2022.pdf` +- 年份:2022 +- 类型:市场调研/咨询报告 +- 适合引用点:McKinsey 估计 metaverse 到 2030 年可产生最高 5 万亿美元影响。 +- 使用建议:不是最新技术报告,但适合用于“沉浸式/空间内容长期市场上限”的背景论证。 + +### Citi GPS - Metaverse and Money + +- 文件:`citi_metaverse_and_money_2022.pdf` +- 年份:2022 +- 类型:市场调研/金融机构报告 +- 适合引用点:Citi 估计 2030 年 metaverse TAM 可达 8-13 万亿美元,潜在用户可达约 50 亿。 +- 使用建议:适合与 McKinsey 交叉引用,说明市场空间预测区间很大,但多家机构都认为上限巨大。 + +### Accenture - Metaverse: Evolution, Then Revolution + +- 文件:`accenture_metaverse_evolution_before_revolution_2023.pdf` +- 年份:2023 +- 类型:咨询报告 +- 适合引用点:Accenture 调研称企业预计 4.2% 收入来自 metaverse 相关产品、服务或商业模式,代表约 1 万亿美元价值;89% 的 3200 名高管认为 metaverse 对未来增长重要。 +- 使用建议:适合论证企业端和消费端都存在沉浸式内容/空间体验需求。 + +## 好莱坞媒体生产技术路线 + +### MovieLabs - The Evolution of Media Creation: 2030 Vision + +- 文件:`movielabs_2030_vision_evolution_media_creation.pdf` +- 年份:2019,仍是 2030 Vision 系列基础白皮书 +- 类型:好莱坞技术白皮书 +- 适合引用点:提出未来媒体创作会走向云端、软件定义、资产复用、自动化、XR/沉浸式格式。报告提到资产复用可覆盖 feature、marketing、XR experiences、games、spin-offs 等。 +- 使用建议:虽然不是近两年,但它是 MovieLabs 2030 系列基础文件,后续 2026 论坛材料仍在引用。 + +### MovieLabs - Software-Defined Workflows + +- 文件:`movielabs_software_defined_workflows.pdf` +- 类型:好莱坞生产工作流技术白皮书 +- 适合引用点:说明媒体生产工作流如何软件定义、自动化、可组合。 +- 项目对应价值:本项目的 Depth/Warp/Inpaint 模块化接口,可以和“软件定义工作流、模块可替换、自动化处理链”呼应。 + +### MovieLabs - Interoperability in Media Creation + +- 文件:`movielabs_interoperability_media_creation.pdf` +- 类型:好莱坞互操作白皮书 +- 适合引用点:强调工具、数据、元数据、工作流互操作,降低切换成本。 +- 项目对应价值:可支撑你们文档中“统一输入输出、坐标、掩码、评价协议”的工程化必要性。 + +## 其他支撑资料 + +### Salesforce - Media and Entertainment Redefined + +- 文件:`salesforce_ai_media_entertainment_redefined.pdf` +- 年份:约 2023/2024 +- 类型:行业趋势报告 +- 适合引用点:生成式 AI 正在影响内容创作、营销、广告、订阅增长和媒体电商;报告引用 Market.us,称媒体娱乐 GenAI 收入预计 2032 年达到 116 亿美元。 + +### Deloitte - Future of Media and Entertainment + +- 文件:`deloitte_future_of_media_and_entertainment_2024.pdf` +- 年份:2024 +- 类型:媒体娱乐行业未来趋势 +- 适合引用点:内容爆炸、设备与格式演进、生成式 AI 对媒体娱乐的影响。 + +### Deloitte - State of Generative AI in the Enterprise + +- 文件:`deloitte_state_of_gen_ai_enterprise_2024.pdf` +- 年份:2024 +- 类型:企业 GenAI 调研 +- 适合引用点:企业采用 GenAI 的收益包括效率、生产力、成本下降。 + +### Accenture - Technology Vision 2025 + +- 文件:`accenture_technology_vision_2025.pdf` +- 年份:2025 +- 类型:大厂技术趋势报告 +- 适合引用点:AI 自主性、模型工作流、企业级 AI 应用趋势。 + +### Accenture - Getting Your Workforce Ready for AI and Spatial Computing + +- 文件:`accenture_ai_spatial_computing_workforce_2024.pdf` +- 年份:2024 +- 类型:AI + Spatial Computing 报告 +- 适合引用点:空间计算与 AI 可提升沉浸式协作、降低企业运营成本、扩展内容创建能力。 + +### OECD - An Immersive Technologies Policy Primer + +- 文件:`oecd_immersive_technologies_policy_primer_2025.pdf` +- 年份:2025 +- 类型:政策/产业技术报告 +- 适合引用点:沉浸式技术应用方向、政策与产业机会、生产率和成本影响。 + +## 建议写进项目文档的表述方向 + +1. 市场空间:全球娱乐传媒市场已是数万亿美元规模,PwC 预计 2030 年达到 4.2 万亿美元;沉浸式/metaverse 相关市场上限被 McKinsey、Citi、Accenture 估到万亿美元级。 +2. 供给瓶颈:XR、空间视频、裸眼 3D 和 3D 影院的消费体验需要大量空间内容,但原生双目/多目拍摄对设备、同步、标定、现场调度和后期校正要求高,难以覆盖海量存量 2D 视频。 +3. 降本逻辑:自动 2D 转 3D不替代所有原生拍摄,但可把大量存量影视、广告、短视频、纪录片、动画和 UGC 转成可消费的双目/空间视频,降低内容供给成本。 +4. 技术价值:本项目的 `Depth -> Warp -> Inpaint` 多阶段结构对应影视后期中的几何理解、视图生成和缺失区域补全;模块化设计符合 MovieLabs 软件定义工作流和互操作趋势。 +5. 竞品与落地:DNEG/Prime Focus 仍将 Stereo Conversion 列为端到端媒体内容服务能力;Netflix 已在 2026 年财报会中公开 AI 生产案例并给出半成本、两倍速度的效率口径。 + +## 重要口径说明 + +- PwC 的 4.2 万亿美元是整个娱乐传媒市场,McKinsey 的 5 万亿美元是潜在经济影响,Citi 的 8-13 万亿美元是广义元宇宙情景 TAM;三者定义不同,不能直接比较或相加。 +- 本项目的直接市场应通过目标客户数、可转换片库分钟数、单分钟报价和采用率测算;外部万亿美元数字只用于行业背景。 +- Netflix、Deloitte、Morgan Stanley、MovieLabs 的降本数字分别对应单一 AI 案例、虚拟制作、广义 GenAI 和云编辑平台,不能替代项目自身试点数据。 + +## 年份说明 + +- 核心近年资料:2024-2026。 +- 市场规模背景:2022-2023,但仍常被引用,主要用于“万亿级市场潜力”。 +- MovieLabs 2030 Vision 基础白皮书年份较早,但与 2026 论坛材料形成连续体系,建议作为好莱坞技术路线背景使用。 diff --git 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sha256:d03519073f8182aa0b90264a569f2bfd7fe834cedab2a22ef544f876b1e160aa +size 5498156 diff --git a/2d_to_3d_market_tech_reports/autodesk_state_design_make_2025.pdf b/2d_to_3d_market_tech_reports/autodesk_state_design_make_2025.pdf new file mode 100644 index 0000000000000000000000000000000000000000..e2a079da60d3f5e348bd9dfa58460ddbdefde7de --- /dev/null +++ b/2d_to_3d_market_tech_reports/autodesk_state_design_make_2025.pdf @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:b78dcc282c49d8246c3c6a451fcf773e9558eb72fc70a03ca46c7e426f4a8c48 +size 17695087 diff --git a/2d_to_3d_market_tech_reports/build_market_chapter.py b/2d_to_3d_market_tech_reports/build_market_chapter.py new file mode 100644 index 0000000000000000000000000000000000000000..43de634f0728a125d87691d586b290bf2bf1b834 --- /dev/null +++ b/2d_to_3d_market_tech_reports/build_market_chapter.py @@ -0,0 +1,710 @@ +from __future__ import annotations + +import os +import shutil +import sys +import zipfile +from pathlib import Path + +import matplotlib.pyplot as plt +from matplotlib import font_manager +from matplotlib.patches import FancyBboxPatch +from docx import Document +from docx.enum.table import WD_CELL_VERTICAL_ALIGNMENT +from docx.enum.text import WD_ALIGN_PARAGRAPH +from docx.oxml import OxmlElement +from docx.oxml.ns import qn +from docx.shared import Cm, Pt, RGBColor + + +ROOT_BYTES = b"/mnt/hdd/wjy/czy/diaoyan" +REPORT_ROOT = Path("/mnt/hdd/wjy/czy/diaoyan/2d_to_3d_market_tech_reports") +ASSET_DIR = REPORT_ROOT / "market_chapter_assets" +BLUE = "1F4E79" +MID_BLUE = "5B9BD5" +LIGHT_BLUE = "DCE6F1" +PALE_BLUE = "EDF3F8" +ORANGE = "ED7D31" +GRAY = "66727C" + + +def mpl_color(value: str) -> str: + return value if value.startswith("#") else f"#{value}" + + +def encoded_path(display_name: str) -> bytes: + return ROOT_BYTES + b"/" + display_name.encode("gbk") + + +TARGET_BYTES = encoded_path("修改文档.docx") +BACKUP_BYTES = encoded_path("修改文档_补充市场调研前备份.docx") +TEMP_BYTES = ROOT_BYTES + b"/.market_chapter_edit.tmp.docx" + + +def configure_chinese_fonts() -> None: + regular = "/usr/share/fonts/opentype/noto/NotoSansCJK-Regular.ttc" + font_manager.fontManager.addfont(regular) + family = font_manager.FontProperties(fname=regular).get_name() + plt.rcParams["font.family"] = family + plt.rcParams["axes.unicode_minus"] = False + + +def create_growth_chart(path: Path) -> None: + years = list(range(2020, 2030)) + revenue = [2.31, 2.53, 2.66, 2.78, 2.93, 3.06, 3.20, 3.30, 3.42, 3.51] + growth = [None, 9.4, 5.0, 4.7, 5.5, 4.5, 4.3, 3.4, 3.4, 2.7] + colors = [mpl_color(MID_BLUE) if y <= 2024 else "#9DC3E6" for y in years] + + fig, ax = plt.subplots(figsize=(8.4, 4.35), dpi=220) + bars = ax.bar(years, revenue, color=colors, width=0.66, zorder=2) + ax.set_ylim(0, 4.05) + ax.set_ylabel("全球娱乐与媒体收入(万亿美元)", fontsize=9.5, color="#333333") + ax.set_xticks(years) + ax.set_xticklabels([str(y) for y in years], fontsize=8.5) + ax.grid(axis="y", color="#D9E1E8", linewidth=0.7, zorder=1) + ax.spines[["top", "right"]].set_visible(False) + ax.spines[["left", "bottom"]].set_color("#AAB4BE") + for bar, value in zip(bars, revenue): + ax.text(bar.get_x() + bar.get_width() / 2, value + 0.06, f"{value:.2f}", + ha="center", va="bottom", fontsize=7.8, color="#34495E") + + ax2 = ax.twinx() + xs = years[1:] + ys = growth[1:] + ax2.plot(xs, ys, color=mpl_color(ORANGE), marker="o", linewidth=2.0, markersize=4.2, zorder=3) + ax2.set_ylim(0, 10.6) + ax2.set_ylabel("年度增速(%)", fontsize=9.5, color=mpl_color(ORANGE)) + ax2.tick_params(axis="y", labelsize=8.2, colors=mpl_color(ORANGE)) + ax2.spines["top"].set_visible(False) + ax2.spines["left"].set_visible(False) + ax2.spines["right"].set_color("#D7A17B") + for x, value in zip(xs, ys): + ax2.text(x, value + 0.35, f"{value:.1f}%", ha="center", va="bottom", + fontsize=7.3, color="#B45F23") + + ax.set_title("全球娱乐与媒体行业收入保持增长", loc="left", fontsize=15, + fontweight="bold", color="#1F4E79", pad=12) + ax.text(2024.5, 3.88, "2025-2029为预测值", ha="center", va="center", + fontsize=8.2, color=mpl_color(GRAY), bbox=dict(boxstyle="round,pad=0.25", fc="#F2F5F7", ec="none")) + fig.text(0.01, 0.01, "数据来源:PwC《Global Entertainment & Media Outlook 2025-2029》[13]", + fontsize=7.4, color=mpl_color(GRAY)) + fig.tight_layout(rect=(0.015, 0.045, 0.985, 0.965)) + fig.savefig(path, bbox_inches="tight", facecolor="white") + plt.close(fig) + + +def add_box(ax, x, y, w, h, title, body, fc, ec=BLUE, title_color=BLUE): + box = FancyBboxPatch((x, y), w, h, boxstyle="round,pad=0.018,rounding_size=0.018", + linewidth=1.1, edgecolor=mpl_color(ec), facecolor=fc) + ax.add_patch(box) + ax.text(x + 0.03, y + h - 0.055, title, ha="left", va="top", fontsize=11, + fontweight="bold", color=mpl_color(title_color)) + ax.text(x + 0.03, y + h - 0.125, body, ha="left", va="top", fontsize=8.4, + color="#334455", linespacing=1.5) + + +def create_application_map(path: Path) -> None: + fig, ax = plt.subplots(figsize=(8.4, 4.55), dpi=220) + ax.set_xlim(0, 1) + ax.set_ylim(0, 1) + ax.axis("off") + ax.text(0.02, 0.96, "技术能力与重点应用市场的对应关系", fontsize=15, + fontweight="bold", color="#1F4E79", va="top") + + add_box(ax, 0.02, 0.55, 0.22, 0.30, "电影与长视频", + "存量片库立体化\n影院3D/大画幅版本\n纪录片、动画、剧集", "#EDF3F8") + add_box(ax, 0.26, 0.55, 0.22, 0.30, "OTT与个人消费", + "流媒体空间版本\n头显与家庭终端\n短视频与UGC", "#F5F8FB") + add_box(ax, 0.50, 0.55, 0.22, 0.30, "XR与空间计算", + "双目/空间视频\n可调视差与零视差\n多终端格式适配", "#EDF3F8") + add_box(ax, 0.74, 0.55, 0.24, 0.30, "商业与沉浸体验", + "裸眼3D与数字标牌\n主题乐园、数字演出\n4D放映与沉浸式场馆", "#F5F8FB") + + pipeline = FancyBboxPatch((0.08, 0.18), 0.84, 0.20, + boxstyle="round,pad=0.02,rounding_size=0.025", + linewidth=1.3, edgecolor=mpl_color(BLUE), facecolor="#DCE6F1") + ax.add_patch(pipeline) + ax.text(0.5, 0.335, "统一内容生产底座", ha="center", va="center", + fontsize=10.2, color=mpl_color(BLUE), fontweight="bold") + ax.text(0.5, 0.255, "单目视频 → Depth → Warp → Inpaint/Fusion → 左右眼 / SBS / 空间视频", + ha="center", va="center", fontsize=10, color="#203A52", fontweight="bold") + ax.text(0.5, 0.105, "共性价值:复用海量2D内容 · 减少重新拍摄与逐帧处理 · 支持批量化和参数化交付", + ha="center", va="center", fontsize=8.6, color=mpl_color(GRAY)) + fig.text(0.02, 0.012, "资料来源:PwC[12-13]、Prime Focus/DNEG[19]、WEF[17];项目组整理", + fontsize=7.4, color=mpl_color(GRAY)) + fig.tight_layout(pad=0.2) + fig.savefig(path, bbox_inches="tight", facecolor="white") + plt.close(fig) + + +def create_cost_evidence(path: Path) -> None: + fig, ax = plt.subplots(figsize=(8.4, 4.45), dpi=220) + ax.set_xlim(0, 1) + ax.set_ylim(0, 1) + ax.axis("off") + ax.text(0.02, 0.965, "影视内容生产与后期自动化的公开价值证据", fontsize=15, + fontweight="bold", color="#1F4E79", va="top") + + cards = [ + (0.02, "传统成本基线", "重拍占最终制作成本\n5%-20%(有时更高)\n高预算科幻/奇幻片VFX\n可达总预算20%", "Deloitte 虚拟制作报告[15]"), + (0.265, "真实制作案例", "17分钟AI增强画面\n制作速度达到2倍\n成本降至此前方案的\n约50%", "Netflix 2026财报会[14]"), + (0.51, "行业降本估计", "媒体行业成本约降10%\n电视和电影制作\n最高约降30%", "Morgan Stanley 研究[16]"), + (0.755, "云端后期案例", "成本改善30%以上\n所需IT人员减少85%\n零CAPEX与100%利用率", "MovieLabs/JioStar案例[20]"), + ] + for idx, (x, title, body, source) in enumerate(cards): + fc = "#EDF3F8" if idx % 2 == 0 else "#F7F9FB" + box = FancyBboxPatch((x, 0.20), 0.225, 0.62, + boxstyle="round,pad=0.018,rounding_size=0.02", + linewidth=1.0, edgecolor="#6E91AE", facecolor=fc) + ax.add_patch(box) + ax.text(x + 0.018, 0.765, title, ha="left", va="top", fontsize=10.4, + fontweight="bold", color=mpl_color(BLUE)) + ax.text(x + 0.018, 0.665, body, ha="left", va="top", fontsize=9.0, + color="#263C4D", linespacing=1.55) + ax.text(x + 0.018, 0.245, source, ha="left", va="bottom", fontsize=7.2, + color=mpl_color(GRAY), wrap=True) + + ax.text(0.5, 0.095, "注意:四组数字分别对应传统成本结构、单一项目、行业预测和云编辑平台,口径不同,不可相加或直接视为本项目实测值。", + ha="center", va="center", fontsize=8.1, color="#9C4A1A", + bbox=dict(boxstyle="round,pad=0.35", fc="#FFF3E8", ec="#F2C29B")) + fig.tight_layout(pad=0.15) + fig.savefig(path, bbox_inches="tight", facecolor="white") + plt.close(fig) + + +def create_dneg_capability_chart(path: Path) -> None: + fig, ax = plt.subplots(figsize=(8.4, 4.725), dpi=220) + ax.set_xlim(0, 1) + ax.set_ylim(0, 1) + ax.axis("off") + ax.text(0.02, 0.965, "DNEG端到端媒体内容处理能力", fontsize=15, + fontweight="bold", color="#1F4E79", va="top") + + center = FancyBboxPatch((0.30, 0.33), 0.25, 0.30, + boxstyle="round,pad=0.025,rounding_size=0.035", + linewidth=1.5, edgecolor="#1F4E79", facecolor="#F5A14B") + ax.add_patch(center) + ax.text(0.425, 0.515, "DNEG", ha="center", va="center", fontsize=18, + fontweight="bold", color="#FFFFFF") + ax.text(0.425, 0.42, "端到端媒体内容\n处理生态", ha="center", va="center", + fontsize=9.3, color="#253B50", fontweight="bold", linespacing=1.45) + + items = [ + (0.03, 0.66, "电影与剧集\n视觉特效"), + (0.18, 0.73, "长片与剧集\n动画"), + (0.03, 0.37, "立体转换"), + (0.18, 0.08, "前期创意\n服务"), + (0.43, 0.72, "制作服务、摄影棚\n与设备租赁"), + (0.56, 0.46, "沉浸式体验\n与动作捕捉"), + (0.43, 0.08, "全球内容处理\n与发行"), + (0.03, 0.12, "虚拟制作与\n实时服务"), + ] + for idx, (x, y, label) in enumerate(items): + width = 0.20 if idx in (4, 5, 6) else 0.15 + box = FancyBboxPatch((x, y), width, 0.14, + boxstyle="round,pad=0.012,rounding_size=0.018", + linewidth=1.0, edgecolor="#6E91AE", + facecolor="#EDF3F8" if idx % 2 == 0 else "#F7F9FB") + ax.add_patch(box) + ax.text(x + width / 2, y + 0.07, label, ha="center", va="center", + fontsize=8.4, color="#1F4E79", fontweight="bold", linespacing=1.35) + + side = FancyBboxPatch((0.72, 0.16), 0.25, 0.66, + boxstyle="round,pad=0.018,rounding_size=0.025", + linewidth=1.1, edgecolor="#1F4E79", facecolor="#F4F7FA") + ax.add_patch(side) + ax.text(0.755, 0.755, "覆盖制作全流程", ha="left", va="top", + fontsize=11, color="#1F4E79", fontweight="bold") + processes = "前期制作\n拍摄制作\n后期制作\n视觉特效\n动画与游戏\n母版制作与发行" + ax.text(0.755, 0.655, processes, ha="left", va="top", fontsize=9.2, + color="#2D4355", linespacing=1.65) + ax.text(0.02, 0.025, + "来源:Prime Focus/DNEG《Investor Presentation: January 2026》第9页[19];项目组据官方能力图重绘", + fontsize=7.2, color="#66727C") + fig.tight_layout(pad=0.15) + fig.savefig(path, bbox_inches="tight", facecolor="white") + plt.close(fig) + + +def set_cell_shading(cell, fill: str) -> None: + tc_pr = cell._tc.get_or_add_tcPr() + shd = tc_pr.find(qn("w:shd")) + if shd is None: + shd = OxmlElement("w:shd") + tc_pr.append(shd) + shd.set(qn("w:fill"), fill) + + +def set_cell_margins(cell, top=70, start=90, bottom=70, end=90) -> None: + tc = cell._tc + tc_pr = tc.get_or_add_tcPr() + tc_mar = tc_pr.first_child_found_in("w:tcMar") + if tc_mar is None: + tc_mar = OxmlElement("w:tcMar") + tc_pr.append(tc_mar) + for margin, value in (("top", top), ("start", start), ("bottom", bottom), ("end", end)): + node = tc_mar.find(qn(f"w:{margin}")) + if node is None: + node = OxmlElement(f"w:{margin}") + tc_mar.append(node) + node.set(qn("w:w"), str(value)) + node.set(qn("w:type"), "dxa") + + +def format_run(run, size=9.0, bold=False, color=None) -> None: + run.font.name = "Times New Roman" + run._element.get_or_add_rPr().get_or_add_rFonts().set(qn("w:eastAsia"), "Noto Sans SC") + run.font.size = Pt(size) + run.bold = bold + if color: + run.font.color.rgb = RGBColor.from_string(color) + + +def format_table(table, widths_cm: list[float]) -> None: + table.style = "Table Grid" + table.autofit = False + tbl_pr = table._tbl.tblPr + layout = tbl_pr.find(qn("w:tblLayout")) + if layout is None: + layout = OxmlElement("w:tblLayout") + tbl_pr.append(layout) + layout.set(qn("w:type"), "fixed") + + for row_index, row in enumerate(table.rows): + tr_pr = row._tr.get_or_add_trPr() + cant_split = OxmlElement("w:cantSplit") + tr_pr.append(cant_split) + if row_index == 0: + header = OxmlElement("w:tblHeader") + header.set(qn("w:val"), "true") + tr_pr.append(header) + for col_index, cell in enumerate(row.cells): + cell.width = Cm(widths_cm[col_index]) + cell.vertical_alignment = WD_CELL_VERTICAL_ALIGNMENT.CENTER + set_cell_margins(cell) + set_cell_shading(cell, BLUE if row_index == 0 else ("F4F7FA" if row_index % 2 == 0 else "FFFFFF")) + for paragraph in cell.paragraphs: + paragraph.alignment = WD_ALIGN_PARAGRAPH.CENTER if row_index == 0 else WD_ALIGN_PARAGRAPH.LEFT + paragraph.paragraph_format.space_after = Pt(0) + paragraph.paragraph_format.line_spacing = 1.15 + for run in paragraph.runs: + format_run(run, size=8.5, bold=(row_index == 0), color="FFFFFF" if row_index == 0 else None) + + +def add_table(doc, headers: list[str], rows: list[list[str]], widths: list[float]): + table = doc.add_table(rows=1, cols=len(headers)) + for index, text in enumerate(headers): + table.rows[0].cells[index].text = text + for row_data in rows: + cells = table.add_row().cells + for index, text in enumerate(row_data): + cells[index].text = text + format_table(table, widths) + return table + + +def add_paragraph(doc, text: str, style="Normal", size=None, bold_prefix: str | None = None): + paragraph = doc.add_paragraph(style=style) + if bold_prefix and text.startswith(bold_prefix): + first = paragraph.add_run(bold_prefix) + format_run(first, size=size or 10.5, bold=True, color=BLUE) + rest = paragraph.add_run(text[len(bold_prefix):]) + format_run(rest, size=size or 10.5) + else: + run = paragraph.add_run(text) + if size: + format_run(run, size=size) + return paragraph + + +def add_caption(doc, text: str): + paragraph = doc.add_paragraph(style="Caption") + paragraph.add_run(text) + paragraph.paragraph_format.keep_with_next = True + return paragraph + + +def add_figure(doc, image_path: Path, width_cm: float, caption: str): + paragraph = doc.add_paragraph(style="Normal") + paragraph.alignment = WD_ALIGN_PARAGRAPH.CENTER + paragraph.paragraph_format.space_after = Pt(0) + paragraph.add_run().add_picture(str(image_path), width=Cm(width_cm)) + cap = doc.add_paragraph(caption, style="Caption") + return paragraph, cap + + +def move_before(anchor, block) -> None: + element = block._p if hasattr(block, "_p") else block._tbl + anchor._p.addprevious(element) + + +def remove_paragraph(paragraph) -> None: + element = paragraph._element + element.getparent().remove(element) + + +def build_chapter(doc: Document, growth: Path, applications: Path, cost: Path, dneg: Path) -> None: + if any(p.text.strip().startswith("7.1 调研口径") for p in doc.paragraphs): + raise RuntimeError("第7章已经包含本次市场调研内容,停止重复写入。") + + heading_8 = next(p for p in doc.paragraphs if p.text.strip() == "8 参考资料") + heading_7_index = next(i for i, p in enumerate(doc.paragraphs) if p.text.strip() == "7 市场调研") + blank = doc.paragraphs[heading_7_index + 1] + if not blank.text.strip(): + remove_paragraph(blank) + + blocks = [] + + blocks.append(add_paragraph(doc, "7.1 调研口径与市场边界", style="Heading 2")) + blocks.append(add_paragraph( + doc, + "本节围绕本项目“单目视频输入—时序深度估计—视图变换—遮挡修补—双目/空间视频输出”的技术链路,选取2022—2026年由PwC、Netflix、Deloitte、Morgan Stanley、世界经济论坛、Autodesk、MovieLabs及Prime Focus/DNEG等机构公开的市场报告、投资者材料和制作案例。调研重点不是泛化罗列3D产业,而是回答三个问题:目标内容市场是否持续增长,立体化与空间化内容是否存在明确应用入口,自动化后期是否具有可验证的时间和成本价值。", + )) + blocks.append(add_paragraph( + doc, + "为避免夸大市场规模,本节将行业总盘、相邻可服务市场和项目近期目标市场分开表述。PwC的数万亿美元娱乐传媒收入、McKinsey和Citi的万亿美元级沉浸式情景只用于说明内容经济和空间体验的长期上限,不等同于2D转3D技术自身的可寻址市场。项目直接市场仍应依据可转换片库分钟数、单分钟报价、采用率和目标客户数量测算。", + )) + blocks.append(add_caption(doc, "表7-1 市场口径与本项目的对应关系")) + blocks.append(add_table( + doc, + ["市场层级", "口径说明", "本项目对应关系", "引用原则"], + [ + ["行业总盘", "全球娱乐传媒、广告、连接及消费支出", "电影、OTT、广告和沉浸式内容的上游环境", "仅说明行业背景,不作为项目TAM"], + ["相邻市场", "OTT、影院、XR、沉浸式场馆和数字标牌", "需要双目、空间视频或高规格视听版本的分发场景", "说明需求入口,不等同于转换收入"], + ["直接服务市场", "Stereo Conversion、VFX、AI后期和内容版本制作", "Depth—Warp—Inpaint自动转换与专业校正", "用于竞品和商业能力验证"], + ["近期目标市场", "可触达客户及可处理内容形成的订单", "片库修复、广告短片、演示内容和专业后期工具", "通过项目报价和试点数据测算SAM/SOM"], + ], + [2.5, 4.3, 5.0, 4.0], + )) + + blocks.append(add_paragraph(doc, "7.2 市场规模与发展趋势", style="Heading 2")) + blocks.append(add_paragraph( + doc, + "PwC《Global Entertainment & Media Outlook 2026—2030》显示,全球娱乐与媒体行业收入由2025年的3.5万亿美元预计增长至2030年的4.2万亿美元,预测期复合年增长率为3.4%,相较2025年形成约6000亿美元新增收入[12]。其2025版报告给出的连续数据也表明,全球娱乐传媒收入由2020年的2.31万亿美元增长至2024年的2.93万亿美元,并预计在2029年达到3.51万亿美元[13]。该趋势意味着内容生产、版本适配和跨终端分发仍处于扩张期,为立体化和空间化内容生产提供了稳定的上游需求。", + )) + fig, cap = add_figure(doc, growth, 15.4, "图3 全球娱乐与媒体收入规模及增速(数据来源:PwC[13])") + blocks.extend([fig, cap]) + blocks.append(add_paragraph( + doc, + "与视频内容直接相关的下游市场同样保持增长。PwC预计全球OTT收入将由2025年的2266亿美元增至2030年的3040亿美元,复合年增长率为6.1%;全球电影票房预计在2030年达到395亿美元,影院将继续投资大画幅、高规格视听和家庭环境难以复制的体验[12]。在沉浸式场馆方面,Las Vegas Sphere于2025年报告7.81亿美元收入,其节目已经包含4D电影放映,且运营方正在推进新的地区扩张[12]。这些数据不能直接转换为2D转3D收入,但说明影院、流媒体、头显和沉浸式大屏具有持续的高质量内容版本需求。", + )) + blocks.append(add_caption(doc, "表7-2 与本项目相关的市场指标")) + blocks.append(add_table( + doc, + ["指标", "基期/现状", "预测或公开结果", "与项目的关系"], + [ + ["全球娱乐与媒体收入", "2025年3.5万亿美元", "2030年4.2万亿美元,CAGR 3.4%", "内容生产与分发的行业总盘"], + ["全球OTT收入", "2025年2266亿美元", "2030年3040亿美元,CAGR 6.1%", "片库立体化和空间视频版本的分发入口"], + ["全球电影票房", "持续恢复", "2030年395亿美元,CAGR 3.2%", "3D电影、大画幅和高规格影院体验"], + ["Sphere沉浸式场馆", "2025年收入7.81亿美元", "包含4D电影内容并规划扩张", "沉浸式大屏和专业空间内容应用"], + ["沉浸式长期情景", "预测口径差异较大", "McKinsey:2030年4万亿-5万亿美元潜在影响", "仅作为空间内容长期需求上限"], + ], + [3.2, 3.4, 5.0, 4.2], + )) + blocks.append(add_paragraph( + doc, + "对于更宽口径的空间计算与沉浸式市场,McKinsey估计元宇宙到2030年可能产生4万亿—5万亿美元经济影响[21],Citi在设备无关的广义定义下给出8万亿—13万亿美元情景TAM[22],Accenture调查则显示,具有相关战略的企业预计约4.2%的收入来自元宇宙相关产品、服务或商业模式,对应约1万亿美元价值[23]。上述预测包含电商、游戏、硬件和基础设施,技术与监管不确定性较高,因此本项目仅将其作为空间内容长期需求的辅助背景。", + )) + + blocks.append(add_paragraph(doc, "7.3 应用方向与需求结构", style="Heading 2")) + blocks.append(add_paragraph( + doc, + "市场需求的核心矛盾并非缺少2D内容,而是空间终端和沉浸式场景增长后,可直接消费的双目、多视点内容供给不足。原生双目或多目拍摄需要额外机位、同步、标定、视差设计和后期校正,适合重点项目,却难以覆盖海量存量电影、剧集、纪录片、广告、动画和用户视频。本项目通过可解释的几何估计、确定性视图变换和受掩码约束的视频修补,将存量2D资产转换为可控的左右眼、SBS或空间视频版本,定位于“内容再利用与版本生产”环节。", + )) + fig, cap = add_figure(doc, applications, 15.4, "图4 技术能力与重点应用市场的对应关系(项目组根据公开报告整理[12-13,17,19])") + blocks.extend([fig, cap]) + blocks.append(add_caption(doc, "表7-3 重点应用场景、需求痛点与项目价值")) + blocks.append(add_table( + doc, + ["应用场景", "主要需求", "现有痛点", "本项目可提供的价值", "优先级"], + [ + ["电影/剧集/纪录片", "存量片库和新增内容的立体版本", "原生立体拍摄与人工转换周期长、成本高", "离线高质量转换、镜头级视差控制、长视频稳定", "高"], + ["OTT与个人消费", "头显、家庭终端的空间视频内容", "内容规模不足,终端格式分散", "批量生成左右眼/SBS/空间视频并适配终端", "高"], + ["XR与空间计算", "舒适、稳定、可调节的双目内容", "视差抖动和左右眼冲突影响体验", "零视差平面、视差范围和设备参数可配置", "高"], + ["短视频/广告/UGC", "低成本、多版本、快速交付", "单条预算低,人工处理难以规模化", "自动化处理、局部复核、低边际成本", "中高"], + ["裸眼3D/商业展示", "多视点和大屏沉浸内容", "内容定制多、显示规格不统一", "以双目为基础扩展多视点和显示封装", "中"], + ["专业后期工具", "深度、视差、掩码和修补可编辑", "端到端黑盒难以满足导演和后期控制", "提供中间结果、参数控制和人工校正接口", "高"], + ], + [2.7, 3.6, 3.9, 4.7, 1.3], + )) + + blocks.append(add_paragraph(doc, "7.4 产业主体与竞品验证", style="Heading 2")) + blocks.append(add_paragraph( + doc, + "Prime Focus/DNEG的2026年投资者材料将立体转换(Stereo Conversion)与电影/剧集视觉特效、动画、虚拟制作、沉浸式体验、后期处理和发行并列,纳入其端到端媒体内容处理生态[19]。这是一项直接的产业验证:立体转换并非只停留在研究论文中,而是国际头部视觉特效服务商持续提供的商业能力。材料同时显示,DNEG正由单一视觉特效服务扩展至Brahma AI内容生成与管理平台,反映行业竞争正在由“单个镜头制作”向“AI工具、资产管理、自动化流程和多渠道交付”延伸。", + )) + fig, cap = add_figure(doc, dneg, 15.4, "图5 DNEG端到端媒体内容处理能力(根据Prime Focus/DNEG官方材料重绘[19])") + blocks.extend([fig, cap]) + blocks.append(add_caption(doc, "表7-4 代表性产业主体及其公开动向")) + blocks.append(add_table( + doc, + ["主体", "公开能力或案例", "产业角色", "对本项目的启示"], + [ + ["Prime Focus/DNEG", "立体转换、视觉特效、虚拟制作、沉浸式体验和Brahma AI", "直接竞品与产业服务商", "产品需同时具备高质量转换、可控后期和端到端交付能力"], + ["Netflix", "生成式AI用于预演、VFX、镜头规划和后期,已覆盖约300部作品", "内容平台与需求方", "自动化工具只有进入真实制作流程并提升单位投入产出才具有商业价值"], + ["MovieLabs/JioStar", "云端虚拟编辑、集成工作流及AI本地化", "好莱坞技术组织与规模化案例", "长视频处理应支持云端、批量任务、权限和资产复用"], + ["WEF/Autodesk", "AI内容生产价值链和M&E行业数字化调查", "行业趋势与采用度证据", "成本控制、生产力和可治理的AI工作流是采购决策重点"], + ], + [3.2, 5.0, 3.3, 4.6], + )) + blocks.append(add_paragraph( + doc, + "从竞争关系看,本项目不宜仅以“能生成右眼画面”作为差异点。专业市场更关注几何和时间稳定性、可靠区域保真、视差可控、长视频效率、失败帧定位、人工干预以及交付格式。Depth—Warp—Inpaint分阶段架构能够显式暴露深度、视差、遮挡掩码和修补结果,更容易形成专业后期工具、质量审计与模块替换能力,这是相对于纯端到端黑盒生成路线的重要产品化优势。", + )) + + blocks.append(add_paragraph(doc, "7.5 降本提效与商业价值", style="Heading 2")) + blocks.append(add_paragraph( + doc, + "Deloitte对虚拟制作的调研指出,高预算电影的重拍较为常见,可占最终制作成本的5%—20%甚至更多;高预算科幻/奇幻电影的VFX成本可达到总预算的20%。更早介入的数字资产、可视化和自动化流程能够减少重拍、合成、抠像、差旅和外景成本[15]。虽然该报告讨论的是虚拟制作而非2D转3D,但它揭示了本项目所处的后期与版本生产环节具有明确成本压力。", + )) + fig, cap = add_figure(doc, cost, 15.4, "图6 影视内容生产与后期自动化的公开价值证据(来源:[14-16,20])") + blocks.extend([fig, cap]) + blocks.append(add_paragraph( + doc, + "Netflix在2026年第二季度财报会披露,纪录片系列American Experiment包含17分钟AI增强画面,该部分相较此前方案以两倍速度、约一半成本完成;Netflix同时表示生成式AI工作流已在约300部作品中使用,当前最集中于后期[14]。这一案例表明,AI画面处理不仅能够降低既有方案成本,还可以使原本受预算和周期限制的镜头进入成片。由于案例范围仅为17分钟AI增强画面,不能外推为所有影片均可节省50%。", + )) + blocks.append(add_paragraph( + doc, + "在行业层面,Morgan Stanley估计生成式AI可使媒体行业成本降低约10%,电视和电影制作成本最多降低约30%,主要机会包括动画、脚本、编辑、声音、VFX以及以数字或虚拟组件减少重拍[16]。MovieLabs公布的JioStar/Postudio云端后期案例则报告,相较本地部署成本改善30%以上、所需IT人员减少85%,并实现零资本性投入和资源充分利用[20]。Autodesk 2025年对5594名行业领导者的调查也将成本控制列为首要业务挑战,并认为媒体娱乐行业同时面临显著AI扰动和收益[18]。这些材料共同说明,客户采购新工具的核心依据将是单位内容成本、交付周期、人员投入和可复用资产,而不只是单帧视觉效果。", + )) + blocks.append(add_caption(doc, "表7-5 外部价值证据及其在本项目中的使用边界")) + blocks.append(add_table( + doc, + ["证据来源", "公开结果", "可支持的项目论点", "使用限制"], + [ + ["Deloitte[15]", "重拍占5%-20%;高预算类型片VFX可达预算20%", "传统制作与后期存在较高成本基线", "虚拟制作口径,不是本项目节省比例"], + ["Netflix[14]", "17分钟AI增强画面:2倍速度、约50%成本", "AI后期已产生真实制作价值", "单一项目局部案例,不可普遍外推"], + ["Morgan Stanley[16]", "媒体约降10%,电视/电影最高约降30%", "影视GenAI具有行业级降本空间", "研究估计,覆盖广义GenAI"], + ["MovieLabs[20]", "成本改善30%+,IT人员减少85%", "云化和批量化工作流可降低工程成本", "云编辑平台案例,不是算法指标"], + ["WEF[17]", "创意生产力约提升25%,编辑工作时间潜在减少72%", "自动化可释放重复编辑工作量", "不同研究任务,数字不可相加"], + ], + [3.0, 4.7, 4.6, 3.8], + )) + + blocks.append(add_paragraph(doc, "7.6 项目市场定位与实施建议", style="Heading 2")) + blocks.append(add_paragraph( + doc, + "综合市场规模、应用需求和产业案例,本项目适合定位为“面向存量和新增2D视频的可控双目/空间视频生成底座”,而不是宣称替代所有原生立体拍摄。近期应优先进入对离线质量、可控参数和版本交付要求明确的专业后期、片库样片、广告展示和沉浸式演示场景,通过小规模试点积累单分钟处理成本、人工复核时间、返修率和观看舒适度数据;中期再面向OTT、XR终端和批量内容平台形成标准化服务接口;远期在双目系统稳定后扩展多视点、裸眼3D和实时处理。", + )) + blocks.append(add_caption(doc, "表7-6 项目能力、客户价值与验证指标")) + blocks.append(add_table( + doc, + ["项目能力", "解决的客户问题", "商业价值", "建议验证指标"], + [ + ["时序深度与视差控制", "镜头间层次漂移、观看不舒适", "减少人工逐镜头调节", "视差稳定性、舒适区超限率、人工调参时长"], + ["可解释Warp与遮挡分析", "边界重影、空洞和错误区域难定位", "缩短质量检查和返修定位时间", "空洞率、边界错误率、问题帧定位时间"], + ["受掩码约束的视频修补", "逐帧补洞成本高、纹理闪烁", "降低重复修补工时并保护原内容", "修补区域工时、时序闪烁、可靠区域变化率"], + ["长视频批处理与统一输出", "格式多、编解码和任务管理复杂", "提高吞吐率并降低单位分钟成本", "分钟/GPU小时、峰值显存、任务成功率、交付周期"], + ["中间结果和人工校正接口", "黑盒结果难审计、专业客户不可控", "提升可用率、客户信任和复购可能", "人工接管率、返修率、客户验收通过率"], + ], + [3.6, 4.6, 4.3, 3.8], + )) + + spacer = doc.add_paragraph(style="Normal") + spacer.paragraph_format.space_after = Pt(4) + blocks.append(spacer) + note = add_table( + doc, + ["内部商业测算建议"], + [["单分钟净节省 = 传统人工立体转换单价 - 系统推理成本 - 人工复核成本;年度净价值 = 年处理分钟数 × 单分钟净节省 - 固定研发与运维成本。外部报告用于证明行业需求和降本方向,项目试点数据用于证明本系统实际ROI。"]], + [16.3], + ) + set_cell_shading(note.rows[1].cells[0], "EDF3F8") + blocks.append(note) + blocks.append(add_paragraph( + doc, + "因此,市场化评价应与前文实验体系同步建设:在PSNR、SSIM、LPIPS、视差误差和时序稳定性之外,增加每分钟GPU成本、每分钟人工复核工时、一次验收通过率、返修率和交付周期等指标。只有将技术质量与单位经济性同时量化,才能把多阶段框架的工程优势转化为可验证的市场竞争力。", + )) + + for block in blocks: + move_before(heading_8, block) + + +def update_references(doc: Document) -> None: + heading_index = next(i for i, p in enumerate(doc.paragraphs) if p.text.strip() == "8 参考资料") + existing = [p for p in doc.paragraphs[heading_index + 1:] if p.text.strip()] + for number, paragraph in enumerate(existing, start=1): + if not paragraph.text.lstrip().startswith("["): + paragraph.text = f"[{number}] {paragraph.text}" + p_pr = paragraph._p.get_or_add_pPr() + num_pr = p_pr.find(qn("w:numPr")) + if num_pr is not None: + p_pr.remove(num_pr) + paragraph.paragraph_format.left_indent = Cm(0.72) + paragraph.paragraph_format.first_line_indent = Cm(-0.72) + paragraph.paragraph_format.space_after = Pt(4) + paragraph.paragraph_format.line_spacing = 1.2 + for run in paragraph.runs: + format_run(run, size=9.5) + new_references = [ + "[12] PwC. Global Entertainment & Media Outlook 2026-30: Digital Innovation Drives Demand for Human Experiences [EB/OL]. 2026-06-22 [2026-07-22]. https://www.pwc.com/gx/en/issues/business-model-reinvention/outlook/insights-and-perspectives.html.", + "[13] PwC. Global Entertainment & Media Outlook 2025-2029: Hong Kong Summary [R]. Hong Kong: PwC, 2025.", + "[14] Netflix, Inc. FQ2 2026 Earnings Call Transcript [EB/OL]. 2026-07-16 [2026-07-22]. https://s22.q4cdn.com/959853165/files/doc_financials/2026/q2/Netflix-Inc-_Earnings-Call_2026-07-16T00_00_00_English-1.pdf.", + "[15] Deloitte. The Future of Content Creation: Virtual Production [R]. Deloitte Insights, 2024.", + "[16] Morgan Stanley. How AI Benefits—and Threatens—the Entertainment Industry [EB/OL]. 2025-07-17 [2026-07-22]. https://www.morganstanley.com/insights/articles/ai-in-media-entertainment-benefits-and-risks.", + "[17] World Economic Forum. Artificial Intelligence in Media, Entertainment and Sport [R]. Geneva: World Economic Forum, 2025.", + "[18] Autodesk. 2025 State of Design & Make [R]. San Francisco: Autodesk, 2025.", + "[19] Prime Focus Limited. Investor Presentation: January 2026 [R]. Mumbai: Prime Focus Limited, 2026.", + "[20] MovieLabs. Industry Forum Spring Summit 2026 Presentation Deck [R]. Los Angeles: MovieLabs, 2026.", + "[21] McKinsey & Company. Value Creation in the Metaverse: The Real Business of the Virtual World [R]. McKinsey & Company, 2022.", + "[22] Citi GPS. Metaverse and Money: Decrypting the Future [R]. New York: Citigroup, 2022.", + "[23] Accenture. Metaverse: Evolution, Then Revolution [R]. Accenture, 2023.", + ] + for text in new_references: + paragraph = doc.add_paragraph(text, style="Normal") + paragraph.paragraph_format.left_indent = Cm(0.72) + paragraph.paragraph_format.first_line_indent = Cm(-0.72) + paragraph.paragraph_format.space_after = Pt(4) + paragraph.paragraph_format.line_spacing = 1.2 + for run in paragraph.runs: + format_run(run, size=9.5) + + +def update_toc_reference_page(doc: Document) -> None: + for paragraph in doc.paragraphs: + if paragraph.text.startswith("8 参考资料\t"): + paragraph.text = "8 参考资料\t19" + return + + +def update_revision_history(doc: Document) -> None: + table = doc.tables[0] + if any("补充第7章市场调研" in cell.text for row in table.rows for cell in row.cells): + return + cells = table.add_row().cells + values = ["3", "补充第7章市场调研", "V1.3", "项目组", "2026-07-22", "增加市场规模、应用、竞品和降本证据"] + for cell, value in zip(cells, values): + cell.text = value + for cell in cells: + cell.vertical_alignment = WD_CELL_VERTICAL_ALIGNMENT.CENTER + for paragraph in cell.paragraphs: + paragraph.alignment = WD_ALIGN_PARAGRAPH.CENTER + for run in paragraph.runs: + format_run(run, size=8.5) + + +def validate_docx(path_bytes: bytes) -> None: + path = os.fsdecode(path_bytes) + with zipfile.ZipFile(path) as archive: + bad = archive.testzip() + if bad: + raise RuntimeError(f"DOCX ZIP校验失败:{bad}") + document_xml = archive.read("word/document.xml") + for marker in ("7.1 调研口径与市场边界", "图6", "[23] Accenture"): + if marker.encode("utf-8") not in document_xml: + raise RuntimeError(f"DOCX内容校验失败,缺少:{marker}") + if document_xml.count(b" None: + ASSET_DIR.mkdir(parents=True, exist_ok=True) + configure_chinese_fonts() + dneg = ASSET_DIR / "figure5_dneg_capabilities_cn.png" + create_dneg_capability_chart(dneg) + + doc = Document(os.fsdecode(TARGET_BYTES)) + if len(doc.inline_shapes) < 5: + raise RuntimeError("未找到图5对应的嵌入图片。") + shape = doc.inline_shapes[4] + blip = shape._inline.graphic.graphicData.pic.blipFill.blip + image_part = doc.part.related_parts[blip.embed] + image_part._blob = dneg.read_bytes() + + for paragraph in doc.paragraphs: + if paragraph.text.startswith("图5 DNEG"): + paragraph.text = "图5 DNEG端到端媒体内容处理能力(根据Prime Focus/DNEG官方材料重绘[19])" + paragraph.style = doc.styles["Caption"] + for run in paragraph.runs: + replaced = run.text.replace( + "将Stereo Conversion与电影/剧集VFX", + "将立体转换(Stereo Conversion)与电影/剧集视觉特效", + ).replace("国际头部VFX服务商", "国际头部视觉特效服务商").replace( + "由单一VFX服务扩展", "由单一视觉特效服务扩展" + ) + if replaced != run.text: + run.text = replaced + for table in doc.tables: + for row in table.rows: + for cell in row.cells: + for paragraph in cell.paragraphs: + for run in paragraph.runs: + replaced = run.text.replace( + "Stereo Conversion、VFX、虚拟制作", + "立体转换、视觉特效、虚拟制作", + ) + if replaced != run.text: + run.text = replaced + + doc.save(os.fsdecode(TEMP_BYTES)) + validate_docx(TEMP_BYTES) + os.replace(TEMP_BYTES, TARGET_BYTES) + print("localized_figure5=", TARGET_BYTES.decode("gbk")) + + +def polish_existing_document() -> None: + doc = Document(os.fsdecode(TARGET_BYTES)) + heading_index = next(i for i, p in enumerate(doc.paragraphs) if p.text.strip() == "8 参考资料") + for paragraph in doc.paragraphs[heading_index + 1:]: + p_pr = paragraph._p.get_or_add_pPr() + num_pr = p_pr.find(qn("w:numPr")) + if num_pr is not None: + p_pr.remove(num_pr) + update_toc_reference_page(doc) + + note = next(t for t in doc.tables if t.cell(0, 0).text == "内部商业测算建议") + previous = note._tbl.getprevious() + if previous is None or previous.tag != qn("w:p"): + spacer = doc.add_paragraph(style="Normal") + spacer.paragraph_format.space_after = Pt(4) + note._tbl.addprevious(spacer._p) + + doc.save(os.fsdecode(TEMP_BYTES)) + validate_docx(TEMP_BYTES) + os.replace(TEMP_BYTES, TARGET_BYTES) + print("polished=", TARGET_BYTES.decode("gbk")) + + +def main() -> None: + if not os.path.exists(TARGET_BYTES): + raise FileNotFoundError(TARGET_BYTES.decode("gbk")) + + ASSET_DIR.mkdir(parents=True, exist_ok=True) + configure_chinese_fonts() + growth = ASSET_DIR / "figure3_global_em_growth.png" + applications = ASSET_DIR / "figure4_application_map.png" + cost = ASSET_DIR / "figure6_cost_evidence.png" + create_growth_chart(growth) + create_application_map(applications) + create_cost_evidence(cost) + + dneg = ASSET_DIR / "figure5_dneg_capabilities_cn.png" + create_dneg_capability_chart(dneg) + + if not os.path.exists(BACKUP_BYTES): + shutil.copy2(TARGET_BYTES, BACKUP_BYTES) + + doc = Document(os.fsdecode(TARGET_BYTES)) + build_chapter(doc, growth, applications, cost, dneg) + update_references(doc) + update_toc_reference_page(doc) + update_revision_history(doc) + + doc.core_properties.subject = "基于多阶段深度估计、视图变换与视频修补的双目视频生成系统" + doc.core_properties.comments = "第7章市场调研于2026-07-22补充。" + doc.save(os.fsdecode(TEMP_BYTES)) + validate_docx(TEMP_BYTES) + os.replace(TEMP_BYTES, TARGET_BYTES) + + print("updated=", TARGET_BYTES.decode("gbk")) + print("backup=", BACKUP_BYTES.decode("gbk")) + print("assets=", ASSET_DIR) + + +if __name__ == "__main__": + if "--polish-existing" in sys.argv: + polish_existing_document() + elif "--localize-existing" in sys.argv: + localize_existing_figure5() + else: + main() diff --git a/2d_to_3d_market_tech_reports/citi_metaverse_and_money_2022.pdf b/2d_to_3d_market_tech_reports/citi_metaverse_and_money_2022.pdf new file mode 100644 index 0000000000000000000000000000000000000000..cb87809709ca799089c4894a5b5d1cc90889aa6c --- /dev/null +++ b/2d_to_3d_market_tech_reports/citi_metaverse_and_money_2022.pdf @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:08f86b65df3f78520c4354b7b689e05e1a1bfe9329977584398d1cd0b52bf7de +size 8769353 diff --git a/2d_to_3d_market_tech_reports/deloitte_future_of_media_and_entertainment_2024.pdf b/2d_to_3d_market_tech_reports/deloitte_future_of_media_and_entertainment_2024.pdf new file mode 100644 index 0000000000000000000000000000000000000000..029d636e735f1e9b0c94b7d877fc019b38c22d8a --- /dev/null +++ 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b/2d_to_3d_market_tech_reports/key_charts/03_competitor_product/primefocus_2026_p17_content_tam.png new file mode 100644 index 0000000000000000000000000000000000000000..3003927e07c1c9b56963c75c28ee6c7d4d3bbdb8 --- /dev/null +++ b/2d_to_3d_market_tech_reports/key_charts/03_competitor_product/primefocus_2026_p17_content_tam.png @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:489a3259ba4296bc1789cfd9cf661d74261a19052149c666547a2dfd7e3a6755 +size 357074 diff --git a/2d_to_3d_market_tech_reports/key_charts/README.md b/2d_to_3d_market_tech_reports/key_charts/README.md new file mode 100644 index 0000000000000000000000000000000000000000..5afb2a7229fd922e2ba381bca3726bfde300f039 --- /dev/null +++ b/2d_to_3d_market_tech_reports/key_charts/README.md @@ -0,0 +1,50 @@ +# 关键图表页索引 + +这些 PNG 均由本目录中的原始 PDF 按页导出,未改写图中数据。使用时应在图注中标注机构、报告名、年份和 PDF 页码。 + +## 01_market_size + +| 文件 | 原报告页 | 内容 | +|---|---:|---| +| `pwc_2025_p05_global_em_revenue.png` | 5 | 全球 E&M 收入 2020-2029,2029 年 3.51 万亿美元,CAGR 3.7% | +| `pwc_2025_p07_revenue_structure.png` | 7 | 全球 E&M 广告、连接、消费者收入结构 | +| `pwc_2025_p16_ott_market.png` | 16 | 香港 OTT 收入 2024-2029;仅作区域示例 | +| `pwc_2026_p01_global_em_2030.png` | 网页打印 1 | 全球 E&M 2030 年 4.2 万亿美元标题和摘要 | +| `pwc_2026_p05_sphere_immersive.png` | 网页打印 5 | Sphere 2025 年 7.81 亿美元收入及 4D 放映应用 | +| `pwc_2026_p06_cinema_live_experiences.png` | 网页打印 6 | 影院和现场体验收入趋势图 | +| `pwc_2026_p08_global_ott.png` | 网页打印 8 | 全球 OTT 2025 年 2266 亿美元、2030 年 3040 亿美元 | +| `mckinsey_2022_p37_metaverse_impact.png` | 37 | 元宇宙 2030 年 4 万亿-5 万亿美元潜在经济影响及用例 | +| `citi_2022_p12_metaverse_tam.png` | 12 | 不同渗透率假设下的元宇宙 TAM 情景表 | +| `accenture_2023_p10_metaverse_value.png` | 10 | 企业预期的 4.2% 收入、约 1 万亿美元价值和高管调查 | + +## 02_cost_value + +| 文件 | 原报告页 | 内容 | +|---|---:|---| +| `autodesk_2025_p07_digital_transformation_roi.png` | 7 | 数字化转型改善幅度调查图 | +| `autodesk_2025_p38_media_ai_impact.png` | 38 | M&E 的 AI 扰动与收益对比图 | +| `autodesk_2025_p46_cost_control.png` | 46 | 成本控制是受访企业首要挑战,33% | +| `deloitte_2024_p07_virtual_production_cost.png` | 7 | 重拍、VFX、差旅、外景、合成和抠像成本说明 | +| `netflix_2026_p12_ai_cost_case.png` | 12 | 17 分钟 AI 增强画面,2 倍速度、半成本案例 | +| `morgan_stanley_2025_p01_cost_estimate.png` | 网页打印 1 | 媒体约 10%、电视/电影最高 30% 的 GenAI 降本估计 | +| `morgan_stanley_2025_p03_tv_film_savings.png` | 网页打印 3 | 前后期、VFX、虚拟组件和减少重拍的解释 | +| `movielabs_2026_p146_jiostar_case.png` | 146 | JioStar 云编辑平台前后状态和 30%+ 成本改善 | +| `movielabs_2026_p148_jiostar_outcomes.png` | 148 | 30%+ 成本改善、85% 更少 IT 人员、零 CAPEX | +| `wef_2025_p10_ai_creative_value.png` | 10 | AI 内容创作价值链和创意生产力指标 | +| `wef_2025_p14_ai_productivity_cost.png` | 14 | AI 提效降本流程图和编辑工作时间指标 | +| `wef_2025_p15_ai_content_creation.png` | 15 | 视频对象处理和资产管理案例 | + +## 03_competitor_product + +| 文件 | 原报告页 | 内容 | +|---|---:|---| +| `primefocus_2026_p04_business_and_products.png` | 4 | Prime Focus/DNEG 的创意、AI/技术和制作三条业务线 | +| `primefocus_2026_p09_stereo_conversion_capability.png` | 9 | DNEG 端到端内容生态中的 Stereo Conversion | +| `primefocus_2026_p14_immersive_business.png` | 14 | 主题乐园与数字演出业务和应用案例 | +| `primefocus_2026_p17_content_tam.png` | 17 | 企业内容转型超过 1300 亿美元的公司市场口径 | + +## 使用说明 + +- `official_web_print` 文件是官方网页的本地打印件,便于归档,不应描述为厂商发布的原生 PDF 报告。 +- 图表可用于内部项目文档;如文档对外发布,应确认原报告的转载和图表使用条款,优先采用“据报告数据重绘并注明来源”的方式。 +- 具体数字、页码和限制条件见上一级目录的 `market_evidence_matrix.csv`。 diff --git a/2d_to_3d_market_tech_reports/market_chapter_assets/figure3_global_em_growth.png b/2d_to_3d_market_tech_reports/market_chapter_assets/figure3_global_em_growth.png new file mode 100644 index 0000000000000000000000000000000000000000..b6319f146580f2f7a53aabe5e45a917f3e047759 --- /dev/null +++ b/2d_to_3d_market_tech_reports/market_chapter_assets/figure3_global_em_growth.png @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:4d0cc1380bb5c74dab3d48619e7f750dacc44b14a9532e98f7d78323c8a6ded1 +size 139856 diff --git a/2d_to_3d_market_tech_reports/market_chapter_assets/figure4_application_map.png 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a/2d_to_3d_market_tech_reports/market_chapter_assets/figure6_cost_evidence.png b/2d_to_3d_market_tech_reports/market_chapter_assets/figure6_cost_evidence.png new file mode 100644 index 0000000000000000000000000000000000000000..d6966f6f80fd50bcf61794d78c9fb9f0274344a6 --- /dev/null +++ b/2d_to_3d_market_tech_reports/market_chapter_assets/figure6_cost_evidence.png @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:02639800944e79d21ba5370c03f12e0caf979c3062e01477c71034e55601b46c +size 205720 diff --git a/2d_to_3d_market_tech_reports/market_evidence_matrix.csv b/2d_to_3d_market_tech_reports/market_evidence_matrix.csv new file mode 100644 index 0000000000000000000000000000000000000000..dc02fe5913403875d65bb3714a1774139b4fb5ef --- /dev/null +++ b/2d_to_3d_market_tech_reports/market_evidence_matrix.csv @@ -0,0 +1,19 @@ +"evidence_id","evidence_level","theme","organization","report","year","exact_claim","page","chart_file","project_use","limitation","local_report","official_url" +"M01","C-宏观市场上限","全球娱乐传媒市场","PwC","Global Entertainment & Media Outlook 2025-2029: Hong Kong Summary","2025","全球娱乐与媒体收入预计由2024年的2.93万亿美元增长至2029年的3.51万亿美元,预测期CAGR为3.7%。","PDF第5页","key_charts/01_market_size/pwc_2025_p05_global_em_revenue.png","说明项目面向的电影、OTT、广告和沉浸式内容处于数万亿美元内容经济中。","这是整个E&M市场,不是2D转3D技术自身市场;不能直接写成本项目TAM。","pwc_global_entertainment_media_outlook_2025_2029.pdf","https://www.pwchk.com/en/tmt/entertainment-and-media-outlook-2025-2029.pdf" +"M02","C-宏观市场上限","全球娱乐传媒市场","PwC","Global Entertainment & Media Outlook 2026-2030","2026","全球E&M收入由2025年的3.5万亿美元增至2030年的4.2万亿美元,CAGR为3.4%,2030年相较2025年新增约6000亿美元收入。","网页打印PDF第1-2页","key_charts/01_market_size/pwc_2026_p01_global_em_2030.png","用于市场总盘和数字内容需求增长的最新背景。","网页打印件仅为官方网页的本地留档;4.2万亿美元包含广告、连接和消费支出等广泛板块。","pwc_global_entertainment_media_outlook_2026_2030_official_web_print.pdf","https://www.pwc.com/gx/en/issues/business-model-reinvention/outlook/insights-and-perspectives.html" +"M03","B-相邻可服务市场","OTT视频市场","PwC","Global Entertainment & Media Outlook 2026-2030","2026","全球OTT收入由2025年的2266亿美元预计增至2030年的3040亿美元,CAGR为6.1%,新增774亿美元。","网页打印PDF第8页","key_charts/01_market_size/pwc_2026_p08_global_ott.png","支撑长视频、流媒体片库立体化和空间视频版本制作的下游分发需求。","OTT收入并不等同于3D/空间视频收入,只能作为下游内容市场。","pwc_global_entertainment_media_outlook_2026_2030_official_web_print.pdf","https://www.pwc.com/gx/en/issues/business-model-reinvention/outlook/insights-and-perspectives.html" +"M04","C-宏观市场上限","沉浸式与空间内容","McKinsey & Company","Value Creation in the Metaverse","2022","2030年元宇宙在消费和企业用例中的潜在经济影响约为4万亿至5万亿美元。","PDF第37页,Exhibit 11","key_charts/01_market_size/mckinsey_2022_p37_metaverse_impact.png","说明空间内容、VR/AR硬件、数字媒体和现场娱乐的长期需求上限。","这是情景化经济影响估计,技术、监管和社会不确定性很高;不是市场收入,也不是2D转3D TAM。","mckinsey_value_creation_in_the_metaverse_2022.pdf","https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/value-creation-in-the-metaverse" +"M05","C-宏观市场上限","沉浸式与空间内容","Citi GPS","Metaverse and Money: Decrypting the Future","2022","设备无关的广义元宇宙到2030年TAM情景为8万亿至13万亿美元,潜在用户约50亿;报告图表给出不同数字经济渗透率假设。","PDF第3、8、12页,Figure 3","key_charts/01_market_size/citi_2022_p12_metaverse_tam.png","用于呈现个人消费设备、AR/VR和沉浸式互联网的远期情景。","范围包含电商、社交、游戏、基础设施等,口径极宽且为情景推演;不得作为本项目直接市场规模。","citi_metaverse_and_money_2022.pdf","https://www.citigroup.com/global/insights/metaverse-and-money_20220330" +"M06","C-宏观市场上限","企业与消费沉浸式市场","Accenture","Metaverse: Evolution, Then Revolution","2023","具有元宇宙战略的企业预计未来三年4.2%的收入来自相关新产品、服务或商业模式,对应约1万亿美元;3200名受访高管中89%认为元宇宙对未来增长重要。","PDF第10页","key_charts/01_market_size/accenture_2023_p10_metaverse_value.png","支撑企业端和消费端对空间内容及沉浸式体验的需求预期。","数字来自高管预期调查,不是已实现收入,也不是2D转3D专项市场。","accenture_metaverse_evolution_before_revolution_2023.pdf","https://www.accenture.com/content/dam/accenture/final/accenture-com/document/Accenture-Metaverse-Evolution-Before-Revolution.pdf" +"M07","B-直接下游市场","全球影院市场","PwC","Global Entertainment & Media Outlook 2026-2030","2026","全球电影票房预计以3.2%的CAGR恢复增长,到2030年达到395亿美元;影院将继续投资家庭环境难以复制的大画幅、高规格视听体验。","官方网页正文;网页打印PDF第6页含影院趋势图","key_charts/01_market_size/pwc_2026_p06_cinema_live_experiences.png","为3D电影版本、影院大画幅和高规格视听体验提供直接下游市场依据。","395亿美元是全部电影票房,不是3D电影票房,也不是立体转换服务收入。","pwc_global_entertainment_media_outlook_2026_2030_official_web_print.pdf","https://www.pwc.com/gx/en/issues/business-model-reinvention/outlook/insights-and-perspectives.html" +"M08","B-直接应用案例","沉浸式场馆","PwC","Global Entertainment & Media Outlook 2026-2030","2026","Las Vegas Sphere在2025年报告收入7.81亿美元,节目包括《绿野仙踪》4D放映和演唱会,其母公司正在美国其他地区及迪拜规划扩张。","官方网页正文;网页打印PDF第5页","key_charts/01_market_size/pwc_2026_p05_sphere_immersive.png","说明沉浸式大屏、4D放映和现场体验已经形成实际收入与扩张案例。","这是单一场馆的整体收入,不是2D转3D项目收入;应用相关性高但不可直接外推。","pwc_global_entertainment_media_outlook_2026_2030_official_web_print.pdf","https://www.pwc.com/gx/en/issues/business-model-reinvention/outlook/insights-and-perspectives.html" +"V01","A-直接影视案例","制作时间与成本","Netflix","FQ2 2026 Earnings Call Transcript","2026","纪录片系列American Experiment使用17分钟AI增强画面;Netflix称这部分相较此前方案制作速度为2倍、成本为一半,并称生成式AI已用于约300部作品,主要集中在后期。","PDF第12页","key_charts/02_cost_value/netflix_2026_p12_ai_cost_case.png","为自动化后期可缩短周期、降低单位内容成本提供大厂真实项目案例。","这是17分钟AI增强画面的单一案例,并非2D转3D或全片成本基准;不能外推为所有项目均节省50%。","netflix_q2_2026_earnings_call_transcript_ai_cost.pdf","https://s22.q4cdn.com/959853165/files/doc_financials/2026/q2/Netflix-Inc-_Earnings-Call_2026-07-16T00_00_00_English-1.pdf" +"V02","A-直接影视成本基线","重拍与VFX成本","Deloitte","The Future of Content Creation: Virtual Production","2024","高预算电影重拍通常占最终制作成本5%-20%甚至更多;高预算科幻/奇幻电影VFX可占总预算20%;虚拟制作可减少重拍、合成、抠像、差旅和外景成本。","PDF第7页","key_charts/02_cost_value/deloitte_2024_p07_virtual_production_cost.png","用于建立传统制作和后期的成本痛点,并解释自动深度、视图生成和修补的降本逻辑。","报告讨论虚拟制作,不是2D转3D;可作为相邻工作流成本基线,不能宣称本项目已实现相同比例节省。","deloitte_virtual_production_future_content_creation_2024.pdf","https://www.deloitte.com/content/dam/assets-zone3/us/en/docs/industries/technology-media-telecommunications/2024/us-tmt-the-future-of-content-creation-virtual-production.pdf" +"V03","B-行业分析估计","影视GenAI降本","Morgan Stanley","How AI Benefits—and Threatens—the Entertainment Industry","2025","Morgan Stanley Research估计GenAI可使媒体行业成本降低约10%,电视和电影最多约30%;影视内容资本支出约占总费用50%,数字/虚拟组件还可减少重拍及前后期成本。","网页打印PDF第1-3页","key_charts/02_cost_value/morgan_stanley_2025_p01_cost_estimate.png; key_charts/02_cost_value/morgan_stanley_2025_p03_tv_film_savings.png","支撑AI影视制作的行业级降本空间,并说明后期、VFX和虚拟组件是主要价值环节。","这是研究机构的行业估计,覆盖广义GenAI而非2D转3D;最多30%不是已验证的统一基准。","morgan_stanley_ai_entertainment_costs_2025_official_web_print.pdf","https://www.morganstanley.com/insights/articles/ai-in-media-entertainment-benefits-and-risks" +"V04","B-相邻制作案例","云端后期降本","MovieLabs","Industry Forum Spring Summit 2026 Presentation Deck","2026","JioStar/Postudio案例称云端虚拟编辑比本地部署成本低30%以上,所需IT人员减少85%,实现零CAPEX和100%利用率。","PDF第146、148页","key_charts/02_cost_value/movielabs_2026_p146_jiostar_case.png; key_charts/02_cost_value/movielabs_2026_p148_jiostar_outcomes.png","说明模块化、云化、批量化媒体处理可降低基础设施与运维成本,适合映射项目的长视频批处理和服务化部署。","案例衡量的是云端编辑平台,不是立体转换算法;应作为工程部署价值旁证。","movielabs_industry_forum_spring_summit_2026.pdf","https://movielabs.com/prodtech/Industry-Forum-Spring-Summit-2026-Presentation-Deck.pdf" +"V05","B-行业组织综合证据","AI内容生产效率","World Economic Forum","Artificial Intelligence in Media, Entertainment and Sport","2025","报告称文生图GenAI可使人类创意生产力提高约25%;LLM可能减少编辑人员72%的工作时间;自动资产管理案例的相关运营成本最多可下降75%。","PDF第10、14、15页,Figures 2-3","key_charts/02_cost_value/wef_2025_p10_ai_creative_value.png; key_charts/02_cost_value/wef_2025_p14_ai_productivity_cost.png; key_charts/02_cost_value/wef_2025_p15_ai_content_creation.png","用于说明内容生成、编辑、跨帧对象处理和资产管理的自动化价值。","各数字来自报告引用的不同研究或案例,任务和口径不同;不可合并成一个项目ROI。","wef_ai_in_media_entertainment_sport_2025.pdf","https://reports.weforum.org/docs/WEF_Artificial_Intelligence_in_Media_Entertainment_and_Sport_2025.pdf" +"V06","B-跨行业调查","数字化ROI与成本压力","Autodesk","2025 State of Design & Make","2025","5594名行业领导者调查显示,多数受访组织认为数字化转型带来的客户满意度、生产力或创新改善达到50%以上;33%将成本控制列为首要挑战,M&E被描述为AI扰动和收益最明显的行业。","PDF第7、38、45-46页","key_charts/02_cost_value/autodesk_2025_p07_digital_transformation_roi.png; key_charts/02_cost_value/autodesk_2025_p38_media_ai_impact.png; key_charts/02_cost_value/autodesk_2025_p46_cost_control.png","为媒体制作数字化投资、AI采用和成本控制优先级提供大样本调查图表。","50%+指受访者对改善幅度的分档回答,不是严格财务核算的项目ROI;调查覆盖Design & Make多个行业。","autodesk_state_design_make_2025.pdf","https://adsknews.autodesk.com/app/uploads/2025/04/2025-SDM-Report-%E2%80%93-Final.pdf" +"P01","A-直接竞品能力","Stereo Conversion产品能力","Prime Focus / DNEG","Investor Presentation January 2026","2026","DNEG将Stereo Conversion列入端到端媒体内容处理生态,并与VFX、虚拟制作、沉浸式体验、后期和发行并列。","PDF第9页","key_charts/03_competitor_product/primefocus_2026_p09_stereo_conversion_capability.png","直接证明大型VFX厂商仍将2D/3D立体转换作为商业能力,可作为本项目竞品和产业验证。","投资者材料仅展示能力版图,没有披露算法架构、精度、处理时长或单项目成本。","primefocus_investor_presentation_jan_2026.pdf","https://www.primefocus.com/wp-content/uploads/2026/01/PFL-Investor-Presentation-January-2026-1.pdf" +"P02","B-竞品公司市场口径","内容转型可寻址市场","Prime Focus / DNEG","Investor Presentation January 2026","2026","公司将企业内容转型的全球机会描述为2030年超过1300亿美元,业务包括媒体资产管理、生成式AI内容创作和营销编排。","PDF第4、17页","key_charts/03_competitor_product/primefocus_2026_p04_business_and_products.png; key_charts/03_competitor_product/primefocus_2026_p17_content_tam.png","可说明头部内容服务商正从单一VFX扩展到AI内容生成、管理和分发平台。","这是公司投资者口径,且汇总了多个第三方市场;不是Stereo Conversion单项TAM。","primefocus_investor_presentation_jan_2026.pdf","https://www.primefocus.com/wp-content/uploads/2026/01/PFL-Investor-Presentation-January-2026-1.pdf" +"P03","B-相邻应用落地","主题乐园与数字演出","Prime Focus / DNEG","Investor Presentation January 2026","2026","DNEG披露其为环球主题乐园制作屏幕内容,并称Disney与Comcast主题乐园及景点2025年收入超过400亿美元;公司正制作两场全长数字演唱会,FY26及以后收入超过6000万美元。","PDF第14页","key_charts/03_competitor_product/primefocus_2026_p14_immersive_business.png","支撑2D转3D/空间内容在主题乐园、数字演出和沉浸式大屏中的应用方向。","数字来自企业投资者材料,部分为关联大盘或项目管线,不等于本项目可获得收入。","primefocus_investor_presentation_jan_2026.pdf","https://www.primefocus.com/wp-content/uploads/2026/01/PFL-Investor-Presentation-January-2026-1.pdf" +"P04","B-行业趋势","视频广告制作","PwC","Global Entertainment & Media Outlook 2025-2029: Hong Kong Summary","2025","报告指出GenAI正在通过压缩成本和时间改变视频广告制作,AI采用早期通常先在后台运营中体现为降本增效。","PDF第27页","","支撑广告、品牌内容和短视频批量立体化的商业方向。","定性判断,没有给出2D转3D专项节省比例。","pwc_global_entertainment_media_outlook_2025_2029.pdf","https://www.pwchk.com/en/tmt/entertainment-and-media-outlook-2025-2029.pdf" diff --git a/2d_to_3d_market_tech_reports/mckinsey_value_creation_in_the_metaverse_2022.pdf b/2d_to_3d_market_tech_reports/mckinsey_value_creation_in_the_metaverse_2022.pdf new file mode 100644 index 0000000000000000000000000000000000000000..a461dd418dfad0f0c62d408a0bffcd93a1a07603 --- /dev/null +++ b/2d_to_3d_market_tech_reports/mckinsey_value_creation_in_the_metaverse_2022.pdf @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:6717312ce0e99d0d8f002111044564e65c328c80dba3afcc695f7eb2154459eb +size 7380236 diff --git a/2d_to_3d_market_tech_reports/morgan_stanley_ai_entertainment_costs_2025_official_web_print.pdf 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Underpinning all that we do are five core values. + +Core Values + +Everything we do at Morgan Stanley is guided by our five core values: Do the right thing, put clients first, lead with exceptional ideas, commit to diversity and inclusion, and give back. + +Since our founding in 1935, Morgan Stanley has consistently delivered first-class business in a first-class way. Underpinning all that we do are five core values. + +Leadership + +Morgan Stanley leadership is dedicated to conducting first-class business in a first-class way. Our board of directors and senior executives hold the belief that capital can and should benefit all of society. + +Since our founding in 1935, Morgan Stanley has consistently delivered first-class business in a first-class way. Underpinning all that we do are five core values. + +History + +From our origins as a small Wall Street partnership to becoming a global firm of more than 80,000 employees today, Morgan Stanley has been committed to clients and communities for 90 years. + +Since our founding in 1935, Morgan Stanley has consistently delivered first-class business in a first-class way. Underpinning all that we do are five core values. + +Locations + +The global presence that Morgan Stanley maintains is key to our clients' success, giving us keen insight across regions and markets, and allowing us to make a difference around the world. + +Since our founding in 1935, Morgan Stanley has consistently delivered first-class business in a first-class way. Underpinning all that we do are five core values. + +Diversity + +Morgan Stanley is differentiated by the caliber of our diverse team. Our culture of access and inclusion has built our legacy and shapes our future, helping to strengthen our business and bring value to clients. + +Since our founding in 1935, Morgan Stanley has consistently delivered first-class business in a first-class way. Underpinning all that we do are five core values. + +Sustainability + +Our firm's commitment to sustainability informs our operations, governance, risk management, diversity efforts, philanthropy and research. + +Since our founding in 1935, Morgan Stanley has consistently delivered first-class business in a first-class way. Underpinning all that we do are five core values. + +Giving Back + +At Morgan Stanley, giving back is a core value—a central part of our culture globally. We live that commitment through long-lasting partnerships, community-based delivery and engaging our best asset—Morgan Stanley employees. + +Since our founding in 1935, Morgan Stanley has consistently delivered first-class business in a first-class way. Underpinning all that we do are five core values. + +Technology + +As a global financial services firm, Morgan Stanley is committed to technological innovation. We rely on our technologists around the world to create leading-edge, secure platforms for all our businesses. + +Since our founding in 1935, Morgan Stanley has consistently delivered first-class business in a first-class way. Underpinning all that we do are five core values. + +Sponsorships + +At Morgan Stanley, we believe creating a more equitable society begins with investing in access, knowledge and resources to foster potential for all. We are committed to supporting the next generation of leaders and ensuring that they reflect the diversity of the world they inherit. + +Careers + +Students & Graduates + +Opportunities + +Experienced Professionals + +Opportunities + +Technology Professionals + +Experienced Financial Advisors + +We believe our greatest asset is our people. We value our commitment to diverse perspectives and a culture of inclusion across the firm. Discover who we are and the right opportunity for you. + +Students & Graduates + +A career at Morgan Stanley means belonging to an ideas-driven culture that embraces new perspectives to solve complex problems. See how you can make meaningful contributions as a student or recent graduate at Morgan Stanley. + +We believe our greatest asset is our people. We value our commitment to diverse perspectives and a culture of inclusion across the firm. Discover who we are and the right opportunity for you. + +Experienced Professionals + +At Morgan Stanley, you’ll find trusted colleagues, committed mentors and a culture that values diverse perspectives, individual intellect and cross-collaboration. See how you can continue your career journey at Morgan Stanley. + +We believe our greatest asset is our people. We value our commitment to diverse perspectives and a culture of inclusion across the firm. Discover who we are and the right opportunity for you. + +Experienced Financial Advisors + +At Morgan Stanley, our premier brand, robust resources and market leadership can offer you a new opportunity to grow your practice and continue to fulfill on your commitment to deliver tailored wealth management advice that helps your clients reach their financial goals. + +Featured + +Explore Our Culture + +Careers + +CLEAR + +Research + +How AI Benefits—and Threatens—the Entertainment Industry + +Jul 17, 2025 + +The impact of generative AI on the production and distribution of TV, film and music offers cost savings for media companies but could also upend the competitive landscape. + +(opens in a new tab) + +Key Takeaways + +GenAI could lead to cost reductions of 10% across all the media industry, and as much as 30% in TV and film. + +New and smaller companies should be able to leverage technology to produce high-quality content, challenging the major leaders of the industry. + +Media companies could reinvest savings from GenAI in top talent and sports rights. + +In music, the main opportunities from GenAI are in curation and personalization of content, while concerts and sporting events are likely to benefit from increased demand for live experiences. + +Technology has always had a leading role in the entertainment industry, changing the way content is created, distributed and consumed – from turning black and white pictures to technicolor, and the gramophone to streaming music. Now, with generative artificial intelligence, technology’s impact is likely to be even more profound: Media companies can produce high-quality content faster and at lower costs, while curation and personalization are likely to increase audiences’ engagement. + +Investors are watching closely, as these developments should open opportunities for industry leaders to achieve higher margins, explore new revenue streams and make changes in their capital allocation. At the same time, technology may also allow for new and smaller players to challenge the dominance of the biggest names in the industry. + +“While we generally frame generative AI technology as an opportunity for today's entertainment market leaders, it can be a risk as well,” says Benjamin Swinburne, who leads equity research coverage of the Media & Entertainment, Telecom & Cable Services, and Communications Infrastructure industries at Morgan Stanley. “GenAI is available to both scaled incumbents and new entrants, so it’s not difficult to imagine that individuals could produce relatively professional quality output within the next five years.” + +GenAI could also spur industry consolidation if major technology companies, which compete with entertainment companies for global consumer attention, use their AI capabilities, marketing tools, intellectual property portfolios and global distribution platforms to dominate the sector. + +“The combination of an entertainment and technology asset portfolio under one corporate roof may be the media conglomerate of 2030,” Swinburne says. + +Cutting Costs in TV and Film + +Creating, producing and distributing content for TV, film, music, books or other forms of media usually involves substantial time and money. For example, a major studio recently took about five years and $250 million to produce and release a blockbuster animated movie. But Morgan Stanley Research estimates that major media companies could reduce their overall programming expenses by around 10% as they begin to test GenAI tools. + +For TV and film production companies, whose content capital spending accounts for about 50% of total expenses, costs could fall as much as 30%. They can apply GenAI to activities such as script writing, production, editing, sound mixing and visual effects. + +Animation is an area where there may be more opportunities for both product enhancement and cost reductions. For example, GenAI applications can quickly help with character design, syncing lips to recorded video, adding sound effects and dubbing the final film into a variety of languages. + +“We expect that GenAI can meaningfully reduce the cost of production by replacing physical production with digital or virtual components,” Swinburne says. “These savings extend to pre- and post-production, reducing the need for re-shoots, the cost of script writing and editing, among other opportunities.” + +Media and entertainment companies can then reinvest a large share of the savings in their own value chain, including marketing, talent and live sports rights. + +“It’s a talent-driven business and, if there’s more money to be allocated, top talent would probably get paid more,” Swinburne says. “In this attention economy, in which mega media platforms are battling for consumer engagement, sports are unique and budgets for sports rights should increase as GenAI tools free up resources.” + +Curating Music and Boosting Live Events + +The cost of recording and distributing music has fallen significantly in the past years as technology has started offering capabilities previously available only at professional studios. GenAI is expanding those capabilities, allowing artists to produce high-quality recordings from their own homes and then to upload to streaming platforms. + +As a result of that shift, music labels could benefit from a higher volume of songs and more chances of developing artists. But they will also face the challenge of a more fragmented audience. + +Then enters GenAI with curation and personalization. Technology could help deliver the right track to the right consumer at the right time. That translates to more engagement, which supports consumer retention and higher pricing power. + +At the same time, GenAI is driving additional demand for live experiences. + +“Because AI changes how we communicate with each other digitally, it probably causes consumers to treasure ‘in-the-moment,’ communal experiences even more,” says Cameron Mansson-Perrone, who leads Music and Live Entertainment coverage at Morgan Stanley. “Also, as AI creates more consumer demand, it might lead to more financial incentive for artists to tour.” + +7275232 + +63766 + +3CD19151-F46C-4595-84CF-8EEC3E05FD19 + +Sign up to get Morgan Stanley Ideas delivered to your inbox. + +Email Address + +Email Address (Required) + +Invalid Email Address + +Subscribe + +Thank You for Subscribing! + +Would you like to help us improve our coverage of topics that might interest you? 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We value your feedback. + +Previous + +Next + +01 / 03 + +Research + +Stablecoins Offer Another Way to Move Money + +As the stablecoin market reaches more than $250 billion, investors are watching for opportunities while legislators discuss rules on this new asset class. + +Research + +Singapore’s Next Chapter + +Singapore, now celebrating its 60th year of independence, is entering a new era of wealth creation that could nearly double household assets in the next five years. + +Research + +How AI Is Reshaping Real Estate + +From digital receptionists to hyperlocal valuation models, AI is transforming the real estate industry and paving the way for $34 billion in efficiency gains by 2030. + +Previous + +Research + +Stablecoins Offer Another Way to Move Money + +Research + +Singapore’s Next Chapter + +Research + +How AI Is Reshaping Real Estate + +Next + +01 / 03 + +(opens in a new tab) + +Disclosures + +Investor Relations + +Corporate Governance + +Newsroom + +Careers + +Contact Us + +Global Offices + +Equal Employment Opportunity + +Cybersecurity + +Terms of Use + +Privacy & Cookies + +Your Privacy Choices + +© 2026 Morgan Stanley. 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The impact of generative AI on the production and distribution of TV, film and music offers cost savings for media companies but could also upend the competitive landscape.

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Key Takeaways

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  • GenAI could lead to cost reductions of 10% across all the media industry, and as much as 30% in TV and film.
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  • New and smaller companies should be able to leverage technology to produce high-quality content, challenging the major leaders of the industry.
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  • Media companies could reinvest savings from GenAI in top talent and sports rights.
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  • In music, the main opportunities from GenAI are in curation and personalization of content, while concerts and sporting events are likely to benefit from increased demand for live experiences.
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Technology has always had a leading role in the entertainment industry, changing the way content is created, distributed and consumed – from turning black and white pictures to technicolor, and the gramophone to streaming music. Now, with generative artificial intelligence, technology’s impact is likely to be even more profound: Media companies can produce high-quality content faster and at lower costs, while curation and personalization are likely to increase audiences’ engagement.

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Investors are watching closely, as these developments should open opportunities for industry leaders to achieve higher margins, explore new revenue streams and make changes in their capital allocation. At the same time, technology may also allow for new and smaller players to challenge the dominance of the biggest names in the industry.

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“While we generally frame generative AI technology as an opportunity for today's entertainment market leaders, it can be a risk as well,” says Benjamin Swinburne, who leads equity research coverage of the Media & Entertainment, Telecom & Cable Services, and Communications Infrastructure industries at Morgan Stanley.  “GenAI is available to both scaled incumbents and new entrants, so it’s not difficult to imagine that individuals could produce relatively professional quality output within the next five years.”

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GenAI could also spur industry consolidation if major technology companies, which compete with entertainment companies for global consumer attention, use their AI capabilities, marketing tools, intellectual property portfolios and global distribution platforms to dominate the sector. 

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“The combination of an entertainment and technology asset portfolio under one corporate roof may be the media conglomerate of 2030,” Swinburne says.

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Cutting Costs in TV and Film

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Creating, producing and distributing content for TV, film, music, books or other forms of media usually involves substantial time and money. For example, a major studio recently took about five years and $250 million to produce and release a blockbuster animated movie. But Morgan Stanley Research estimates that major media companies could reduce their overall programming expenses by around 10% as they begin to test GenAI tools.

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For TV and film production companies, whose content capital spending accounts for about 50% of total expenses, costs could fall as much as 30%. They can apply GenAI to activities such as script writing, production, editing, sound mixing and visual effects.

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Animation is an area where there may be more opportunities for both product enhancement and cost reductions. For example, GenAI applications can quickly help with character design, syncing lips to recorded video, adding sound effects and dubbing the final film into a variety of languages.

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“We expect that GenAI can meaningfully reduce the cost of production by replacing physical production with digital or virtual components,” Swinburne says. “These savings extend to pre- and post-production, reducing the need for re-shoots, the cost of script writing and editing, among other opportunities.”

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Media and entertainment companies can then reinvest a large share of the savings in their own value chain, including marketing, talent and live sports rights.

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“It’s a talent-driven business and, if there’s more money to be allocated, top talent would probably get paid more,” Swinburne says. “In this attention economy, in which mega media platforms are battling for consumer engagement, sports are unique and budgets for sports rights should increase as GenAI tools free up resources.”

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Curating Music and Boosting Live Events

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The cost of recording and distributing music has fallen significantly in the past years as technology has started offering capabilities previously available only at professional studios. GenAI is expanding those capabilities, allowing artists to produce high-quality recordings from their own homes and then to upload to streaming platforms.

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As a result of that shift, music labels could benefit from a higher volume of songs and more chances of developing artists. But they will also face the challenge of a more fragmented audience.

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Then enters GenAI with curation and personalization. Technology could help deliver the right track to the right consumer at the right time. That translates to more engagement, which supports consumer retention and higher pricing power.

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At the same time, GenAI is driving additional demand for live experiences.

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“Because AI changes how we communicate with each other digitally, it probably causes consumers to treasure ‘in-the-moment,’ communal experiences even more,” says Cameron Mansson-Perrone, who leads Music and Live Entertainment coverage at Morgan Stanley. “Also, as AI creates more consumer demand, it might lead to more financial incentive for artists to tour.”

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2025 + +Menu + +Careers + +Find out more about careers + +Search for a job + +Menu + +Careers + +Find out more about careers + +Menu + +Careers + +Search for a job + +Featured + +Global Annual Review 2025 + +Purpose, values, and behaviours + +Loading Results + +No Match Found + +View All Results + +Global Entertainment & Media Outlook 2026–30 + +Digital innovation drives demand for human experiences + +Humans depicted in this image are AI generated + +Insight + +22 + +minute read + +June 22, 2026 + +Share + +Copy Link + +Link Copied + +Close + +The E&M industry’s global revenue will grow to US$4.2 trillion by 2030, fuelled by technology and live events. + +The takeaways + +PwC’s Global Entertainment & Media Outlook forecasts that spending in the vast industry will rise at a 3.4% compound annual growth rate (CAGR) through 2030, when total revenues will reach $4.2 trillion. + +In an age of digital innovation, live and immersive experiences, including sports, concerts, and trade shows, will show significant growth as consumers seek in-person experiences. + +Advertising, enabled by AI, will grow rapidly, topping $1.4 trillion by 2030, as marketers seek to meet consumers where they are accessing content and making retail decisions. + +The global entertainment and media (E&M) industry grew 5.3% in 2025, with total revenue from advertising, connectivity, and consumer spending reaching US$3.5 trillion, and it should rise another 4.6% in 2026. The industry remains on a firm growth trajectory. According to PwC’s Global Entertainment & Media Outlook 2026–30, which charts growth in 12 segments across 53 territories (see Methodology for more information on the segments), the global E&M market will grow at a CAGR of 3.4% for the next five years, reaching $4.2 trillion in 2030. This expansion, unlocking $600 billion in new revenues in 2030, will be overwhelmingly driven by digital ecosystems across the E&M landscape. + +Players in the E&M ecosystem who want to capture their share of those new revenues—and then turn those revenues into profit—will have to act quickly. Innovation has forged change in the creative industries, and it will continue to do so. Increasingly powerful digital technologies centred on AI will disrupt and change the way E&M products and services are created, distributed, and monetised. These shifts will alter profit pools along the value chain, open the door for new business models, and transform consumer expectations. + +But AI won’t change what people expect and need from entertainment and media. No matter how digital and algorithmic the user experience becomes, at its root, E&M remains an industry built on human craft and human experiences. Expertise, judgement, creativity, nuance, emotions, needs, relationships: these fundamentally human attributes drive engagement, interest, and passion. Going forward, technology, and especially AI, will enable more effective and efficient means of connecting people to one another, and connecting marketers to consumers. The most rapidly growing of the big three E&M sectors—advertising—is geared towards reaching individuals wherever they experience and interact with content, and precisely when and where they choose to make purchasing decisions. + +Among the clear findings in our forecast: + +Consumers in 2030 will want choice, low prices, and digital access—even if their willingness to pay for these things remains limited. + +In a digital world, people will be increasingly attracted to real-world experiences that are immersive, emotional, contextual, and personal. + +Advertisers will keep spending more to meet customers where they want to be. Advertising surpassed $1 trillion for the first time in 2025, and it will rise to $1.4 trillion in 2030. + +Shared reality + +Humans depicted in this image are AI generated + +Sphere, a massive, immersive concert and media venue in Las Vegas, has proven to be a powerful attraction. In 2025, it reported revenues of $781 million, with programming including 4D screenings of The Wizard of Oz and Eagles concerts. Its parent company is now planning expansion elsewhere in the US and in Dubai. + +Small screens may dominate people’s personal and professional lives. But through 2030, we will continue to see growth in content experiences centred on one-time events and activities taking place in public, in real life, and in real time—at Sphere, Cosm, and other ‘shared reality’ venues. Live, immersive shared reality experiences are becoming increasingly valuable because they function as social currency: proof points that can be broadcast across social media to project status, taste, and cultural relevance to the younger consumers who place high values on these experiences. + +Several of the segments that will chart growth in the coming five years fall under the broad live-and-in-person umbrella. These include movie box office, live music, and the rapidly growing gambling segment, which centres around live sports and other events. Other areas that depend on in-person, out-of-home (OOH) experiences, like B2B trade shows and B2C OOH advertising, are making up a larger piece of the E&M pie as well. + +Live on a big screen + +The original big screen—the movie theatre—continues to draw people who want to view films in a large format in the company of others. Continuing its post-pandemic recovery, global box office is projected to grow at a CAGR of 3.2% to reach $39.5 billion by 2030—as it continues to regain ground lost in the pandemic. + +Cinema advertising revenue will rise through 2030, but it will still account for less than 10% of the industry’s total revenue. Cinema admissions are projected to increase globally at a modest 1.0% CAGR, and growth varies significantly by geography. In China, a lack of content, long investment cycles, and uncertain returns are hampering growth. Globally, because high-quality content is readily accessible on demand, cinemas will continue to invest in experiences that can’t be replicated at home: large-format screens, luxury seating, upgraded sound systems and high-spec audiovisual technologies, and enhanced concessions or bar or fine dining offerings. + +The live music vibe + +Musicians playing together in public is one of the oldest forms of entertainment. In the post-pandemic era, live music is experiencing new growth—with a boost from digital technology. Spotify, Tidal, and other music streaming services are turning digital listening behaviour into a gateway for concert discovery and participation. The global music market is comprised of digital and physical recorded music and live performances, as well as digital streaming. It will grow from $125.9 billion in 2025 to $145.8 billion by 2030. Streaming will remain the largest component of revenue in 2030, at $56.3 billion. Live music, which will grow at a 2.3% CAGR, will top $41.5 billion in 2030. + +Out of home + +Out-of-home advertising is another segment that depends on people interacting with media on the outside—and it’s a segment into which powerful digital expertise and capabilities have infused new life. OOH revenues will grow from $37.9 billion in 2025 to $45.8 billion in 2030, representing a CAGR of 3.9%. Out of home is gaining greater currency and vibrancy from the growing value of real-life experiences. Digital OOH (DOOH) offers a brand-safe, mass-reach, real-time advertising environment that’s capable of engaging digital-native demographics. DOOH will rise at a 9.2% CAGR to $26.5 billion in 2030, at which point it will account for 57.9% of spending in the industry. The operators growing most strongly are those that have invested in digital inventory as well as the data and programmatic capabilities that make such inventory more valuable to advertisers. Research by VIOOH, an online OOH digital marketplace, found that 97% of marketers were actively integrating or testing dynamic creative optimisation in their campaigns to tailor creative content to users in real time. + +Face-to-face at trade shows + +Trade shows are roughly the size of live music on a global basis, and they’re growing more rapidly. Spending on exhibiting at these events generated $38 billion in 2025, and spending is projected to grow at a 3.3% CAGR through 2030 to $44.6 billion. The growth is driven by demand for face-to-face interactions, along with technology-integrated enhancements. As with Sphere, industry leaders are moving away from traditional exhibition booth events and towards experience-led business festivals. The industry is expanding capacity to enable growth. The Dubai World Trade Centre is set to expand its capacity significantly. India’s Bharat Mandapam, with a seating capacity of 7,000 people, hosts massive events such as the Bharat Mobility Global Expo 2025, which attracted about 1 million visitors and more than 1,500 exhibitors. + +Betting on rising revenues + +One of the most powerful trends in recent years has been the rise of online betting and gambling, especially involving sports. Gambling is now a significant part of the fan experience for shared reality happenings like sporting events. This is the first year the Outlook is measuring such revenues. Across the ten geographic markets studied, gross online gaming revenue (GGR, defined as turnover minus winnings returned to player) more than doubled between 2021 and 2025, from $37.1 billion in 2021 to $79.5 billion in 2025. This growth will continue, with total GGR reaching $119.7 billion by 2030, at a CAGR of 8.5%. By 2030, online betting will be a larger segment than OOH or cinema. Although much of this growth has been in the US and newly regulated Brazil, regulated online betting revenues grew in all the key markets covered in our report. + +The future of streaming + +Humans depicted in this image are AI generated + +Of course, the audiences that can attend live music and sporting events are limited by venue capacity. Advertisers will pay a premium to reach the largest possible groups of people. And here the synergies between sports and streaming are evident. One of the few formats capable of delivering audiences at scale at a specific time is live sports. The 2026 World Cup in North America is likely to be among the longest shared reality experiences in history. Millions of people will attend in person; billions of people will stream, watch, or listen; and many others will gamble on the event. + +More marquee sporting events are taking place on streaming platforms. In the US, Amazon Prime Video has steadily expanded its live sports footprint since acquiring NFL rights. Netflix and Paramount+ also are hosting an increasing variety of live events, including UFC bouts and WWE wrestling. In France, a notable share of Ligue 1 matches are now delivered via the direct‑to‑consumer service Ligue 1+. The movement of live event viewing to online media may have much further to run, given the streamers’ deep pockets and desire to appeal to subscribers and advertisers alike. (Read more in PwC’s Sports Industry Outlook 2026.) + +The streamers’ challenge + +Sports are one piece of the puzzle for streamers as they look to the future. Total over-the-top (OTT) revenues—including consumer spending on video, advertising spending, and TV delivered only by traditional broadcasters—rose an impressive 13.9% in 2025 to $226.6 billion from $199 billion in 2024. But the pace of this growth will slow. In maturing streaming markets such as Australia, Spain, and South Korea, consumers are beginning to exhibit ‘subscription fatigue.’ The industry may be confronting the limits of consumers’ willingness to pay for multiple subscriptions. Through 2030, OTT revenues will grow at a CAGR of 6.1% to reach $304 billion. That represents $77.4 billion in new revenues over 2025. One notable trend is that as consumers resist paying for continually rising numbers of subscriptions, advertising will assume a more prominent role. OTT ads, now 19.4% of revenues, will grow at a 9.4% CAGR so that in 2030 they will represent 22.6% of revenues. + +The forces at work in the streaming economy will push greater consolidation and bigger bundles of content and services. In 2030, as streamers strive to drive higher per-user revenue growth and minimise churn, their offerings will look different than they do today. Big streaming platforms will strive to be the entertainment hub of the home, offering access to television, movies, video games, music, sports, social media, and user-generated content. In other words, they will offer bigger bundles of content. + +Centralisation versus decentralisation + +Humans depicted in this image are AI generated + +The opposing forces of platform centralisation and content decentralisation will continue to shape the media and entertainment industry, as they have since the birth of the World Wide Web. + +On the one hand, we expect growing concentration of advertising revenues among a handful of huge global players and more M&A megadeals as streamers seek scale. These companies, and the advertisers they sell to, want to aggregate the largest possible collections of users. Yet these platforms increasingly rely on the human spark of creativity among millions of creators, influencers, and streamers who are building their own audiences on platforms like YouTube, Instagram, Substack, and TikTok. + +Through 2030, audiences will increasingly discover content through feeds rather than schedules, creators rather than commissioners, and recommendation systems rather than editorial curation. As smartphones, platform tools, AI, and low-cost production reduce barriers to entry, livestreaming and short-form user-generated content (UGC) videos will shift media further away from centrally controlled distribution and towards a more democratised environment. China and India present interesting case studies in decentralisation in the OTT/streaming space. After a decade of rapid OTT expansion led by major domestic platforms like Youku, iQIYI, and Tencent Video, China’s competitive landscape is fragmenting, with smaller and more specialised services gaining traction, particularly short-form video ecosystems such as Douyin and Kuaishou. In India, competition is dominated by domestic platforms—notably JioHotstar and Sun NXT—focused on local language content, Bollywood catalogues, and cricket rights. + +Centralisation in new ecosystems + +Countervailing forces are pushing the E&M industry towards increasing centralisation and the creation of new bundles in several dimensions. Connectivity, including what people pay for internet access, is the largest of the three major E&M sectors (advertising, connectivity, and consumer spending). Thanks in part to the growth of social platforms and decentralised content creation, revenue growth in connectivity, the largest E&M sector, will slow through 2030. Annual global service revenue for providing internet access will increase steadily at a 2.3% CAGR from $1.3 trillion in 2025 to $1.5 trillion in 2030. Wider adoption and usage of fixed and mobile broadband will account for the bulk of this growth, as paid voice services are further commoditised by cheap or free IP-based alternatives and the prevalence of messaging apps. (PwC’s Global Telecom Outlook goes into more depth on how muted growth will influence business strategy.) Meanwhile, global traditional TV revenues fell 2.7% in 2025 to $360.5 billion and will continue to fall at a CAGR of –01.1% to $341.2 billion by 2030. + +In response, traditional TV and telecom operators are going back to the future. Bundling, the business concept that underlies the declining cable industry, now has renewed currency. Companies such as Sky, Comcast, Rogers, and Jio are combining pay TV, broadband, and third-party streaming subscriptions within single offers. Bundling can help operators reduce churn and retain relevance even as audiences continue to shift away from linear viewing. Distributors including Amazon Prime Video, Apple TV, and YouTube TV are offering bundled third-party streaming subscriptions. Increasingly sophisticated bundling and aggregation models, such as Disney+ offering bundled subscription plans with Hulu and Max, seek to embed streaming services more deeply into consumption habits. + +OTT’s encroachment into key content genres like live events has spurred the traditional media industry to move away from direct competition and into collaborative partnerships. In the UK, the BBC’s agreement in 2026 to produce YouTube-specific content under a partnership with the streaming giant reflected a recognition by traditional broadcasters that younger audiences are now more readily reached on third-party platforms than through their own video on demand (VOD) services. In France, TF1’s agreement with Netflix shows how incumbent broadcasters are using global streaming platforms to monetise content libraries—bringing the traditional partner a bigger audience reach while providing the global platform with high-quality local content. + +Centralisation through consolidation + +The current M&A cycle differs from prior waves. Not only are audiences fragmenting, but legacy profit pools are increasingly dependent on companies’ bargaining power over distribution and access to advertising. Large companies with significant investments in existing systems, including advertising, cable, and streaming, must position themselves for a future of comparatively slower growth. The Omnicom–IPG merger in 2025 created the world’s largest advertising agency holding group. Canal+, seeking to gain exposure to rapidly growing markets, in 2025 completed the acquisition of MultiChoice, the video provider in South Africa. Paramount was acquired by Skydance, and then merged with Warner Bros. Discovery, creating a significantly larger streaming, production, and distribution platform. In the OOH segment, as companies are eager to reach people closer to the point of economic decision-making, a number of transformative corporate restructuring moves have consolidated inventory and technological capabilities into fewer, more powerful entities. In 2025, T-Mobile bought programmatic DOOH platform Vistar Media, and Clear Channel Outdoor (CCO) sold its units in Northern Europe to Bauer Media Group and in Brazil to an affiliate of Eletromidia, in order to focus on its core US and airports businesses. + +Human connection at scale with advertising + +Humans depicted in this image are AI generated + +Consolidation and centralisation are also evident in the fastest-growing of the three major sectors: advertising. The global internet advertising market accelerated by 12.2% year-on-year in 2025 to reach $755.6 billion. Internet ad revenue will rise at an impressive 7.2% CAGR through 2030, when it will reach nearly $1.1 trillion. US-based tech companies will continue to enjoy a leading position, especially when China (which has its own players) is taken out of the equation. Google and Meta remain the driving forces behind global growth; they use AI to better manage, target, and customise campaigns based on improved understanding of consumers. In May 2026, to better position itself for changing trends, Publicis agreed to spend $2.2 billion to acquire LiveRamp, a major player in data, identity, and agentic media buying. Agency consolidation provides advertising buyers with more integrated planning, execution, and accountability across an increasingly platform-mediated advertising ecosystem. + +The world of internet advertising, the ultimate disruptor of the E&M ecosystem, is changing rapidly in several dimensions. Witness the rise of online retail ads at the expense of traditional paid search. More disruption is on the way as large language model (LLM)–powered conversational search gains share from traditional search. Brands need to rethink where and how they show up, whether their online visibility is paid (advertising) or earned (content optimisation, PR). + +A key distinction here is between paid search, where advertisers pay platforms like Google, Bing, and Baidu to serve their ads to relevant consumers, and retail search, where retail media ads are displayed on online marketplaces such as Amazon.com and Walmart.com, powered by first-party customer data. The latter aims to reach individuals at the point of purchase. A third concept to add to the mix is conversational search powered by AI tools such as Gemini and ChatGPT, which poses a long-term threat to the entire traditional paid search advertising business model. More broadly, the way brands make themselves visible is changing—it’s moving from search engine optimisation to generative engine optimisation, experiencing a shift in digital public relations strategy, and developing a greater reliance on influencers. Major players like Google, Meta, and Tencent are responding by embedding AI to great effect into their search and advertising models. + +As e-commerce, streaming, and social media have grown in scale and sophistication, they’ve also strengthened their ability to combine audience reach with richer first-party data and more measurable commercial outcomes. Although paid search overall will expand at a 6.1% CAGR to $402.7 billion in 2030, the traditional component will expand at a CAGR of just 3.8% to $214.5 billion. Meanwhile, retail paid search will rise at a far faster 9.3% CAGR to reach a total value of $188.2 billion in 2030, at which point it will account for 46.7% of global paid search advertising revenue. That compares with just 40.4% today. + +We will also see a continuing shift in the display advertising market. Amazon’s reported advertising revenue surpassed $50 billion in 2024 and rose to $68 billion in 2025. Other major retailers are actively growing their retail media business: Walmart’s retail media advertising revenue, for example, topped $4 billion in 2024 and rose to $6.4 billion in 2025. + +Streaming companies are working hard to drive advertising revenues as their subscription revenue growth slows. Going forward, digital advertising will be increasingly layered onto other platforms—with Amazon Prime Video, Disney+, Spotify, and Netflix all successfully developing their advertising businesses. Netflix reported that its advertising revenue more than doubled in 2025, to over $1.5 billion. By 2030, video will account for 27% of global internet advertising revenue, up from around 19% in 2021. + +AI as a strategic advantage + +Humans depicted in this image are AI generated + +AI is already having transformational impacts along the E&M content value chain, from production to recommendation, discovery, personalisation, presentation, and consumption, as well as in advertising. But the rationale for its adoption in the industry is evolving. Initially seen as an enabler of greater efficiency, AI is now being harnessed as a driver of value. Its strongest areas of impact? Boosting ad revenues, and interacting with the other trends we’ve highlighted, especially in enhancing shared reality experiences. + +Paradoxically, AI, which aims to take some of the human element out of decision-making, is enabling a greater possibility for connections in two important vectors: between brands and marketers, and between brands and individual consumers. Advertisers are increasingly favouring formats that offer greater measurability, more precise targeting, and closer links to commercial outcomes. Looking ahead, momentum will be driven by newer formats such as connected TV and shoppable video, which combine digital reach with stronger attribution and closer proximity to transactions. + +The ability to observe users’ behaviour directly, understand patterns of engagement, and connect exposure to outcomes is ever more central to monetisation. Companies with large logged-in user bases and strong direct customer relationships are better placed to refine targeting, improve recommendations, and demonstrate value to advertisers. Put another way, AI is another force favouring centralisation, because having large troves of proprietary audience data will become a key defensive moat as AI models become more ubiquitous. + +AI will influence countless ways of working in the E&M industry in 2030. Content creators such as musicians and filmmakers will use AI tools to develop narratives and polish their output. AI won’t stop people from going outdoors to see billboards and other signs. It will help marketers reach people with more dynamically timed content and offerings when they do see those signs. Platforms will deploy AI to understand their customers’ preferences more effectively. Ad agencies will shift away from charging clients for time and expenses to charging for the performance they can deliver via targeted campaigns. + +In each of these instances, while AI is an important tool—perhaps the most important tool—control remains firmly in the hands of the craft, experience, and delivery capabilities of the service providers. + +Methodology + +Additions + +In the video games and esports segment, “total video games consumer revenue” has been added as a recut aggregate measure representing the total revenue from the sale of physical and digital video games across all platforms, including console, PC, online, and mobile. + +In the OTT video segment, the alternative recut of the AVOD data by free ad-supported streaming TV (FAST) and non-FAST revenue has been extended to all markets. + +In the music, radio, and podcasts segment, the podcasts advertising revenue, podcasts monthly listeners, and smart speakership measures have been extended to all markets. + +Online betting has been added to the Outlook as a new segment. + +Territories + +A total of 53 countries and territories are represented within the Global Entertainment and Media Outlook and the Global Telecoms Outlook. These are spread across North America, Europe, Middle East & Africa, Latin America and Asia Pacific. The Other MENA grouping is treated as a single territory and comprises Algeria, Bahrain, Jordan, Kuwait, Lebanon, Morocco, Oman and Qatar. Australia and New Zealand have also been combined into a single region, referred to as Oceania. Rest of region aggregates have also been included to extend both Outlooks beyond core markets. + +In 2025 these countries and territories account for approximately 74% of the global population and the sum of all countries and territories generates the ‘Total’ estimate. + +Segments + +Twelve entertainment and media segments are covered within the Global Entertainment and Media Outlook, with a range of revenue and non-revenue subcategories. The segment categories for 2026 are as follows: + +Traditional TV + +OTT video + +Mixed reality + +Internet connectivity and data consumption + +Newspapers, consumer magazines, and books + +OOH + +Business-to-business + +Video games and esports + +Cinema + +Music, radio, and podcasts + +Internet advertising + +Online betting + +Many segments include recut or double-counted revenues: + +Consumer spending on radio licence fees is included in both traditional TV and music, radio, and podcasts, though double counting is removed at the total level. + +Digital advertising components, such as digital music streaming advertising, podcast advertising, digital newspaper advertising, digital consumer magazine advertising, digital trade magazine advertising, esports streaming advertising revenue, terrestrial online radio advertising, mobile AR advertising, advertising VOD, and in-app games advertising, are all included within their respective segments and also within internet advertising. These are removed at the total level to avoid double counting. + +Esports consumer contribution revenue is included in its segment and also within online/microtransaction PC games revenue. + +Mobile AR consumer revenue is counted in the VR and AR segment, as well as within app-based social/casual gaming revenue in the video games and esports segment. + +Advertising revenue from video services such as YouTube is considered within the video subsegment of internet advertising. + +Historic data collection + +All the forecasts have been built by starting with the collection of historical data from a variety of sources. A baseline of accurate and comprehensive historic data is collected in the first instance from publicly available information including from trade associations and government agencies. When this data is used directly, these sources are cited accordingly. In addition to this, interviews with relevant associations, regulators, and leading players have been conducted to gather insights and estimates not available in the public domain. When this information is collected, it is used as part of the calculations, and the sources are proprietary. + +Ampere Analysis, the agency that collected this year’s data, is a data and analytics firm specialising in the media, games and sports sectors. + +Forecasting methods + +All forecasts are prepared as part of a collaborative, integrated process involving both quantitative and qualitative analysis. The forecasts are the result of a rigorous process of scoping, market mapping, data collection, statistical modelling, and validation. + +Permission to cite + +No part of this publication may be excerpted, reproduced, stored in a retrieval system, or distributed or transmitted in any form or by any means—including electronic, mechanical, photocopying, recording, or scanning—without the prior written permission of PwC. + +Requests should outline the excerpts you wish to use and be submitted in writing to Kamlesh Balasubramanian in a new window, along with a draft copy of the full report in which the excerpts will appear. + +Provision of this information is necessary for every citation request to enable PwC to assess the context in which the excerpts are being presented. Without limiting the foregoing, excerpts from the publication may be used only for background market illustration, should not be the sole source of 2026–30 information, and must not form the majority of sourced information. Please cite the Outlook as follows: “PwC Global Entertainment and Media Outlook 2026–30, www.pwc.com/outlook” in your article. + +Contributors + +Mark Antoniello, Kamlesh Balasubramanian, Christina J. Bangah, Stef Bayley, Joshua Brown, Katie Butcher, Stefanie Bubbers, Daniel J. Bunyan, Wilson Chow, Vasilios Chrisos, Enrico Boscolo Contadin, Ashley Crawford, Karim Daoud, Tarunay Dayal, Mike Devlin, Dallas Dolen, Daniel Gross, Yusuke Harad, Claudia Kaupenjohann, Louise King, Claudia Lobaton, Andy Lobo, Shahista Limbada, Giuseppina Maccario, Emily Maguire, Rikki Mait, Willer Marcondes, Danilo Mecenas, Brianna Meister, Harrish Nor, John Page, Mariana Pimenta, Karim Sarkis, Rajesh Sethi, Abigail L. Singley, Bart Spiegel, Charles Stuart, Chitose Taguchi, David Trunkfield, Luke Thomson, Erik Wall, Cecilia Yau, and Darin Yug + +Author + +Bart Spiegel + +Global Entertainment & Media Sector Leader, Partner, PwC United States + +Email + +View More + +Sports Industry Outlook 2026 + +From AI-fueled fan engagement to athlete-driven economics, PwC unpacks the hottest trends. + +Explore + +Subscribe to the Outlook + +Get 12 months of access to data and commentary for segments across 53 countries and territories, and access to dashboards and visualisations, including heat maps and comparisons of GDP and growth rates. + +Find out more + +Related content + +Filter by + +Apply filters + +Media and telecommunications: US Deals 2026 outlook + +Explore how streaming consolidation, gaming and sports IP, and telecom infrastructure deals are reshaping media and telecom M&A in PwC’s US Deals 2026 outlook. + +Global M&A trends in technology, media and telecommunications: 2026 mid-year outlook + +Companies rethink control, using M&A, partnerships, minority investments, and capacity agreements to secure access across the AI landscape. + +We help you meet tomorrow’s tech demands + +so you can + +compete at a speed that rewrites the rules + +See how + +Follow us + +PwC office locations + +Site map + +Contact us + +© 2017 + +- 2026 PwC. 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Global Entertainment & Media Outlook 2026–30

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Digital innovation drives demand for human experiences

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  • Insight
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  • June 22, 2026
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The E&M industry’s global revenue will grow to US$4.2 trillion by 2030, fuelled by technology and live events.

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+ The takeaways

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  • PwC’s Global Entertainment & Media Outlook forecasts that spending in the vast industry will rise at a 3.4% compound annual growth rate (CAGR) through 2030, when total revenues will reach $4.2 trillion.  
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  • In an age of digital innovation, live and immersive experiences, including sports, concerts, and trade shows, will show significant growth as consumers seek in-person experiences.  
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  • Advertising, enabled by AI, will grow rapidly, topping $1.4 trillion by 2030, as marketers seek to meet consumers where they are accessing content and making retail decisions. 
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The global entertainment and media (E&M) industry grew 5.3% in 2025, with total revenue from advertising, connectivity, and consumer spending reaching US$3.5 trillion, and it should rise another 4.6% in 2026. The industry remains on a firm growth trajectory. According to PwC’s Global Entertainment & Media Outlook 2026–30, which charts growth in 12 segments across 53 territories (see Methodology for more information on the segments), the global E&M market will grow at a CAGR of 3.4% for the next five years, reaching $4.2 trillion in 2030. This expansion, unlocking $600 billion in new revenues in 2030, will be overwhelmingly driven by digital ecosystems across the E&M landscape. 

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Players in the E&M ecosystem who want to capture their share of those new revenues—and then turn those revenues into profit—will have to act quickly. Innovation has forged change in the creative industries, and it will continue to do so. Increasingly powerful digital technologies centred on AI will disrupt and change the way E&M products and services are created, distributed, and monetised. These shifts will alter profit pools along the value chain, open the door for new business models, and transform consumer expectations.  

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But AI won’t change what people expect and need from entertainment and media. No matter how digital and algorithmic the user experience becomes, at its root, E&M remains an industry built on human craft and human experiences. Expertise, judgement, creativity, nuance, emotions, needs, relationships: these fundamentally human attributes drive engagement, interest, and passion. Going forward, technology, and especially AI, will enable more effective and efficient means of connecting people to one another, and connecting marketers to consumers. The most rapidly growing of the big three E&M sectors—advertising—is geared towards reaching individuals wherever they experience and interact with content, and precisely when and where they choose to make purchasing decisions. 

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Among the clear findings in our forecast: 

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  • Consumers in 2030 will want choice, low prices, and digital access—even if their willingness to pay for these things remains limited. 
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  • In a digital world, people will be increasingly attracted to real-world experiences that are immersive, emotional, contextual, and personal. 
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  • Advertisers will keep spending more to meet customers where they want to be. Advertising surpassed $1 trillion for the first time in 2025, and it will rise to $1.4 trillion in 2030.  
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Sphere, a massive, immersive concert and media venue in Las Vegas, has proven to be a powerful attraction. In 2025, it reported revenues of $781 million, with programming including 4D screenings of The Wizard of Oz and Eagles concerts. Its parent company is now planning expansion elsewhere in the US and in Dubai. 

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Small screens may dominate people’s personal and professional lives. But through 2030, we will continue to see growth in content experiences centred on one-time events and activities taking place in public, in real life, and in real time—at Sphere, Cosm, and other ‘shared reality’ venues. Live, immersive shared reality experiences are becoming increasingly valuable because they function as social currency: proof points that can be broadcast across social media to project status, taste, and cultural relevance to the younger consumers who place high values on these experiences.  

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Several of the segments that will chart growth in the coming five years fall under the broad live-and-in-person umbrella. These include movie box office, live music, and the rapidly growing gambling segment, which centres around live sports and other events. Other areas that depend on in-person, out-of-home (OOH) experiences, like B2B trade shows and B2C OOH advertising, are making up a larger piece of the E&M pie as well.  

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+ + + The future of streaming + +

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Of course, the audiences that can attend live music and sporting events are limited by venue capacity. Advertisers will pay a premium to reach the largest possible groups of people. And here the synergies between sports and streaming are evident. One of the few formats capable of delivering audiences at scale at a specific time is live sports. The 2026 World Cup in North America is likely to be among the longest shared reality experiences in history. Millions of people will attend in person; billions of people will stream, watch, or listen; and many others will gamble on the event.  

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More marquee sporting events are taking place on streaming platforms. In the US, Amazon Prime Video has steadily expanded its live sports footprint since acquiring NFL rights. Netflix and Paramount+ also are hosting an increasing variety of live events, including UFC bouts and WWE wrestling. In France, a notable share of Ligue 1 matches are now delivered via the direct‑to‑consumer service Ligue 1+. The movement of live event viewing to online media may have much further to run, given the streamers’ deep pockets and desire to appeal to subscribers and advertisers alike. (Read more in PwC’s Sports Industry Outlook 2026.)  

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The streamers’ challenge 

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Sports are one piece of the puzzle for streamers as they look to the future. Total over-the-top (OTT) revenues—including consumer spending on video, advertising spending, and TV delivered only by traditional broadcasters—rose an impressive 13.9% in 2025 to $226.6 billion from $199 billion in 2024. But the pace of this growth will slow. In maturing streaming markets such as Australia, Spain, and South Korea, consumers are beginning to exhibit ‘subscription fatigue.’ The industry may be confronting the limits of consumers’ willingness to pay for multiple subscriptions. Through 2030, OTT revenues will grow at a CAGR of 6.1% to reach $304 billion. That represents $77.4 billion in new revenues over 2025. One notable trend is that as consumers resist paying for continually rising numbers of subscriptions, advertising will assume a more prominent role. OTT ads, now 19.4% of revenues, will grow at a 9.4% CAGR so that in 2030 they will represent 22.6% of revenues. 

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The forces at work in the streaming economy will push greater consolidation and bigger bundles of content and services. In 2030, as streamers strive to drive higher per-user revenue growth and minimise churn, their offerings will look different than they do today. Big streaming platforms will strive to be the entertainment hub of the home, offering access to television, movies, video games, music, sports, social media, and user-generated content. In other words, they will offer bigger bundles of content. 

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+ + + Centralisation versus decentralisation + +

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The opposing forces of platform centralisation and content decentralisation will continue to shape the media and entertainment industry, as they have since the birth of the World Wide Web.  

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On the one hand, we expect growing concentration of advertising revenues among a handful of huge global players and more M&A megadeals as streamers seek scale. These companies, and the advertisers they sell to, want to aggregate the largest possible collections of users. Yet these platforms increasingly rely on the human spark of creativity among millions of creators, influencers, and streamers who are building their own audiences on platforms like YouTube, Instagram, Substack, and TikTok.  

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Through 2030, audiences will increasingly discover content through feeds rather than schedules, creators rather than commissioners, and recommendation systems rather than editorial curation. As smartphones, platform tools, AI, and low-cost production reduce barriers to entry, livestreaming and short-form user-generated content (UGC) videos will shift media further away from centrally controlled distribution and towards a more democratised environment. China and India present interesting case studies in decentralisation in the OTT/streaming space. After a decade of rapid OTT expansion led by major domestic platforms like Youku, iQIYI, and Tencent Video, China’s competitive landscape is fragmenting, with smaller and more specialised services gaining traction, particularly short-form video ecosystems such as Douyin and Kuaishou. In India, competition is dominated by domestic platforms—notably JioHotstar and Sun NXT—focused on local language content, Bollywood catalogues, and cricket rights.  

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Centralisation in new ecosystems 

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Countervailing forces are pushing the E&M industry towards increasing centralisation and the creation of new bundles in several dimensions. Connectivity, including what people pay for internet access, is the largest of the three major E&M sectors (advertising, connectivity, and consumer spending). Thanks in part to the growth of social platforms and decentralised content creation, revenue growth in connectivity, the largest E&M sector, will slow through 2030. Annual global service revenue for providing internet access will increase steadily at a 2.3% CAGR from $1.3 trillion in 2025 to $1.5 trillion in 2030. Wider adoption and usage of fixed and mobile broadband will account for the bulk of this growth, as paid voice services are further commoditised by cheap or free IP-based alternatives and the prevalence of messaging apps. (PwC’s Global Telecom Outlook goes into more depth on how muted growth will influence business strategy.) Meanwhile, global traditional TV revenues fell 2.7% in 2025 to $360.5 billion and will continue to fall at a CAGR of –01.1% to $341.2 billion by 2030.  

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In response, traditional TV and telecom operators are going back to the future. Bundling, the business concept that underlies the declining cable industry, now has renewed currency. Companies such as Sky, Comcast, Rogers, and Jio are combining pay TV, broadband, and third-party streaming subscriptions within single offers. Bundling can help operators reduce churn and retain relevance even as audiences continue to shift away from linear viewing. Distributors including Amazon Prime Video, Apple TV, and YouTube TV are offering bundled third-party streaming subscriptions. Increasingly sophisticated bundling and aggregation models, such as Disney+ offering bundled subscription plans with Hulu and Max, seek to embed streaming services more deeply into consumption habits.  

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OTT’s encroachment into key content genres like live events has spurred the traditional media industry to move away from direct competition and into collaborative partnerships. In the UK, the BBC’s agreement in 2026 to produce YouTube-specific content under a partnership with the streaming giant reflected a recognition by traditional broadcasters that younger audiences are now more readily reached on third-party platforms than through their own video on demand (VOD) services. In France, TF1’s agreement with Netflix shows how incumbent broadcasters are using global streaming platforms to monetise content libraries—bringing the traditional partner a bigger audience reach while providing the global platform with high-quality local content.  

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Centralisation through consolidation 

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The current M&A cycle differs from prior waves. Not only are audiences fragmenting, but legacy profit pools are increasingly dependent on companies’ bargaining power over distribution and access to advertising. Large companies with significant investments in existing systems, including advertising, cable, and streaming, must position themselves for a future of comparatively slower growth. The Omnicom–IPG merger in 2025 created the world’s largest advertising agency holding group. Canal+, seeking to gain exposure to rapidly growing markets, in 2025 completed the acquisition of MultiChoice, the video provider in South Africa. Paramount was acquired by Skydance, and then merged with Warner Bros. Discovery, creating a significantly larger streaming, production, and distribution platform. In the OOH segment, as companies are eager to reach people closer to the point of economic decision-making, a number of transformative corporate restructuring moves have consolidated inventory and technological capabilities into fewer, more powerful entities. In 2025, T-Mobile bought programmatic DOOH platform Vistar Media, and Clear Channel Outdoor (CCO) sold its units in Northern Europe to Bauer Media Group and in Brazil to an affiliate of Eletromidia, in order to focus on its core US and airports businesses.  

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Consolidation and centralisation are also evident in the fastest-growing of the three major sectors: advertising. The global internet advertising market accelerated by 12.2% year-on-year in 2025 to reach $755.6 billion. Internet ad revenue will rise at an impressive 7.2% CAGR through 2030, when it will reach nearly $1.1 trillion. US-based tech companies will continue to enjoy a leading position, especially when China (which has its own players) is taken out of the equation. Google and Meta remain the driving forces behind global growth; they use AI to better manage, target, and customise campaigns based on improved understanding of consumers. In May 2026, to better position itself for changing trends, Publicis agreed to spend $2.2 billion to acquire LiveRamp, a major player in data, identity, and agentic media buying. Agency consolidation provides advertising buyers with more integrated planning, execution, and accountability across an increasingly platform-mediated advertising ecosystem.  

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The world of internet advertising, the ultimate disruptor of the E&M ecosystem, is changing rapidly in several dimensions. Witness the rise of online retail ads at the expense of traditional paid search. More disruption is on the way as large language model (LLM)–powered conversational search gains share from traditional search. Brands need to rethink where and how they show up, whether their online visibility is paid (advertising) or earned (content optimisation, PR). 

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A key distinction here is between paid search, where advertisers pay platforms like Google, Bing, and Baidu to serve their ads to relevant consumers, and retail search, where retail media ads are displayed on online marketplaces such as Amazon.com and Walmart.com, powered by first-party customer data. The latter aims to reach individuals at the point of purchase. A third concept to add to the mix is conversational search powered by AI tools such as Gemini and ChatGPT, which poses a long-term threat to the entire traditional paid search advertising business model. More broadly, the way brands make themselves visible is changing—it’s moving from search engine optimisation to generative engine optimisation, experiencing a shift in digital public relations strategy, and developing a greater reliance on influencers. Major players like Google, Meta, and Tencent are responding by embedding AI to great effect into their search and advertising models. 

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As e-commerce, streaming, and social media have grown in scale and sophistication, they’ve also strengthened their ability to combine audience reach with richer first-party data and more measurable commercial outcomes. Although paid search overall will expand at a 6.1% CAGR to $402.7 billion in 2030, the traditional component will expand at a CAGR of just 3.8% to $214.5 billion. Meanwhile, retail paid search will rise at a far faster 9.3% CAGR to reach a total value of $188.2 billion in 2030, at which point it will account for 46.7% of global paid search advertising revenue. That compares with just 40.4% today.  

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We will also see a continuing shift in the display advertising market. Amazon’s reported advertising revenue surpassed $50 billion in 2024 and rose to $68 billion in 2025. Other major retailers are actively growing their retail media business: Walmart’s retail media advertising revenue, for example, topped $4 billion in 2024 and rose to $6.4 billion in 2025.  

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Streaming companies are working hard to drive advertising revenues as their subscription revenue growth slows. Going forward, digital advertising will be increasingly layered onto other platforms—with Amazon Prime Video, Disney+, Spotify, and Netflix all successfully developing their advertising businesses. Netflix reported that its advertising revenue more than doubled in 2025, to over $1.5 billion. By 2030, video will account for 27% of global internet advertising revenue, up from around 19% in 2021.

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AI is already having transformational impacts along the E&M content value chain, from production to recommendation, discovery, personalisation, presentation, and consumption, as well as in advertising. But the rationale for its adoption in the industry is evolving. Initially seen as an enabler of greater efficiency, AI is now being harnessed as a driver of value. Its strongest areas of impact? Boosting ad revenues, and interacting with the other trends we’ve highlighted, especially in enhancing shared reality experiences. 

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Paradoxically, AI, which aims to take some of the human element out of decision-making, is enabling a greater possibility for connections in two important vectors: between brands and marketers, and between brands and individual consumers. Advertisers are increasingly favouring formats that offer greater measurability, more precise targeting, and closer links to commercial outcomes. Looking ahead, momentum will be driven by newer formats such as connected TV and shoppable video, which combine digital reach with stronger attribution and closer proximity to transactions.  

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The ability to observe users’ behaviour directly, understand patterns of engagement, and connect exposure to outcomes is ever more central to monetisation. Companies with large logged-in user bases and strong direct customer relationships are better placed to refine targeting, improve recommendations, and demonstrate value to advertisers. Put another way, AI is another force favouring centralisation, because having large troves of proprietary audience data will become a key defensive moat as AI models become more ubiquitous.  

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AI will influence countless ways of working in the E&M industry in 2030. Content creators such as musicians and filmmakers will use AI tools to develop narratives and polish their output. AI won’t stop people from going outdoors to see billboards and other signs. It will help marketers reach people with more dynamically timed content and offerings when they do see those signs. Platforms will deploy AI to understand their customers’ preferences more effectively. Ad agencies will shift away from charging clients for time and expenses to charging for the performance they can deliver via targeted campaigns.  

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In each of these instances, while AI is an important tool—perhaps the most important tool—control remains firmly in the hands of the craft, experience, and delivery capabilities of the service providers.  

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Bart Spiegel
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Global Entertainment & Media Sector Leader, Partner, PwC United States

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+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pdf_text/accenture_metaverse_evolution_before_revolution_2023.txt b/2d_to_3d_market_tech_reports/pdf_text/accenture_metaverse_evolution_before_revolution_2023.txt new file mode 100644 index 0000000000000000000000000000000000000000..c27f997af31e41d658a2837d62f24657da640923 --- /dev/null +++ b/2d_to_3d_market_tech_reports/pdf_text/accenture_metaverse_evolution_before_revolution_2023.txt @@ -0,0 +1,1194 @@ +The Metaverse + + + + Metaverse: + evolution, + then revolution + Gradually, then suddenly: + The metaverse is changing the + way we experience the internet + Metaverse: evolution, then revolution + + + + + Contents + + + + + It’s time to Technology Metaverse: Where is And it all Conclusion: Building toward Research + cut through and creativity A continuum the value? needs to be How to reap our metaverse methodology + the hype will accelerate that will responsible value from the vision + the metaverse transform all metaverse + parts of the + businesses + + + + + 4 7 8 10 19 20 21 22 2 + Metaverse: evolution, then revolution + + + + +Executive Summary + + + + It’s time to + embrace the + new world. + Since starting the Metaverse Continuum + Business Group, we know that there is + enormous potential for consumers and + businesses: The metaverse is the next iteration + of our digital future. It is revolutionizing how + we work and opening new doors for value + generation across industries. The metaverse is + also transforming economies and social spaces, + as an ever-expanding Internet of Place and + Ownership. To tap into this potential, businesses + can pair technology with creativity, driving + experiences that will invigorate our lives, work + and society. + + + + 3 + Metaverse: evolution, then revolution + + + + + It’s time to cut + The metaverse will impact people, too. It is time rendering of photorealistic environments, + a revolutionary virtual addition to our world true-to-life virtual physics, artificial intelligence + + + through the hype + that is enriching the human experience with and real-time 3D creation tools such as Unreal + new possibilities, not detracting from it. The Engine or Unity support the creation of these + metaverse will become a place where humans environments. With these technologies, the + will find purpose, love and friends across a Internet of Place will expand as new communities + new type of internet, opening aspects of each form and grow. Additionally, a “Mirror World” is + individual that will disrupt work models and form created when virtual places are linked to the real + powerful communities. world via digital twins. At their core, digital twins + replicate the performance of individuals, physical + How do we begin? To gain a better understanding assets and processes in a virtual environment + of this potential, let’s start with definitions. to help us understand how these objects might + behave under a variety of circumstances. + The 3D evolution of the internet is underway. This + Metaverse is a buzzword with fluctuating is what we call the Internet of Place, adding a We also see the Internet of Ownership + definitions. Is it the same as Web3? Are there sense of space to the digital world and bringing developing quickly—a digitally native + other words to define it? Will my company look digital elements to our physical lives. It contains infrastructure powered by technologies such as + cool if we say it? And does it really matter? a continuum of virtual realms that operate across blockchain, decentralized identities, confidential + Some have a short-sighted vision of the a spectrum. On one side, there are virtual worlds computing and more that creates the ability + metaverse as a bleak, computerized world and locations where people converse, trade and for people to carry their identity, money and + powered by people in virtual reality (VR) socialize. On the other, an augmented reality (AR) objects from place to place in the digital world. + headsets. But once we cut through the layer overlays our physical world, creating new The driving cultural force behind the Internet + misconceptions and hype, its potential is clear. opportunities for interaction and engagement. of Ownership is known as Web3. This user-led + The swath of contingent technologies will movement emphasizes digital ownership and + evolve and converge, as the Internet of Place Users access these realms in 2D and 3D, transparency in the products and services that + and Ownership opens bold new opportunities accessible via devices such as headsets, phones, make up the Web3 ecosystem. + for businesses and consumers. and computers. Significant advances in real- + + 4 + Metaverse: evolution, then revolution + + + + +As a user-centric movement, Web3 leverages organizations and ecosystems will find entirely +the vast ecosystem of distributed data new sources of value. This fusion will create a +technologies behind the Internet of Ownership. brand-new spectrum of digital worlds, realities + 2343 +While specific technologies are highlighted and business models ripe for exploration. In the +above, the key enabler of the Internet of Accenture Technology Vision 2022, we call this +Ownership is its tokens. Tokens are the digital the Metaverse Continuum, where immersive 1938 + 1871 +encapsulation of rights and obligations that technologies and new types of ownership 1828 +when transacted upon by owners can transfer combine to bring about the next era of our +financial, functional or social value to others. digital lives. 1553 1508 +Tokenization is what will enable users to carry +their identities, money and objects from place to + 1117 1104 1146 +place in the digital world. + + +The Internet of Place can exist without the +Internet of Ownership, and vice versa—but 585 +only together can they help to realize the +full value of the metaverse. As they combine +over the next decade, we believe people, + + + + + 1 + + + + 2 + + + + + 3 + + + + + 4 + + + + + 1 + + + + 2 + + + + + 3 + + + + + 4 + + + + + 1 + + + + + 2 + Q + + + + + Q + + + + + Q + Q + + + + + Q + + + + + Q + Q + + + + + Q + Q + + + + + Q + 21 + + + + + 22 + 20 + + + + + 21 + + + + + 22 + 20 + + + + + 21 + 20 + + + + + 21 + 20 + + + + + 20 + + + + 20 + + + + + 20 + 20 + + + + + 20 + 20 + + + + + 20 + 20 + + + + + 20 + + + + + 20 + Total mentions + + + + + Figure-1: Accenture’s analysis of earning call transcripts shows that interest around the + metaverse continues to remain strong. The total mentions of metaverse-related keywords + increased a staggering 212% during 2022Q2 over 2020Q1. + + + + + 5 + Metaverse: evolution, then revolution + + + Accenture’s metaverse vision: “We see the metaverse as a continuum that + spans the spectrum of digitally enhanced worlds, realities and business + models. It applies across all aspects of business, from consumer to worker and + across the entire enterprise; from reality to virtual and back; from 2D to 3D; + and from the cloud and artificial intelligence to extended reality, blockchain, + digital twins, edge technologies and beyond.” + + + + + Before embracing the metaverse, businesses • Automotive companies are creating exciting + are asking important questions: “Will the “phygital” launches of new vehicle models as well as + metaverse help us save money? How will it help using augmented reality and digital twins to improve + my growth targets? How can the metaverse manufacturing and quality assurance processes in + increase the time to market for our products and facilities and across their supply chains. + services? When will it happen?” + • Luxury brands are using tokens to create digital + Our response is the same to all businesses: twins of physical clothing items and leveraging AR + There is value in the metaverse right now for virtual shopping experiences. + anyone to reap, and the capturable valuable will + increase dramatically with time. • Banks are creating customer-centric experiences + in virtual environments to reduce queues, and using + Major players in the automotive, retail and VR training to simulate client interactions in a safe, + banking industries have already begun their realistic setting. + metaverse journeys: + It’s time to act. Finding value in the metaverse is + not a distant ambition, and businesses can start + capturing value today. + 6 + Metaverse: evolution, then revolution + + + + + Technology and creativity + We’ve seen this story before: Technology We’ve all seen failed and abandoned metaverse + has always accelerated human creativity and experiences spurred by the initial hype. + + + will accelerate the metaverse + ingenuity. From the earliest discoveries of fire Much like physical experiential marketing, + to modern computing devices, we’ve used an experience in the metaverse is only alive + technology to express ourselves, connect and when people are there to create the buzz of + improve lives. conversations and discussions. + + + We also know that technology drives major Metaverse experiences require diverse creative + cultural shifts. We’re at the dawn of the next teams to fully come to life. Event planners, + culture-defining moment, as we express and architects, theme park designers, film writers + connect in new and exciting ways. And we must and game designers are just a few examples of + prepare for it. the diverse talent needed to supplement the + typical marketing teams. + The technology behind the metaverse is + certainly exciting, but the most important We don’t yet know the precise path of + element is us, as humans. It’s the well-designed, metaverse adoption because many of + creative and frictionless experiences—imagined the contributing technologies are still in + by people—that will make the metaverse stick. development. This is like the technologies + behind mobile phones, which existed for + That’s because great metaverse experiences, decades, but only became clear when they + products and services require an understanding evolved into the smartphones we use today. + of human needs. This needs to satisfy the core The train of adoption keeps pushing forward; + drivers influencing human behavior—the desire and we must catch it and continue to learn as it + for material (such as a car) and immaterial things moves into the new horizon. + (such as influence), to bond, to satisfy curiosity, + to protect and for emotional experiences like + pleasure and excitement. But most importantly, + the technology behind these experiences must + be invisible. + 7 + Metaverse: evolution, then revolution + + + + + Metaverse: A continuum + that will transform all + parts of the businesses +So where do we start? Let’s explore how the An economy thrives when it is backed by a and engagement. And blockchain-enabled identifying the ways in which the metaverse +metaverse will shape customers, enterprises, diverse network of stable and trusted currencies traceability in supply chains gives customers a adds value to the employee experience, making +industries and the economy. that will evolve as the metaverse grows. It is better understanding of where their products work easier and more impactful. + important to ensure financial regulation and come from. +The financial infrastructure that underpins it all compliance in a metaverse environment. Training is one example. Virtual worlds allow + These are only a few applications of the many to for a more engaging shift in workplace +The metaverse will become an important How the metaverse will impact customers come. Yet by reframing metaverse technologies learning. Instead of cheesy instructional videos, +economic and financial environment, and experiences as a suite of tools to help solve employees can practice and apply skills in a +underpinned by a vibrant economy where Virtual platforms and buzz-worthy brand unmet customer needs like these, our clients are real-time immersive setting alongside others. +businesses will find new opportunities to offer activations are just the tip of the iceberg. already seeing new revenue streams. This applies to everything from learning culture +products and services, and customers will trade Meeting customer needs in the metaverse and core values via an onboarding experience +in the new reality. Digital currencies already means blending physical and digital touchpoints How the metaverse will impact enterprises when an employee joins a new company, to a +provide a new means for users to store value to create purposeful, value-adding and safe space to practice complex, high-risk and +and exchange assets in the metaverse, using frictionless products, services and experiences. The metaverse will make enterprise intranets as hazardous scenarios, to improving soft skills, +wallets that convey a new sense of identity. 1 we know them today obsolete, replacing them where empathy and the nuances of human +Additionally, central banks will continue to For example, 3D commerce gives customers with immersive, virtual town squares where behavior matter. +develop central bank digital currencies (CBDC), a new way to buy, driving acquisition and employees can collaborate, socialize, create and +which will serve as another, potentially more retention. Tokenization creates new forms celebrate together. However, this is not about +stable, means for users to store value and of social, functional and emotional value replacing eight hours of video calls with eight +exchange in the metaverse in the future. for customers, increasing brand loyalty hours of VR meetings—far from it. It’s about + 8 + Metaverse: evolution, then revolution + + + + + How the metaverse will impact + complex ecosystems + + Businesses are always seeking new efficiencies, improve connections between workers and + especially during times of economic supply chains through advanced true-to-life + unpredictability. The metaverse optimizes how a simulations. These improvements could be a + product is sourced, created and brought to market shift to a new manufacturing technique, a more + through the power of virtual simulations and a efficient store layout or new product designs. + new level of partner collaboration—separating + industries from their inward facing organizations. However, there is nothing constraining the + power of immersive digital twins to the industrial + In an industrial setting, businesses are setting. Increasingly, this value stream is + increasingly leveraging 3D simulations and breaking free of the manufacturing facility + digital twins to test and learn. In virtual and into diverse usage cases from improving + versions of their businesses, they can measure hospital operations to generating snow on ski + and predict the effects of changes and mountains to port operations. + + + + + “The interest in exploring the metaverse comes primarily + from the need to analyze any trends that have potential + to transform, revolutionize or improve business, + e.g., the retail space in the case of Carrefour,” + Nicolas Safis, + Innovation Director at Carrefour Group. + 9 + Metaverse: evolution, then revolution + + + + +Where is +the value? +Executives expect returns from their metaverse The metaverse has vast potential, underpinning +investments in the short run. According to the the very infrastructure of new and existing +Accenture Business Trends Survey conducted in economies while benefitting consumers and +April – May 2022, respondents in companies having businesses. We can tap into its potential today, +some form of a strategy around the metaverse while planning for new business opportunities +believe that in the next three years, a 4.2% share that lie ahead. As mentioned, we divide the +of their revenues will come from new products, metaverse into three key areas—consumer, +services or business models related to the enterprise, industrial. In the next section, we’ll +metaverse. This represents a value of $1 trillion. describe where and how value is emerging + across these areas. +We see the same trend reflected in the +Accenture CxO survey conducted during the +same period too. Eighty-nine percent of 3,200 +executives surveyed agree that the metaverse +will have an important role in their organizations’ +future growth. + 10 + Metaverse: evolution, then revolution + + + + + Question: Which metaverse use cases are you most interested in exploring at present? + + 4% 5% 3% 4% 4% 5% 4% 5% + 6% 6% 6% 7% 6% 7% 7% + 12% 8% 12% + 13% + 11% 16% 10% 8% + 12% 10% 15% 13% + 14% 17% 16% 7% 14% + 17% 24% 18% 7% 21% 7% + 16% + + 20% 10% 18% + 17% 17% 22% + 13% 16% + 21% 18% 31% + 25% 27% + 29% + + 30% 24% 19% + 31% 35% + 26% 36% + 42% + 9% 27% 29% + 29% 23% + 22% 33% 21% + 32% + 10% 35% + 21% + 29% 20% + 36% 33% + 25% + 18% + 10% + + + + 28% 32% 25% 26% 38% 34% 16% 38% 23% 36% 41% 26% 21% 34% 40% 32% 14% 28% 48% 34% + Aerospace + and Defense + + + + Airline, Travel + & Transport + + + + Automotive + + + + + Retail + Banking + + + + Capital Markets– + Pvt. Equity + + + + Capital Markets– + Other + + + + Chemicals + + + + Communications, + Media & Technology + + + + Consumer Good + & Services + + + + + Health + + + + + High-Tech + + + + + Industrial + Energy + + + + + Insurance + + + + + Natural Resources + + + + Pharma, Biotech, + Life Sciences + + + + Public Services + + + + + Retail + + + + Software & + Platforms + + + + + Utilities + Consumer metaverse Consumer metaverse Enterprise metaverse Digital assets economies Digital twin + services experiences products experiences (extended reality, virtual workplaces) (e.g. non-fungible tokens) + + + Figure 2: Across many industries, executives are most interested in metaverse use cases associated with consumer product and service experiences. + Source: Accenture CxO Survey, April–May 2022: (n=3200) + + 11 + Metaverse: evolution, then revolution + + + + + Consumer + metaverse +The metaverse is swiftly opening new ways for Immersive product experiences are becoming + + + + + 71% +consumers to connect and socialize together, more normalized. This is allowing brands to +forming strong bonds within close-knit showcase new products and services through +communities. The Internet of Ownership brings more compelling touchpoints. For example, +new kinds of value and experiences to everyone, Chinese multinational technology company +and brands can form stronger ties of customer Baidu unveiled Robo-01—a new autonomous +loyalty in the new paradigm. car - on Xirang, its metaverse app. A virtual of 325 respondents + master of ceremonies introduced the car to participating in Accenture’s + recent focus group +People are finding joy, delight and fun in its audience, drumming up interest for the discussions expect the +immersive experiences. There is even more product and the app’s metaverse capabilities. metaverse to provide + real-world shopping +value for customers with incentivization and self- The news generated much discussion on experiences, such as +expression enabled by tokenization and avatars. the microblogging platform Weibo, where a the ability to try clothes + and products before + hashtag for the car’s unveiling gained almost purchasing, over the +Immersing the senses and the mind next three years. + 40 million views.2 + + +Immersive technologies enable multi-sensory But metaverse experiences need to be more +experiences that create real connection and than just visually interesting if brands expect +bring users closer to brands. These experiences to see growth from them. They need to be +can also unlock information previously something customers want to visit, often and “Virtual try-on experience in the retail industry has been a game +constrained by the limitations of the real world. consistently. To accomplish this, experiences changer. Right now, it is being used for simple social interactions +For example, shoppers can visualize products must contain a mechanic or gamified element. which have a fun element, but gradually new use cases are being +on themselves prior to purchase, or wear For example, Pet Simulator’s “Adopt Me” game developed, e.g., weather reporting and progression games.” +clothing that cannot physically exist in the real is one of the most popular games on Roblox +world, pushing the boundaries of art, expression with over 28 billion+ visits (as of June 2022).3 — AR Platform Lead of one of the largest social media platforms. +and fashion. + 12 + Metaverse: evolution, then revolution + + +Incentives “NFT is not just a sticker with Some companies have already started testing Through self-sovereign identity models, the + value—it’s an entryway to a world consumers’ identity appetite. In 2021, Dior user onboarding experience is reversed. Service +Tokenization gives brands, creators and partnered with avatar app Zepeto to create providers onboard to the users, giving them + of opportunity with specific utility. +influencers direct ownership of fan relationships digital makeup looks,5 and with Ready Player control over what data is shared with websites, + Defining that utility needs to be +via social tokens. And the tokens give fans more Me to launch exclusive fragrances with an services, applications and other users across +control and decision-making rights as a rewards + based on brand’s needs.” interactive experience. In 2022, Dior launched the web.8 +for their loyalty and participation. Fans can also its first-ever metaverse exhibition in China, + — Senior executive for metaverse +use tokens to directly invest in their favorite “On the Road,” which showcased fall 2022 Brand strategy + initiatives in a global sportswear brand +creators, receiving pieces of content, access menswear through an interactive experience +to exclusive material or membership in the hosted on Baidu’s metaverse social app. Not The metaverse will transform how brands deliver +creator’s community in return. Today, the way we present ourselves depends on only do these experiences entice luxury fashion on their promises. We recently identified life + the website or platform. Who we are on LinkedIn is fans to follow Dior to a new channel, but they centricity as a critical growth driver for staying +These incentives create powerful customer how we express ourselves professionally, which is appeal to consumers’ desire for exclusivity and relevant to customers. Brands must also consider +journeys. For example, Starbucks is reimagining different from how we express ourselves on Reddit social standing. the dynamic lives of their customers in the +its loyalty programs by using tokenization at or Instagram. But soon, avatars may become the metaverse, but within the context of the new +scale to create an accessible Web3 community. new expression of our digital identities. For continuity, identity credentials and digital missions customers are on. It’s still important to +“Starbucks Odyssey” allows users to buy digital assets should be consistent across experiences. appeal to customers’ transactional, emotional +collectable stamps that unlock access to new Avatars are a virtual manifestation of someone’s This isn’t currently possible because we and social needs—it’s just not 1:1 with the physical +coffee experiences. 4 digital identity and personify many forms of onboard as users for different service providers. world. Soon, it will be commonplace to see a + identity expression—products, experiences digital layer over the physical worlds consumers +Retaking ownership of our identities and values. With avatars, users are no longer and companies inhabit. Advances in augmented + confined by the characteristics assigned to reality are already preparing us for this— + “Avatars are the new face of digital +In the physical world, identity is defined by them at birth and are empowered to express digitalizing identity, possessions and worlds. +characteristics such as race, ethnicity, gender, themselves in ways not possible in real life. One + identity. Those are shells or capsules +age, personality and physical attributes. But our participant from Accenture-organized focus around one’s identity—still working Tokens will transform the way brands engage +digital identities are less clear. Today, it includes group discussions on the metaverse offered the with traditional ID protocols and with customers. A universal digital wallet solution +what the web knows about you (which you do following insight: “The metaverse will allow us to data, but now including a 3D is currently in the works to enable their broad +not control) and how you present yourself online be more confident because there is little fear of representation.” usage. It will give brands and users a place to +(which you do control). being judged based on our looks or behavior in a store and control any digital asset—identity, + virtual environment.” —Sercan Altundaş, SDK & Integrations money and objects—and will be portable across + Team Leader, Ready Player Me all sites, experiences and communities. + + 13 + Metaverse: evolution, then revolution + + +As adoption grows, brands will find value in the +first-party data customers allow them to access via +tokenization. However, getting and keeping access to +this data is based on a new trust dynamic where users +are in control. You can build trust through employing +data-use transparency, aligning your reputation to +customer values, and being mindful of how your brand +builds the relationship around products and services. + + +New products and business models + +In the physical world, products and services +provide a specific utility to customers. When brands +experiment with virtual products and services, they +need to retest the utility. Brands are finding value +today in reimagining their products and services as +blended physical and digital assets. These brands +are also creating entirely new revenue opportunities +through the deployment of exclusive content and +co-collaborations with customers enabled by +tokenization. + “Universal digital wallet infrastructure will create the ability +Combating real-world problems + to carry tokenized identity, money and objects from place to + place in the digital world. Massive business model change is +Brands have started using the metaverse to solve +real-world problems such as validating identities. For + coming, and the winning digital business will be the one that +example, real estate, art and luxury fashion are all using + earns trust to directly access the real data in our wallets to +blockchain to authenticate and combat counterfeit create much better digital experiences.” +markets. With an NFT’s unique identification, issuers +and buyers have a true certificate of digital ownership, —David Treat, Senior Managing Director, +guaranteeing authenticity and protecting both co-lead of Accenture’s Metaverse Continuum Business Group +consumers and businesses. + 14 + Metaverse: evolution, then revolution + + +Secondary marketplace revenues + + +Digital products are providing new sources of +revenue beyond their initial sales. For example, +one of the largest sportswear company’s +original collections in the metaverse grants +owners exclusive rights to its merchandize +throughout the year. As a result, this company +saw more than 50,000 transactions on the +secondary market, generating revenues in 63% + 61% + 60% 59% +excess of US$175 million. 58% + 57% + 59% 58% + 56% 56% + 55% 55% 55% 54% 54% + 53% 53% 53% 53% 53% 53% 52% + 50% + 49% +Control over brand journeys 46% 46% + 43% + 42% 41% + +Branded marketplaces give enterprises control 37% 38% + 10% 34% +over the consumer experience. They will also 33% 32% + 29% +prevent the brand dilution that happens in large 25% + +marketplaces. Big tech is starting to experiment 23% + 20% 19% + 18% +with these marketplaces as well. For example, +Salesforce has recently piloted its NFT cloud +commerce plugin.9 + + +Consumers have an appetite for these digital + Working with + co-workers + in a virtual or + + + + + Virtual + fashion + + + + + Virtual + travel + + + + + In-game + currency + + + + + Virtual + ‘looks’ + + + + + Gaming power- + AR worlds + + + + + Shopping for + real-life products + in virtual worlds + + + + + Virtual + consultations + with experts + + + + + Virtual + entertainment + + + + + Digital + collectibles + + + + + ups received with + virtual purchases +products and services. Currently, our research +indicates that Gen-Z and Millennials are open +to spending their money on digital experiences +and products (see Figure 3). Brands will need +to get creative to make themselves visible to Gen Z Millenials Gen X Boomers +customers. As new experiences hit the market, +customers will expect more than a 3D store in a + Figure 3: Gen-Z and millennials are interested in buying virtual experiences and products in a virtual world in the next year +virtual world. + Source: Accenture Consumer Pulse Survey, Feb 2022: 11,000+ consumers over 16 countries + + 15 + Metaverse: evolution, then revolution + + + + + Enterprise metaverse + +The metaverse introduces a new dimension to A new way to collaborate Take our partnership with Microsoft and Meta Mater Private Hospital and Siemens +an organization’s enterprise and will underpin as one example, where we are creating VR Healthineers Value Partnership +its core enterprise software and functions, The metaverse shows huge promise to improve solutions customized for businesses. A new type + team built a representation of the +enhancing the way people engage, learn, and productivity, increase workforce equity and of work is being embedded into the existing + hospital’s radiology operations to +collaborate. It allows us to work together no reduce travel along with its carbon impact, as communications suite, allowing our clients to +matter the distance, to feel the presence of well as increase employee retention. Workers build museums of their history for new joiners, + review current layouts and identify +colleagues in virtual meetings, and to operate can join virtual spaces together, regardless of build brand equity and increase recruitment. potential improvements. Through +within remote sites or digital twins of spaces. In location across the world, and work on the same extensive consultations, a digital +short, the metaverse will change the workplace projects. Colleagues form a stronger connection Additionally, process design and development twin was created allowing the +across physical and digital spaces. through immersive collaboration, as they work will also be faster and cheaper with the partners to run different scenarios, + together toward a unified company goal. metaverse. Interactive digital environments identify the best use of equipment + enable collaboration regardless of location. This and pressure test a physical layout. + means clients, vendors, partners and customers + can bring their own supply chain data and meet Improvements that previously took + in the metaverse. + months or years of trial and error + Learning and employee experience could now be achieved in a matter + of days or weeks. The digital twin + The best employee experiences hinge on helped the hospital shorten MRI + getting the moments that matter right, such as wait times for patients; accelerate + connection, upskilling and communication. The patient turnaround for MRIs; + metaverse is a versatile, scalable solution for increase equipment utilization; and + improving the employee experience across a lower staffing costs (in terms of + geographically distributed workforce. This can + overtime paid per day).10 + manifest in many ways, whether it be virtual + onboarding, hosted engagement, inclusion or + well-being activities. + 16 + Metaverse: evolution, then revolution + “Education is a perfect metaverse + use case where teaching can happen +Immersive experiences in the metaverse create a digital center of gravity for with simulated experiences. This also +teams and organizations by giving proximity and enhancing collaboration. gives students field exposure to any +For example, industrial companies are training in VR so they can leave location or industry in the world.” +production lines up longer and at a higher efficiency, rather than slow them + —Jeff Sanders, +down to train new operators. Chief Architect, Microsoft + + + +A virtual environment also allows employees to express themselves in new +ways. Employees’ digital avatars become extensions of their identities +and they can customize their workspaces to fit their individual tastes. +Plus, employees become creators. For example, at Accenture, our African +American Employee Resource Group used the metaverse to celebrate and +to invite others to celebrate Black History Month. + + +As technology accelerates the pace of change, the shelf life of skills +shortens. With its ability to drastically reduce the gap between skill +acquisition and application, the metaverse enables companies to become +talent creators and nurturers—building a pool of upskilled, relevant talent +and increasing the value people can provide. + + + + + Accenture’s enterprise metaverse, the Nth floor, is a + virtual environment created to bring Accenture people + together to meet, collaborate and learn. Within the Nth + floor, a virtual campus called One Accenture Park is + helping new employees personally connect with the + culture and plant the seeds of professional relationships. + This type of immersive experience enables new hires to + experience orientation in a more personal way and meet + many more people. + 17 + Metaverse: evolution, then revolution + + + + + Industrial and + systems metaverse +The metaverse virtualizes industrial systems and late 2020. Applied to its manufacturing plants, +processes with immersive technologies such digital twins will enable Mars to simulate and +as AR and digital twins. The industrial sector is validate the results of product and factory +realizing the benefits today within operations adjustments before allocating time and +and supply chains. resources in the physical space. The companies + tested a digital twin to reduce instances of +Simulation and real-world operations over-filling packages, a common problem in + the food industry. The digital twin gave Mars a +Digital twins allow management teams to bird’s-eye view of the production lines at one +interact with operational systems and reach of its factories. The twin fed sensor data from +across to their partners’ networks, both manufacturing machinery into a predictive +upstream and downstream. Linking digital twins analytics model, which allowed factory line +to a company’s machinery, operating models, operators to monitor events in real-time and strategic decisions during disruption. Tokenization with virtual interactions. Additionally, digital twins +processes and systems enables predictive adjust the filling process. Accenture and increases transparency while retaining data will help companies optimize physical spaces or +maintenance, better team collaborations and Mars will work together to apply digital twin ownership, driving massive improvements to products well before they are made or moved in +trainings, and real-time remote monitoring. technology and models to the company’s supply chain. Increasingly, immersive places real life. +Accenture is working with Mars, the global manufacturing facilities globally. This will give provide the opportunity to move the command +leader in confectionary, food, and pet care Mars factory line operators real-time insights center and control tower to virtual spaces to better Shell, Accenture and Amex GBT launched +products and services, to transform and into current and predictive performance. 11 collaborate across the ecosystem. one of the world’s first blockchain-powered +modernize its global manufacturing operations digital book-and-claim solutions for scaling +with artificial intelligence (AI), cloud, edge Supply chain networks The metaverse and Web3 technologies are sustainable aviation fuel (SAF). It is the largest +technology and digital twins. contributing to the quest for more sustainable SAF book-and-claim pilot at launch, offering + Supply chain transparency is key to resiliency and supply chains. They promise to reduce carbon around 1 million gallons of SAF—enough to +Accenture and Mars have been trialing digital collaboration. Businesses with deep visibility into emissions by substituting physical goods with power almost 15,000 individual business +twins for Mars’ manufacturing operations since each piece of their value chains can make more digital ones and replacing real-world presence traveler flights from London to New York.12 + 18 + Metaverse: evolution, then revolution + + + + + And it all needs + Gerando Falcões (GF) is a non-profit + organization (NPO) committed to eliminating + poverty in Brazilian favelas (Portuguese for + to be responsible slums). GF aims to transform communities into + “dignified, digital and developed environments,” + where proper housing, access to healthcare and + education, women’s autonomy and more are + possible and available to all. + + GF recently launched FavelaX, an initiative in + partnership with Accenture that brings high- + tech tools to turn favelas into innovation labs. In + the first leg of this initiative, they named a poor + community within the favelas “Favela Mars” + and chose it as the location to pilot a “digitally + transformed slum” platform called Favela 3D. + +The metaverse is a massive opportunity for Companies must be intentional with the metaverse. To engage the younger audience, Accenture + developed and launched the game Mission +businesses to create value. But it’s important It’s important to understand how technologies + FavelaX, the “first immersive experience of a +to approach it with firm values to stand by in the metaverse stack can hamper sustainability + non-profit organization in Latin America” on +and protect. It gives us the chance to make goals, and to mitigate risks accordingly. However, Roblox. Players climb a six-floor rocket ship +this new era of internet more responsible than we believe the metaverse can also support placed in the middle of a favela to learn about +those of the past. The metaverse should be an organizations’ ESG goals—from behavior change what life is like for the people living in these +opportunity for humans to collectively imagine through deeper levels of empathy to reduced communities as well as the actions that can help +and build a future that is more sustainable, emissions from digital twin technologies. + improve them.13 +diverse and inclusive. + While exciting, all innovation starts by building on +It’s essential that we create a metaverse where values from the start. On firm foundations comes a +people want to engage and have trust that it is mature and pragmatic approach to the metaverse. +run responsibly. Trust is what shapes the design +and deployment of technology, product policies +and practices. + + + 19 + Metaverse: evolution, then revolution + + + + + Conclusion: How to reap + During uncertain economic conditions, it’s Start small and focused + tempting to look to the familiar for innovation. + + + value from the metaverse + But the metaverse is here and its technologies Businesses should approach the metaverse + are moving fast to build our digital future. with a rigorous, customer-focused mindset + The way enterprises adapt to circumstances, that artfully services their needs. They should + remain relevant and find new opportunities has also focus on understanding how to apply the + fundamentally changed. The metaverse can serve metaverse to different parts of the business. + as the key to both survival and prosperity in this Otherwise, they could end up with multiple + new world. tendrils of innovation, potentially wasting + company time and finances. + The metaverse may seem daunting or opaque, + but businesses can move ahead by keeping their Engage with early building blocks + strategies simple and focused, building on the + very foundations of the metaverse. The size of the Metaverse and Web3 ecosystems are rapidly + prize is huge for businesses that take an integrated developing and launching new opportunities for + approach and tap into the full and vibrant potential value generation. This continues to open new + of the metaverse for customers. doors for businesses—as long as these target + the right areas quickly but thoughtfully. Early + There are three rules that we must apply: engagement engenders true long-term trust + with customers over time and grants an edge + Be creative and keep it simple over the competition, but reckless engagement + damages trust + Businesses should only develop metaverse + experiences that are within their users’ mental + models. In practice, this means going back to + the basics and building upwards. Creativity is + still key—this is not a lift-and-shift of current + products and services. With this mindset, + businesses can focus on the right metaverse + strategies and operating models. + + + + 20 + Metaverse: evolution, then revolution + + + + + Building toward + our metaverse vision + +The metaverse will integrate our physical and +digital worlds, reshaping how we live and +work. Businesses will drive this transformation +with the highest standards for safety, security, +diversity and trust. Communities will arise from +virtual worlds, collaborating and opening new +opportunities for engagement backed by a new +type of economic infrastructure. And in this +new world, social connections and business +dynamism will thrive like never before. + + +In the end, the metaverse comes down to +people. As the building blocks continue to rise, +They will encourage an ecosystem of players to +work together toward common goals that will +swiftly change the world, much like the internet +of the past. + + +The Metaverse Continuum will define the next +era of digital transformation, revolutionizing life +and enterprises in the years ahead. It’s speeding +towards mainstream adoption—and businesses +need to move now if they wish to join the race. + 21 + Metaverse: evolution, then revolution + + + • Algorithm-based analysis of proprietary their organizations’ investments direction toward + databases: pertinent business-centric topics, including + the metaverse. Respondents represented 19 + + Research a. Analysis of earnings calls transcripts — We + leveraged our data science research capability + industries from companies $500 million or more + in global revenue. + + methodology to perform a natural language processing + (NLP) analysis of more than 100,000 earning • Accenture Consumer Pulse survey: + calls transcripts of 11,407 companies listed Accenture’s Consumer Pulse Survey offers + on the S&P Global Index. We analyzed insights into consumer outlook, sentiment and + the transcripts for a list of more than 100 behaviors two years on from the start of the +At Accenture, we have been working on the • Interviews with industry experts: We metaverse-related keywords for earnings calls pandemic (March 2020). This current survey was +component technologies of the metaverse conducted 20 in-depth video interviews with held between January 2020 – July 2022. conducted between 7th and 15th February 2022, +for years, handling hundreds of patents and metaverse subject matter experts covering with a representative sample of 11,311 consumers +delivering hundreds of projects for our clients. Accenture’s clients, sandbox gaming platform b. Metaverse investment analysis—We from 16 countries. The survey was conducted +We used our expertise to inform our research vendors, technology solution providers, and analyzed VC investment on metaverse-related online and targeted consumers who have made +and approach. Toward evolving meaningful and metaverse startup representatives. Qualitative start-ups using the Crunchbase database. purchases for their households in the past six +real insights on where value lies in the metaverse, insights gained from these interviews range from For the investment analysis, we identified months. Respondents were split evenly across +we have used a combination of qualitative as well opportunity and investment areas, strategies metaverse-related start-ups as companies that gender and age group. +as quantitative research methods: and quick win approaches, and budget and fall into one of the following five categories + organization, to ecosystem opportunities and (as mentioned in their descriptions): digital • Accenture Business Trends survey: In May +• Focused group discussion: We conducted challenges. The interviews were conducted ownership and ID; enterprise simulations and June 2022, Accenture Research conducted a +hour-long focus group research with 325 US-based between May and August 2022. and digital twins; immersive consumer global survey of 3,450 C-level executives across +participants to understand their perceptions and experiences; metaverse algorithms and AI; 22 countries to understand the importance of the +biases about the metaverse, with a focus on their • Discussions with C-suite executives: Over the and responsible metaverse. The analysis was key business trends. Respondents represented 26 +adoption barriers. These participants, spread period April–September 2022, we conducted conducted for the period of January 2017 to industries from companies $500 million or more in +across age (18 years to 65+ years), household discussions with nearly 50 C-suite executives September 2022. global revenue. +income (<$30K to >$200K), gender (male, female, of businesses exceeding revenues $1 billion to +non-binary), and ethnicity, have been active on understand their perspectives on the metaverse • Accenture CXO survey: Between April and May +internet and social media, and were also aware of/ and Web 3 technologies; the value they would 2022, Accenture Research conducted a global +have experienced metaverse. like to unravel in the metaverse; and the Web3 survey of 3,200 C-level executives across 15 + technologies they would like to explore. countries, to understand their perspectives and + 22 + Metaverse: evolution, then revolution + + +Authors Acknowledgements About Accenture About Accenture Research + +Mark Curtis We thank everyone in the Metaverse Continuum Accenture is a global professional services Accenture Research shapes trends and creates +Managing Director, Business Group and Accenture Research who company with leading capabilities in digital, data-driven insights about the most pressing +Metaverse Continuum Business Group assisted with the report, from research to insights. cloud and security. Combining unmatched issues global organizations face. Combining the + experience and specialized skills across power of innovative research techniques with +David Treat more than 40 industries, we offer Strategy a deep understanding of our clients’ industries, +Senior Managing Director and co-lead, and Consulting, Technology and Operations our team of 300 researchers and analysts +Metaverse Continuum Business Group services and Accenture Song — all powered spans 20 countries and publishes hundreds of + by the world’s largest network of Advanced reports, articles and points of view every year. +Katie Burke Technology and Intelligent Operations centers. Our thought-provoking research – supported by +Senior Manager, Our 721,000 people deliver on the promise of proprietary data and partnerships with leading +Metaverse Continuum Business Group technology and human ingenuity every day, organizations, such as MIT and Harvard – guides + serving clients in more than 120 countries. We our innovations and allows us to transform +Raghav Narsalay embrace the power of change to create value theories and fresh ideas into real-world solutions +Managing Director, and shared success for our clients, people, for our clients. For more information, visit www. +Accenture Research, Accenture shareholders, partners and communities. Visit accenture.com/research. + us at www.accenture.com. + + + + +Disclaimer: This content is provided for general +information purposes and is not intended +to be used in place of consultation with our +professional advisors. This document refers to +marks owned by third parties. All such third- +party marks are the property of their respective +owners. No sponsorship, endorsement or +approval of this content by the owners of such +marks is intended, expressed or implied. + + 23 + Metaverse: evolution, then revolution + + + + + References + + + +1 World Economic Forum (2022), The Macroeconomic 8 Andrew Tobin & Drummond Reed (2017), The Inevitable + Impact of Cryptocurrency and Stable Coins, White Rise of Self-Sovereign Identity, available at: The-Inevita- + Paper, available at: https://www3.weforum.org/docs/ ble-Rise-of-Self-Sovereign-Identity.pdf (sovrin.org) and + WEF_The_Macroeconomic_Impact_of_Cryptocurrency_ accessed on September 20, 2022 + and_Stablecoins_2022.pdf and accessed on November + 17, 2022. 9 Salesforce (2022), Mint and sell NFTs on a trusted, sus- + tainable platform, available at: Mint NFTs on a Trusted +2 Beatrice Tamagno (2022), Baidu Uses Metaverse App Platform - Salesforce.com and accessed on September + to Unveil Its First Commercial Self-Driving Car, Article 03, 2022 + published on RADII, available at: https://radii.co/article/ + baidu-self-driving-car and accessed on November 15, 10 Siemens Healthineers (2018), Digital Workflow Opti- + 2022 mization; available at: https://corporate.webassets. + siemens-healthineers.com/1800000005658034/ +3 playadoptme (2022), What is Adopt Me?, available at: d2ba2b3d0cc5/From_Digital_Twin_to_Improved_Pa- + https://playadopt.me/ and accessed on October 29, tient_Experience_Case_Study_1800000005658034.pdf + 2022 and accessed on July 21, 2022 +4 Starbucks Stories and News (2022), Starbucks Brewing 11 Accenture (2022), Accenture Collaborates with Mars to + Revolutionary Web3 Experience for its Starbucks Develop “Factory of the Future” Using AI, Cloud, Edge + Rewards Members, September 12, available at: https:// and Digital Twins, News Release, available at: Accenture + stories.starbucks.com/press/2022/starbucks-brew- Collaborates with Mars to Develop “Factory of the Fu- + ing-revolutionary-web3-experience-for-its-starbucks-re- ture” Using AI, Cloud, Edge and Digital Twins | Accenture + wards-members/ and accessed on November 10, 2022 and accessed on November 15, 2022 +5 Becky Bargh (2021), Dior goes after Gen Z with virtual 12 Shell (2022), Shell, Accenture and Amex GBT launch + beauty link-up; published in Cosmetic Business; avail- one of the world’s first blockchain powered digital book- + able at: https://cosmeticsbusiness.com/news/article_ and-claim solutions for scaling sustainable aviation fuel + page/Dior_goes_after_Gen_Z_with_virtual_beauty_link- (SAF), Press Release, available at: Shell, Accenture and + up/177953 and accessed on July 21, 2022 Amex GBT launch one of the world’s first blockchain + powered digital book-and-claim solutions for scaling +6 Dior (2021), Miss Dior Immersive Journey; available at: + sustainable aviation fuel (SAF) | Shell Global and ac- + https://www.dior.com/beauty/en_int/th/miss_dior_im- + cessed on November 15, 2022 + mersive_journey.html/ and accessed on July 21, 2022 + 13 Accenture (2022), Helping Brazil’s slums tackle poverty; +7 JING DAILY (2022), Dior Jumps Into China’s Metaverse; + available at: Helping Brazil’s slums tackle poverty | + available at: https://jingdaily.com/dior-metaverse-exhi- + Growth Markets (accenture.com) and accessed on + bition-xirang/ and accessed on July 21, 2022 + August 3, 2022 + + + +References 24 + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pdf_text/autodesk_state_design_make_2025.txt b/2d_to_3d_market_tech_reports/pdf_text/autodesk_state_design_make_2025.txt new file mode 100644 index 0000000000000000000000000000000000000000..2c4dac13e5c5f8906379bbd42e0d0cc9ed4da9a0 --- /dev/null +++ b/2d_to_3d_market_tech_reports/pdf_text/autodesk_state_design_make_2025.txt @@ -0,0 +1,3275 @@ +State of +Design & Make +A GLOBAL, ANNUAL, LONGITUDINAL STUDY for leaders +who design and make places, objects, and experiences. + Contents + + 03 22 68 + Insight 3 Insight 7 + About the report AI solidifies its place as the The search for talent intensifies, + top sustainability enabler with a focus on AI skills + + + + + 04 29 82 + Insight 4 Insight 8 + Introduction The AI hype cycle meets reality + Investments remain strong + but reflect uncertainty + + + + + Insight 1 + + 06 44 90 + Digital transformation + Insight 5 + efforts have an overwhelmingly + Cost, tech, and talent Conclusion + are top concerns + positive impact + + + + Methodology + + 11 57 91 + Insight 2 Insight 6 + Sustainability transitions Leaders are cautious Glossary + from pressure to profitability in the near term + Thank you + + +2 2025 STATE OF DESIGN & MAKE + For the 2025 State of Design & Make car, or making a myth into a movie. + edition, Autodesk surveyed and Globally, Design and Make employs, + + + + + About + interviewed 5,594 industry leaders, conservatively, 295.7 million people.1 + futurists, and experts across Design + and Make industries: architecture, Before digitalization, much of this + engineering, construction, and work took place in discrete, siloed + + + + the report + operations (AECO); design and phases, handed off from specialist to + manufacturing (D&M); and media specialist. With the advent of digital + and entertainment (M&E). Survey workspaces and modeling tools, + data has been broken down by global these phases have converged into a + region: Asia-Pacific (APAC); Europe, centralized way of working informed + Middle East, and Africa (EMEA); and by data-driven insights. Today, teams + The State of Design & Make report is a global, annual, + the Americas (AMER). This is the third collaborating on Design and Make + longitudinal study for leaders who design and make places, + longitudinal year of this report series projects see their work as part of a + objects, and experiences. It identifies the most pressing + with data comparisons from the larger, interconnected process. Digital + issues shaping today’s businesses and helps leaders make + previous two reports. tools and standards make it easier + informed, strategic decisions about how to prioritize and + to map interdependencies, refine + invest for the future. + What is Design and Make? processes, and democratize solutions. + + A convergence of technologies and For the professionals immersed in + methodologies in industries that it every day, Design and Make is + produce digital and built assets more than a way of working—it’s + over the past 40-plus years has a philosophy and a mindset. It + resulted in a distinct category of represents a deep belief that every + work: Design and Make. Design challenge and complexity can be + and Make shapes the surrounding overcome with the right tools and the + world, translating complex ideas right skill set. Designers and makers + into powerful experiences, whether are optimists united by a shared drive + it’s transforming a sketch into a to make a better world for all. + school, turning a concept into a + + + + + 1 + World Economic Forum, 2023 + + +3 2025 STATE OF DESIGN & MAKE + 2025 State of Design • Although overall investments are + & Make key findings down year-over-year, more than + + + + + Introduction + two-thirds of leaders say they will + Leaders were clear on the challenges increase overall future investments. + they are facing. • Sustainability is experiencing a + surge of optimism, with nearly all + Cost control remains top of mind for leaders saying their organizations + organizations amid continued inflation are taking steps to be more + Leaders in Design and Make industries report that they + and increasing supply-chain fragility. sustainable. Sustainability also + are confronting daunting headwinds, from increased + Implementation of AI and emerging continues to be a key differentiator + geopolitical uncertainty and inflation to talent gaps and + technologies is the second most-cited in talent acquisition. + challenges implementing emerging technologies like artificial + challenge, one that is compounded by + intelligence (AI). But for the third year, digital transformation + both cost and labor concerns. Talent • This year, AI solidified its place as + has proven to help Design and Make organizations identify the top sustainability enabler for + remains a perennial problem, with + opportunity amid disruption, providing benefits nearly Design and Make organizations, + nearly two-thirds of organizations + across the board. with applications from natural- + experiencing a skills gap and the + majority of companies saying lack of disaster mitigation to project + skilled talent is hindering growth. lifecycle management. + + + Optimism about AI is down, and One standout finding this year is + concern about its destabilizing effects that most leaders surveyed say + is up among leaders in Design and digital transformation efforts + Make as organizations struggle with led to improvements at their + implementation and finding practical organizations. The majority of + use cases for the new technology. And, organizations benefiting from digital + finally, global uncertainty is depleting transformation are seeing more than + organizational confidence and 50% improvements in categories such + increasing feelings of unpreparedness. as customer satisfaction, innovation, + and productivity. Digitally mature + Despite this uncertainty, business companies tend to invest more heavily + leaders in Design and Make are still in technology, and those investments + feeling bullish in some areas as they are now paying outsize dividends + identify opportunity amid disruption: during the current period of caution. + + +4 2025 STATE OF DESIGN & MAKE + The digital • Digital maturity eases talent +maturity difference concerns, with a 22-point + improvement in talent acquisition + and retention from their +In this report, “digitally mature” + technological advancement over +companies are defined as those + less digitally mature organizations. +that are approaching or have +achieved the goal of their digital • Organizations that are digitally +transformation journey. “Less mature are more likely to enter new +digitally mature” companies are markets and increase investments +defined as those that are in the early into acquisitions, allowing them to +stages or right in the middle of their expand while others are contracting. +digital transformation journey. + There’s no question that leaders +• Digitally mature organizations in Design and Make industries are + are 41% more likely to diversify confronting a challenging geopolitical + their supply chains, and leaders and macroeconomic environment. + at these organizations feel more But given the findings of the 2025 + prepared to handle unforeseen State of Design & Make survey, a + changes compared to less resilience agenda centered on digital + digitally mature companies, transformation can provide strong + giving them an advantage protection against uncertainty. + when it comes to resilience. +• These organizations are also more + likely to leverage internal data + to gain a competitive edge, more + quickly develop products and + services, and complete projects + faster than other companies. + + + + +5 2025 STATE OF DESIGN & MAKE + 08 + INSIGHT 1 + + + + +Digital transformation +efforts have an +overwhelmingly 00 +positive impact + 01 +6 2025 STATE OF DESIGN & MAKE + 02 + INSIGHT 1 + +Implementation of new technology +is a perennial challenge for leaders Digital transformation efforts have +in Design and Make industries, but +those who tackle the complexities of + an overwhelmingly positive impact +digital transformation are reaping the +rewards of their efforts. In fact, most Majority of organizations realize more than 50% ROI from digital transformation +leaders surveyed for the 2025 State Customer Productivity Innovation to lead +of Design & Make report have already satisfaction to better ideas +realized a 50%-plus return on their +digital transformation efforts through Drastically improved 4% 3% 4% +increases in innovation, productivity, +and other categories. + + + +50%+ Significantly improved 28% 22% 26% + +return on investment from +digital transformation + Considerably improved 38% 36% 41% + + + + + Moderately improved 27% 33% 23% + + + + + Marginally improved 4% 6% 5% + + + + Survey question: Has your company or organization experienced any of the following benefits of digital transformation? Select all that apply. + Followed by survey question: You selected [benefit] as a benefit of digital transformation. How much has digital transformation improved [benefit]? + Response scale: “Marginally,” “Moderately, by 25%,” “Considerably, by 50%,” “Significantly, by 75%,” and “Drastically, by 100%.” + + +7 2025 STATE OF DESIGN & MAKE + INSIGHT 1 + +Along with improvements in Digital maturity benefits the entire organization: +customer satisfaction, productivity, +and innovation, leaders benefiting In this report, “digitally mature” companies are defined as those that +from digital transformation report are approaching the goal or have achieved the goal of their digital +it is also having positive effects on transformation journey. “Less digitally mature” companies are defined +company reputation (72%), expansion as those that are in the early stages or right in the middle of their digital +of products and services (68%), and transformation journey. +improved data exchange (67%). + Respondents from digitally mature companies report they are ... + + + + +30% +29% +“Our digital transformation + program today will create + huge amounts of efficiency, … more likely to have … more likely to “agree” they + allowing us to go 50% faster experienced “above average” are prepared for the future + and 30% cheaper.” or “exceptional” performance + + NITESH ALAGH + + +35% +26% + Business Lead – Digital Engineering, + Sustainability & Emerging Tech, + Severn Trent Water, a water and wastewater + … more likely to have “increased” … more likely to have kept up + utility company headquartered in the UK + or “strongly increased” “very well” with + investment in the past 3 years change in the industry +“When it comes to modernization + and digitalization, we will + continue to invest in these areas With results like these, less digitally mature organizations thinking + because it helps us get more done about reducing their digital transformation investments in the next few + and increase our profitability.” years should reconsider. The benefits of digitalization are clear, and the + ANNA NONEDER longer organizations take to get up to speed, the greater the drag on + BIM and Change Manager, Lindner Group, their performance could be. While sometimes challenging, the long-term + an interior construction specialist benefits of digital transformation far outweigh short-term struggles. + headquartered in Germany + + + + +8 2025 STATE OF DESIGN & MAKE + INSIGHT 1 + + +Cost, time, and talent are the biggest barriers to digital transformation + 2024 2025 + + +45% + + + +40% + + + +35% + + + +30% + + + +25% + + + +20% + Cost Time needed to Lack of knowledge or Limited capabilities Resistance to + invest in new tools and technical skills to in the tools changing established + ways of working implement digital solutions currently available workflows + + + + +Survey question: What are the barriers to digital transformation in your company or organization? Select all that apply. + + +9 2025 STATE OF DESIGN & MAKE + INSIGHT 1 + + The cost of digital transformation The more digitally mature an + is a growing challenge for many organization, the less concerned its + “The biggest barrier to digital transformation is time. We have + organizations, with 44% of leaders leaders are with cost and talent and + so many projects, so many client demands to design quickly + saying it’s their main barrier, up the more concerned they are with the + and yesterday. The speed of change is rapid. Enabling our staff from 35% in 2024 and reflecting a actual technology. Digitally mature + to have enough time to be trained and be familiar and ensure global increase in concern about cost companies less often cite cost (41% + the adoption is key. I find it’s not the willingness of staff—it’s control. But given the outsize returns compared to 46%) and more often cite + the availability of staff.” organizations are seeing from their the limited capabilities of tools (29% + digital transformation investments, compared to 24%) as a barrier. These + DR. MAX CLARK + Senior Vice President, EMEA CTO & Sector Manager, Parsons, cost-cutting measures could have organizations also have an advantage + a global engineering firm headquartered in the United States equally outsize negative effects if when it comes to talent, with 27% of + they impact technology initiatives. leaders saying digital transformation + has improved talent acquisition and + Concerns about cost are followed by retention compared to 18% at less + the persistent challenges of time and digitally mature companies. + talent, tied for second this year as the + most-cited obstacles as organizations + struggle to meet implementation + goals while also trying to do more + with fewer resources. + + + + +10 2025 STATE OF DESIGN & MAKE + 00 + INSIGHT 2 + + + + +Sustainability +transitions +from pressure 01 +to profitability + 02 +11 2025 STATE OF DESIGN & MAKE + 03 + INSIGHT 2 + +Increasing awareness of the business crucial for future business growth in to last year (79%), despite this year’s +value of sustainability has many the next three years. cost concerns. + “All the work that +leaders changing their perspective, + This signals a shift in sentiment and + we’re doing towards +seeing sustainability initiatives less While organizations across Design and +as an obligation and more as an priorities, driven by both the short- Make industries are still influenced sustainability +opportunity for greater performance. and long-term opportunities that by stakeholders to become more differentiates us +The number of executives globally sustainability can provide. Seventy- sustainable, that influence appears with clients.” +who understand the business case two percent of business leaders to be waning. For instance, this year, MOHAMAD KASSIR +for sustainability tripled between believe that sustainability measures 72% of leaders say their sustainability Global BIM Manager, Egis Group, +2022 and 2023,2 and the majority of can generate in excess of 5% of their initiatives were influenced by an engineering and consulting firm +2025 State of Design & Make survey annual revenue, a figure that has customers, compared to 83% in headquartered in France + +respondents say that sustainability is remained relatively strong compared 2024—a 13% year-over-year decline. + + + +2 + World Economic Forum, 2023 + + +12 2025 STATE OF DESIGN & MAKE + INSIGHT 2 + “I am optimistic about +Stakeholder influence is in decline the future. We have + technology that will +Leaders have other reasons for sustainability initiatives help us build new + infrastructure, consuming +85% less resources. We’re + becoming better and are + investing in better, and + greener, solutions.” +80% + MARCELO PILLER + Director of Engineering and + Innovation, OEC Engenharia, an + engineering and construction firm + headquartered in Brazil +75% + + + Customers + +70% Employees + + Investors + + +65% + Policymakers + + + + +60% + + 2023 2024 2025 + +Survey question: How influential are the following groups in motivating your company or organization to create and meet sustainability goals? +5-point scale. Top two = influential. + + +13 2025 STATE OF DESIGN & MAKE + INSIGHT 2 + +The decline in stakeholder influence +is universal across all groups, + “The drive for sustainability within our organizations comes +including customers, employees, + from both internal and external factors. Internally, we are +investors, and policymakers. New +to the survey this year as possible committed to corporate responsibility, focusing on reducing +influencers are partners (70%), who our carbon footprint, promoting ethical sourcing, and aligning +rank the same as employees, and our practice with long-term environmental goals.” +suppliers (65%), which are just above ANDY YU +policymakers in the 2025 results. Director, Build King Construction Ltd., a construction + services company headquartered in Hong Kong +Although the influence of stakeholder +groups is down, sustainability +efforts remain steady, with 95% of +leaders reporting their organizations +are making changes to be more +sustainable. This suggests that +organizations are starting to take the +reins on sustainability initiatives by +incorporating them into long-term +strategy rather than allowing external +influences to guide decisions. + + + + +14 2025 STATE OF DESIGN & MAKE + INSIGHT 2 + + +Closing the gap between long-term and short-term strategy + “We have ongoing + Improving sustainability practices is a good long-term business decision enhancements to our + sustainability practices + Improving sustainability practices is a good short-term business decision + and use of technology, and +90% + we see them as two sides + of the same coin. At the end + of the day, sustainability + helps reduce costs.” +80% ENG. TAREK ELGAMAL + Chairman, Redcon Construction, + an engineering, construction, + and infrastructure company + headquartered in Egypt +70% 12% + 26% + + + +60% + + + + +50% + + + + +40% + + 2023 2024 2025 + +Percentage of respondents who agree to statements: 1. Improving sustainability practices is a good long-term business decision. 2. Improving sustainability practices is a good +short-term business decision. 5-point scale. Top two = agree. Gap = difference between long-term and short-term for each year. + + +15 2025 STATE OF DESIGN & MAKE + INSIGHT 2 + + At the heart of this perspective mature companies, with 75% of + shift is the growing understanding leaders reporting their sustainability + that, while historically seen as a efforts help attract and retain + long-term revenue play, improving talent, compared to 54% at less + sustainability is also a good digitally mature companies. Industry + near-term strategy. This year, the interviews reinforce these findings, + gap between leaders who see with leaders saying younger skilled + sustainability as a short-term versus workers want to join organizations + long-term strategy has narrowed to that are both technologically + just 12%, signaling that sustainability advanced and committed to building + is seen as good for business overall. a better future. + + Digitally mature companies appear Leaders at digitally mature + to be at an advantage when it comes companies appear to be seeing + to reaping sustainability benefits. the transformational potential + Eighty-five percent of digitally of sustainability across their + mature organizations see long-term organizations—and are likely + benefits from sustainability and 74% increasing their budgets to match. + see short-term benefits, compared Seventy-four percent of leaders say + to just 67% and 53%, respectively, at they will increase their investments + less digitally mature organizations. in environmental sustainability, + compared to just 52% at less digitally + Sustainability efforts are also mature companies. + easing talent struggles at digitally + + + + +16 2025 STATE OF DESIGN & MAKE + INSIGHT 2: AMER + + +Brazil and the United States are most influenced by customers +90% AMER + + + + +85% + + + + +80% + Brazil + United States + + +75% + Canada + + + +70% + + + + +65% + + + Mexico + +60% + + 2023 2024 2025 + +Percentage of respondents who agree that customers are influential when it comes to their sustainability goals. Survey question: How influential are the following groups in +motivating your company or organization to create and meet sustainability goals? 5-point scale. Top two = influential. + + +17 2025 STATE OF DESIGN & MAKE + INSIGHT 2: AMER + +In the Americas, Brazil is where considered customers to be influential +the largest percentage of business in motivating companies to create and + “I think about 95% of our matrix are clean energy. So it’s +leaders surveyed (80%) say meet sustainability goals. + hydropower power plants; it’s solar grids and all those +customers are influential in +motivating companies to be more The influence of customers dropped technologies. I’m very proud to say, yes, we are very, very, +sustainable. The United States is close most significantly in Mexico, with very busy on the work and sustainability point.” +behind, with 78% of respondents a year-over-year decrease from VINICIUS PRATA +citing customers as influential. 89% to 62%, making Mexico the Leader of the Power Generation BIM Committee, Eletrobras, an electric power +However, both countries show Americas country where the lowest generation and transmission company headquartered in Brazil + +declines compared to the previous percentage of business leaders +survey. In 2024, 86% of respondents consider customers to be influential +in Brazil and 90% of US respondents in motivating sustainability efforts. + + + + +18 2025 STATE OF DESIGN & MAKE + INSIGHT 2: APAC + +Today, Japan has the lowest +percentage (57%) of business leaders + Japan least influenced by customers +saying that customers are influential +in motivating sustainability efforts, 95% APAC +trending down from 64% in 2024. + +The steepest year-over-year decline 90% +in the influence of customers was +in China, where the percentage of +leaders saying that customer influence 85% +drove sustainability efforts fell from +85% to 71%. In Australia, where the + 80% India +percentage of respondents saying + Australia +customers were influential held steady + Singapore +at 85% for the past two years, that +percentage dropped this year to 79%. 75% + + China + 70% South Korea + “Our company’s ultimate + goal is to promote social + progress. This naturally 65% + attracts people with the + same values, which are + the driving force for 60% + our practices.” + Japan + JUN XUE + 55% + Digital Design Director, + Industrial Design, Xiaomi EV, an + 2023 2024 2025 + electric vehicles manufacturer + headquartered in China + Percentage of respondents who agree that customers are influential when it comes to their sustainability goals. Survey question: How influential are the following groups in motivating + your company or organization to create and meet sustainability goals? 5-point scale. Top two = influential. Data for Singapore was not gathered for the 2023 and 2024 surveys. + + +19 2025 STATE OF DESIGN & MAKE + INSIGHT 2: EMEA + + +Turkey most influenced by customers, Netherlands the least +90% EMEA + + + + +85% + France + Nordics + United Kingdom + +80% + + + Turkey + Italy +75% + + + Middle East +70% + Spain + + + Germany +65% + Netherlands + + + +60% + + 2023 2024 2025 + +Percentage of respondents who agree that customers are influential when it comes to their sustainability goals. Survey question: How influential are the following groups in motivating +your company or organization to create and meet sustainability goals? 5-point scale. Top two = influential. + + +20 2025 STATE OF DESIGN & MAKE + INSIGHT 2: EMEA + +Turkey is the EMEA country where +the highest percentage of business + “Sustainability is very +leaders (77%) say that customers + important for us, of +influence sustainability initiatives. +Turkey is also one of the EMEA course, because of +countries with the lowest percentage the nature of what +of respondents saying that their we do—because we +companies are not engaged in any design buildings and +sustainability actions (2%), the other infrastructures in +being the Middle East, also at 2%. transportation and for + energy. And these sectors +Some countries saw significant represent, together, +year-over-year declines in the close to 70% of carbon +percentage of business leaders + emissions worldwide.” +who consider customers influential, +including Germany (90% to 67%) PIERRE-YVES MASSILLE +and the Nordics (90% to 71%). CTO, Egis Group, + an engineering and consulting +The drop in customer and other firm headquartered in France +external influences could suggest +organizations taking the lead when it +comes to sustainability initiatives. + + + + +21 2025 STATE OF DESIGN & MAKE + 01 + INSIGHT 3 + + + + +AI solidifies its +place as the top +sustainability enabler 02 + 03 +22 2025 STATE OF DESIGN & MAKE + 04 + INSIGHT 3 + +For the second year running, AI is the +top sustainability enabler for Design + “AI holds incredible potential to transform how we predict and respond to +and Make industries, with 39% of + challenges. While we, as an industry, are still on that journey, I am confident +leaders saying they use AI to be more +sustainable, more than any other that our predictive capabilities will continue to evolve, enabling us to anticipate +action; this is up from 34% in 2024 and address issues with greater precision. As climate-change mitigation efforts +and 26% in 2023. advance, they will bring a degree of much-needed certainty to the future. It’s + equally important that these advancements are reflected in regulator-set +With nearly all organizations taking objectives, aligning innovation with actionable goals to drive tangible progress.” +steps to be more sustainable, many + NITESH ALAGH +are turning to AI technology to Business Lead – Digital Engineering, Sustainability & Emerging Tech, Severn Trent Water, +help enable sustainable outcomes. a water and wastewater utility company headquartered in the UK +For instance, in the design and +manufacturing industries, where 80% +of a product’s environmental impact +is influenced by decisions made +at the design stage,3 AI is helping +leaders think about sustainability +from conception through production. + + + +39% +of businesses have used AI +to be more sustainable + + + + +3 + Ellen MacArthur Foundation + + +23 2025 STATE OF DESIGN & MAKE + INSIGHT 3 + + +The continuing integration of AI and sustainability +AI is the top sustainability enabler for the second year in a row +2023 2024 2025 + + Decreased waste from Used AI to be + 1 1 1 + production and construction more sustainable + + + + + Adopted more circular principles Invested in more energy-efficient + 1 2 2 + by using recycled materials processes or machinery + + + + + Increased share of renewable Decreased waste from + 3 3 3 + energy sources used production and construction + + + + + Invested in more energy-efficient Increased share of renewable + 4 4 4 + processes or machinery energy sources used + + + + + Used AI to be Applied sustainable Applied sustainable + 5 5 5 + more sustainable design principles design principles + + + + +Survey question: What changes has your company or organization already made to be more sustainable? +Select all that apply. 12 response options. + + +24 2025 STATE OF DESIGN & MAKE + INSIGHT 3 + + + + + “I’m excited about the sustainability efforts the industry has been working towards. We’re just + beginning to develop the tools that can support where we want to be, and it’s exciting to see + technology get to the point where we can start to meet sustainability goals.” + BRIAN ALTING + Principal and Director of Technology, Moody Nolan, an architecture design firm headquartered in the United States + + + + +The integration of AI into more than less digitally mature is also increasingly taxing on the +sustainability efforts is having an organizations (43% and 35%, environment. Data centers require +impact across Design and Make respectively). At data-effective a large amount of water and energy +industries. Among other things, organizations—those at which to run and cool, and they produce +artificial intelligence helps to leaders said they are “very effective” electronic waste that is difficult +mitigate the impact of natural at leveraging data—45% of leaders to dispose of. Design and Make +disasters by visualizing flood impacts; are using AI to enable sustainability, organizations are exploring solutions +reduce carbon footprint by optimizing compared to 38% of other to this problem to offset the impact +building energy use and preventing organizations. These numbers of data centers, including carbon- +material waste; and assess product could highlight an AI implementation removal technology or carbon- +lifecycles, providing a detailed gap—one that may widen as offset programs. +view of environmental impact from technology advances and provide +materials sourcing through disposal. a competitive advantage for data- + centric organizations. +Not surprisingly, digitally mature +companies report using the Ironically, the AI technology +technology for sustainability enabling more sustainable outcomes + + + + +25 2025 STATE OF DESIGN & MAKE + INSIGHT 3: APAC + +In 2024, China was the global leader +in using AI for sustainability—but no + The steepest and most consistent + increase in AI adoption for South Korea sees the largest increase +longer. Then, 53% of leaders in China +said their organizations used AI for + sustainability is among business + leaders in South Korea, with 43% + in AI adoption for sustainability +sustainability efforts. This year, that of leaders saying they use the +number dropped to 38%. technology, up from 36% in 2024 and APAC 55% + 15% in 2023. India +Taking the lead on incorporating AI + 50% +into sustainability efforts this year is Within APAC, the countries where the +India, with 52% of business leaders lowest percentage of respondents Singapore +using AI as a sustainability enabler. say their companies are using AI to + 45% +While this number remains flat for drive sustainability are Japan and South Korea +the past two years, it suggests a Australia (30%). +steady commitment to the strategy 40% +and is well above the global average China +of 39%. + 35% + + + 30% Australia + “We are very interested in increasing work efficiency and + productivity for individual employees that we have. An AI- Japan + based productivity gain is what we are going after. We try to 25% + harness AI and other related tools to improve the efficiency + and productivity of every architect so they can do more with + their time.” 20% + + YONGSIK JEONG + Vice President, Sustainable Design Team, Samoo Architects & Engineers, + 15% + a global architecture and engineering firm headquartered in South Korea + 2023 2024 2025 + + Percentage of respondents who selected “Used AI to be more sustainable.” Survey question: What changes has + your company or organization already made to be more sustainable? Select all that apply. 12 response options. + Data for Singapore was not gathered for the 2023 and 2024 surveys. + +26 2025 STATE OF DESIGN & MAKE + INSIGHT 3: EMEA + +Today, Turkey has the highest +percentage (47%) of business leaders + Germany, Nordics see largest jump + “The Middle East is +in EMEA who say they are using +AI to become more sustainable, + becoming more and more in AI adoption for sustainability +unseating the Middle East, where driven by sustainability. +the percentage dropped to It’s required by the EMEA 50% +40% from 49% in 2024. client. It is embedded + within our clients’ Turkey +Germany and the Nordics saw the respective master plans +largest increases in the region in and visions that they +the percentage of respondents who have laid out publicly, Spain +say their companies are leveraging including the Bahrain, +AI for sustainability, from 28% to 40% Middle East + Qatar, Abu Dhabi, and +40% in Germany and from 28% to + Saudi Visions 2030; +39% in the Nordics, representing + Oman Vision 2040; and +a 43% and 39% year-over-year +increase, respectively. Governments + the Dubai 2040 Urban Netherlands +in Germany and Turkey, for example, Master Plan.” + France +have invested in AI technology for DR. MAX CLARK +sustainability as part of a larger Senior Vice President, EMEA Italy + CTO & Sector Manager, Parsons, 30% +AI strategy, and those efforts are + a global engineering firm +starting to yield downstream results United Kingdom + headquartered in the United States +at the organizational level. + + + Germany + Nordics + + 20% + 2023 2024 2025 + + Percentage of respondents who selected “Used AI to be more sustainable.” Survey question: What changes has + your company or organization already made to be more sustainable? Select all that apply. 12 response options. + + +27 2025 STATE OF DESIGN & MAKE + INSIGHT 3: D&M + +Industrial machinery is currently +the sector in product design and Industrial machinery leads the way Solution spotlight +manufacturing that is using AI the +most to enable sustainable outcomes. + for AI-enabled sustainability efforts Yamaha Motor and Final Aim + collaborated to design the +This sector also showed the steepest Concept 451, an electric utility +year-over-year increase in AI use D&M 45% vehicle tailored for agricultural +for sustainability, with 44% of Industrial machinery and mountainous terrain, +organizations using the technology unveiled at the Tokyo Auto Salon +to achieve their goals. Leaders in Life sciences 2024. Using generative AI, Final + 40% manufacturing +industrial machinery say they are Aim explored extensive design +using AI starting at the design phase, Consumer products possibilities, creating more than +baking sustainability into the entire 2,000 concepts. The AI facilitated +project from inception. Automotive, mobility, communication and iterative + 35% and other transportation + design processes, resulting in + Building products a unique, asymmetrical electric +“AI has more elements that vehicle (EV) structure. Final Aim + and fabrication + can be used to judge whether 30% also developed a blockchain- + or not something can actually Process manufacturing based platform, Final Design, to + be applied, rather than just securely manage design data + conceptual presentations.” and intellectual property. This + 25% project highlights generative AI’s + HIDENORI SAITO + Department Manager of the DX Strategy potential in design, addressing + Division and BIM Management Office, both creative and practical + Takasago Thermal Engineering, an + 20% challenges while safeguarding + air conditioning equipment company + intellectual property through + headquartered in Japan + innovative technology. + + 15% + READ MORE + 2023 2024 2025 about Yamaha EV + + Percentage of respondents who selected “Used AI to be more sustainable.” Survey question: What changes has + your company or organization already made to be more sustainable? Select all that apply. 12 response options. + + +28 2025 STATE OF DESIGN & MAKE + 02 + INSIGHT 4 + + + + +The AI hype cycle +meets reality + 03 + 04 +29 2025 STATE OF DESIGN & MAKE + 05 + INSIGHT 4 + + Since the introduction of ChatGPT This global drop in sentiment + in late 2022, businesses have been across industries signifies that AI + racing to tap the potential of artificial is following the classic tech hype + intelligence, making it a strategic cycle, as leaders face the reality of + priority across industries. The 2024 implementation, an ongoing technical + State of Design & Make survey results skills shortage, and the limitations of 48% + underscored this enthusiasm, with the current technology. agree AI will + 78% of leaders saying that AI would destabilize + enhance their industry. “When generative AI first appeared, their industry + there was an excessive sense of + But the reality of AI hasn’t yet lived expectation towards generative + up to the hype, according to leaders AI and AI in general, and I think + in Design and Make industries. that we have just passed the peak + Sentiment toward AI and other of that,” says Fumihiro Ojima, + emerging technologies is down general manager, Digital Innovation + significantly year-over-year, with Department, Value Creation Office, + just 69% of business leaders saying Tokyu Construction Co. Ltd., a + AI will enhance their industry— Japanese civil engineering and + representing a 12% drop from 2024. building construction company. + Industry disruption from AI is also “There was an impression that + a major concern, with nearly half of generative AI could do anything, + leaders now agreeing that AI will but, in fact, there are things that it + destabilize their industry. is suited to and things that it is not + suited to, and I think that we have + finally come to understand that.” + + + + +30 2025 STATE OF DESIGN & MAKE + INSIGHT 4 + + + Concern about AI-related + “We prefer technology that evolves with the industry—tools + with AI features tend to offer smarter, more adaptive industry disruption is up + solutions, making them our go-to choice.” + Nearly half of business leaders agree AI will be destabilizing + AMARNATH PATNAM + Head – Design Technology, Sobha Realty, + a real estate developer headquartered in the UAE + 50% + + 18% Strongly agree + 16% +Nearly half (48%) of leaders and in perceptions of disruption. Digitally + 25% +experts agree AI will destabilize their mature companies are far more likely +industry, up from 41% in 2024 and to say that AI will destabilize their + 30% Agree +representing a 20% year-over-year industry (56%) compared to less 25% +increase. This indicates leaders are digitally mature companies (40%). +becoming more concerned about AI This makes sense when considering + 0% +and emerging technologies as their that digitally mature organizations + 2024 2025 +implementation in their industry, and would likely have more processes, + 0% +at their organizations, grows. systems, and workers impacted by + AI implementation. 18% Disagree +From the standpoint of digital 24% +maturity, there is a stark difference + 10% Strongly disagree + 25% + 16% + + + + 50% + + + Survey question: When you think about artificial intelligence (AI) in your industry and company, to what extent do you + agree or disagree with the following? AI will destabilize my industry. 5-point scale. + + +31 2025 STATE OF DESIGN & MAKE + INSIGHT 4 + + +AI sentiment is down across the board +80% + + + + +75% + −9% −12% −13% + + + + −14% +70% + + + + +65% + + + + +60% + 2024 2025 2024 2025 2024 2025 2024 2025 + + AI will enhance I am confident my company will make AI will make my I trust AI technologies + my industry the right decisions regarding AI industry more creative for my industry + +Percentage of respondents who agree to statements: 1. AI will enhance my industry. 2. AI will make my industry more creative. 3. I am confident my company will make the right decisions regarding AI. 4. I trust AI technologies for my industry. +Survey question: When you think about artificial intelligence (AI) in your industry and company, to what extent do you agree or disagree with the following? 5-point scale. Top two = agree. + + +32 2025 STATE OF DESIGN & MAKE + INSIGHT 4 + “It’s not easy to use AI in Germany, because of cybersecurity rights. +Concern about disruption is up + Some people see opportunities to use AI, others don’t know what to +and overall positivity about AI has + do with it, and some are afraid of using it because they don’t know +dropped significantly from 2024. + where their data is going or what it’s being used for.” +Most notably, trust in AI technology +for Design and Make industries has CHRISTIAN AHLERS +decreased 11 percentage points year- CAD Systems Administrator, Lindner Group, + an interior construction specialist headquartered in Germany +over-year, representing a 17% change +in sentiment. + “AI requires a much larger investment than we expected. So there +One of the many reasons for this is a bit of a delay moving forward. And not all things related to +sharp decline is concern about AI are positive signals; there are clear limitations. We look at +cybersecurity incidents; privacy AI in two different ways: We can use AI more practically in our +issues; biased or harmful outcomes; work processes, and our employees can harness AI to effectively +and limited control over how, where, increase their efficiency and productivity. We are also exploring +and when their data is used. For new business areas related to AI, which is a long-term effort that +example, organizations struggle to requires more time. We see AI developing very fast. The level of +manage how to use third-party AI technology we looked into last year is completely different, and we +tools without exposing their sensitive clearly believe that we will be able to reach ROI when we invest in +data or sensitive customer data. Also + AI for new business opportunities and business areas.” +challenging is the implementation of +AI solutions across the organization, YONGSIK JEONG + Vice President, Sustainable Design Team, Samoo Architects & Engineers, +both in terms of time and money. In + a global architecture and engineering firm headquartered in South Korea +interviews, leaders said that in some +industries or regions, AI regulations +are lagging behind the pace of +technology, leaving businesses in a +difficult position when it comes to +implementation, limitations on use, +and liability. + + + + +33 2025 STATE OF DESIGN & MAKE + INSIGHT 4: AECO + + +Utilities and telecom are least concerned about AI +AECO: AI will destabilize my industry AI will enhance my industry + + + +Architecture services + + + +Oil and gas + + + +Construction services + + + +Utilities and telecom + + +Engineering +service providers + + +Civil infrastructure owners + + + +Building owners + + + 0% 20% 40% 60% 80% + + +Percentage of respondents who agree to statements: 1. AI will destabilize my industry. 2. AI will enhance my industry. +Survey question: When you think about artificial intelligence (AI) in your industry and company, to what extent do you agree or disagree with the following? 5-point scale. Top two = agree. + + +34 2025 STATE OF DESIGN & MAKE + INSIGHT 4: AECO + +In AECO industries, leaders in +utilities and telecom, one of the + “We are actually quite optimistic about AI and the future of AI +most enthusiastic sectors about the + in our industry. There is big concern about AI taking over the +potential for AI, are least concerned +about industry destabilization, with industry and changing it completely and potentially putting +70% saying AI will enhance their architectural firms out of business. We actually look at this +industry. Seen less as a replacement as another step, albeit a potentially exponential jump, in the +for current workers than as a tool to evolution of how we will work with new innovative tools that +enhance their work, AI is being used will help in streamlining our design activities and providing us +by utilities firms to predict service with more intelligent ways to create, improve how we design +disruptions and plan preventative buildings, and improve overall productivity and efficiency.” +maintenance, lowering energy + AMMAR AL ASSAM +consumption and optimizing + CEO, Dewan Architects, an architecture firm headquartered in the UAE +grid usage. + +On the flip side, architecture sees +the least potential in AI technology, +with just 57% saying AI will enhance +their industry, well below the +global average. + + + + +35 2025 STATE OF DESIGN & MAKE + INSIGHT 4: D&M + + +Life sciences sees possibility amid disruption +D&M: AI will destabilize my industry AI will enhance my industry + + + +Automotive, mobility, and +other transportation + + +Process manufacturing + + +Building products +and fabrication + + +Consumer products + + + +Industrial machinery + + + +Life sciences manufacturing + + + 0% 20% 40% 60% 80% + + + + +Percentage of respondents who agree to statements: 1. AI will destabilize my industry. 2. AI will enhance my industry. +Survey question: When you think about artificial intelligence (AI) in your industry and company, to what extent do you agree or disagree with the following? 5-point scale. Top two = agree. + + +36 2025 STATE OF DESIGN & MAKE + INSIGHT 4: D&M + +For product design and One standout sector is life sciences, +manufacturing companies, concern which is both most concerned +about industry destabilization from about disruption (57%) and most +AI is lower than the global average. enthusiastic about AI enhancing +Similarly, the positive sentiment the industry (75%). This seeming +about AI’s ability to enhance their contradiction implies that leaders in +industry is generally above average, life sciences see AI as an inevitable +suggesting D&M, as a whole, is disruption but one that will come +benefiting from the implementation with great benefits. +of AI solutions at their organizations. + + +“Certainly, there are AI tools that help with creativity, but I + don’t think AI will ever take over an engineer or a scientist or + a designer’s job. I think AI will be a fantastic assistant and boost + efficiency and productivity.” + BLAINE BUENGER + Technology Director, Infrastructure Solutions, Foth, a science, engineering, + and technology company headquartered in the United States + + + + +37 2025 STATE OF DESIGN & MAKE + INSIGHT 4: M&E + + +Media and entertainment is experiencing +the most AI disruption and the most benefit + AECO D&M M&E + + + + AI will destabilize my industry + + + + + AI will enhance my industry + + + + +0% 20% 40% 60% 80% + + +Percentage of respondents who agree to statements: 1. AI will destabilize my industry. 2. AI will enhance my industry. +Survey question: When you think about artificial intelligence (AI) in your industry and company, to what extent do you agree or disagree with the following? 5-point scale. Top two = agree. + + +38 2025 STATE OF DESIGN & MAKE + INSIGHT 4: M&E + +Leaders in M&E are 25% more likely unionization to ensure AI doesn’t Solution spotlight +than leaders in D&M and 20% more endanger job security. But amid +likely than AECO leaders to say that this concern is an optimism for AI Since its launch in 2018, Untold +AI will destabilize their industry. in the future of the industry—71% of Studios—the world’s first fully +In fact, the entertainment industry M&E leaders think AI will enhance cloud-based creative studio—has +is already seeing the effects of AI their industry, compared to 69% in leveraged software for scalable +disruption, including strikes from product design and manufacturing, collaboration in animation and +writers and actors protesting the use and 68% in architecture, engineering, visual effects across music, +of AI and game developers seeking construction, and operations. film, TV, and advertising. This + approach has attracted top + global talent, growing the team + from 16 to more than 240 in five +“We use AI to ideate for discussions. But there are no big studios that years and earning it multiple + are distributors who touch AI-generated images, because of the legal awards nominations, including + issues. Who owns the intellectual right to the material, and where did BAFTA, Emmy, and Grammy. + it plagiarize it from? As a company, at this point, we are consciously Untold Studios integrates + staying away from using it for more than ideating. We do not create emerging technologies such + any final images, pixels, or writing with those tools.” as universal scene description + (USD) into its workflows, + VEERENDRA PATIL + Founder and Creative Director, Zebu Animation Studios, + allowing the company to scale + an animation studio headquartered in India quickly and manipulate data + more precisely. +“z-emotion harnesses AI for two key areas: high-fidelity cloth simulation + in real time for gaming and feature films and virtual try-on for the + fashion industry, leveraging 3D digital fashion technology to generate READ MORE + infinite combinations of synthetic garment data sets.” about Untold Studios + + DONGSOO HAN + CEO, z-emotion, a 3D fashion technology company headquartered in South Korea + + + + +39 2025 STATE OF DESIGN & MAKE + INSIGHT 4 + + +AI journeys adjust to reflect implementation realities + “AI is a subset of + Not started Early stage Middle of the effort Approaching goal Achieved goal + technology. It’s an + enabler, not an end result. +2024 AI is there to help us drive + our business forward and + have tangible results. + 6% 13% 25% 48% 8% AI is not the end state. I + think lots of people get + excited about buzzwords. + Some time ago, it was + digital. Before that, it was + cloud. Before that, maybe +2025 + talking about BIM. To me, + it is an all-encompassing + 7% 21% 31% 31% 9% improvement of + efficiency for our + delivery, especially in + the engineering sector. + I think the challenge + is, as we become more + used to it, the technology + moves from a buzzword to + business as usual.” + DR. MAX CLARK + Senior Vice President, EMEA + CTO & Sector Manager, Parsons, + a global engineering firm +Survey question: Where is your company or organization in incorporating artificial intelligence (AI) technology? headquartered in the United States +5-point scale. + + +40 2025 STATE OF DESIGN & MAKE + INSIGHT 4 + + + + + “In the past few years, there has been a lot of hype around AI. Everyone had high expectations, + but actual progress might be slower or more complicated than we imagined. And AI’s outputs + are not as accurate as we wanted. It’s rationality returning over expectation.” + JUN XUE + Digital Design Director, Industrial Design, Xiaomi EV, an electric vehicles manufacturer headquartered in China + + + + + In 2024, leaders were confident about decline. Leaders are more conservative Their response is to invest, but there is + progress toward reaching their AI this year when estimating their a stark divide in who is betting big on + goals, with 56% saying they were progress, with a 37% year-over-year artificial intelligence. Seventy-seven + approaching or had already achieved increase in leaders who say they are percent of leaders at digitally mature + their goals. This year, as leaders in the early or middle stages of their organizations say they will increase + are faced with the complexities of AI journey. Along with other survey investment in AI, compared to 59% + implementing AI solutions across their results, this finding suggests that at less digitally mature companies. + organizations, they are rethinking leaders could be struggling to progress These increased investments could + where they are on their AI road maps. with AI as they encounter a confluence lead to outsize benefits for more + of cost, talent, and time concerns digitally mature organizations that + Only 40% of leaders say they are and that the technology is not quite are already seeing benefits in hiring, + approaching or have achieved their mature enough to easily implement productivity, and innovation from + AI goals, a 16-point decrease that across organizations as leaders hoped. digital transformation efforts. + represents a 29% year-over-year + + + + +41 2025 STATE OF DESIGN & MAKE + INSIGHT 4 + + +Investments dip overall but remain high in AI +80% + + + + +75% + + + −9% + −12% + −12% −13% +70% + −12% + + + + +65% + + + + +60% + 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 + + Artificial Developing new Improved processes Technology to deliver Environmental + intelligence products and services and operations improved project outcomes sustainability + + + +Survey question: How do you think your company or organization’s investment in the following will shift in the next 3 years? +5-point scale. Top two = increase. Drop = increase for 2024 minus 2025. + + +42 2025 STATE OF DESIGN & MAKE + INSIGHT 4 + “Last year was a really exceptional year in terms of AI. The +Despite implementation challenges + excitement about the potential that AI could actually deliver +and a dip in sentiment, Design and + has gone down to a more realistic approach, where we’re +Make leaders are still optimistic + understanding that the journey is long and we’re really in the +about AI’s potential. When asked how +their organizations’ investments will beginning. That puts back that some of the expectations were +shift over the next few years, 68% of maybe unrealistic given the current capabilities of AI. But we +respondents say their investments remain proactive in driving future advancements.” +in AI will increase. And while AI and MOHAMAD KASSIR +emerging tech investments are down Global BIM Manager, Egis Group, a engineering and consulting firm headquartered in France +9 points from 2024, this represents a +smaller dip than the average 13-point “I would say the most exciting thing is to be on the journey +overall decrease in future investments. with technology, to see how technology is actually moving + and expanding. Just going five years back, some of these + technologies that we are seeing today were actually, more or + less, really science-fiction future.” + LARS ALBJERG + Head of BIM, Novo Nordisk, a pharmaceutical company headquartered in Denmark + + + + +43 2025 STATE OF DESIGN & MAKE + 03 + INSIGHT 5 + + + + +Cost, tech, and talent +are top concerns + 04 + 05 +44 2025 STATE OF DESIGN & MAKE + 06 + INSIGHT 5 + +In the wake of a year of geopolitical +and economic turmoil, continued + “Another key challenge is the cross-industry +inflation, and supply-chain fragility, + integration of technological advancements. +it’s not surprising that cost control is +top of mind for leaders in Design and Originally focused on single-function core +Make industries, with 33% citing it as equipment, we now need to develop more +their main business challenge. versatile solutions applicable across multiple + fields and provide downstream customers +Spending is down in nearly all with the world’s leading high-value-added +categories, from technology to process solutions; digital-intelligence- +talent, as leaders hope to mitigate integrated plant solutions, including +the continued challenges of a post- process packages; and value-added services +pandemic economy. This dip in future covering the full lifecycle. Lack of cross- +investments could compound both + industry technology integration capability +talent and technology troubles, as + could confine us to specific supply-chain +organizations will struggle to do +more with less. + segments, rendering us unable to offer + comprehensive solutions to our clients.” + WEI FENG LU + Senior Vice President, Morimatsu International Holdings + Company Ltd., a global manufacturing and solutions company + headquartered in China + + + + +45 2025 STATE OF DESIGN & MAKE + INSIGHT 5 + + +Cost control is the top global challenge +AI and other emerging technologies a close second +35% + + + 33% +30% + 31% + + +25% + 26% + 24% +20% 22% + + +15% + + + +10% + + + +5% + + + +0% + Cost control and Technological Attracting, training, Environmental Product or service + cost management advancements, and retaining talent sustainability innovation + including AI + + +Survey question: What are the top three challenges your company or organization faces today? +Select up to three. 13 response options. + + +46 2025 STATE OF DESIGN & MAKE + INSIGHT 5 + +Thirty-one percent of leaders identify Ironically, cutting investment in Talent remains a perennial struggle, +technological advances (including technology can have a negative identified by 26% of leaders as a top +AI) as a top challenge as their impact on budgets because new challenge at their organization. The +organizations struggle to implement tools and processes can often lead search for skilled talent is especially +new and emerging technologies. to greater efficiencies across the difficult, with nearly two-thirds of +Cost-control measures will likely have organization. For instance, leaders leaders saying they struggle to find +a downstream impact here and could at data-effective organizations see the skills they need. Exacerbating the +affect how quickly companies are cost as less of a challenge—just 26% talent crunch is the growing number of +able to reach their technology and identify it as a top concern, compared organizations that are letting people go +digital transformation goals. to 35% at other organizations. because they lack the right technical + skills, further widening their talent gap. + + + +47 2025 STATE OF DESIGN & MAKE + INSIGHT 5: AMER + + + Americas split on top organizational challenge + “I think our biggest issues + now are cost and the new AMER: Cost control and cost management Technological advancements, including AI + processes that we are + trying to implement at + 41% + the company.” 36% + + VINICIUS PRATA + Leader of the Power Generation + BIM Committee, Eletrobras, + an electric power generation + and transmission company Canada United States + headquartered in Brazil + + + + + 26% + 30% +In contrast with global results this +year, the Americas are split on their +view of top challenges. + 27% 26% +While cost control is the concern +most likely to be listed as a top +challenge among respondents in +the United States (36%) and Canada Mexico Brazil +(41%), respondents in both Brazil and +Mexico are more concerned about AI +implementation than cost. + + 37% + 42% + + + Percentage of respondents who selected “cost control and cost management” and “technological advancements, including AI” as their top challenge. + Survey question: What are the top three challenges your company or organization faces today? 13 response options. + + +48 2025 STATE OF DESIGN & MAKE + INSIGHT 5: APAC + + +APAC region split on top challenge +APAC: Cost control and cost management Technological advancements, including AI + + + + 40% 42% + 35% + + + + + Australia Singapore India + + + + 24% + 30% 33% + + + + 36% + 30% 27% + + + + South Korea Japan China + + + + + 35% 34% + 39% + + + +Percentage of respondents who selected “cost control and cost management” and “technological advancements, including AI” as their top challenge. +Survey question: What are the top three challenges your company or organization faces today? 13 response options. + + +49 2025 STATE OF DESIGN & MAKE + INSIGHT 5: APAC + +When leaders in APAC were asked In contrast, respondents in South +about their organizations’ top three Korea, Japan, and China say + “We are a very old organization with aging +challenges, their answers tended to they are more concerned with + infrastructure. There’s a certain amount +differ depending on the country. technology than with costs, signaling + that these countries could be of investment year-over-year that is purely +Japan is the only country surveyed encountering significant roadblocks to keep the facilities running.” +where attracting, training, and with implementation at their SHARMY FRANCIS +retaining talent is the most cited organizations. Leaders in Australia Manager – Innovation, InfraBuild, a steel manufacturing +challenge; leaders in Australia, India, are both the most concerned about company headquartered in Australia + +and Singapore are more concerned costs (40%) and the least concerned +with cost, aligning with global findings. about technology and AI (24%), a + deviation from global results. + + + + +50 2025 STATE OF DESIGN & MAKE + INSIGHT 5: EMEA + + +EMEA region split on top challenge +EMEA: Cost control and cost management Technological advancements, including AI + + + + + 41% 40% + 30% 33% 35% + + + + Turkey United Kingdom Middle East France Italy + + + 21% 25% + 29% 29% 34% + + + + + 29% 30% 30% + 25% + + + Netherlands Germany Nordics Spain + + + + 27% + 32% 34% + 43% + + + + +Percentage of respondents who selected “cost control and cost management” and “technological advancements, including AI” as their top challenge. +Survey question: What are the top three challenges your company or organization faces today? 13 response options. + + +51 2025 STATE OF DESIGN & MAKE + INSIGHT 5: EMEA + +EMEA is a land of contrasts when During qualitative interviews, +it comes to the top challenges business leaders in the region cited +identified by respondents. This region security concerns and regulatory +includes both the country where the confusion as common obstacles for +smallest percentage of respondents implementation of AI solutions. +say technology, including AI, is a +top challenge, Turkey (21%), and the +country where the largest percentage +of business leaders sees it as a top +challenge, Spain (42%). + + + + + “Our industry is interested in the application of AI to automate + designing and creating maps. But concerns about security + have prevented us from exploring AI further.” + GREGORY ZATKA + Head of Digital Assets Management, EuroAirport Basel-Mulhouse-Freiburg, + a French international airport + + + + +52 2025 STATE OF DESIGN & MAKE + INSIGHT 5: AECO + + +Construction services is least concerned about AI, most concerned about cost +AECO: Cost control and cost management Technological advancements, including AI + + + 40% + 36% 34% 32% + + + + + Construction services Oil and gas Architecture services Building owners + + + + + 23% 25% + 31% 30% + + + + 27% 34% 31% + + + + + Civil infrastructure owners Engineering service providers Utilities and telecom + + + + + 28% + 39% 39% + + + +Percentage of respondents who selected “cost control and cost management” and “technological advancements, including AI” as their top challenge. +Survey question: What are the top three challenges your company or organization faces today? 13 response options. + + +53 2025 STATE OF DESIGN & MAKE + INSIGHT 5: AECO + Solution spotlight +Within AECO, leaders in construction On the other hand, a higher +services are most concerned with cost percentage of respondents working in Norway is one country embracing AI in AECO. Construction engineering company +control (40%) and less concerned utilities and telecom and engineering Norconsult designed the Sotra suspension bridge using a fully digital approach. The +with technology advancements and services sees technology, including project used a cloud platform for 3D modeling, reporting, cost control, and facility +AI (23%). Although the contrast AI (39%), as a top challenge than management, eliminating traditional drawings. The digital model minimized errors +is less dramatic, other segments— costs (31%). This isn’t surprising and provided clear visibility into progress, saving time and effort, while automation +including oil and gas, architecture for utilities, given that the sector streamlined repetitive tasks. This led to significant cost control, reducing hand +services, and building owners—are is historically slower to adopt new drawings by 99.5% and cutting drawings from 4,000 to just 15. APIs facilitated +also more preoccupied with costs technologies amid increased security efficient data management and workflow integration. +than with technology and AI. concerns around data. + + + READ MORE +“Our projects can be 10–15 years and longer. To be successful, about Sotra suspension bridge + we must continuously plan for technological change, all within + a live project environment.” + ROBERT HICKS + Strategic Partnership Manager, Skanska, a global project development + and construction company headquartered in Sweden + + +54 2025 STATE OF DESIGN & MAKE + INSIGHT 5 + + + Supply chains remain + fragile and undiversified + Supply chain diversification is down + despite increased global uncertainty + 80% + + + + + 70% + + My company is diversifying + its supply chain + 60% + + + + + 50% + + My company’s supply + chain is fragile due to + 40% geopolitical tensions + + + + + 30% + + 2024 2025 + + Percentage of respondents who agree to the statements: 1. My company’s supply chain is fragile due to geopolitical + tensions. 2. ...to be more resilient... My company is diversifying its supply chain. 5-point scale. Top two = agree. + + +55 2025 STATE OF DESIGN & MAKE + INSIGHT 5 + + +Digitally mature companies 41% more + “Over the past 30 years, China’s supply chain has become +likely to diversify their supply chains relatively mature and internationally well-identified. The + current challenge lies in the fragility of overseas supply + 2024 2025 chains. For example, our factory in Malaysia faces significant + challenges if it solely relies on non-Chinese supply chains. We + are actively expanding new overseas supply chains to address +85% + these vulnerabilities.” + WEI FENG LU +80% Senior Vice President, Morimatsu International Holdings Company Ltd., + a global manufacturing and solutions company headquartered in China + +75% + + +70% Supply-chain reliability continues to demands within the organization, + be a concern worldwide, with 49% of and the lack of alternative options + business leaders saying their supply to their current supply chain as +65% chain is fragile due to geopolitical ongoing struggles with supply- + tensions, up from 45% in 2024. chain resilience. +60% + Despite this increased fragility, there But one additional and critical factor + is a global, industry-wide decline in companies need to consider when +55% the percentage of leaders who say it comes to supply-chain stability is + their organizations are diversifying digital maturity. Survey results this + their supply chains. This year saw an year revealed that digitally mature +50% + 11-point drop (to 65%) in the number organizations were 41% more likely to + Digitally Less digitally + of leaders saying their companies are diversify their supply chains—giving + mature companies mature companies + diversifying their supply chains. them a significant edge when it + comes to resilience. +Percentage of respondents who agree to the statements: ...to be more resilient... My company is diversifying its supply During interviews, leaders cited the +chain. 5-point scale. Top two = agree. For the definition of digital maturity, see glossary. cost of diversification, competing + +56 2025 STATE OF DESIGN & MAKE + 04 + INSIGHT 6 + + + + +Leaders are cautious +in the near term + 05 + 06 +57 2025 STATE OF DESIGN & MAKE + 07 + INSIGHT 6 + + This year saw a general cooling Leaders feel the future + of sentiment across Design and global landscape is + Make industries, with the majority more uncertain + of business leaders feeling both + more uncertain about the future + and less prepared to handle + +10 points + unforeseen changes. from 2024 + + Sixty-five percent of leaders surveyed Leaders feel less prepared + for this year’s report agree that to handle unforeseen + the global landscape is now more future changes + uncertain, a 10-point jump that + represents a 19% increase year- over- + year. Leaders are also less confident −12 points + in their organization’s ability to from 2024 + weather unforeseen obstacles, + with just 61% saying they are well + prepared, down from 73% in 2024. + + This conflation of uncertainty and + unpreparedness is having far- + reaching impact across Design and + Make industries. From a general + reduction in spending to a decreased + enthusiasm for new technologies, + leaders are experiencing a lack of + organizational confidence. + + + + +58 2025 STATE OF DESIGN & MAKE + INSIGHT 6 + + +Leaders feel more uncertain about the future + “We’re obviously +and less prepared to face it concerned about the + state of the world we’re in +Global uncertainty is affecting organizational confidence today, with multiple wars, + geopolitical stresses, + My company is well prepared to handle unforeseen future change environmental issues, + The future global landscape feels more uncertain now than 3 years ago and how all this affects + our region. There’s a +80% lot of tension in the + world right now, and as + humans, of course, we do +75% + worry about this—this will + affect us today as society +70% and individuals—but also + how this can potentially + affect business and, more +65% + importantly, how this + may affect the future of +60% our children and future + generations and so on.” + +55% AMMAR AL ASSAM + CEO, Dewan Architects, + an architecture firm + headquartered in the UAE +50% + + 2023 2024 2025 + +Percentage of respondents who agree to statements: 1. My company is well prepared to handle unforeseen future macroeconomic and geopolitical changes. +2. The future global landscape feels more uncertain now than 3 years ago. 5-point scale. Top two = agree. + + +59 2025 STATE OF DESIGN & MAKE + INSIGHT 6 + +But amid uncertainty, some organizations. And data-effective +organizations are faring better than organizations are most confident, + “You can also look at declining global sentiment in a different way, and we +others. Leaders at digitally mature with 84% of leaders at those + took a very optimistic approach and said that there were opportunities out +organizations, for example, feel organizations feeling prepared to +better prepared to handle unforeseen handle unforeseen changes. This of the devastation that were caused by the pandemic. So it fast-tracked +changes—76% of leaders at these points to yet another advantage of and forced a lot of people to go into the cloud and communicate better. And +companies feel prepared, compared digitalization across Design and Make we were struggling with that. We are invited to work on projects around +to only 47% at less digitally mature industries: increased resilience. the globe, and clients expected us to do joint ventures with people across + the world. It hadn’t really been mainstream, but it was starting to become + mainstream. All of these things came together and enabled us to be agile + enough to switch from 700 people or more in offices to everybody at home in + two weeks, with minimal loss of production because of that connectedness.” + BRAD SONTER + Practice Design Technology Lead, Cox Architecture, + a design-focused architectural practice headquartered in Australia + + + + +60 2025 STATE OF DESIGN & MAKE + INSIGHT 6: AMER + +The United States and Brazil both +saw roughly 10-point increases in the + The United States sees the biggest decrease in +number of respondents who agree +that the future global landscape + preparedness, Canada the largest decrease in uncertainty +feels more uncertain. And the United +States is also feeling less prepared AMER: My company is well prepared to handle unforeseen future changes 2024 +than the previous year, with 69% of The future global landscape feels more uncertain now than 3 years ago 2025 +leaders saying they feel prepared +to handle unforeseen changes, a + 85% +decrease of 11 points. + +In Mexico and Canada, the trend was 80% +reversed. In Mexico, slightly fewer +(56%) agree that uncertainty is + 75% +greater now compared to the survey +a year earlier (59%). In Canada, the +difference was more significant. In 70% +2024, 72% of survey respondents in +Canada agreed that the future felt + 65% +more uncertain; in this year’s survey, +only 60% agree, signaling that Canada +is one of the few regions optimistic 60% +about the current global landscape. + + 55% + + + 50% + United States Brazil Mexico Canada + + + + Percentage of respondents who agree to statements: 1. My company is well prepared to handle unforeseen future macroeconomic and geopolitical changes. 2. The future global + landscape feels more uncertain now than 3 years ago. 5-point scale. Top two = agree. + + +61 2025 STATE OF DESIGN & MAKE + INSIGHT 6: APAC + + +Japan’s leaders feel the least prepared, Singapore’s the most uncertain +APAC: My company is well prepared to handle unforeseen future changes 2024 + The future global landscape feels more uncertain now than 3 years ago 2025 + +90% + + + +80% + + + +70% + + + +60% + + + +50% + + + +40% + + + +30% + + China India Singapore Australia South Korea Japan + + + +Percentage of respondents who agree to statements: 1. My company is well prepared to handle unforeseen future macroeconomic and geopolitical changes. 2. The future global landscape feels more uncertain now than 3 years ago. +5-point scale. Top two = agree. Data for Singapore was not gathered for the 2023 and 2024 surveys. + + +62 2025 STATE OF DESIGN & MAKE + INSIGHT 6: APAC + +Most APAC business leaders echoed +global trends, with an increase in the + “In uncertain times, many businesses prioritize +perception of uncertainty and a decline + stability over expansion. Issues such as supply +in feeling well prepared to handle +unforeseen changes in the future. chain, rising costs, and market instability lead + companies to focus more on efficiency improvement +China was the only country that and digital transformation.” +saw an increase, however slight ANDY YU +(60% to 63%), in the percentage Director, Build King Construction Ltd., a construction services +of respondents agreeing that their company headquartered in Hong Kong +companies are well prepared to +handle unforeseen changes. Leaders +in Japan (37%) and South Korea +(49%) feel less prepared to handle +unforeseen macroeconomic and +geopolitical changes. + +Overall, Singapore had the highest +percentage of respondents saying +that uncertainty is on the rise, with +81% agreeing the future global +landscape is more uncertain, while +South Korea is feeling the most +confident about the global landscape, +with a 2-point decline in uncertainty. + + + + +63 2025 STATE OF DESIGN & MAKE + INSIGHT 6: EMEA + + +Nordics sees the largest swing in both preparedness and uncertainty +EMEA: My company is well prepared to handle unforeseen future changes 2024 + The future global landscape feels more uncertain now than 3 years ago 2025 + +90% + + +80% + + +70% + + +60% + + +50% + + +40% + + +30% + + +20% + + Turkey United Kingdom Germany Middle East Nordics Italy France Spain Netherlands + + + +Percentage of respondents who agree to statements: 1. My company is well prepared to handle unforeseen future macroeconomic and geopolitical changes. 2. The future global landscape feels more uncertain now than 3 years ago. +5-point scale. Top two = agree. + + +64 2025 STATE OF DESIGN & MAKE + INSIGHT 6: EMEA + +In EMEA, the Nordics saw the largest 26% to 59%. This swing in both +change in sentiment year-over-year. uncertainty and preparedness is + “We are a very diversified company because we work in more +Just 57% of leaders in the region due to a confluence of factors. In + than 100 countries on many elements of the value chain +feel prepared to handle unforeseen interviews, leaders said this swing in +macroeconomic or geopolitical both uncertainty and preparedness and in many verticals: rail, energy, buildings, et cetera. So +changes, down significantly from was a delayed effect from the larger if there is a negative impact here, it’s mitigated by the rest +88% in 2024. global economic downturn that just of the activities. So we are not too worried, but, for sure, + started impacting the construction the industry has to be careful of what is happening. The +The Nordics also saw a dramatic industry in the region, along with geopolitical situation can have an impact.” +increase in the percentage of uncertainty around the impact of + PIERRE-YVES MASSILLE +respondents who agree that various tariffs and trade embargoes. CTO, Egis Group, an engineering and consulting firm headquartered in France +uncertainty is on the rise, from + + + + +65 2025 STATE OF DESIGN & MAKE + INSIGHT 6: AECO + + +Architecture services sees large shift in both preparedness and uncertainty +AECO: My company is well prepared to handle unforeseen future changes 2024 + The future global landscape feels more uncertain now than 3 years ago 2025 + +80% + + + + +70% + + + + +60% + + + + +50% + + + + +40% + + + + +30% + Civil infrastructure Building Oil and gas Engineering Construction Utilities Architecture + owners owners service providers services and telecom services + + + +Percentage of respondents who agree to statements: 1. My company is well prepared to handle unforeseen future macroeconomic and geopolitical changes. 2. The future global landscape feels more uncertain now than 3 years ago. +5-point scale. Top two = agree. + + +66 2025 STATE OF DESIGN & MAKE + INSIGHT 6: AECO + +AECO, in general, is feeling less +prepared to handle unforeseen + “The future appears to be progressing towards a significant divide between +changes than the previous year, + technology adopters and nonadopters, with this gap continually widening. This +with architecture services seeing +the steepest decline, from 74% presents opportunities for smaller companies to leverage emerging technologies +to 46%, representing a 38% and establish new trends. However, it is important to acknowledge that +change year-over-year. Leaders in integrating such technology on a large scale within established companies may +architecture services not only feel not always be feasible.” +their organizations are less prepared + OLIVER HALL +to handle unforeseen changes, but BIM Manager - Senior Staff, Stefan Antoni Olmesdahl Truen Architects (SAOTA), +their confidence in the future has an architecture and design firm headquartered in South Africa +also fallen—there is a 21-point year- +over-year increase in the number +of leaders who see the future as +uncertain. From increased materials +costs to the shifting regulatory +landscape and disruption from AI, +architecture services is currently +seeing, and feeling, the effects of +ongoing global uncertainty. + + + + +67 2025 STATE OF DESIGN & MAKE + 05 + INSIGHT 7 + + + + +The search for talent +intensifies, with +a focus on AI skills 06 + 07 +68 2025 STATE OF DESIGN & MAKE + 08 + INSIGHT 7 + +Design and Make industries have +struggled in recent years to find 2024 +skilled talent, and this year, that 45% +struggle has become acute enough +to hinder growth. Fifty-eight percent +of business leaders say that lack of 2025 +access to skilled talent is a barrier +to their company’s growth, up from +43% in 2024. + 61% + +The skilled talent gap increased in say they have difficulty +nearly every country surveyed—in finding employees +some cases, quite significantly. with the right skills +Germany, for example, saw an +increase from 28% to 61% in the +number of organizations saying +skilled talent is difficult to find. In the +Nordics, this number jumped from likely to implement continuous +18% to 51%, representing a 183% learning programs than less +year-over-year increase. digitally mature companies, at + 74% and 55%, respectively. Digitally +When it comes to bridging and mature companies also see a boost +filling the skills gap, digitally when it comes to talent. Twenty- +mature companies are at a distinct seven percent of digitally mature +advantage. Seventy-seven percent of companies report improved talent +digitally mature companies will invest acquisition and retention as a +more in digital training, compared benefit of digital transformation, +to 59% of less digitally mature compared to only 18% of less +companies. They are also more digitally mature companies. + + + + +69 2025 STATE OF DESIGN & MAKE + INSIGHT 7 + + +Nearly two-thirds of organizations are confronting a skills gap +36% year-over-year increase in leaders who say they struggle to find candidates with technical skills +80% + + + +70% + −7% + + +60% + + +16% +50% +15% + +15% + + + +14% +40% + + + +30% + + + +20% + 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 + + New employees Lack of access to The workforce is My company has had My company is implementing + with the right skilled talent is a rapidly aging to let employees a continuous learning + technical skills are barrier to my go because they program to mitigate the + difficult to find company’s growth lack technical skills shortage of skilled workers + + +Percentage of respondents who agree to statements: 1. New employees with the right technical skills are difficult to find. 2. My company has had to let employees go because they lack technical skills. 3. Lack of access to skilled talent is a barrier +to my company’s growth. 4. The workforce is rapidly aging. 5. My company is implementing a continuous learning program to mitigate the shortage of skilled workers. 5-point scale. Top two = agree. + + +70 2025 STATE OF DESIGN & MAKE + INSIGHT 7 + +Sixty-one percent of business leaders Despite these struggles, leaders increasing talent acquisition through +worldwide agree that new employees are confident in their organizations’ working with recruiters or using + “Finding the right talent is challenging. They +with the right technical skills are ability to tackle talent issues. In targeted job postings. + have to know how to work with the software +difficult to find, up from 45% the the analysis of open-ended survey +previous year. Moreover, the number questions asking respondents how Leaders are also much more confident and have a technical understanding of the +of leaders who say they have had their company is addressing this lack that their organizations are handling product we are designing. It can be very +to let people go because they lack of access to skilled talent, only 5% the challenge of a rapidly aging hard and very expensive to find people.” +technical skills has jumped to 49%, say their company is not handling the workforce; just 5% of leaders think CHRISTIAN AHLERS +up from 35%, compounding labor- issue, down from 11% last year. These their organizations are not handling CAD Systems Administrator, Lindner Group, an interior +shortage problems. organizations say they are focused on the issue, compared to 20% last year. construction specialist headquartered in Germany + + + + +71 2025 STATE OF DESIGN & MAKE + INSIGHT 7 + + +Despite the skills gap, Solution spotlight + +investment in training is down Steelcase—a furniture manufacturer for offices, + hospitals, and classrooms—addresses the + skills gap through various initiatives focused +75% on workforce development and inclusion. + Recognizing the importance of a diverse and + sustainable workforce, Steelcase partners with + organizations such as the West Michigan Center +73% for Arts and Technology (WMCAT) to provide + hands-on arts and technology programming, + gap-year programs, and adult workforce + development. Additionally, Steelcase’s Camp + Ignite empowers underrepresented teens +71% + through leadership training and internships, + preparing them for future careers. The company + also supports women in manufacturing at its + Pune, India, plant through educational programs +69% and flexible work arrangements. These efforts + aim to build a diverse talent pipeline, enhance + workforce skills, and create a culture of inclusion, + ultimately benefiting both the company and the +67% communities it serves. + + + + READ MORE + about Steelcase +65% + + 2023 2024 2025 + +Percentage of respondents who agree to the statement: In the next 3 years, my company is planning to invest more in +digital skills training. 5-point scale. Top two = agree. + + +72 2025 STATE OF DESIGN & MAKE + INSIGHT 7 + +One way to bridge the skills gap is Confronted by multiple +to invest more in workforce training implementation obstacles, some + “I believe that anyone can be developed +through continuous learning organizations are turning to third + and trained to excel. Talent development +programs, but implementation of parties to train their employees. +continuous learning programs has While external training programs is about providing the right resources and +declined to 64% from 71% in 2024. seem like an ideal solution for those opportunities for growth. It’s crucial for + organizations tight on resources, our industry to rethink how we cultivate +Budget aside, training holds other their efficacy remains in doubt, with that talent and equip our people with the +challenges. Nearly half of all 52% of leaders saying these do not necessary skills. By rethinking how we +respondents (48%) say they do meet the needs of their organizations. train and upskill our people, we can build a +not have the resources to design workforce ready to meet the demands of the +internal training programs, up 10 Notably, for companies held back by modern construction industry.” +points over 2024, indicating that lack of access to skilled talent, just 9% +the tight labor market is impacting said they were using AI to fill this gap. MICHAEL ZEPPIERI + Vice President, Emerging Technology, Skanska, +initiatives across organizations. Instead, organizations are focused on + a global project development and construction + hiring workers with AI skills. company headquartered in Sweden + + + “We do a lot of work with universities, and + this has been a great pipeline for new and + emerging talent. We have a robust internship + program—500 just last year—and we look at + the interns as future employees. It ensures + they have the technical skills we need and also + that they will already fit into our culture.” + JEFF SIEGEL + Digital Infrastructure Solutions Delivery and Organizational + Growth Officer, Senior Vice President, and HNTB Fellow, + HNTB, a transportation infrastructure design firm + headquartered in the United States + + + + +73 2025 STATE OF DESIGN & MAKE + INSIGHT 7 + + +AI skills top the list of future hiring priorities + “Resourcing is the biggest +2024 2025 Change in % challenge. It’s number + one. We can’t replace + Ability to implement/ + 1 1 +4.9% the human; therefore, + work with AI + resourcing is vital. + It’s becoming more + difficult as technology is + becoming more advanced + 2 Digital design skills 2 −0.8% for people to understand + it, get trained for it, + and engaged in it. It’s + becoming more difficult, + and it’s not going to + Digital project + 3 + management + 3 +0.1% get any less difficult. + We’re being asked as + practitioners to do more + with less time. We’re time + poor, and a lot of people + Software development/ + 4 4 +0.5% don’t have the time to go + programming + and upskill.” + BRAD SONTER + Practice Design Technology + Lead, Cox Architecture, a design- + Knowledge of data focused architectural practice + 5 5 −1.5% + safety and security headquartered in Australia + + -2% 0% +5% + +Survey question: What technical or digital skills do you believe your company or organization will be prioritizing when hiring over the next 3 years? +Select all that apply. 12 response options. + + + +74 2025 STATE OF DESIGN & MAKE + INSIGHT 7 + + Forty-six percent of leaders say the + ability to work with AI will be their + “In the next few years, with the advent of generative AI, + top priority when hiring in the next + we need a different kind of talent. We need artists. We + few years, up from 41% in 2024. + This indicates that, despite a more need creative thinkers. We need problem solvers. We don’t + cautious approach to the technology need button pushers, because those are the tasks that will + this year, leaders are still dedicated to get automated.” + integrating AI into their organizations. VEERENDRA PATIL + Founder and Creative Director, Zebu Animation Studios, + At the industry level, utilities and an animation studio headquartered in India + telecom see the most need for AI skills, + with 58% of leaders saying they are “But from the design, construction, and the operation + a priority. Considering this industry perspective, AI plays a very critical role. From a productivity + also sees AI and technology as its top perspective, we can use different AI processes to help maybe + challenge, it makes sense that leaders come up with design suggestions in terms of optimizing + are prioritizing the tech skills that will maybe airflow, optimizing space.” + ease implementation concerns. + DR. KAREN BLAY, MCP, BSC, PGCERT, MSC, PHD, FHEA, MACM, MCIOB, MIHEEM + Senior Lecturer in Digital Construction and Quantity Surveying, + Loughborough University, a public research university in England + + + + +75 2025 STATE OF DESIGN & MAKE + INSIGHT 7: AECO + + +Civil infrastructure sees dramatic technical skills shortage +AECO: New employees with the right technical skills are difficult to find 2024 + In the next 3 years, my company is planning to invest more in digital skills training 2025 + +80% + + + +70% + + + +60% + + + +50% + + + +40% + + + +30% + + + +20% + Utilities Engineering service Building Civil infrastructure Oil and gas Construction Architecture + and telecom providers owners owners services services + + + +Percentage of respondents who agree to statements: 1. My company is well prepared to handle unforeseen future macroeconomic and geopolitical changes. 2. The future global landscape feels more uncertain now than 3 years ago. +5-point scale. Top two = agree. + + +76 2025 STATE OF DESIGN & MAKE + INSIGHT 7: AECO + +Civil infrastructure organizations are industry is cool enough,” says Linn +experiencing a major increase in their Areno, head of digital development +skills gap. This year, 61% of leaders at Skanska Sweden, a global project +in the sector say the right technical development and construction +skills are hard to find, up from 28% in company. “Personally, it’s quite hard +2024 and representing a 118% year- because everyone else is depending +over-year change. Concerns about on our industry. You don’t have +an aging workforce are compounded anything if you don’t have roads, +by the industry’s difficulty in if you don’t have houses. Younger +attracting young talent who see civil generations want to do cool computer +engineering as less technologically stuff.” To combat this image and +advanced than other sectors. attract future generations, Skanska + invests in outreach programs for +“Recruiting younger generations is students of all ages, from university +a challenge. People don’t think our students to preschoolers. + + + + + “One problem is education. Nowadays, we are making people + more general instead of training for specialties. Today, we see + mechanical engineers instead of, say, a mechanical engineer for + the utility industry or a mechanical engineer for the automotive + industry. So for us, we say that it will take an engineer one to + three years, at least, to be ready to work effectively.” + VINICIUS PRATA + Leader of the Power Generation BIM Committee, Eletrobras, an electric + power generation and transmission company headquartered in Brazil + + + + +77 2025 STATE OF DESIGN & MAKE + INSIGHT 7: D&M + + +Industrial machinery sees dramatic jump in skills shortage +D&M: New employees with the right technical skills are difficult to find 2024 2024 and 2025 + In the next 3 years, my company is planning to invest more in digital skills training 2025 + +90% + + +80% + + +70% + + +60% + + +50% + + +40% + + +30% + + +20% + Life sciences Industrial Building products Process Consumer Automotive, mobility, + manufacturing machinery and fabrication manufacturing products and other transportation + + + +Percentage of respondents who agree to statements: 1. My company is well prepared to handle unforeseen future macroeconomic and geopolitical changes. 2. The future global landscape feels more uncertain now than 3 years ago. +5-point scale. Top two = agree. + + +78 2025 STATE OF DESIGN & MAKE + INSIGHT 7: D&M + +The industrial machinery sector saw image of the sector as a reason why Solution spotlight +the largest increase in the number they are struggling to find talent— +of leaders who say they struggle to younger employees, they say, are Revolution Workshop’s workforce development +find the right technical skills—up to drawn to industries they see as more programs offer more than jobs; they provide +65% from 25% in 2024, representing technologically advanced. a pathway to stable, prosperous futures for +a dramatic 160% increase year-over- people from underserved neighborhoods in +year. And while it also had one of To address this issue, leaders in Chicago’s West and South sides. Revolution’s +the highest percentages of leaders the sector say they are focused on Trade Pathways and Professional Pathways +saying their companies plan to invest outreach, recruitment, and internship programs focus on practical skills training and +more in digital skills training, that programs with students to attract holistic support, including financial literacy, +figure is down 16 points to 70% this them to the industry right at the start conflict resolution, and goal setting. This +year. Leaders cite the old-fashioned of their careers. comprehensive approach prepares participants + for careers in construction, ensuring they are + job-ready and able to succeed. The Professional +“As with the construction industry, as a whole, there is a shortage Pathways program, in particular, offers training + of skilled workers, and in Japan, the issue of how to respond to the in engineering, architecture, and construction + Work Style Reform is a challenge. But as a means of solving this, we management, addressing the industry’s need + are introducing new technology to improve productivity.” for new skilled workers as older ones retire. + By fostering relationships with employers and + HIDENORI SAITO + Department Manager of the DX Strategy Division and BIM Management Office, Takasago providing tailored training, Revolution Workshop + Thermal Engineering, an air conditioning equipment company headquartered in Japan bridges the gap between supply and demand in + the construction workforce, promoting diversity + and helping communities thrive. + + + + LEARN MORE + about Revolution Workshop + + + + +79 2025 STATE OF DESIGN & MAKE + INSIGHT 7: M&E + + +Games sector sees biggest challenge with finding skilled talent +M&E: New employees with the right technical skills are difficult to find 2024 2024 and 2025 + In the next 3 years, my company is planning to invest more in digital skills training 2025 + +80% + + + + +70% + + + + +60% + + + + +50% + + + + +40% + + + + +30% + Advertising, publishing, + Games Film and TV + and graphic design + + + +Percentage of respondents who agree to statements: 1. New employees with the right technical skills are difficult to find. 2. In the next 3 years, my company is planning to invest +more in digital skills training. 5-point scale. Top two = agree. + + + + +80 2025 STATE OF DESIGN & MAKE + INSIGHT 7: M&E + +Media and entertainment leaders are To address this gap, leaders in M&E +no stranger to the talent crunch, with plan to increase investment in digital + “We created a program called Learn OK Please because tools are +59% saying they struggle to find the skills training, contrary to the drop + changing. Our 2D animation artists are learning how to use 3D +right technical skills. in digital investments seen across + AECO and D&M. This makes sense software, and our 3D artists are learning how to use illustration. +Driven by recent significant layoffs when considering the outsize and We do a lot of cross-training. The era of superspecialization +across the sector, games is seeing disruptive impact AI and emerging is over. You need to have multiskilled artists and dependency +the largest talent shortage, with 62% technologies have had on the departments. If you’re doing texturing, you should be able to +of leaders agreeing that it’s difficult industry, from intellectual property understand lighting, surfacing, and basic compositing.” +to find skilled talent, up from 36% concerns to massive writer and actor + VEERENDRA PATIL +last year, but film and TV (59%) and strikes. It suggests the industry is Founder and Creative Director, Zebu Animation Studios, +advertising (57%) are also feeling the looking to minimize future disruption an animation studio headquartered in India +talent crunch. and keep pace with rapidly advancing + technology in the sector. + + + + +81 2025 STATE OF DESIGN & MAKE + 06 + INSIGHT 8 + + + + +Investments remain +strong but reflect +uncertainty 07 + 08 +82 2025 STATE OF DESIGN & MAKE + 00 + INSIGHT 8 + + + + + “Companies are all preparing for tougher times ahead and are thus avoiding blind expansion. + Resources are limited, and there is increased uncertainty, so it is common for businesses to scale + back operations to maintain security. Additionally, market opportunities have decreased, leading to + a lower success rate, which also causes investments to diminish. This is part of entering a cyclical + downturn, and such reactions are normal.” + WEI FENG LU + Senior Vice President, Morimatsu International Holdings Company Ltd., + a global manufacturing and solutions company headquartered in China + + + + + Future investment projections leaders planning to increase future Businesses scale back + have fallen this year but are still investments, compared to 53% at less investment plans + robust: 66% of business leaders digitally mature companies. + say their organizations will increase + or strongly increase their investments Further, future investments are 80% + over the next three years. While this higher at data-effective companies, 2024 + 66% + reflects confidence in the future, where 86% of leaders say they + this number is down from 80% will increase future investments. 2025 + in 2024, indicating that leaders This indicates that organizations + are being more conservative in are seeing outsize benefits from + an uncertain geopolitical and their investments and that digital + macroeconomic environment. transformation efforts may have + Increase or strongly + eased implementation challenges, increase investment + However, digitally mature resulting in long-term cost savings + organizations are significantly more and productivity gains. + bullish on the future, with 80% of + + + + +83 2025 STATE OF DESIGN & MAKE + INSIGHT 8 + + +Future investments still robust +Two-thirds of organizations will increase their investments, down from 2024 + Strongly decrease Decrease Stay roughly the same Increase Strongly increase + +2024 + + + + 1% 3% 16% 52% 28% + + + + +2025 + + + 2% 7% 24% 51% 15% + + + + +Survey question: How do you think your company or organization’s level of investment will shift over the next 3 years? +5-point scale. + + +84 2025 STATE OF DESIGN & MAKE + INSIGHT 8: AMER + +In the 2024 State of Design & +Make report, the United States was + Canada and the United States see the + “I think reduction in +especially positive, with 90% of +survey respondents saying that their + spending is due to largest decline in future investments +company’s level of investment would the uncertainty of the +increase over the next three years. economy. We want to 90% AMER + focus on the things that +One year later—driven by high we know we do well and +interest rates, among other not increase or introduce +factors—that figure is down to 73%, any new risk.” +representing a 19% decline. Canada is 80% + BLAINE BUENGER +similarly cautious this year, with just + Technology Director, +58% of survey respondents saying Infrastructure Solutions, Foth, Brazil +their companies will increase or a science, engineering, +strongly increase their investments and technology company United States + headquartered in the United States +in the next three years—a 21% year- +over-year decline. 70% Mexico + + + + + 60% + Canada + + + + + 50% + 2024 2025 + + Survey question: How do you think your company or organization’s level of investment will shift over the next + 3 years? 5-point scale. Top two = increase. + + +85 2025 STATE OF DESIGN & MAKE + INSIGHT 8: APAC + + + China is the only country + “Korea is less optimistic. There are large-scale project- + financing business divisions. But because of high interest increasing future investment + rates, the project-financing businesses are not as active as in + the past. And during the past three years, there was a market 100% APAC + increase in raw material prices, including reinforced steel, + concrete, and labor. These elements hamper the profitability + of different initiatives and projects.” + 90% + YONGSIK JEONG + Vice President, Sustainable Design Team, Samoo Architects & Engineers, + a global architecture and engineering firm headquartered in South Korea + India + 80% + Singapore + + China +In contrast to the rest of the world, will increase or strongly increase. +China did not see a decline in the While China may be the only country 70% +percentage of leaders who say they where more leaders are saying they Australia +will increase investment over the will be increasing their investments, +next three years. The APAC region India still leads the region, with + 60% +generally saw steep year-over-year 84% of leaders saying they will +declines in the number of leaders increase investments. +who say organizational investments South Korea + 50% + + Japan + + 40% + 2024 2025 + + Survey question: How do you think your company or organization’s level of investment will shift over the next + 3 years? 5-point scale. Top two = increase. Data for Singapore was not gathered for the 2023 and 2024 surveys. + + +86 2025 STATE OF DESIGN & MAKE + INSIGHT 8: AECO + + + Architecture services, oil and gas see + “We service the Australian market, and, other than New + Zealand, we don’t export. We are somewhat of an island, sharpest decline in investment level + and even our island is seeing the effects of what’s going on + in the world. Construction is down, investment is down, and 90% AECO + available funding is down. That’s a reaction to what’s going on + in the world.” + SHARMY FRANCIS + Manager – Innovation, InfraBuild, a steel manufacturing company + headquartered in Australia + 80% + + + + Civil infrastructure owners +While all sectors in AECO are seeing a Oil and gas also saw a steep year- +decline in the percentage of leaders over-year decline in spending, with +that will increase future investments, 61% of leaders saying they will 70% Building owners +architecture services and oil and gas increase investments, compared to +are seeing the sharpest decline. 84% in 2024. Oil producers are taking Engineering service providers + a more conservative approach to + Construction services +Architecture services, specifically, is spending owing to a host of factors— +reining in spending, with just 55% concerns about oversupply amid a Oil and gas + 60% +of leaders in this sector saying they tightening of consumer spending, Utilities and telecom +will increase investments in the next for example—and are reducing +three years, a 28% decline year- capital investments and focusing on + Architecture services +over-year. This makes sense when improving operational efficiencies. +considering the unique confluence of +pressures for the sector from rising 50% +materials and labor costs to supply- 2024 2025 +chain fragility. + Survey question: How do you think your company or organization’s level of investment will shift over the next + 3 years? 5-point scale. Top two = increase. + + +87 2025 STATE OF DESIGN & MAKE + INSIGHT 8 + + +Companies are pulling back on expansion efforts + 2024 2025 + + + + + My company is considering entering new markets + + + + + My company is planning to offer new services + + + + +0% 10% 20% 30% 40% 50% 60% 70% 80% + + + + +Percentage of respondents who agree to statements: 1. My company is considering entering new markets. 2. My company is planning to offer new services. +Survey question: To what extent do you agree or disagree that your company or organization is doing the following to be more resilient? 5-point scale. Top two = agree. + + +88 2025 STATE OF DESIGN & MAKE + INSIGHT 8 + +Most leaders surveyed for the 2025 But as with so many aspects +State of Design & Make report say concerning Design and Make + “Resources are limited, and with increased +their companies continue to invest in industries, digitally mature + uncertainty, businesses tend to adopt a more +entering new markets and in offering organizations are much less likely +new products and services but at a to be affected by this general belt- cautious approach. Therefore, in the current +lower rate than the previous year— tightening. Seventy-seven percent of climate of diminished confidence, a defensive +67% of leaders say they will enter digitally mature companies say they strategy is natural, and reducing investments is a +new markets this year, compared to are considering entering new markets, rational decision. It is not wise to make substantial +75% in 2024. Enthusiasm for offering compared with 57% of less digitally investments when the direction is unclear; being +new services is also down, with mature companies. They are also more cautious is prudent.” +69% of leaders this year saying they likely (79%) to offer new products + WEI FENG LU +will offer new services, compared to and services than their counterparts + Senior Vice President, Morimatsu International Holdings Company Ltd., +77% previously. (60%) and to increase their a global manufacturing and solutions company headquartered in China + investments into acquisitions (67% +These findings echo the global drop compared to 42%). These actions +in sentiment seen this year and align give digitally mature organizations a +with efforts to control costs in the competitive advantage, allowing them +near term. to expand while others contract under + market pressures. + + + + +89 2025 STATE OF DESIGN & MAKE + Regardless of recent headwinds, + leaders in Design and Make industries + + + + + Conclusion + are focused on solving today’s + problems with an eye toward future + opportunity. While cautious in the + near term, leaders who want to gain a + competitive edge need to think about + the long-term benefits of investing in + digital transformation now—and the + implications that falling behind could + have across the organization. + + + + +90 2025 STATE OF DESIGN & MAKE + For the 2025 report, Autodesk + surveyed and interviewed 5,594 68% + + Methodology + industry leaders, futurists, and of survey participants are + experts in the architecture, decision-makers in their companies + engineering, construction, and + operations; product design and + manufacturing; and media and + entertainment industries from + countries around the globe. This + 11 years + report contains key findings from is the average time of experience + this research, including details at the in their industry + sector and regional level. + + + + 34% + The quantitative data (n=5,560) was + collected between May and August + 2024 through a 20-minute online of respondents said that they + survey.4 Autodesk partnered with primarily use Autodesk Design + Qualtrics for the collection of this and Make software + data. In addition, 34 qualitative + interviews with business leaders and + futurists were conducted in October + and November 2024. + + + + + 4 + 2025 State of Design & Make questionnaire + + +91 2025 STATE OF DESIGN & MAKE + SURVEY RESPONDENT BREAKDOWN + + + + 21% Construction services + 19% Engineering service providers 22% Australia + 15% Utilities and telecom 21% China + AECO 13% Building owners APAC 21% India + 1,965 total 12% Architecture services 2,152 total 21% Japan + 10% Civil infrastructure owners 8% Singapore + 8% Oil and gas 7% South Korea + 3% Mining + + + + + 19% France + 26% Consumer products 19% Germany + 16% Automotive, mobility, and other transportation 19% United Kingdom + 16% Process manufacturing 11% Middle East + D&M EMEA + 13% Industrial machinery 8% Nordics + 1,925 total 2,471 total + 12% Building products and fabrication 6% Italy + 11% Life sciences manufacturing 6% Netherlands + 6% Aerospace and defense equipment 6% Spain + 6% Turkey + + + + + 49% United States + 38% Advertising, publishing, and graphic design + M&E AMER 17% Brazil + 32% Games + 1,670 total 937 total 17% Canada + 30% Film and TV + 17% Mexico + + + + +92 2025 STATE OF DESIGN & MAKE + Glossary + +AI leaders: Industry: Leaders and experts: Sustainability: +Respondents were asked where their companies AECO: Architecture, engineering, • Leaders: Sixty-eight percent of survey The survey questions about sustainability, for +were in incorporating artificial intelligence (AI) construction, and operations participants are decision-makers in their example, in the list of changes companies are +technology. Respondents who identified their • Architecture services companies. In this report, this group is making, focus on environmental sustainability; +organization as “approaching the goal” or having • Building owners (i.e., developers, referred to as leaders. Job roles for the however, this definition was not explicitly stated. +“achieved the goal” are considered AI leaders. real estate companies, governments) leaders group include business owners/ + • Civil infrastructure owners entrepreneurs, directors, and VP- and In one-on-one interviews, a descriptive +Data effective companies: (e.g., transportation infrastructure, C-level executives. definition was used incorporating the United +Respondents were asked, “How effective would water infrastructure) • Experts: The remaining 32% of respondents Nations definition: “Meeting the needs of the +you say your company or organization is at • Construction services are referred to as experts. This group present without compromising the ability of +leveraging data?” Those who responded with • Engineering service providers includes respondents at the nonmanagerial future generations to meet their own needs.” +“very effective” on a 4-point scale are referred • Mining level and managers. Respondents were told this includes efforts +to as data-effective companies. This is 19% of • Oil and gas related to the environment (mitigating the effect +respondents. • Utilities and telecom Region: on climate change); the community (social well- + APAC: Asia-Pacific being, improving the life of populations); and +Digital maturity: D&M: Design and manufacturing Australia, China, India, Japan, Singapore, corporate governance. +Respondents were asked how far their • Aerospace and defense equipment South Korea +companies were in their transformation journeys. • Automotive, mobility, and other +Respondents who described their organization transportation (including supply chain) EMEA: Europe, the Middle East, and Africa +as “early stage” or “right in the middle” of their • Building products and fabrication France; Germany; Italy; Middle East (Saudi +digital transformation journeys are considered • Consumer products Arabia, United Arab Emirates); Netherlands; +less digitally mature companies. Those who • Industrial machinery Nordics (Denmark, Finland, Norway, Sweden); +responded “approaching the goal” or having • Life sciences manufacturing Spain; Turkey; United Kingdom +“achieved the goal” of digital transformation are • Process manufacturing +considered more digitally mature companies. AMER: North, Central, and South America +Of 2025 State of Design & Make respondents, M&E: Media and entertainment Brazil, Canada, Mexico, United States +2,784, or 50%, are digitally mature. • Advertising, publishing, and graphic design + • Film and TV + • Games + +93 2025 STATE OF DESIGN & MAKE + Thank you + Andy Yu Brad Sonter Ammar Al Assam Mohamad Kassir + Autodesk would like to thank the following Director Practice Design CEO Global BIM Manager + industry leaders who participated in in-depth Build King Technology Lead Dewan Architects Egis Group + Construction Ltd. Cox Architecture + interviews to discuss industry trends and ways + their companies are responding to changing times. + + + + + Pierre-Yves Massille Vinicius Prata Gregory Zatka Blaine Buenger + CTO Leader of the Power Head of Digital Assets Technology Director, + Egis Group Generation BIM Management Infrastructure + Committee EuroAirport Basel- Solutions + Eletrobras Mulhouse-Freiburg Foth + + + + + Jeff Siegel Sharmy Francis Christian Ahlers Anna Noneder + Digital Infrastructure Manager – Innovation CAD Systems BIM and Change + Solutions Delivery InfraBuild Administrator Manager + and Organizational Lindner Group Lindner Group + Growth Officer, Senior + Vice President, and + HNTB Fellow + HNTB + + +94 2025 STATE OF DESIGN & MAKE + Dr. Karen Blay, BSc, Brian Alting Wei Feng Lu Lars Albjerg Marcelo Piller Dr. Max Clark Eng. Tarek ElGamal Yongsik Jeong +MSc, PgCert, PhD, FHEA, Principal and Director Senior Vice President Head of BIM Director of Senior Vice President, Chairman Vice President, +MACM, MCIOB, MIHEEM of Technology Engineering and EMEA CTO & Sector Sustainable + Morimatsu Novo Nordisk Redcon Construction +Senior Lecturer in Moody Nolan International Innovation Manager Design Team +Digital Construction Holdings Company OEC Engenharia Parsons Samoo Architects +and Quantity Surveying Ltd. & Engineers +Loughborough +University + + + + +Nitesh Alagh Robert Hicks Michael Zeppieri Linn Areno Amarnath Patnam Oliver Hall Hidenori Saito Fumihiro Ojima +Business Lead — Strategic Partnership Vice President, Head of Digital Head – Design BIM Manager – Department Manager General Manager, +Digital Engineering, Manager Emerging Technology Development Technology Senior Staff of the DX Strategy Digital Innovation +Sustainability & Skanska Skanska Skanska Sweden Sobha Realty Stefan Antoni Division and BIM Department, Value +Emerging Tech Olmesdahl Truen Management Office Creation Office +Severn Trent Water Architects (SAOTA) Takasago Thermal Tokyu Construction + Engineering Co., Ltd. + + + + +Jun Xue Veerendra Patil Dongsoo Han +Digital Design Director, Founder and Creative CEO +Industrial Design Director z-emotion +Xiaomi EV Zebu Animation + Studios +95 2025 STATE OF DESIGN & MAKE + About Autodesk +Autodesk is changing how the world is designed and made. Its technology spans architecture, engineering, construction, product design, manufacturing, and media and +entertainment, empowering innovators everywhere to solve challenges big and small. From greener buildings to smarter products to more mesmerizing blockbusters, Autodesk +software helps customers design and make a better world for all. For more information, visit autodesk.com or follow @autodesk on social media. + +Contact Autodesk at state.of.design.and.make@autodesk.com about this research report or to sign up to participate in future research programs. + +The information provided in this report is for general informational purposes only and strictly for the convenience of our customers. Autodesk, Inc. does not endorse or warrant the +accuracy or completeness of any information, text, graphic, links, or other items contained within the report. + +Autodesk, Inc. does not guarantee that you will achieve any specific outcomes or results if you follow any advice in the report. + +© 2025 Autodesk, Inc. All rights reserved + + + + +96 2025 STATE OF DESIGN & MAKE + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pdf_text/citi_metaverse_and_money_2022.txt b/2d_to_3d_market_tech_reports/pdf_text/citi_metaverse_and_money_2022.txt new file mode 100644 index 0000000000000000000000000000000000000000..dcfdff20f5d1740db6c5f6b27b8ef9df170c461c --- /dev/null +++ b/2d_to_3d_market_tech_reports/pdf_text/citi_metaverse_and_money_2022.txt @@ -0,0 +1,10605 @@ +METAVERSE AND MONEY +Decrypting the Future + +Citi GPS: Global Perspectives & Solutions +March 2022 + + + + +Citi is one of the world’s largest financial institutions, operating in all major established and emerging markets. Across these world markets, our employees conduct +an ongoing multi-disciplinary conversation – accessing information, analyzing data, developing insights, and formulating advice. As our premier thought leadership +product, Citi GPS is designed to help our readers navigate the global economy’s most demanding challenges and to anticipate future themes and trends in a fast-changing and +interconnected world. Citi GPS accesses the best elements of our global conversation and harvests the thought leadership of a wide range of senior professionals +across our firm. This is not a research report and does not constitute advice on investments or a solicitations to buy or sell any financial instruments. +For more information on Citi GPS, please visit our website at www.citi.com/citigps. + Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Ronit Ghose, CFA Head of Banking, Nisha Surendran + FinTech and Digital Assets, Future of Project Manager + Finance ICG Digital Assets, Citi + Citi Global Insights + + +44-20-7986-4028 | ronit.ghose@citi.com +44-20-7986-7766 | nisha.surendran@citi.com + + + Sophia Bantanidis Kaiwan Master + Future of Finance Analyst Future of Finance Analyst + Citi Global Insights Citi Global Insights + + + +44-20-7500-9655 | sophia.bantanidis@citi.com +91-22-4277-5037 | + kaiwan.hoshang.master@citi.com + + Ronak S Shah Puneet Singhvi + Future of Finance Team Head of Digital Assets + Citi Global Insights ICG Digital Assets, Citi + + +44-20-7986-3960 | ronak.sharad.shah@citi.com +1-212-723-3269 | puneet.singhvi@citi.com + + + + + Jamie Burke Phil Chen + CEO and Founder Founding Partner, Race Capital + Outlier Ventures Chief Decentralized Officer, HTCs + + + + + Stani Kulechov Urszula McCormack + CEO and Founder Parner + The Aave Companies King & Wood Mallesons + + + + + Sandeep Nailwal Yonatan Raz-Fridman + Co-Founder Founder and CEO + Polygon Supersocial + l + + + + + Rebecca Rettig Yat Siu + General Counsel Co-Founder and Executive Chairman, Amico + The Aave Companies Brands + Founder and CEO, Outblaze + + + + + Victor Alexiev, Karan Agrawal, William Artingstall, Joseph Ayoub, Anas Bhurtan, + Jonathan Bloohn, Victor Dmbd, Ana Duek, Namrate Kanzaria, Richard Lomas, +With thanks to: + Omid Malekan, Niall McDermott, Alison McGaughey, Deepak Mehra, Rachael + Montgomery, Gareth Robinson, Ashwin Shirvaikar, Ajit Tripathi, and Jelena Zec. + March 2022 Citi GPS: Global Perspectives & Solutions 3 + + + + + METAVERSE AND MONEY + Decrypting the Future +Kathleen Boyle, CFA Have you ever had one of those “aha” lightbulb moments when you realize your +Managing Editor, Citi GPS grasp of technology, or lack thereof, showed your age? One of those moments hit + me like a ton of bricks this week when I was asked to create my own avatar for a + presentation in the Metaverse. I did manage to create something functional and + presentable. What I did not do, or should I say could not do, was operate my avatar + — make it walk or interact. Given the speed at which the Metaverse is advancing, I + need to learn this quickly because it was very obvious I was an un-savvy older + person in the Metaverse room. + + The Metaverse as a concept has been around for a few decades. However, interest + in the virtual world spiked at the end of 2021 following a rise in sales of non-fungible + tokens (NFTs) as well as announcements from Big Tech players indicating their + interest and investment in the space. + + Today, the most popular way to experience the Metaverse is via a video game + played on a virtual reality (VR) headset. But in the report that follows, we discuss + the possibility that the Metaverse is moving towards becoming the next iteration of + the internet, or Web3. This “Open Metaverse” would be community-owned, + community-governed, and a freely interoperable version that ensures privacy by + design. + + Users should increasingly be able to access a host of use cases, including + commerce, art, media, advertising, healthcare, and social collaboration. A device- + agnostic Metaverse would be accessible via personal computers, game consoles, + and smartphones, resulting in a large ecosystem. Using this broad definition, the + total addressable market for the Metaverse could be between $8 trillion and $13 + trillion by 2030, with total Metaverse users numbering around five billion. + + But getting to that market level is going to require infrastructure investment. The + content streaming environment of the Metaverse will likely require a computational + efficiency improvement of over 1,000x today’s levels. Investment will be needed in + areas such as compute, storage, network infrastructure, consumer hardware, and + game development platforms. + + The definition of what counts as money in the Open Metaverse is also likely to be + very different from what counts as money in the real world today. Interoperability + and seamless exchange between underlying blockchain technology are critical to + ensure a frictionless user experience. Different forms of cryptocurrency are + expected to dominate, but given the multi-chain trend in the crypto ecosystem, + cryptocurrency will likely coexist with fiat currencies, central bank digital currencies + (CBDCs), and stablecoins. + + Finally, if the Metaverse is indeed the new iteration of the internet, it will mostly likely + attract greater scrutiny from global regulators, policymakers, and governments. + Issues such as anti-money laundering rules for exchanges and wallets, the use of + decentralized finance (DeFi), crypto assets, and property rights will all have to be + addressed. + + The opportunity for the Metaverse looks exciting, so I’m off to find a seven-year old + to teach me some avatar moves. + + + + +© 2022 Citigroup + 110110010001101101110000100110100101010100010101100111001001000111010101110110010001101101110000 + 001010110011100100100011101010111011001000110110111000010011010010101010001010110011100100100011 + 011011011100001001101001010101000101011001110010010001110101011101100100011011011100001001101001 + 111001001000111010101110110010001101101110000100110100101010100010101100111001001000111010101110 + + +Metaverse — The Next Generation of the Internet + 000010011010010101010001010110011100100100011101010111011001000110110111000010011010010101010001 + 001110101011101100100011011011100001001101001010101000101011001110010010001110101011101100100011 + 100101010100010101100111001001000111010101110110010001101101110000100110100101010100010101100111 + 111011001000110110111000010011010010101010001010110011100100100011101010111011001000110110111000 + 000101011001110010010001110101011101100100011011011100001001101001010101000101011001110010010001 + 001101101110000100110100101010100010101100111001001000111010101110110010001101101110000100110100 +THE METAVERSE011100100100011101010111011001000110110111000010011010010101010001010110011100100100011101010111 + IS POTENTIALLY AN + 100001001101001010101000101011001110010010001110101011101100100011011011100001001101001010101000 +$8 TRILLION TO $13 TRILLION OPPORTUNITY + 000111010101110110010001110011010010101010001010110011100100100011101010111011001000110110111000 + 000101011001110010010001110101011101100100011011011100001001101001010101000101011001110010010001 +We believe the Metaverse + Metaverse may + is thebenext + the generation + next generation + of theofinternet + the + 001101101110000100110100101010100010101100111001001000111010101110110010001101101110000100110100 +internet +— — combining + combining the physicalthe physical + and andworld + digital digital + in world + a in a persistent + persistent and + 011100100100011101010111011001000110110111000010011010010101010001010110011100100100011101010111 +and immersive +immersive mannermanner— and— and + not not purely + purely a a Virtual + Virtual Reality + Reality world.world. + 100001001101001010101000101011001110010010001110101011101100100011011011100001001101001010101000 +A device-agnostic Metaverse accessible via PCs, game consoles, and + 000111010101110110010001101101110000100110100101010100010101100111001001000111010101110110010001 +smartphones could 010010101010001010110011100100100011101010111011001000110110111000010011010010101010001010110011 + result in a very large ecosystem. Based on our +definition, we estimate 011101100100011011011100001001101001010101000101011001110010010001110101011101100100011011011100 + the total addressable market for the Metaverse +economy could grow100010101100111001001000111010101110110010001101101110000100110100101010100010101100111001001000 + to between $8 trillion and $13 trillion by 2030. + 000110110111000010011010010101010001010110011100100100011101010111011001000110110111000010011010 + 001110010010001110101011101100100011011011100001001101001010101000101011001110010010001110101011 + 110000100110100101010100010101100111001001000111010101110110010001101101110000100110100101010100 + 100011101010111011001000110110111000010011010010101010001010110011100100100011101010111011001000 + 101001010101000101011001110010010001110101011101100100011011011100001001101001010101000101011001 + Metaverse: narrow definition Metaverse: broad definition + 101110110010001101101110000100110100101010100010101100111001001000111010101110110010001101101110 + 2030 VR/AR headset users 2030 unique internet users + 010001010110011100100100011101010100100100011101010111011001000110110111000010011010010101010001 + 900mn–1bn 5bn + 001110101011101100100011011011100001001101001010101000101011001110010010001110101011101100100011 + 100101010100010101100111001001000111010101110110010001101101110000100110100101010100010101100111 + 111011001000110110111000010011010010101010001010110011100100100011101010111011001000110110111000 + 000101011001110010010001110101011101100100011011011100001001101001010101000101011001110010010001 + 001101101110000100110100101010100010101100111001001000111010101110110010001101101110000100110100 + Total addressable market estimate Total addressable market estimate + 011100100100011101010111011001000110110111000010011010010101010001010110011100100100011101010111 + $1tn–$2tn $8tn–$13tn + 10000100110100101010100010101100111001001000111010 + + + + +METAVERSE USE CASES +Gaming is viewed as a key Metaverse use case for the next several years due to the immersive and multi-player +experience of the space currently. But we believe that the Metaverse will eventually help us find new enhanced ways to +do all of our current activities, including commerce, entertainment and media, education and training, manufacturing and +enterprise in general. Enterprise use cases of the Metaverse in the coming years will likely include internal collaboration, +client contact, sales and marketing, advertising, events and conferences, engineering and design, and workforce training. + + + + + SMART HEALTHCARE EDUCATION + MANUFACTURING + + + + + DEVELOPER/ VIRTUAL VIRTUAL SPACES/ + CREATOR ECONOMIES ADVERTISING COMMUNITIES + + + + + SOCIAL DIGITAL EVENTS/ VIRTUAL CITIES/ + COMMERCE CONCERTS/TOURISM PUBLIC SERVICES +© 2022 Citigroup + 010011010010101010 +110101011101100100 +101010100010101100 +011001000110110111 + STILL EARLY: METAVERSE INFRASTRUCTURE BUILDING +101011001110010010 +101101110000100110 + In the current state, the internet infrastructure is unsuitable for building a fully-immersive content streaming Metaverse +100100100011101010 + environment, that enables users to go seamlessly from one experience to another. To make the vision of Metaverse a reality, we +001001101001010101 +111010101110110010 + expect significant investment in a confluence of technology. Low latency — the time it takes a data signal to travel from one point +010101010001010110 + on the internet to another point and then come back — is critical to building a more realistic user experience. +101100100011011011 +010101100111001001 +001001101001010101 +111010101110110010 +010101010001010110 +101100100011011011 +010101100111001001 +110110111000010011 +110010010001110101 +000100110100101010 +011101010111011001 +001010101000101011 +110110010001101101 +001010110011100100 +011011011100001001 +111001001000111010 +000010011010010101 + 75-150ms Sub 30ms Sub 12ms + round-trip time latency for +101011001110010010 latency for multi-player, latency required for truly +101101110000100110 + video calling/cloud gaming complex games immersive Metaverse experience +100100100011101010 +001001101001010101 +111010101110110010 +010101010001010110 +101100100011011011 + + MONEY IN THE METAVERSE + We expect the next generation of the internet, i.e., the Metaverse, would encapsulate a range of form factors of money, including + the existing/traditional forms of money and also upcoming/digitally-native forms — cryptocurrency, stablecoins, central bank + digital currencies (CBDCs) — that were out of scope in a pre-blockchain virtual world. + + + In-Game Tokens Cryptocurrency Stablecoins CBDCs Fiat Money (Current) + + + + + Examples Examples Examples Examples Examples + Robux, Minecraft, Bitcoin, Ethereum, USDT, USDC, Dai, e-CNY, e-Naira, USD, GBP, EUR, CNY + Linden dollars Polygon, etc. BUSD Sand Dollar + Key Use Cases + Key Use Cases Key Use Cases Key Use Cases Key Use Cases Traditional + Gaming Virtual lands, NFTs, DeFi, International Domestic Financial Services, + Gaming, DeFi Payments, Payments, Targeted Credit Cards + Limitations Settlement Currency Subsidies, Public for Consumer + Withdrawal Limits, Limitations for Trading, Affairs, Healthcare, Protection-Linked + Centralized Volatility, Energy Entertainment, Tourism Use Cases + Platform T&C, No Usage (Proof- Shopping, Tourism + Interoperability of-Work based), Limitations Limitations + Anonymity and Limitations Predominant Non-Tokenized, + AML Concerns Anonymity and Domestic Use Case Account-Based, + AML Concerns, a Challenge on Micro-Payments + Collateralization Open Metaverse Tough + Requirements + 6 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Contents + Quick Take 8 + Ten Key Takeaways from the Report 8 + MetaFi: Finance in the Metaverse — Quick Take 9 + MetaFi: DeFi in the Metaverse — Quick Take 10 + Why Metaverse? 11 + What is the TAM of the Metaverse? Everyone Online? 11 + The Metaverse: Historically and Today 15 + What Exactly Is the Metaverse and How Will We Use It? 16 + External Expert View: Phil Chen on Understanding the + Metaverse 18 + Metaverse 101 21 + What Is the Metaverse? 21 + External Expert View: Jamie Burke on Metaverse 101 24 + Embracing the Metaverse with Web3 27 + External Expert View: Ioana Surpateanu on Metaverse and + Web3 28 + Metaverse Use Cases 29 + Gaming in the Metaverse: An Early Start Point? 36 + Making the Case for a Progressively Open Metaverse 38 + The Metaverse as an Enterprise Play? 39 + Building Financial Sector in the Metaverse: A South Korea Case + Study 40 + Metaverse-as-a-Service 42 + External Expert View: Yonatan Raz-Fridman on the Metaverse + and the Consumer 43 + Metaverse Infrastructure: Open vs. Closed 48 + Building the Open Metaverse: Apps or Infra? 49 + Building Blocks of an Open Metaverse Operating System 50 + Identity in the Open Metaverse: Digital Passports and Web3 + Access 53 + Ownership in the Open Metaverse: DAOs 55 + External Expert View: Jamie Burke on the Open Metaverse 57 + External Expert View: Phil Chen on Decentralization and Digital + Assets 61 + Still Early: The Metaverse Infrastructure Building 63 + Technology Challenges to Realizing the Metaverse 69 + Moxie’s Criticism of Web3 71 + Other Web3 High-Profile Critics 73 + Digital Assets and NFTs in the Metaverse 75 + Digital Assets and NFTs 75 + NFTs Under the Hood 88 + External Expert View: Yat Siu on The Sandbox Metaverse 92 + External Expert View: Huy Nguyen Trieu on Virtual Real Estate 96 + Separating the NFT Hype from the Primitive 98 + The Dark Side of the NFT Market: Counterfeits, Rug Pulls, and + Wash-Trading 99 + Moxie’s Criticism of NFTs 103 + Money and DeFi in the Metaverse 105 + Money in the Metaverse 105 + Features of Money in the Metaverse 106 + Different Form Factors of Money in the Metaverse 107 + External Expert View: Ioana Surpateanu on the Metaverse and + Money 110 + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 7 + + + + + External Expert View: Sandeep Nailwal on Building the Future + Immersive Internet 114 + External Expert View: Stani Kulechov on DeFi in the Metaverse 118 + Decentralized Finance (DeFi) in the Metaverse 123 + How NFTs and DeFi Work Together 128 + Key DeFi Use Cases 131 + The Dark Side of DeFi 133 + Regulatory Developments and Sociopolitical Considerations 135 + How Have Regulators, Policymakers, Global Standard-Setters + Reacted? 136 + Regulatory Walk Through the Metaverse 140 + Crypto Assets: A Fragmented Regulatory Environment 143 + Who Owns What in the Metaverse: NFTs and IP 148 + Environmental and Social Considerations 152 + Political Considerations 158 + External Expert View: Urszula McCormack on Who Owns the + Metaverse 161 + External Expert View: Rebecca Rettig on DeFi Policy and + Regulations 168 + Appendix 172 + Ethereum 101 172 + DeFi versus Traditional Finance and Centralized Finance 177 + + + + +© 2022 Citigroup + 8 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Quick Take + Ten Key Takeaways from the Report + 1. What Will We Do in the Metaverse? + The Metaverse may be the next generation of the internet. It would combine the physical and digital worlds in an immersive manner. Use + cases may include everything we use the internet for today with gaming, commerce, art, media, advertising, smart manufacturing, health care, + virtual communities, and social collaboration (including for enterprise and education). + 2. How Big Will the Metaverse Be? + We estimate the target addressable market (TAM) for the Metaverse economy could be in the range of $8 trillion to $13 trillion. Expert + contributors to our Citi GPS report indicate a potential range of users of up to five billion, depending on whether we take a broad definition (i.e., + unique internet users) or just a billion based on a narrower definition (i.e., Virtual Reality/Augmented Reality-device user base). + 3. Is the Metaverse the Same as Virtual Reality? + No, the Metaverse is not only Virtual Reality. In the foreseeable future, an immersive internet experience for most users will likely be + accessed via their mobile phones, and only a subset of the Metaverse participants will use VR devices. However, we expect the usability of + Virtual Reality (VR) and Augmented Reality (AR) will improve in the coming years with many consumer hardware manufacturers building on the + 2021 holiday season success of the Oculus Quest in the U.S. + 4. What Infrastructure Needs to Be Built? + Latency needs to improve, and faster connectivity speeds are needed. With only 25% of the global population expected to have access to 5G by + 2025, network bandwidth needs to be increased and delivered. The lags, packet drops, and network unreliability witnessed in today’s world + makes the current state of the infrastructure unsuitable for building an envisioned Metaverse experience. + 5. What Does Money Look Like in the Metaverse? + The Metaverse of the future is likely to encompass more digitally-native tokens, but also embed traditional forms of money. Money in the + Metaverse could exist in different forms, i.e., in-game tokens, stablecoins, central bank digital currencies (CBDCs), and cryptocurrencies. + Current payment rails are usually domestic for real time and expensive cross-border payments making them an imperfect fit for a borderless + global Metaverse ecosystem. We expect decentralized finance (DeFi) and existing traditional financial systems to coexist. + 6. How Many Metaverses Will There Be? + If most users access the Metaverse via a mobile phone, the operating system (OS) will be the same. Consumer hardware manufacturers will + be portals to the Metaverse and potential gatekeepers. Similar to today, there will likely be a split between a U.S./international and a + China/firewall-based Metaverse. Furthermore, there will also likely be a spectrum based on technology and business model, i.e., Metaverse + centralization versus decentralization. + 7. What Do Blockchain and Web3 Have to Do with the Metaverse? + Web3 refers to one conceptual third iteration of the internet and is based on ownership and decentralization, which is facilitated via + blockchain. The so-called “Open Metaverse” is built upon blockchain — mainly the Ethereum chain — and overlaps with Web3. But it is likely + that many Web2 centralized platforms will play an important role in the Metaverse, and even Web3 today relies on elements of centralization. + 8. Do Users Want Web3 or Do Investors Want It? + Web3’s goal of a decentralized, democratic internet is an attractive one for some, but implementation questions remain. Most users want + better user interface (UI)/user experience (UX) and superior content, and current Web3 solutions are far behind best-in-class Web2 + solutions. Many internet users, including gamers, dislike the financialization of online activity due to the addition of tokens to business + models. + 9. What Is the Role of NFTs in the Metaverse? + It is not just about cute collectibles and social media bragging rights. Digital assets, such as non-fungible tokens (NFTs), in the Metaverse + enable a form of sovereign ownership for the users/owners and are tradeable, composable, immutable and mostly interoperable. There has + been an increased interest from gamers, investors, and corporates in the NFT space in recent months. NFTs in the Metaverse are virtual items + stored in a digital wallet that can be taken everywhere within the Metaverse. + 10. Are Our Laws and Regulations Ready for the Metaverse? + We have a lot to work out. If the Metaverse(s) is the new iteration of the internet, it will attract great scrutiny from global regulators and + policymakers. All the challenges of the Web2 internet could be magnified in the Metaverse, including content moderation, free speech, and + privacy. In addition, a blockchain-based Metaverse will brush up against still evolving laws around cryptocurrencies and DeFi in many + jurisdictions around the world. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 9 + + + + + MetaFi: Finance in the Metaverse — Quick Take + As the Metaverse develops, a spectrum of financial services will be needed to + support its activities. Metaverse finance (MetaFi) will likely be a combination of + decentralized finance (DeFi), centralized finance (CeFi), and traditional finance + (TradFi), with new products specifically designed to meet the unique needs of the + new ecosystem. From initial capital formation to supporting commerce within the + Metaverse, financial services can play an important role in the evolution. + +Figure 1. Financial Services in the Metaverse + Puneet Singhvi + Head of Digital Assets + Citi Institutional Clients Group + + + + +Property Rights in the Metaverse Providing Common, Consistent, and Resilient Wallet Infrastructure + +• Specific property rights in the Metaverse may be recognized across • With a myriad of cryptocurrencies, wallets, and associated private- + some jurisdictions, for instance, with the non-fungible tokens (NFTs) key management options, financial institutions would be able to + providing the digital ownership layer. support abstracting away the complexities associated with wallet + management, multi-chain environments, and enable financial flows +• Such property rights would lead to both use and commerce. We + in a regulated manner within the Metaverse. + expect MetaFi to help support needs around buying, selling, and + funding these property rights. • Institutions would also provide custody services to businesses with + one or more trusted third parties to improve security and resilience, + while providing easier and consistent access. + +Payment Rails in the Metaverse Liquidity Providers and Automated Market Making + +• Fundamental to the economic infrastructure of the Metaverse would • We expect financial institutions to play a role in providing liquidity to + be a seamless and high-transaction throughput financial the markets, including for certain DeFi protocols. Institutional players + infrastructure working across fragmented implementations between may help to provide additional liquidity, facilitate price discovery, and + centralized platforms and decentralized instances alike. We expect make the DeFi protocols more resilient. + 24x7, always-on, instant micropayments to be the main mode of + • We also expect the sheer number of assets available for exchange + payment in the Metaverse. + will grow exponentially, and strong institutional liquidity will help +• While cryptocurrencies, stablecoins, and central bank digital stabilize the market and drive additional efficiency. + currencies (CBDCs) are likely to coexist in the Metaverse, we also + foresee an important role for financial institutions in payments, + especially with on-ramp, off-ramp capabilities, as well as supporting + a myriad of business and consumer use cases. + +Financing in the Metaverse NFTs and Digital-Native Assets as Collateral + +• DeFi, with collateralized lending, yield farming protocols, is expected • Over time, we expect an increasing number of traditional financial + to coexist along with TradFi with its unique credit risk management institutions to start working with digital-native assets such as NFTs + capabilities in many forms including collateralized loans, assessment and fungible tokens as a means of collateral. + of off-chain and on-chain credit history, crowd funding, and + • Mainstream NFTs and tokens are highly volatile, resulting in a large + microfinance. + haircut as collateral, in today’s context. We expect that as the market +• We expect it would enable DeFi to operate in its sweet spot, while evolves, the digital nature of this activity can enable new risk models + TradeFi and CeFi facilitates further capabilities by undertaking off- and create varying categories of asset baskets. + chain due-diligence and credit assessment. + +Source: Citi ICG Digital Assets + + + +© 2022 Citigroup + 10 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + MetaFi: DeFi in the Metaverse — Quick Take + MetaFi is increasingly used as a new term that blends two of the biggest technology + trends around today: the Metaverse and DeFi. Jamie Burke, who helped us with + parts of this report, and his team at Outlier Ventures, note that MetaFi refers to “the + decentralized financial tools of the Metaverse” that will drive the majority of the + growth in DeFi. + + Figure 2. Decentralized Finance in the Metaverse + Why DeFi? + A virtual world like the gaming environment Roblox is not open today. To enable openness, there needs to be ownership of digital assets that is + independent of proprietary implementations. This is enabled by blockchains like Ethereum with its market-based standards that allow digital objects to + be owned in a fully portable way across Metaverse implementations. Once property rights are established, it opens up ways of financializing the assets + — by renting, borrowing, and trading similar to how we currently deal with property in the real world. Legacy rails of toady are not yet interoperable with + the open technology and standards of the Metaverse. + Permissionless, Trustless, and Decentralized Services Composability in DeFi + • We expect the Open Metaverse to be run primarily on • Smart contract applications working as “money Legos” can build on + permissionless, trustless, and decentralized systems enabled by top of each other in a trustless and permissionless way, leading to + DeFi. interoperable and composable services. + • Primary use cases today include decentralized exchanges (DEXs), • Users can swap tokens on decentralized exchanges, deposit these + borrowing and lending, staking, and yield farming to name a few. tokens to a lending protocol to earn yield, or cross the swapped + Over time, we expect DeFi to work with an increasing range of tokens over into other blockchains using bridges. + assets — from traditional financial assets such as stocks and bonds, + to collector’s items and in-game tokens. • In the context of the Metaverse, composability and interoperability + would enable different virtual worlds and NFTs to build on top of + each other using DeFi protocols for transfer and exchange. + Self-Sovereign Financial Accessibility Early Days Yet, Too Complex for the Average User + • As the popular crypto saying goes, “Not your keys, not your crypto.” • Even as we expect increasing self-custody, we also expect the + We expect an increasing number of users to self-custody their majority of the population to be more comfortable with an + cryptocurrency. intermediary abstracting away the complexities of the DeFi + ecosystem. + • As the front-end user experience of wallets improves, we expect self- + custody and key management in crypto to become progressively • The sheer number of tokens and currencies as well as the + easier, driving mainstream adoption. management of diverse assets could be too much to handle for the + average user. + • Self-sovereign accessibility combined with single sign-on enabled by + Web3 would allow Metaverse users to seamlessly access virtual • We expect intermediaries would evolve (including current + worlds, taking their digital assets with them. centralized financial services) that solve these complexities for the + Metaverse user or small business owner. + Interoperability of NFTs and DeFi Real-World Asset Market + • DeFi can help unlock the value in NFTs by means of its use as • We expect the overlap of real-world assets and NFTs to power + collateral for lending, especially for high-value NFTs that today unique ways of unlocking the potential of NFTs. + cannot be unlocked without an outright sale. + • We expect two-way movement here — both in terms of real-world + • Fractionalization of NFTs also brings in more liquidity through DeFi, assets being brought on-chain (e.g., tokenized real-world + by combining NFTs with tokens that can be traded on DEX-based mortgages/REITs working with virtual land parcels) and also on- + (peer-to-peer) liquidity pools. Nesting and wrapping of non-fungible chain assets being moved to the real world (purchasing NFTs in a + and fungible tokens opens up new use cases. virtual world and redeeming them in the real world as an e- + commerce product). + + Source: Citi Global Insights l + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 11 + + + + + Why Metaverse? + The Metaverse is “a digital space inhabited by digital representations of people and + things.” — Microsoft1 + + “Just like in 1993 we couldn’t tell how big (the internet) was and what it was exactly, + this thing we are calling the Metaverse is a continuation of that…it is going to be + bigger than anything we have ever known.” — Rev Lebaredian, Vice President, + Simulation Technology at NVIDIA2 + + Mike Wadhera, the founder of Teleport, noted as early as 2016 that the “Information + Age” was transitioning into the “Experience Age.” The Metaverse represents one + compelling vision of this shift toward experiences. Although it is often associated + with immersive Virtual Reality (VR) and Augmented Reality (AR), VR/AR is not + essential. + + The Metaverse may be the next generation of the internet. It could further integrate + our lives into digital platforms. The Metaverse would combine the physical and + digital world in an immersive manner, possibly intermediated via virtual and + augmented reality. And it raises questions around technology, business models, and + society more broadly. + + We are in the early days of the journey into the Metaverse economy. Much needs to + be built. We discuss all these themes over the course of this report — with the help + of colleagues and leading external industry experts. + + What is the TAM of the Metaverse? Everyone Online? +Total Metaverse users could be anywhere It is still early to make precise predictions around the size of the total addressable +between one billion (VR headset users) to market (TAM) as a lot depends on the definition we use for the Metaverse. Is it the +around five billion (5G/broadband users) by next generation of the internet, accessed through mobile devices, but more +2030, depending on the interface layer immersive? Or is it a Virtual Reality world only accessed through VR devices? + + Taking the broad definition of the Metaverse, we believe the user base could be up + to five billion. We get to this forecast using today’s number of unique internet users + and assume the current 4% annual growth rate for unique internet users will + continue. We then cut this by 25% to make an allowance for users without access to + stable 5G, broadband, or Wi-Fi, which are indispensable for a Metaverse + experience. This gives us a TAM of around five billion users.3 + +We estimate the target addressable market Taking a narrower definition, based on VR headsets, we expect the Metaverse TAM +(TAM) for the Metaverse economy could be to be only around 200 million to 250 million users by 2030. We expect AR to be +in the range of $8 trillion to $13 trillion more ubiquitous given its less-invasive user experience compared to VR, and to be + in the range of 700 million to 775 million users. In 2030, we expect the total amount + of VR/AR users to be 900 million to one billion. 4 + + + 1 Microsoft, ‘What Is Microsoft’s Metaverse?” YouTube Video, 2:10, November 3, 2021. + + 2 Bloomberg Intelligence podcast, Omniverse with Nvidia's Rev Lebaredian, February 17, + + 2022. + 3 According to the GSMA’s report The Mobile Economy Report 2022, 5G connections will + + surpass 1 billion in 2022 and 2 billion by 2025. By the end of 2025, more than 40% of the + world’s population will live within reach of a 5G network. If the penetration of 5G users in + 2030, relative to the total population, is similar to internet users to the total population, + we arrive at a figure of 5.4 billion users. + 4 Citi Research "VR/AR: The Next Dimension — Staying Connected Remotely Now a + + Reality,” June 24, 2020. + +© 2022 Citigroup + 12 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + We estimate a target addressable market for the Metaverse economy could be + in the range of $8 trillion to $13 trillion (see Figure 3). A device-agnostic + Metaverse accessible via personal computer (PC), game console, smartphone, etc., + could result in a very large ecosystem value. Also, the telecom, technology + hardware, and infrastructure upgrades required to host an immersive internet will + result in large capital expenditure spend. In Figure 3, we size the Metaverse + economy based on different potential scenarios. + + In our expanded definition of the Metaverse, we consider AR, VR, and persistent + and immersive 3D worlds accessed through multiple devices, including + smartphones, to qualify as the Metaverse. The use cases of the Metaverse will + likely include commerce, social, and gaming, but could also include most activities + that are undertaken digitally today. We discuss the use cases in greater detail in the + next chapter. + + Figure 3. Sizing the Metaverse Economy in 2030 ($ trillions) + Metaverse TAM, 2030 Digital Economy as % of GDP + ($ trillions) 15% 20% 25% 30% + 10% 1.9 2.6 3.2 3.8 + 20% 3.8 5.1 6.4 7.7 + Metaverse + 30% 5.8 7.7 9.6 11.5 + as % of Digital + 40% 7.7 10.2 12.8 15.3 + 50% 9.6 12.8 16.0 19.2 + Assumptions: (1) Global GDP of $127.9 trillion in 2030, based on IMF growth forecasts; (2) Digital as % of GDP in + 2025 of 24.3% (Oxford Economics); (3) Metaverse as a % of Digital based on the scenarios above. + Source: IMF, Citi Global Insights + + + For our TAM calculations, we use a global GDP growth forecast from the + International Monetary Fund (IMF) of 3.5%, which gives an estimated global GDP of + $128 trillion by 2030. We also incorporate a 2017 report from Oxford Economics + which estimated the digital economy would be 24% of global GDP.5 This forecast + attempts to capture the digital component on the economy beyond simply the + information and communications technology (ICT) sector directly. + + Based on the U.S. Bureau of Economic Analysis (BEA) pre-pandemic estimate, + digital was 10% of the U.S. economy in 2018. This number is likely higher now due + to accelerated digital adoption during the pandemic. However, the BEA study is + based on a narrow definition of the digital economy, i.e., based on only the ICT + sector, and does not capture the broader digital spillover into non-ICT sectors. + + We model Metaverse penetration of the digital economy using the analogy of the + growth of smartphones. Smartphones accounted for about one-third of all mobile + phones around seven years post launch. If the Metaverse is the next generation of + the internet, we assume a similar one-third penetration rate (of the total digital + economy) is possible. + + Given our earlier definition of the Metaverse as accessed through + VR/AR/smartphones, we expect 30-40% of digital spend and capital expenditure to + happen through or enable Metaverse-like mediums by 2030. And given the growth + of 5G to include a majority of the world’s smartphones by the end 2030, the portion + of Metaverse-related digital spend could be even higher. + + + + + 5 Huawei and Oxford Economics, Digital Spillover. Measuring the True Impact of the + + Digital Economy, 2017. + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 13 + + + + + Our scenario analysis above helps put into context comments from the external + industry experts we have spoken to recently, who we feature in Figure 4 and + throughout this Citi GPS report. They estimate the 2030 Metaverse market could be + up to and above $10 trillion with billions of users (Figure 4). + + Note the Metaverse defined narrowly as only VR/AR devices would be at the lower + end of the estimates above (~$1 trillion to $2 trillion). Citi’s Technology research + team previously estimated a $900 billion total addressable market for VR/AR in + 2030, which includes hardware, software, and commerce but not infrastructure- + related spend.6 + + + + + 6 Citi Research ,"VR/AR: The Next Dimension —Staying Connected Remotely Now a + + Reality," June 24, 2020. + +© 2022 Citigroup + 14 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Figure 4. Industry Experts on the Expected Users, Use Cases, and Economic Value of the Metaverse + Ioana Surpateanu, Web3 and DeFi Investor, Adviser, and Entrepreneur, believes the Open Metaverse will + encapsulate composable DeFi protocols and programmable NFTs (with an estimated market value of $800 billion and $30 + billion, by 2022, respectively) governed by decentralized autonomous organizations (DAOs). Ioana expects economic value for + the Open Metaverse to be at least $5 trillion by 2030. + + + + Jamie Burke, CEO and Founder, Outlier Ventures believes growth from the unlocking of digital value currently + trapped in siloed platforms (i.e., Oculus) or ecosystems (i.e., Fortnite) will be a significant contributor to the economic value of + the Open Metaverse where social, e-commerce, and retail are likely to be the common use cases. + + + + + Phil Chen, Founding Partner, Race Capital and Chief Decentralized Officer, HTC expects the Metaverse + ecosystem to be institutionalized as it reaches a billion users with an economic value of over one trillion dollars (á la the + cryptocurrency ecosystem). The potential market for the Metaverse could range from the current gaming console user-base + (about 200 million users) to the number of mobile phone users (about five billion users). + + + + Sandeep Nailwal, Co-Founder, Polygon (Ethereum Layer-2 chain) believes innovation runs on steroids in the + blockchain space. By 2025, with scalability solutions in place, we will likely experience an accelerated adoption curve with + around 50 million to 100 million blockchain and Web3 users. Further, Sandeep expects gaming, FinTech, identity, social media, + and publishing will be Web3 enabled or at least have bridges to Web3 ecosystem in the next five to 10 years, and these + communities would be governed by DAOs, which in his view could be the next big thing in the Web3 space. + + + Yat Siu, Co-Founder/Executive Chairman, Animoca Brands and Founder/CEO, Outblaze expects the + Metaverse to be a multi-trillion dollar opportunity in the near term and be multiple times larger every successive year thereafter. + Growth/innovation in the Metaverse is likely to be greater than how open source transformed the world of software, startups, and + economies. DAOs will be larger than companies and many countries. Every aspect of our life will be affected, much the same + way internet affected every industry, individual, and society at large. + + + Yonatan Raz-Fridman, Founder/CEO, Supersocial expects 80% of the world's population will access the + Metaverse by 2030 via fast internet in a device-agnostic way (e.g., AR, VR, mobile, autonomous vehicles) and the Metaverse- + native generation could have 100 billion avatars. There is significant market potential for commerce, fashion, sports, and + gaming. And he “cautiously estimates” the potential 2030 Metaverse market size to be above $10 trillion. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 15 + + + + + The Metaverse: Historically and Today +The Metaverse is partly a dream of the In the early 2000s, Second Life offered a virtual world for users to hang out together +future of the internet and partly a neat way and buy/sell virtual items to each other without any goals or objectives; depicting a +to encapsulate the current trends in online proto-Metaverse. However, it failed to see mass adoption as it was complex, +infrastructure, including the growth of real- restricted to PC-only, two dimensional, and pre-dated enabling technologies. +time 3D worlds + By contrast, gaming environments like Roblox (2004) and Fortnite (2017) boast + hundreds of millions of users and offer users goals and objectives to achieve in a + virtual gaming environment. + + Popular discussion around the “Metaverse” exploded in October 2021, as + highlighted by Google Trends data. Similarly, mentions of the term Metaverse took + off in U.S. company filings and earnings calls around November 2021 and remains + at elevated levels today. + + At a corporate level, the spike in interest was led by landmark announcements + including the late October 2021 rebranding of Facebook as Meta Platforms. At a + popular culture level, growth of non-fungible tokens (NFTs) was fed by the + increasing involvement of artists, actors, athletes, and other celebrities (some as + paid sponsors) in the space. + +Figure 5. Search Interest for the Term “Metaverse” Using Google Figure 6. Weekly Mentions of the Term “Metaverse” in Company Filings +Trends Data, 2020-2022 (Indexed to 100) And Earnings Calls for U.S. Companies + +100 Company Fillings Earning Calls Trend Score + 90 42 100 + 80 90 + 35 80 + 70 + 28 70 + 60 + 60 + 50 21 50 + 40 40 + 30 14 30 + 20 20 + 7 + 10 10 + 0 0 0 + Apr-20 + + + + + Oct-20 + + + + + Apr-21 + + + + + Oct-21 + + + + + Apr-21 + + + + + Oct-21 + Oct-21 + May-20 + + Jul-20 + + + + Nov-20 + Dec-20 + Aug-20 + Sep-20 + + + + + May-21 + + Jul-21 + + + + Nov-21 + Dec-21 + Aug-21 + Sep-21 + + + + + May-21 + + + Jul-21 + + + + + Nov-21 + Dec-21 + Aug-21 + Sep-21 + Jan-20 + + Mar-20 + + + + + Mar-21 + Feb-20 + + + + Jun-20 + + + + + Jan-21 + Feb-21 + + + + Jun-21 + + + + + Jan-22 + Mar-22 + Feb-22 + + + + Jan-21 + + + Mar-21 + Feb-21 + + + + + Jun-21 + + + + + Jan-22 + Feb-22 + Note: Trend Score is a function of the number of documents containing hits on the + keyboard and the total documents that would be found for the same search without the + keyword. +Source: Google Trends Source: AlphaSense, Citi Global Insights + + + SciFi Origins of the “Metaverse” + + Neal Stephenson famously coined the term “Metaverse” in his 1992 science fiction + novel Snow Crash to depict a 3D photo-real digital meeting space, in which + humans, represented by programmable avatars, interacted with one another. + + While lots of other science fiction media include Metaverse-like systems, + Stephenson's Snow Crash book is the most common reference point, coupled with + Ernest Cline’s 2011 novel Ready Player One, where most of its action unfolds in a + shared VR environment, called "the Oasis." + + The Oasis functioned as a massively multiplayer online role-playing game and as a + virtual community. Massively multiplayer online role-playing games (MMORPG) are + video games that are proto-Metaverses, albeit centralized, without ownership and + not interoperable. + + +© 2022 Citigroup + 16 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + What Exactly Is the Metaverse and How Will We Use It? + The Metaverse is partly a dream of the future of the internet and partly a way to + encapsulate current trends in online infrastructure, including the growth of real-time + 3D worlds. VR and AR technology specifically should benefit many sectors, + resulting in potentially more efficient processes, enhanced training, and improved + collaboration. + + Gaming is viewed as a key Metaverse use case for the next several years due to + the current immersive and multi-player experience of the space. But we believe the + Metaverse will eventually help us find new and enhanced ways to do all of our + current activities, including commerce, entertainment and media, education and + training, manufacturing, and enterprise in general. In the coming years, we expect it + to include internal collaboration, client contact, sales and marketing, advertising, + events and conferences, engineering and design, and workforce training among + other activities. + + The technology is also likely to have a significant positive impact on the healthcare + and retail sectors. Telemedicine and the delivery of services outside large hubs + should improve, thereby significantly flattening the challenge of distance. For the + retail and fashion sectors, the Metaverse is e-commerce 2.0, and embracing the + new technology will be key. + + The Metaverse would require countless new technologies and infrastructure to + come together, including applications around Web3, DeFi, NFTs, and mining + protocols. This makes it difficult to exactly quantify the capital expenditure needed + for the Metaverse — but we expect it to be large. + + There is less consensus currently around design choices pertaining to the + Metaverse. Should it be “open”— built on Web3 primitives (building blocks) of + permissionless and open protocols? Or “closed”— built by the capital-efficient, + easy-to-use Web2 platforms? + + Polygon Co-Founder Sandeep Nailwal believes Web3 and blockchain-based + technologies will be part of the Metaverse, saying, “I estimate by 2025, we could + have at least 50 million users (possibly even 100 million) in the blockchain + space…by 2030, I believe Web3 could take over the internet, even as Web2 + continues to coexist.” + + Web3 powers the vision of a decentralized, blockchain-based Open Metaverse and + it is attracting a significant amount of investment in digital assets — global venture + capital funding to blockchain startups increased 7x in 2021 to $25.2 billion — and + even more eyeballs in terms of social and cultural relevance.7 + + In an Open Metaverse world, there is likely to be significant technological and + business model disruption. This new world would be a blockchain-based ecosystem + and Web3 native companies would challenge — and perhaps overtake — the + current internet behemoths. + + In this world, value will be transferred in tokenized format — crypto, CDBCs, or + stablecoins would be the form factor of money — and ownership would be + registered by NFTs or similar blockchain-based digital assets. This would be a big + change from the current monetary and financial world. + + + + + 7 CB Insights, State of Blockchain 2021 Report, February 2022. + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 17 + + + + +For the foreseeable future, most of us will But are we anywhere close to a Web3 world? Is the technology ready? Will 5G be +live and work in a Web2 or Web2.5 world — rolled out globally? Are the end-use cases and applications developed? Are +we will experience Web3 via Web2 front- consumers ready? Self-sovereignty, digital ownership, and a borderless world are +ends all attractive features. But – spoiler alert – we are still very early in the journey, both + technologically and from a user perspective, to a Web3-powered Open Metaverse + world. Critics maintain that it is a mirage. Our thesis: for the foreseeable future, + most of us will live and work in a Web2 or Web2.5 world. We will experience + Web3 via Web2 front-ends. + + The next few years will be ones of experimentation, adventure, trial, and error. Many + of us may buy VR headsets, especially during holiday season marketing manias. + But will we use them regularly? Will we get close to using AR or VR devices for as + many hours as our mobile phones? + +We believe mobile phones will continue to At the risk of skeuomorphic thinking, we believe mobile phones will continue to +be a gateway to the emerging Metaverse be a gateway to the emerging Metaverse world. And via our phones, most +world internet users will have access to Metaverse-like experiences. This could number in + the billions. For the foreseeable future, say up to 2025, Web3 users will likely + number in the millions. + + As the technology evolves, we expect policy and regulation will play catch-up. There + is a lot to unpack about the internet age. Join us as we dive deep into all of these + topics in this report. + + + + +© 2022 Citigroup + 18 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + External Expert View: Phil Chen on Understanding the + Metaverse + Phil Chen is the Founding Partner of Race Capital and Managing Partner Emeritus + of Presence Capital. As the founding managing partner at Presence Capital, Phil + has invested in over 40 Metaverse-related companies over the past six years. Phil + is also an advisor and Chief Decentralization Officer at HTC. + + Q: Let’s start with Metaverse 101 — What is the Metaverse? + + A: At a very high level, it is a mash-up of the 3D immersive experience — the + gaming part, the technical part (i.e., “persistence”) and the intersection of Web3 + things. My favorite way to think about the Metaverse is how Mark Zuckerberg + described it, as really just internet+ (i.e., internet + 3D, internet + persistence, + internet + VR/AR). + + The Metaverse is not a destination, but rather a point-in-time. Just as singularity is + the point in time where artificial intelligence surpasses human intelligence, the + Metaverse is a point in time where people value digital assets more than physical + assets. You can broaden that to digital experiences and digital relationships as well. + + Q: How do Web3 and the Metaverse overlap? + + A: Web1 refers to the AOLs and emails of this world. Web2, as we know it today, is + about companies like Meta, Google, and others with a lot of interactions, algorithms, + and social media. + + Web3 is a reaction to the centralization caused by Web2. Centralization of data is a + fundamental problem not just to technology, but also to society, politics, and religion. + Web3 focuses on decentralization and being open, censorship-resistant, borderless, + and permissionless. In Web3, people should own their data and digital assets. + + The original promise of the internet was for it to be open, but in reality we live in + different walled gardens — the internet is quite closed. Big Techs, in a sense, have + created walled gardens as they manage the social data feeds of 3.5 billion people. + They are the only ones with access to the algorithms of what is seen and clicked on. + + Q: Define the target addressable market for the Metaverse? How is it likely to + change in the next five to 10 years? + + A: If you think of the Metaverse as a rebranding of VR/AR and limit its use cases to + gaming, the VR/AR hardware could reach out to about 200 million users globally. + However, if the Metaverse is widely adopted, just like the mobile phone in today's + age, we are more in the range of five billion worldwide. + + In my opinion, the potential market size (based on the number of pieces of + hardware) will likely be bigger than the gaming console market, but not as big as the + mobile phone market. The future of the Metaverse is on multiple devices (i.e., + internet+). To hit mass market, I estimate we need about a billion users to adopt + Metaverse hardware. + + Q: What are the key aspects to look out for in the Metaverse? + + A: I think the first thing is NFTs. Today, there are close to 10 different types of NFTs + ranging across music, art, game objects, access, and identity. NFTs can be referred + to as digital primitives as they offer many different applications. It is helpful to think + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 19 + + + + + of NFTs similar to websites back in the 2000s, when every company had to have a + website. I believe we will soon start seeing every company doing NFTs. + + The second key development to look out for is around cryptocurrency regulations. + There is still quite a lot of debate on how cryptocurrencies such as Bitcoin and + Ethereum should be classified — is it a security, a commodity, or property? I believe + there will be a lot of ancillary/auxiliary effects on how this space is regulated. + + Q: What are the building blocks for the Metaverse? How much will it cost? + + A: I believe compute power will definitely increase, but the more pertinent question + relates to, “What kinds of things will people do with the Metaverse?” Honestly, we + do not know that yet. + + The capital expenditure (capex) requirements in computing can be very high. + Looking at the capex requirements for the Metaverse, we must consider not just the + Metaverse, but also all the applications around artificial intelligence (AI), + autonomous driving, robotics, Web3, DeFi, NFT etc., and include mining protocols + for things like Bitcoin. + + Q: What is the likely killer-app / use-case for the Metaverse? + + A: Let me illustrate a few interesting use-cases for the Metaverse. + + Startup AppliedVR, is pioneering evidence-based, immersive VRx — a new + category of prescription digital therapeutics. The company aims to treat chronic pain + without use of drugs, but instead using VR to focus on the visual cortex and alter + the patient’s focus. The company recently ran a trial on a woman during childbirth at + Cedars-Sinai Medical Center in the U.S., where the procedure was successfully + conducted with a manageable level of pain and without the need for an epidural. + + Likewise, Osso VR is a surgical training and assessment platform that gives + medical device companies and healthcare professionals radically better ways to + share, practice, and learn new skills/procedures using immersive 3D technology. + + Near-term, I believe the killer Web3 apps will be NFTs and DeFi. I believe we are + likely to see a combination of these gain prominence in 2022. + + Q: How important is VR to the Metaverse? Does current generation hardware + pose limitations? Where are major investments being made in the space? + + A: I would not classify the Metaverse as purely VR/AR, but it is definitely one strand + of it. For instance, Oculus sold nearly 10 million units in December 2021. This is + surely interesting, but it still represents a niche. + + Instead, I believe we need to consider the following: (1) what is the underlying + growth trend in the number of VR/AR hardware units sold, and (2) how much time + are users actually spending on it — is it 15-20 minutes or an hour? Presently, users + spend close to six to eight hours on their mobile phones on a daily basis. + + Nearly 80% of the hardware for VR/AR headsets is similar to that for mobile + phones. Given the scale at which mobile phones are manufactured, we can surely + re-use those parts. For the remaining 20%, the most significant hardware + components include optics and technologies such as inside-out tracking and hand- + gesture pattern recognition. + + + + +© 2022 Citigroup + 20 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Investments are being made in companies building the optics, with a focus on + vergence accommodation, i.e., how can your eyes and lens focus on different + depths of field. Big Techs are also filing several patents around facial recognition + and eye tracking, i.e., how people are feel, think, and react to what they are seeing. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 21 + + + + + Metaverse 101 + What Is the Metaverse? +The Metaverse can be thought of as one The Metaverse is emerging as the next potential big technology platform, attracting +conceptual the next iteration of the internet both attention and investments. Yet it is difficult to agree on an exact definition of the +supporting a collection of real-time Metaverse. It is partly a dream of what the future of the internet could be and partly +applications and experiences across devices a way to encapsulate the current trends in online infrastructure, including the growth + of real-time 3D worlds. + + The Metaverse does not yet have an industry-wide set definition. It can be thought + of as one conceptual next iteration of the internet supporting a collection of real-time + applications and experiences across devices. A simplified vision of the Metaverse + ecosystem would likely include the components noted in Figure 7. + +Figure 7. Simplified Version of the Metaverse Ecosystem + + + + +Source: Citi Global Insights + + +  The Space: A shared, open, virtual world environment which people can access + via the internet with rich multi-layered interactions. This calls for persistent, real- + time connections, high bandwidth networks, and exchange centers, among other + items, that create an immersive digital experience. + +  The Interface: Refers to the hardware that helps users access the Metaverse + and includes Virtual Reality (VR) and Augmented Reality (AR) headsets, mobile + devices, PC and game consoles, smart glasses, and other sensory tools. + +  The Monetary Infrastructure: Refers to what supports digital payment + processes, allowing users to purchase/sell digital assets in the Metaverse. This + could either be fiat on-ramps or pure-play digital currencies, including + cryptocurrencies. + +  The Compute: Refers to the enablement and supply of computing power to + support the Metaverse structure. This is the software that brings objects into 3D + and allows users to interact with them. In practice, the Metaverse could resemble + a combination of existing technologies and ones still in development, all working + together to create a tangible, digital layer on top of reality. These systems can + either be centralized, decentralized, or hybrid. + + + +© 2022 Citigroup + 22 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + But it is not necessarily that simple. The idea of creating an alternative, digital + world is not new — it has existed for years. Games such as Second Life in the early + 2000s created a virtual reality world for users to play in, but failed to see mass + adoption as it was complex, restricted to PC-only, two dimensional, and pre-dated + enabling technologies. + + + + I see the Metaverse not as a destination, but rather as a point in time. Just as + singularity is the point in time where artificial intelligence surpasses human + intelligence; the Metaverse is a point in time where people value digital assets + more than physical assets. + – PHIL CHEN, FOUNDING PARTNER OF RACE CAPITAL, MANAGING PARTNER EMERITUS OF + PRESENCE CAPITAL, CHIEF DECENTRALIZED OFFICER OF HTC + + + + + There are competing visions for the Metaverse, most notably one dominated by + closed platforms and Big Techs, and the other built on open protocols leveraging + blockchain. We discuss these aspects more in detail in the chapter titled “Metaverse + Infrastructure: Open vs. Closed.” + + In October 2021, Mark Zuckerberg, Chairman and CEO of Meta Platforms, outlined + his intentions to the public for building the Metaverse — a VR construct intended to + supplement the internet, merge virtual life with real life, and create several VR + environments for everyone. + + + + You can think about the Metaverse as an embodied internet, where instead of + just viewing content, you are in it. And you feel present with other people as if + you were in other places, having different experiences that you couldn’t + necessarily do on a 2D app or webpage, like dancing, for example, or different + types of fitness. + – MARK ZUCKERBERG, CEO OF META PLATFORMS + + + + + Zuckerberg defines the Metaverse as essentially the internet+ and sees it as the + successor to the mobile internet that offers a virtual world where people can + socialize, work, and play. The Metaverse can be viewed as the next step in the + development of robust, real-time, visualized communication. + + However, as is already clear in our discussion so far, the concept of the Metaverse + is a contested one. Definitions differ. As Jamie Burke, the Open Metaverse + proponent, notes, “The beauty of the Metaverse as a narrative or a meme, is the + fact that it can be interpreted in different ways.” + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 23 + + + + + The Metaverse is effectively an interface layer made up of hardware and + software that makes the physical and virtual worlds indistinguishable from one + another.8 + – JAMIE BURKE, FOUNDER AND CEO OF OUTLIER VENTURES + + + + + 8 Christopher Hamman, “Outlier Ventures CEO Jamie Burke Explains the Metaverse + + According to the Polkadot Base Camp,” E-Crypto News, accessed March 18, 2022. + +© 2022 Citigroup + 24 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + External Expert View: Jamie Burke on Metaverse 101 + Jamie Burke is the Founder and CEO of Outlier Ventures, Europe's first dedicated + blockchain Venture Capital fund and Accelerator. Jamie and his team have grown a + portfolio of nearly 100 start-ups, facilitated over $130 million in seed funding for their + portfolio companies, and helped to jump start multiple billion-dollar crypto + ecosystems. + + Q: What is the Metaverse in your view? + + A: The beauty of the Metaverse as a narrative or a meme is the fact that it can be + interpreted in different ways. + + Many people get hung up on the belief that in order for the Metaverse to exist, VR + must be fully commoditized and ubiquitous. This means, everyone will need to own + a VR device that they use to connect into a fully-immersive 3D world; or walk + around the High Street with AR glasses. + + While this will happen, it is not a pre-requisite for the Metaverse. I would argue the + Metaverse is here and now. The Metaverse is powerful, as it can be thought of as a + contact language between different cultures. It allows people from finance, creative + industries, and technologists to communicate with one another. + + I would argue the most important characteristic of the Metaverse is that it is a + universal economic system that enjoys supremacy. I know this might sound a bit + crazy to nation states, but in my opinion, this helps connect the present and the + historical versions of the Metaverse. + + If you look at the historical, science fiction-based version of the Metaverse in Snow + Crash or Ready Player One, a single corporation (“Oasis”) tried to take control and + apply a monopoly — isn’t this awfully similar to the Web today? Be it search, social, + or e-commerce, players with centralized platforms tend to be highly monopolistic. + + It is important to think of the Metaverse as an economic system — it could be + dystopic (captured by a single corporation or group of corporations) or utopic (a + permissionless environment that prioritizes users and sovereignty of their data + identity and wealth). + + In my opinion, you can have immersive hardware, software, and everything else, + but most importantly, it must be an open economic and universal system. The + important questions that need to be asked are: (1) Who can participate in the + Metaverse? (2) Who will be the gatekeepers? and (3) Where does value accrue? + + Q: Can you elaborate on the analogy of NFTs being the equivalent of “social + media without a platform?” + + A: I see NFTs as a form of atomized socialness. + + For instance, you may have bought a CryptoPunk NFT, or some variation of it, or + the newer NFT franchise that offers Profile Pictures (PFPs), e.g., a unique avatar + character. You can then upload these PFPs/NFTs in your profile on social media + platforms to socially signal your affiliation/preference for a particular subject, group, + or community. This results in ascribing a higher premium to the social asset, almost + forming a social currency. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 25 + + + + + I believe NFTs can be an interesting medium for social signaling and they will + ultimately exist off-platform. As Marshall McLuhan phrased it, "The medium is the + message." In my opinion, it is not important what the context of an NFT is, instead it + is what the NFT represents in the context of innovation and socialness. + + Q: What are some of the Metaverse use cases? + + A: The biggest use cases for the Metaverse will be in the creator economy. The + explosion of NFTs in 2021 has led to a focus on digital ownership, be it in the form + of art or gaming. Value currently locked in online platforms including social media, + simple 2D art pieces, videos, audio files, or 3D objects could be the NFTs of the + future. + + Additionally, we are seeing a convergence of finance, culture, and technology. We + are at a point where the creative industry has the benefit of a direct digital + distribution channel, as well as the financial tooling to take control of the economics + of the relationship with their audience (rather than the platform). + + Q: What is driving recent interest in the Metaverse? + + A: I believe it is a confluence of factors, including COVID-19, which has led us to be + more digitized. Additionally, we have also seen significant advancement in software + and hardware. For instance, the cost of an Oculus device has seen a drastic + reduction to just a few hundred pounds today, with hardware that is also more + immersive. + + Today’s hardware/software also gives us the ability to (1) gain economic exposure + to companies who are developing the space, and (2) value companies early on via + fungible/non-fungible tokens. This was previously limited to venture capitalists, + investors, and corporations in Web1 and Web2. + + I see the Metaverse as a single, open economy underpinned by cryptocurrencies, + which are scalable and censorship resistant. This should provide the impetus for + innovations in hardware, software, gaming, entertainment, and media, which are + likely to converge to leverage Web3 technology ahead. + + Q: Could you put some numbers around the target addressable market for the + Metaverse, whether decentralized or centralized? + + A: In my view, to be part of the Metaverse, you need to be connected to a shared + economic system greater than your own siloed digital economy. While Fortnite is a + great game with lots of users, it is siloed and you cannot transfer economic value in + and out of it. The same is true for the Oculus ecosystem and many others. + + Instead, I would primarily focus on things that are connected to a single, shared, + open economic system — e.g., crypto. We could look at the aggregate value of + things such as virtual real estate in Sandbox or play-to-earn games like Axie Infinity. + + Q: What key trends should one look for in the space over the coming years? + + A: A key trend to watch in the next 12 to 24 months will be the development of + social layers for NFTs (i.e., social experience). At present, while we have created + new NFTs, we do not have any place to consume or experience them. Instead, they + are often merely stored in a wallet or displayed as a profile picture on social media. + + + + +© 2022 Citigroup + 26 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + However, as interest in NFTs grows and the focus on the experience intensifies, we + are likely to see the need for new social and retail layers. These layers would allow + users to experience the NFT, play with it, use it as a 3D object, socialize with + friends, and offer a better retail shopping experience. + + For example, the Metaverse could allow companies to take a small group of users + to experience a highly-rendered environment, preserving the quality and integrity of + a branded luxury item. Blockchain-based gaming is likely to be another growth area + in the coming years with NFTs and the Metaverse playing crucial roles. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 27 + + + + + Embracing the Metaverse with Web3 +Web3 could serve as the basis for The Metaverse is related to Web3, but the two concepts are not identical. +connectivity in the Metaverse; however, the Simplistically, Web3 is a vision of the internet of the future, i.e., a kind of +Metaverse could be within the paradigm of decentralized, permissionless, sovereign ownership of data; whereas the Metaverse +Web2 or Web3 or a mix of the two is a vision of an immersive internet seamlessly integrating into our daily lives. + + Web3 could serve as the basis for connectivity in the Metaverse as it attempts to + connect the offline and online worlds. However, the Metaverse could be within the + paradigm of Web2 or Web3 or a mix of the two. + + A Web2-based Metaverse would give its users an immersive experience, but still + continue to operate on a centralized model, with the benefits of convenience and + ease of use, whereas a Web3-based Metaverse would enable a form of sovereign + ownership of data, portability of data, and interoperability between platforms. + + Web3 decentralization could result in a more transparent environment and help + address issues of ownership/control in Web2. In this vision, the internet will revert to + its original blueprint of a more decentralized entity, free of the institutional players + and tech giants that have dominated it for the past two decades or so. + +Figure 8. A Framework for the Evolution of the Internet: Web1 vs. Web2 vs. Web3 + + + + +Source: ResearchGate, Wordpress, Citi Global Insights + + + + +© 2022 Citigroup + 28 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + External Expert View: Ioana Surpateanu on Metaverse and + Web3 + Ioana Surpateanu is a Web3 and DeFi investor, adviser, and entrepreneur. She + strategically supports a variety of projects and focuses on various verticals within + the Metaverse as well as DeFi 2.0 protocols. She sits on the Executive Board of the + Multichain Asset Managers Association (MAMA) where she advances DeFi + advocacy and interactions with policymakers and regulators. She is in the process + of creating League of Metas, a women-only Metaverse focus group that will channel + advocacy and education efforts for policymakers interested in this space. + + Q: Could you help define the Metaverse? + + A: The Metaverse is a shared digital/physical space, instrumented by crypto tokens, + and powered by distributed coordination mechanisms in the form of DAOs + (Decentralized Autonomous Organizations). In a sense, the Metaverse has become + an exponential playground to showcase the power of DAOs. + + I believe this is the next phase of the internet and a very tangible implementation of + Web3 technologies. Additionally, it can be thought of as a much-needed mass + onboarding platform for users into cryptocurrencies, beyond an almost exclusive + trading and decentralized finance (DeFi) angle. + + Taking a step back, this is not the first time we have witnessed activity in virtual + worlds. If we go back to the early 2000's, Second Life had created a novel form of + escapism via access to virtual worlds. + + One of the main reasons Second Life did not scale in 2003, when it was launched, + is because the correct primitives and incentive alignment mechanisms were lacking. + Today we refer to them as the Web3 tech stack, which powers a multitude of + protocols in DeFi and the Metaverse. + + By contrast, Web2 platforms, which are often times monopolistic, do not enable any + form of ownership or monetization for their users. You can think of this paradigm as + a neo-communist model, where active users contribute to the value creation and + development of a platform or a product, without any “return on involvement.” + + Q: Could you talk about Web3 and what this means for the Metaverse? + + A: Web3 has been in development for the past 10 years and it encapsulates a + variety of user-centric decentralized technologies. Via the Metaverse, we have for + the first time a very tangible and easy to explain implementation of those + abstract/nebulous notions of Web3 technologies. + + It is still unclear how the Metaverse will be designed and what the overall + ecosystem will evolve into — open, closed, or hybrid models. So far, it has mostly + been designed with user-centricity in mind and it operates in constant progression + towards a full-fledged, open economic system end-state. In order to fulfill that open + virtual economic ideal, non-fungible tokens (NFTs) come into play as primary and + indispensable tools because they represent digital property in virtual environments. + + If you calibrate the correct digital ownership tools and power a new format of the + internet that is owned by the users and developers, the resultant system will equally + be open and accessible. This means full access across the board for participants + who, via these digital ownership instruments, become owners and direct partakers + in the success of a specific platform or protocol. It’s unlikely they would ever go + back to a “simple user of a system” status ever again. + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 29 + + + + + Metaverse Use Cases + We now take a closer look at the plethora of use cases of the Metaverse and take a + deeper dive into gaming and enterprise as they may be key drivers of adoption. + +  Developer/Creator Economies, Games: The Metaverse potentially presents + large opportunities for content creators to come up with something unique and + find a niche for themselves. The Metaverse could help build a robust third-party + developer base selling experiences and virtual assets, which could span games, + social media, trading, and NFT marketplaces. + +  Virtual Workspaces, Communities: Workspaces could turn virtual, especially + as stakeholders strive to improve remote and hybrid work by creating constant, + digital spaces where users can log in as some form of avatar. Products such as + Facebook's Horizon Workrooms and Microsoft's Mesh for Microsoft Teams make + it possible to hold meetings in virtual reality. Buzz around the Metaverse has also + led to a boom in virtual real estate, including on platforms like The Sandbox, Axie + Infinity, and Decentraland. + +Figure 9. Prominent Use Cases for the Metaverse + + + + +Source: Citi Global Insights + + + + +© 2022 Citigroup + 30 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Decentraland is a decentralized social platform built on the Ethereum blockchain, + where users can experience events as well as connect with people. Users enjoy + governance and voting rights over the platform, unlike many other virtual lands + and Web2 social platforms. + The platform has experienced rapid user growth, albeit still in an early stage of + development with 500,000 monthly unique users today versus just 30,000 in + March 2021. + – ADAM DE CATA, HEAD OF PARTNERSHIPS AT DECENTRALAND + + + + +  Digital Entertainment Events — Concerts, Tourism, Museums, Fashion + Shows, Sports, Theme Parks and Beyond: The virtual environment could help + host virtual concerts, movie premieres, launch parties, and events spanning + numerous industry verticals as well as offer a marketplace for fan collectibles + (NFTs). We outline key live examples for such digital entertainment events: + + – In 2020, rapper Travis Scott performed a virtual concert inside of Fortnite (a + free-to-play cross-platform game developed by Epic Games), which attracted + several million viewers. + + – Adoption of the Metaverse could accelerate tourism use cases. For example, + the Korea Tourism Organization in December 2021 released the map for + HAHAHOHO Gyeongju World in the Metaverse, offering visitors a chance to + experience the cultural heritage sites of the Silla Dynasty and other popular + tourist hotspots. The traditional lantern festival is also planned virtually to + attract global citizens. + + – In the fashion vertical, shows are being organized in the Metaverse. + Decentraland hosted a four-day digital fashion week (MVFW) in March 2022. + Virtual avatars strutted the virtual runway; virtual pop-up stores, showrooms, + fashion talks, and after parties were also a part of the experience. + + – Users will have the opportunity to purchase both digital clothes (to dress their + avatars) and real clothes. We have seen partnerships between digital fashion + brands and retailers to sell digital clothes. For example, digital fashion brand + Republique partnered with the French accessories retailer Monnier Frères. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 31 + + + + + Figure 10. Fashion in The Metaverse + + + + + Source: Republique and Monnier Frères + + + – Consumers may experience theme parks in more immersive and personalized + ways in the future. Disney for example is interested in building a theme park in + the Metaverse and registered its patent known as ”virtual world simulator in a + real place,” which received approval in December 2021.9 It is envisioned that + personalized interactive attractions for theme park visitors would be created + using headset-free augmented reality. 3D images and effects will be projected + onto physical spaces and the experience of visiting Disney theme parks will be + tailored to individual users. It remains to be seen if the Metaverse plans will + come to fruition and to what degree this sets a trend for other theme parks. + + – Museum experiences in the Metaverse are already in the process of being + built. For example, the online group Pixlr Genesis is aiming to build the + “Louvre of the Metaverse” with NFTs as a way of connecting artists and art + connoisseurs globally and as a way of empowering creators to showcase their + artwork to a wider audience. + + – Major sporting events and clubs are starting to tap into the Metaverse to + attract fans. The president of the football club FC Barcelona, Joan Laporta, + announced in his keynote speech at the Mobile World Congress 2022 that the + club will deploy NFTs (the launch date at this stage has not been defined) and + build its own Metaverse as part of its strategy to attract new fans. He said at + the conference, “We want to develop our Metaverse, our NFTs, and all of + these new business [opportunities] that appear in our world.” He explained that + the club will soon be able to offer digital products to members and to fans and + made reference to the club’s players being in the Metaverse — without + providing any detailed plans. + + – Tennis is ahead of the game with the Australian Open (AO) already in the + Metaverse. It is the first Grand Slam event to enter this space with the first + minting of the “AO Art Ball NFT” linked to live match data, giving people + globally the opportunity to own a piece of the AO. In addition, there will be a + virtual hosting of the AO in Decentraland so that tennis fans can explore the + Grand Slam from anywhere in the world. + + + + + 9 Disney Enterprises Inc., U.S. Patent11210843, dated December 28, 2021. + + + +© 2022 Citigroup + 32 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + The Australian Open prides itself on being one of the most + innovative sports and entertainment events in the world, and + we are delighted that through our expansion into the + Metaverse and Decentraland, more fans can engage with + our sport than ever before. + – CEDRIC CORNELLIS, CHIEF COMMERCIAL OFFICER AT TENNIS AUSTRALIA + + + + +  Virtual Advertising: In-platform ads allow users to bring their digital avatar and + become an active participant, offering an immersive experience where they can + interact with real-life physical items as well as digital Metaverse-oriented items. + + Brands such as Nike, Vans, Adidas, Gucci, and Burberry, to name a few, are + embracing the new marketing frontier and are active in virtual attire and + accessory sales in multiplayer online games. Several brands are also showing up + in Metaverse environments through digital advertising, mimicking real-life and + blending into gameplay (e.g., billboard ads or branded clothing). + + Figure 11. Gucci Has Partnered with ZEPETO (A South Korean Metaverse Platform) to Help + Users Create 3D Avatars of Themselves + + + + + Source: Courtesy of Gucci + + +  Social Commerce and e-commerce: The Metaverse could have a profound + impact on the way we shop. Virtual shopping malls and digitized retail products + could allow users to look at items with friends, talk to company representatives + and influencers about products, as well as digitally try out goods. This could be + the next iteration of commerce, where e-commerce and social media intersect. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 33 + + + + + Even without the social media aspect, the Metaverse in combination with + commerce can create new experiences on how consumers shop online and + interact with e-commerce platforms. The fact that we have witnessed technology + and retail giants already starting to deploy the Metaverse for commerce could be + a sign that others will follow suit: + + – Amazon is deploying the Metaverse with an augmented reality shopping tool + called “Room Decorator.” The tool allows users to see what furniture and + home decor will look like in one’s own space using a mobile phone/tablet. + + – In December 2021, Google also tapped into the Metaverse technology by + launching augmented reality beauty experiences to allow consumers to test + out cosmetic products via their apps before they buy, and without having to try + them on in stores. + +  Virtual Cities, Public Services: Sovereign governments, public offices and + central banks are embracing different components of the Web3/Metaverse to + create virtual communication ecosystems for some areas of administration, + including economic, cultural, tourism, education and civic service. + + For instance, Seoul, the capital of South Korea, as part of its Seoul Vision 2030 + plan, intends to establish a Metaverse platform.10 This is likely to include a virtual + city hall and public service centers, allowing citizens to interact with city officials + for virtual consultations, as well as feature tourism locations. Other cities such as + Dubai in the United Arab Emirates are also exploring the Metaverse. + +  Smart Manufacturing: Given the Metaverse's ability to extend use cases + beyond gaming, virtual offices, and e-commerce, among others, the + manufacturing industry is also exploring opportunities with digital twin technology + (virtual representations of real-world physical assets or systems which are + continuously updated), which is core to the industrial Metaverse. By utilizing + simulations, manufacturers could significantly cut down on project costs, time, + and wasted resources. + + For example, Boeing is exploring digital twin technology to build airplanes in the + Metaverse.11 Siemens Energy developed a digital twin to offer predictive + maintenance of power plants.12 Meanwhile, Ericsson is building city-scale digital + twins to help study the interplay of 5G cells and the environment for maximum + performance and coverage.13 + + + + + 10 Julie Gaubert, “Seoul to Become the First City to Enter the Metaverse. What Will it + + Look Like?” euronews.next, updated November 11, 2021. + 11 Eric M. Johnson and Tim Hepher, “Boeing Wants to Build Its Next Airplane in the + + ‘Metaverse’,” Reuters, December 17. 2021. + 12 Richard Kerris, “Siemens Energy Taps NVIDIA to Develop Industrial Digital Twin of + + Power Plant in Omniverse,” NIVIDIA blog, November 15, 2021. + 13 Richard Kerris, “Ericsson Builds Digital Twins for 5G Networks in NVIDIA Omniverse,” + + NVIDIA blog, November 9, 2021. + +© 2022 Citigroup + 34 Citi GPS: Global Perspectives & Solutions March 2022 + + + + +  Healthcare: While surgical procedures already use robotics, complex surgeries + and training may benefit from augmented and virtual reality applications. + However, several clinical trials and use cases will have to be explored in order to + truly understand whether this technology is capable for use in the real world. + Early use cases involving healthcare training are emerging. + + – Universities such as the Seoul National University Bundang Hospital + (SNUBH), is already providing training to medical staff in a smart operating + room in the Metaverse. In May 2021, the Asian Society for Cardiovascular and + Thoracic Surgery (ASCVTS) provided lung cancer surgery training to over 200 + thoracic surgeons through a Metaverse platform at an online conference. All + the equipment they needed was a head-mounted display. + + Figure 12. Healthcare in the Metaverse at Seoul National University Bundang Hospital + + + + + Source: Korea Biomedical Review and Seoul National University Bundang Hospital (link) + + + – Microsoft's Hololens technology has already been explored in non-operative + as well as surgical cases to provide medical care remotely (link). DeHealth + announced the creation of a decentralized Metaverse (an extension of + VR/AR/MR) where doctors can work/interact with each other as well as with + patients in 3D and earn virtual assets.14 + + In addition to these use cases, we have also seen signs of the Metaverse + hardware in the form of the headsets being equipped with technology to measure + and assess patients’ health. REACT Neuro, for example, has partnered with + PICO Interactive to deploy their virtual reality headsets (Neo 2 Eye) which are + equipped with eye-tracking capabilities to measure brain health. + + There are also early studies underway to see to what degree virtual reality and its + ability to distract users from reality and potentially block pain signals from + reaching the brain can be used as an alternative to opioids to manage pain. + + + + + 14 AIT News Desk, “The World’s First Healthcare Metaverse from DeHealth,” + + AITHORITY, December 23, 2021. + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 35 + + + + + It’s like having a GPS navigator in front of your eyes. + – TIMOTHY WITHAM, M.D., DIRECTOR OF THE JOHNS HOPKINS NEUROSURGERY SPINAL FUSION + LABORATORY (AFTER CONDUCTING THE INSTITUTION’S FIRST-EVER AUGMENTED REALITY + SURGERY IN JUNE 2021) + + +  Education: Growth of the Metaverse in the education sector could help students + receive an immersive learning experience, as well as enjoy the gamut of other + campus activities online to encourage students' creativity and collaboration. For + instance, authorities in Seoul are currently operating Metaverse-based science + classes for students to explore a virtual exhibition hall called "Gather Town" with + their own avatars. + + – In Florida, the Optima Classical Academy, a charter school announced its + intention to establish a school which will be tuition free starting in August 2022. + Oculus headsets will be given to the students so that they can participate in + virtual lessons. + +  Recruitment and Training: As more and more people engage with the + Metaverse, particularly people in younger age demographics, we anticipate that + the recruitment industry will adapt and use it as a platform to connect with and to + recruit emerging talent. Recruiters will have to shift their focus and go to where + the talent spends their lives and where they can best engage with such talent. + + + + For recruitment, we are already using a Metaverse platform, Virtual Park, to + interview job candidates and offer them the ability to meet our people and find + out more about our culture, values and opportunities. We’ve seen great success + in using this platform to connect with high school leavers and graduates in + particular and, to date, have welcomed over 17,000 students to PwC’s Virtual + Park.15 + – JEREMY DALTON, HEAD OF EXTENDED REALITY (XR) FOR PWC UK + + + – Samsung Electronics, for example, already conducted recruitment fairs on the + Gather Town Metaverse platform, in which candidates’ avatars can talk to + avatars from human resources (HR) and other members of staff as part of the + recruitment process. Hyundai Motor and Lotte E&C have also conducted job + fairs using the same platform. + + – In addition to education for students, the Metaverse also offers opportunities + for corporates to train their new joiners in more engaging ways. Hyundai + Mobis, for example, is conducting inductions and training for new employees + in the Metaverse through their “Metaverse experience” and “untact online trip” + programs. These were designed so that new employees working remotely + could form bonds more easily. According to the firm, the plan is to make “use + of Metaverse contents to add programs for observing major company facilities + such as workspaces, research labs, and driving test centers, to seek various + ways to communicate with the MZ generation at their eye level.” + + + + 15 Dominic Bernard, “Recruitment in the Metaverse: Will It Become a (Virtual) Reality?” + + HR Magazine, January 13, 2022. + +© 2022 Citigroup + 36 Citi GPS: Global Perspectives & Solutions March 2022 + + + + +  Climate Change: Scientists and researchers conduct experiments using digital + twin technology to model scenarios on virtual representations of the earth. + + – NVIDIA, for example, is building a giant Metaverse of the planet Earth through + its NVIDIA Omniverse™, which offers designers a 3D virtual world where + users globally can collaborate on software applications. This digital twin of the + Earth will continuously model, predict, and track climate change in real time so + that scientists can find ways to mitigate its spread. + + Gaming in the Metaverse: An Early Start Point? + The gaming industry has played a fundamental role in shaping the Metaverse and it + is likely to continue doing so with immersive elements like 3D avatars, building new + virtual worlds, and observations as a gameplay. + + Most console and role-playing games have Today, most console and role-playing games have started developing Metaverse- + started to develop Metaverse-like like experiences into their gaming structure and feature in-game events. Game + experiences into their gaming structure and developers are increasingly tapping the opportunity to create immersive virtual + feature in-game events experiences by partnering with musicians, movie markets, record labels and other + brands. For instance, Fortnite featured a virtual concert of rapper Travis Scott; + whereas Roblox hosted the Electric Daisy Carnival, an annual dance music festival. + + + + Over the coming decades, the Metaverse has the potential to become a multi- + trillion dollar part of the world economy. + The next three years are going to be critical for all Metaverse aspiring companies + like Epic, Roblox, Microsoft, and Facebook.16 + – TIM SWEENEY, CEO OF EPIC GAMES + + + + + The gaming industry is growing rapidly and the emergence of new economic + models, such as play-to-earn, coupled with blockchain and the Metaverse could + likely have a significant impact. + + Play-to-earn gaming models give gamers ownership over in-game assets and allow + them to increase their value by actively playing the game. These digital assets can + range from cryptocurrencies to in-game resources that are tokenized on the + blockchain. The play-to-earn gaming model could help bridge the gap between + players looking to earn extra income and those interested in playing the game. + + + + + 16 Sohee Kim, “Metaverse Is a Multitrillion-Dollar Opportunity, Epic CEO Says,” + + Bloomberg, November 17, 2021. + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 37 + + + + +Figure 13. Different Economic Models for Gaming + + + + +Source: Citi Global Insights + + + For example, players in the game Axie Infinity earn Smooth Love Potion (SLP) + tokens, which they can sell to other players in a dedicated marketplace. Players can + also trade digital assets, including land and weapons in the form of NFTs, to other + players. Likewise, Decentraland allows users to trade virtual plots. + + The Metaverse could help make gaming more immersive through AR and VR, while + also offering better engagement, virality, and monetization for games. Integration of + e-commerce, NFTs, and other collectibles could also allow users to interact and + support their favorite teams in new ways. + + The Metaverse is still in its early phases and is about designing and coding with + early-mover companies and platforms such as Epic Games, Roblox, and The + Sandbox. Others such as Microsoft, which owns Xbox and games like Minecraft, + are also players in the gaming world. + + However, it has attracted significant investment. In April 2021, Epic Games raised + $1 billion in private capital funding to support its long-term vision for the Metaverse + and accelerate work around building connected social experiences. + +Figure 14. Popular Metaverse Games and Developers + + + + +Source: Citi Global Insights + + + + +© 2022 Citigroup + 38 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Making the Case for a Progressively Open Metaverse + Tim Sweeney, founder of Epic Games, advocates an incremental approach to + opening up the Metaverse from the current framework of closed platforms. He + suggests that current game platforms like Fortnite, Roblox, and Minecraft adopt + more and more open standards, progressively enabling more interoperability. + + + + The benefit of more activity and openness to everybody is much stronger than + any other temporary benefit to any player from having lock-in. + – TIM SWEENEY, FOUNDER OF EPIC GAMES + + + Sweeney also points that he believes Metcalfe’s law applies in the Metaverse + scenario, where the value of the network is proportional to the square of the number + of network users. With positive-sum payoffs, the whole market grows with more + users jumping in, and all the platforms benefit. This would suggest individual + components of services therefore need to be built without enforcing a “tie-in” to + another service offered by the same platform or game developer. Different game + platforms opening up more of their services would also pave an alternate path + towards getting to, at the minimum, a “semi” Open Metaverse — starting from + established centralized platforms as opposed to a fully closed one. + + + + The principle here is every creator owns their original creations and has the right + to make the profit from them…And it’s great to choose service providers they + choose to work with, without being forced to accept a massive bundle of services + in order to reach the customer base. We want each component of the system to + stand on its own merits and not use dominance or significant market power in + any space to force adoption. + – TIM SWEENEY, FOUNDER OF EPIC GAMES + + + + + Today, technical interoperability standards However, technical interoperability standards are a missing core component of + are the missing core component of an Open openness in the Metaverse. To enable portability of assets, different suites of 3D + Metaverse and leading game technologies modelling need to be able to interface each other, and the industry needs + believe that achieving inter-game or virtual standardized file formats for exchanging data, among other requirements. + world interoperability is a pipe dream + From a technology standpoint, this is a big challenge, and a number of leading + game technologists predict that inter-game or virtual world interoperability is a pipe + dream, or at the very least, a long way away. + + + + Once again, you cannot take a 'skin' from one game, drop it into another, and + expect good results — even if they were made in the same engine… + The scales won't match. The rigs won't match. The [level of detail] won't match. + The hitboxes won't match. The shader budgets won't match… + – JULES GLEGG, PRINCIPAL ENGINEER AT RIOT GAMES + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 39 + + + + + If you actually want to bring along that t-shirt, you run into a problem that a t-shirt + is made for a specific character…So the fit will be a specific way. It's animated a + specific way. It has physics built in a specific way — again, for that custom size, + for that custom gravity, of the first game. That's not going to translate to the + second game. + – RAMI ISMAIL, GAME MAKER AND CONSULTANT + + + + + The Metaverse as an Enterprise Play? +The post-pandemic work-from-home Proponents of the technology often cite the Metaverse’s ability to build shared +environment could greatly be influenced by virtual spaces for enterprises. The post-pandemic work-from-home environment +VR/AR adoption, dramatically changing the could greatly be influenced by VR/AR adoption, dramatically changing the way +way colleagues collaborate on projects or colleagues interact and collaborate on projects or attend trainings and meetings. +attend trainings/meetings + + + + + The Metaverse is here, and it’s not only transforming how we see the world but + how we participate in it — from the factory floor to the meeting room. + It is no longer just looking at a camera view of a factory floor, you can be on the + floor. It's no longer just video conferencing with colleagues, you can be with them + in the same room. It's no longer just playing a game with friends, you can be in + the game with them.17 + – SATYA NADELLA, CHAIRMAN AND CEO OF MICROSOFT + + + Products such as Facebook's Horizon Workrooms and Microsoft's Mesh for + Microsoft Teams, make it possible to hold meetings in a virtual office space. Virtual + campuses also allow onboarding of new employees and can enable existing + employees to personally connect and enjoy social hangouts. + + + + Going forward, every business process will be collaborative, powered by data + and AI, and will bridge the digital and physical worlds.18 + – SATYA NADELLA, CHAIRMAN AND CEO OF MICROSOFT + + + + + At the 2021 GPU Technology Conference (GTC), NVIDIA showcased Omniverse™, + an enterprise Metaverse that can be used by engineers/designers to generate + physically accurate virtual replicas of buildings, manufacturing lines, and factories, + as well as help run simulations of models in the physical world. + + + + + 17 Satya Nadella (@satyanadella), Twitter, November 2, 2021; Satya Nadella, Microsoft + + Ignite 2021 conference, November 2, 2021. + 18 Satya Nadella, Microsoft Ignite 2021 conference, November 2, 2021. + +© 2022 Citigroup + 40 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + A constant theme you’ll see — how Omniverse is used to simulate digital twins of + warehouses, plants and factories, of physical and biological systems, the 5G + edge, robots, self-driving cars, and even avatars.19 + – JENSEN HUANG, FOUNDER AND CEO, NVIDIA + + + + + Ben Thompson (Founder and Author of Stratechery) and James Allworth (Head of + Innovation at Cloudflare, and Co-host of the Exponent podcast) talk about the + importance of the Metaverse as an enterprise play, offering the next-generation of + video conferencing in the Exponent Podcast Episode 196: Forecasting the + Metaverse.20 + + Imagine being teleported digitally to a remote location for an interactive shared + experience with your work colleagues, with features such as the ability to: + +  Bring your desk, computer & keyboard into the virtual environment + +  Sketch out ideas on a virtual whiteboard together with your team + +  Share meeting notes and files, and integrate calendars + +  Configure the virtual room’s layout to match user needs + +  Or, simply hang out and socialize + + While the Metaverse may start slow as the Ben Thompson believes the first major use cases of virtual reality will be employees + technology still remains nascent, using devices bought for them by their employer, eager to increase collaboration in + advancements over time could see more a remote-work world. As quality increases, this could offer a superior working + and more enterprises sign up for Metaverse environment. Some employees will be interested in using VR for non-work activities + platforms and invest in necessary hardware as well, increasing the market for non-work applications gradually. + + While the Metaverse may start slow as the technology still remains nascent, + advancements over time could see more enterprises sign up for Metaverse + platforms and invest in necessary hardware (e.g., VR headsets). + + Building Financial Sector in the Metaverse: A South Korea Case Study + South Korea is one of the emerging players in the Metaverse with its strong gaming industry and popular culture + content. We cite some examples below of major financial institutions exploring opportunities to integrate the world of + finance and the virtual space of the Metaverse. + + KB Kookmin Bank has developed a pilot virtual financial town (operational since July 2021), which includes (1) a + financial and business center composed of virtual branches, public relations and recruitment booths, and auditoriums; + and (2) a telecommuting center, to facilitate communication and collaboration across telecommuters and office + workers.21 + + + + 19 Brian Caulfield, “GTC Wrap-Up: NVIDIA CEO outlines Vision for Accelerated + + Computing, Data Center Architecture, AI, Robotics, Omniverse Avatars and Digital Twins + in Keynote,”, NVIDIA Blog, November 9, 2021. + 20 Ben Thompson and James Allworth, “Episode 196 – Forecasting the Metaverse,” + + Exponent (podcast), November 5,2021. + 21 Kim Jee-Hee, “Following the Money Takes Finance to the Metaverse,” Korea JoonAng + + Daily, July 21, 2021. + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 41 + + + + + Hana FG and Shinhan FG are also exploring the Metaverse to offer millennials/Gen-Z customers a digital platform + with virtual bank branches, VR-based financial servicing, and financial education.22 + + Woori Bank has joined a broader community initiative, “Metaverse Alliance,” with over 400 companies collaborating to + create a Metaverse broader than just banking.23 + + Brokerage firms such as NH Investment & Securities are working on their Metaverse platform, offering services like + investment analysis seminars and games.24 + + Likewise, Shinhan Card plans to launch prepaid cards for virtual and real-world use.25 + +Figure 15. Woori FG Metaverse Branch for SME Customers + + + + +Source: Woori Financial Group + + + + + 22 “Hana Bank to Lure Younger Customers with Metaverse Platforms,” Econotimes, + + August 6, 2021. + 23 “Hanryu Bank joined ‘Metaverse Alliance’, the Korean New Deal Hosted by the + + Ministry of Science and Technology, After Samsung Electronics,” CISION, September 7, + 2021. + 24 Anna J. Park, “Metaverse Becomes New Growth Engine of Financial Industry,” The + + Korea Times, August 24, 2021. + 25 Kim Jee-Hee, “Following the Money Takes Finance to the Metaverse,” Korea JoonAng + + Daily, July 21, 2021. + +© 2022 Citigroup + 42 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Metaverse-as-a-Service + The Metaverse will require countless new technologies, protocols, companies, + innovations, and discoveries to work. Many companies with existing technological + and network infrastructure might not be capable to build out and offer an immersive + Metaverse-like experience to a large number of users. + + Just as the internet has a set of protocols for visual representation, communication, + graphics, and data, the Metaverse would require a broader and resilient set of + standards and protocols that also embrace interoperability. For example, Fortnite + functions across almost all major platforms (e.g., iOS, Android, PlayStation, Xbox), + allowing for multiple identity/account systems and payment methods, pushing + competitors into cooperation (i.e., interoperability) with one another. + + Today, Web2 giants (e.g., Apple, Google) use similar technologies, but they are not + designed to transition into one another. Interoperability will be far more important for + building a scalable Metaverse. Metaverse-as-a-Service (MaaS) would enable + companies to use standardized protocols to build their Metaverse campus and + begin offering immersive experiences that help bring people together. + + Companies could make the Metaverse possible with private network capabilities, + delivered to any destination on the internet. Plug-and-play Metaverse services + would also offer a high degree of interoperability between experiences. Several Big + Techs are exploring the Metaverse and could help drive mass adoption of virtual + assets in coming years. + + Figure 16. Select Big Techs Exploring the Metaverse + + + + + Source: Citi Global Institute + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 43 + + + + + External Expert View: Yonatan Raz-Fridman on the + Metaverse and the Consumer + Yonatan Raz-Fridman is the Founder and CEO of Supersocial, an interactive media + company focused on providing immersive experiences. The company is building + virtual worlds, games, and experiences for the Metaverse, starting with Roblox and + in the future Web3. Prior to Supersocial, Yon co-founded Kano, a consumer tech + company that makes computer kits for play and learning, most recently releasing + the Stem Player in a partnership with Kanye West. + + Q: Could you tell us more about Supersocial? + + A: The genesis for starting Supersocial goes back to my previous venture, a VR- + related product for play and learning. When COVID-19 hit, I realized that nearly 2.5 + billion young people below the age of 18 were in their homes and locked out of + schools. It became abundantly clear to me that the next decade of internet was + likely to be about virtual worlds. The young population already spends the majority + of their time on 3D multi-player games such as Roblox, Minecraft, and Fortnite and + this is only likely to grow to other experiences. + + At Supersocial, we want to build a company at the intersection of Disneyland and + Nintendo — offering immersive experiences like an attraction in a theme park, but + occurring virtually, along with iconic content and franchises that companies like + Nintendo have built for several years. + + Q: How would you describe the Metaverse? + + A: Listening to several thought leaders such as Tim Sweeney (CEO of Epic + Games), Dave Baszucki (CEO of Roblox) and Matthew Ball (co-creator of the + Metaverse Ball Index), I believe the Metaverse is a real-time, persistent, large-scale + 3D virtual world that will allow millions of individuals to congregate and spend time + doing things together (e.g., playing games, working, designing, learning, and joining + concerts). + + In my opinion, there are a few key elements to consider in the Metaverse. The first + element is immersion. The manifestation of this technology is leading to virtual + environments that are more immersive (i.e., allow you to live the experience) and + allow the user to port oneself seamlessly from one experience to another. + + The second is the social element. Imagine being in a place where you can interact + and socialize, not only with a small group of your friends, but also with thousands + (potentially millions) of people in one virtual setup. Imagine going to a concert where + you can be with 20 million to 50 million people. + + The third element is expressiveness. Users in the real-time 3D worlds are + represented by avatars, allowing you to express yourself in completely new ways + that you may not want to express in real life. For example, in the Metaverse, I can + be whoever I want and wear whatever I want — things which I may not be + comfortable wearing in the real world. I can even have multiple avatars/identities, + allowing me to express myself in 10x more creative ways in the Metaverse. + + + + +© 2022 Citigroup + 44 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Q: How important are VR/AR devices for the Metaverse experience? + + A: I perceive the Metaverse as being device agnostic. The Metaverse is not a + device, just like the internet is not a device. The Metaverse is definitely not a VR + headset, AR glasses, a mobile console, or a game console. Instead, it is the + distribution of 3D, real-time, immersive content across multiple form factors that are + connected to the internet. Users will likely be able to access the Metaverse + experience through VR headsets, game consoles, PCs, mobile phones, and other. + + Q: What kind of gateways/entry points are we likely to have for the Metaverse + in the future — is it likely to be primarily mobile phones? + + A: In my opinion, over the next five years, the primary access for the Metaverse + experience will still be dominated by iOS/Android mobile devices. However, we are + also likely to see continuing developments and evolutions in game consoles, PCs, + VR headsets, and AR glasses. + + Over the longer-term (i.e., 2025-2030), we could see greater integration across + devices, which will likely require more work to be done on the software side. Big + Techs have a good chance at continuing to play a dominant role in the emergence + and access to the Metaverse as they remain in control of a key system — the + mobile app marketplace. However, I believe they will not be the only ones as + companies like NVIDIA, Epic, and Unity continue to build important technologies for + enabling developers to build these 3D persistent worlds. + + Additionally, we are also likely to see higher proliferation of next-generation devices + that may be available at lower price points and offer greater capabilities. Computers + (PCs) are likely to be an important gateway for the Metaverse experience. VR + headsets and AR glasses are also likely to start growing. However, smartphones + are likely to be the key remote control through which you access most of the + Metaverse experiences. + + As people spend more time remotely, we are also likely to see experiments on the + next consumer interface that will inherit the mobile phone in this decade. Use cases + for devices such as game consoles, PCs, VR/AR devices are likely to grow. + However, it is unlikely to be mass consumed in this decade alone, and I believe a + more realistic target would be the next decade (i.e., 2030-40). + + Q: Can you share any estimates on the potential adoption of VR/AR devices in + the coming years? + + A: I would not be surprised if VR headsets reach a target of one hundred million + units by 2025 — this seems reasonable. It is unlikely the headsets will significantly + cross this threshold, considering the need for further development to reach the + mass market. + + In my opinion, the VR category is comparable to gaming consoles. It will be an + important category that will see significant growth, and there will always be newer + versions, but it is unlikely to be something that three billion people would buy. + Interestingly, I wouldn’t want it to happen as I think it would be a shame to have a + headset on our head through most hours of the day. + + Meanwhile, I believe AR glasses are likely to be more interesting due to their unique + form factor that can be used both indoors and outdoors. However, no company has + built anything truly compelling so far. While products such as HoloLens already + exist, enthusiasts anticipate tech companies to offer a better product. + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 45 + + + + + If done right, the market for AR glasses could grow to a hundred million units within + two to three years of launch, in my opinion. Pricing will play a crucial role in the rate + of adoption, as AR glasses will be an add-on to the mobile phone, and a $1,000 + price tag could make them a tougher sale for mass-scale adoption. + + To summarize, I believe the VR headset market could grow to 200 million to 300 + million units by 2030, possibly 500 million at a stretch. Meanwhile the market for AR + glasses could surpass 500 million, possibly reaching a billion units by 2030, if priced + appropriately. In order to generate mass appeal, I believe both devices will need to + offer a new type of paradigm for consumer interface, and not just be an additive + product for the mobile phone. + + Q: Can you estimate the target addressable market for the Metaverse? + + A: Before I can give you a rough number, let me unpack how I would think about the + target addressable market (TAM). + + Since the Metaverse is likely to be device agnostic, I believe anyone in the real + world would be able to access the Metaverse through fast internet and engage in + the 3D, real-time, immersive virtual worlds. I would estimate that by the end of the + decade, the majority (nearly 80%) of the world's population will be able to access + the Metaverse with the help of faster devices/technology. + + Further, I believe people are likely to have multiple identities in the Metaverse. + Maybe as many as 10 avatars per person — e.g., one for sport activities/games, + another for school work, another for music concerts. This, combined with our + previous estimate for 80% of the world's population being able to access the + Metaverse, translates to the potential to interact with over a hundred billion + individuals in the Metaverse in the coming years. Extending these numbers helps us + estimate an industry-agnostic market potential worth a few trillion dollars. + + Drawing a parallel with the concept of singularity, termed by Ray Kurzweil, as that + point of time where artificial intelligence surpasses human intelligence. I believe, we + will reach a point of time (around 2030-35), where human beings will potentially + consider their virtual presence (avatars), to be as valuable (if not more) than their + physical/real-life identity. + + If we subscribe to this view, it isn’t unimaginable to think of us making significant + investments on the digital presence of our avatars. This could translate to significant + market potential for commerce, fashion, sports, and gaming. I would cautiously + estimate the potential market size to be over $10 trillion by 2030. + + Q: Why will people have multiple avatars? Is this the equivalent of having + multiple online profiles today? + + A: Interestingly, most of us already have multiple identities. We are not the same + person at home with family as we are with office colleagues or school friends. We + often have different attitudes, personalities, and identities depending on the + environment around us. + + Second, technology enables us to do things virtually in a more seamless and + frictionless manner. It allows us to creatively express our personalities, e.g., dress + up to a wedding, sports event, or work. We already do most of this today in our real + life, but the way this will be manifested in the Metaverse will be totally different. + + + + +© 2022 Citigroup + 46 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + We could have two, five, or even 10 avatars for distinct purposes within our + personality and we are likely to treat/invest in each one of them differently. I believe + this transformation is likely to first occur with the younger demographic population. + + I also believe part of this is cultural. For example, over the last decade, we have + seen several users in Japan have multiple Twitter accounts. The Metaverse and its + avatars will give us freedom on how we translate our desires and creative + aspirations in a world with limitless possibilities of who we can be. + + Q: What in your opinion, needs to happen in order for us to enjoy a + "Metaverse experience" on our mobile devices without VR/AR? + + A: In my opinion, first, we need to see an increase in the purchasing power of + customers across developing economies. For instance, the prominent markets for + the Roblox platform, after the U.S., include several emerging markets such as + Brazil, Russia, the Philippines, Thailand, Indonesia, and South Korea. In order for + customers to be able to access more advanced devices, we need to see an + increase in purchasing power across these economies. + + Second, accelerated development of infrastructure, including 5G, are fundamental + to enable access to a 3D, real-time, persistent, and immersive Metaverse + experience at large scale. There is surely a lot of work to be done in this regard, + especially in emerging markets across Asia and Africa. + + Last, we need to create an ecosystem that enables developers and content creators + to collaborate easily and share their creativity. The Metaverse experiences need to + be built by a diverse population, across different countries, genders, and regions, + rather than be dominated by the developed economies. + + Q: Is there a need for interoperability across different Metaverses? + + A: I strongly believe that for the Metaverse to truly emerge, as we all want it to be, it + has to be open and interoperable. We already have different types of siloed + platforms that aspire to be a Metaverse in itself. However, if users cannot interact + with the digital assets they carry from one platform to another, then this is not a + Metaverse. Interoperability is critical in my opinion. + + For this to happen, I believe consumers need to put pressure on closed platforms, + to make sure the platform shifts to being an Open Metaverse. Eventually, those + platforms that do not shift to an Open Metaverse will become niche and obsolete. + + Blockchain will play a key role in the conversation to enable interoperability and an + Open Metaverse. Several technology companies are also likely to play a key role in + the emergence of the Metaverse. The exact role they play, remains to be seen. + + Q: What are the likely use cases for the Metaverse in the coming years? + + A: Over the next five years, we will see online gaming remain a predominant use + case for the Metaverse. Additionally, more use cases are likely to emerge around + socialization, for events such as fashion shows, music concerts, and sport events. + + We are also likely to see consistent growth of Metaverse commerce with users + spending money to purchase NFTs or digital items for their avatars. In my opinion, + consumption of virtual goods is likely to grow over the coming years. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 47 + + + + + On the enterprise side, we are likely to see growth of enterprise software as several + industries are keen to experiment with the Metaverse and build industrial + applications. For example, the Omniverse™, built by NVIDIA, has seen traction with + companies building environments where people can come and work together to + build high-end cars or design new concepts. + + + + +© 2022 Citigroup + 48 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Metaverse Infrastructure: Open vs. + Closed + The Closed Metaverse would likely The Metaverse will require countless new technologies and infrastructure to come + resemble a Web2 experience of having together. And design choices are the topic of much debate — should it be “open”, + multiple logins, platform gatekeepers, user built on Web3 primitives (building blocks) of permissionless and open protocols, or + data monetization, and embedded “closed”, built by the capital-efficient, easy-to-use Web2 platforms? + advertising + Big Tech is in a virtual arms race to build the next generation of dominant virtual + The Open Metaverse, on the other hand, reality (VR) and augmented reality (AR) platforms, raising concerns among some + would likely be community-owned, that the Metaverse will resemble our Web2 experience of having multiple logins, + community-governed, and a freely platform gatekeepers, user data monetization, and embedded advertising, but with + interoperable version that ensures privacy real-time, immersive VR and AR. + by design + Meta Platform reported a 2021 loss of $10 billion on its Metaverse-related consumer + hardware, software, and content division.26 Mark Zuckerberg, who calls the + Metaverse an “embodied internet,” has been careful to state that Meta’s approach + to building the Metaverse would be responsible and collaborative. + + + + Privacy and safety need to be built into the Metaverse from day one. So do open + standards and interoperability. This will require not just novel technical work — + like supporting crypto and NFT projects in the community — but also new forms + of governance. Most of all, we need to help build ecosystems so that more + people have a stake in the future and can benefit not just as consumers but as + creators. + – MARK ZUCKERBERG, CEO OF META PLATFORMS + + + Nevertheless, concerns around surveillance and privacy are high. Virtual Reality is + far more invasive than our current 2D internet and has the capability to gather huge + amounts of behavioral data, including body language cues, eye-tracking, and other + biometrics, in the name of “experience enrichment.” + + Taken to the extreme, ubiquitous surveillance underpinned by invasive biometric + analytics and profiling would bring to life a dystopian vision of a world outlined in + science fiction novels. The Closed Metaverse could end up with a handful of + corporations owning and controlling the servers, databases, and hardware. This + would likely cause users to lose control of their own private data, be tracked and + targeted with advertisements, and also be at the mercy of de-platforming due to a + centralized platform’s changes to EULAs (End User License Agreements). + + There is an alternative, as widely championed by the Web3 community. A + conceptually utopian, community-owned, community-governed, freely interoperable + version. Ensuring “privacy by design,” the Open Metaverse is visualized as a + “massively participatory medium” built by thousands of creators, designers, + developers, and companies. + + + + + 26 Steve Kovach, “Mark Zuckerberg’s ‘Metaverse’ Business Lost More than $10 Billion + + Last Year, and the Losses Keep Growing,” CNBC, February 2, 2022. + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 49 + + + + + The proponents of the Open Metaverse promise an interconnected world built on + open standards. The Open Metaverse needs to be a fair economy to enable + different participants in the value chain, including the creators and participants, to + profit from it — not just enrich a few companies that build out the “platforms.” + + Just as Web3 has emerged to challenge the ascendency of today’s Web2 mega + platforms, a critique of Web3, a backlash against the backlash, has developed. We + will get to the Web3 critics soon — but first an exploration of what the Open + Metaverse could be. + + Building the Open Metaverse: Apps or Infra? +It is likely that Open Metaverse applications From a relatively decentralized architecture in Web1 where a wide range of +will be built even before the infrastructure is distributed ISPs (Internet Service Providers) hosted static webpages, Web2 saw an +fully ready, leading to clunky and awkward accelerating trend towards centralization. This heavy centralization unlocked new +user experience (UX) that feels retrograde economic opportunities for winner-takes-all platforms that monetized user data for +from the optimized Web2 UX advertising revenues. As the popular saying goes, “If you are not paying for it, you + become the product.” + + Web3 was a term coined by Gavin Wood, a co-founder of Ethereum. The technical + architecture of Web3 visualizes peer-to-peer, blockchain-based architecture with + decentralized storage, user-hosted identity, and sign-in with wallet functionality. + + + + Web3 is an inclusive set of protocols to provide building blocks for application + makers. These building blocks take the place of traditional Web technologies like + HTTP, AJAX, and MySQL, but present a whole new way of creating applications. + These technologies give the user strong and verifiable guarantees about the + information they are receiving, what information they are giving away, and what + they are paying and what they are receiving in return. By empowering users to + act for themselves within low-barrier markets, we can ensure censorship and + monopolization have fewer places to hide. + – GAVIN WOOD, CO-FOUNDER OF ETHEREUM + + + + + To support an Open Metaverse, new infrastructure will need to be built in the + coming years. However, it is likely that applications are built even before the + infrastructure is fully ready, leading to a clunky and awkward user experience (UX) + that feels retrograde from the optimized Web2 UX. + +Infrastructure and applications evolve in an As Dani Grant and Nick Grossman of Union Square Ventures highlight, in the +iterative way. The first few apps are often history of new technology development, infrastructure and app development does +built on sub-optimal infrastructure, but the not happen in a sequential process with all infrastructure being built first, followed +arrival of a wildly successful app leads to by the apps. +further investments in the underlying +technologies, drawing development efforts Instead, infrastructure and applications evolve in an iterative, cyclical way. The first +into more user-friendly apps few apps are often built on sub-optimal infrastructure. Then the arrival of a wildly + successful breakout app leads to further investment in the underlying technologies, + drawing fresh development efforts into easier-to-build and more-usable apps, and + the virtuous cycle continues (Figure 17). + + + + +© 2022 Citigroup + 50 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Hence, while there is a lot of criticism (mainly from Web2 fans) of Web3 being built + on centralized architecture in today’s world, it is likely the current centralized + infrastructure only serves as scaffolding until a truly decentralized infrastructure is + built to underlay Web3. + + This implies that centralized components would be used, temporarily, for + convenience (e.g., centralized cloud storage services, centralized blockchain tools, + and exchanges), but be swapped out later for decentralized alternatives as the + Web3 ecosystem matures and develops. + + It is also likely that a large section of users become habituated to the centralized + systems, and these continue to coexist with their decentralized counterparts, + offering a spectrum of options. The future is not Web3 versus Web2, but likely + coexistence. + + Figure 17. Cycle of Evolution of Internet and Web Apps + + + + + Source: Union Square Ventures, Citi Global Insights + + + Building Blocks of an Open Metaverse Operating System + Blockchain, self-sovereign identity, and The Open Metaverse is made possible by a convergence of different technologies + cryptographic primitives around “digital — blockchain, self-sovereign identity, and cryptographic primitives around “digital + asset” ownership are the building blocks of asset” ownership that was missing in the Web2 world. Without blockchain and + an Open Metaverse cryptography, guarantees of ownership in a trustless way would be impossible. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 51 + + + + + CRYPTOGRAPHIC PRIMITIVES + + Cryptographic primitives are well-established, low-level cryptographic building + blocks that are used to build cryptographic protocols. Commonly used cryptographic + primitives include one-way hash functions, public key cryptography, and digital + signatures. These primitives are combined and used in various ways to enable + different levels of security guarantees. + + Hash Functions: Represent a versatile one-way cryptographic algorithm that maps + an input of any size into a unique output of a fixed length of bits. + + Public Key Cryptography: A cryptographic system that uses a pair of keys — a + public key, which may be known to others (e.g., an email id); and a private key, + which may not be known by anyone except the owner (e.g., email password). Data + that is encrypted with the public key can be decrypted only with the corresponding + private key. + + Digital Signatures: An electronic-encrypted stamp of authentication on the + message/any digital information, which gives guarantees that the original + message/digital information has not been tampered with since being signed with the + sender’s private key. + + In the words of Outlier Ventures, Web3 is a stack for an Open Metaverse. “It is a + paradigm ultimately based on blockchains.” + +Open Metaverse OS can be thought as an Open Metaverse OS (Operating System) can be thought as an evolving collection of +evolving collection of highly composable highly composable technologies that sits between the hardware, application +technologies that sits between the hardware, software, and the user, which will be used to make aspects of an Open Metaverse +application software, and the user possible globally across several use cases. + + + + +© 2022 Citigroup + 52 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Figure 18. The “Operating System” for the Open Metaverse + + + + + Source: Outlier Ventures + + + According to Outlier Ventures, the Open Metaverse OS is concentrated on the + critical lower layers of the stack — for example, the non-negotiable features such as + user-sovereign identity and assets, in-world economics and bridges into and out of + its economy, 3D modeling toolchains, and rendering stacks to the primarily + centralized world. + + We do not anticipate that the entire Metaverse OS will be built by a small number of + centralized players, similar to how the mobile phone OS evolved. We expect that + the OS of the Open Metaverse will likely take a path similar to the evolution of + Linux, organically through a patchwork of different contributors building functionality, + in a truly composable way. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 53 + + + + + However, building an OS that works with such a complex distributed system is hard + and will take time to develop, with the apps and the infrastructure coming much + earlier, and there being multiple device-specific or context-specific OS in the interim. + It is, however, likely that early progress on this is made by the big tech firms – but + over time, we expect more decentralization. + + Identity in the Open Metaverse: Digital Passports and + Web3 Access +In an Open Metaverse, a digital Some of the technologies being built include an “always-available” companion on +passport/digital closet will hold a user's the Metaverse, a digital passport (in the context of gaming and social apps), and +social media, digital property, and personal digital closet of sorts that will hold a player’s social media, digital property, personal +accounts and will be protected by private accounts, and friends. Protected by private keys, these would allow the user to +keys with full self-sovereignty of their identity selectively expose their identity and property for different use cases as they deem + fit, with full self-sovereignty. + + This “passport” would enable the player to seamlessly weave in and out of virtual + worlds, taking their digital skins, identities, and property with them. This builds on + the login-free and password-free movement between virtual worlds driven by wallet- + enabled, one-click sign-in, without handing over all of the player’s data to the + platform. + + The internet has no user authentication system or identity layer built in. In the + current instance, this has led to a host of authentication solutions and logins, + individually managed by different applications. Social sign-on in Web2 (sign in with + Google, Apple, Facebook, etc.) partly solves this problem, but leaves the control of + identity in the hands of a few big platforms acting as gatekeepers. + + Against this backdrop, Web3’s solution to sign-on and login is a new paradigm + driving decentralized authentication, backed by public key cryptography. Users get + assigned public-private key pairs, with the public key generating a unique address + and the private key functioning similar to a password that is used for authentication. + This private key, housed in Web3 wallets, can then be used to connect to Web3 + websites and decentralized applications, bringing one’s digital wallet into different + apps for seamless interoperability. + + Centralized Finance (CeFi) players are not far behind in providing identity solutions + in the Metaverse. Coinbase, a U.S. cryptocurrency exchange, aims to develop an + "identity on-ramp" into the Metaverse by using Ethereum Name Service (ENS), an + open-source, blockchain-based identity protocol.27 ENS enables users to create a + unique username non-fungible token (NFT) that resolves to a wallet and eventually + allows them to carry a unique ID across different virtual worlds. + +The internet has no user authentication SIGN-IN WITH ETHEREUM +system or built-in identity layer, leaving the Sign-In with Ethereum is a decentralized self-custody user-authentication system +control of identity in the hands of a few big enabled by public key cryptography, crypto wallets, and decentralized naming +platforms acting as gatekeepers system ENS (Ethereum Name Service). + + Ethereum Name Service is a protocol for human-readable crypto addresses and + decentralized domain names. It is similar to DNS, i.e., a system that assigns + human-readable domain names to internet protocol (IP) addresses in Web2. + + Sign-In with Ethereum, launched in 2021, enables users to use their Ethereum + account and associated ENS name as identifiers across multiple services, including + + 27 Brian Armstrong and Alex Reeve, “How Coinbase Thinks About the Metaverse,” The + + Coinbase Blog, December 16, 2021. + +© 2022 Citigroup + 54 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + off-chain applications. Users can use their Web3 wallet of choice to connect to the + underlying Ethereum accounts and their ENS names to log in to applications. + + This sign-on with Ethereum account and supported wallet removes the need to not + only store individual logins and passwords, but also enables native payments + through cryptocurrencies and tokens linked to the wallet without needing separate + credit card details. + + A key advantage of decentralized identity is that eventually the user will be able to + decide which pieces of information to share with individual applications, depending + on the use case and specific requirements. It also enables pseudonymous identities + — one user can have different identities for different use cases, linked with different + addresses and ENS names. + + Pseudonymous identities would enable the user to have multiple personas — + “avatars” on the Metaverse — complementing real-life behavior where people bring + forth different aspects of their personalities in different social groups. Switching + personas would become as easy as changing digital skins, taking on different + pseudonyms, and being transformed into a new identity. + + Even when pseudonymous identities become the norm, it will be possible to verify + the core aspect of one’s identity for specific use cases using decentralized + identifiers, verifiable credentials, and selectively exposing identity details to service + providers. + + A key characteristic of the Open Metaverse is “self-sovereignty,” where the user is + expected to have full control/ownership of the data created by them, and + monetization models may be built that put the control of how/when to monetize data + in the user’s hands. + + A user would typically hold their unique identifiers and credentials in their ID wallet. + The issuance of some of these credentials is done by trusted authorities, e.g., their + bank, government, or employer. But as these credentials are digitally signed; there + is a way to independently verify the authenticity of these credentials on demand by + the entity requesting verification. + + For example, if a user wanted to apply for a mortgage, they could pull credentials + from different sources (e.g., employment records from an employer, home address + from a utility bill, bank statements from a bank) and disclose these selectively as a + “verifiable presentation,” only exposing information needed for the mortgage lender, + who can in turn independently query/verify underlying data from different sources. + + The amount of data that would be generated in the Metaverse is massive, + especially as VR technologies collect thousands of petabytes of invasive + physiological data, on top of shopping, engagement, and preferences. + + In a Closed, or centralized, Metaverse, However, in a Closed, or centralized, Metaverse, monetization is expected to follow + monetization is expected to follow familiar familiar patterns of Web2 platforms, primarily centered around advertising, but in a + patterns of Web2 platforms, primarily potentially more invasive way. For instance, cues of hunger observed from + centered around advertising, but in a biometrics could trigger pizza adverts in VR headsets. + potentially more invasive way + Social groups in the Metaverse could congregate and engage with experiences + similar to how teenagers use the app Discord today. Discord was built on the + concept of a third place, a place where people congregate or hang out, and branch + out to explore different avenues. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 55 + + + + + It is likely that a user’s experience in the Metaverse has an overarching connectivity + layer that spans multiple virtual worlds that they can step in and out of, as people + create, play, collaborate, and shop with their communities in the Metaverse. + + Ownership in the Open Metaverse: DAOs + Decentralized Autonomous Organizations (DAOs) hit the mainstream media in + November 2021 when an internet collective called ConstitutionDAO launched a + mission to buy a rare copy of the U.S. Constitution at a Sotheby’s auction. The DAO + crowdfunded about $47 million in Ether, but lost the bid. + + A DAO is a blockchain-based co-operative that is collectively owned by its + members, with rules set and executed through code. As public limited companies + (PLCs) were to the industrial era of the 19th century, DAOs may be to the 21st + century internet era. + + The essential feature of the DAO is that core operating rules are coded into a smart + contract, and automatically applied/enforced. The organizational structure of a DAO + is collectively controlled by members, unlike hierarchical traditional organizations. + + + + DAOs = automation at the center, humans at the edges. + – VITALIK BUTERIN, CO-FOUNDER OF ETHEREUM + + + + + DAOs have come a long way from their original instance on Ethereum. The first + DAO launched in 2016 through a crowdfunded token sale, raising $150 million as a + cross between a Kickstarter and a venture capital fund. Although this particular + instance of DAO had an eventful and controversial history given the hard fork on the + Ethereum network, it belied the true power of decentralized organization structure + that is becoming mainstream of late. + + + + The question of whether DAOs are efficient enough to compete with centralized + service providers can be answered by the view that DAOs are very good at + managing treasury globally. I think it really depends on what a DAO is doing, + what the objective is, and what it tries to achieve. In my opinion, DAOs are very + good at governing public goods or infrastructure that have a greater base than + one particular company. But when it comes to actually building something + efficient, perhaps a DAO might not be very suitable. However, we're still in the + early stages. We might see, actually, a very efficient way of building things + through DAOs soon. + – STANI KULECHOV, FOUNDER AND CEO OF THE AAVE COMPANIES + + + + + A typical DAO launch has the following steps: + +  Smart Contract Creation: A group of developers create smart contracts that run + the DAO. After launch, rules can only be changed through a governance system. + +  Funding: The second step is usually the issuance of tokens to raise funds and + giving holders voting rights to participate in the governance framework. + + +© 2022 Citigroup + 56 Citi GPS: Global Perspectives & Solutions March 2022 + + + + +  Deployment: Once the DAO is deployed on the blockchain, governance is fully + controlled by the community, with the original creators no longer influencing the + project any more than other stakeholders (though original creators or their + proxies may award themselves token stakes). + +  Governance System: Governance of a DAO is typically managed by the token + holders who vote on proposals to facilitate consensus-driven decision making. + + It is very early days, and the few prominent use cases of DAOs seem to be around + specified Decentralized Finance (DeFi) protocols or specific near-term projects. + DeFi protocols like Aave and Maker are organized as DAOs. DAOs have + demonstrated that they can be good at specific use cases like community-led + governance and treasury management. However, we are yet to see DAOs take on + hard challenges that centralized institutions solve well. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 57 + + + + + External Expert View: Jamie Burke on the Open Metaverse + Jamie Burke is the Founder and CEO of Outlier Ventures, Europe's first dedicated + blockchain venture capital (VC) firm and accelerator. Jamie and his team have + grown a portfolio of nearly 100 startups, facilitated over $130 million in seed funding + for its portfolio companies, and have helped to jump start multiple billion-dollar + crypto ecosystems. + + Q: Can you elaborate on centralized versus decentralized Metaverses? As + Web2 platforms pivot to the Metaverse, are both versions likely to coexist or + will decentralized thrive, killing all centralized platforms? + + A: At the onset, we must note that Web3 technologies make decentralized + Metaverses possible. Importantly, we now have something that can be digital and + scarce. People often overlook the importance of this innovation, but previously + anything digital, lost all of its value. + + One example is a music file. People expect to consume unlimited amounts of music + for the price of an espresso every month. You are essentially just paying for the UX, + rather than the underlying content. This has decimated the music industry and + totally devalued this particular creative asset class. + + The innovation of Bitcoins has helped create digital assets that are unique and can + be transferred on a distributed ledger — creating a new form of internet-native + money. NFTs extend this concept further to non-fungible use cases, where + uniqueness and provenance are important. + + We are seeing platforms gain economies of scale, primarily from infrastructure, to + the point where it has network effects. Will these platforms remain relevant in the + Metaverse? Certainly in the short-term and probably also in the mid-term. The + question is for the long-term, i.e., a decade plus. + + The only way centralized corporations can compete is to form a permissioned + version of the Metaverse, possibly using Central Bank Digital Currencies (CBDCs). + This way, centralized corporations could be a real threat to the Open Metaverse, as + they already have billions of users, are great at building hardware/software, and will + be regulatory friendly. + + Q: How is an Open/Web3 Metaverse built? How is it different to what + centralized corporates like Meta Platforms and other corporates plan to do + with the Metaverse? + + A: There is no clear distinction between an Open and Closed Metaverse, although + one of the defining characteristics is permissionless. Both versions have their pros + and cons. I am an advocate for permissionless environments, as I believe they are + more innovative and inclusive, albeit there are valid concerns about potential + misuse. + + My preference for an Open Metaverse is premised on three key + considerations/challenges with the digital creator economy on a closed platform + today. + + First, limited financial inclusion, There are several people creating value on these + platforms, but they are somehow financially excluded from the value creation + process. This is largely due to the way platform economics are split, with content + creators only getting a small percentage of the generated revenues. + + + +© 2022 Citigroup + 58 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + For example, how much of the advertising revenue would a content + creator/musician on YouTube get? Generally not much. A large share of the value + created on these platforms by its users is often captured by the company and its + shareholders. I believe these platforms usually operate on principles of shareholder + supremacy over the user. + + The other form of limited financial inclusion refers to the digital value locked on + platforms. For instance, if you are a successful gamer with several unique digital + avatar skins worth a lot of money, can you go to a traditional bank and get a short- + term loan against these assets? Certainly not. + + Second, terms and conditions of these platforms are often determined by the + platform alone (i.e., subject to change unilaterally). As a result, content creators face + the risk of demonetization or de-platforming. Rules for participating on these + platforms can be unclear, not consistently applied, or simply not understandable. + + Third, Web2 is effectively siloed by design, and platforms make it deliberately hard + or nearly impossible to transfer value off the platform, thereby restricting participants + from either partially or fully cashing out from the digital economy. This structure + often results in strong monopolies/duopolies in the market. + + By contrast, Web3 enables users to have full ownership of their data and digital + objects. Use of smart contracts can also help frame a set of fixed rules that define + how you interact with applications on the platform. These rules can be audited and + triggered automatically on the fulfillment of certain criteria. By virtue of their + structure, Web3 also makes it impossible for corporations to create monopolistic + positions. + + Q: What does a Metaverse platform look like from a consumer perspective? + Do end-consumers really care about the underlying technology of a platform + or do they only care about the experience? + + A: Multiple generations have been conditioned to accept the paradigm of Web2, + i.e., expect a high degree of free personalization, often at the cost of privacy, and + participation in the value creation process. + + Additionally, there is also a cultural element — people in different countries/cultures + have varying attitudes to privacy. For instance, users in certain Asian countries have + accepted that the government/platform operators can see everything and users + should not expect sovereignty. This can even be argued for some countries in the + West. Therefore, in my opinion, there is not universal truth. + + However, it is important to note that Web3 enables sovereignty (i.e., primarily digital + property rights), permissionless-ness, and the unstoppable nature of crypto. + + For instance, if you are looking for a NFT, you could go to Nifty Gateway (an NFT + curation platform primarily for art) to discover a NFT you would like to buy. Then + using your account, you could buy the NFT, paying for it with your debit/credit card + that is linked to fiat. Thereafter, you could just keep the NFT on the Nifty Gateway or + later decide resell it for fiat currency — not touching crypto or Web3 all along. + + Alternatively, you could connect to the MetaMask wallet and purchase an NFT, + paying for it either in fiat currency or crypto. Thereafter, this NFT is added to your + MetaMask wallet, which you control (not Nifty Gateway). Under this approach, you + are in control of your digital assets, which you can transfer or resell on another + platform. The entire process is permissionless and you can freely move your assets. + Further, you could even use this asset as collateral in DeFi. + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 59 + + + + + Much of this needs a certain degree of competency — a MetaMask wallet, + understanding dynamics of a NFT, and a secondary market in DeFi. Surely, some + people would be early adopters in the space and they are prepared to overcome the + burden of poor UX, gas costs (the fee required to conduct a transaction), clogged + networks, or scalability issues. + + However, the average mainstream user does not care about this. Instead, they + generally want faster, cheaper, better, and innovation (something they couldn’t do + before). An average user is likely to prioritize all of this over sovereignty, + permissionless, and unstoppability — unless you find a way to incentivize them. An + average user is not going to buy some Ether (ETH) because they understand + Ethereum is the world's super computer and what it means for Web3 — these are + complex. + + However, NFTs suddenly offer different use cases for the same underlying + technology, which average users could understand/relate to — e.g., buying/owning + a digital collectible or playing a game. Once you buy a NFT, you are more likely to + think about what you would like to do with it (i.e., transfer it off-platform, resell it). + This gives you an economic incentive to overcome the friction/hurdles. + + As a by-product, you have also experienced sovereignty and permissionless-ness + — a paradigm difference from Web2, which may change your expectations. For the + younger generations, this could be intuitively obvious; while others may begin to + experience it gradually. + + Q: What are the capital expenditure (capex) requirements for running the + Metaverse at scale? Large corporates could spend billions for a centralized + Metaverse, but what about the Open Metaverse? Who will incur the capex for + computing and storage? + + A: Large sums of money from venture capitalists are entering the Metaverse space. + There is also a long tail of retail money investing in the space. + + Secondly, developers are working on Cloud 2.0 in Web3, which addresses + decentralized storage and compute — this in aggregate, would make the equivalent + for a decentralized cloud architecture. For example, players like IPFS + (InterPlanetary File System) and Filecoin offer decentralized storage with incredible + capacity by leveraging the long tail of a peer-to-peer network and making it + available to the protocol. Likewise for computing, QDos Networks can use latent + compute capacity from your desktop, smartphone, and gaming console and make it + available to the network. + + Today, most of our online activities function on centralized cloud compute, but I think + this will change to a decentralized format, as the latter will be cheaper and offer + better performance. + + Lastly, I would also point out Bitcoin, which is a relatively simple protocol. The + network allows people to plug in a mining rig, either from an industrial scale farm or + a server on your workstation, and participate. This has led to the creation of a + permissionless network, worth billions of dollars, without being centrally controlled. I + believe something similar can play out in storage and compute as well. + + + + +© 2022 Citigroup + 60 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Q: Elaborate on DeFi beyond NFTs. Is there any other primitive we should be + excited about when looking at DeFi in the Metaverse? + + A: In my opinion, we should primarily focus on MetaFi and NFTs. There is a need to + better bridge CeFi (Centralized Finance) and DeFi (Decentralized Finance), which I + believe will inevitably happen in the medium to long term. This will help solve for + aspects like counterparty risk in a decentralized setting, possibly through verifiable + claims and zero-knowledge proofs. However, this will take time as regulators need + to develop a detailed understanding of the matter. + + Aspects such as fractionalized real estate are also likely to gain prominence in + DeFi, but will require regulatory frameworks/policy, again likely to develop only in + the medium to long term. + + In the short to medium term, I believe growth in DeFi will be driven by connecting it + with NFTs for use cases that are already digital. Notably, NFTs are entirely digital + and work in a permissionless environment, thereby not requiring regulatory approval + (except for the on-/off-ramps). Growth is likely to emerge by unlocking digital value, + currently trapped in platforms, and allowing them to be permissionless and peer-to- + peer. This can then be collateralized to borrow/lend against in DeFi. + + Q: What are the potential revenue streams around NFTs in the next three to + five years? + + A: Gaming is definitely the place to focus on in coming years, as there are already a + few billion users today. Furthermore, despite the industry growing exponentially, + most of its digital value remains trapped in platforms. You have an entire generation + of users with maybe millions of dollars in digital assets that they can’t access. + + Today, it is not surprising to find people earning a living via social media — i.e., the + creator economy. It might not be full-time employment and maybe they earn income + by playing one of the play-to-earn games. However, the crucial point is whether this + is considered wealth? + + As long as other people recognize the activity/item, a market will form and there will + be value (wealth). After all, markets are derived from the primitive of property rights. + You can have an open, 24x7 capital market, where people can freely borrow/lend, + as long as there are enough people that recognize the item as bearing some value. + This presents a strong opportunity in the context of financial inclusion. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 61 + + + + + External Expert View: Phil Chen on Decentralization and + Digital Assets + Phil Chen is the Founding Partner of Race Capital and Managing Partner Emeritus + of Presence Capital. As the founding managing partner at Presence Capital, Phil + has invested in 40+ Metaverse-related companies over the past six years. He is + also an advisor and Chief Decentralization Officer at HTC. + + Q: Can you own digital assets when the data is in the centralized cloud? + + A: People own and protect their digital assets by way of encryption. It’s where we + get the word cryptocurrency, which is actually just cryptography. This private key + infrastructure technology was invented in the 1970s, and Bitcoin is the best example + of that. Bitcoin is the inventor of being able to own a digital asset. + + Today, everyone's computer/server can have a Bitcoin and ledger, and one only + needs a private key to access it — that's the part you need to protect. Private keys + are crucial to all digital ownership. It almost does not matter where the actual "digital + asset" is stored in the public cloud. + + In fact, Bitcoin has already demonstrated that you can own a digital asset using the + public/private key infrastructure. Encryption protects property rights and the + blockchain is the guarantor of property rights. + + Q: Can digital assets be confiscated? + + A: Digital assets are open-sourced, borderless, neutral, censorship resistant, and + permissionless. If you own your private keys and they have not been shared with a + third party, they cannot be confiscated. This is one example of how digital assets + differ from gold or real estate. + + However, very few companies build the technologies that empower the user to own + their private keys. Web2 giants such as Apple/Google devices do not allow you to + own your private keys. The Exodus is the only phone that empowers the user to + own their private keys. + + One can still confiscate them by physically robbing or by hacking the device. + However, the difference is one hack compromises only one key versus one hack in + centralized servers, where data of hundreds of millions of users could be + lost/compromised. That’s the danger of centralized services. + + Q: Can you elaborate on the operating system/technology for the Metaverse? + + A: Today, the operating system for the Metaverse is Bitcoin (the internet of money) + and Ethereum (being more programmable). However, there are pain points + associated with the current system, primarily gas fees and scalability issues. + + Ethereum is working on switching to a proof-of-stake model, similar to Solana, + Cordano, and other Ethereum-like chains. However, this would lead to + centralization, compromising features such as being open, censorship-resistant, + and permissionless. + + In my opinion, Ethereum should continue with proof-of-work in Layer-1 and find + alternative ways of scaling in Layer-2. There are several interesting innovations on + Layer-2 scaling solutions. + + + + +© 2022 Citigroup + 62 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Q: Where do you see the future of the Metaverse in the context of + centralization versus decentralization? + + A: Centralization suggests surveillance; while decentralization promises a brave + new world, where people get what they want and this turns into anarchy. There are + no clear answers to the debate on centralization versus decentralization. + + For example, some opine DAOs (Decentralized Autonomous Organizations) cannot + function effectively and nothing productive can come out of them; while others see + them as the future. Now, adding Bitcoin to the mix, we can add a third view, i.e., one + that is based on the belief/tenet that it must be sovereign. + + This leaves us with three spokes: (1) surveillance, (2) anarchy, and (3) sovereignty. + I believe the correct balance does not lie at either extremes, but instead somewhere + between the intersection of these three elements. + + Q: Considering Web2 (centralized) and Web3 (decentralized), are Bitcoin, + Ethereum, and Solana the beginning of the end of large, centralized Big + Techs? + + A: The underlying question is that of data ownership. Do you want somebody else + to own/manage your data or do you want to manage it yourself? Additionally, one + also needs to consider the profit element — do you want to profit off your data? + + Different countries have adopted different approaches to manage this. For example, + gaming and social media have gained significant prominence in China, which has + led the government/policymakers to focus on regulating these aspects. + + While Bitcoin, Ethereum, and others are taking a little power away from Big Techs, I + do not believe we are anywhere near the end of Big Tech dominance. + + Q: What is the relevance of DAOs in the future of decentralized blockchain? + + A: There is a growing interest around DAOs. Applying DAOs to the current + hierarchical corporate structure doesn’t seem to work. However, with Web3 and + DAOs, we are looking at several new possibilities. + + There are many ongoing experiments currently looking to widen the scope of DeFi, + including the use of digital assets for lending/borrowing. Likewise, we are also + seeing several experimentations with governance tokens. + + We do not truly know what the main applications of DAOs will be in the future. + However we are seeing several experiments to explore how DAOs work in different + contexts. + + Q: Decentralized Applications (dApps) and the Web3 world already built out + today are often cited as not being very mobile friendly. Do you agree with this + statement? How do we bridge this gap? + + A: I agree dApps are not very mobile friendly today as they tend to be more + laptop/desktop browser centric. This is partly because mobile phones are controlled + by iOS and Android with Apple/Google acting as gatekeepers for Web3 applications. + By contrast, the laptop/desktop category offers relatively more open web browsers. + + This also raises a pertinent question on whether the future of mobile operating + systems should be browser-based or app-based. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 63 + + + + + Still Early: The Metaverse Infrastructure Building +An immersive Metaverse with a content The Metaverse proponents envisage a fully-immersive content streaming +streaming environment would involve a environment, where users are able to seamlessly go from one experience to +continuous stream of interconnected data another. This would involve a continuous stream of interconnected data — a +and a computational efficiency improvement computational efficiency improvement of over 1,000x versus today according to one +of potentially over 1,000x today senior tech industry executive.28 + + The exact quantum of computational efficiency, and the path to its achievement, is a + subject of debate. What is not a subject for debate is that computational efficiency + and network bandwidth will need to materially improve to enable travel across + applications, networks, and platforms — in real-time and across the world — in a + peer-to-peer fashion, inside the Metaverse. + + The challenge, however, is that the internet was not designed for high-bandwidth, + peer-to-peer communication The lags, packet drops, and network unreliability + witnessed in today’s world would make the current state of infrastructure unsuitable + for building an experience remotely resembling the Metaverse as envisioned. + + To make the vision of the Metaverse a reality would need a significant investment in + a confluence of technologies. This investment would need to be orders of + magnitude higher than today’s levels to facilitate the enabling infrastructure for + virtual worlds, to be enhanced by VR and AR. + + – Compute (Central Processing Unit (CPU), Graphics Processing Unit (GPU)) + + – Storage (Data Centers, Cloud), Edge Computing + + – Network Infrastructure (Low Latency, High Bandwidth) + + – Consumer Hardware (Headsets, Real World Modelling) + + – Game Development Platforms + +The lags, packet drops, and network 1. Compute +unreliability witnessed in today’s world would +make the current state of the infrastructure + If network and bandwidth form the nervous system of the Metaverse ferrying +unsuitable for building an experience + packets of data, then CPUs and GPUs form the brain of the Metaverse. CPUs and +remotely resembling the Metaverse as + GPUs play complementary roles — in a gameplay environment, the GPU renders +envisioned + the game world whereas the CPU handles the game logic. In an immersive internet + world, more high-performance chips are needed. + + Total capital expenditure (capex) in the semiconductor industry hit $152 billion in + 2021 with 35% growth, and strong growth is expected in the coming years.29 + Foundry investments are specifically key to driving high-performance computing + that is critical to the Metaverse, given high entry barriers to setting up new foundries + or fabrication plants, and the gestation time for these to go into production. + + + + + 28 Raja Koduri, “Powering the Metaverse,’ Intel, December 14, 2021. + 29 Based on data from IC Insights. + + + +© 2022 Citigroup + 64 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Figure 19. Worldwide Capital Spending by Product Type + 2019 YoY % 2020 YoY % 2021F YoY % + Product ($ bn) Chg. ($ bn) Chg. ($ bn) Chg. + MPU/MCU $16.9 12% $16.5 -2% $23.5 42% + % of Total 17% - 15% - 15% - + Logic $8.5 6% $8.8 4% $12.4 40% + % of Total 8% - 8% - 8% - + Foundry $26.2 18% $37.3 42% $53.0 42% + % of Total 26% - 33% - 35% - + DRAM/SRAM $19.1 -17% $17.9 -6% $24.0 34% + % of Total 19% - 16% - 16% - + Flash/Non-Volatile $22.6 -19% $24.6 9% $27.9 13% + % of Total 22% - 22% - 18% - + Analog/Other $9.0 -7% $7.9 -12% $11.2 41% + % of Total 9% - 7% - 7% - + Total $102.5 -3% $113.1 10% $152.0 34% + Source: IC Insights + + + Intel, the world’s biggest maker of central processors, is planning to introduce + several new generations of chip-making technology by 2025, as a part of its + turnaround strategy. Intel indicated its capex/investments could reach $25 billion to + $28 billion in 2022, and rise in the subsequent years. + + 2. Storage + + “Computer vision, graphics, and physics NVIDIA CEO Jensen Huang has underscored that computer vision, graphics, and + simulation will need to converge in a physics simulation will need to converge in a coherent architecture to meet the + coherent architecture to meet the needs of needs of the Metaverse. According to enterprise IT infrastructure market research + the Metaverse.” firm, Dell’Oro Group, cloud data centers will be at the core of this architecture. The + Jensen Huang, CEO, NVIDIA Metaverse will house artificial intelligence and data-hungry applications that will + require 5G/6G network speeds, capitalizing on edge computing. + + Chips needed for cloud computing will have larger die size and be significantly more + powerful. However, the focus on ultra-low latency for virtual-world applications will + also lead to more edge data centers powering the Metaverse. Edge data centers + are smaller computational facilities closer to the “edge of a network,” reducing the + distance between the user and the processing network to reduce latency and lag. + + A key reason for today’s stronger computing experience on smartphones is on the + back of cloud computing — apart from stronger chips, cloud datacenters also have + better electricity and cooling systems. While Moore’s Law and the eventual limit to + decreasing chip size will likely hit a wall, it is offset by the amount of compute that is + going to be done on the cloud in an accelerated and “leading-edge” way. + + Dell’Oro Group also projects that worldwide capex on data center infrastructure will + increase at a 7% compound annual growth rate from 2020 to 2025, to hit $278 + billion. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 65 + + + + +Figure 20. From Edge Sensors to the Centralized Cloud: How Computing Infrastructure of the Future Is Likely to Evolve + + + + +Source: CB Insights, WinSystems, Citi Global Insights + + + 3. Network Infrastructure + +The next generation of internet driving The next generation of internet driving immersive applications needs to improve +immersive applications needs to improve significantly on two key areas — bandwidth and latency. +significantly on two key areas — bandwidth +and latency  Bandwidth: The requirement of bandwidth — a measure of how much data can + be transmitted over a unit of time — is higher for the Metaverse than most + internet applications/games. Many games today embrace a hybrid model of + locally-stored information working together with cloud data streaming. Storing + data locally is not very practical for live immersive applications, as they require a + significant amount of real-time cloud streaming — on a scale not seen before. + + When Fortnite hosted the Travis Scott concert (which involved seamlessly + transporting players from the game’s core map to other virtual worlds like deep + into outer space and the depths of ocean), Epic Games sent all the game worlds + to users days-to-hours before the event via a standard Fortnite patch. This + enabled the game world to load the pre-determined next set piece in the + background. + + In contrast to this pre-installed mode, if a user wants to choose which world to go + to from a wide range of destinations, they would need to cloud stream them as + they make real-time decisions. Today’s gamers already struggle with bandwidth + congestion, even when online games send only positional and input data. The + Metaverse will amplify these needs to a different order of magnitude. + +  Latency: Latency is the time it takes a data signal to travel from one point on the + internet to another point and then come back. Low latency is critical to capture + micro-expressions, reduce discomfort with virtual reality (VR) displays, and build + a more realistic user experience. Today’s public internet does not work well for + real-time communication such as games or VR, being troubled by problems like + latency, jitter, and packet loss, among others. + +© 2022 Citigroup + 66 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Yet while the Metaverse isn’t a fast-twitch AAA game, its social nature and + desired importance means it will require low latency. Slight facial movements are + incredibly important to human conversation — and we’re incredibly sensitive to + slight mistakes and synchronization issues (hence the uncanny valley problem in + CGI). Social products, too, depend on their ubiquity. Just imagine if FaceTime or + Facebook didn’t work unless your friends or family were within 500 miles, for + example. Or only when you were at home. And if we want to tap into foreign or + at-distance labor in the virtual world, we need considerably more than just + excess bandwidth. + – MATTHEW BALL, THEORIST AND VENTURE CAPITALIST + + + + + Sri Iyer, CEO and Founder of game performance monitoring software + GameBench, stated that, “To meet the demands of enthusiasts, the input latency + needs to be less than 133 milliseconds (ms), quickening to less than 83ms for + ultra-gamers, yet the best we can currently serve up is 170 to 180ms, which only + caters to basic performance.” + + Reducing the latency of networks is a hard problem to solve. Although data + packets technically travel at the speed of light, fiber optics cable falls around 30% + short of this given transmission loss. Copper and coaxial cables still form a large + part of the network infrastructure, especially at the last mile, and degrade latency + further. + + Players like Subspace are building their own parallel and real-time internet for + gaming and the Metaverse, enabling game developers to deliver real-time + connectivity to their users. + + 5G does help, shaving off 20ms to 40ms off 4G with promises of latency as low + as 1ms; however, this is constrained as it only solves for the last few hundred + meters of data transmission from the cellular towers to homes, with traditional + infrastructure forming the backbone until the towers. While SpaceX’s Starlink will + help bring more people into the Metaverse, it does not solve for latency given the + increased travel distances and potential relaying across multiple satellites. + + 4. Consumer Hardware + + Consumer hardware plays a critical role in Consumer hardware plays a critical role in end-user interface and in shaping how + end-user interface and in shaping how users users will experience the Metaverse. Big Techs have been working on Metaverse- + will experience the Metaverse related technology, joining game makers and startups in pursuit of an immersive + digital experience. It is very likely that consumer hardware manufacturers act as + gatekeepers of the Metaverse and collect rents from apps and users. + +  VR Headsets + + VR headsets are head-mounted devices with integrated displays, stereo sound, + and motion tracking sensors that offer immersive 3D experiences for the wearer. + Today, they are most widely used with video games, but other applications + include simulators and trainers. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 67 + + + + + Additionally, VR headsets and viewers have also been designed for + smartphones. Unlike headsets with integrated displays, these units are + essentially enclosures which a smartphone can be inserted into (e.g., Samsung + Gear VR). VR content is viewed from the screen of the device itself through + lenses acting as a stereoscope, rather than using dedicated internal displays. + + Products such as the Oculus Quest 2, PlayStation VR, and Vive Pro 2 are + popular integrated VR headsets that have advanced over the years, offering + better graphics and computing power. Most VR headsets today can be + categorized into two buckets: + + – Tethered: These need an external device such as a PC or gaming console for + processing and are physically connected using cables (e.g., PlayStation VR). + These tend to be more powerful than standalone VR headsets and may even + require external sensors. + + – Standalone: These eliminate the need for external devices to handle + processing and any cable connections. The Oculus Quest 2 are amongst the + more popular VR headsets available today, offering great versatility and ease + of use. + + VR headsets have steadily been declining in weight and improving in capabilities. + Advancements in technology have helped create realistic visuals, motion + capture, and improved overall performance. For example, the first Oculus + released in 2016 (Oculus Rift) featured a resolution of 1080x1200 per eye, while + the Oculus Quest 2, released in 2020, offers a resolution of 1832x1920 per eye + (roughly equivalent to 4K). + + In addition to technological advancements, the cost for consumer VR headsets + has also declined over the years and today ranges from $400 to $1,200. China is + emerging as an important VR market, likely due to its high use of mobile internet, + sizeable gaming demographic, and early-adopter culture. According to + International Data Corporation (IDC), China accounted for over half the + commercial and consumer spending on VR/AR worldwide in 2020, and this is + likely to decline to over 36% by 2024 as global adoption picks up. The United + States is likely to be the second-largest region for VR/AR spending. + + VR headsets are not hitting mainstream adoption yet. According to data from + IDC, VR headset shipments likely reached 9.36 million in 2021. This could be a + result of the limited customer utility outside of gaming today. VR headsets are + also still clunky and relatively heavy to wear and induce motion sickness in some + users, making them difficult to use for extended periods of time. + +  AR Headsets + + AR headsets are also head-worn apparatus that allow viewers to see images + superimposed onto the real environment. However, unlike VR headsets, AR + headsets have transparent lenses that allow you to look at your surroundings, + instead of completely replacing your vision with a computer-generated image. + Products such as Microsoft HoloLens 2 offer a look at how augmented realty can + be used to educate, entertain, and enable research. + + + + +© 2022 Citigroup + 68 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Having come a long way from Sergey Brin’s original vision for the Google Glass, + Google is also building its AR headset, codenamed Project Iris, using outward- + facing cameras to blend computer graphics with a video feed of the real world, + creating a more immersive, mixed-reality experience. The firm Snap is also in + beta mode on its AR Spectacles. + +  Haptic and Sensory Experience Devices + + While VR/AR headsets offer visual stimulus, a fully immersive experience would + be incomplete without touch feedback. In late 2021, Meta's Reality Labs, + showcased a prototype for a haptic glove that delivered local haptic feedback to + different areas of the hand to stimulate the feedback of touching an object. + + Somnium Space, an Ethereum-based VR world, has developed a haptic suit, + DK1, which includes full-body motion capture and comes with 68 haptic points + capable of simulating a wide variety of experiences like feeling raindrops hit a + user’s body, and feet pounding on pebbled walks on a run. + + As haptics and biometric sensory technologies are refined and edge computing is + able to quickly process multiple data streams, more sophisticated interfaces are + likely to emerge. + +  Fusion of Smartphones and VR/AR Devices + + While VR and AR technologies are expected to play a central role in the + Metaverse, it is expected that users will be able to access the Metaverse from a + wide range of devices. + + Smartphones today already feature advanced capabilities with fast CPU/GPU + processing and live radar mapping. Add to it the ubiquity of smartphones, and + one could argue for a future where the Metaverse can be accessed without + VR/AR headsets, instead using just smartphones. After all, we already have a + few billions of these in people's hands, acting as the gateway to today’s internet. + + Phil Chen (Founding Partner of Race Capital, Managing Partner Emeritus of + Presence Capital, and Chief Decentralized Officer at HTC) cites about 80% of the + hardware for VR/AR headsets is similar to smartphones, making it easy to reuse + most parts. The remaining 20% is primarily comprised with the optics and + technologies, such as inside-out tracking and hand gesture pattern recognition. + These are areas likely to grow in the coming years as the technology ripens. + + 5. Game Development Platforms + + Game engines are software that provide game creators with the necessary set of + features to build games quickly and efficiently. Instead of having to reinvent the + wheel and create every aspect of their game from scratch, developers build games + with engines that handle things like physics, sound effects, player movement, + managing networking, and multi-platform compatibility. + + Game development engines like Unity and Unreal offer a suite of products that + make creation and development easier and composable for developers. It is + therefore critical that as key “shovels and picks” for building the Metaverse, game + development platforms enable the rails for interoperability to make it easier for + developers to build products that work across different virtual worlds. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 69 + + + + + NVIDIA’s Omniverse™, which its CEO Jensen Huang calls “Metaverse for + Engineers,” has the ability to render images at high fidelity in a photorealistic + Metaverse. It is designed to obey the laws of physics, gravity, electromagnetism, + and fundamental physical laws that are sacrosanct in the real world. NVIDIA is also + enabling building this infrastructure in a way that is open — using Pixar’s universal + scene description language so that AI agents can go inside and out through + wormholes. + + Technology Challenges to Realizing the Metaverse +To realize the true vision of the Metaverse, To realize the true vision of the Metaverse, immense investment would be needed in +the investment needed in hardware, hardware, networking, data centers, and processing power, at orders of magnitude +networking, data centers and processing higher than what exists in today’s world. +power is immense + + The Metaverse Connectivity Challenge + + Meta Platforms recently highlighted the connectivity challenges and significant + advancements needed in network latency, symmetrical bandwidth, and overall + speed of networks for an open and interoperable Metaverse.30 + + Network Latency Constraint: Today's latency-sensitive apps, like video + calling/cloud gaming, have a round-trip time latency of 75 ms to 150ms, and multi- + player, complex games can go sub-30ms. However, for the Metaverse to be truly + immersive, graphics need to update much faster, i.e., single to low double-digit + milliseconds. Local real-time rendering could enable this, but necessitate large + downloads for complex scenes, which may be unfeasible. Instead, development of + remote rendering over edge cloud or a hybrid between local and remote rendering + is likely to play a greater role in the future. + + Immersive Video-Streaming Gaps: The Metaverse is likely to be accessed via a + head-mounted display, centimeters away from the eye, requiring large resolution + videos, potentially well beyond 4K. This would require substantial improvements in + network throughput and innovations across the hardware and software stack. + + It is not feasible to currently quantify the exact capex needed given the industry is in + the early days of capacity building, and all the potential use cases of the Metaverse + are not fully scoped out yet. Nevertheless, the capex needs of the Metaverse are + expected to be highly interrelated with the capex needed for VR, AR, robotics, and + autonomous driving. + + + + + 30 Dan Rabinovitsj, “The Next Big Connectivity Challenge; Building Metaverse-Ready + + Networks,” Tech at Meta, February 27, 2022. + +© 2022 Citigroup + 70 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + We need several orders of magnitude more powerful computing capability, + accessible at much lower latencies across a multitude of device form factors. To + enable these capabilities at scale, the entire plumbing of the internet will need + major upgrades… + Truly persistent and immersive computing, at scale and accessible by billions of + humans in real time, will require even more: a 1,000x increase in computational + efficiency from today’s state of the art. + – RAJA KODURI, SENIOR VICE PRESIDENT AND GENERAL MANAGER OF THE ACCELERATED + COMPUTING SYSTEMS AND GRAPHICS GROUP AT INTEL CORPORATION + + + + + According to Intel, the building blocks for the Metaverse could be categorized into + three layers: (1) an intelligence layer (software), (2) a compute layer (processing), + and (3) an operational layer (delivers compute to users).31 For a seamless + experience in the Metaverse, the computing layer would need to undergo serious + advances across key areas of transistors, packaging, and memory. + + For a seamless experience in the To realize the Metaverse, advanced computing technology is needed because as + Metaverse, the computing layer would need per IEEE (Institute of Electrical and Electronics Engineers), making any advances in + to undergo serious advances across key increasing chip density and computing power is unlikely beyond 10 years from now, + areas although this could be partly offset by the technology architecture choices. The + Metaverse will likely have artificial intelligence and data-hungry applications which + will require 5G/6G network speeds and evolution of computing from cloud to edge. + + + + We have 10 years until silicon size of semiconductors stops shrinking entirely. + That's barely sufficient to produce the needed breakthroughs that will keep + computing going. + – PAOLO GARGINI, AN IEEE LIFE FELLOW AND INTEL VETERAN + + + + + 5G capabilities will enable a new range of applications (e.g., immersive internet), + but the GSMA expects only 2 billion (25% of global population in 2025) 5G + connections by 2025.32 While edge computing will reduce latency and allow data + localization in cases where data cannot be transferred offshore, challenges around + limited network devices, lack of implementers, and preventing and monitoring + security breaches remain. + + To have simultaneous immersive experiences, the Metaverse cannot afford to have + the “sharded” (split into different partitions or shards) implementation of most of + today’s games. It needs a platform that is truly scaled for robust interactions with + millions across the world, without any latency or degradation in experience. + + Further, blockchains need to support transaction processing instantaneously, and + different chains need to smoothly interoperate, mirroring a massively parallel + infrastructure supporting multiple chains and virtual worlds. + + + + 31 Raja Koduri, “Powering the Metaverse,” Intel, December 14, 2021. + 32 GSMA, The Mobile Economy 2022, February 2022. + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 71 + + + + + Moxie’s Criticism of Web3 + Matthew Rosenfeld, also known as Moxie Marlinspike, is an American + cryptographer, entrepreneur, and computer security researcher. He is the creator of + the encrypted messaging app Signal, and also the co-author of the Signal Protocol + encryption used by Signal, WhatsApp, Facebook Messenger, and Skype. + + In January 2022, Moxie published a blog post titled “My First Impressions of Web3,” + which caused quite a stir in the crypto ecosystem. Here we capture some of the + core points made by Moxie and evaluate them. On Web3, he makes two core + points: + +  People do not want to run their own servers, and never will. The premise for + Web1 was that everyone on the internet would be both a publisher and consumer + of content, as well as a publisher and consumer of infrastructure. However, + Moxie emphasizes that people do not want to run their own servers. In fact, even + organizations do not want to run their own servers. Therefore, companies that + offered to do this for others, i.e., cloud businesses, were very successful. + +  A protocol moves much more slowly than a platform. If something is truly + decentralized, it becomes very difficult to change, and often remains stuck in + time. Centralized organizations are able to mobilize resources and move as + quickly as possible to get things done. As an example, Moxie notes that even + after 30+ years, email is still unencrypted, whereas WhatsApp went from + unencrypted to full end-to-end encryption in a year. + + + + Given the history of why Web1 became Web2, what seems strange to me about + Web3 is that technologies like Ethereum have been built with many of the same + implicit trappings as Web1. To make these technologies usable, the space is + consolidating around…platforms. Again. People who will run servers for you, and + iterate on the new functionality that emerges. Infura, OpenSea, Coinbase, + Etherscan. + – MATTHEW ROSENFELD, ALSO KNOWN AS MOXIE MARLINSPIKE + + We agree there is a lot of truth to both the points above. Most people (and + companies) will not run their own servers. It is easy, more economical, and more + practical to outsource this to companies that can operate servers at scale and are + highly specialized. It is also true that centralized organizations are able to mobilize + resources and people, and get things done quickly. + + However, the ethos of open-source development also has had considerable + demonstrated success. For instance, the core protocol of Ethereum is governed by + the community and has navigated the protocol through fundamental changes + including the (ongoing) switch to proof-of-stake, scaling methodologies, and + protocol improvement proposals, amongst others. + + What is not to be underestimated is the power a group of volunteers bring to open- + source development, self-selected for both interest and ability to contribute to + projects they choose to work on. Eric S Raymond, in his seminal essay, The + Cathedral and the Bazaar, lays out the success of Linux OS’ approach, i.e., + “Bazaar” method of development (open-source, self-selection, collaborative + agendas, and approaches) versus the hallowed, centralized, secretive approach of + “Cathedrals,” driven top-down with conventional management and institutional + controls. + + +© 2022 Citigroup + 72 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Linux was the first project to make a conscious and successful effort to use the + entire world as its talent pool. I don't think it's a coincidence that the gestation + period of Linux coincided with the birth of the World Wide Web, and that Linux + left its infancy during the same period in 1993–1994 that saw the takeoff of the + Internet Service Provider (ISP) industry and the explosion of mainstream interest + in the Internet. Linus [Torvald] was the first person who learned how to play by + the new rules that pervasive Internet access made possible. + – ERIC S RAYMOND, SOFTWARE DEVELOPER AND AUTHOR OF THE CATHEDRAL AND THE + BAZAAR + + + + + In his experience of experimenting with distributed apps, Moxie makes the following + observations: + +  Distributed apps are just normal react websites. The “distributedness” refers + to where the state and logic/permissions for updating the state lives — on the + blockchain instead of “centralized” databases. + +  Lack of attention in the crypto world to “client/server interfaces.” Moxie + highlights that in all the focus on distributed trust, leaderless consensus, etc., + clients cannot participate in those mechanics, only servers can. Blockchains are + designed to be a network of peers, but not designed such that it is really possible + for a mobile device or browser to be one of those peers. + +  Further to the point that people do not want to run their own servers, a + decentralized app (dApp) also does not have to run its own node. + Companies have emerged that sell API (application programming interface) + access to an Ethereum node they run as a service, along with analytics and + access to historical transactions. These are centralized services, and a majority + of decentralized applications (dApps) today rely on services like Infura or + Alchemy to interact with the blockchain, and the client APIs do not verify + blockchain state or authenticity of responses. + +  A crypto wallet faces similar challenges like dApps. A wallet needs to do + basic things like display balances/recent transactions, showcase NFTs, and more + complex things like construct transactions, and interact with smart contracts. + However, most wallets run on mobile devices or browsers, and neither of these + can interact directly with blockchain, and hence rely on the same centralized + service providers that extend APIs to access blockchain through their nodes. + + We see a lot of validity in Moxie’s criticisms above, especially around access and + centralization, but believe the comment that distributed apps could just be react + websites is not accurate. In-browser, one-click, native plug-in to DeFi enabled by + wallet apps like MetaMask and the easy portability of coins, tokens, and NFTs + between dApps are unlike anything seen in Web2 sites. + + Blockchain infrastructure is not accessible directly from browser or mobile yet, + although technically an Ethereum node can run on a system as simple as a + Raspberry Pi (a single board computer used by hobbyists). However, a lot of + infrastructure build is still early. We expect that light nodes on Ethereum, which only + store the block headers and not the full chain, will soon bring blockchain to mobile + phones/smaller devices. + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 73 + + + + + Moxie’s points around centralization are, however, critical, and it is important that + the Web3 ecosystem pays heed to some of the core points. He writes, “Once a + distributed ecosystem centralizes around a platform for convenience, it becomes + the worst of both worlds: centralized control, but still distributed enough to become + mired in time,” (and therefore hard to improve). The temporary scaffolding becomes + permanent. + + Moxie emphasizes that his points are not a complaint about platforms like OpenSea + or what they are building, but that we should expect platform consolidation to + happen as an inevitable outcome, given how things are organized and how system + design works in such scenarios. + + + …it seems like we should take notice that from the very beginning, these technologies + immediately tended towards centralization through platforms in order for them to be + realized, that this has ~zero negatively felt effect on the velocity of the ecosystem, and + that most participants don’t even know or care it’s happening. + This might suggest that decentralization itself is not actually of immediate practical or + pressing importance to the majority of people downstream, that the only amount of + decentralization people want is the minimum amount required for something to exist, + and that if not very consciously accounted for, these forces will push us further from + rather than closer to the ideal. + – MATTHEW ROSENFELD, ALSO KNOWN AS MOXIE MARLINSPIKE + + + + + We see a lot of “bazaar”-like ethos at work today — bug bounties, white hat hacks, + the ecosystem coming together collectively to identify and solve problems in + different protocols. But the Web3 ecosystem also needs to be conscious of the risks + around early centralization that Moxie highlights and ensure that the Web3 + infrastructure is built with truly decentralized tooling, and not have a disconnect + between the narrative and the reality. + + Other Web3 High-Profile Critics + Web3’s goal of a decentralized, democratic internet is a noble one, but how much of + it is really true? Jack Dorsey, the CEO of Block (formerly known as Square) and + former-CEO of Twitter, criticized Web3 as not fully decentralized, arguing it is + ultimately owned by venture capitalists and investors. + + + + You don't own ‘Web3.’ The VCs and their LPs do. It will never escape their + incentives. It's ultimately a centralized entity with a different label. Know what + you're getting into... + – JACK DORSEY, CEO OF BLOCK (FORMERLY KNOWN AS SQUARE) ON TWITTER, DECEMBER 21, + 2021 + + + + + Tesla CEO Elon Musk, also tweeted his views on Web3, writing on December 21, + 2021, “Has anyone seen Web3? I can’t find it.” + + + + +© 2022 Citigroup + 74 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + I don’t see someone strapping a frigging screen to their face all day and not + wanting to ever leave. That seems — no way...I currently am unable to see a + compelling Metaverse situation… + – ELON MUSK, BABYLON BEE INTERVIEW, DECEMBER 21, 2021 + + + + + Video-essayist Dan Olson’s recent takedown on NFTs, titled “Line Goes Up — The + Problem with NFTs” has gone viral. Olson highlights the usual criticism around NFTs + being just web links with no cryptographic verification, royalties being platform- + specific, and the sheer number of scams in the space. + + “NFTs are just another mechanism to create Olson also calls out that NFTs are (1) just another mechanism to create demand for + demand for cryptocurrency building on the cryptocurrency building on the “greater fool” theory that benefits early-adopters at + ‘“greater fool” theory which benefits early- the expense of late-joiners, (2) have no innate value, and (3) the risks of “code + adopters.” being law.” He also highlights the privacy risks apparent in putting “everything on + – Dan Olson the blockchain.” + + There is some truth to the basic issues Olson highlights — there is no innate + consumer protection in Web3 as is in the centralized world (no credit card + chargebacks, dispute resolution mechanisms), no “root proof of authenticity” (i.e., + fraudulent data can be put on the blockchain), and financialization of everything + (making gaming a chore and not for fun). + + However, it is also true that a number of issues highlighted are likely attributable to + the Web3 space still being in fairly early and evolving phase. Some of these points, + for instance privacy-concerns, are being addressed by primitives like zero- + knowledge proofs, which separate knowledge (of underlying records, for instance) + from its verification. + + Ownership and self-custody are key enablers of Web3 and the Open Metaverse, + where power and control are returned to the user from the centralized platforms of + Web2. However, with this great power comes great responsibility for the user — in + private key custody, identity management, and security challenges, to name a few. + + Added to this is the complexity and volatility of managing a multi-currency world, + built on top of different blockchains optimized for different use cases. It is an open + question if all this will be too much to handle for the average user, who is used to + delegating all of this to centralized platforms. + + Does the average user care enough about decentralization to resist “centralization + by convenience,” even when the centralized Metaverse platforms likely provide a + much simpler and easier user experience, at least for the next few years? + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 75 + + + + + Digital Assets and NFTs in the + Metaverse +Blockchain primitives change the Twitter handles, domain names, and in-game costumes could all qualify as digital +fundamentals of digital asset ownership, assets. However, unlike ownership in the physical world, the digital equivalent of +quite unlike "ownership in platform” or property has been centered around “ownership in platform” or renting — a Fortnite +renting in the centralized ecosystems skin cannot be taken out of the game and traded, Twitter handles can be blocked, + and Instagram followers cannot be ported out to a new platform. + + Digital Assets and NFTs + Blockchain primitives change the fundamentals of digital asset ownership by + bringing in: + +  Standardization (e.g., the ERC-721 standard, which defines how non-fungible + tokens, or NFTs, are accessed/transferred) + +  Interoperability (i.e., which can work with different wallets and exchanges as the + token is recorded on the underlying blockchain) + +  Tradability (i.e., which enables auctions on marketplaces enabling liquidity) + +  Composability (i.e., which allows open-source apps to build on top of one + another) + +  Immutability (i.e., which allows for recording on the blockchain for posterity) + + Digital property in the Metaverse likely spans skins, avatars, emotes, NFTs, fungible + tokens, and collectibles, among others. One way to visualize these is as virtual + items stored in a digital wallet or “digital closet” that one can move in the Metaverse. + + Combined with the ease of switching pseudonymous identities, this involves + showing a different curated persona with a specific set of music, collectibles, + avatars, and skins from the digital closet with different social groups or game + environments, easily switching identities in a flash. + + In 2021, venture capital funding to NFT startups globally grew 130x versus 2020 to + reach $4.8 billion, as investors tend to believe in the promise of NFTs as collectible + assets, drivers of brand equity for companies, and playing a significant role in Web3 + and the Metaverse.33 + + NFTs + + NFT is a term used to describe a unique non-fungible digital asset, whose + ownership is recorded on a blockchain. This is a powerful primitive that allows + anyone to create, own, and trade digital assets whose provenance, history of + ownership, and rarity can be easily verified on the blockchain. + + Digital art has come a long way from the first image on the blockchain in 2011 — in + Bitcoin block 138725, a tribute to Cyberpunk and cryptographer Len Sassaman — + an image of Sassaman created with ASCII art. + + + + + 33 CB Insights, State of Blockchain 2021 Report, February 2022. + + + +© 2022 Citigroup + 76 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + NFTs — with permanent reference to the Most goods in the real world are non-fungible, unlike in the digital world, where an + creator and/or original owner of the digital action as simple as “right-click save” could potentially replicate a digital asset, + art — can preserve aspects of digital violating the creator’s intellectual property rights. Although digital tools enabled + ownership rights creation of more and more products, digital distribution was a threat to intellectual + property rights as it enabled easy replication at zero marginal cost. + + Figure 21. NFT Characteristics + + + + + Source: Citi Global Insights + + + We saw this firsthand in the Web1 world, when Napster (a peer-to-peer or P2P file + sharing service) enabled the transfer of music files over the distributed internet at + near zero cost. Hard disk and internet bandwidth costs were already so low that it + enabled a new way of distribution of digital assets, even in the 1990s. Napster was + quickly shut down over copyright infringement, although it had firmly established the + potential of P2P file sharing in the collective consciousness. + + NFTs can completely turn this model on its head by tying ownership intrinsically to + the art or music being created such that there is a permanent reference to the + creator and/or original owner, which can preserve aspects of digital ownership + rights. + + Digital goods need the same guarantees of permanence, openness, and “non- + fungibility” for them to be counted as intrinsically valuable. As NFTs are recorded on + the blockchain, it adds “permanence” to the item that outlives the creator. NFTs are + created from within smart contracts on the blockchain, by the process of “minting” + — creating an NFT, typically an ERC-721 token, from a digital asset and recording it + on the blockchain. + + NFTs usually do not store the digital asset itself on the blockchain (as to do so + would incur storage costs in the thousands/millions of dollars, as every contract in + the Ethereum blockchain must be stored on every full node on the network), but + instead contain a URL that points to the metadata, usually stored on decentralized + file storage such as InterPlanetary File System (IPFS), or Arweave. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 77 + + + + +Figure 22. How Do NFTs Work? + + + + +Source: Citi Global Insights + + +NFTs’ permanence and openness enables This permanence and openness also enables composability, as builders and +composability as creators and developers creators can now build on each other’s solutions, without fearing that the underlying +can build on each other's solutions creating component will disappear from use or be deprecated (where a software component +compounding the creation process is no longer considered efficient or safe, usually without completely removing it to + enable legacy use cases). This enables developers to create new solutions that + build on other developers’ work, compounding the creation process. + + NFTs broke into the mainstream with CryptoKitties in 2017, which were the first + NFTs to be minted with the ERC-721 NFT standard. The game became so popular + that it temporarily congested the Ethereum network. CryptoKitties allowed players to + purchase, breed, and trade virtual cats with different features with varying levels of + rarity. CryptoPunks, a two-person project inspired by the London cyberpunk + movement, predated CryptoKitties by a few months and had a resurgence of sorts + in 2021, kicking off the 2021 NFT craze along with a few other projects. + + + + +© 2022 Citigroup + 78 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Figure 23. CryptoKitties Figure 24. CryptoPunks + + + + + Source: OpenSea Source: OpenSea + + + Composability of NFTs is best illustrated by the Loot NFT project, which was + created in 2021 by Dom Hofmann, co-founder of the Vine video app. Loot is a + collection of 8,000 (virtual) bags of adventure gear, mintable as NFTs, with each bag + essentially containing a unique list of eight items, with the items only represented by + text phrases like “divine robe” and “silk hood.” + + Buyers spent hundreds and thousands of dollars to buy these unique text lists that + they could keep in their crypto wallets. The project not only went viral immediately, + hitting market capitalization of $180 million within five days, but also spurred many + projects to build on top of those few phrases. Certain kinds of items in these lists + were found to be rare within the whole set, and so bags with those lists were very + valuable. + + + + [Loot is] a minimum viable product that anybody can take up and expand upon, + limited only by their collective imaginations. The speed of which builders have + flocked towards Loot has been astounding, incensed by the possibility of building + something altogether. + – DARREN LAU, INVESTOR AT NOT3LAU CAPITAL + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 79 + + + + +Figure 25. Loot Bags — Unique Lists of Word for Sale + + + + +Source: Loot Project + + + Figure 26 highlights a few composable projects built on top of the original project by + different groups of people. One project involves 8,000 “procedurally-created” realms + to explore, one to unbundle the bag and individually trade and upgrade bag items, + and one for 3D interpretation of entire categories, to name a few. + + + + +© 2022 Citigroup + 80 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Figure 26. Composable Projects Built on Loot + + + + + Source: Loot Project + + + + + So if somebody has built a good version of how to solve a certain problem, I’m + just going to reuse that and reuse it again. Maybe I’ll fork it, maybe I’ll improve it + a little bit, maybe I’ll put it to a slightly different system, but essentially at the + fundamental level, each problem only has to be solved once. + – NAVAL RAVIKANT, FOUNDER OF ANGELLIST + + + + + Every time an NFT is traded, be it at first minting or on the secondary market, the + new owner and the price paid is recorded indelibly on the blockchain, available for + anyone to view and verify. As Jake Brukhman, founder of cryptocurrency investment + company CoinFund said, “You’re not buying the picture. You’re buying the property + rights to the picture.” + + There is, however, a lot of ambiguity about There is, however, a lot of ambiguity about what property rights come with NFT + what property rights come with an NFT purchase, and it is not a one-size-fits-all approach, as there are multiple instances + purchase — is it only the “right-to-use,” or of NFT sales with intellectual property rights being retained by the creator. So the + “virtue signaling” with a digital asset? question then arises as to what the buyer is actually purchasing, is it only the “right- + to-use,” or “virtue signaling” with a digital asset? + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 81 + + + + + In the discussion around NFTs, it is critical to note that what is usually recorded on + the blockchain is only a pointer to the metadata of the digital asset that records its + ownership and key parameters, and not the underlying digital asset itself on the + blockchain. + + Further, NFTs (or anything stored on the blockchain) only vouch for authenticity and + traceability from the point that the data is recorded on the blockchain. Fraudulent or + counterfeit data can be recorded on the blockchain, and the blockchain makes no + claims about the off-chain authenticity and validity pre-minting. + +There is a lot of criticism around the use of There is a lot of criticism around the use of Web2 URLs and servers as the +Web2 URLs and servers as the underlying underlying digital asset or metadata file could be easily replaced. This problem is +digital asset or metadata file could be easily mitigated by using decentralized file storage like IPFS or Arweave. +replaced. Decentralized storage has +solutions that work well with immutable data Decentralized storage has solutions that work well with immutable data that could +that could be useful for storing the digital be useful for storing the digital asset. For instance, IPFS links cannot be easily +asset. tampered with or altered to point to different data after they have been created. + + NFT Use Cases + + We can broadly split NFT use cases into two basic approaches — those with utility + and those primarily used as collectibles, and some as a combination of the two. + Utility-centered NFTs usually open up access to exclusive events, and are starting + to be used by consumer brands for creating marketing buzz or improving loyalty + points; they are also used to capture a “deed of ownership” of real-world assets. + Collectibles are usually seen as speculative investments. + + However the most popular use cases of NFTs today span gaming (by volume of + transactions) and art (by value of transactions) (see Figure 29 and Figure 30), but + we are seeing increasingly new use cases across other domains. + +Figure 27. Prominent NFT Use Cases + + DIGITAL ART + NFTs can be used to authenticate + originality/ownership of digital art + + NAME SERVICE & DOMAINS COLLECTIBLES + Create unique domains on the Identify collectibles with unique algorithms + blockchain, which can be bought/sold and identities with added value + + SOCIAL TOKENS GAMING + Tokens issued by creators/communities Allows in-game items to be tokenized & + to drive engagement/ownership exchanged with peers on marketplaces + + + SPORTS FASHION & LUXURY + Offers licensed digital media of Helps customers verify ownership/authenticity + favourite sport moments, collectibles of luxury items, reducing counterfeit + VIRTUAL WORLD + Decentralized virtual reality platforms enable + users to monetize virtual land with in-game NFTs +Source: 101 Blockchains, NonFungible.com, Citi Global Insights + + +© 2022 Citigroup + 82 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + 1. Digital Art and Collectibles + + NFTs for art exploded into the mainstream in March 2021, with the sale of the digital + art work Everydays: The First 5000 Days by digital artist Mike Winkelmann, + popularly known as Beeple, for $69 million at Christie’s. + + Unlike the physical world, where artists do not get a revenue share from secondary + sales, NFTs can be crafted to ensure the artist gets a percentage of subsequent + secondary sales after initial minting. However, it is important to note that despite all + the hype, until mid-2021 there was no standard for royalty payouts for NFTs, and + royalties on secondary sales were primarily limited to the platform the NFTs were + minted on. This has been fixed with EIP-2981 (Ethereum Improvement Proposal - + 2981), released in July 2021, which established standards for royalty payouts. + + According to nonfungible.com, a total of 16.8 million sale transactions, worth $18.4 + billion were witnessed between April 2021 and March 2022. + + Cryptoart enthusiasts and investors tend to judge NFTs not by traditional art + standards, but by characteristics such as “dankness,” which captures the potency of + expression and creativity, and usually indicates an exceptionally rare image gone + viral. This helps explain why pictures of bored apes or pudgy penguins are trading + for millions of dollars. + + The economy and community built around some of these images and profile + pictures (PFPs) has dragged in prominent influencers, venture capitalists, and + business personalities into its fold (some as paid sponsors). Two projects are + specifically worth calling out within the digital collectibles space: + +  CryptoPunks, is a collection of 10,000 pixelated characters built and generated + procedurally from a project in 2017, which exploded into the mainstream in the + last 18 months, with the cheapest “punk” ranging anywhere around $30,000 and + the rarest fetching close to $10 million. + +  Bored Ape Yacht Club (BAYC), which is an NFT collection with a fixed supply of + 10,000, reported all-time trading volume of $2.6 billion by March 2022. BAYC, + originally launched in April 2021 by a team of pseudonymous developers, sold + out the 10,000 pieces for a price of 0.08 ether, or about $190. However, a + combination of influencer involvement, community strength, and utilities for + members boosted its value to a floor price of about $326,000 in February 2022. + + Figure 28. Selected Prominent NFT Sales, 2021 + NFTs Price (US$) Price (ETH) + 1. Beeple's Everydays: The First 5000 Days $69.3 million - + 2. Human One $29.0 million - + 3. BAYC and BAKC Bundle $26.2 million* - + 4. CryptoPunk #4156 $10.4 million 2,500 ETH + 5. COVID Alien $11.7 million - + 6. CryptoPunk #7804 $7.56 million 4,200 ETH + 7. CryptoPunk #3100 $7.51 million 4,200 ETH + 8. Right-click and Save As guy $7.09 million 1,600 ETH + 9. Ringers #109 $6.94 million 2,100 ETH + 10. CryptoPunk #8857 $6.64 million 2,000 ETH + * 101 BAYC = $24.4 million and 101 BACK = $1.8 million + Source: DappRadar.com, Citi Global Insights + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 83 + + + + + 2. Gaming + + Blockchain gaming traces its mainstream origins to CryptoKitties, released by + Dapper Labs in 2017, that enabled players to purchase, breed, and trade virtual + cats with varying genomes and rarity characteristics. Notably, the game has no + goal. By October 2018, CryptoKitties reached the milestone of one million cats + being bred with a volume of 3.2 million transactions on its smart contract. + + However, the game that pioneered the “play-to-earn” concept in which players make + money in proportion to time and effort invested in the game was Axie Infinity, + operated by Vietnam-based Sky Mavis. Inspired by the Nintendo franchise + Pokémon, the Axie game has its own ecosystem where players acquire digital pets + called Axies, which are bred, raised, traded, and battled with other players or teams. + The game became so popular that in markets like the Philippines, workers were + supplementing daily income with playing on Axie, especially during the pandemic. + Although interest in Axie Infinity has waned the last few months, it still commands a + market capitalization of close to $2.8 billion as of March 2022. + + Although a large section of the traditional gaming community is resistant to micro- + transactions and blockchain adoption in what they see as usurping of “gaming for + fun” by introduction of a for-profit motive, 2021 witnessed over $4.5 billion of + gaming-related NFT trading volume. + + Although transaction volume (by number of transactions) in NFTs is primarily driven + by games over the last 12 months, we notice that most of the gaming transaction + value is miniscule. The category Art and Collectibles, by contrast, has a transaction + value an order of magnitude higher than gaming. + +Figure 29. Number of NFT Sales by Category (7-Day Moving Average) Figure 30. US$ Spent on Completed NFT Sales by Category (7-Day + Moving Average) + + Gaming Art and Collectibles Gaming Art and Collectibles + 150k $250m + + 120k $200m + + 90k $150m + + 60k $100m + + 30k $50m + + 0k $0m + Jan-18 + + May-18 + + + + Jan-19 + + May-19 + + + + Jan-20 + + May-20 + + + + Jan-21 + + May-21 + + + + Jan-22 + Jul-18 + + + + + Jul-19 + + + + + Jul-20 + + + + + Jul-21 + Nov-20 + + + + + Nov-21 + Mar-18 + + + Sep-18 + Nov-18 + + Mar-19 + + + Sep-19 + Nov-19 + + Mar-20 + + + Sep-20 + + + Mar-21 + + + Sep-21 + + + Mar-22 + + + + + Jan-18 + + May-18 + + + + Jan-19 + + May-19 + + + + Jan-20 + + May-20 + + + + Jan-21 + + May-21 + + + + Jan-22 + Jul-18 + + + + + Jul-19 + + + + + Jul-20 + + + + + Jul-21 + Mar-18 + + + Sep-18 + Nov-18 + + Mar-19 + + + Sep-19 + Nov-19 + + Mar-20 + + + Sep-20 + Nov-20 + + Mar-21 + + + Sep-21 + Nov-21 + + Mar-22 + + +Source: NonFungible.com Source: NonFungible.com + + + 3. Fashion and Luxury: Marketing and Events + + Retail, fashion, and luxury brands could potentially be key participants in the + Metaverse. We have seen partnerships between digital fashion brands and retailers + to sell digital clothes, including some restricted to the virtual world only. + + Below are examples of some brands already making early moves in the Metaverse. + +  Adidas: Recently announced an NFT collection titled “Into the Metaverse,” + comprising virtual wearables that buyers can use in the Metaverse, with physical + clothing to match. All 30,000 NFTs were sold in the span of an afternoon, netting + the company more than $22 million from the NFT sales. + +© 2022 Citigroup + 84 Citi GPS: Global Perspectives & Solutions March 2022 + + + + +  Balenciaga: Designed four virtual outfits and various accessories for Fortnite + avatars. + +  Burberry: Announced a partnership with Mythical Games to launch NFTs in their + flagship player-owned Blankos Block Party blockchain game. + +  Gucci: Attracted headlines when a single bag sold for $4,000 through “Gucci + Garden,” a pop-up world on the gaming environment Roblox selling the brand’s + designs. + +  Nike: Acquired digital sneaker maker RTFKT Studios. Nike also built an + immersive world, Nikeland in Roblox, featuring Nike buildings, arenas, and fields + where players can compete in mini-games. + +  Prada: Together with Adidas, announced a selection of apparel and accessory + pieces carrying the DNA of both partners, available to be minted as NFTs on the + Polygon network. + +  Ralph Lauren: Launched its new store in Roblox in December 2021, open 24x7, + and stocked with winter wear in the Metaverse, for under $5. + +  Uniqlo: Partnered with Microsoft to sell virtual outfits for Minecraft players. + + We are already seeing consumer brands, luxury goods companies, and others + exploring the NFT space, partly due to FOMO (Fear Of Missing Out) on the next big + cultural and marketing trend. Specific use cases for corporates and brands include: + +  Creating Marketing “Buzz”: A leading brand could collaborate with street artists + or digital artists to create unique versions of their products for auction; ownership + of the product can then be transferred and evidenced via an NFT token. + +  Event-Ticketing and Driving Loyalty: NFTs have practical applications and can + be used to simplify (or improve the security of) existing processes. For example, + a brand could launch a special edition product or an event where an NFT is used + to “gatekeep” access. It can double as a ticket that can be used for admittance + via a QR (“quick response”) code. The ticket might have other material, such as + images or video, that would encourage a consumer to retain it or collect a series, + in order to eventually even sell the series. + + 4. Virtual Worlds + + The year 2021 witnessed a virtual land rush, with leading platforms (e.g., The + Sandbox, Decentraland, Cryptovoxels, and Somnium Space) selling over $100 + million worth of virtual land in just one week in November 2021, with over $86 + million of it coming from The Sandbox. Although conceptually, these virtual worlds + should be interoperable given they are built on the same underlying blockchain, to + what extent there is true movement of digital assets from one world to another + remains to be seen. + + Virtual worlds like Decentraland and The Sandbox are decentralized, virtual land + software applications powered by blockchain, within which users purchase digital + land parcels and build, develop, and sell these. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 85 + + + + + There are three layers that enable these virtual land platforms: + +  Consensus Layer: Tracks the ownership of land purchases on the blockchain. + +  Content Layer: Controls the distribution of the parcels and renders content such + as audio, video, and voice chat. + +  Real-Time Layer: Used for peer-to-peer connections. + + Virtual real-estate is just starting to emerge and head towards the mainstream, and + we are yet to see a wide array of potential use cases. Barbados launched the first + “virtual embassy” in the Metaverse in Decentraland in November 2021. + + + + [E]-consular services will be a core feature alongside with a virtual teleporter + which will be built in Barbados’ Metaverse Embassy connecting all Metaworlds + as a gesture of diplomatic unification between technology platforms. + – BARBADOS GOVERNMENT, PRESS RELEASE + + + + + Investing in digital real estate is still highly speculative, and with users and investors + trying to get early entry into betting on which districts and areas are likely to + appreciate the most. + + Figure 31. Top NFT Sales on Decentraland + NFTs Price (US$) Price (MANA) + 1. Fashion Street Estate $2.42 million 618,000 MANA + 2. Lady Bug (Plaza) $1.32 million 510,000 MANA + 3. Official District $1.19 million 425,000 MANA + 4. Massive Genesis Plaza $1.08 million 210,000 MANA + 5. VentureEstates $1.03 million 300,000 MANA + Note: Decentraland (MANA) is an Ethereum token that powers the Decentraland virtual reality platform. + Source: DappRadar.com, Citi Global Insights + + + Tokens.com, the majority owner of the Metaverse Group, one of the world’s first + virtual real estate companies, purchased Fashion Street Estate for $2.4 million in + November 2021 and is developing the virtual land parcel it acquired with virtual + towers, fashion tents, and runways. It plans to host the first of its kind virtual fashion + event in March 2022, featuring avatar models, catwalks, pop-up shops, after parties, + and immersive experiences connecting digital to physical fashion. + + 5. Sports NFTs + + Sports NFTs offer fans a chance to acquire licensed digital media of their favorite + sport moments, including limited-edition video clips, player cards, or game-related + artifacts. Sports NFTs caught the collective attention of fans with NBA Top Shots + NFTs, launched in late 2020, by the NBA in partnership with Dapper Labs (of + CryptoKitties fame), clocking in over $700 million sales in less than a year of launch. + + Sports NFTs not only bring additional revenue to sports leagues, teams, and + players, but also provide an opportunity to enhance relationships with fans, as well + as design and sell merchandise. Additionally, NFTs could be useful for digital sports + tickets, reducing instances of fakes and black-marketing. + + + + +© 2022 Citigroup + 86 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + According to Deloitte Global, the global sports NFT sector will generate over $2 + billion in transactions in 2022, with an estimated four to five million sports fans + globally having purchased or been gifted a sports collectible NFT. Limited edition + video clips of sporting moments or player cards are likely to be the most popular in + this space. + + 6. Social Tokens + + Social tokens are tokens issued by creators and communities to drive engagement + and ownership and are backed by the reputation of a brand, individual, or + community. A social token can represent use cases from permissioned access to + gated private communities to creators offering incentives to fans. In general, social + tokens align participants behind a collective mission related to the community or the + creator. + + Celebrity artists and athletes like rapper Lil Yachty, and Grammy-award winning + musician RAC have introduced tokens to give fans a stake in their work. The $RAC + tokens were not purchasable, but only earned retroactively by the most loyal + subscribers. + + Social tokens, issued as ERC-20 tokens, are freely transferable and tend to be + listed on decentralized exchanges which gives them a clear value. According to + Outlier Ventures, social tokens could become the norm for digital status signaling, + showing off membership to prestigious groups in a digital-native way, and a + coordination mechanism for political action. + + Real-World NFTs + + Real-world NFTs are a way to tokenize Real-world NFTs are a way of establishing a bridge connecting the Metaverse world + physical property so that it can be uniquely with NFTs with real-world assets. It is a way to tokenize physical property so that it + identified in the digital realm, traded, can be uniquely identified in the digital realm, traded, governed, and owned using + governed, and owned, using the same the same primitives driving the crypto economy. + primitives driving the crypto economy + This is a powerful concept that enables use cases from decentralized commerce + (buying a physical asset in the decentralized Metaverse world and redeeming it for + a physical good in the real world), to real-asset backed decentralized finance (DeFi) + loans. + + Real-world use cases of NFTs include applications from supply-chain traceability to + confidentiality of healthcare records. NFTs could also be used to confirm + provenance and authenticity of rare goods with an encrypted NFC (near field + communication) tag. + + FinTechs are working on solutions that would bring real-world assets into DeFi + markets by making these assets into NFTs. For instance, LoanSnap, a mortgage + lender, uses the Bacon Protocol to convert a mortgage into an NFT, enabling retail + participation in fractional mortgage shares. + + Real-World Use Case: Decentralized Commerce + + Cryptographic primitives, blockchain- Cryptographic primitives and blockchain have the potential to decentralize + enabled traceability, and security will likely commerce, enabling small- and medium-sized businesses to list, vend, and build + enable customers to bypass large platforms their on-chain credit and reputation. Blockchain-enabled traceability and security + and go direct to smaller brands may enable customers to bypass large platforms and go direct to the smaller brand, + similar to the kind of direct-to-consumer infrastructure that Shopify enabled for small + merchants, but decentralized and on-chain. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 87 + + + + + Now it’s normal for humans to have a digital shadow, such as a LinkedIn or + Twitter profile. And within the next couple of years, it will also be normal for + physical and fashion items to have a digital twin. + – JUSTIN BANON, CO-FOUNDER OF BOSON PROTOCOL + + + + + Boson Protocol, one of the early builders in the decentralized commerce + (dCommerce) space, is a protocol that enables the sale of real-world goods and + services as NFTs and is building an infrastructure layer to map these onto the real + world in a trustless way. For example, an NFT of a pair of shoes bought on the + Metaverse would be redeemable for a physical pair in the real world, and vice + versa. + + Real-World Use Case: Community, Events, and Investments + + Arts DAO represents the largest NFT community in the Middle East, composed of + investors, artists, creators, collectors, and Web3 developers. The community was + formed initially by Kristel Bechara, one of the first NFT artists in the Middle East, + alongside Anas Bhurtun and Danosch Zahedi, the founders of the Crypto Sheikhs + Podcast. + + Arts DAO is part NFT fund manager, providing fractional ownership of NFTs for end + investors; and part Y Combinator (YC) for Web3, helping aspiring artists and + creators launch themselves with in the NFT space. Holder of Arts DAO x Kristel +Arts DAO + NFTs get access to the NFT fund, community events, and the accelerator. + + + + The key limitation however was community members in Web2 were not able to + ‘own’ the network or pool resources together and therefore directly participate in + the financial gains from a community built on these legacy Web2 platforms. The + advent of Ethereum, smart contracts and decentralization in Web3 changed + everything. Members can become ‘token holders’ (which share similarities with + being a company shareholder) by owning underlying assets held by a community + through the tokenization of assets enabled by NFTs.34 + – ARTS DAO + + + + + 34 Arts DAO, “Your Bridge to Wealth Management in the Metaverse,” Medium, February + + 18, 2022. + +© 2022 Citigroup + 88 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Figure 32. Examples of NFTs — Arts DAO Community + Rarest CloneX Bored Ape Yacht Club + + + + + Source: Citi Research + CryptoPunk Example of NFT Generative Art Piece Forming Part of Arts DAO Drop + + + + + Source: Arts DAO + + + NFTs Under the Hood + We attempt to look under the hood of an NFT (an ERC-721 token), the smart + contract code, its metadata, and storage of the base image on IPFS (Inter Planetary + File System, a decentralized peer to peer storage system) to help deconstruct how + NFTs work. + + Figure 33 shows the listing on NFT marketplace OpenSea of a Bored Ape Yacht + Club (BAYC) NFT, a collection of 10,000 NFT Apes, each with a unique set of traits. + Some traits are rarer, leading to more demand amongst collectors. The Bored Ape + token also gets its owner exclusive access to future collections and other perks as + members of BAYC. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 89 + + + + +Figure 33. Under the Hood of a Bored Ape Yacht Club (BAYC) NFT + + + + +Source: OpenSea + + + Programs that implement smart contracts by running on an EVM (Ethereum Virtual + Machine) are commonly written in a high-level programming language called + Solidity. Ethereum Virtual Machine is an abstraction for a computation engine which + acts as a decentralized computer (but in reality is actually thousands of computers + across the world). + + ERC-721 is an open standard that describes how to build NFTs on EVM-compatible + blockchains. It is a standard interface for NFTs and has a set of rules which make it + easy to work with NFTs. + +  Embedded in the smart contract is a function that defines the URI (Universal + Resource Identifier — a unique sequence of characters that identifies a resource + on the web), as highlighted in location 1 in the example image. This points to the + location where the “Metadata” of the NFT is stored, and could be an http link, i.e., + a Web2 reference, or as in the image earlier, an IPFS Web3 location. + + + + +© 2022 Citigroup + 90 Citi GPS: Global Perspectives & Solutions March 2022 + + + + +  The Metadata defines the key characteristics of the NFT, such as its name, + description, and location where the NFT’s image is stored. Web3 applications + use the Metadata to index, store, and display the NFT as intended. The Metadata + (in location 2 in the image) gives us the link where the base image is stored. + + Metadata can therefore be stored either on centralized/decentralized servers, and + accessed through an http URL or IPFS URL, accordingly. The sequence therefore + goes from the smart contract → Metadata → Image stored on Web2/IPFS servers. + + To purchase an NFT from a marketplace like OpenSea, a Web3 wallet like + MetaMask (an in-browser extension) is needed to enable the connection with + supported Web3 sites. Once the specific NFT is selected and “buy” button clicked, + the wallet app displays total estimated cost including gas fees (all Ethereum + transactions incur gas costs to discourage spamming the network). The transaction + then needs to be signed, and gets submitted to be confirmed on the blockchain. + + In Figure 34 below, we purchased a CryptoKitty from Dapper Labs’ website, and we + signed the transaction on the MetaMask wallet by clicking “Confirm” in the image + below. Within a few minutes, the transaction gets picked up by one of the miners + mining a block, and gets written to the blockchain. + + Figure 34. CryptoKitty NFT + + + + + Source: Dapper Labs + + + Every transaction has a unique transaction hash, which is an identifier and can be + used to access the transaction from the blockchain. We can now verify that the + transaction is confirmed by checking Etherscan, a blockchain explorer (Figure 35). + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 91 + + + + +Figure 35. Transaction Confirmation + + + + +Source: Etherscan + + + Once purchased, the NFT is now reflected in our wallet and can be used across + Web3 applications or transferred to other addresses. + + + + +© 2022 Citigroup + 92 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + External Expert View: Yat Siu on The Sandbox Metaverse + Yat Siu is the Founder and CEO of Outblaze, a digital services and solutions + company specializing in gaming, cloud technology, and smartphone/tablet software + development. A serial entrepreneur, Yat is also a Founder and Board Director of + mobile games publisher Animoca. + + Q: How has the gaming industry evolved over the last 30-40 years? Where are + we today in terms of the interface whether it is blockchain, DeFi, or NFT? + + A: I believe we have been trained over the years to enjoy immersive virtual + experiences. As children, many of us have enjoyed video games and we continue to + play them even as we get older. Today 3.2 billion people, out of the 4.6 billion + people that are online, play video games. + + More interestingly, you do not just play video games for five to 10 minutes. Instead, + you immerse yourself into the gameplay and tend to play it for several hours in a + day. You also make friendships and purchase virtual items that you believe you + own, for the most part. For instance, when you buy a skin on Fortnite, you do not + think you are renting it, although actually you are. In reality you own nothing. In fact, + today most virtual items have become social status symbols online. + + Q: Is the Metaverse just an extension of Web2? What do you define as the real + Metaverse? + + A: The paradigm of ownership is the ability to construct, innovate, and create new + products/services on top of the bedrock of other products/services. However, a + challenge we face today in the online world is that we do not own anything — we + are effectively renters. This also means we are effectively building other people’s + platforms and enriching it with our data. + + In my opinion, data is amongst the most valuable resource today and is crucial for + the digital world or the Metaverse. I believe this is because data has data gravity, + i.e., it compounds on top of each other to create network effects. + + We see this compounding effect in our lives every day. As we talk, learn, study, and + face different life experiences, we create different data sources. However, as human + beings, we have a limit to the number of people we connect with and learn from. + This data when processed using artificial intelligence and deep machine learning + can have a strong compounding network effect, revealing strong insights into + human behavior. + + However, most of us give away our data for free every time we use the internet for + activities such as social media, shopping, or gaming. Our data is then sold to us in + the form of advertising. Unfortunately, all of us have been conditioned to think that in + order to use these services, we have to give away our data. + + Today, we are living in an age that is digitally colonized by Big Tech platforms. Can + you imagine what would happen to us if we get de-platformed? In the real world, + this is not possible, as you cannot evict someone from their house due to several + legal frameworks. However, in the digital world, this is possible as we are bound by + terms of service. + + Therefore, it is my view that ownership cannot exist in any centralized platform that + is a corporate body, as it is owned and controlled by a minority. The minority interest + will always serve to protect its minority interest. Ultimately, all the power resides in + data, which is in a private, centralized database; inaccessible to end-users. + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 93 + + + + + Blockchain and Web3 aim to change this, allowing data to be stored in an open + structure that is decentralized and not owned by anyone. This could help facilitate + new innovations and businesses on top of it. + + The Metaverse can be thought of as a real country/economy. Studies have shown + that countries with poor/no property rights tend to be very economically distraught; + whereas those with strong property rights tend to flourish. I believe the same holds + true for the Open Metaverse and it has to start with ownership. + + Q: How do virtual lands fit into the overall story of the Metaverse? + + A: In my opinion, the cost of most things we pay for today, is linked to the prestige, + social status value of the item versus the actual cost of the material. For instance, + when you buy a Nike shoe or a Gucci bag, you are paying not only for the utility + value, but also the network effect, i.e., what other people think of it, social status, + etc. + + Moving from the physical world to the virtual world isn’t significantly different. While + we can purchase a big mansion in the middle of nowhere, we often choose to live in + an expensive small apartment, in the center of the town/city. This is because the + network effect is meaningful, as the apartment says something about us and the + community around it. + + In the virtual world, platforms such as The Sandbox also have multiple pieces of + real estate. However, owing to the network effects, we tend to perceive certain plots + as more valuable than others, especially if they are in the vicinity of celebrities or in + closer proximity to the center of the town. + + Aside from the social status one gets purchasing a plot in the proximity of + celebrities, you also get the attention of people and they might want to know more + about you. Likewise, some people prefer to buy virtual land in mega cities, although + there are several other plots of land available in The Sandbox at cheaper rates. + These decisions are driven by some of the same factors we take into consideration + while purchasing land in the physical world. + + Today, we have approximately 200 Metaverse architects/builders in The Sandbox + that are building experiences for other people. In fact some companies in Hong + Kong have as much as 18 full-time staff categorized as Metaverse architects. These + are real jobs and employment around building experiences. + + Q: What is a voxel environment? Why is it important in the Metaverse? + + A: The visual experience for The Sandbox is reminiscent of an upgraded version of + Minecraft — both of which offer a voxel environment. Minecraft and Roblox are the + two largest games by order of magnitude and are bigger than Fortnite or Call of + Duty. Moreover, these games continue to grow as people create experiences and + construct on top of others, which is possible in a voxel environment. + + One can think of voxel like Lego bricks. You can construct a new thing on top of + something else, depending entirely on your creativity. Voxel tools are open source, + easy to use, and allow anyone to design/edit 3D voxel (cube) models. For instance, + using voxel, individuals can design and build a piece of furniture in The Sandbox + that they can then buy/sell to other customers. + + Q: Can you share some statistics on the sale and purchase of virtual land? + + + + +© 2022 Citigroup + 94 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + A: In volume terms, we could be trading $200 million to $300 million a day of land + amongst parties. This could be in the form of investments, speculation, or building + new experiences. In fact a lot of game developers are constantly building new + experiences on virtual land. + + I would estimate, we currently have about 18,000 land owners and a few million + users experiencing it on The Sandbox. There are several high-net-worth individuals + on these platforms, with an average wallet size of around $150,000 on The + Sandbox. + + Q: Does the Metaverse represent a marketing opportunity for brands? + + A: Much of the value on platforms such as The Sandbox isn’t just because of the + land they have created. Rather it can be attributed to the experiences users have + created on these platforms. + + For instance, brands such as Adidas have built virtual store experiences on + platforms such as The Sandbox with the aim of tapping into an established + customer base. The ultimate objective is to let their audience know more about the + brand and give them an opportunity to purchase virtual items. + + Likewise, brands such as Nike have created an entire world of their own with + experiences such as Nikeland on Roblox that are free for anyone to visit. The + Nikeland showroom features a collection of Nike shoes, clothes, and accessories to + personalize the look of your avatar in the virtual environment. + + Several brands are also purchasing/selling NFTs in an attempt to signal to their + customers that they are actively present in the Metaverse community. + + Q: Can you elaborate on the development cycle of The Sandbox? What + changes are we likely to see in the next rollout? + + A: The Sandbox Metaverse Alpha was launched in 2021, and we are launching a + second phase of the Alpha version very soon. I believe the Beta version of the + project is only likely to be launched in a year from now. + + An aspect that is likely to change in future rollouts relates to the economies + constructed around people who are building experiences and investing in it. The + Sandbox is a very powerful platform as we have several groups of people building + different experiences on it, whether its entertainment or games. + + Q: How do you define scarcity in the virtual world? Is the supply of virtual + land limited? + + A: We are not excited about artificial scarcity in the context of land/NFTs. Instead, + we are excited about scarcity when humans build experiences on top of it. + + For instance, in the physical world, why are we attached to the place we live in? It + certainly is not due to the plot of land being scarce/valuable. Instead, we have + ancestral history, culture, and memories attached to the property which make it + valuable. Value does not come from artificial scarcity. This is even the case with the + Metaverse. + + We are in the early days of the Metaverse, which partly explains the high price + volatility. Additionally, since we are all virtually connected in the Metaverse, we are + able to develop quicker. Imagine, Hong Kong would have taken decades to grow + from a small fishing island to a busting city with several million people today. + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 95 + + + + + However, in the Metaverse, we are scaling from hundreds of users to millions of + users in a matter of months. + + Surely, there are risks associated with virtual lands in the Metaverse. For instance, + what if celebrities sell-off their land in the Metaverse? Would land prices crash? In + my opinion, this is where consensus and ownership are so valuable. If The Sandbox + continues to grow and have ownership, who is protecting The Sandbox? I believe it + is not the company (quasi-government), but rather the owners themselves. + + Q: How do you see the Metaverse interface developing from a consumer + products standpoint — i.e., VR/AR headsets, etc.? + + A: I would argue we are already in the Metaverse-like experience. Today, most of us + are completely hooked onto our mobile phones. Notice during lunchtime, everyone + is physically present, but their mind space is occupied by their mobile phones. We + are already interfacing in a virtual world for several hours of the day. The Metaverse + does not necessarily have to include VR/AR headsets. + + In my opinion, it all boils down to the paradigm of ownership and innovation (the + ability to construct new experiences on top of it). The fact that I own land in The + Sandbox with several million other users, could motivate companies to build a + hardware experience that might elevate the experience we have on The Sandbox. + + From a technology standpoint, interfaces to enjoy the Metaverse will improve over + time. For instance, tech companies have innovated new gaming hardware, largely + due to growth of video games. I believe we will see a similar trend in the Metaverse + ecosystem as well, especially since the economic opportunity can be significantly + larger than in video games. + + + + +© 2022 Citigroup + 96 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + External Expert View: Huy Nguyen Trieu on Virtual Real + Estate + Huy Nguyen Trieu is Co-Founder of the Centre for Finance, Technology, and + Entrepreneurship (CFTE), and the CEO of The Disruptive Group — a business + builder and advisory firm in innovation and finance. Previously, Huy was a + Managing Director at Citi. Huy is an industry fellow at Imperial College and was an + associate fellow at Oxford. + + Q: What is virtual land in the Metaverse? What are the use cases? + + A: There are several different virtual worlds that allow users to do multiple things. + Presently, most of it is gaming, but you can also socialize with people, build a + building, or engage in other creative activities. The largest Metaverse platforms + currently are The Sandbox and Decentraland. However these platforms tend to be + siloed and one cannot move virtual land/digital assets across platforms. + + As part of our study at CFTE, we looked at the real estate market in The Sandbox + (report link). The Sandbox offers a virtual space of about 40 km x 40 km, or 160,000 + plots of land, which can be bought and sold. Users can then create experiences on + these plots of land, such as build a building or create a game. + + Undoubtedly, these are still early days and we are seeing a lot of experimentation. + People are still exploring the use of virtual land for building mansions, conducting + educational classes, and building museums for their NFTs. Virtual lands are also + starting to showcase the same set of features that one would associate with + physical land in the real world — one can buy it, rent it, transfer it, speculate on it, or + invest in it for the long term. + + Initial interest has largely been driven by early adopters, pioneers, and fans buying + virtual land. However, we have seen an explosion in activity/prices in the last three + months, with people looking to invest, speculate, and understand more about the + space. This also potentially ties in with the growing interest in the Metaverse and + announcements of the digital future by Mark Zuckerberg. + + The Sandbox sees nearly 300 to 500 virtual land transactions daily. These tend to + be in the form of NFTs, which are bought in secondary marketplaces such as + OpenSea or Rarible. Prices have also shot up — while users could buy virtual lands + on The Sandbox for $100 to $200 until a year ago; today they range from $10,000 + to $15,000. + + Q: Can you highlight the steps that need to be followed to buy virtual land? + + A: Once you make the decision to buy a virtual land, you can either execute it via + the primary market or the secondary market. Prices in the primary market tend to be + relatively cheaper, but it is also very difficult to execute the transaction, as these + land parcels tend to be sold within a matter of seconds. + + If you are purchasing virtual land from the secondary market, most transactions + tend to occur on marketplaces such as OpenSea. It is important to note that the + currency on these platforms is not U.S. dollars and one cannot use credit cards + directly. Instead, users need to create an ether-based wallet. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 97 + + + + + The marketplaces display all the virtual land plots available for sale on platforms like + The Sandbox. At the time of purchase, buyers need to connect their wallet (e.g., + MetaMask wallet) directly into the marketplace (e.g., OpenSea). The actual buy/sell + transaction with the transfer of property title occurs directly on the blockchain within + matter of seconds. + + However, one also needs to be cautious and not get scammed. Appropriate due + diligence on the land plot being bought/sold is crucial. + + Q: From a cultural perspective, are brands interested in virtual real estate? + + A: Brands like Nike and Adidas have forayed into the Metaverse with new virtual + spaces. For instance, Nikeland offers an entire world designed for Nike fans to + connect, create, compete, and share experiences on Roblox. Likewise, Adidas + owns real estate on The Sandbox with exclusive digital collectibles. + + Artists and social influencers are also buying virtual real estate with the aim of + offering unique experiences to their fans. U.S. hip hop superstar, Snoop Dogg, is + designing his virtual real estate (called Snoopverse) in The Sandbox. An early + access pass even allows users to get involved in the development of the virtual + world, which includes access to new avatars and play-to-earn games. + + Q: How do you determine the valuation of a virtual real estate plot on + platforms such as The Sandbox? + + A: As part of our study, we analyzed the pricing of several virtual real estate sale + transactions on The Sandbox. We noticed that the most expensive transactions are + in the range of 4-6 ethers (about $15,000 to $20,000) for a plot of land. These + typically tend to be at the center of the virtual town, which is where The Sandbox + started. + + Plots owned by social influencers, celebrities, and brands also tend to command a + premium over the rest. For instance, the plot of land owned by Snoop Dogg, and its + neighboring plots, tend to be priced relatively higher. + + By contrast, newer plots of land or the ones close to the outskirt boundary of the + virtual town tend to be cheaper. Much like in the real world, distance/proximity plays + a crucial role in determining the value of a plot of land in the virtual world. After all, + people prefer to be close to the center of all the action. Proximity is also important, + as you cannot fly/teleport in the virtual world yet. Instead one needs to walk from + one location to another. + + Prices of virtual land on The Sandbox are also closely linked to news flow. For + instance, the announcement of the Alpha version by The Sandbox or Snoop Dogg's + developing a virtual real estate (called Snoopverse) have seen a sharp increase in + transaction volumes and prices for virtual real estate. + + + + +© 2022 Citigroup + 98 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Q: Is supply of virtual land infinite? What prevents platforms like The + Sandbox from expanding supply of the plots of land? + + A: In my opinion, there is nothing that prevents any platform (e.g., The Sandbox) + from doubling the amount of virtual land available. This is surely a risk users need to + understand before purchasing any virtual real estate. + + I believe virtual real estate is a highly speculative asset and buyers need to take a + lot of informed assumptions. The potential other risk buyers assume is that the + particular virtual real estate platform will remain dominant in the future. For + example, will users continue to use The Sandbox in the future? This in turn will + potentially drive valuations of virtual real estate. + + Separating the NFT Hype from the Primitive + According to nonfungible.com, the 365 days ending in mid-March 2022 witnessed + 16.8 million number of sales, totaling $18.4 billion in value. + + However, we need to take the above statistics with a pinch of salt. “Wash trading,” + which is executing a transaction in which the seller is on both sides of a trade, is + rampant in the NFT space (essentially selling the asset to oneself). This practice + artificially inflates the asset’s value and provides a misleading picture of liquidity. + On-chain sales history boosts the success rate of flipping an NFT (buying for a low + price and selling it quickly for a profit). + + According to the Chainalysis 2021 NFT Further, the NFT market is highly concentrated. As per the 2021 NFT Market Report + Market Report, 20% of user addresses on from Chainalysis, over 2,000 individual NFT collections on the marketplace + OpenSea account for 80% of secondary OpenSea have had a secondary sale, but only 250 collections account for 80% of + NFT sales, while just 5% of all addresses these secondary sales. + account for 80% of profits made on + secondary sales This concentration is not only limited to the collections but is also apparent in the + addresses doing the transactions — 20% of user addresses on OpenSea account + for 80% of secondary NFT sales, while just 5% of all addresses account for 80% of + profits made on secondary sales. + + Figure 36. Concentration in Share of NFT Flips vs. Share of Gains from NFT Flips by Address + on OpenSea + + + + + Source: Chainalysis + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 99 + + + + + Gamers and developers are engaged in a perennial battle over how games are + monetized. Gamers generally want to pay one low price to play a game forever; + developers are forever experimenting with exotic new financing schemes to grow + their profits. Outside of the play-to-earn gaming ecosystem, any game developer + announcing some sort of NFT/crypto integration has faced massive backlash, + leading some to disavow the project. + + Matthew Rosenfeld (aka Moxie Marlinspike), former CEO and Co-Founder of Signal + and a well-known cryptographer, was critical of the experience he faced when + creating an NFT. For starters, as specified earlier, NFTs store most of the data off- + chain, use Web2 servers, and rely on centralized intermediaries. He also highlights + that NFTs being traded for thousands and sometimes millions of dollars on popular + NFT marketplaces, link to underlying data that can be easily tampered with. + + + + Instead of storing the data on-chain, NFTs instead contain a URL that points to + the data. What surprised me about the standards was that there’s no hash + commitment for the data located at the URL. Looking at many of the NFTs on + popular marketplaces being sold for tens, hundreds, or millions of dollars that + URL often just points to some VPS running Apache somewhere. Anyone with + access to that machine, anyone who buys that domain name in the future, or + anyone who compromises that machine can change the image, title, description, + etc. for the NFT to whatever they’d like at any time (regardless of whether or not + they ‘own’ the token). There’s nothing in the NFT spec that tells you what the + image ‘should’ be, or even allows you to confirm whether something is the + ‘correct’ image. + – MATTHEW ROSENFELD (ALSO KNOWN AS MOXIE MARLINSPIKE), FORMER CEO AND CO- + FOUNDER OF SIGNAL + + + + + A recent survey by Game Developers Conference shows 72% of the respondents + consisting of game developers and their studios are not interested in cryptocurrency + as a payment tool and 70% are not interested in developing or working with NFTs. + Respondents shared a generally negative outlook on Metaverse gaming as well. + Even though many companies are now developing VR/AR devices for gamers to + immerse themselves in games, the survey suggests that about one-third of + respondents believe the Metaverse concept will never deliver on its promise. + +While flipping digital art is not likely a While flipping digital art is not likely a sustainable way to make a living (yet), the +sustainable way to make a living (yet), the space is transitioning from raw experimentation to multi-million dollar communities +space is transitioning from raw that drive protocol-driven economics and governance into their design. +experimentation to multi-million-dollar +communities that drive protocol-driven The Dark Side of the NFT Market: Counterfeits, Rug Pulls, +economics/governance into their design and Wash-Trading + According to Chainalysis, a minimum of $44.2 billion worth of cryptocurrency was + sent to ERC-721 and ERC-1155 contracts (NFT standards) in 2021 versus $106 + million in 2020. What is masked under the astronomical trading volumes and + surrounding hype is an ugly triad of counterfeits, scams, and wash trading. + + + + +© 2022 Citigroup + 100 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + NFTs have a Counterfeiting Problem + + While NFTs are useful to mark and verify authenticity once it has been recorded on + the blockchain, today’s NFT ecosystem makes it very easy to start off with a work + that belongs to someone else and mint that on the blockchain as an NFT. So while + there is an indelible on-chain record that points to that specific work, it could easily + be counterfeit to begin with, and its validity void ab initio. + + In January 2022, Aja Trier, an artist, reported her work was stolen 86,000 times and + listed on OpenSea. This explosion of duplication looks likely from bots scraping + artists’ online galleries or keywords on search engines and then creating automated + collections with auto-generated texts. + + Traditional artists’ platforms like DeviantArt have introduced machine learning- + based image recognition software that scans public blockchains and third-party + marketplaces for potential plagiarism. + + Originally, NFTs submitted to a few of the NFT marketplaces needed to be verified + and pre-approved. However, popular NFT marketplace OpenSea eased this + requirement in March 2021 and also enabled “lazy minting” (where users list NFTs + for sale without writing them to the blockchain and hence do not need to pay gas + fees till the NFT sells, making the sunk cost of counterfeiting negligent). + + Figure 37. Counterfeit and Duplication: A Major Drawback of NFTs + + + + + Source: DeviantArt, Citi Global Insights + + + Recently, NFT marketplace Cent (popularized by Twitter Founder Jack Dorsey’s first + tweet selling for over $2.9 million) had reportedly shut down nearly all sales earlier + this year as there was a large spectrum of illegal counterfeiting activity, mainly from + minting of NFTs that did not belong to the creators. + + Cent cited the lack of an “industry-wide standard for counteracting bad behavior” as + the reason behind this move. The issue faced by Cent is not an isolated one, with + OpenSea admitting earlier in January that over 80% of the items created with the + shared storefront contract on its platform were plagiarized, fake, or spam. + + + + …we've recently seen misuse of this feature increase exponentially. Over 80% of + the items created with this tool were plagiarized works, fake collections, and + spam. + – OPENSEA + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 101 + + + + + To counter this, OpenSea announced it would impose strict limits on its free listing + tool. Rarible, another leading NFT marketplace, has introduced a human-moderated + verification system, encouraging proof of social media accounts (thereby tying + creations to validated identities), which led to a stated 90% drop in fraudulent and + plagiarized NFTs. + + Rug Pulls + + “Rug pulling” in crypto parlance is when creators of a project hype it up and then + suddenly stop backing the project, and disappear from the ecosystem. This results + in the price of the NFT/tokens falling steeply, leading to massive losses for + unsuspecting buyers and investors who already have a stake in the projects. + + Although not restricted to NFTs (common in ERC-20, and also play-to-earn games), + rug pull scams are reported have stolen $2.8 billion worth of crypto assets in 2021, + according to Financial Post. + + In January 2022, the creator of a line of limited-edition cartoon ice cream NFTs + called “Frosties” disappeared hours after their 8,888 tokens were sold out. The + creators then closed down their Twitter handle, Discord server, and website, and + also removed their wallet from OpenSea. The creators were estimated to have + earned $1.3 million, moving the funds to an unknown wallet prior to exiting. + +Figure 38. First Rug Pull of 2022 Figure 39. Wrapped Frosties: A Revival Project Launched by Victims of + NFT Rug Pull by Frosties' Team + + + + +Source: Twitter Source: OpenSea + + + NFT Wash Trading + + “Wash trading” is executing a transaction in which the seller is on both sides of the + trade. Wash trading provides a misleading picture of liquidity and sale price, as all + this information is captured on-chain, a casual NFT buyer could believe that the + history of transactions provide proof of value of the NFT they are buying. + + Figure 40 is a Chainalysis Reactor graph that shows the relationship in transaction + history between a specific seller and hundreds of other addresses to which they + have sold NFTs. The address in the middle is Seller 1 — and all the other + addresses on the graph received funds from Seller 1’s main address prior to buying + an NFT from that address. + + Surprisingly, the report indicates that Seller 1 does not seem to have profited from + the sale as they spent more on gas fees during the wash trading transactions. + Although this one specific trade does not show profitable results for Seller 1 (as they + probably were not able to lure in a buyer attracted by the transaction history + signaling), wash traders profit from sales to unsuspecting buyers. + + + + +© 2022 Citigroup + 102 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + These buyers would have likely relied on past sale history as an indicator of price + support for the NFT, being misled by the buying and selling of NFTs with on-chain + history as an indication of liquidity and demand. + + Analyzing the on-chain transaction history of 262 users who have sold to a self- + financed address more than 25 times, the Chainalysis report highlights that the top + 110 addresses have made significant profits (see Figure 41). + + Figure 40. Chainalysis Reactor Graph Figure 41. NFT Wash Trading + + Number of Profits from Wash + + Wash Trader Group Addresses Trading + + Profitable wash traders 110 $8,875,315 + + Unprofitable wash traders 152 -$416,984 + + All 262 $8,458,331 + + + + + Source: Chainalysis Source: Chainalysis + + + CryptoSlam, an NFT analytics site, examined a week's worth of blockchain data for + one of the NFT collections "Meebits" on an NFT marketplace called LooksRare and + found that almost all (94%) of more than $2 billion worth of NFTs transacted during + the period were wash traded.35 + + Phishing in Web3 Waters + + Up to an estimated $3 million worth of NFTs were stolen from wallet accounts of + NFT marketplace OpenSea users over a weekend in February 2022. The attack + was a selective one, targeting a few dozen users who were lured by a phishing + email that impersonated OpenSea. + + Web3 brings the additional challenge of self- These emails required the NFT holders to click malicious links that pre-approved + custody leading to probably higher individual transactions that resembled a regular proxy setup in OpenSea that enables gasless + losses. The users and NFT owners must listing. However, the underlying protocol (Wyvern) in this scenario is complex and + remain extremely cautious not just with keys the user interface (UI) has not evolved sufficiently to clearly lay out what the user + but also with signatures and revoke was signing and approving. + unwarranted permissions + The ecosystem moves quickly, however, and standardization of off-chain signatures + (that would reduce the risk of signing of misleading transactions) is underway. + Regardless, we expect phishing instances to capture unsuspecting users in Web3, + as it happens in Web2 today. + + But Web3 brings the additional challenge of self-custody (and therefore no + centralized gatekeeper), probably leading to higher individual losses. It is therefore + very important that users and NFT owners are extremely cautious, not just with + keys, but also with signatures and revoke unwarranted permissions. + + + + 35 Lachlan Keller, “Wash Trading in NFT Marketplace LooksRare Can Inflate Prices; + + Analysis,” Forkast News, February 4, 2022. + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 103 + + + + + While scams abound in the Web3 space today, a key characteristic of blockchain is + traceability of transactions. In February 2022, the identity of the suspected DAO + hacker was released — a key event in Ethereum’s timeline which hard-forked in + 2016 following a hacker siphoning off 31% of ETH in circulation, at the time. + + Moxie’s Criticism of NFTs + As mentioned earlier, Matthew Rosenfeld, also known as Moxie Marlinspike, and + the creator of the encrypted messaging app Signal, published a blog post titled “My + First Impressions of Web3” in January 2022, which highlighted some of the + challenges and issues. + + On NFTs, Moxie lays out the following points: + +  Most NFTs do not store the data on-chain as it would be too expensive. Instead, + they only contain a URL that points to the data. The standards do not include a + hash commitment for the data located at the URL, therefore, anyone with access + to the underlying URL could easily swap out the base file. There is nothing in the + NFT specification itself that restricts where the image “should” be, or even allows + to confirm whether something is the “correct” image. + +  He also highlights that the most popular wallet app, MetaMask, displays NFTs in + the wallet by making an API call to the NFT marketplace OpenSea. OpenSea is a + centralized platform, and if OpenSea deplatforms a specific NFT, then that NFT + will not show up in the owner’s wallet, despite it being on the blockchain, given + that MetaMask relies on OpenSea’s API. + + Regarding the point on NFTs not storing the URL/URI (Universal Resource + Identifier) in the code itself, or restricting what the image should be, we note that + blue-chip projects do include “provenance hash” as part of the smart contract. + + Part of the reason why projects do not store the URI in the code itself is to ensure + that NFT minting process is fair and random (by not disclosing which specific image + goes to which specific token prior to minting). Certain sets of features are rarer, and + the randomness in the minting process ensures that all minters stand a fair chance. + + Provenance hash solves this paradox of how to retain some anonymity pre-minting + but still make the NFT project trustworthy. A hash is a one-way conversion of any + length of a data to a fixed-length string, and can be conceptually thought of similar + to a “unique fingerprint” of the base data. Hashes cannot be reverse-engineered, so + it is near impossible to start with the hash and figure out the base data. But if there + is a minor change in the base data, the hash will change completely. Therefore + hashes are useful to verify that the underlying data has not been tampered with. + + In the case of blue-chip NFT projects like Bored Ape Yacht Club, each image is + hashed, then the entire list of image hashes along with the token IDs are further + hashed to produce a final “provenance” hash, which is then stored on the smart + contract, even prior to minting. + + Web3 protocols, like most protocols, are slow to evolve. Moxie highlights that + people are excited about NFT royalties for the way they benefit creators, but + royalties are not specified in ERC-721 and it is too late to change, so platforms like + OpenSea have their own way of configuring royalties. Iterating quickly on + centralized platforms is already outpacing the distributed protocols and + consolidating control into platforms. + + + + +© 2022 Citigroup + 104 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + On this point, we note that the Ethereum ecosystem did bring in standardization + around royalties in 2021 by means of Ethereum Improvement Proposal (EIP) 2981, + which allows contracts to signal a royalty amount to be paid to the creator or rights + holder every time the NFT is sold or resold. This would also ensure that royalties + work across marketplaces, unlike earlier. So, protocols do move slower than + platforms, but they can still be reasonably quick and effective. + + Moxie’s points around centralization are important for the Web3 ecosystem to factor + in as they build protocols and decentralized applications (dApps). Moxie + emphasizes that his points are not a complaint about platforms like OpenSea or + what they are building, but that platform consolidation is an eventual outcome if + centralized design choices are made for convenience. + + “Once a distributed ecosystem centralizes Using decentralized and trustless Web3 tooling to ensure that applications built + around a platform for convenience, it using them are true to the ethos of Web3 is potentially a critical factor – otherwise, + becomes the worst of both worlds: there is risk of a disconnect between the narratives of Web3 and how it actually + centralized control, but still distributed works under the hood. + enough to become mired in time.” + – Moxie + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 105 + + + + + Money and DeFi in the Metaverse +A constant refrain in the technology world is The Bitcoin whitepaper in 2008 aimed to solve the problem that the internet was +that the internet was built without a native built without a native way to transfer money. It outlined a peer-to-peer electronic +way to transfer money — without a “value cash system that would allow online payments to be sent directly from one party to +settlement layer” another without going through a trusted intermediary. + + Money in the Metaverse + The earliest precursor to money in the Metaverse is the gaming ecosystem. + Although multiplayer games popularized the concept of in-game micro-transactions + in the latter part of the first decade of the 2000s, we can trace the history of micro- + transactions to 1990 and the game Double Dragon 3: The Rosetta Stone. + + Players now had the chance to spend real world money to better their in-game + situation. It popularized a concept that forms the basis of “free-to-play” game + economics. Fast-forward 30+ years, and we now have gamers and virtual world + users paying for digital skins, virtual land parcels, and loot boxes. + + To understand the first instance of what a functioning economy in the Metaverse + looks like, look no further than Second Life. In many ways ahead of its time, Second + Life is a user-created online world, in existence since 2003. It allows people to + create avatars for themselves and have a “second life” of sorts in a virtual world. + + It can be viewed as part game, part chat room, and part commerce, and still has a + dedicated user base of a few 100,000 active users. Second Life has had a thriving + and vibrant economy for close to two decades; it had a 2021 GDP of $650 million, + with 345 million transactions of virtual goods, real estate, and services. + +We expect the Metaverse of the future will With Linden dollars (L$) as the in-world currency, Second Life details the various +include in-game tokens, traditional money, ways to make money in the virtual world: buy L$ on the in-house exchange LindeX, +and digitally native primitives tied to NFTs play Linden earning games, get a job buying and selling land, create and sell +and other tokens content, participate in referrer/affiliate programs, host and perform at events, sell + information, win prizes, fill out surveys, and so on. + + We expect the Metaverse of the future would encompass existing forms of money + and also a set of digitally-native primitives, tied to non-fungible tokens (NFTs) and + other tokens, that were out-of-scope for a pre-blockchain virtual world. + + One of the key reasons for the introduction of the in-game currency L$, was to + reduce transaction costs. In 2008-09, virtual shoes from Adidas cost 50 L$, roughly + $0.19. If paid directly with U.S. dollars, transaction costs for the purchase will + usually far exceed the price of the goods. By passing traditional payment rails, and + using in-world currencies exclusively, transaction costs were kept low. + + The hype cycle and astronomical valuations around NFTs notwithstanding, most + transactions on the Metaverse tend to be for a small value. It is therefore critically + important to ensure that the transactions costs of buying and selling content on the + Metaverse is low. + + + + +© 2022 Citigroup + 106 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Features of Money in the Metaverse + 1. Decentralized to Centralized: A Spectrum + + Centralized in-game tokens do provide Linden Labs ensured the Second Life economy was resistant to speculation and + community and branding benefits, but do not served its primary purpose as an alternate avenue for living in the virtual world. The + have the interoperability of popular online game Roblox, a favorite among tweens today, also tightly controls + CBDCs/stablecoins, and are not as the exchange rate of its in-game currency Robux into fiat currency. + borderless as cryptocurrencies + Most centralized Metaverse-like platforms today apply withdrawal limits, centralized + in-world game monetary policy, and marketplace fees and rents. The centralized in- + game tokens do provide community and branding benefits, but do not have the + interoperability of stablecoins, and are not as borderless as cryptocurrencies. + + For the Metaverse to truly function as an alternate economy that is not controlled by + a central entity, it requires formats of money that are truly decentralized, trustless, + and verifiable. These properties are critical given the entire premise of an Open + Metaverse is built on not having centralized intermediaries and arbitrators. + + In a centralized Metaverse, we expect the platforms to offer a range of choices — + from the myriad fiat-based options available today, to cryptocurrencies, stablecoins, + and central bank digital currencies (CBDCs). We expect payment service providers + (PSPs) will emerge with new capabilities that will enable seamless interfaces + between the consumer and the platforms. + + Wallets like Apple Pay and Google Pay will likely expand the range of supported + payment types to fully integrate options in the decentralized world. This can be done + in a way that abstracts away Web3 complexities the average consumer likely does + not want to contend with. One can think of it as Web2.5 — decentralized finance + (DeFi) at the back enabling the cryptocurrency payment methods and centralized + finance (CeFi) at the front, acting as familiar user interface. + + 2. Frictionless Micro-Payments with Instant Settlement + + A large portion of Metaverse money use For creators and builders, it is important that the Metaverse form of money is easily + cases will likely be for small-value accessible, has predictable fees, and is convertible to real-world currencies of + transactions and some for even choice. We could foresee a future where streaming packets of money flow in the + micropayments with instant settlement a key opposite direction to streaming content from decentralized Netflix-like apps. Also, + requirement depending on how we define embedded finance, nearly all payment in the + Metaverse could be embedded finance payments. + + We expect frictionless payments with instant settlement to be a key requirement of + money in the Metaverse. Further, we expect a large portion of use cases of money + to be for small-value transactions and some for even micropayments — ranging + from a few cents to fractions of cents for certain use cases. + + Today, micro-payments on payment rails can be expensive, albeit open-banking and + real-time payment solutions, such as Unified Payment Interface (UPI) in India, + provide effective in-country solutions. CDBCs or stablecoins could also provide + tokenized alternatives better suited as internet-native value transfers. + + CDBCs or stablecoins could provide However, similar to national faster payment rails, CBDCs will have the limiting factor + tokenized alternatives better suited as of being tied to a single currency, unless central banks work together to launch a + internet-native value transfers multi-currency CBDC. Decentralized crypto is a better fit for the Open Metaverse. + Low-cost blockchains such as Polygon or Solana can provide effective low-cost + payments, albeit crypto fees are linked to network congestion/capacity. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 107 + + + + + Different Form Factors of Money in the Metaverse + The definition of what counts as money in the Open Metaverse is likely to be very + different from what counts as money in the real world today. We expect different + forms of cryptocurrency to dominate, given the inherent multi-chain trend in the + crypto ecosystem, but to coexist with fiat currencies, CBDCs, and stablecoins. + + Interoperability and seamless exchange between chains is critical to ensure a + frictionless user experience in the Metaverse, especially in decentralized + implementations. Apart from the likes of Bitcoin and Ethereum, we should expect to + see coexistence of other Layer-1 currencies and stablecoins. + +Interoperability and seamless exchange In-Game Tokens: The launch of in-game or community tokens and the tokenomics +between chains are critical to ensure surrounding it are key features of decentralized applications. We should expect +frictionless user experience in the every world/platform to launch its own in-game token (e.g., MANA for Decentraland, +Metaverse, especially in decentralized SAND for The Sandbox). Although superficially similar to Roblox’s in-game +implementations functioning currency, Robux, there are fundamental differences: + +  In-game tokens of decentralized games like Decentraland and The Sandbox + implement the ERC-20 standard, which makes them interoperable, standardized, + and consistent with specified functionality on the Ethereum blockchain, as well as + transparently traceable. The tokens are freely tradeable and exchangeable for + other cryptocurrencies. + +  By contrast, in-game currencies of centralized platforms have specific rules + around withdrawals. Roblox specifies that developers can only cash out once a + month and the exchange rate is set by the platform. Further, it is the creators and + game builders (and premium users) who have access to earning Robux. + + Figure 42. Top Gaming Tokens by Market Capitalization (as of March 29, 2022) + Name Market Cap. Volume (24-hr) Circulating Supply + $507,781,990 + Decentraland MANA $5,050m 1,840,876,568 MANA + (185,101,676 MANA) + $737,008,742 + Axie Infinity AXS $4,140m 60,907,500 AXS + (10,843,634 AXS)) + $773,401,296 + The Sandbox SAND $4,091m 1,149,278,952 SAND + (217,258,393 SAND)) + $1,196,538,289 + ApeCoin APE $3,981m 277,500,000 APE + (83,408,630 APE)) + $1,136,447,709 + Gala GALA $1,895m 6,977,205,436 GALA + (4,183,822,994 GALA) + Source: Coinmarketcap, Citi Global Insights + + +As implementations of Metaverse can be Layer-1s, Layer-2s, and Layer-0s: Public blockchains are categorized in layers, +built on different underlying blockchain with Layer-1 denoting the main blockchain (usually with a native coin) and Layer-2 +technologies, we should expect native indicating an overlay network or chain that optimizes Layer-1. Layer-0 are +tokens of these Layer-1 chains to be interoperability protocols that allow different blockchains to work together. +acceptable forms of money in the Metaverse + 2021 witnessed the evolution of Layer-1 chains such as Solana, and Avalanche, as + major competitors to Ethereum’s dominance. Competitive gas fees, fast transaction + speed, and a growing developer ecosystem were key factors contributing to the + emergence of alternate Level-1s. + + + + +© 2022 Citigroup + 108 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Ethereum Virtual Machine (EVM) compatible chains like Binance Smart Chain + (BSC) and Avalanche provided a familiar but lower-gas fee environment for + developers and users alike to experiment. As implementations of the Metaverse can + be built on different underlying blockchain technologies, we should expect native + tokens of these Layer-1s to be acceptable forms of money in the Metaverse. + + We also expect Layer-2 Ethereum solutions like Polygon to continue to see + widespread adoption given the low prevailing gas costs on the Polygon network, + strong user adoption, and the growing developer ecosystem and decentralized + applications already available on Polygon and other Level-2s. + + Layer-0 blockchains like Cosmos and Polkadot, which allow for building entire + customized blockchains themselves with cross-chain interoperability, are also + expected to play a key role in bringing forward increasingly specialized chains + optimized for specific use cases. + + We expect stablecoins play a major role in Stablecoins: Given the high volatility of most cryptocurrencies, stablecoins, with + the Metaverse as a form of money given their relative stability, usually linked to fiat, are already showing promising adoption + high volatility of most cryptocurrencies as a medium of exchange. We should expect to see stablecoins play a major role in + the Metaverse as a form of money. + + Annual stablecoin-adjusted transaction value crossed $5 trillion in 2021, up 370% + over 2020. According to Block Research, aggregate supply of stablecoins grew + 340% in 2020, from $5.9 billion at the beginning of 2020 to $26 billion by the end of + 2020. Aggregate stablecoin supply jumped to $140 billion by the end of 2021. + + While stablecoins like USDC, USDT, and others have been growing significantly, + Diem, the stablecoin of the consortium founded and led by Meta, recently + announced the sale of its technology assets, after a several months-long uphill + regulatory pushback globally. + + Figure 43. Total Stablecoin Supply + + USDT USDC BUSD DAI PAX GUSD HUSD USDK + 160B + 140B + 120B + 100B + 80B + 60B + 40B + 20B + 0B + 2017 2018 2019 2020 2021 2022 + Source: CoinMetrics, Citi Global Insights + + + With governments looking to set up outposts Central Bank Digital Currencies (CBDCs): Retail CBDCs, under consideration by + in the Metaverse for various public services, various central banks across the world, could potentially be used in the Metaverse + it is likely CBDCs could potentially be used akin to private cryptocurrencies and tokens. With governments looking to set up + in the Metaverse, akin to private crypto outposts in the Metaverse for services, it is likely that governmental services on the + and/or stablecoins Metaverse will be a use case for CBDCs. In November 2021, South Korea’s capital + Seoul became the first city government to join the Metaverse, looking to setup a + “municipal Metaverse.” + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 109 + + + + + CBDCs are centralized by design and at first glance, could seem to be at odds with + the principles driving the decentralized vision of the Metaverse. It remains to be + seen if there is any adoption of CBDCs in the centralized implementations of the + Metaverse as well, given that borderless conceptualization of the Metaverse is at + odds with country-specific digital currencies issued by respective central banks. + + + + +© 2022 Citigroup + 110 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + External Expert View: Ioana Surpateanu on the Metaverse + and Money + Ioana Surpateanu is a Web3 and decentralized finance (DeFi) investor, adviser, and + entrepreneur. She strategically supports a variety of projects and focuses on various + verticals within Metaverse as well as DeFi 2.0 protocols. She sits on the Executive + Board of the Multichain Asset Managers Association (MAMA) where she advances + DeFi advocacy and interactions with policymakers and regulators. + + Q: Elaborate on centralized versus decentralized Metaverses? As Web2 + platforms pivot to the Metaverse, are both versions likely to coexist? + + A: In the near term, we will operate within a symbiotic Web2/Web3 model, wherein + user aggregation will occur on Web2 platforms, while the monetization layer will + leverage Web3 primitives. Traditional companies could perceive the Metaverse as a + segment where they can experiment with decentralization — not in a fully-fledged + Decentralized Autonomous Organization (DAO) manner, but via an angle that + allows circumvention of restrictive or rigid regulations. + + All future Metaverse segments are likely to be built with user-centricity in mind thus + generating a prevalence of open economic systems. Various risks are obviously + inherent, but we are seeing a plethora of companies entering the Metaverse at an + accelerated pace, and this in itself represents significant validation. + + Q: Elaborate on the interconnection of DeFi/non-fungible tokens (NFTs) and + traditional finance (TradFi)? What is the role of traditional financial + institutions in the DeFi/NFT world? + + A: The first implementation of DeFi was a reinterpretation of traditional finance with + the aim to eliminate intermediaries and automate processes while democratizing + access for masses of users. DeFi has since metamorphosed into an extremely + sophisticated ecosystem. We are now witnessing an organic stratification of users, + based on prior understanding of financial systems and their intricacies. + + The advent of NFTs has generated a paradigm shift, or a restoration of the initial + paradigm, as NFTs are accessible irrespective of prior familiarity with financial + jargon and applications. Various NFT/DeFi symbioses are extremely powerful from + a user onboarding and aggregation perspective. Two main features are extremely + relevant for these symbiotic angles: composability and programmability. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 111 + + + + + Composability refers to the ability to combine components and features of + decentralized applications (dApps), in order to alter and upgrade the initial protocol + state via integrations with other elements. Composability could, for instance, allow + collectors to experiment with bundling together different assets to create bespoke + NFT packages. Composability is a core element of DeFi 2.0 applications. + + To understand programmability (i.e., programmable ownership), let us take the + example of an NFT created by a content creator. Notably, NFTs enable content + creators to embed a royalty distribution mechanism into the design of the token. + This means, the creator/minter of NFTs will be involved in the economic-lifecycle of + the object for perpetuity, even after the primary sale transaction. + + Various permutations between NFTs and DeFi generate infinite possibilities. For + example, you could create NFT indices (basket of companies relevant for the NFT + market) or a Metaverse index (basket of companies that build infrastructure for or + operate in the Metaverse) and make it accessible to both DeFi and TradFi investors. + NFTs can also be fractionalized (turned to a fungible state) enabling integrations + with various DeFi protocols or used as a collateral in DeFi applications. + + Internet-related value accrual in the future will mainly occur via tokens. NFTs can + help bring in mass users, who potentially had not been particularly interested in + DeFi applications or crypto use cases beforehand. Growth of play-to-earn games + will also allow more users to earn revenue in a ludic fashion. I expect DeFi to evolve + and expand even further thus becoming a relevant competitor to TradFi. + + Q: What does the Metaverse mean for a large incumbent corporation, bank, or + financial institution? Why does it matter for them? + + A: For corporations, an extension of their current business into the Metaverse could + be extremely lucrative and easy to design. For instance, a fashion company is able + to create a Metaverse presence by designing a bespoke platform for a digital + fashion collection that will strongly appeal to Gen-Z/Alpha customers. This parallel + can also be extended to gaming, e-sports, and other sectors. + + Traditional financial institutions could easily and meaningfully be part of the + Metaverse in several ways. Traditional financial institutions have access to + sophisticated infrastructure to enable use cases including custody, benchmark, and + administrative capabilities. Additionally, banks could also benefit by offering + financial-related services to corporations with a presence in the Metaverse. + + Play-to-earn model games (e.g., Axie Infinity) have already established a micro- + economy around themselves in an organic fashion (guilds offering loans to users, + decentralized exchanges for in-game currency/objects to be traded, etc.) Players + will use crypto/DeFi to handle their finances and capitalize on their in-game + earnings. This is yet another market traditional financial institutions would want to + be part of. + + Lastly, the Metaverse will need a strong digital identity standard as it powers an + open economic system where decentralized reputation is a sine qua non feature. + Banks, with their perfected know-your-customer (KYC) processes, could play a + crucial role in setting those standards. + + + + +© 2022 Citigroup + 112 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Q: How do we define value and money in the Metaverse, especially in the + decentralized Metaverse? + + A: I believe the Metaverse will be populated by both centralized (closed) and + decentralized (open) platforms. The ideal scenario directs towards an Open + Metaverse with cross entity value portability, but the current setting is different from + that reality. + + As a result, value is represented by a combination of intra-entity and dApp tokens + (private crypto or in-game tokens), NFTs, and stablecoins. Fiat to Metaverse + onramp infrastructure is attracting considerable investment as it will be relevant for + non-crypto native entities that want to operate in the Metaverse. + + I do not believe retail CBDCs in the Metaverse are likely near term. Several central + banks are studying/piloting CBDCs, but it will be long before any central bank in the + Western world will fully roll-out a retail CBDC. There is also the question of how + smooth their implementation would be, given the need for back-end integration + between the central bank and the Metaverse infrastructure. + + However, I would not completely discount China. China's clamp-down of crypto is + strategically driven by the need to create momentum for their retail CBDC (digital + yuan). In my opinion, China is likely to primarily use its retail CBDC internally, tied to + its credit scoring system, and potentially add a layer of privacy before expanding it + to the world: sanctioned countries could be an interesting initial use case in China’s + digital yuan external rollout plan. + + Q: Will multiple chains coexist in the decentralized Metaverse? How important + is infrastructure that allows for high volume/value and low volume/value? + + A: Yes, multiple chains will coexist in the Metaverse. Most Metaverse protocols are + built on top of Ethereum and near term, this reality will not be considerably + challenged. However, other Layer-1 chains (Solana, Binance Smart Chain, and + Terra) as well as Layer-2 chains (Polygon, Arbitrum, and Optimism) are gaining + momentum and prominence in the Metaverse. In addition, cross-chain bridges and + multi-chain ecosystems will contribute to the consolidation of Metaverse + infrastructure thus allowing for more sophisticated use cases. + + Q: What are the problems you see in the Metaverse today? + + A: Even though problems related to the Metaverse don’t take central stage, they + certainly exist and I could name a few: lack of NFT standards, NFT metadata + storage ambiguities, reliability of NFT rarity calculation models, and even potential + regulatory issues when it comes to free-floating value being ported across the + Metaverse. + + The current NFT explosion had certainly not been anticipated, and the subsequent + supporting infrastructure had not been built. As a result, NFT metadata storage + could be an area of concern ahead. Often times, some of this data is stored off- + chain and some of it on-chain or in hybrid formats. + + This isn’t necessarily a problem yet, as most people only use NFTs for collecting or + selling them in the secondary market. However, as NFT use cases grow, this could + result in ambiguities related to the liability of third parties hosting that metadata as + well as issues related to what the ownership of an NFT actually represents. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 113 + + + + + In an ideal world, all NFT metadata should be stored on-chain. However, the cost of + doing that on the current predominant chain (Ethereum) would be extremely high. + + Moreover, I believe the collaboration between the traditional game developer + community and the crypto community — even though vital — won’t be frictionless. + The current Metaverse exuberance is largely a result of the exponential growth of + blockchain-based gaming. However, traditional game developers opine there isn’t + much quality in the blockchain-based game sector today. + + The Open Metaverse parameters rely heavily on composability between traditional + gaming, blockchain gaming, and crypto. I believe tokenomics could play a crucial + and unifying role here as game developers are extremely familiar with in-game + economies and do see the value of network effects and community coordination + mechanisms enabled by crypto tokens. + + Irrespective of the end design, the Metaverse represents one of the most exciting + and complex experiments in recent history. + + + + +© 2022 Citigroup + 114 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + External Expert View: Sandeep Nailwal on Building the + Future Immersive Internet + Sandeep Nailwal is the Co-Founder of Polygon Technology, a leading blockchain + scalability platform. Sandeep began his career as a software engineer in 2010, + before moving on to become a consultant for Deloitte and the Head of Technology + and Supply Chain for Welspun Group. He has also co-founded ScopeWeaver.com, + a dApp (decentralized application) development company in 2016. + + Q: What does Polygon do? What are Layer-2 scaling solutions? How does it + all fit into the Ethereum network? + + A: Polygon aims to bring blockchain to mass adoption. In my opinion, one of the + main reasons blockchain has not been able to percolate into our day-to-day lives is + that it is still not ready for global scale, i.e., to serve millions of users. + + The blockchain is akin to a processor running code in a decentralized setting. No + single entity is running the code and no changes can be made singly. People have + to coordinate with one another to ensure everybody is in the same state and looking + at the same decision to get into consensus. This introduces a lot of overhead, due + to which, the blockchains are inherently not scalable. + + For instance, Ethereum uses a Proof-of-Work model, which now enables just 13 + transactions per second (TPS). However, this is done in a very secure and + decentralized manner. I believe for blockchain to reach global scale, one needs the + following two things. First, you could try to scale it at Layer-1. Alternatively you need + to build Layer-2 chains on top of it, where you do the large computations at a much + faster rate and then batch the cryptographic proof back to a secured and + decentralization system. + + Over the last four to five years, we have seen several attempts to scale at Layer-1. + However, since it is decentralized, several challenges exist and the network cannot + be sustainably scaled beyond a certain point, in a decentralized way. Many + researchers believe that building on Layer-2 is the way forward. + + Under the Polygon approach, you have a base chain with Layer-2 chains on top of + it, which contain all the business activities. All of this is settled and secured by + Ethereum. Taking an analogy from the internet, Ethereum is the transcontinental + optical fiber, which connects the whole world, but each country has their own + subnets (i.e., own chain). + + Polygon is a Layer-2 scaling solution, but we do not believe in a single approach. + Instead, we are an aggregator with multiple Layer-2 solutions. We offer solutions + such as Polygon SDK, Polygon Edge (where one can choose to build their own + chains), as well as Polygon PoS, which derives some security from Ethereum. We + also offer other scaling technology, including rollups and validiums. + + Q: Elaborate on the inefficiencies of the Ethereum network. How does + Polygon help address these challenges? + + A: Ethereum can presently process 13 transactions per second and each + transaction takes a minimum of 15 seconds to confirm on the blockchain. In my + opinion, Ethereum's low transactions per second combined with high gas fees is not + actually an inefficiency, but rather a trade-off one must make depending on the + amount of decentralization, inclusiveness, and security desired on Layer-1. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 115 + + + + + Today, nearly 90% of everything you see on the blockchain is on Ethereum, + resulting in assets of around $1 trillion. As a result, the Ethereum core developer + community has to choose the trade-offs very carefully. Admittedly there can be + optimizations, but it is unlikely for any Layer-1 chain to be built for millions of + transactions per second. + + According to the scalability trilemma, of the three factors — decentralization, + security, and scale — one can choose only two. Ethereum chooses decentralization + and security. And as a result has to sacrifice on scale. Instead, if one is trying to + scale, they will have to lose a certain extent of decentralization. + + By contrast, Polygon PoS chain (one of the popular chains) has a capacity of 900 to + 1,000 transactions per second, and is secured by 100 public validators. The gas + fees are also lower (versus Ethereum) by around 1,000 to 10,000 times, depending + on the number of transactions delayed on the chain at a given time. This makes it + extremely effective for games, NFTs (non-fungible tokens), and other DAO + (Decentralized Autonomous Organization) activities. + + Polygon has several such chains, where it is possible to scale the number of + transactions per second using Layer-2 protocols. One can think of it as a single + Ethereum layer with multiple chains plugging into it. + + Q: How do you see the future of Polygon, especially with Ethereum 2.0? + + A: Presently, Ethereum can process 13 TPS. However, with Ethereum moving from + Proof-of-Work to Proof-of-Stake possibly this year, we could see a jump in TPS, + likely to 20 TPS. Further, over the next three to five years, we are also likely to see + shards, i.e., multiple chains on Ethereum (64 chains to be precise). Presently, the + settlement layer is very small and Ethereum is trying to expand this. However, I + believe the scaling of Layer-1 is much more beneficial for Layer-2. + + Our interactions with institutions are increasingly digital and Web3 promises to help + bring greater sanity to these executions. Aspects such as smart contracts provide + verified computation on DeFi (decentralized finance) applications. Secondly Web3 + can also enable true ownership of assets. At Polygon, we believe we are likely to + see several millions of users join the blockchain and Web3, requiring significantly + higher TPS speeds. + + However, even a fully-scaled Ethereum over the next five years is only likely to offer + 1,200 TPS. This is clearly insufficient and is likely to choke the entire chain. As a + result, one tends toward solutions on Layer-2 protocols, where individual entities + can have their own chain, whilst still preserving the values/benefits of the + blockchain. + + Q: What is Polygon Nightfall? What solutions does it offer for enterprises? + + A: Polygon Nightfall is a privacy-focused Rollup being co-developed by Ernst & + Young and Polygon and is particularly focused on the enterprise side. Notably, the + biggest concern for enterprises is around privacy. + + In my opinion, if anybody wants to build anything meaningful on the blockchain, they + have to interface with the public blockchain, while still catering to their compliance + requirements. One needs to comply with aspects such as data privacy, Europe’s + General Data Protection Regulation (GDPR), digital identity, know-your-customer + (KYC), and others. These are some of the aspects we are trying to incorporate with + zero-knowledge and optimistic rollups into Nightfall. + + + +© 2022 Citigroup + 116 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + We are already working with several Fortune 100 banks and large tech companies + to enable their solutions on the public blockchain interface while still servicing their + requirements for privacy, compliance, and data control. + + In the enterprise space, some of the biggest issues we have to deal with are around + privacy of data. Enterprises are very protective of their business sectors and would + not want it to be revealed. However, most also agree that they need to be in a public + blockchain setting, where users have control over their data, typically using smart + contracts. Other areas of concern for enterprises are KYC and compliance. + + Q: Please elaborate on Polygon Studios — what is its primary focus? + + A: Blockchain-based gaming has emerged as one of the biggest segments in the + space, presently. Polygon is by far the leader in the gaming space and in order to + retain that position, we need to grow the ecosystem. This is the primary focus of + Polygon Studios. + + Most gaming studios are looking to create Web3-enabled games, because they see + the promise of this new business model. Until now, gaming ecosystems acted as a + walled garden, i.e., users can only do things within its walls, unable to monetize + their assets in the external market. + + However, with blockchain gaming, platforms like Axie Infinity and OpenSea have + created new economies where assets can be bought or sold across platforms. This + has led to greater composability and created a new revenue model where users can + monetize assets from a game/ecosystem by selling them on external marketplaces. + + Polygon Studios is currently working with nearly 500-1,000 games globally. Notably, + Polygon Studios does not develop games itself, rather it is the gaming/NFT arm of + Polygon that helps guide developers to build on Polygon. + + Polygon Studios started in July 2021 and we are now a 30 people strong team. + Ryan Wyatt, the former head of YouTube Gaming, has now joined Polygon Studios + as its CEO. We also have several other gaming veterans in the company. + + Aside from gaming, we have also seen a lot of brands/enterprises keenly looking at + the NFT space. Brands such as Adidas, Prada, and Dolce & Gabbana have all + launched their NFTs in the past using Polygon. Additionally, prominent Metaverses + such as Decentraland, Somnium Space, The Sandbox, and Bloktopia are on + Polygon. + + Q: What is the target addressable market? What is the number of people + playing blockchain games today? How is this likely to grow by 2030? + + A: Around mid-2020, when there were no scaling solutions available, the number of + daily active users (DAU) was around 200,000 to 300,000. However, in just 18 + months, this number has exploded 10x to 15x fold. We currently have around two to + three million DAUs with gaming probably accounting for the largest share (around + 1.5 million users). + + In 2020, Ethereum did not have sufficient scale and we were unable to cater to + more than 500,000 users a day. In fact, the moment the number of users reached + about 500,000, Ethereum fees shot up significantly to around $500 a transaction. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 117 + + + + + However, today we have been able to scale up with Layer-1 and Layer-2 solutions, + allowing us to cater to these two to three million users. At the extreme, I believe we + might even be able to cater to five to 10 million users with our existing infrastructure + and all chains running at full capacity. + + Looking ahead, I believe we are likely to see extremely fast adoption with DAU + growing exponentially, as long as scalability solutions are available. One of the key + drivers for the rapid growth is financialization of digital assets as seen most + evidently with the play-to-earn gaming model. + + I estimate by 2025, we could have at least 50 million users (possibly even 100 + million) in the blockchain space, which includes DAOs, games, Bitcoin, and + stablecoin transactions. Further, by 2030, I believe Web3 could take over the + internet, even as Web2 continues to coexist in certain areas. + + Q: What are likely to be the big use cases on the blockchain in 2025-20? + + A: In my opinion, gaming and finance (FinTech) are likely to be the biggest use + cases in 2025. I am very excited about the prospects of combining FinTech with + Web3 and the potential with DAOs and DeFi. This includes neobanks as well as + lending/borrowing providers. I believe we are likely to see FinTechs adopt a slightly + decentralized approach, where they take fiat money and bring it into DeFi to earn + yields or alternatively take capital from DeFi and deploy it into the real world. + + Social needs is another promising area for Web3, including messaging services. + For example, Signal is already using some form of Web3 with end-to-end encryption + and use of shared secret keys. + + Lastly, digital identity is an important area for blockchain and we are likely to see big + use cases in this space emerge over the coming years. + + + + +© 2022 Citigroup + 118 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + External Expert View: Stani Kulechov on DeFi in the + Metaverse + Stani Kulechov is the Founder and CEO of the Aave Companies, a group of + software development companies that build open-source, blockchain-based + software. To date, the Aave Companies are best known for creating the Aave + Protocol, a decentralized, open source, and non-custodial liquidity protocol which + allows users to supply cryptoassets (and earn interest on them) and borrow + cryptoassets. He is a seasoned entrepreneur with extensive experience developing + technology in the crypto, blockchain, and FinTech space. In 2017, Stani released + ETHLend, one of the first DeFi dApps (decentralized finance decentralized + applications). + + Q: Can you briefly explain what Aave does? + + A: Aave is an application running 24x7 on the blockchain that allows users to + deposit cryptographic assets and helps them grow in value in a simple, transparent, + and efficient way. The value for users essentially emerges from the interest earned + in the application. Applications running on the blockchain are called protocols, and + they have certain characteristics (e.g., permissionless, non-custodial). Anyone can + access the infrastructure, as it is running on an ongoing basis as long as the + network is. + + The Aave protocol was originally deployed on the Ethereum blockchain, but is + currently also on Polygon as well as Avalanche, and the community is also coming + up with multiple other networks. Notably, blockchain is increasingly becoming a + cross-chain infrastructure and it is no longer just about one particular + network/infrastructure, but rather multiple networks/communities. + + From a TradFi (traditional finance) perspective, you can think of it as a system in + which you supply the assets and gain interest. However, you can still use those + assets to do things while earning interest (e.g., use as collateral to borrow another + assets). + + Q: Can you elaborate on Aave's journey to becoming one of the largest + lending protocols today? What is the competitive advantage? + + A: Most protocols and applications in DeFi are built in an open source way. This + means the source code is publically available and can be re-used by making + improvements/changes to it and re-deploying it on another network. + + By contrast, companies in traditional finance may gain value from the licenses they + own to operate a unique business model, their strong customer base, or the + infrastructure built for trading/managing funds. In addition, traditional companies + also own a strong brand value that they have built over decades. + + In DeFi, the protocol is definitely not your moat. However, the open environment + helps drive rapid innovation, allowing developers to create more efficient, better- + yielding infrastructure. Developers can take inspiration from the work done by + others and build something on top of it that improves the whole ecosystem. + + The concept of open source has gained prominence, finding its way outside of + finance and into other industries. For instance, several of Tesla's patents around + self-driving cars are open source. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 119 + + + + + The DeFi industry is still nascent and has been around for only about two years. + However, we have seen an exponential growth in the number of users, from about + 5,000 at the beginning, to a few million accounts today. + + The Aave Companies is a well-recognized entity that builds very secure smart + contract infrastructure, usable by anyone. Being early to the space also helps us + iterate our products/protocols to a state that is very efficiently usable for the wider + audience. This, in my opinion, is our moat. + + Q: What in your view has driven user adoption growth in DeFi? + + A: When I first built ETHLend (a decentralized lending platform based on + blockchain), the number of DeFi users were only in a few thousands. Today, the + DeFi infrastructure has evolved substantially from the ETHLend days, which has led + to an exponential jump in the number of DeFi users. + + Looking back, the ETHLend application developed by us was a proof of concept. + There was only one protocol then, as against multiple protocols today. Today, we + also have automated market-making protocols, where anyone can supply liquidity + without having a custom market-making strategy. + + However, I believe DeFi applications do not grow by themselves, but rather grow + together as an ecosystem. For instance, when the Aave protocol grows, + decentralized exchanges (DEX) or other such infrastructure grow and vice versa. + + Ultimately, everything is on the same network and all smart contracts on the + network interact with one another. There are also additional protocols built on top of + base layers, such as the Aave protocol. This interoperability helps drive innovation. + + Q: How would you describe DeFi? What is the future roadmap you see for + DeFi and TradFi? + + A: I believe DeFi is just a technology, especially when you look at the protocols and + how they work. It is infrastructure that allows us to make more efficient and + transparent economic decisions. Personally, I do not see much difference between + DeFi and TradFi, it is all finance in the purest sense. + + While I was building FinTech applications in my early days, I noticed that most of my + work related to the front-end, i.e., user experience. Notably, during that time, most + of banking was still brick-and-mortar, internet banking had just got popular, and + mobile banking was still evolving. FinTechs enjoyed a head-start as they were able + to build quicker/better user experiences versus the larger legacy-based banks. + + By contrast, looking at DeFi today, most of our work is focused on improving the + backend of banks. Looking at our payments/settlement infrastructure systems, a + large part of it is still using paper-based agreements. Electronic trading could help + get rid of this, but blockchain/DeFi takes it to a completely new approach. + + The possibilities with DeFi can be endless. What if we can change finance, not just + to be efficient, but also make it more transparent with public blockchains? What if + we open up the ecosystem such that it is more composable and we can create + applications on top of applications that can interact with one another by default. + + Lastly, DeFi protocols are governed by communities and users, which is in stark + contrast to what we see with businesses in TradFi. + + + + +© 2022 Citigroup + 120 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Q: Can you describe a Decentralized Autonomous Organization, or DAO? How + does it work? What does it mean in practice? + + A: The Aave DAO is a group of over 100,000 unique wallet addresses that hold the + AAVE governance token. AAVE allows its holders to make proposals to change the + Aave Protocol or amend parts of the Aave ecosystem, and to vote on those + proposals. In other words, the Aave Protocol’s “treasury” as well as the code base + itself (protocol code) is governed by the Aave DAO. + + This means the Aave team, who built the protocol and continues to build all sorts of + Web3 infrastructure, cannot go and change the code in any way. Instead, there is a + formal governance process that one goes through in order to submit an on-chain + proposal and change the actual smart contract code to reflect decisions the + community wants. This helps bring more certainty and ensures no single party + controls the infrastructure. + + Q: Can you highlight some pros and cons of a private company versus a + DAO? + + A: I believe private/public companies are good at organizing themselves into + business units and optimizing them for profitability. On the other hand, DAOs can + look like a corporation, but there are several unclear parts, especially related to + regulations. For instance, can you sign an agreement before a DAO? What is its + legal entity status? Some might also question whether DAOs are efficient enough to + compete with centralized service providers. + + Meanwhile, DAOs are very good at managing treasury globally. They are also very + good at governing public infrastructure for the greater good than versus the interest + of anyone particular company. + + Q: What is the purpose for Aave's launch of Web3 social media platform + “Lens”? What does the move to social media mean for the broader DeFi + industry? + + A: At the Aave Companies, we are focused on building the initial protocol, much like + a pre-construction company. This applies not only to DeFi, but any meaningful + infrastructure we believe belongs to the users. We believe all user-owned + infrastructure deserves transparency, especially using the blockchain technology. + + We believe Web3 is not only about financial value, but rather cultural value and + social value. We see a lot of value in social relationships and the need to reframe + those relationships, such that users have ownership of it. + + Looking at social media today, we realize that the space isn’t perfect, as platforms + own the users, their content, and their rights. Instead, we wanted to create a model, + just as in DeFi, where you do not need to trust the platform, but rather different + verticals are actually owned by its users. + + As a result, we decided to build the social graph, which allows any social media + application to be built on top of it. This means when you create a new account in a + new social media application, you do not need to build your audience from scratch. + Instead, you already have your audience as it is integrated with the social graph. + + The social graph can also be turned into a trust graph in the future, allowing for use + in DeFi, as a reputation facility. Web3 in our opinion, helps bring everything together + from commerce, social media and DeFi. + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 121 + + + + + The social graph is presently being tested on Polygon, and we have more + mainstream adoption in mind. The Lens team is also working to build a flagship + application to demonstrate the benefits of the protocol and what can actually be + built. + + Q: What is your vision of Web3 and the Metaverse? How do you see this + developing in the coming years? How is Aave going to be part of it? + + A: I believe the Metaverse has existed for quite a long time now, and I do not see it + as anything new. Simplistically, the Metaverse is just a virtual place where we can + all gather together with customized avatars and immersive experiences. + + The COVID-19 pandemic has put a lot of focus on the Metaverse, which has led it + to become a new online venue for people to play games and socialize. The + Metaverse creates several new opportunities for developers to create new services + (e.g., create a shop, set up a bank, or buy land). + + On centralized versus decentralized Metaverse, I believe both versions will coexist + in the future. However, in a centralized Metaverse, developed by a company, the + ownership of IP, the Metaverse look-and-feel, and how people behave/interact are + all set by the company. If you are not part of the company, it is very difficult for an + individual to have a say in how the Metaverse evolves. + + In my opinion, decentralization is crucial, as it creates accessibility to the + Metaverse. Users also need to have certainty that if they spend most of their time in + the Metaverse, they can create their own narrative or have a say in things. + + Lastly, there are questions related to the Metaverse hardware. I believe those who + own the hardware, will eventually own the Metaverse. This begs the questions — + Can we decentralize hardware? Can we decentralize access to those Metaverses? + + Q: Where do you see the DeFi adoption picking up the fastest? What are the + likely mainstream use cases we should expect in the future? + + A: In my opinion, a lot of the infrastructure will be behind the scenes. Notably, DeFi + can not only be scaled to a particular user group or financial institution, but rather + allows everybody globally could directly/indirectly use DeFi. Financial service + providers may be key distributors of this technology. + + DeFi brings several advantages — for instance, service providers need not have + custody of funds and can still interact in a permissionless nature. It also helps infuse + transparency to the market, such that no individual group of users can arbitrarily + change the code. Rather there is a formal governance process, whereby users + become owners of the protocol by providing liquidity and have a say in the system. + Globally, such an infrastructure makes a lot of sense. + + Switching to NFTs, we have seen strong growth in adoption recently, especially with + the focus on the creator economy. However, I believe we are still in the early days. + In my opinion, social media could drive strong adoption and bring in many users. + + Q: How big do you think DeFi will be by 2025? How does Aave look in 2025? + + A: Total locked value in DeFi protocols is currently at about $100 billion. I would + estimate that in the next few years, this number could well be 10x more. However, + much of this depends on the infrastructure developments and adoption by users. + + + + +© 2022 Citigroup + 122 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Based on the number of inbound questions we get from several financial + institutions, I believe we are likely to see strong institutional adoption in this space, + especially in the Aave Arc market (an institutional-grade version of the Aave + Protocol). Notably Aave Arc uses all the ingredients of DeFi, but is designed to + provide compliance solutions for traditional financial players, with all participating + entities and institutions required to undergo know-your-customer (KYC) verification + prior to engaging with the Aave Arc markets. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 123 + + + + + Decentralized Finance (DeFi) in the Metaverse +DeFi enables users to transfer, trade, Decentralized finance (DeFi) is a blockchain-based alternative financial ecosystem +borrow, and lend cryptocurrency based on that does not rely on centralized financial intermediaries such as banks, brokerages, +blockchain-based infrastructure and exchanges to offer financial products/services. DeFi enables users to transfer, + trade, borrow, and lend cryptocurrency, running on distributed blockchain-based + infrastructure primarily built on the concepts of openness and self-sovereignty. + + The core concepts of DeFi — smart contract-linked decentralized applications — + has enabled a host of financial use cases — from borrowing and lending, + stablecoins, staking and yield farming to decentralized exchanges. The users of the + applications interact with each other in a peer-to-peer fashion relying primarily on + “rule by code” rather than on any centralized intermediaries. + +A smart contract is a self-enforceable digital In DeFi, a smart contract replaces a financial intermediary, and is programmed to +representation of a traditional contract. In hold, send, and receive funds based on certain conditions. Once a smart contract is +essence, they are a collection of live, it is immutable and permanent. Smart contracts are also public and auditable, +functions/data stored at a specific address this openness enables weakly written contracts to come under public scrutiny and +on a blockchain verification. + + A decentralized app (dApp), is an application built on decentralized technology, with + transparent auditable code, built on smart contracts, permissionless, and globally + accessible from inception. + + Composability in DeFi + +A key feature of DeFi is “composability,” One of the key features of DeFi is “composability,” which enables all the different +which enables all the different protocols to protocols to capitalize on interoperability and build on each other’s capabilities. For +capitalize on interoperability and build on instance, a user can swap some of their tokens into another on a decentralized +each other’s capabilities exchange like Uniswap, deposit these swapped tokens to a lending protocol like + Aave and earn yield, or use these swapped tokens to cross over into other + blockchains using bridges. + + + + Just like a software library, smart contracts for different protocols and + applications can easily plug into each other like Lego pieces. In fact, smart + contracts within decentralized finance (DeFi) — which represents one of the + earliest and most vibrant examples of composability — are often referred to as + ‘money Legos.’ + – LINDA XIE, CO-FOUNDER OF SCALAR CAPITAL + + + + + Role of DeFi in the Metaverse + +Fundamental to the economic infrastructure Given that the Open Metaverse is visualized as a permissionless, persistent, virtual +of the Metaverse is a seamless and high world where people and communities meet, create, and exchange value, it is likely +transaction-throughput financial that the Metaverse is supported by financial infrastructure that encapsulates the +infrastructure same values of permissionlessness, decentralization, and trustlessness. + + While cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs) + are likely to coexist in the Metaverse, we also foresee a role for centralized financial + institutions for payments especially with closed-loop, B2B, and privacy-focused + consumer use cases. Fiat-based payment rails will likely remain important in the + centralized Metaverses. + + + +© 2022 Citigroup + 124 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + A seamless and high transaction-throughput financial infrastructure, that works + across fragmented implementations between centralized platforms and + decentralized applications, would be a fundamental foundation to the economic + infrastructure of the Metaverse. + + Many DeFi products resemble traditional financial products, delivered in a + permissionless and decentralized way. The decentralized apps, dApps for short, + usually offer an ability to post a collateral, and borrow against it, much like + traditional collateralized loans. Or earn yield or fees for supplying digital assets. + + DeFi is good at specific use cases like staking, collateralized loans, and yield + farming, where it brings out the best of a peer-to-peer, trustless, interoperable + ecosystem. There are however a number of use cases that DeFi is yet to solve well, + including non-collateralized transactions. + + DeFi in its current form is best suited for investors who hold a lot of assets, who can + use the staked assets as an investment tool, including collateralized borrowing to + unlock liquidity. However, for the majority of users, traditional finance will still be + relevant. DeFi will coexist on a spectrum with traditional and centralized finance. + + We expect the following themes will play a central role in adoption of DeFi in the + Metaverse. + + 1. Self-Sovereign Financial Accessibility to Grow + + The power of one wallet being able to As the popular refrain in crypto says, “Not your keys, not your crypto.” We expect a + access entire range of DeFi financial product meaningful number of users to self-custody their cryptocurrency. As the front-end + suite is completely antithetical to current user experience of wallets improves, we expect self-custody and key management + user experience in traditional finance in crypto to get progressively easier, driving mainstream adoption. The power of one + through walled gardens wallet being able to access the entire range of DeFi financial product suites is + completely antithetical to the current user experience in traditional finance through + walled gardens. + + 2. But Intermediaries Remain to Abstract Away Complexities + + Even while we expect self-custody to play an important role, we expect the majority + of the population to be more comfortable with an intermediary abstracting away the + complexities of the DeFi ecosystem. The sheer number of tokens, currencies, and + management of diverse assets could be too much to handle for the average user. + + If we take the example of a small merchant accepting payment on the Metaverse, + this would require the merchant to not only accept the currency of choice of the + consumer, but also manage liquidity, long/short positions, and yields across a + basket of currencies. An intermediary can abstract away the complexities. + + We expect trust, permission, and Visa is working on making it hassle-free for card customers wanting a familiar card- + decentralization to exist across a wide based user experience to continue to use familiar form factors. Merchants receive + spectrum in the Metaverse payment in cryptocurrency of their choice, even if the customer uses a different + payment cryptocurrency. + + While this goes against the permissionless and trustless basis of the decentralized + world, we expect trust, permission, and decentralization to all exist across a wide + spectrum in the Metaverse. And it will be the users’ choice to decide on which end + of the spectrum they choose to participate in. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 125 + + + + + 3. Investments in the Metaverse + + Given the vast variety of digital assets on offer spanning NFTs, social tokens, virtual + land and property, digital luxury goods, and digital art, we expect demand from + users for a systematic approach to planning investment strategies in the Metaverse. + + We expect specialized investment firms and funds that focus on select themes. For + example, real estate firms are launching funds that are aimed at investors seeking + to buy virtual land parcels across several “Metaverses” and develop virtual hotels, + stores, and others. We believe more of these investment themes around social + tokens will emerge. + + 4. Risk Management and Short Selling + + Volatility and liquidity risk management, active hedging, and the ability to take both + sides of the market, would be key to a well-functioning financial market, and we + expect new DeFi applications to emerge that enable short selling, improved market + making and price discovery, and synthetics. + + Decentralized derivative exchange SynFutures has recently launched NFTures, a + product that lets consumers participate in both sides of the market. This opens new + avenues for investors, as opposed to primarily “buy and hold” strategies on NFTs + (non-fungible tokens), leading to better price discovery. + + 5. Tokenization of Everything + +All traditional and new forms of assets Blockchain technology has launched a digital-token rush of sorts with a large +classes are expected to be tokenized in section of assets expected to be tokenized progressively. Tokenization opens up +upcoming years i.e., stocks, bonds, music avenues for instant exchange, trading, and settlement of assets that have +albums, rarities, etc. historically been hard to exchange real-time. + + Traditional assets including stocks, bonds, and other financial assets are expected + to be tokenized soon. We are already seeing use cases of tokenization of music + albums, rare products, and even a person’s time. Tokenization allows digital + representation of all assets, and this opens up new methods of transacting that are + real-time and frictionless. + + + + I believe every company in the world will have a token in its capital structure in + the next five to 10 years. These tokens will be hybrid securities — part + loyalty/member rewards program and part quasi-equity, in that the token will + have a utility within a company’s ecosystem (rewards) and will also have + financial value as the company grows revenues (pass-through dividends). + All consumer-facing businesses will benefit from engaging their customers with a + token — from Starbucks…Netflix, and Disney to small local companies like your + barber, gym and corner bodega. + – JEFF DORMAN, CHIEF INVESTMENT OFFICER AT ARCA + + + + +© 2022 Citigroup + 126 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + 6. Automated Market Making + + Automated market making is likely to drive Compared to centralized exchanges where price discovery is enabled by book- + investors to hold more yield-bearing assets building, automated market marking (AMM) enables real-time price discovery even + and reduce the incentive to hold cash for illiquid assets. On AMM platforms, instead of trading between buyers and sellers + as direct counterparties, users trade against liquidity locked inside smart contracts. + + Given that there is no book-building process, AMM opens up new avenues for hard- + to-directly exchange asset pairs to now find a market. Anyone can provide liquidity + to the pools by supplying both assets represented in the pool. The AMM protocols + incentivize users to provide liquidity by sharing a portion of the fees provided on the + transaction with the liquidity providers. + + Automated market making is likely to drive investors to hold more yield-bearing + assets and reduce the incentive to hold cash, given the possibility of liquidity. Users + will be able to constantly decide on which assets are overvalued/undervalued and + rebalance their portfolio accordingly. + + 7. DeFi Matrix + + Introduced by Balaji Srinivasan, the DeFi Matrix is a paradigm that unlocks the + power of tokenization and automated market making. + + Real-time DeFi tradability powered by Tokenization of all assets leads to a scenario where every asset, by means of its + automated market marking leads to real- token, can be held in a universal self-custodial wallet and be exchanged for every + time price discovery even between any other asset in real-time. Real-time DeFi tradability powered by automated market + illiquid asset pairs marking leads to real-time price discovery even between any illiquid asset pairs, + and this opens-up potentially tremendous opportunities in direct exchange and + value-unlock. Every asset is therefore competing with every other asset in the + world. + + The way Balaji Srinivasan describes the DeFi matrix is a giant billion-by-billion table + where the rows and columns represent everything that is tokenizable — + cryptocurrencies, CBDCs, stablecoins, equities, bonds, NFTs, and video game + potions. Each row of asset is tradable for every other asset in the columns of the + matrix. Every existing exchange today — be it a cryptocurrency exchange like + Coinbase, a stock exchange like NASDAQ, or a foreign exchange or a bank — can + be considered sub matrices of this. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 127 + + + + + The DeFi matrix may be to the 2020s what the social graph was to the 2010s. + Once every asset can be represented in a digital wallet — Bitcoin and Ethereum, + yes, but also CBDCs [central bank digital currencies], stocks, loans, bonds, etc. + — all these billions of assets will trade against each other every second of every + day around the world. + This table of pairwise trades is what I call the DeFi matrix. Some of the cells in + the DeFi matrix, like BTC/USD, have tremendous liquidity across many order + books. Others, like a recent NFT [non-fungible token] vs. a new token, may only + have what an AMM [Automated Market Maker] can give them. But all financial + markets can be reduced to sub-matrices of the DeFi matrix. The traditional stock + market will be CBDCs vs. crypto equities. The forex market will be CBDCs vs. + CBDCs. And the fiat/crypto markets will be BTC/USDC and the like. + – BALAJI SRINIVASAN, INVESTOR, FORMER CHIEF TECHNOLOGY OFFICER OF COINBASE AND + GENERAL PARTNER AT A16Z + + + + + 8. Centralized Services on DeFi + In the Metaverse, we expect there are likely to be use cases where centralization is + relevant, and we expect DeFi payment rails to enable access to these services, + coexisting with traditional payment rails like cards/instant payments. One example + could be local municipal governments offering services on the Metaverse that are + paid for in stablecoins. As noted earlier, centralization and decentralization will likely + coexist on a spectrum, although increased regulatory scrutiny on DeFi will also lead + to both blending towards the middle. + + 9. Micropayments and Streaming Packets of Money in the Metaverse + +Payments as small as tenth of a cent are Micropayments should drive “pay-per-use” content monetization as opposed to +required to realize the value of the established monetization norms of charging flat fee subscriptions or digital ad- +Metaverse revenue models. + + Payments as small as a tenth of a cent are required to realize the value of the + Metaverse, especially around the new economy of millions of digital goods, each of + which can have a value and a price. Monetizing the vast majority of digital goods is + impossible without the Metaverse enabling the infrastructure for real-time + micropayments. A user can pay $0.50 to unlock a digital item and its features, with + this payment being immediately split between the artists and creators who + contributed to the making of the object. + + 10. NFTs Central to Near-Term Metaverse DeFi Use Cases + +DeFi can help unlock the value in NFTs by Translating the established DeFi use cases to the Metaverse, we expect NFTs to +means of its use as collateral for lending play a central role in tapping the potential of DeFi in the Metaverse. DeFi can help + unlock the value in NFTs by means of its use as collateral for lending, especially for + high-value NFTs that today cannot be unlocked without an outright sale. + + Fractionalization of NFTs also brings in more liquidity through DeFi, by combining + NFTs with tokens that can be traded on DEX-based (decentralized exchange- + based) liquidity pools. Nesting and wrapping of NFTs with fungible tokens opens up + new avenues and use cases. + + + + +© 2022 Citigroup + 128 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + 11. Real World NFTs to Open Up More DeFi Avenues + + We expect two-way movement in the real- Covered later in this section, we expect the overlap of real-world assets and NFTs + world assets and NFTs to power unique to power unique ways of unlocking NFT’s potential. We expect two way movement + ways of unlocking NFT potentials here — both in terms of real world assets being brought on-chain (e.g., tokenized + real world mortgages/REITs or real estate investment trusts) and also on-chain + assets being moved to the real world (purchasing an NFT and redeeming it in the + real world as an e-commerce product). + + How NFTs and DeFi Work Together + Basic primitives of composability enable NFTs (non-fungible tokens) and DeFi + (decentralized finance) applications that use fungible ERC-20 tokens to interoperate + unlocking new use cases. + +  NFTs as Collateral: NFTs are illiquid compared to fungible tokens, and one of + the first applications of the overlap of DeFi and NFTs is using NFTs as collateral + for DeFi lending. In case the borrower fails to repay the loan, the ownership of + the NFT passes to the lender. It is, however, early days for NFTs as collateral, + given high volatility around most NFT valuations. + +  Fractionalization of NFTs (F-NFTs): We expect fractionalization of NFTs to lead + to more flexible use cases outside of owning and trading. Fractionalization of + NFTs is the process of splitting up an NFT (ERC-721 token) into smaller fungible + tokens (ERC-20). + + Fractionalization of NFTs could lead to more Fractionalized NFTs enable part ownership of an NFT that would otherwise be + flexible use cases and enable part prohibitively expensive. It also enables the owner to unlock part of the value in + ownership, partial liquidation, greater price their NFT without selling it fully. In addition, it leads to greater price discovery, as + discovery, etc. NFT markets are highly illiquid, and also enables using the fractional NFT as a + collateral in the loan. + + An early example of fractionalization is the “Feisty Doge” NFT. An image of the + Dogecoin meme, Shiba Inu, originally purchased for 13 ETH in June 2021, or + roughly $35,000 at the time, was fractionalized and sold as 100 billion ERC-20 + tokens, skyrocketing to a $80 million market cap in a few days, and was labelled + as the most valuable NFT. While questions remain around the intrinsic value in + this example, it is important to note that fractionalization opens up significant use + cases and opportunities to invest in NFTs that would otherwise be unaffordable. + +  Nested and Wrapped NFTs: We expect a lot of interesting use cases to evolve + around nested and wrapped NFTs, which involve packaging fungible tokens + within an NFT or wrapping a bunch of NFTs within a fungible token. + + DeFi protocol Charged Particles is experimenting with new formats around + “nested NFTs” — this enables a number of fungible tokens being wrapped or + nested within an NFT. + + One enterprise use case around nested NFTs could be with vesting of benefits, + where fungible tokens could be issued at time of launch of a product/company, + but wrapped inside an NFT, a “vesting capsule,” and programmatically time- + locked. The vesting capsule then can be traded or used as collateral for loan + among other items. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 129 + + + + +Nesting of NFTs also allows users to Nesting of NFTs also allows users to generate programmable yield by depositing +generate programmable yield by depositing fungible tokens within an NFT. Wrapped NFTs into a fungible asset increases the +fungible tokens within an NFT liquidity of the NFTs and enables flexible DeFi use cases. + +  NFT as Derivatives: According to the thesis in the MetaFi report from Outlier + Ventures, NFTs as derivatives will enable the creation of a range of liquid digital + assets whose value would depend on the value of off-chain assets, in-game + items, and social capital, represented as NFTs and perhaps linked to data + oracles to determine state. This would enable digital artists to create art, create + an NFT derivative, and use it as a collateral to mint synthetic assets. + + Another example of DeFi and NFTs working together is Aavegotchis, playable + NFTs that also act as interest-generating piggy banks, created by staking DeFi + tokens directly into the NFT. + +  Financing Real-World Asset (RWA) Market: While most of the DeFi apps deal + exclusively with digital assets, there is growing interest in the primitive of + mapping real world non-fungible assets into NFTs. + +Financial applications built on public Financial applications built on public blockchains open up access to borrowing, +blockchains open up access to borrowing, lending, and other services; however, there are not many avenues for capitalizing +lending and other services; however, there on real-world assets in the DeFi space. +are not many avenues for capitalizing on +real-world assets in the DeFi space Centrifuge, one of the leading protocols in the RWA tokenization space, allows + anyone to launch an on-chain credit fund, creating collateral-backed pools of + loans. Centrifuge’s privacy-enabled NFTs are tokenized representations of + individual assets, keeping some of the assets attributes private on a peer-to-peer + (P2P) protocol, while the Centrifuge Chain (a public, decentralized ledger) tracks + the asset ownership. + + This would allow small businesses to finance their tokenized real-estate bridge + loans, trade receivables, cargo and freight forwarding invoices, branded + inventory financing, and revenue-based financing using crypto, to name a few. + + In December 2021, Aave Protocol, a DeFi lending platform, and Centrifuge + launched the RWA market. This is the first diversified real-world asset market on + the Aave Protocol. + + + + The RWA Market is a much-needed building block not only for protocols such as + Aave, but across DeFi as a whole. Knocking down barriers of entry and making + DeFi accessible to all is part of the Aave Companies’ vision, and we are excited + Centrifuge is working on these solutions. + – STANI KULECHOV, FOUNDER AND CEO OF AAVE COMPANIES + + + Although it is early days yet, we expect a number of DeFi use cases to launch + around bringing real-world assets on-chain. + + + + +© 2022 Citigroup + 130 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Figure 44. The Aave Protocol + + + + + Source: Aave, Citi Global Insights + + + Over the past 18 months, the number of unique addresses that have used DeFi + applications has grown exponentially — touching 4.4 million as of February 2022. + Although this number is likely an overestimate of the number of unique users in + DeFi (given that one user can and most likely has more than one on-chain address), + it still gives a potentially good indication of the interest and growth in this space. + + Total Value Locked (TVL) in DeFi protocols is $200 billion as of March 2022, + according to DeFiLlama. TVL represents the sum of all assets deposited in + decentralized protocols, earning rewards, and tokens. + + Figure 45. Total DeFi Users Over Time Figure 46. Gross Value Locked of Smart Contract Platforms + ($bn) Ethereum Fantom Terra BSC Avalanche Solana Others + 5,000,000 300 + 4,500,000 + 4,000,000 250 + 3,500,000 + 200 + 3,000,000 + 2,500,000 150 + 2,000,000 + 1,500,000 100 + 1,000,000 50 + 500,000 + 0 0 + Oct-20 + + + + + Apr-21 + + + + + Oct-21 + Nov-20 + Dec-20 + Aug-20 + Sep-20 + + + + + May-21 + + Jul-21 + + + + + Nov-21 + Dec-21 + Aug-21 + Sep-21 + Jan-21 + + Mar-21 + Feb-21 + + + + + Jun-21 + + + + + Jan-22 + + Mar-22 + Feb-22 + Dec-17 + + + + + Dec-18 + + + + + Dec-19 + + + + + Dec-20 + + + + + Dec-21 + Sep-18 + + + + + Sep-19 + + + + + Sep-20 + + + + + Sep-21 + Mar-18 + Jun-18 + + + + Mar-19 + Jun-19 + + + + Mar-20 + Jun-20 + + + + Mar-21 + Jun-21 + + + + + Source: Dune Analytics, Citi Global Insights Source: DeFiLlama, Citi Global Insights + + + Ethereum accounts for around 55% of the total value locked in DeFi, although the + high gas fees has spurred the adoption of DeFi apps on alternate Layer-1s. + According to a report from early-stage crypto investment firm Electric Capital, + several protocol ecosystems — notably Polkadot, Solana, NEAR, Binance Smart + Chain, Avalanche and Terra — have had faster initial ecosystem growth than + Ethereum. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 131 + + + + + Figure 47. Growth Rate Outside Top 200 Ecosystems +86% + + + + + Source: Electric Capital, Citi Global Insights + + + Key DeFi Use Cases + Figure 48. DeFi Value Locked by Category (Net) + + ($bn) Ethereum Fantom Terra BSC Avalanche Solana Others + 300 + + 250 + + 200 + + 150 + + 100 + + 50 + + 0 + Oct-20 + + + + + Apr-21 + + + + + Oct-21 + Nov-20 + Dec-20 + Aug-20 + Sep-20 + + + + + May-21 + + Jul-21 + + + + + Nov-21 + Dec-21 + Aug-21 + Sep-21 + Jan-21 + + Mar-21 + Feb-21 + + + + + Jun-21 + + + + + Jan-22 + + Mar-22 + Feb-22 + Source: DeFiLlama, Citi Global Insights + + +  Lending: One of the core use cases of decentralized finance (DeFi), lending, + witnessed total value locked (TVL) of $46.8 billion in 2021, which reflected a + 559.2% growth over 2020. Maker, Compound, and Aave are the top lending + protocols by value locked. Lending pools staked in Maker back the decentralized + stablecoin DAI, whereas in Aave and Compound, lending pools are deployed for + fully collateralized lending. + +  Decentralized Exchanges: A decentralized exchange (DEX) is a cryptocurrency + exchange which operates in a fully decentralized way without a central authority. + Decentralized exchanges rely on self-executing smart contracts to facilitate + trading and settlement. Different DEX use different underlying technologies — + some like dYdX and Loopring use conventional order book models, and others + like Uniswap and Curve use emergent liquidity pools. + + + + +© 2022 Citigroup + 132 Citi GPS: Global Perspectives & Solutions March 2022 + + + + +  Automated Market Makers (AMMs): Automated Market Makers aim to allocate + passive liquidity from idle assets of market participants to generate yields. + Leading DEXs that use are automated market making are Uniswap and Curve. + +  Perpetuals: Perpetuals are futures contracts that have no expiry or settlement + date but trade closely to the underlying asset price using a funding mechanism. + dYdX is a popular exchange for cryptocurrency derivatives, including perpetuals + with a hybrid infrastructure model. + + Figure 49. DeFi Value Locked in Lending Figure 50. DeFi Value Locked in DEXs + AAVE Anchor Compound Curve PancakeSwap SushiSwap Balancer + JustLend Venus Others Osmosis VVS Finance SpookySwap Bancor + $20 bn SUNSwap Others + $40 bn + $15 bn + $30 bn + + $10 bn + $20 bn + + $5 bn $10 bn + + + $0 bn $0 bn + Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-22 Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-22 + Source: DeFiLlama, Citi Global Insights Source: DeFiLlama, Citi Global Insights + + + DeFi Stack + + The DeFi technology stack is composed of the below layers. + +  Settlement Layer: Comprises a public blockchain with a native currency. The + most popular settlement layer for DeFi, as noted earlier, is Ethereum, but the + newer chains are gaining fast traction. + +  Asset Layer: Specifies the tokens that are DeFi'ned within the ecosystem. In the + case of Ethereum, while ETH, the native token would form a part of the + settlement layer, all the token standards — including ERC-20 (fungible tokens), + and ERC-721 (non-fungible tokens) — will comprise the asset layer. + +  Protocol Layer: Enables adequate liquidity and provides standards for specific + use cases such as decentralized exchanges, on-chain asset management, and + derivatives implemented in a highly-interoperable way. + +  Application Layer: Houses the user-facing decentralized applications (dApps) + that build on the underlying layers and bring functionality to users. The + application layer is where most DeFi users interact with the whole infrastructure, + through apps like Aave and Uniswap. + +  Aggregation Layer: Sits on top of the application layer and consists of + aggregation apps that route and manage interacting with multiple underlying + apps. The role of aggregators becomes especially important due to fragmented + liquidity in various underlying protocols. These also enable users to perform + complex tasks by connecting to several protocols simultaneously. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 133 + + + + + Figure 51. DeFi Stack + + + + + Source: Federal Reserve Bank of St Louis, Citi Global Insights + + + DeFi Protocols: Most Revenue to the User and Not the Platform? + + A key statistic around DeFi protocols is that over 80% of the revenues across DeFi + protocols, on average, accrues to the user and not to the protocol (platform- + equivalent in Web2). There are indications that some projects are in customer + acquisition pre-revenue mode, and hence have a much smaller share of protocol + revenue than is to be expected in a long-term steady-state basis. + + Figure 52. Annualized DeFi Revenue by Protocol (30-Day Sample) + + $1.2 bn Supply-Side Revenue Protocol Revenue + $1.0 bn + $0.8 bn + $0.6 bn + $0.4 bn + $0.2 bn + $0.0 bn + MakerDAO + Aave + Uniswap + + SpookySwap + + + + + Abracadabra.mo + SushiSwap + + + + + Bancor + Compound + + + + + Quickswap + Trader Joe + + + + + Balancer + + + + + ney + + + + + Note: Latest data as of March 11, 2022. + Source: Crypto Fees, The Block, Citi Global Insights + + + The Dark Side of DeFi + The peer-to-peer, trustless, and permissionless infrastructure of decentralized + finance (DeFi) opens up new possibilities for financial services on the Metaverse. + However, DeFi is also plagued by challenges and scams, and has a long way to go + in strengthening the security mechanisms for participants so they do not fall victim + to an ever-increasing list of scams and abruptly-dropped projects. + + + + +© 2022 Citigroup + 134 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Taking away the role of centralized intermediaries transfers the onus of self- + protection to every investor and DeFi participant. There are no chargebacks or + cancelled transactions in DeFi – once a transfer of tokens has been effected, the + transaction is almost irreversible. + + To validate the security of DeFi protocols would involve the investor demonstrating a + high level of sophistication and awareness of the protocol technique itself, having + familiarity with potential means of scams to be wary against, and undertaking a lot + of due diligence at their own end. + + There are hundreds of DeFi protocols live today. Barring the top protocols with well- + audited security measures, communities, and user base, a number of DeFi projects + also have very short shelf lives. There are many high-risk projects and exposure to + “key person risk,” ironic for decentralized projects. + + Recently, Yearn Finance, one of the leading aggregator services for DeFi investors + with over $3.5 billion of value locked, witnessed a major drop in token price + following the exit of key players. Andre Cronje, popularly called the “Godfather of + DeFi,” has quit before — his February 2020 blogpost was titled “Building in #DeFi + sucks.” + + Some DeFi protocols also promise high short-term yields to attract investors, but + with no underlying sustainable model for such high yields. After the initial surge in + users and the following “pump-and-dump” of tokens, yields normalize, and early + investors migrate leaving for the next “high yield” project. + + Yields are kept unsustainably high in the initial stages of a few projects that are + focused on unnaturally driving up demand and these normalize over time. But by + then, early investors have a left looking for the next promising project. Many high- + yielding products are untested by time. + + Given a number of developers behind leading DeFi protocols are pseudonymous, + there are also risks from sudden doxxing (revealing the identity). Popular DeFi + protocol Wonderland almost shut down after it was discovered that its core Treasury + Manager had earlier been convicted for fraud. + + Overall, while the DeFi ecosystem opens up a world of possibilities for the investor, + the core “buyer beware” approach and absence of recourse and redress + mechanisms puts enormous responsibility on the average user to be aware of the + safety and soundness of the protocol they are interacting with. + + Generally, (not specifically DeFi), we notice that early tokenization for decentralized + apps skews product-market fit metrics, where the user is also the investor: Is the + user using the product because they really like it, or because they are expecting the + associated token to go up in value? + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 135 + + + + + Regulatory Developments and + Sociopolitical Considerations + In this chapter, we examine key legal questions and regulatory issues surrounding + the Metaverse and the implications for society, politics, and governments. Whatever + form the Metaverse takes, it will likely change the way we live and work, both + digitally and physically. + +The Metaverse will most likely attract greater If the Metaverse is indeed the new iteration of the internet, it will most likely attract +scrutiny from global regulators, greater scrutiny from global regulators, policymakers, academic institutions, and +policymakers, governments, etc. Key areas governments. A lot of this is still in flux. Key areas of concerns include: +of concerns include content moderation, +privacy, ownership, competition and antitrust  Content Moderation: Ensuring that no harmful and illegal content enters the + Metaverse and preventing misbehavior in this environment. + +  Privacy: Protecting the privacy of the users and data collected. + +  Ownership: Establishing the instruments through which one can own something + in the Metaverse and what rights are attached to these. + +  Competition and Antitrust: Considering when platforms look to expand their + activities in the Metaverse. + + + + The digital world is a reflection of the way humans operate in the physical world. + In the Metaverse, we see an amplification of risks, value propositions, challenges + and opportunities that warrant an elevation of our legal and regulatory response. + However, this calls for an evolution of the law, rather than completely re-writing it. + – URSZULA MCCORMACK, PARTNER AT KING & WOOD MALLESONS + + + + +Stakeholders operating in the Metaverse will It is important for any stakeholder operating in the Metaverse to consider the legal +have to consider established as well as and regulatory environment (both well-established legal frameworks and emerging +emerging legal and regulatory frameworks, regulatory developments) from the outset, as they will play a critical role in shaping +as they will be crucial in shaping their their business strategy. +business strategy + + + + +© 2022 Citigroup + 136 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Many people categorize the DeFi space as being unregulated or the ‘Wild West.’ + I do not agree with this characterization. DeFi companies are developing + software products, which are covered under consumer protection laws and are + broadly applicable across all geographies with some variation. + I believe the more interesting questions come around regulation and + decentralization. No matter what a company says regarding it being + centralized/decentralized, if you are able to affect user funds, are taking custody + of user assets in any form, or other matters that financial regulators intend to + address, you have to comply with relevant regulations. But if you do not have + those abilities — as is the case for truly decentralized DeFi software — + traditional regulation, which focuses on intermediaries, is not applicable in its + current form. + – REBECCA RETIG, GENERAL COUNSEL AT AAVE COMPANIES + + + + + It is the regulators who will determine what governance structure needs to be put in + place, what types of activities are permissible in different jurisdictions, among other + issues. It is regulators who will have to give the green light for certain activities to go + ahead. We have recently witnessed projects wind down due to the lack of regulatory + support. + + + + Despite giving us positive substantive feedback on the design of the network, it + nevertheless became clear from our dialogue with federal regulators that the + project could not move ahead. + – STUART LEVEY, CEO OF DIEM ASSOCIATION + + + + + Policymakers could work alongside industry Policymakers have an opportunity to work together with industry participants to + participants to establish a regulatory establish a regulatory framework while the Metaverse is in the process of being + framework instead of the possible risk of created – as opposed to the possible risk of front-running technology and + front-running technology and innovation by innovation, by putting in preventative regulations without a full understanding of the + putting in preventative regulations potential risks and opportunities. + + Some regulatory areas are still works in progress and in the drafting stage, while + other areas have well established legal principles which we expect will need a more + sophisticated regulatory response to be Metaverse-ready. In this section, we + consider some of the key emerging regulatory and legal issues. + + How Have Regulators, Policymakers, Global Standard- + Setters Reacted? + Today, the “Metaverse” is not defined in any rule or regulation at a national level or + by any global standard-setting body, nor is there a set body of law that has been + drafted specifically with the Metaverse in mind. This is to be expected. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 137 + + + + + For starters, there is no industry-wide agreed definition of what the Metaverse + means, and in this report, we present a wide range of views from a broad range of + stakeholders. Definitions are important. They set out the boundaries of what will fall + within regulatory scope and what remains outside the regulatory perimeter. + + A logical starting point when mapping out the regulatory landscape is to look where + the word “Metaverse” has been called out specifically. We are starting to see a few + examples already. + + A Starting Point: Specific Mentions of the Metaverse + + The word “Metaverse” was explicitly used at the final public evidence session of the + Joint Committee on the draft Online Safety Bill (the Bill) in the Houses of Parliament + on November 4, 2021. The United Kingdom government published the draft bill on + May 12, 2021. + + Nadine Dorries (Member of U.K. Parliament, Secretary of State for Digital, Culture, + Media and Sport) said about the bill, “I make the point that this Bill also applies to + the Metaverse.” She also confirmed that the Metaverse is classified as a user-to- + user service. + + The Bill does three things and gives confirmation that the Metaverse will be in scope + of the legislation and that there will be consequences for non-compliance. + + 1. The Bill establishes a new regulatory regime to address illegal and harmful + content online, with the aim of preventing harm to individuals in the U.K. It + imposes duties of care in relation to illegal content and content that is + harmful to children on providers of internet services, which allow users to + upload and share user-generated content (user-to-user services) and on + providers of search engines, which enable users to search multiple + websites/databases. + + 2. The Bill also imposes duties on such providers in relation to the protection of + users’ rights to freedom of expression and privacy. Providers of user-to- + user services which meet specified thresholds are subject to additional + duties in relation to content that is harmful to adults, content of + democratic importance and journalistic content. + + 3. The Bill confers powers on the Office of Communications (Ofcom) to + oversee and enforce the new regulatory regime and requires Ofcom to + prepare codes of practice to assist providers in complying with their + duties of care. The Bill also expands Ofcom’s existing duties in relation to + promoting the media literacy of members of the public. + + + + I believe we heard that they (Meta Platforms) are putting 10,000 or 20,000 + engineers onto the Metaverse. Rebranding does not work. When harm is + caused, we are coming after it. Put those 10,000 or 20,000 engineers now on to + abiding by your terms and conditions and removing your harmful algorithms. If + you do not, this Bill will be watertight. I am looking at three to six months for + criminal liability. + – NADINE DORRIES, MEMBER OF U.K. PARLIAMENT, SECRETARY OF STATE FOR DIGITAL, + CULTURE, MEDIA AND SPORT + + + + +© 2022 Citigroup + 138 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Indication that the Metaverse will be in The comments made by Nadine Dorries indicate that the Metaverse will be in scope + scope of the legislation, and that there will of the legislation, and that there will be consequences for non-compliance. The Bill + be consequences of non-compliance was introduced in the House of Commons on March 17, 2022 (the first step in its + (criminal liability) passage through Parliament to become law). It has been tightened from earlier + drafts with new offenses added and prosecution or jail time for executives whose + companies fail to cooperate with Ofcom’s information requests brought forward from + two years to two months of the Bill becoming law and thus strengthening penalties + for wrongdoing from the outset. + + In South Korea, the Communications Commission (the domestic media regulation + agency) announced a new council mandate in January 2022 focused on user + protection in the Metaverse, including sexual harassment targeting minors, violence, + and inclusivity. The council consists of 30 professionals in media, law, technology, + and industrial management. + + During a parliamentary sitting in Singapore on January 11, 2022, the Minister for + Communications and Information was asked to comment on the Metaverse + specifically. The Ministry’s response highlights the fine balancing act between risk + and reward, and the importance of international regulatory coordination. + + The Ministry observed that technologies such as the Metaverse are at a nascent + stage of development and application, and that they present the potential for both + businesses and people to extend their activities and ownership into the virtual world. + The Ministry also noted that the government is closely studying their characteristics, + attendant implications, and risks: + + “For example, the immersive, interactive, decentralized, or anonymity elements of + these technologies have the potential to be harnessed to either strengthen or pose + risks to online safety, consumer protection, privacy, and protection of intellectual + property.” + + The Ministry went on to explain that the government “will seek to balance between + promoting economic vitality, preserving social stability, and protecting public security + in the digital domain. International coordination of regulatory approaches to the + Metaverse and associated technologies will also be crucial, given the borderless + nature of these technologies.” + + Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age + and Commissioner for Competition at the European Commission (EC), has also + called out the Metaverse and expressed competition concerns in an interview she + did with the online news site POLITICO Europe on January 18, 2022. + + “The Metaverse will present new markets and a range of different businesses. + There will be a marketplace where someone may have a dominant position,” and + said. “Things are happening that [the EU needs] to be able to follow.” + + On examining emerging digital spaces and the potential abuses of power that could + arise, she goes on to say, “We should start thinking about it now.” Vestager added + that the likely increase in the use of non-fungible tokens (NFTs) within the + Metaverse could also be an area to follow closely. + + This is a warning signal of what is to come, namely, scrutiny from competition + regulators and scrutiny of NFTs (more on these tokens below). The fact that NFTs + are called out is understandable given the role they will play in the Metaverse. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 139 + + + + + Open or Closed Metaverse? + + Earlier in the report, we cover two design choices pertaining to the Metaverse, + namely Open, based on blockchain primitives of sovereign identity and ownership, + that are trustless, permissionless, and borderless; and Closed, built by capital- + efficient platform companies that provide convenient user experience. There will be + different regulatory considerations for each as they are being built out. + + A Closed Metaverse built by platforms already has a vast number of regulations to + follow. These players operate in a mature regulatory environment. Platforms such + as Meta, Microsoft, and Amazon are not only highly regulated entities already, but + also attract further regulation when broadening their horizons/activities. + +We believe, the regulatory intensity will The existing regulatory frameworks within which platforms already operate will not +increase given the comments made by go away if they choose to build out their activities in the Metaverse. On the contrary, +authorities on competition, antitrust and we imagine the regulatory intensity will increase given the comments that authorities +online safety have already made on competition, antitrust, and online safety. + + There is already a direction of regulatory travel to complement (not replace) activity- + based regulation with the emergence of entity-based rules. We have already + witnessed such moves in the EU, China, and the United States. This could just be + the start. + + In the EU for example, the European Commission has proposed the Digital Markets + Act (which is making its way through the legislative process) specifically targeting + technology giants. + + + + Today, it is clear that competition rules alone cannot address all the problems we + are facing with tech giants and their ability to set the rules by engaging in unfair + business practices. + – ANDREAS SCHWAB, LEAD MEMBER OF THE EUROPEAN PARLIAMENT THE DIGITAL MARKETS + ACT + + + + + The Digital Markets Act sets out the criteria for identifying large online platforms as + gatekeepers and gives the European Commission the power to carry out market + investigations. The proposed rules are supposed to improve the removal of illegal + content and give users greater control. + +Any firm seeking to build a closed Along with existing rules and regulations, this emerging regulatory environment will +Metaverse, will have to consider emerging have to be considered by any firm seeking to build a closed Metaverse. How will +regulatory developments along with existing users transact and move value in a closed Metaverse? Using fiat currency or a +rules and regulations digital form of fiat currency, like a central bank digital currency, or tokens? + + Web2 platform companies have a relentless focus on providing superior customer + experiences, and one imagines that this will have a significant role to play when + they decide what payment instrument to integrate and what payment rails to + leverage. If non-fiat currencies are integrated, the regulatory framework is still + emerging. + + In an Open Metaverse, the regulatory environment is far less mature (and there is + no rule that refers to the “Open Metaverse” per se). With the Open Metaverse, we + are operating in the sphere of Web3 primitives of permissionless and open + protocols. + + +© 2022 Citigroup + 140 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + We imagine Open Metaverse transactions will use cryptocurrencies and maybe + central bank digital currencies that we will hold in digital wallets, and we will enter + the world of decentralized finance (DeFi) to access financial services. + + Regulatory Walk Through the Metaverse + Let us take a brief tour of the activities that can be conducted in the Metaverse, for + example, purchasing digital land or a digital piece of art, to illustrate the range of + regulatory and legal issues that are relevant. + + Exchanges & Wallets: Global and Local AML Rules + + When looking to make a purchase in the Metaverse, for example buying a piece of + land, one will need to open a digital wallet in which to store the private keys to + facilitate the purchase. + + Assume that we make the purchase using cryptocurrency. The exchanges that will + facilitate the on and off ramps, and custodial wallets, need to be regulated for anti- + money laundering (AML) and know-your-customer (KYC), as per global standard + setters. + + It is important to pay close attention to what In October 2021, the Financial Action Task Force (FATF) —the global standard + is coming out of the FATF, as it sets the setter on AML and countering finance of terrorism (CFT) — published guidance that + tone on the movement of value and AML updated and superseded their 2019 guidance on a risk-based approach for virtual + rules that need to be built around this space assets (VAs) and virtual asset service providers (VASPs). + + The FATF guidance is an anchor for participating member jurisdictions to implement + in their own laws and thus provides a crystal ball outlook on emerging regulatory + change in the field of AML and CFT. The guidance has six key areas: + + 1. Clarifies the definitions of VAs and VASPs to make clear that these definitions + are expansive and there should not be a case where a relevant financial asset + is not covered by the FATF Standards (either as a VA or as another financial + asset). + + 2. Provides guidance on how the FATF Standards apply to stablecoins and + clarifies that a range of entities involved in stablecoin arrangements could + qualify as VASPs under the FATF Standards. + + 3. Provides additional guidance on the risks and tools available to countries to + address the money laundering (ML)/terrorist financing (TF) risks for peer-to- + peer transactions, which are transactions that do not involve any obliged + entities. + + 4. Provides updated guidance on the licensing and registration of VASPs. + + 5. Provides additional guidance for the public and private sectors on the + implementation of the travel rule. + + 6. Includes Principles of Information-Sharing and Cooperation Amongst VASP + Supervisors. + + As FATF guidance will require local It is important to pay a close attention to what is coming out of the FATF, as it sets + implementation; we anticipate a fragmented the tone on the movement of value and the AML rules that need to be built around + regulatory framework this space. If the Metaverse accepts virtual assets as a form of payment, then the + FATF guidance and how it will be transposed into local law will need to be adhered + to. As it requires local implementation, we anticipate a fragmented regulatory + implementation (as different jurisdictions have different regulatory philosophies). + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 141 + + + + + At an EU-wide level, the 5th Anti-Money Laundering Directive (AMLD5), which + entered into force on July 9, 2018 and gave EU Member States until January 10, + 2020 to implement these rules into national legislation, brought certain categories of + virtual currency providers (namely, providers engaged in exchange services + between virtual currencies and fiat currencies and custodian wallet providers) into + scope imposing a range of obligations on them (such as the requirement to perform + customer due diligence checks, ongoing monitoring, and filing of suspicious activity + reports). + + The 6th Anti-Money Laundering Directive, proposed in July 2021, takes things + further by expanding the scope of the rules obliging all virtual asset service + providers to apply AML/CFT measures to bring it in line with the FATF guidance. + + Across the Atlantic, the Financial Crimes Enforcement Network (FinCEN’s) has + been building an AML framework and guidance since 2013 on cryptocurrencies. Its + latest Notice of Proposed Rulemaking from December 2020 requires service + providers to collect KYC information when performing transactions involving + unhosted wallets (wallets not hosted by a financial institution). + + The semiannual regulatory agenda released by the Department of the Treasury on + January 31, 2022 includes mention of this rule, which means it is on their “book of + work” for the year ahead. There is no indication if the rule will be implemented or, if + implemented, whether it will be applied in its current form. + + In Asia, the Monetary Authority of Singapore (MAS) is introducing changes to its + Payments Services Act 2019 to implement FATF standards. On February 14, 2022, + MAS issued an explanatory brief covering the Financial Services and Markets Bill + and how it will align the scope of digital token services to the standards. + + It remains to be seen what additional changes jurisdictions will make locally to + further align their laws to the 2021 standards. It is early days since they were only + released in October 2021. + + Accessing the Metaverse Though DeFi: Early Indications from + Policymakers + + Extending our example of purchasing a virtual land in the Metaverse one step + further, imagine one does not have enough funds to pay for the land. You could take + out a loan to finance the purchase. However, the traditional financial institutions + such as banks and mortgage providers typically do not provide loans for items in the + virtual world (yet). To finance the purchase, one could look to the world of DeFi. + +The Bank of International Settlements (BIS) Earlier in the report, we described in detail what DeFi is and that many DeFi +has urged the policymakers to look at the applications are governed by decentralized autonomous organizations (DAOs). +DeFi space and outlined possible entry While the legal systems around them are still evolving, we have one clear example +points for potential regulations in the state of Wyoming where they have been allowed to register as limited liability + companies since mid-2021. + + + + +© 2022 Citigroup + 142 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + I think you can wrap a DAO in a legal entity like an LLC. In the United States, + Wyoming has put out a special law relating to wrapping DAOs as LLCs, or + limited liability companies. There are a number of different new proposals being + put together for DAOs to be trusts or wrapped in trusts in certain different + jurisdictions, most notably, Guernsey. + – REBECCA RETTIG, GENERAL COUNSEL AT AAVE COMPANIES + + + + + We also have a very early direction of travel from the Bank of International + Settlements (BIS), urging policymakers to look at the space and outlining possible + entry points for future financial services regulation. These center around the degree + of centralization that occurs in DeFi platforms along with DeFi’s links with the + traditional financial system. + + The authors of the paper “DeFi Risks and the Decentralization Illusion,” published in + the BIS Quarterly Review, note, “[DeFi] platforms have groups of stakeholders that + take and implement decisions, exercising managerial or ownership benefits. These + groups, and the governance protocols on which their interactions are based, are the + natural entry points for policymakers.” + + They also warn, “The limited application of anti-money laundering and know-your- + customer (AML/KYC) provisions, together with transaction anonymity, exposes DeFi + to illegal activities and market manipulation.” + + We saw these risks crystalize very recently following the Wonderland DeFi protocol + scandal in January 2022 after it emerged that a convict was serving as its treasury + manager. This is certainly an area to watch and see how the regulatory response + will unfold in the future. + + The FATF's 2021 guidance brings creators, Already, the 2021 FATF guidance mentioned above brings creators, owners, + owners, operators and any person who operators, and other persons who maintain control or sufficient influence in DeFi + maintains control or sufficient influence in arrangements under its “VASP” definition, where they are providing or actively + the DeFi protocols under their VASP facilitating VASP services (and leaves the door open for countries to consider other + definition factors as well). + + This means that owners/operators falling within the VASP definition will have to + undertake money laundering/terrorism financing risk assessments prior to the + launch or use of the software or platform and take appropriate measures to manage + and mitigate these risks on an ongoing and forward-looking basis as per the 2021 + FATF guidance. + + This guidance also considers cases where it is not possible to identify a legal or + natural person with control or sufficient influence over a DeFi arrangement. In these + cases, it says that, “countries should consider, where appropriate, any mitigating + actions, where DeFi services operating in this manner are known to them.” An + example of a mitigating action is for countries to consider the option of requiring a + regulated VASP to be involved in the activities related to the DeFi arrangement in + line with the country’s risk-based approach or to consider other mitigations. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 143 + + + + +We believe there will be a further regulatory Following the publication of the BIS paper and the FATF guidance, policymakers +response given DeFi and decentralized around the world are in the very early stages of contemplating what action to take. It +applications are the financial backbone of is possible that the scams/rug pulls, which have made their way into the DeFi +Web3, allowing transactions to take place on ecosystem, will give regulators a reason to look at this space more closely. +a peer-to-peer basis without the need for an +intermediary It is difficult to see what recourse, if any, there will be in the case of decentralized + exchanges that do not have auditing protocols in place making it very easy for any + bad actor (e.g., a bad developer) to create and enlist new tokens. + + + + However, this very characteristic makes these regulations difficult to implement + in the DeFi world, as they do not function in a similar manner. Well-reviewed and + audited smart contracts should do exactly what you want them to do — there is + no scope for subjectivity or judgement. + – REBECCA RETTIG, GENERAL COUNSEL AT AAVE COMPANIES + + + + + We believe there will be a further regulatory response given DeFi and decentralized + applications are the financial backbone of Web3, allowing transactions to take place + on a peer-to-peer basis without the need for an intermediary. The BIS indicates that + current rules should be used as a compass as the same risk-same rules principles + should apply to avoid any regulatory arbitrage. + + If their recommendations are followed, then a tweaking and an updating of existing + rules will likely take place. We will have to see how these can be implemented by + the private sector and challenges in this process. It may mean the proliferation of + various iterations of draft rules whilst the industry feeds in their views during + regulatory consultations. + + Crypto Assets: A Fragmented Regulatory Environment + The regulatory environment on crypto assets has been heating up over the last six + years, and if transactions in the Metaverse happen through the use of crypto assets + (cryptocurrencies or other tokens), then there are a range of rules that need to be + considered — and many are still in the drafting stage. + +The regulatory treatment of crypto assets Broadly speaking, the regulatory treatment of crypto assets will depend on their +will depend on their economic function and economic function and other key attributes to classify the instruments and to +other key attributes to classify the determine what rules apply. Are they used for payments, investment, trading, or as +instruments and to determine what rules a utility to access other goods or services? +apply + In some cases, these assets may straddle several categories, or they may change + their function throughout their lifecycle, making their classification and regulatory + treatments challenging. + + By way of example, the confusion around how security tokens are to be classified + (and by extension which regulatory body will oversee them) entered into the + spotlight in the United States, with the Congress writing to the SEC Chairman on + September 28, 2018, asking for clarification on how these tokens are to be treated. + + There is further complication because what might be classified as a certain token + type in one country and therefore falling within certain rules may not be classified in + the same way by regulators in another country, absent of a globally consistently + applied crypto asset taxonomy. + + + +© 2022 Citigroup + 144 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Global standard-setting bodies such as the Financial Stability Board (FSB), the + Basel Committee on Banking Supervision (BCBS), the Committee on Payments and + Market Infrastructures (CPMI), and the International Organization of Securities + Commissions (IOSCO) are focusing their efforts on key themes when it comes to + crypto assets, including: + +  Investor protection + +  Market integrity + +  Bank exposure to crypto assets + +  Monitoring financial stability + + Anything issued by these global standard-setting bodies will require local + implementation, which can lead to fragmentation. We have already witnessed + jurisdictions taking very different regulatory approaches, in line with their own + regulatory philosophies, from being restrictive (where certain activities are banned), + to more permissive regimes (where new rules are put in place or existing rules are + amended to provide a framework for what is permissible). + + Figure 53. Legal Status of Cryptocurrencies Around the World + + + + + Source: Citi Global Insights + + + + + Often, the more permissive regimes, are not the ones that have no regulation, + but rather ones with welcoming regulations. They provide a simple framework + with modest (and logical) barriers-to-entry and some core requirements that give + the market regulatory certainty. These markets tend to be early in regulating + virtual assets and considering emerging risks and opportunities: many are + actively considering decentralization and the potential recognition of new forms + of legal entity (e.g., DAOs). + – URSZULA MCCORMACK, PARTNER AT KING & WOOD MALLESONS + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 145 + + + + + We highlight a few examples to show the different degree of regulatory intervention + and implications for the Metaverse (note, the list below is not exhaustive and new + developments are taking place regularly): + +  In the United States, the regulatory environment is fragmented with + developments taking place at the state and at the federal level. We list examples + below. + + – On March 9, 2022, the Biden administration released an Executive Order (EO) + on digital assets, outlining a whole-of-government approach to crypto and + addressing both the risks and the benefits. The EO outlines a coordinated + approach directing various federal agencies to develop policy + recommendations on digital assets addressing six key objectives: + + • Protect consumers, investors and businesses + + • Protect global financial stability and mitigate systemic risk + + • Mitigate illicit finance and national security risks + + • Reinforce U.S. leadership in the global financial system and economic + competitiveness + + • Promote access to safe and affordable financial services + + • Support technological advances and responsible innovation + + The EO requires several follow-up reports and actions by federal agencies, + many of which are directed at the Department of Treasury, and most of which + have deadlines of 180 days from the issuance of the EO. + + – The Board of Governors of the Federal Reserve System (FRB), the Federal + Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the + Currency (OCC) have set out their joint work map for 2022. This work map + lists the areas they will provide clarity on including whether certain activities + related to crypto assets conducted by banking organizations are legally + permissible, their expectations for safety and soundness, consumer protection, + and compliance with existing laws related to: + + • Crypto-asset safekeeping and traditional custody services + + • Ancillary custody services + + • Facilitation of customer purchases and sales of crypto assets + + • Loans collateralized by crypto assets + + • Issuance and distribution of stablecoins + + • Activities involving the holding of crypto assets on balance sheet + + The above-mentioned agencies will also look at bank capital and liquidity + standards and how these apply to crypto asset activities involving U.S. + banking organizations, and they will continue to engage with the BCBS. + + + + +© 2022 Citigroup + 146 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + – Various interpretive letters have been released by the OCC covering crypto + asset activities and to give guidance to the industry. These letters address + whether banks may provide cryptocurrency custody services, whether they + may hold dollar deposits serving as reserves backing stablecoins in certain + circumstances, whether they may act as notes in distributed ledgers to verify + customer payments, whether they may engage in certain stablecoin activities + to facilitate payment transactions on a distributed ledger), and to give + guidance to the industry. + + The last letter (at the time of writing) dated November 18, 2021 clarifies that + the activities addressed in previously issued interpretive letters “are legally + permissible for a bank to engage in, provided the bank can demonstrate, to + the satisfaction of its supervisory office, that it has controls in place to conduct + the activity in a safe and sound manner.” + + – We have also witnessed regulatory approaches at the state level. In the state + of New York, a person or a company that engages in virtual currency business + activity will require a license — a “BitLicense.” + + • The State of Wyoming has laws allowing for special purpose depository + institutions — so called SPDIs. These are banks that receive deposits and + conduct other activities incidental to the business of banking including + custody, asset servicing, fiduciary asset management, and related activities. + These SPDIs can focus on digital assets like virtual currencies, digital + securities, and digital customer assets when conducting their activities. + + • On February 15, 2022, the Governor of Colorado, Jared Polis, said in an + interview with CNBC that his state will accept cryptocurrency in payment for + state taxes by this summer (the state will not be holding crypto and + payments will be converted to U.S. dollars by an intermediary). + +  The U.K. has a banned the sale of crypto derivatives and exchange-traded notes + to retail consumers. The Financial Conduct Authority (FCA) is concerned about + consumer protection and has put the ban in place because it considers these + products to be ill-suited for retail consumers due to the harm they pose. The ban + came into effect on January 6, 2021 with a strong warning that any firm offering + these services to retail consumers is likely to be a scam. + + The FCA also decided to extend existing rules on financial promotions (namely, + that they should be fair, clear, and not misleading) to the promotion of crypto + assets so that these are held to the same standards that other financial + promotions on shares and insurance products are held to. + +  By contrast, the Monetary Authority of Singapore (MAS) decided to take a more + restrictive approach. Their guidelines published on January 17, 2022 prohibit + cryptocurrency service providers from promoting their services through marketing + and advertising in public areas or through third parties such as social media. + + What precedence does this set for the future? Will it also mean that restrictions + will follow for Metaverse-related advertisements (like an advert to buy a plot of + land in the Metaverse) if one can only make the purchase using cryptocurrency? + +  On September 15, 2021, the People's Bank of China (PBOC), together with nine + other governmental departments, jointly issued the Notice on Further Preventing + and Handling the Risk of Speculation in Virtual Currency Transactions. The + notice states that virtual currency-related activities (the ban covers multiple + activities) are illegal financial activities and that they are strictly prohibited and + banned by law. + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 147 + + + + + It also stipulates a prohibition on financial institutions and non-bank payment + institutions providing services for virtual currency-related activities. The notice + further says that it is illegal for overseas cryptocurrency exchanges to provide + services to Chinese domestic residents via the internet. Internet companies shall + not provide online business premises and commercial display, marketing, + advertising, paid traffic, or other services for virtual currency-related activities. + + Bans will make it difficult for firms integrating these assets in Metaverse + applications. Could the Metaverse in China be CBDC (Central Bank Digital + Currency) enabled? + +  With regard to taxation on capital gains tax and sticking with our example of the + plot of digital land, what if one buys and sells the land and makes a profit? Would + rules on capital gains tax kick in, and would they be the same as capital gains on + investments or other assets? This would depend on what type of activity the + individual is engaged in. Is it, for example, an activity that is sufficiently active + and profitable over time so as to constitute a trade, in which case it may be taxed + as income? Is it held for investment purposes and sold for profit in which case it + may be considered a capital gain? Any tax would be specific to the + circumstances of the individual and their respective tax jurisdiction. + +  An all-new regulatory framework covering a broad range of crypto assets + activities is the approach taken by the European Commission (EC). This is the + Markets in Crypto-Assets Regulation (MICA) and has been proposed to fill in the + gaps where crypto assets are not covered by existing EU financial regulation. + + The regulation is not finalized; it is still going through the EU legislative pipeline + and may very well change from its initial form. However, as regulations are + directly applicable within the EU Member States, it will ensure a harmonized level + playing field across the EU and remove fragmentation. + + The reforms proposed are wide ranging in terms of what types of crypto assets + are covered (utility tokens, payment tokens, stablecoins, e-money tokens, and + any crypto assets that are not already subject to EU law) and the types of + services that will be regulated (providing custody, operating a crypto trading + platform, exchanging crypto into fiat and crypto into another type of crypto, and + executing crypto asset orders on behalf of third parties, among others). + +  In Russia the regulatory position is changing from one end of the spectrum to the + other end at pace. In January 2022 Russia’s central bank (the Bank of Russia) + proposed a cryptocurrency ban as part of a consultation paper. This appears to + have been reversed, according to a news release dated February 8, 2022, and + now work on legislation is underway that would see digital currencies be + regulated and integrated into the country’s financial system. + + + + Given the scope of differences in regulations across jurisdictions, harmonization + of standards is important to ensure a consistent level of balanced risk-based + rules that everybody can understand and implement. + – URSZULA MCCORMACK, PARTNER AT KING & WOOD MALLESONS + + + + +© 2022 Citigroup + 148 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Who Owns What in the Metaverse: NFTs and IP + Continuing with our example of buying a piece of land in the Metaverse, it is + important to consider how ownership is demonstrated in the virtual worlds. + + A non-fungible token (NFT) is a record of ownership of the unique digital version of + the asset one is purchasing and is based on blockchain primitives, and hence is + borderless. So let us take a look at what global standard setters are doing on NFTs, + using some examples from the U.S. and the EU to set out the main legal issues + around intellectual property (IP). + + It will be important for any NFT issuer to The updated Financial Action Task Force (FATF) guidance from 2021 muddies the + consider what the token is used for, as this waters on how these tokens shall be treated. If they are in scope, which they may + may bring the token into the scope of the not be, then the guidance opens the door for member jurisdictions to regulate them. + guidance. NFT issuers will then have to look In referring to NFTs, the guidance notes, “Such assets, depending on their + at how each jurisdiction is implementing the characteristics, are generally not considered to be Vas (virtual assets) under the + guidance into local law for a clearer picture FATF definition.” + + The guidance goes on to stipulate “However, it is important to consider the nature of + the NFT and its function in practice and not what terminology or marketing terms + are used. This is because the FATF Standards may cover them, regardless of the + terminology used. Some NFTs that on their face do not appear to constitute VAs + may fall under the VA definition if they are to be used for payment or investment + purposes in practice. Other NFTs are digital representations of other financial + assets already covered by the FATF Standards.” + + It will be important for any NFT issuer to consider what the token is used for, as this + may bring the token into the scope of the guidance. NFT issuers will then have to + look at how each jurisdiction is implementing the guidance into local law for a + clearer picture. + + Further, NFTs may fall within the scope of securities law in the case of a + fractionalized NFTs. In a December 2021 interview CoinDesk’s “First Mover” show, + the U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce + urged NFT issuers to be cautious if they decide to sell fractional interests in NFTs or + NFT baskets. + + Commissioner Peirce says in the interview, “I think as people have learned, our + definition of security is quite broad, and so people need to be thinking about + potential places where NFTs might run into a securities regulatory regime." + + It remains to be seen whether other countries will take a similar approach and + regulate these tokens as securities. They may also be brought into the securities + regulatory fold in Europe under MiCA, which we refer to above. + + NFTs also present legal issues around NFTs also present legal issues around intellectual property and who owns what and + intellectual property and who owns what and what rights have been purchased or sold. NFT stakeholders will have to look at the + what rights have been purchased or sold. IP rights and contracts that govern the transaction. + NFT stakeholders will have to look at the IP + rights and contracts that govern the In March 2021, auction house Christie’s sold a digital art piece in NFTs titled + transaction Everydays: The First 5000 Days by Beeple for $69 million, bringing NFTs to the + attention of the world stage. While the original digital file is now owned by the + purchaser, the IP rights in the work have not transferred across — they have + remained with the artist. Intellectual property rights, very broadly, are rights granted + to creators and owners of works that are the result of human intellectual activity. + The U.K. government, for example, explains that having the right type of intellectual + property protection helps to stop people from stealing or copying: + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 149 + + + + +  The names of your products or brands + +  Your inventions + +  The design of look of your products + +  Things you write, make, or produce + + From the perspective of an NFT buyer, it will be important to pay close attention to + what terms are set out in the underlying smart contract that forms part of the NFT, or + any separate contractual document or agreement between the NFT buyer and + seller, and not make any assumptions on underlying IP ownership. + +From the perspective of an NFT buyer, it will From the perspective of an NFT minter, they will have to pay close attention to any +be important to pay close attention to what potential trademark infringements and ask themselves whether someone else (a +terms are set out in the underlying smart brand, company) owns the registered trademark that could cover the NFT. +contract that forms part of the NFT. NFT +minters will have to pay close attention to IP, trademarks, and NFTs are already emerging as a battleground area in lawsuits. +any potential trademark infringements They are a wake-up call for conducting solid due diligence on the documentation + that covers what one is buying/selling, the validity of any rights that are purported to + come with it, and above all putting “a Metaverse strategy” in place to protect ones IP + and trademark. + + We discuss this a conversation Urszula McCormack, Partner at King & Wood + Mallesons, and cover some high-profile examples (given the parties involved) + below. + +  When we think of the movie Pulp Fiction a few iconic scenes, music, and names + come to mind. Quentin Tarantino is one of them. He wrote and directed the film. + Miramax distributed the film and owns the IP. Tarantino is planning to auction off + chapters of the handwritten screenplay for the film as NFTs, and Miramax has + reacted. They are suing Tarantino for breach of contract and violation of their + copyright and trademark rights. Tarantino argues that the film is his creation and + that he may do as he pleases with the screenplay. The lawsuit is ongoing. + Whatever the outcome is, it raises questions on who has the right to create and + action off/sell the NFT in the first place (and it may very well not be the NFT + creator) and what rights do artists have to their content. + +  Disputes are also heating up in the world of luxury fashion. The iconic French + luxury fashion house, Hermès, has filed a lawsuit in the New York federal court + against the NFT creator Mason Rothschild for selling digital assets, MetaBirkins + alleging that he is using their federally-registered trademark, that he “rips off” + Hermès’ famous Birkin trademark by adding the generic prefix “meta,” and that + the use of the Birkin trademark misleads consumers and misidentifies source of + goods. They are claiming trademark infringement, trade dress infringement, + trademark dilution, false designation of origin, cybersquatting, injury to their + business reputation, and dilution under federal state law. Rothschild argues that + his artistic activities are protected by the First Amendment on freedom of speech + and that his NFT is his artistic interpretation. Who will win? The case continues. + Will this trigger an influx of trademark filings? Quite possibly. + + + + +© 2022 Citigroup + 150 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Figure 54. CryptoPunks Figure 55. Bored Ape Yacht Club (BAYC) + + + + + Source: OpenSea Source: OpenSea + + + CryptoPunks are among the most famous NFTs, a collection of 10,000 computer- + generated 24x24 pixel art launched in 2017, predating the ERC-721 NFT standard. + They make a stark contrast to another blue-chip project launched in 2021 — Bored + Ape Yacht Club (BAYC), a collection of 10,000 cartoon apes customized with unique + color schemes, facial expressions and outfits. + + With all-time sales of $2.6 billion and $1.35 billion, respectively (as of February + 2022), CryptoPunks and BAYC are two of the highest-grossing NFT collections. Yet, + they have vastly different approaches to IP and licensing, and this leads to very + divergent paths to commercial value creation. + + We summarize the vastly different approaches to IP and licensing adopted by the + two projects, below. Incidentally, in March 2022, BAYC owner Yuga Labs acquired + the IP of CryptoPunks and Meebits (20,000 unique 3D voxel character collection, a + voxel can be thought of as a 3D-pixel) from Larva Labs. + + + + Now that we own the IP for CryptoPunks and Meebits, here’s what we’re + planning to do with it. As a first step, we will soon be granting CryptoPunks and + Meebits holders the same commercial rights that BAYC and MAYC owners enjoy. + We’re working with our legal teams to draft the new terms and conditions for both + collections, and expect to share these with the community soon. + By handing over these rights, we’re further aligning CryptoPunks and Meebits + with the web3 ethos, and we expect a wide-range of third-party developers and + community creators to incorporate CryptoPunks and Meebits into their web3 + projects. We’ll be building the overall brand right alongside them. + – YUGA LABS’ MIRROR.XYS ARTICLE + + + + + When CryptoPunks launched in 2017, there was no written license or permissible + terms issued with the NFTs (the initial collection was given away for free, and it was + likely that no one expected each NFT to sell for over $1 million). + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 151 + + + + + Prior to the Yuga Labs’ acquisition, it was still unclear as to what content license the + acquirers of CryptoPunks owned. The terms and conditions of the CryptoPunks + page of Larva Labs was glaringly silent on the permissible uses of CryptoPunks. + + It was, however, understood that CryptoPunks were covered under the standard + NFT license released by Dapper Labs for CryptoKitties. Under this license, each + owner receives a limited commercial use license for the purpose of commercializing + their own merchandise, capped at $100,000 annually. + + By contrast, Yuga Labs, creator of BAYC, gives full commercial license with + unlimited commercialization rights to the owners of the BAYC NFTs. This license + includes a right to make derivative works, thereby maximizing decentralized + collaboration. + + + + Commercial Use. Subject to your continued compliance with these Terms, Yuga + Labs LLC grants you an unlimited, worldwide license to use, copy, and display + the purchased Art for the purpose of creating derivative works based upon the + Art (‘Commercial Use’). Examples of such Commercial Use would e.g., be the + use of the Art to produce and sell merchandise products (T-Shirts etc.) displaying + copies of the Art. + – BORED APE YACHT CLUB WEBSITE + + + + + This has led to BAYC increasingly becoming an off-chain brand. Adidas launched its + first NFT project in collaboration with BAYC. People are doing creative things with + their Bored Apes, and this drives up value for the entire collection. + + One owner setup a Twitter account and created a backstory for his ape named + Jenkins, turning him into a valet that works for the Yacht club. Jenkins, now has + signed with Creative Artists Agency (which works with the likes of Beyoncé and + other celebrities) for representation across books, film, TV, podcasts, and more. + + Jenkins created his own NFT late last year that gives holders access to members- + only website called “The Writer’s Room,” where holders can vote on the creative + direction of the novel. + + Universal Music Group has signed a band consisting of three Bored Apes and one + Mutant Ape (another spin-off project of Bored Apes from creator Yuga Labs). Soon + after, record producer Timbaland launched “Ape-In Productions,” a production + company that will develop music and animation for Metaverse applications, and will + work with BAYC NFT owners and collaborators. + + There are use cases where owners have used their NFTs for comic book collections + and Bored Apes have made their way to a Times Square billboard and the cover of + Rolling Stone magazine. + + Both Bored Apes and CryptoPunks serve as digital identities and symbols of pop + culture. However, the fact that Bored Apes come with full commercial rights has led + to multiple spin-off projects fueling exponential growth in its ecosystem within a year + of launch. + + + + +© 2022 Citigroup + 152 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + It is important to highlight that when BAYC The copyright debate also fueled expectations that the BAYC project's floor price + was launched and selling for under $500, will surpass CryptoPunk's floor price. This flip materialized and sustained since + CryptoPunks were already trading for January 2022 (Figure 56). It is important to highlight that when BAYC was launched + millions, highlighting the power of and selling for under $500, CryptoPunks were already trading for millions, + community, commercial rights, and highlighting the power of community, commercial rights, and composability of NFTs. + composability of NFTs + Figure 56. Floor Price of Art and Collectibles NFTs + + Bored Ape Yacht Club Floor Price ETH CryptoPunks Floor Price ETH + 150 + + + 100 + + + 50 + + + 0 + Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 + Source: NFT Price Floor, Citi Global Insights + + + The difference in commercial rights and IP associated with the CryptoPunk NFT + was leading to heated debate in the community. A well-known CryptoPunk owner + Punk 4156 recently sold CryptoPunk #4156 for over $10 million protesting the + copyright issues. Now however, with the sale of IP to Yuga Labs, and their + announcement to allow full commercialization, it is likely that the CryptoPunks + community would be able to maximize the commercial use cases around the brand. + + Environmental and Social Considerations + The social media we know of and consume in today’s Web2 world and the + technology underpinning it has already exposed the harm that it can cause. This + includes mental-health risks from using social media platforms, cyberbullying, the + spreading of misinformation on vital issues (such as the pandemic, elections, etc.), + the poor handling of data, and the list goes on. + + Today's social and mental risks from using The question is, will these be amplified in tomorrow’s Metaverse? Will the + Web2 platforms could be amplified in the Metaverse bring out the best or the worse in us and in society? The balance can tip + Metaverse depending who owns the in either direction and this will depend on who will own the Metaverse and how they + Metaverse, how users decide to interact with will use it (responsibly or not responsibly?), how users decide to interact with the + the Metaverse, and what regulatory Metaverse, and what regulatory framework is put in place. + framework is put in place + We start with the positive and zoom in on one of the most pressing environmental, + social, and governance (ESG) priorities the world is grappling with: tackling climate + change and reducing carbon emissions. The Metaverse provides tools to connect + with people socially and professionally irrespective of where they are in the world + without having to travel. If this option is exercised and there is indeed a reduction in + travel by heavy CO2 emitting forms of transportation, then by definition there will be + a reduction in carbon footprint. + + On the other hand, if cryptocurrencies are used in the Metaverse, then the question + that arises is to what degree are these assets ESG friendly? We set out the + arguments on both sets of the fence. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 153 + + + + + Taking Bitcoin as an example, its energy consumption is very high. The estimated + energy consumption for Bitcoin surged to 148TWh (terawatt hours) in February + 2022, i.e., increasing 32x from the beginning of 2016 (Figure 57), surpassing that of + many large nations. + +Figure 57. Estimated Energy Consumption of Bitcoin (TWh, annualized) Figure 58. Bitcoin vs. Countries' Annual Electricity Consumption (TWh) +160 + 152.6 150.6 147.2 +140 + 131.8 126.2 125.0 124.1 120.6 119.5 +120 +100 + 80 + 60 + 40 + 20 + + + + + Poland + + + + + Argentina + + + + + Pakistan + Malaysia + Egypt + + + + + Norway + Bitcoin + + + + + United Arab + Sweden + + + + + Emirates + 0 + Jul-16 + + + + Jul-17 + + + + Jul-18 + + + + Jul-19 + + + + Jul-20 + + + + Jul-21 + Oct-16 + + + + Oct-17 + + + + Oct-18 + + + + Oct-19 + + + + Oct-20 + + + + Oct-21 + Apr-16 + + + + Apr-17 + + + + Apr-18 + + + + Apr-19 + + + + Apr-20 + + + + Apr-21 + Jan-16 + + + + Jan-17 + + + + Jan-18 + + + + Jan-19 + + + + Jan-20 + + + + Jan-21 + + + + Jan-22 + +Note: As of March 11, 2022 Note: As of March 11, 2022 +Source: CBECI, Citi Global Insights Source: CBECI, EIA, Citi Global Insights + + + Elon Musk, CEO of Tesla has also weighed in and on May 12, 2021 wrote on + Twitter, “Tesla has suspended vehicle purchases using Bitcoin. We are concerned + about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, + especially coal, which has the worst emissions of any fuel. Cryptocurrency is a good + idea on many levels and we believe it has a promising future, but this cannot come + at a great cost to the environment.” + + We have argued previously that the energy consumption of Bitcoin (and other + cryptocurrencies) is a feature — not a bug — and that there are ways its + environmental impact could be mitigated. It uses Proof-of-Work consensus + algorithms, which consume a lot of energy related to mining, in contrast to Proof-of- + Stake algorithms, which are far more energy efficient as they rely in the stake that + each node posts to become eligible for voting. + + The Financial Stability Board (FSB) in their report titled “Assessment of the Risks to + Financial Stability from Crypto Assets”, dated February 16, 2022, also points out the + high market capitalization of Proof-of-Work-based crypto assets; at about 80% of + the total crypto-asset market capitalization, though some of the largest crypto- + assets have announced their intention to move to Proof-of Stake as stated in the + FSB report. + + The environmental impact could be mitigated through using measures to encourage + renewable energy use, higher energy efficiency in mining for Bitcoin and other + Proof-of-Work coins, ways to increase transaction load per unit of energy + consumption, and measures to offset the environmental impact though carbon + futures. + + Apart from the environmental impact, crypto has some redeeming “S” credentials in + the ESG agenda. Some characteristics of Bitcoin render it more resistant to certain + forms of seizure relative to other financial assets. Math does not discriminate, so + anyone who wants to access a blockchain network to transfer Bitcoins, dollars, or + any other store of value, is able to do so. Africa is experiencing accelerated + adoption of cryptocurrencies, or private stablecoins, mainly driven by its under- + banked adult population, broken payment rails, and expensive remittances. + +© 2022 Citigroup + 154 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + On the other side of the “coin,” while cryptocurrencies may initially appear to be + socially inclusive as they are attractive to younger age groups, data from the U.S., + as part of Bank of International Settlements (BIS) Paper No 951 titled Distrust or + Speculation? The Socioeconomic Drivers of U.S Cryptocurrency Investments, + highlights a high concentration among male educated segments. + + Figure 59. Gender and Age Gap Trends in Cryptocurrency Ownership and Knowledge (2014-19) + + + + + Source: BIS Working Paper No. 951 Distrust or speculation? the socioeconomic drivers of U.S. cryptocurrency + investments". Material available freely at www.bis.org. + + + There are of course other social considerations that the Metaverse poses that are + beyond the use of cryptocurrencies. The Metaverse seeks to bring us together with + our friends, families, and colleagues in a more immersive way. It also tries to makes + home working, home schooling, and connecting with friends in remote locations + more fun and potentially more productive. + + In the Metaverse world, one will not be consuming the information in this report by + downloading and reading it — instead one would be immersed in it. Would that + make the experience of consuming the information more enjoyable and therefore + lead to more people accessing it? And what does this mean for how people learn + and how people are educated in the future? + + Virtual immersive experiences can elevate education. We already witnessed how + the sector had to quickly adapt to virtual modes of learning on the back of the + COVID-19 pandemic with students and teachers getting accustomed to non-face-to- + face education. The Metaverse could take things to the next level and potentially + have a positive impact on how education is experienced. One could argue that the + adjustments to education as a result of the pandemic were the perfect dress + rehearsal for education in the Metaverse. + + + + Let’s say you’re a med student or a doctor. With apps like Osso VR, you can + learn new techniques in surgery firsthand, practicing until you get it right. + – MARNE LEVINE, CHIEF BUSINESS OFFICER AT META PLATFORMS + + + + + Practicing skills using highly realistic simulations before testing them out in real life + (where there are real-life consequences if things go wrong) will be a huge benefit for + the education sector. It will be interesting to observe how the sector will evolve over + the next few years and if it becomes a mass adopter of Metaverse applications or if + these will simply be too costly or difficult to integrate. + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 155 + + + + + If we do see the sector move into the Metaverse, then metrics around student test + results pre- and post-Metaverse could be a measure of success. + + The Metaverse could provide access to a wider pool of people for recreational + activities such as virtual tours of museums, an immersive and virtual theatre, or + other cultural and even luxury experience that perhaps they have not been able to + afford in the past — as these experiences can all be accessed from the comfort of + one’s one home irrespective of where they are located in the world. + +As the Metaverse is still a work in progress, As the Metaverse is still a work in progress, it gives society the opportunity to +it gives society the opportunity to implement implement the learnings from mistakes/failings in the real world. Taking diversity and +the learnings from mistakes/failings in the inclusion as an example — or the lack thereof in many sectors in the real world — +real world one hopes that digital representations in the Metaverse will include people with + disabilities, women, and the LGBTQ+ community. + + + + When it comes to the Metaverse, I think that there are different types of integrity + questions. One of the big issues that I think people need to think through is right + now there’s a pretty meaningful gender skew, at least in virtual reality, where + there’s a lot more men than women. And in some cases that leads to + harassment.36 + – MARK ZUCKERBERG, CEO OF META PLATFORMS + + + + + Virtual communities can step in and create diverse skin colors and non-gender + binding clothing for the avatars and avatars with different body shapes. We have + already seen early movements in this space. On January 4, 2022, the digital design + studio Daz 3D created Non-Fungible People, which are avatars promoting diversity. + + It’s collection focuses on female and non-binary avatars which can be imported into + games. Door Labs is creating games focused on users with disabilities with a first + collection of wheelchair and disability-related NFTs. The point is the opportunity is + there to build something good with the Metaverse. The question is, what will society + do with this opportunity? + + Meta’s Chief Diversity Officer Maxine Williams told Bloomberg in an interview + published on November 4, 2021 that it plans to build the Metaverse using lessons + learned “from the technology that does exist, as we help to build new technology, + which does not yet exist.” + + On the flip side there are also many concerns. Reflecting on our earlier comments + on regulation, we are reminded that privacy is referenced as one of the four risk + areas Meta wants to get right in the Metaverse. Privacy issues have been at the + forefront of social media platforms because these platforms rely on an enormous + amount of personal data. + +Privacy issues in the Metaverse have been The same will be true for the Metaverse, with one important difference — the +at the forefront of social media platforms sensitivity of the data collected. The fuel of the Metaverse is data — lots of personal +because these platforms rely on an and sensitive data, which will be collected by the infrastructure that underpins both +enormous amount of personal data the hardware and the software giving those who collect the data a lot of power over + how it will be used. + + + + 36 Casey Newton, “Mark in the Metaverse,” The Verge, July 22, 2021. + + + +© 2022 Citigroup + 156 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Users’ facial expressions, movements, voices, and reactions (such as how one + reacts in a game) are all examples of biometric data that will be collected. This data + will give unprecedented insights into user behavior, likes, and dislikes and will + enable those who hold it to create advertisements with laser precision tailored to the + user and thus ultimately controlling what users buy. + + In many parts of the world, there are already data protection laws. Europe has one + of the most stringent regimes in place with the General Data Protection Regulation + (GDPR) which acted as an inspiration for many countries when drafting their own + rules such as Brazil, Canada, and the California Consumer Privacy Act in the U.S. + + Any firm building something in the Any firm building something in the Metaverse will have to pay very close attention to + Metaverse will have to pay very close data protection laws (such as for obtaining consent and collecting, storing, and + attention to data protection laws processing data in a compliant way) beyond the shores of where they are + established and where they do business to account for any extraterritorial provisions + in the rules. + + We have also seen countries put data localization laws in place. This is likely to add + another level of complication for interoperability between different Metaverse + platforms and applications, and it is unclear how interoperability will be work in + practice in a country with data localization laws. + + Interoperability between different Metaverse The big open question is: are our privacy laws fit for purpose? They were not + platforms and applications will be drafted with the Metaverse in mind, so they may be tweaked as the Metaverse + complicated and challenging in countries evolves. What is more certain is that any firm building something the Metaverse will + with data localization laws have to build a privacy strategy upfront. + + Will the Metaverse be a new outlet for cyberbullying, harassment, hate speech, and + other bad behavior and will such harm be experienced more severely than how it is + experienced online today? + + Quite possibly. Such misbehavior already exists in both the physical world and in + today’s virtual reality world. According to research conducted by the nonprofit + Center for Countering Digital Hate, abusive behavior occurs in one of every seven + minutes in the game VRChat and includes: + +  Minors being exposed to graphic sexual content + +  Bullying, sexual harassment, and abuse of other users, including minors + +  Minors being groomed to repeat racist slurs and extremist talking points + +  Threats of violence and content mocking the 9/11 terror attacks + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 157 + + + + + When Facebook launched the Metaverse for Oculus just in time for Christmas + shopping, its CEO, Mark Zuckerberg, pledged that privacy and safety is at the + heart of Virtual Reality. But our researchers discovered that, contrary to his + promises, Metaverse is a haven for hate, pornography, and child grooming. + In our study, Metaverse connects users not just to each other but to an array of + predators, exposing them to potentially harmful content every seven minutes on + average. If Metaverse is safe for predators, it’s unsafe for users, especially + children. + Any parent who gifted Facebook’s VR Oculus headset for Christmas needs to be + aware that they are potentially exposing their children to serious danger. + – IMRAN AHMED, CHIEF EXECUTIVE OF THE CENTER FOR COUNTERING DIGITAL HATE + + + It is not clear what, if any, barriers exist to stop such misbehavior from creeping into + the Metaverse. In fact, there is an argument to be made that it may even increase if + bad actors can conduct activity anonymously without being tracked and traced. + +Metaverse could even propagate bad There are already various reports of women being sexually harassed and groped in +conduct as activities, if violators remain the Metaverse. While no actual physical bodily harm will be felt (but in some cases +anonymous, without mechanisms for and depending on the type of technology that a user “wears” to engage in the +tracking and tracing Metaverse like haptic vests, we understand that real sensations can be felt), mental + harm will result because unwanted touches, and behaviors can be made to feel real + in a virtual reality environment and the sensory experience is heightened. + + What if such misbehavior does occur — what recourse will there be against the + misbehaving avatar/digital persona? This raises a set of questions on how + avatars/digital personas will be treated by the law. Will they be treated as legal + persons? Can they be subjects of lawsuits? Do they have to be assigned a legal + status in order to operate in a safe and compliant way or is there another solution to + hold them accountable and to make them act responsibly? + + Tackling misbehavior will require robust measures to be put in place from + tracking/monitoring activity, to reporting problematic activity, removing abusive users + with immediate effect, and controlling so that platforms do not include content that + attacks people based on their gender, sexual orientation, and race. + + There are also questions around Metaverse addiction. Can its wide-ranging reach + into all aspects of our lives make it so addictive that we start to disengage from the + real world and from real-life connections with humans? + + We highlight the positive aspects of virtual collaboration above, but will it translate + into an ever-increasing decline in human-to-human, face-to-face social interactions? + Will the days of in person dining with friends and colleagues be over, will physical + parties be a thing of the past? Is this a desirable direction travel for society and will + it lead to a society that becomes emotionally numb? And how relevant will the + aspects of the Metaverse be now that many countries are opening up post COVID- + 19 with employers calling their employees back into the physical office and + stressing the importance of physical presence. Will some aspects of the Metaverse + just be an upgraded version of video conferencing? + + + + +© 2022 Citigroup + 158 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Rules, regulations, and guardrails can only take us so far. Ultimately the question + for society as a whole is to dig deep and ask: to what degree do we want + technology to elevate aspects of our life that happen in the physical world (and that + we have come to “normalize” as experiences in the physical world) into the digital + world? And where do we want the boundaries between physical and digital to lie? + Do we really want virtual holidays in the Metaverse to become the new normal for + how we go on vacation, for example? And what will this mean for real-life + experiences? What value will we place on these in the future when the Metaverse + comes along? + + Technological advancements can make many things possible that we cannot even + imagine today, and regulations will play catch-up to these advancements to build in + safeguards and protections. The Metaverse places a huge onus on individuals, + companies, and society to exercise judgement in how to engage with it. It is for + each of us to reflect on what a healthy Metaverse looks like. + + Political Considerations + Different Metaverse frameworks can take different shapes. They can be open, or + they can be walled gardens, and they can touch on every aspect of our lives making + them a very powerful tool for whoever builds them. + + The Metaverse can give political leaders a They are not only a powerful tool for private-sector companies and creators, but + new channel to reach their voters in a more also for politicians and governments. We have started to see some countries and + immersive way and get their messages cities dip their toes into the Metaverse. + across to younger voters in a way that may + appeal to them more In November 2021, Seoul announced plans to set up “Metaverse Seoul” — a virtual + communication ecosystem for all areas of municipal administration including + economics, culture, tourism, and educational. The plan will be completed by 2026 + and rolled out in phases. Citizens will be able to meet avatars of public officials, + festivals will be held in the Metaverse for everyone to experience, and Seoul’s + tourist attractions will be virtually created. + + Barbados is planning on opening a “virtual embassy” in the Metaverse and has + signed an agreement with the Metaverse platform Decentraland. It is perhaps not + surprising that Barbados is the first country to make this move given it has a friendly + crypto environment. What impacts can we predict? Is the accessing of countries + and cities from the comfort of one’s home the ultimate form of advertising and what + could this lead to? One can imagine that it may attract foreign capital, tourism, and + labor. It is far too early to say, as there are very few examples which that are still in + fruition, but it will certainly be interesting to trace back on the impact as things + develop. + + Continuing with the public sector, it is not novel for politicians around the world to + use social media to engage and communicate with voters and the public at large. In + 2014, India’s then-candidate for prime minister, Narendra Modi, used a hologram to + appear in multiple campaign rallies at the same time. + + It could be a game-changer for politics and More recently in the U.S., the Joe Biden-Kamala Harris campaign tried an in-game + the types of campaigns we will experience app with the video game Fortnite. The video game was used to put across the + going forward, potentially impacting voting campaign’s message of “Build Back Better with Biden.” + demographics + The Metaverse gives political leaders a new channel to reach their voters in a + potentially more immersive way and get their messages across to younger voters in + a way that may appeal to them more. It can be a game-changer for politics, and the + types of campaigns we will experience going forward, potentially impacting type of + voting demographics. + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 159 + + + + + Will immersive campaigns get more young people voting? They can be a powerful + engagement tool in any politician’s tool book. Imagine for example that the next + U.S. presidential debate takes place in the Metaverse. How could this affect the + election result? Will the candidate that creates the most fun and engaging + experience be the winner, and how will the winning candidate engage with the + Metaverse and the public once they are in power? Further, will we see political + scandals in the Metaverse, and will these have a direct impact on how people vote + for when election season comes around? + + The Metaverse with its convening power could bring a wider group of people + together. If the experience is immersive, it will potentially hook more people. If you + have more people coming together in an environment that is more immersive than + today’s digital world, will it be easier for people to bond, and if that is the case, then + what impacts can we anticipate? If more people come together to exchange views + and ideas, will new political ideologies and even political parties form as a result? + Will the technology make it easier for extremists to communicate with each other + and plan attacks more effectively? It is too soon to say, but these questions + underscore the need that the Metaverse cannot be left to develop unchecked. + + When any new technological advancement comes along our government + institutions, schools and universities, and religious institutions will be asking + themselves what role they want to play in the Metaverse, and we suspect we will + see more and more institutions announce their own thoughts for the Metaverse. + + If the Metaverse lives up to its promise to be the successor of the internet we know + today, then who will build it will be hugely important for the world we live in. As we + think about what different governments around the world are doing with the + Metaverse, it naturally begs the question, could the Metaverse be the next digital + arms race among different countries? + + This will come down to who controls the core technology the Metaverse will run on + — artificial intelligence (AI); 5G; the technology in the devices we use to connect to + the Metaverse, whether that is through fancy virtual reality (VR) glasses, VR + headsets, watches, or phones. Winning the race will require big investments in + technology and R&D, patents in how it can be used and moving at speed when it + comes to delivering innovation to market. + + China certainly has ambitious plans in place following its July 2017 announcement + of its “New Generation AI Development Plan,” a major program for its domestic + development of AI with the aim of become a world leader by 2030. + + The European Commission is determined to make this “Europe’s Digital Decade,” + according to a vision presented in March 2021. It also aims to strengthen its digital + sovereignty and set standards with a clear focus on data, technology, and + infrastructure. Europe has set its own targets by 2030, including 100% online + provision of key public services; 80% of EU citizens using a European digital + identity; and 75% of European enterprises to be using cloud computing, big data, + and AI to name a few. + + + + +© 2022 Citigroup + 160 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + In June 2021, President Biden launched the National Artificial Intelligence Research + Resource Task Force, which will develop a roadmap to democratize access to + research tools that promote AI innovation and fuel economic prosperity. Who will be + the winner? Who will lead in the technologies that will build the Metaverse? Will it be + China versus the U.S., or versus the rest of the world? News sources reported that + when speaking on AI in early September 2017, Russian President Vladimir Putin + said, “Whoever becomes the leader in this sphere will become the ruler of the + world.” + + It is an area we are watching closely, and while we may not be able to draw any + clear conclusions on who the winner(s) will be, they will certainly have hugely + influential role on our society. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 161 + + + + + External Expert View: Urszula McCormack on Who Owns + the Metaverse + Urszula McCormack (Partner, King & Wood Mallesons) is one of the world's leading + regulatory and digital economy lawyers, with a focus on emerging technologies. + Urszula advises global banks, multilaterals, financial institutions, social media + companies, crypto and payment institutions, and developers on new products, multi- + jurisdictional business strategies, cross-border transactions, compliance, and + licensing. Urszula is especially well known for building global digital ecosystems. + Urszula is a member of multiple advisory bodies and has been appointed to the + Panel of Recognised International Market Experts (P.R.I.M.E.). Urszula is admitted + to practice law in Hong Kong, Australia, and England & Wales. + + Q: Do current laws have any relevance in the Metaverse? What are the key + regulatory/legal challenges posed by the Metaverse? + + A: The digital world is a reflection of the way humans operate in the physical world. + In the Metaverse, we see an amplification of risks, value propositions, challenges, + and opportunities that warrant an elevation of our legal and regulatory response. + However, this calls for an evolution of the law, rather than a complete re-writing. + + When we consider Metaverse applications such as non-fungible tokens (NFTs), + gaming platforms, and digital land, we essentially need to consider intellectual + property (IP) rights. We also need to think about the application of new digital asset + laws, cybercrime and cybersecurity standards, consumer protection rules, data + privacy protection, tax, and competition law. We are seeing the emergence of more + advanced digital equivalence laws to ensure certainty of contracts and help ensure + recourse when things go wrong. Many of the newer iterations of these laws consider + smart contracts and distributed ledgers. Modern data privacy laws are also factoring + in automation and more sophisticated cross-border regulatory regimes. + + Looking at the challenge, the first step is to recognize what legal frameworks apply + as we engage with the Metaverse in a trusted way. In the last five to seven years, + we have seen a growing focus on digital assets offering different ways in which we + create, move value, and govern them. + + There has been a growing number of legal and regulatory frameworks, principles, + consultations, and discussion papers globally that specifically seek to address + stablecoins, NFTs, peer-to-peer (P2P) transactions, and decentralized finance + (DeFi). These are especially relevant to the Metaverse as they are squarely focused + on the ways in which we transmit value in a digital context. + + Good governance around IP is also important, especially considering how often + uncertainties around IP ownership and licensing occur. What am I really getting + when I buy an NFT? How do I enforce those rights? What am I getting if I lease/own + some digital land? These are no longer abstract questions for an elusive few “crypto + natives” — even banks, sporting organizations, and accounting firms are entering + the fray. Certainty about what they own is important and disputes are on the rise. + + The Metaverse also poses an open question for how we regulate behavior in an + online or hybrid environment. Digital harms mirror “real world” harms in many ways, + but they can be significantly amplified and can prove very difficult to pursue. + + Criminal and civil laws are not perfectly equipped just yet, but increasingly targeted + online harm minimization models are emerging — particularly focused on protecting + minors and integrating trusted digital-identity frameworks. + + + +© 2022 Citigroup + 162 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Q: Can you elaborate on the role of the Financial Action Task Force (FATF)? + Can you also discuss their recently published paper? + + A: The Financial Action Task Force (FATF) is an intergovernmental organization, + headquartered in Paris. Its key objectives are to set standards and promote + effective implementation of legal, regulatory, and operational measures for + combating money laundering, terrorism financing, proliferation financing, and other + related threats to the integrity of the international financial system. + + FATF has long played a pivotal role in governing financial services, other "enabling" + services such as legal support, trust, and company services, and the movement of + value. Jurisdictions and sectors with high exposure to money laundering and + terrorism financing, typically have an especially strong need to implement FATF + standards, but ultimately it is a de facto global baseline. + + FATF has been looking at virtual assets for several years and has published + multiple papers on the subject — some of its earliest work focused on the evolution + from the gaming world, but this has rapidly expanded. You will now find several + recommendations that form the blueprint for virtual asset service provider (VASP) + laws, which most economies will eventually incorporate. + + FATF's latest guidance paper (link) is a refresher of their recommendations with + additional guidance around emerging risk areas including DeFi, P2P, and NFTs. If + you need a crystal ball for where the value component of Metaverse regulation is + headed, this is it. + + Q: Blockchain and cryptocurrencies are intrinsically cross-border; whereas + laws tend to be jurisdiction based. How do you get around these challenges? + + A: I often hear things like, "No law applies to me as I operate in cyber space." Or, + "it's decentralized, so it's not regulated." Or simply there’s a view that new + technology shouldn’t be regulated because of how broken or non-inclusive existing + laws are perceived to be. + + It's interesting to identify when a certain law engages from within a jurisdiction — is + it when someone is physically present on the ground? What if they market to + someone locally, or someone finds them of their own accord? What if they use + “global” platforms? What if someone is only working somewhere locally for a short + time because of COVID restrictions? Many laws go a long way to capturing offshore + activities targeted locally, but most were built in the days of paper-based pitch + decks, little or no internet, no “influencers,” and no global networking platforms. The + reality is that it is difficult to achieve effective enforcement regulation and + supervisory oversight over everything. + + But that doesn’t mean no law applies, or that regulators will not pursue you. Even + with decentralized protocols and Decentralized Autonomous Organizations (DAOs) + one needs to think about aspects like: Where are the founders located? Where are + any ongoing developers located? Where are the participants and what are they + doing? Who is building (and where are) any engines? Where are the users? Who is + marketing and where? Who is trading the tokens associated with them? Where can + the law help you? + + When we’re working on multi-jurisdictional projects, we do see everything. + + Some choose to operate a global platform, domiciled in a far-flung jurisdiction and + ideally regulated nowhere. + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 163 + + + + + Others may seek legitimacy as they aim to form partnerships with other regulated + entities (e.g., banks). In this case, companies need to find a jurisdiction of domicile + that is favorable from a regulatory, tax, operational, and reputational perspective. + These companies then typically expand out to other jurisdictions and collect + licenses where required, by setting up local branches and subsidiaries. + + We are starting to see a proactive set of rules and regulations around digital activity. + Regulators are also taking an aggressive approach towards investigations and are + requiring proactive blocking mechanisms, if you are not actually intending on + targeting that market. Some others are also adopting additional layers, like more + comprehensive and stringent regulatory models (e.g., mainland China). In practical + terms, we are seeing more developers, exchanges, and service providers adopt an + “allow list” model for where their activities occur, rather than the traditional “block + list.” + + Given the scope of differences in regulations across jurisdictions, harmonization of + standards is ultimately important to ensure a consistent level of balanced, risk- + based rules that everybody can understand and implement. It must also be fair, + reasonable, enforceable, and integrative with industry to avoid the creation of + shadow markets. + + Q: What legal steps must one consider before buying a piece of virtual land in + the Metaverse? + + A: There are a few key steps to consider before purchasing anything. For instance, + where are you holding the relevant asset you will use to purchase the land? Is it a + bank account? Do banking regulations apply? + + Alternatively, if it is in a custodial wallet, do we need to transact it into the payment + asset? For example, if you are holding Bitcoin in an exchange wallet and the + platform only accepts Ether or SOL, you need to use an exchange service to + convert your Bitcoin into that payment asset. + + One also needs to bear in mind key differentiators across platforms — i.e., is there + a custodial component to it? Some platforms reissue the IP license each time there + is a sale; while others may have a P2P transaction between wallets with + intermediation from the platform linking people together to communicate. Further, + some platforms will hold the actual wallets within a closed ecosystem, while others + may allow holders to transact out of that asset. + + While the steps to purchase a digital asset vary based on the model used, it would + still include some kind of wallet, conversion, and the actual payment. + + The decision to purchase a digital land would involve a contract. However, digital + land is not real estate and therefore not governed in the same way. Instead we are + purchasing a bundle of rights defined (often very poorly) by the contract. + + Another element to consider is that you may not be contracting with a real person, + but instead someone purporting to be a decentralized autonomous organization + (DAO), or a foundation, or a collection of individuals. It’s not silly to consider basic + contractual questions here. Do I have a contract and who is it with? Can I enforce? + What risks do I wear? Metaverse contracts need exactly the same rigor as any + other contract. + + Lastly, regulations around what you buy (digital real estate in this case) vary based + on the local regulatory regime — i.e., is it considered digital property? Can it be + + + +© 2022 Citigroup + 164 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + collateralized? "Old fashioned" rules regarding the registration of security collateral, + paying taxes, and accounting for assets will also apply. + + Q: Have you seen any Metaverse-related lawsuits or litigation? What do you + see as the key battlegrounds people are likely to fight over? + + A: On the top of my list are disputes around what has been bought or sold (i.e., IP + rights). There is often a lot of confusion with regards to the rights people own for a + digital asset. For example, if I sell personal rights to use a digital image (via an + NFT), does it also include a commercial right? Did the NFT sale infringe on + someone else’s rights? Why is the same image being sold again? + + Cyber risk and loss of digital assets remain an area of contention. Notably, the + Metaverse is a collection of services and not a single platform. Therefore loss of + digital assets can occur at digital asset exchanges, NFT marketplaces, with + fraudulent actors, or simply peer-to-peer. + + Actions in relation to NFTs also include allegations of breach of consumer protection + laws and even securities laws. + + Disputes are also rising in relation to social media and other platforms themselves + and what level of responsibility they have for preventing scams, psychological harm, + and other loss scenarios. On the flipside, disputes also arise when de-platforming + occurs. + + Additionally, one needs to consider where the Metaverse is headed. At some point, + avatars/robotic forms may perform various tasks for us in the physical world, + perhaps including medical procedures. This will inevitably be an area ripe for + dispute on the road ahead. + + Lastly, I would also like to touch upon data protection. Much of the engagement in + the Metaverse relies on digital identities — both formal (e.g., government digital + identity) and informal (e.g., Twitter handles). This includes how identity/user + behavior is tracked through platforms and how it is stored through clouds and + analytical services. We are seeing significant focus on data protection and the + development of trusted frameworks for digital identity. But it’s often very low on the + list for creators, which is troubling. There are some notable exceptions, including + those building privacy-by-design technologies that can also address financial crime + compliance controls. + + Q: Some markets tend to be heavily regulated in data privacy/protection (e.g., + the EU with its GDPR regulations) and we are seeing others follow suit. Are + current data protection rules fit to deal with the Metaverse? + + A: Most laws have key foundations that are there to protect people. However, it is + important to understand what and to whom these applications, use cases, and code + of practices relate to and which particular areas need additional guidance, sub- + regulations or even court interpretations (which is a big part of GDPR’s evolution). + Regulators also need to have an ongoing dialogue with the industry and signal how + the principles apply to new applications. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 165 + + + + + Laws often describe principles relating to integrity and ethical conduct. Even in the + regulated zone, anyone who is regulated is subject to fit and proper requirements + that can be interpreted at will. The question is how do we get to that sweet spot of + laws that do not overregulate and are still flexible? I believe this is possible through + a risk-based structured approach. + + Often times, the regulatory response to risk, as well as potential technological + solutions, tend to be overlooked. Looking at the risk landscape, it is not always laws + that save the day, but also emerging technologies that come to the fore. + + From an organizational perspective, when working with companies on cross-border + data sharing, much of it comes down to the human element of interpreting what + ethical applications look like. Often, you will have questions of judgment involved in + the way in which you share data that roll back to those foundational laws. + + Q: Looking at the global regulatory landscape, do you think different + countries will take different regulatory approaches when looking at issues + posed by the Metaverse? + + A: Most certainly you will have diversity of market approaches. You already have + different regulatory philosophies, strategies across jurisdictions with a number of + push, and pull factors. + + Often, the more permissive regimes, are not the ones without regulation, but rather + ones with welcoming regulations. They provide a simple framework with modest + (and logical) barriers-to-entry and some core requirements that give the market + regulatory certainty. These markets tend to be early in regulating virtual assets and + considering emerging risks and opportunities; many are actively considering + decentralization and the potential recognition of new forms of legal entities (e.g., + DAOs). + + Then you have jurisdictions that prefer to do their own thing either way — e.g., take + a conservative approach but still provide some form of avenue to be able to access + regulatory oversight. + + Lastly, you have the super-restrictive economies that have capital flight issues and + existing capital controls with their own political/economic environment. This makes + free transmission of value in different forms particularly problematic. + + Interestingly, I find many emerging economies are at the forefront of + good/innovative regulation. For example, a number of emerging (and established) + Asian countries are ahead of the curve on sophisticated digital economy + frameworks. Countries like the Philippines and Indonesia have advanced legal and + regulatory frameworks for virtual asset service providers. Thailand also has + advanced laws on smart contracts and blockchain. + + The effort of emerging economies to create digital economy laws often tends to be + underestimated. However, this effort enables these economies to leapfrog the + traditional phases of development other countries have gone through. For example, + banks in emerging economies no longer need to open branches in every island of + an archipelago (unlike their predecessors in the West decades ago). Today, they + can simply leverage the digital economy to widen their reach. + + However, like every market, some practices can be difficult to resolve in practice — + for example, paper-based bureaucracies, legacy government systems, internet + accessibility issues, or antiquated underlying processes, can all prove very stubborn + to change. + + +© 2022 Citigroup + 166 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Q: What are the legalities an NFT issuer must consider before minting? What + legal due diligence must an NFT investor perform prior to investing? + + A: As the issuer, you first need to ascertain what you are doing and whether it is + legal — i.e., is the NFT representative of a diamond, security, or something else. + For instance, if it is an NFT representing a unique type of company share, then it is + still considered the sale of a security. By contrast, if it represents a piece of digital + land, a digital collectible, or a unique artwork that is less likely. + + The biggest problem we see is the lack of clarity on the IP license being granted via + an NFT. This can be achieved in several technological ways, including the use of + NFT metadata. + + One needs to pay close attention to where you want to sell the NFT. It is important + to work with reputable parties and do your homework, to understand what cut they + are getting, the downstream royalties, and if they respect your rights to be + recognized as the creator of the NFT. + + Aspects such as wallet compatibility and choice of technology are also important. + Are you working with a vendor or a co-creator? In the latter, you may not own the IP + at all. Instead, you might have assigned it to somebody else, and then all your + economic value is no longer accruing to you. + + From an investor perspective, it is important to understand what you are buying. Is it + valuable? Is it original or a one in 1,000 version of a particular image? Investors + also need to understand marketplace arrangements, potential regulatory triggers, + and private key management. + + Q: When does an NFT become a security? Do tokens in a DAO count as a + security? + + A: The key things to watch with NFTs are advertised price appreciation, promised + value-adds over time, and fractionalization. That is from a securities law + perspective. You also need to watch out for gambling as it’s a really prevalent + feature of certain parts of the NFT world. + + DAOs can be anything from a bundle of smart contracts with users, through to a + formal legal entity. So much will depend on what the DAO is and what it seeks to + do. At a high level, DAO tokens usually relate to governance within that DAO. Often, + these tokens allow users to participate in the decisions made by the collective in + relation to the protocol itself and even how certain assets are deployed. In some + cases, you might have the ability to direct the collective to go off and make + investments or do different things that generate profit. It is possible that the + engagement amounts to a regulated collective investment scheme or investment + contract. It may also not be so decentralized after all, depending on how the + governance tokens are allocated and if there are any “super” governance rights + ascribed to founders or other participants. + + In my experience, nothing is as simple as it looks. It is really common to see people + wishing to boost the price or desirability of a particular token by adding additional + functionality or elements of chance to make them more attractive. They might also + leverage the tokens to offer revenue sharing or burn tokens to reduce supply. These + “tokenomics” tools can certainly boost the price, but they also make it much more + likely for something to be classified as a security. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 167 + + + + + Q: What specific actions are needed to build a company in the Metaverse? + + A: I believe it has to start by answering these questions: (1) Where are you? (2) + What are you doing? (3) What are your strategies? and (4) What are your priorities? + + Then we look at the setup from a regulatory standpoint — are some of the highly + regulated activities actually conducted by the company or should they be carved + out? Getting the regulatory treatment right during the setup is important. + + Next, we layer on agreements that stitch multiple entities together — service + contracts, IP rights, tax perspectives, etc. On top of that, we have governance and + compliance. One also needs to make sure that policies around issues like anti- + money laundering (AML)/counter terrorist financing (CTF) and sanctions, privacy, + market surveillance, and insider dealing are in place. + + Finally, you need to get your contracts with Metaverse participants, service + providers, and “land” holders right. There are some very average contracts out + there. Many have ridiculous provisions or simply don’t say what will be delivered. + Many are silent on IP or seek to vacuum it up. It may be the Metaverse and + extremely exciting, but contracts still need to work. + + + + +© 2022 Citigroup + 168 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + External Expert View: Rebecca Rettig on DeFi Policy and + Regulations + Rebecca Rettig is the General Counsel of the Aave Companies, a group of software + development companies that build open source, blockchain-based software. Prior to + joining the Aave Companies, Rebecca was a partner at Manatt, Phelps & Phillips + LLP in the financial services group, representing blockchain and crypto clients. + Rebecca specializes in advising blockchain and cryptocurrency clients on legal and + regulatory matters with a particular focus on DeFi projects. + + Q: What is DeFi? Can you illustrate some use cases? + + A: Decentralized finance (DeFi) refers to an open and programmable financial + system built on smart contracts, which allows users to engage in economic activities + without the need to rely on intermediaries. Smart contracts are seen as the + backbone of DeFi, and refer to self-executing computer programs that are stored on + permissionless blockchain and function in a conditional manner. Each protocol on + the DeFi system is made up of numerous smart contracts that speak to one another + and work together. + + This differs significantly from traditional financial transactions as smart contracts will + do exactly what the user has coded and may also include a conditional element. + + DeFi use cases could include all financial/economic transactions currently + undertaken in the traditional world. This includes automated market makers that + allow you to swap one token for another, and use of digital assets as collateral to + borrow against. + + DeFi offers several other benefits. First, transactions on DeFi protocols are publicly + available at all times. This results in a transparent financial system and removes + information asymmetry presently seen in the traditional financial system. + + Second, users only interact with the DeFi protocol and do not engage with any + intermediary or third-party, thereby eliminating counterparty risk prevalent in the + traditional financial system. + + Finally, DeFi protocols are non-custodial. They never take custody of your assets, + i.e., you maintain control over your own assets. + + There is still a lot to be done in the DeFi space, and we are likely to see several new + use cases being developed over the years. + + Q: How does the emerging DeFi world interact with the traditional financial + system (TradFi)? Will it be part of the same spectrum or is one going to + replace the other in the coming years? + + A: I do not believe DeFi is going to wholly replace TradFi anytime soon. Instead, I + believe DeFi aims to improve and expand upon the existing traditional financial + system. In fact, traditional financial experts are interested in knowing what DeFi + means, how it works, and how it can help offer better yields to their customers. + + Most of DeFi is permissionless, which means anyone can get on at any time. DeFi + transactions are also pseudonymous and users only interact though wallet + addresses. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 169 + + + + + Today, there are several solutions being built out in a crypto-native way that allow + institutions to engage in DeFi. For instance, at Aave Companies, we created the + software behind Aave Arc, which allows institutions to interact with the Aave + Protocol the same way any other user would, but in a separate and “permissioned” + liquidity pool where every user has been verified. The permissioned Aave Arc has + the same features as Aave Protocol and fits within the know-your-customer (KYC) + and anti-money laundering (AML) compliance standards, allowing institutions to + leverage almost all the benefits of DeFi, while remaining aligned with their + compliance requirements. + + Q: What are some of the key regulatory developments in the DeFi space? + + A: Many people categorize the DeFi space as being unregulated or the “Wild West.” + + However, I do not agree with this view. First, DeFi companies are developing + software products, which are covered under consumer protection laws and are + broadly applicable across all geographies with some variation. These laws are + mainly aimed at transparency and DeFi software development companies strive to + clearly explain how the protocols work through their documentation and frequently + asked questions (FAQs). + + I believe the more interesting questions come around regulation and + decentralization. No matter what a company says regarding it being + centralized/decentralized, if you are able to affect user funds, are taking custody of + user assets in any form, or other matters that financial regulators intend to address, + you have to comply with relevant regulations. + + I believe decentralization can be assessed by looking at three key questions: (1) Is + the technology decentralized? This generally tends to be the case, as blockchains + are inherently intended to be decentralized. (2) Is the protocol governed in a + decentralized manner or is there a council that makes decisions? (3) Is the original + software developer decentralized away from the protocol such that the governance + is real? Generally if answer to all three of the questions above is positive, then the + protocol is decentralized. + + The biggest hurdle we currently face is identifying what a company really does and + how we can regulate it in a truly decentralized manner. + + Q: What is the regulatory outlook for decentralized ecosystems? + + A: In my opinion, policymakers are looking at cryptos, digital assets, and + decentralized ecosystems with the aim to better understand them and craft new + rules/regulations. In a positive development, we are hearing several + pronouncements from policymakers on what could be done to better regulate the + space in recent times. + + However, it is also important to maintain a fair balance. You do not want to + overregulate the space, potentially bringing everyone into the regulatory gamut and + turning software developers into financial intermediaries. + + Q: Can we apply the existing regulatory framework to DeFi protocols? What + are the challenges? + + A: We need to understand that existing regulations are written with the intent of + having an identifiable actor/person, which could refer to any natural person, + corporation, or corporate entity. This makes sense in the traditional financial world + as even corporations act through human and judgement needs to be applied. + + +© 2022 Citigroup + 170 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + However, this very characteristic makes these regulations difficult to implement in + the DeFi world, as they do not function in a similar manner. A well-reviewed and + audited smart contract will do exactly what you want it to do — they are always + perfect and there is no scope for subjectivity or judgement. + + Additionally, traditional financial regulators necessitate intermediaries be aware of + whom they are dealing with at all times, in order to avoid funding terrorism or parties + engaging in counterfeiting or money laundering. This may well be an argument why + traditional financial actors cannot engage with DeFi. + + We are seeing the development of new alternatives to address these limitations. + One such alternative is the use of white-labeled wallets, which requires an + intermediary to do the KYC (using traditional or non-traditional data methods) and + hold relevant personal information; while enabling users to maintain their privacy. + + In my opinion, we do not need to write new regulations. Instead, policymakers need + to take existing regulations that people feel comfortable with, both from a regulatory + and consumer perspective, and tweak them to apply in the DeFi world. + + Q: Can you elaborate on FATF and its updated guidance for a risk-based + approach to virtual assets and virtual asset service providers? + + A: In my opinion, the updated Financial Action Task Force (FATF) guidance is still + very broad based and could potentially capture too many people under its gamut. I + am unsure if the new updated guidance can be the standard bearers as they are + very hard to implement. Owing to their nature of being very broad based, there is + also a risk of software developers being categorized as financial intermediaries, if + the regulations are not implemented well. + + Q: What is the role of governance tokens in the DeFi ecosystem? Are there + any risks in holding governance tokens? + + A: Governance tokens allow holders to make proposals and vote for any changes + related to the protocol. Certain governance tokens also include a delegation + function, which allows you to delegate the power to make proposals or votes using + the token. + + Governance tokens are important from a decentralization perspective as they help + diffuse governance, bring in new ideas, and allow people to build a financial system + where they have a stake. This system is significantly different from the centralized + power in a corporate-setup traditional financial system. + + I do not believe there are any broad regulation, pronouncement, or risk that + negatively impact the ownership of such tokens, but one needs to assess this on a + country-by-country basis. It is also important to understand the functionality of + specific governance tokens and how are they involved in the project. + + Q: Can you elaborate on the legal framework for DAOs? + + A: As Decentralized Autonomous Organizations (DAOs) gain prominence and play + a crucial role in the open/transparent financial system, pertinent questions to be + asked include whether DAOs can engage in regular contacts, given they lack any + legal entity. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 171 + + + + + I believe it is possible to wrap a DAO into a legal entity, like a Limited Liability + Company (LLC). For instance, the U.S. state of Wyoming recently passed a law that + formally recognizes DAOs and gives them the same legal power as a limited liability + company. Likewise, a number of new proposals are being put together across + jurisdictions, allowing DAOs to share characteristics with partnerships, corporations, + and trusts. However, there is still a lack of general consensus around the legal + status of DAOs for the time being. + + Q: Could you elaborate on privacy consideration, especially since all DeFi + transactions are visible on the blockchain ledger? + + A: In my opinion, the privacy of an individual in a DeFi transaction is protected by + pseudonymous wallets. As long as one does not have anything explicit that ties + them to their wallet, nobody can know the transactions was done by a particular + individual. + + On the contrary, DeFi transactions potentially offer an enhanced layer of privacy + over the traditional financial system. In the latter, centralized intermediaries can + track every single transaction and possibly even control the way in which one + engages economically and financially in the system. + + + + +© 2022 Citigroup + 172 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Appendix + Much of the Open Metaverse today is built upon Ethereum, including most NFTs + and virtual lands. Given the importance of Ethereum and related blockchains to + building Web3 and the Open Metaverse, we will now dig a bit deeper into Ethereum + in the follow pages. + + Ethereum 101 + Ethereum is a general-purpose programmable blockchain that enables building + multiple applications on top of it. This is in contrast to Bitcoin, which is a blockchain + optimized for one specific use case, that of peer-to-peer virtual currency. + + The general-purpose nature of Ethereum opens up use of its blockchain for various + applications like asset issuance, crowd-funding, domain registration, prediction + markets, voting, NFTs, and potentially many other categories of use cases yet to be + identified. + + As described by Gavin Wood, a co-founder of Ethereum at Devcon 1 in 2015, + Ethereum is “a computer, it’s not a very good computer, it’s really slow, it’s really + really expensive…but actually it has got some really interesting properties. It’s the + first global singleton computer that is not localized.” + + It can be visualized as a globally distributed virtual computer that works on + thousands of computers across the globe. It is a computer with no reset button, and + therefore it cannot fail, be stopped, or censored. It is ubiquitous, can be freely and + fairly accessed by everyone. + + Gavin Wood continued, “What’s the point of having these particular + attributes…Ethereum is a commons for innovation, it is a place where we can all + upload code, upload ideas in terms of human interaction … we don’t need to think + about signing partnership contracts… Ethereum commoditizes trust, it is a platform + for zero-trust computing.” + + Key Features of Ethereum + +  Ethereum utilizes Turing-Complete programming language. In simple terms, + Turing-completeness means that the language is capable of solving any + computable problem and it will eventually find an answer, although with no + guarantees regarding runtime or memory. + +  Fundamental to Ethereum is the concept of accounts, which are its main building + blocks. At its core, an account in Ethereum is an entity with an ether (ETH) + balance that can send transactions on Ethereum. The global “shared-state” of + Ethereum is composed of accounts and represented by their states. Each + account is identified by a 160-bit address. + +  Ethereum has two types of accounts: + + – User Accounts (called Externally Owned Account), controlled by private keys + + – Contract Accounts, controlled by code + + Both types of accounts have equal privileges on the Ethereum blockchain. As + Vitalik Buterin, the co-founder of Ethereum puts it “Anything that humans have + the right to do, bots have the right to do.” + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 173 + + + + +  Anyone can create an application with any rules by DeFining it as a smart + contract. Almost everything that’s implemented in Ethereum is done through + smart contracts. A smart contract is a piece of program that has scripting code + built into it. It is a testament to Ethereum’s smart contract functionality that the + total value locked in its smart contract platform is over $110 billion (March 2022) + — in diverse use cases ranging from stablecoins to virtual lands. + +  Once created, anyone can interact with the application by sending transactions to + that specific contract address. + + Ethereum as a State Machine + + Similar to Bitcoin, Ethereum maintains a single global state — however, this state is + embodied by a more complex description than in Bitcoin. + + In simple terms, the state of the Bitcoin blockchain is the list of balances of accounts + — the unspent transaction outputs (UTXOs), i.e., the amount of Bitcoin that every + person has. In Ethereum, the state is more complex — the state is represented as a + mapping from addresses to account objects. As noted earlier, account objects can + be simple user accounts, or contract accounts. + + How Code Execution Works in Ethereum + +  A transaction can only be initiated by an Externally Owned Account. + +  If the destination of the transaction is another user account, it is a simple transfer + of balance (ether — ETH — the currency of Ethereum blockchain) from one + address to another. + +  If the destination of the transaction is an account that has code, then the code at + the destination gets executed. + +  Code in Ethereum can do one of the three things: + + – Send ETH to other contracts + + – Read/write storage on the blockchain + + – Call (i.e., start execution of) other contracts on the blockchain + +  In the process of running the transaction, if the transaction goes to a contract, + then the contract code gets executed, and the state of the global computer is + updated post the execution. + +Every full node on the Ethereum blockchain Given that any complex program could run indefinitely and clog the entire global +processes every transaction and stores the computer, Ethereum has an built-in metering system by means of “gas” and “gas +entire state price.” Gas is a fee that is charged for every computational step, and depends on + factors like complexity and storage involved. + + Programs will execute until they run out of gas, and in a way that is atomic (implying + that the entire transaction will be reverted if it runs out of gas mid-way). This keeps + malicious or badly written programs from clogging the entire blockchain. + + Ethereum Blockchain + + At its very core, a blockchain group blocks of transactions and writes them to the + database. At the end of addition of every new block to the chain, we get a new state + of the blockchain. In Figure 60, S[1], S[2] etc., are the different states of the + blockchain after a set of transactions are written to it. + +© 2022 Citigroup + 174 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Figure 60. The Ethereum Blockchain + + + Tx[0] Tx[1] Tx[n-1] + + + + PAY + S[0] APPLY S[1] APPLY S[2] … APPLY S[n] BLOCK S_FINAL + REWARD + + Source: Ethereum Whitepaper, Citi Global Insights + + + Below are the main components of the Ethereum blockchain (and in general, most + public blockchains): + +  A peer-to-peer network of nodes that propagate transactions and blocks of + verified transactions. + +  Messages, in the form of transactions, representing state transitions. + +  A set of consensus rules, governing what constitutes a transaction and what + makes for a valid state transition. + +  A state machine that processes transactions according to the consensus rules. + +  A chain of cryptographically-secured blocks that act as a journal of all the verified + and accepted state transitions. + +  A consensus algorithm that decentralizes control over the blockchain. + +  A game-theoretically sound incentive scheme (e.g., Proof-of-Work, Proof-of- + Stake, etc.) to economically secure the state machine. + +  Open-source implementation of the above (clients). + + An Ethereum client is a software application that implements the Ethereum + specification and communicates over the peer-to-peer network with other Ethereum + clients. Different Ethereum clients interoperate if they comply with the reference + specification and the standardized communication protocols. + + Any node on the network that is a “miner” can attempt to create and validate a + block. Miners compete to write the next block (and earn rewards) by racing to solve + a complex computational problem, by “Proof-of-Work”. + + Proof-of-Work (or any other reliable consensus mechanism) is a core requirement + of a public, trustless blockchain to ensure that there is a real cost to the miners’ + participation, and this incentivizes honest behavior from the miners, thereby + securing the network. + + Switch from Proof-of-Work to Proof-of-Stake + + Proof-of-Work is highly wasteful. Around 600 trillion hashing computations are being + performed by the Bitcoin network every second, and these ultimately have no + practical or scientific value, other than to evidence that real effort was expended to + ensure there are no easily-enabled malicious attacks. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 175 + + + + + Proof-of-Stake does away with the computational waste of Proof-of-Work, and + requires nodes to put up money at stake that they stand to lose in case of + misbehavior. The reason Proof-of-Stake could not have preceded Proof-of-Work + was that, before Proof-of-Work enabled cryptocurrencies, there was no prior digital + property that could be staked and securely worked with cryptographic protocols. + + While energy efficiency is one of the key drivers for the switch to Proof-of-Stake, + Proof-of-Stake proponents also claim that the economic incentives to play by the + rules are stronger in Proof-of-Stake. If a node validates bad transactions, the + validator faces “slashing” which means that their ether is locked up are burnt (sent + to an unusable wallet address where no one has the key to access). + + Proof-of-Stake is also claimed to be more secure than Proof-of-Work. To attack a + Proof-of-Work chain, the attacker needs 51% of computing power of the network, + which is theoretically feasible with the ASIC and GPU-powered mining pools + centralizing mining capacity. To attack a Proof-of-Stake chain, the attacker must + control more than half the coins in the system, which is much harder to achieve. + + Recovery from attacks are also much easier in Proof-of-Stake than Proof-of-Work, + as the attackers coins are slashed and automatically destroyed. Proof-of-Stake + therefore can be more decentralized in practice than Proof-of-Work, although there + are concerns that initial staking is likely to be more centralized, and there is a “rich + get richer” effect of compounding stake. + + Labeled the “merge,” 2022 is likely to witness the shift of Ethereum consensus from + Proof-of-Work to Proof-of-Stake, where the Beacon chain (the Proof-of-Stake chain) + is to merge with the current Proof-of-Work chain into a single chain. Switching to + Proof-of-Stake could make Ethereum blockchain highly energy efficient with 99.95% + less energy being used post merge. + + A switch to Proof-of-Stake also enables more options for Layer-1 scalability through + “sharding” (splitting the blockchain into different shards/parts). Trying to implement + sharding in Proof-of-Work would only reduce the computational power needed to + compromise a portion of the network, therefore, isn’t a feasible scaling solution. + + After the merge, Ethereum will introduce sharding, where the base chain will be + broken into 64 separate chains, thereby enabling parallel processing and increasing + capacity 64x. Inclusion of shard chains are scheduled from 2023. + + The “merge” is an enormous undertaking — thousands of smart contracts with + billions of locked assets are live on the Ethereum blockchain. There is a small risk + of disgruntled Proof-of-Work miners forking the chain (a “fork” in a blockchain is a + split into two potential paths due to a disagreement or a code change). + + Proof-of-Stake is also yet to be battle-tested to the levels Proof-of-Work has. + Potential “stuck” scenarios in the protocol could freeze the chain from making + further progress. There are also concerns about the behavior of the protocol in case + of network partition, potential validation between competitors, among others. + + However, moving Ethereum to Proof-of-Stake was the intent from the early days of + the protocol, and the phased and carefully-controlled roll out (testnet, various + clients, and hybrid Proof-of-Work/Proof-of-Stake in parallel) is hoped to ensure a + smooth and successful transition. + + Although Ethereum proof-of-stake research started in 2014 (prior to even + Ethereum’s formal launch), solving for the challenges in a Proof-of-Stake model was + highly complex, and hence Proof-of-Stake is not live yet. + + +© 2022 Citigroup + 176 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Different kinds of attack vectors due to economic misalignment and security + assumptions related to Proof-of-Stake needed to be solved for. The community also + had to research and make philosophical design choices that solved for hard + distributed network failure challenges like transaction finality and fault tolerance. + + However, most of these challenges are now addressed, and in December 2020 the + Beacon Proof-of-Stake chain launched. It currently has over 300,000 validators and + $37 billion staked in it. It has been running in parallel with the main Proof-of-Work + chain, and is also being continuously tested. The “merge” of the chains will also + mark the end of proof-of-work, and is targeted for the second quarter of 2022. + + Figure 61. Ethereum Estimated Power Consumption + + + + + Note: Bitcoin and Ethereum PoW data taken from Digiconomist. + Source: Ethereum Foundation Blog + + + Scaling the Ethereum Blockchain + + Ethereum currently can handle 15 to 40 transactions per second (TPS), in contrast + to Visa’s 1,700 TPS. With the vast majority of DeFi and NFT value locked in + Ethereum despite the growth of alternate chains, scaling of Ethereum cases is + extremely critical. + + The Scalability Trilemma states that there are three properties that a blockchain + aims to have — decentralization, security, and scalability. Simple techniques enable + optimization of only two of the three. It is a trade-off, and Ethereum had prioritized + decentralization and security in its first implementation. However, over the last few + years, the Ethereum core community has been focused on scalability without + sacrificing decentralization and security. + + There are two fundamental approaches to scaling the Ethereum blockchain: + +  Scaling the Layer-1 Itself: Increasing the transaction capacity of the base chain + by sharding — splitting a blockchain horizontally into multiple shards or chains, to + spread the load. + +  Scaling by Layer-2 Solutions: Instead of putting all activity on the base + blockchain directly, users perform the bulk of their activity off-chain in a “Layer-2” + protocol, but still use the decentralized security model of the layer-1 chain. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 177 + + + + + – Three major types of Layer-2 scaling are state channels, plasma, and rollups. + + • State channels allow participants to transact multiple times off-chain while + only submitting two on-chain transactions to the Ethereum network. + + • A plasma chain is a separate blockchain that is anchored to the main + Ethereum chain and uses fraud proofs to arbitrate disputes. + + • Rollups are similar to plasma, with the main difference being plasma keeps + all the transaction data and computation off-chain, while rollups keep some + of the data on the main Ethereum chain + + – Layer-2 rollups are important trustless scaling solutions for Ethereum, and at + its core move computation off-chain but keep some transaction data on-chain. + There are different types of rollups depending on the technology adopted. + + – Optimistic rollups assume transactions are valid by default and only run + computation, via a fraud proof, in the event of a challenge. Zero-knowledge + rollups run computation off-chain and submit a validity proof to the chain. + + With rollups, scalability gains of over 100x are expected to be feasible. However, + rollups in combination with sharding on the base chain are expected to collectively + process as much as 100k TPS in the future. This is the theoretical multi-year + roadmap to scaling Ethereum from current low double-digit TPS to throughput levels + that are fitting of a global computer. + + Currently, scaling of Ethereum is delivered by suite of solutions like Polygon, which + has an ecosystem of multiple Ethereum scaling solutions for different use cases. + Polygon PoS chain for instance has a current theoretical capacity of 900-1,000 + TPS, relative to 15-40 for Ethereum. Layer-2 scaling capacity is expected to + increase in the future given rollup and other solutions being built and bought. + + DeFi versus Traditional Finance and Centralized Finance + The levels of centralization, trustlessness, and underlying technology lead to three + different categorization of players in the financial system. + +  Traditional Finance: Regulated conventional banking infrastructure, where a + bank balance is essentially an IOU (I owe you) built on a system of trust and + identity. Banks accept deposits, make loans, and undertake a host of related + regulated activities in the financial system. Participation in the traditional finance + system typically involves transacting using rails and infrastructure that were + largely built prior to the growth of internet, and hence can be slower than some of + the other alternatives in the market. + + + + +© 2022 Citigroup + 178 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + Figure 62. Cryptocurrencies vs. Traditional Financial System + Crypto Financial System + Decentralized Centralized Traditional + Function Service Finance (DeFi) Finance (CeFi) Finance + Funds transfer DeFi stablecoins (DAI) CeFi stablecoins Traditional + (USDT, USDC) payment platforms + Trading Asset trading Crypto asset DEX + (Uniswap) Crypto CEX Exchanges and + Crypto derivatives DEX (Binance, Coinbase) OTC brokers + Derivatives trading (Synthetix, dYdX) + Crypto decentralized Crypto centralized Broker-dealers + Secured lending lending platforms (Aave, lending platforms active in repo and + Compound) (BlockFi, Celsius) securities lending + Lending + Commercial banks + Unsecured lending Crypto credit Crypto banks and non-bank + delegation (Aave) (Silvergate) lenders + Investing Investment vehicles Crypto decentralized Crypto funds Investment funds + portfolios (yearn, Convex) (Grayscale) + Source: Bank for International Settlements, Citi Global Insights + + +  Centralized Finance (CeFi): Centralized Finance is a term that applies to + financial applications that bridge traditional finance and the new world of DeFi. + CeFi is an umbrella term used for applications that involve custody and + centralization, be it through FinTechs or centralized crypto exchanges. For + instance, both Coinbase and PayPal would constitute a part of CeFi. CeFi + applications are also required to comply with AML/KYC regulations and usually + control on-ramp/off-ramp to DeFi. + +  Decentralized Finance (DeFi): DeFi, as detailed earlier is completely + decentralized financial applications that permit pseudonymous or anonymous + participation. Typically, DeFi does not have any trusted intermediary in a + transaction, and relies a lot on self-sovereignty with respect to holding funds, + investing, and participating in an always-on, fully-open, permissionless financial + system. + + Figure 63. Key Differences Between DeFi and Traditional Finance + + + + + Source: Ethereum.org, Citi Global Insights + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 179 + + + + +  DeFi Staking: DeFi staking refers to locking up digital tokens/assets through a + smart contract for a set period of time to earn passive income. Different DeFi + platforms vary in the amount of yield they provide on the staked assets. + +  Yield Farming: Yield farming refers to lending digital tokens/assets to a protocol + to earn interest, measured as annual percentage yield (APY). + + + + +© 2022 Citigroup + Citi Global Perspectives & Solutions (Citi GPS) is designed to help our clients +navigate the global economy’s most demanding challenges, identify future themes and +trends, and help our clients profit in a fast-changing and interconnected world. Citi GPS +accesses the best elements of our global conversation and harvests the thought +leadership of a wide range of senior professionals across the firm. + +All Citi GPS reports are available on our website www.citi.com/citigps + + Global Art Market Women Entrepreneurs + Disruptions Catalyzing Growth, + Pushing Boundaries Innovation, and Equity + March 2022 March 2022 + + + Eliminating Poverty Global Supply Chains + The Importance of a The Complicated Road Back + Multidimensional Approach to “Normal” + February 2022 December 2021 + + + Philanthropy and the Global Education: Learning for Life + Economy Why L&D is the Next Frontier + Opportunities in a World of in Global Education + Transition November 2021 + November 2021 + + Home of the Future Global Carbon Markets + Building for Net Zero Solving the Emissions Crisis + Before Time Runs Out + October 2021 October 2021 + + + Disruptive Innovations VIII Holistic Digital Policy + Ten More Things to Stop and Nation States Must Lead in + Think About Building Equitable Human- + October 2021 Centric Digital Economies + October 2021 + + Biodiversity Natural Gas + The Ecosystem at the Heart Powering Up the Energy + of Business Transition + July 2021 July 2021 + + + Technology at Work v6.0 Hard to Abate Sectors & + The Coming of the Post- Emissions + Production Society The Toughest Nuts to Crack + June 2021 May 2021 + + + Future of Money Systemic Risk + Crypto, CBDCs and 21st Systemic Solutions for an + Century Cash Interconnected World + April 2021 April 2021 + The Global Art Market and Bitcoin +COVID-19 At the Tipping Point +Innovating and Adapting +December 2020 March 2021 + + +Financing a Greener Planet Electric Vehicle Transition +Volume 1 +Volume 2 +February 2021 February 2021 + + +Investment Themes in 2021 Education: Fast Forward to + the Future + +January 2021 October 2020 + + +The Holistic Case for Closing the Racial +Investment in Girls Inequality Gaps + +October 2020 September 2020 + + +Negative Interest Rates ePrivacy & Data Protection +Where Is the Real Limit to Data Privacy & its Influence +Cheap Money? on AI Ethics, Competition & +July 2020 Tech Evolution + July 2020 + +Technology at Work v5.0 5G and Mobile Operators +The New Normal of Remote Is Virtual Becoming Real? +Work April 2020 +June 2020 + + +Closing the Loop on Global Disruptive Innovations VII +Recycling Ten More Things to Stop and +Finding a Global Solution to Think About +the Patchwork of Recycling February 2020 +February 2020 + +Building a TCFD With Teeth Banking the Next Billion +What the Markets Need to Digital Financial Inclusion in +Price Climate Risk Action +February 2020 January 2020 + + +Experiential Commerce Investment Themes in 2020 +A Brave New World +January 2020 January 2020 + + + +Corporate Finance Car of the Future v4.0 – +Priorities 2020 2020 Update +January 2020 The Race for the Future of + Networked Mobility + January 2020 + 182 Citi GPS: Global Perspectives & Solutions March 2022 + + + + + If you are visually impaired and would like to speak to a Citi representative regarding the details of the graphics in this + document, please call USA 1-888-800-5008 (TTY: 711), from outside the US +1-210-677-3788 + + IMPORTANT DISCLOSURES + This communication has been prepared by Citigroup Global Markets Inc. and is distributed by or through its locally authorised affiliates (collectively, the "Firm") + [E6GYB6412478]. 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Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are + used and registered throughout the world. + + + + + © 2022 Citigroup + March 2022 Citi GPS: Global Perspectives & Solutions 183 + + + + +NOW / NEXT +Key Insights regarding the future of the Metaverse + + + CURRENCY Most centralized Metaverse-like platforms today apply withdrawal limits, centralized + in-world game monetary policy, and marketplace fees and rents. / The definition of + what counts as money in the Open Metaverse is likely to be very different from + today. We expect different forms of cryptocurrency to dominate, but to coexist with + fiat currencies, CBDCs, and stablecoins. + + + + + INFRASTRUCTURE Today’s internet was not designed for high-bandwidth, peer-to-peer communication. + The lags, packet drops, and network unreliability in today’s world make the current + state of infrastructure unsuitable for building an experience remotely resembling + the Metaverse as envisioned. / The next generation of internet driving immersive + applications needs to improve significantly in two key areas ------ bandwidth and + latency. + + + + + SOCIAL CHANGE Location, location, location is a mantra in today’s world / Physical location may be + less important in the future. Watching your favorite band perform live from another + country in a virtual concert, runway fashion shows in your living room, and catching + the latest art exhibit at your favorite museum could all be available in the + Metaverse. + + + + +© 2022 Citigroup + Citi GPS: Global Perspectives & Solutions © 2022 Citigroup + www.citi.com/citigps + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pdf_text/deloitte_virtual_production_future_content_creation_2024.txt b/2d_to_3d_market_tech_reports/pdf_text/deloitte_virtual_production_future_content_creation_2024.txt new file mode 100644 index 0000000000000000000000000000000000000000..aa00bb77eab91a4d93470d63a29f10861ee643b9 --- /dev/null +++ b/2d_to_3d_market_tech_reports/pdf_text/deloitte_virtual_production_future_content_creation_2024.txt @@ -0,0 +1,431 @@ +The future of content +creation: Virtual production +Unlocking creative vision +and business value + The future of content creation: Virtual production | Unlocking creative vision and business value + + + + + Pressure is building in the industry + as traditional and disruptive content + creators compete for not only customers, + but also production, visual effects, and + postproduction talent and resources. As + the COVID-19 global pandemic introduces + further complications, virtual production + capabilities may become a competitive + advantage for content creators. + + + + +2 + The future of content creation: Virtual production | Unlocking creative vision and business value + + + + +What is virtual production? +Every director and visual effects (VFX) professional will define +virtual production slightly differently, but at its core, virtual +production is modern content creation: It is an agile process +characterized by starting VFX earlier and leveraging +technology throughout the entire production life cycle to +enhance the way content is created.1 +Traditional production is highly linear: Directors and cinematographers plan scenes using storyboards +and shot lists; actors are filmed on sets, on locations, and against green screens; and editorial and +VFX development starts and finishes after filming is complete.2 This one-way procession through +preproduction, production, and postproduction can encourage negative outcomes, such as a “fix-it-in- +post” mentality, destructive or duplicative VFX labor, and expensive reshoots. + +Virtual production is iterative and creative: Beginning VFX in preproduction makes digital assets available +for planning and shooting, making it easier to continuously refine the final look and feel throughout the +course of production. Virtual production is an expansion of the traditional filmmaking playbook, enabling +studios to pursue greater experimentation while controlling the time and cost of production. + + + + + 3 + The future of content creation: Virtual production | Unlocking creative vision and business value + + + + +There are four key use cases that fall under • Hybrid camera (aka Simulcam, green +the umbrella of virtual production: screen hybrid): Compositing digital VFX + with live-action camera footage in real +• Visualization: Using 3D VFX assets + time. Simulcam was originally developed + to visualize and plan a task. There are + and coined by Weta Digital and James + many types of visualization (for example, + Cameron for the first Avatar movie in + pitchvis, techvis, and postvis), but the + 2009.10 It is a direct improvement over + preeminent form is previs: planning + shooting against green screens, because + a scene in 3D before shooting.3 While + visualizing the digital and physical + experienced VFX professionals may say + simultaneously with accurate parallax + previs has been commoditized,4 only a + helps directors gain a better spatial + handful of VFX studios have developed + understanding of the scene.11 Actors also + a reputation for providing visualization + benefit from seeing a preliminary view of + services on tentpole productions like + the visual effects instead of acting against + Guardians of the Galaxy (2014)5 or Pacific + a green wall. Hybrid cameras have been + Rim: Uprising (2018).6 + used on films like Blade Runner 2049 +• Motion capture (aka mocap): Capturing (2017)12 and Ready Player One (2018).13 + the movements of people to animate + • LED live-action: Replacing shooting + VFX assets. Mocap systems have been + against green screens with shooting + used in film since the 1980s, but over + against LED panels that display final- + time, hardware form factors have shrunk, + quality VFX. LED is a natural progression + and software has become increasingly + from the technique of 2D video screen + automated.7 Excellent motion capture is + projection, and LEDs’ ability to cast light + still technically and artistically challenging, + for accurate reflections is a significant + but it can be critical for realistic animations + benefit to post-production. LED panels + of digital humans and creatures such as + have been used to replace windows in + in War for the Planet of the Apes (2017)8 and + projects like Murder on the Orient Express + Game of Thrones (2019).9 + (2017)14 and Nightflyers (2018).15 + + + + + Preproduction Production Postproduction + + Visualization Hybrid camera + + Editing + Physical art + + + + + Virtual art + + + + Story Filming Showtime + Visual effects + Post VFX + + Motion capture LED live action + + + +4 + The future of content creation: Virtual production | Unlocking creative vision and business value + + + + +“Our latest developments enable final pixel quality in real + time, which empowers content creators across all stages of + production, and equip them to shoot their visual effects + in camera. It’s a game changer." +– Marc Petit, general manager at Epic Games + + + + +Why now? +Virtual production isn’t exactly new, • Increasing accessibility and jockeying also for content production resources. +and some use cases have already between game engines and studios: In our interviews with industry players, +seen significant adoption. However, Development in consumer augmented and they described a global squeeze on +a combination of industry, tech, and virtual reality has brought down costs and media production resources, including +macroscopic developments is accelerating reduced barriers to experimenting with acting talent, VFX talent, and even +Hollywood’s interest in virtual production: virtual production.18 Game engines provide sound stages.23 In these times, virtual + the real-time rendering that powers virtual production’s proposition to support more +• The popularity of VFX-heavy genres + production; Epic Games’ Unreal Engine efficient production can be especially + and recent virtual production + 4 (UE4) was used for The Mandalorian, attractive. + breakthroughs: The highest-grossing + and Epic has stated that virtually all the + films of the past decade generally fall • COVID-19, physical production, and + functions used for that show will soon be + into VFX-heavy genres like action/ avoiding a “content desert”: The global + built directly into the engine.19 At the same + adventure and sci-fi/fantasy.16 Virtual pandemic has halted film and episodic + time, leading VFX studios like ILM and MPC + production techniques have been a production, and this lapse in content + are going to market with their proprietary + critical enabler for both feature films and generation could lead to a “content desert” + virtual production platforms, StageCraft20 + episodic content, as demonstrated by the further down the road.24 Governments + and Genesis,21 respectively. + aforementioned titles. However, in late around the world are cautiously looking to + 2019, The Mandalorian was released and • Competition between streaming reopen with new safety measures set in + widely lauded as the world’s first show platforms and film studios: Episodic place.25 Virtual production could be such + to be virtually produced using an LED content and feature films are converging an opportunity: Virtual sets shift crews + volume: a semicircular LED wall and ceiling in terms of budget, talent, and VFX quality. from the risks of travel and on-location + spanning an entire soundstage.17 The In 2019, Netflix spent $15B on original shooting to the controlled environment + technical difficulty and potential benefits content creation, which is the same of a sound stage.26 Taking it even a step + associated with this technique have amount as ViacomCBS, the parent of further, digital humans and motion + helped reinvigorate conversations about Paramount Pictures.22 These players are capture could enable completely remote + virtual production. competing not only for customers, but productions.27,28 + + + + + 5 + The future of content creation: Virtual production | Unlocking creative vision and business value + + + + +So far, virtual production has +been driven by the creatives +Across the many use cases and virtual to wait until post-production to see the +production tools, there are common output. Hybrid cameras and LED volumes +themes, including: allow creatives and talent to see what + they’re interacting with and producing in +• Improving storytelling: Visualization + real time. + spans the entire production life cycle + and is used to plan scenes and shots. • Unlocking possibilities: + This helps ensure that the storyline, Photogrammetry and 3D scanning + captured footage, and VFX being produced enable virtualization of real-world sets + accurately reflect the director’s vision. and environments. Inside game engines, + filmmakers can reshape mountains, move +• Resolving ambiguity: Historically, actors + the sun, and create a 12-hour-long sunset. + and directors shot against green and had + + + + +6 + The future of content creation: Virtual production | Unlocking creative vision and business value + + + + +Adoption of virtual production +can support desirable business +outcomes, like cost savings and +accelerated time to market +According to our interviews with VFX against an LED wall significantly reduces +producers, VFX artists, and film studio postproduction VFX costs like compositing +producers, Hollywood may be reaching and rotoscoping and helps filmmakers get +the limits of efficiency using the traditional ready for test screening more quickly.30,31 +production methodology. The mindset and +toolset of virtual production can support Virtual production may also have cost +not only better creative outcomes, but also benefits further downstream from principal +potentially significant time and cost savings. photography: LED volumes and virtual sets + can be used by marketing teams to shoot +Visualization can help enhance planning, commercials, and VFX assets can be reused +increasing shooting efficiency and reducing for sequels, subsequent seasons, and other +the occurrence of expensive reshoots. media. While reusing digital assets is not +Based on our research, reshoots are impossible today, it’s not the norm: most +common with high budget films and organizations have many digital versions of +can account for 5 to 20 percent (and the same asset (such as the White House) +sometimes more) of the final production that are not shared because each asset is +cost.29 Although not every story or tied to an individual show, and even within +director is a good fit for LED live-action a given show, production and marketing +production, virtualizing sets saves on travel, budgets are siloed. +transportation, and location costs and +reduces risks. VFX costs on a high-budget +sci-fi/fantasy film can be as high as 20 +percent of the total film budget; shooting + + + + 7 + The future of content creation: Virtual production | Unlocking creative vision and business value + + + + +With great opportunity +comes great challenges +There’s a wide range of strategic questions • Organization transformation: What +for business leaders to consider: organization-wide shifts would help + us unlock the maximum value from an +• Stakeholder alignment: How do we + investment in virtual production? What + develop a shared understanding of virtual + departments or budgets could be merged + production among VFX supervisors, + to unlock synergies? + directors, and film producers? What + parts of the value proposition need to be + clarified in greater detail? + +• Production strategy: What are the + technical strengths and limitations of virtual + production? Based on those trade-offs, is + it a good fit for the content we produce? + Which virtual production techniques are + most suitable for our portfolio? + +• Business case development: How + do we justify an investment in virtual + production or assess using it for a specific + project? What are the costs to execute, + and where can we expect cost savings? + How long will it take to break even, and + what’s my ROI? + +• Capability building: Which capabilities + should we build internally versus contract + externally? What people, processes, + and technology do we need in order to + stand up a virtual production unit? What + software, hardware, and services are + necessary? + + + + +8 + The future of content creation: Virtual production | Unlocking creative vision and business value + + + + +Virtual production is an +attractive opportunity amid +mounting competitive pressures +Creative leaders in film and episodic have shown that virtual production can yield incredible outputs. +Visualization, motion capture, hybrid camera, and LED live-action are virtual production techniques that +belong to the toolset of modern content creation. As with every new technology, there is an initial learning +curve, but the costs of execution will likely ultimately come down over time. Virtual production can be used +across both high- and low-budget projects to improve quality, increase efficiency, and reduce costs. As the +global media and entertainment industry is forced to pause production due to COVID-19, now may be an +opportune time to set your organization on a path to innovate the way stories are told. + + + + + 9 + The future of content creation: Virtual production | Unlocking creative vision and business value + + + + +Endnotes +1. https://www.forbes.com/sites/solrogers/2020/01/29/virtual-production-and-the-future-of-filmmakingan-interview-with-ben-grossman-magnopus/#15b5583275d4 + +2. https://cgsociety.org/news/article/4317/what-is-virtual-production + +3. https://www.foundry.com/insights/real-time/guide-to-production-in-real-time + +4. https://www.awn.com/animationworld/awn-professional-spotlight-fmx-2014-chris-defaria + +5. https://www.proof-inc.com/project/guardians-of-the-galaxy + +6. https://www.halon.com/work/pacific-rim-uprising + +7. https://www.engadget.com/2018-05-25-motion-capture-history-video-vicon-siren.html + +8. https://www.wetafx.co.nz/films/filmography/war-for-the-planet-of-the-apes + +9. https://www.syfy.com/syfywire/game-of-thrones-battle-of-winterfell-was-powered-by-artificial-intelligence-and-horse + +10. https://www.indiewire.com/2017/07/avatar-weta-james-cameron-sequels-1201861720 + +11. https://cdn2.unrealengine.com/Unreal+Engine%2Fvpfieldguide%2FVP-Field-Guide-V1.2.02-5d28ccec9909ff626e42c619bcbe8ed2bf83138d.pdf + +12. https://www.artofvfx.com/blade-runner-2049-richard-clegg-vfx-supervisor-mpc + +13. https://www.fxguide.com/fxfeatured/ready-player-one-inside-the-oasis + +14. https://www.ver.com/featured_work/murder-on-the-orient-express + +15. http://arwall.co/nightflyers-case-study + +16. https://screenrant.com/most-earning-films-decade + +17. https://www.fxguide.com/fxfeatured/art-of-led-wall-virtual-production-part-one-lessons-from-the-mandalorian + +18. https://www.forbes.com/sites/solrogers/2020/01/29/virtual-production-and-the-future-of-filmmakingan-interview-with-ben-grossman-magnopus/#15b5583275d4 + +19. https://www.fxguide.com/fxfeatured/art-of-led-wall-virtual-production-sets-part-two-how-you-make-one + +20. https://www.ilm.com/hatsrabbits/ilm-stagecraft + +21. https://www.mpc-rnd.com/technology/genesis + +22. https://variety.com/2020/digital/news/netflix-2020-content-spending-17-billion-1203469237 + +23. https://observer.com/2019/11/disney-netflix-universal-warner-bros-hollywood-soundstage-space + +24. https://labusinessjournal.com/news/2020/apr/24/filmla-report-covid-19-shutdowns-film-tv + +25. https://variety.com/2020/film/global/europes-film-commissions-assemble-national-safety-protocols-as-film-tv-production-tries-to-restart-1234603258 + +26. https://www.sfgate.com/tv/article/where-was-mandalorian-shot-filmed-made-15001891.php + +27. https://www.vfxvoice.com/real-time-cg-humans-hit-the-big-time + +28. https://deadline.com/2020/05/gaming-tech-harnessed-post-coronavirus-film-tv-production-1202927286 + +29. Deloitte analysis. + +30. Ibid. + +31. http://arwall.co/nightflyers-case-study + + + + +10 + The future of content creation: Virtual production | Unlocking creative vision and business value + + + + +Contact us +Allan V. Cook Jordan Wiggins ­ Robin Tarufelli­ Nick Huang­ +Managing Director Lead Consulting Principal­ Managing Director ­ Consultant +Deloitte Consulting LLP Deloitte Consulting LLP­ Deloitte Consulting LLP­ Deloitte Consulting LLP +allcook@deloitte.com jorwiggins@deloitte.com rtarufelli@deloitte.com nicklhuang@deloitte.com + + + + + 11 + This publication contains general information only and Deloitte is not, by means +of this publication, rendering accounting, business, financial, investment, legal, +tax, or other professional advice or services. This publication is not a substitute +for such professional advice or services, nor should it be used as a basis for any +decision or action that may affect your business. Before making any decision or +taking any action that may affect your business, you should consult a qualified +professional adviser. + +Deloitte shall not be responsible for any loss sustained by any person who relies +on this publication. + +About Deloitte +Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK +private company limited by guarantee (“DTTL”), its network of member firms, +and their related entities. DTTL and each of its member firms are legally +separate and independent entities. DTTL (also referred to as “Deloitte Global”) +does not provide services to clients. In the United States, Deloitte refers to one +or more of the US member firms of DTTL, their related entities that operate +using the “Deloitte” name in the United States, and their respective affiliates. +Certain services may not be available to attest clients under the rules and +regulations of public accounting. 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All rights reserved. + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pdf_text/mckinsey_value_creation_in_the_metaverse_2022.txt b/2d_to_3d_market_tech_reports/pdf_text/mckinsey_value_creation_in_the_metaverse_2022.txt new file mode 100644 index 0000000000000000000000000000000000000000..e653f8b28aca02550af3d73c90af92dd2e46e998 --- /dev/null +++ b/2d_to_3d_market_tech_reports/pdf_text/mckinsey_value_creation_in_the_metaverse_2022.txt @@ -0,0 +1,3919 @@ +Business mobility +payments: On the +June 2022 + + + + +road +Value to change + creation +in the metaverse +The real business of the virtual world + Value creation + in the metaverse + The real business of the virtual world + + + + +2 Value creation in the metaverse: The real business of the virtual world + Contents +Preface 4 + +In brief 5 + +Value creation in the metaverse 7 + +Introduction 9 + +Defining the undefined: What is the 10 +metaverse, really? + + +Following the money: What is driving 18 +investment? + + +Scanning the horizon: How is consumer and 29 +business behavior evolving? + + +Envisioning the potential: How significant could 36 +the metaverse’s impact be? + + +Moving at speed: How do you capture value, 53 +and what can you do today? + + +Conclusion 57 + +Appendix A: Estimate of investment in 58 +metaverse technology + +Appendix B: Impact model and investment 59 + +Appendix C: Consumer and executive surveys 65 + +Acknowledgments 67 + +Bibliography 68 + +Endnotes 73 + + +Value creation in the metaverse: The real business of the virtual world + Preface + + This report examines the emergence of the metaverse: its history and characteristics, the factors driving + investment, how consumers and businesses are using it today and may in the future, its value-creation potential, + and how leaders and policy makers can plan their strategies and near-term actions. Our work began by surveying + more than 3,400 consumers and executives on metaverse adoption, its potential, and how it may shift behaviors. + We also interviewed 13 senior leaders and metaverse experts. In analyzing the metaverse’s value-creation + potential and total investment landscape, we examined the drivers of activity among major corporations, venture + capital, and private-equity funds. We examined the potential impact of the metaverse on sectors most closely tied + to its technology and uses, with our work supplemented with additional research, case studies, and real-world + examples. + + This latest research is the result of collaboration between multiple practices within McKinsey, including Growth, + Marketing & Sales, McKinsey Digital, and Telecommunications, Media & Technology. We also drew on the + expertise of the McKinsey Technology Council, which comprises more than 60 scientists, engineers, investors, + and entrepreneurs from external tech organizations and institutions, along with our own internal experts. This + report also leverages an expanding body of knowledge around the metaverse and deep expertise among our + McKinsey colleagues, including contributions from: Jiamei Bai, Kim Baroudy, Ian De Bode, Marc Brodherson, + Gordon Candelin, Marek Grabowski, Matt Higginson, Klemens Hjartar, Marius Huber, Vinayak HV, Nils Jean- + Mairet, Chau Nguyen, Ichiro Otobe, Kim Rants, Kartik Trehan, and Richard Ward. We also sought the expertise of + metaverse expert Matthew Ball, managing partner of EpyllionCo and McKinsey knowledge partner. + + The project team comprised Inês Araújo Lopes, Antonio Celso Maciel Tavares, Andreas Henriksen, Madalina + Kmen, Lotte Lauer, Estelle Menye Zanga, Philibert Parquier, Stephen Schwab, Ewa Starzynska, and Peter Vang. + We would also like to thank Growth, Marketing & Sales’ Global Communications Director Cindy Van Horne, Global + Publishing Manager Molly Katz, and Global Publishing Coordinator Hannah McGee, as well as Luke Collins, Jen + Thiele, and John-Michael-Maas for their editorial leadership. Additionally, we would like to thank the extended + communications team EMEA External Relations Manager Kinga Young, North America External Relations + Manager Eric Sherman, Global Digital Specialist Sharon Woo, Communications Specialist Marion Obadia, and + Jason Forrest. + + Finally, we sincerely thank the senior executives and experts who graciously agreed to be interviewed to provide + their perspective on the current state of the metaverse and its potential. + + Our ambition is for this report to help drive ongoing dialogue about the development of the metaverse, help + leaders of both consumer and business-to-business clients better understand its power and potential, identify + strategic imperatives, and act as a force for its positive evolution. This work is independent and has not been + commissioned or sponsored in any way by any business, government, or other institution. + + + Tarek Elmasry Hamza Khan Lareina Yee + Senior partner, Bay Area Partner, London Senior partner, Bay Area + Global co-leader, Technology, United Kingdom and Ireland Chair, McKinsey Global + Media & Telecommunications co-leader, Growth, Marketing Technology Council + Practice & Sales Practice Leader, Technology, Media & + Communications Practice + Eric Hazan Greg Kelly + Senior partner, Paris Senior partner, Atlanta Rodney W. Zemmel + Co-leader, Growth, Marketing Global leader, Growth Senior partner, New York + & Sales Marketing & Sales Practice Global leader, McKinsey + Europe member, McKinsey Digital + Global Institute Council Shivam Srivastava + Partner, Bay Area + + +4 Value creation in the metaverse: The real business of the virtual world + In brief + +Value creation in the metaverse +The metaverse is still being defined, both literally and figuratively. Yet its potential to unleash the next wave +of digital disruption seems increasingly clear, with real-life benefits already emerging for early adopting +users and companies. As we saw in previous shifts in technology such as the emergence of the internet +followed by social media, mobile, and cloud, novel strategies can quickly become table stakes. The +metaverse has the potential to impact everything from employee engagement to the customer experience, +omnichannel sales and marketing, product innovation, and community building. Examining its potential +effect should be part of strategy discussions, with leaders accelerating their analysis of how the metaverse +could drive a very different world within the next decade. Of course, many questions remain, including +how virtual worlds will be balanced with the physical world to ensure the metaverse is built in a responsible +manner, how it can be a safe environment for consumers, how closely it will align with the “open” vision +of the next iteration of the internet, and whether technology can advance quickly enough to build the +metaverse of our imagination. This report examines the metaverse’s building blocks, investment flows, and +what is driving them, and how consumer and business behavior is evolving, its potential economic impact, +and actions leaders should consider to capture value. + +— There continue to be questions around the longevity and potential of the metaverse, with an extreme + view regarding it as merely a rebranded gaming platform of little wider interest. We do not share + that skepticism and believe the metaverse has the potential to be the next iteration of the internet. It + may seamlessly combine our digital and physical lives by featuring a sense of immersion, real-time + interactivity, user agency, interoperability across platforms and devices, the ability for thousands of + people to interact simultaneously, and use cases spanning activities well beyond gaming. But the pace + of its development will depend on multiple technological and user-experience factors, and is not limited + to one platform, device, or even technology. + +— The metaverse’s technology stack has four core building blocks: content and experiences, platforms + (such as game engines), infrastructure and hardware (including devices and networks), and enablers + (such as payment mechanisms and security). Ten layers span these components, providing the critical + building blocks on which all metaverse experiences are based. One primary question about the future + evolution of the metaverse is the extent to which the interoperability of these elements can be advanced. + +— Large technology companies, venture capital (VC), private equity (PE), start-ups, and established brands + are seeking to capitalize on the metaverse opportunity. Corporations, VC, and PE have already invested + more than $120 billion in the metaverse in the first five months of 2022, more than double the $57 billion + invested in all of 2021, a large part of it is driven by Microsoft’s planned acquisition of Activision for $69 + billion. Large technology companies are the biggest investors—and to a much greater extent than they + were for artificial intelligence (AI) at a similar stage in its evolution, for example. Industries currently leading + metaverse adoption also plan to dedicate a significant share of their digital investment budgets to it. + +— Multiple factors are driving this investor enthusiasm, including ongoing technological advances across + the infrastructure required to run the metaverse; demographic tailwinds; increasingly consumer-led + brand marketing and engagement; and increasing marketplace readiness as users explore today’s early + version of the metaverse largely driven by gaming (with some games boasting tens of millions of active + players) with applications emerging that span socializing, fitness, commerce, virtual learning, and others. + + + +Value creation in the metaverse: The real business of the virtual world 5 + — Our survey of more than 3,400 consumers and executives found significant excitement about the + potential of the metaverse. Almost 60 percent of consumers using today’s early version of the metaverse + are excited about transitioning everyday activities to it, with connectivity among people the biggest + driver, followed by the potential to explore digital worlds. Some 95 percent of business leaders expect + the metaverse to have a positive impact on their industry within five to ten years, and 61 percent expect + it to moderately change the way their industry operates. Industries most likely to be impacted by the + metaverse include consumer and retail, media and telecommunications, and healthcare, and those + industries are also among those already undertaking metaverse initiatives. + + — While estimates of the potential economic value of the metaverse vary widely, our bottom-up view + of consumer and enterprise use cases suggests it may generate up to $5 trillion in impact by 2030— + equivalent to the size of the world’s third-largest economy today, Japan. It is shaping up to be the biggest + new growth opportunity for several industries in the coming decade, given its potential to enable new + business models, products, and services, and act as an engagement channel for both business-to- + consumer and business-to-business purposes. + + — The potential impact of the metaverse varies by industry, although we believe it holds implications for + all. For instance, we estimate it may have a market impact of between $2 trillion and $2.6 trillion on + e-commerce by 2030, depending on whether a base or upside case is realized. Similarly, we estimate it + to have an impact of $180 billion to $270 billion on the academic virtual learning market, a $144 billion + to $206 billion impact on the advertising market, and a $108 billion to $125 billion impact on the gaming + market. These effects may manifest in very different ways across the value chain, however. + + — Companies already leveraging the metaverse may build lasting competitive advantages. Business + leaders should develop a strategic stance by defining metaverse goals and the role they want to play; + testing, learning, and adopting by launching initial activities, monitoring results, and examining user + behavior; and preparing to scale by identifying necessary capabilities and embedding the metaverse in + their operating model. They should also explore becoming metaverse users themselves. + + — The metaverse also poses urgent challenges that cut across firms, their employees, independent + developers and content creators, governments, and, of course, consumers. Part of the workforce will + need to be reskilled to take advantage of it rather than compete with it, and cities and countries serious + about establishing themselves as hubs for its development will need to join the global competition + to attract talent and investment. The metaverse also has obvious societal implications. A variety of + stakeholders will need to define a road map toward an ethical, safe, and inclusive metaverse experience. + Guidelines may also be necessary around issues including data privacy, security, ethics and regulatory + compliance, physical health and safety, sustainability, and equity and fairness. + + + + +6 Value creation in the metaverse: The real business of the virtual world + Value creation + in the metaverse + The real business of the virtual world + + What’s the opportunity? + In 2021, venture By 2030, the value In 2022 already, + capital and of the metaverse investment into the + private-equity could reach… metaverse space is + funding into the more than double what + metaverse reached ~$5 it was in all of 2021 + + $13 trillion >$120 + billion billion + + + + Consumers and brands + are already engaging + + + 59% 57% + of consumers are excited of metaverse-aware + about transitioning their companies say they + everyday activities to are adopters + the metaverse + + + + Top 5 activities consumers Top 5 enterprise use cases + are excited about companies are implementing + Social Marketing campaign or initiatives + Entertainment Learning and development + Gaming for employees + Travel Meetings in the metaverse + Shopping Events or conferences + Product design or + digital twinning + + + The ten layers of + the metaverse + + A Content and experiences +Value +Value creation + creation in + in the + the metaverse: + metaverse: The + The real + real business + business of + of the + the virtual + virtual world + world 7 + 8 Virtual worlds 9 Applications 10 Content + 10 + Travel Meetings in the metaverse + Shopping Events or conferences + Product design or + digital twinning + + + The ten layers of + the metaverse + + A Content and experiences + 8 Virtual worlds 9 Applications 10 Content + 10 + 9 B Platforms + 8 6 Creators/3-D development platforms 7 Access and discovery + 7 + C Infrastructure and hardware + 6 + 4 Infrastructure 5 Devices, OS, and accessories + 5 + D Enablers + 4 + 3 1 Payments and 2 Identity 3 Security, privacy, + monetization and governance + 2 + 1 + + + 3 steps to capture the value + + + + + Develop a Test, learn, and adopt Prepare to scale + value-focused strategy Launch initial activities, Align talent and tech + Define your goals and the monitor results, capabilities, embed in + role you want to play that and refine your business strategy + will generate value and operating model + + + + +8 Value + Value creation + creation in + in the + the metaverse: + metaverse: The + The real + real business + business of + of the + the virtual + virtual world + world + Introduction + +It is 1992. A group of students and researchers at the University of Illinois are creating the Mosaic browser, +a user-friendly way to search the nascent internet. This is made available to the world a year later—the +same year CERN releases into the public domain the World Wide Web software that Tim Berners-Lee has +invented three years earlier.1 Yet mobile phones still have buttons, the iPhone won’t appear for another 15 +years, and the iPad is still 18 years away. And even if those devices had somehow miraculously existed, Wi-Fi +did not appear until 1997. + +So much technology we take for granted today seemed almost impossible 30 years ago. In a decade or +two, how will we look back on today? It depends. The metaverse is at an inflection point in its development, +just as the social networks and user-generated content driving the transition to Web 2.0 in 2004 sparked +utopian visions of consumer control and the democratization of the internet. The direction the metaverse +takes is tied to stakeholders’ collective actions in the years ahead, and the extent to which their behavior is +influenced by considerations of its potential societal and environmental impact. + +Of course, there are also significant challenges to be overcome. Just as it took time to develop the +technology that sparked the emergence of our devices today, the metaverse of people’s imaginations is not +currently technically feasible. Networks are too slow, and computing power too weak. Graphics engines +need to be exponentially more powerful, and interface hardware is needed to truly take advantage of the +technology as it evolves. + +Yet it would be brave to bet against the developing solutions and billions of dollars flowing into every corner +of metaverse infrastructure. Even if it feels as though we have seen something like this before—almost two +decades ago, Second Life became a phenomenon by introducing game players to the notion of “living” in +an always-on virtual world, only for it to seemingly disappear (it still exists and attracts new users each +month2)—the reality is that the metaverse is different. + +The “proto-metaverse”3 exists, fueled by a powerful force: the gaming experience. Gaming eclipses other +subsectors of the entertainment industry with its popularity. With more than three billion users globally4 and +a total value of more than $200 billion,5 the gaming sector is larger than movies and music. Consumers and +companies are already experimenting with the early metaverse for everything from socializing to fitness, +commerce, virtual learning, and scores of other daily activities. Like any technology, the metaverse is +neither inherently good nor bad; it will be what we make it, and we can learn from previous eras of dramatic +technological change. + +This report acknowledges the metaverse’s positive potential with a focus on its likely economic and business +impact. But while the future appears bright, there will inevitably be challenges. The metaverse is still in a +relatively nascent state with current adoption comparable to where artificial intelligence (AI) adoption was five +years ago.6 Our survey conducted for this report found executives are generally positive about it: metaverse +adopters report greater financial success and a more positive outlook compared with their peers, with higher +current and expected profit margins.7 But much depends on how the metaverse evolves. And how the world +evolves too. + + + + +Value creation in the metaverse: The real business of the virtual world 9 + 1 Defining the undefined: What + is the metaverse, really? + It is a gaming platform, a virtual retail destination, a training tool, an advertising channel, a digital + classroom, a new gateway to digital experiences. The metaverse seems to be whatever people’s + imaginations dream it to be. But today the metaverse remains difficult to define, 8 even though the term + has been in circulation for decades. What we do know is that, beyond the hype, the metaverse is real, + potentially revolutionary, and has the makings of a significant opportunity. Yet how it will eventually + develop remains to be seen. + + While the definition is still fluid—and will likely continue to be for some time—the consensus view is + the metaverse is the next iteration of the internet, where it becomes something we are immersed in, + rather than something we just view. “The metaverse will be the successor to the mobile internet,” Mark + Zuckerberg said last November as he announced that the name of the company he cofounded, Facebook, + was changing to Meta. “We’ll be able to feel present—like we’re right there with people no matter how far + apart we actually are.”9 + + + + +10 Value creation in the metaverse: The real business of the virtual world + Definition and characteristics +Our working definition positions the metaverse as the next iteration of the internet that seamlessly +combines our digital and physical lives. “We’re trying to not define the metaverse so rigidly that it limits +the imagination of creators,” Square Enix CEO Yosuke Matsuda told us. Beyond this, two things are clear. +First, the development of the metaverse is gaining momentum as billions of dollars are invested, gaming +continues to seed the emerging (or “proto”) metaverse, and nongaming use cases emerge for both +businesses and consumers. Second, despite many different potential definitions of the metaverse, it has +several foundational characteristics: + +— At its most basic, the metaverse will have three features: + + • a sense of immersion + + • real-time interactivity + + • user agency +— Ultimately, the full vision of the metaverse will also include the following: + + • interoperability across platforms and devices + + • concurrency with thousands of people interacting simultaneously + + • use cases spanning human activity well beyond gaming + + + +Separating fact from fiction +The metaverse captured universal headlines for the first time after Facebook’s name change last year. Yet +Steven Spielberg’s Ready Player One was released three years earlier, based on a novel released in 2011.10 +And the concept of the metaverse far predates that—the term was first coined in Neal Stephenson’s +1992 novel Snow Crash, and versions of what’s now the metaverse have evolved for almost half a century + + + + +‘We have Instagram. We have email. We have + messaging. And then there’s our real-life friends; + the real-life activity that we’re participating in. + Sometimes there’s an intersection between those + two. But when I think about a real-world vision of + the metaverse, it’s really a union of those where they + become much more deeply fused; where there’s a + digital extension to everything that’s real.’ + –John Hanke, CEO of Niantic + + + +Value creation in the metaverse: The real business of the virtual world 11 + (see sidebar “The history of the metaverse”). Yet for a concept now three decades old—and something + increasingly used by consumers and businesses alike, whether they understand the term or not—there + are several persistent misconceptions about the metaverse. + + The metaverse does not replace real life + Ready Player One presents a virtual world (the OASIS) as infinitely superior to the dystopian real world. + Yet the actual metaverse does not represent a choice between the virtual and the real worlds. The best, + superior version of the metaverse will complement rather than compete with the real world, enhancing + our real-life experiences rather than supplanting them. “I think about the metaverse as a continuation of + where tech was headed prior to COVID-19,” Niantic CEO John Hanke told us. “We have Instagram. We + have email. We have messaging. And then there’s our real-life friends; the real-life activity that we’re + participating in. Sometimes there’s an intersection between those two. But when I think about a real- + world vision of the metaverse, it’s really a union of those where they become much more deeply fused; + where there’s a digital extension to everything that’s real.” + + There are not multiple metaverses + Saying there are many metaverses is like saying there are many internets. The metaverse is the + envisioned end state—incorporating all digital worlds alongside the physical world, with interoperability + between them all. As it exists now, metaverse users are spread across multiple platforms; for example, + Decentraland, Fortnite, Minecraft, Roblox, and The Sandbox. + + + + + The concept of the metaverse has been depicted in sci-fi and pop culture for + longer + Thethan the term + history of theitself has existed. + metaverse + + + + 1978 1982 1984 1992 1999 + MUD1, the first Tron, one of the Neuromancer, a novel Author Neal The Matrix, a + multiplayer first movies to popularizing the term Stephenson coined movie + real-time virtual imagine a digital “cyberspace” that the term “metaverse” imagining + world reality imagined billions of in his 1992 humanity + “cyberusers” science-fiction novel inside a + Snow Crash, which virtual reality + envisions a virtual + reality–based + successor to the + internet + + + + + Future of 2021 2018 2006 2003 + metaverse to Facebook becomes Ready Player One, a Roblox, a multiplayer Second Life, the + come with more Meta, aiming at a film imagining a game platform that first platform + and more use metaverse ecosystem; full-fledged virtual surpassed 55 million allowing users to + cases joining investments of more world called ‘the daily active users in “live” in a virtual + than $10 billion in 2021 Oasis’, based on the February 2022 world, surpassing + book from 2011 1 million monthly + active users in + 2007 + + + + +12 Value creation in the metaverse: The real business of the virtual world + ‘We’re trying to not define the metaverse so rigidly + that it limits the imagination of creators,’ + –Yosuke, Matsuda, CEO of Square Enix + + + + +The metaverse is not AR/VR +Augmented and virtual reality (AR/VR) are important interfaces to help users experience the metaverse, +and point to some of its potentially more exciting experiences (for instance, our research found 62 +percent of respondents were excited or very excited by the possibility of travel in the metaverse, +especially the ability to visit “places I can’t physically go”—including space). Yet AR and VR join +technologies such as smartphones and laptops as just one of many ways people can interact with the +metaverse. And we may use very different devices to access metaverse platforms in the future. + +The metaverse is not (just) gaming +Gaming has been critical in seeding the metaverse, but the metaverse is not exclusive to gaming. In +fact, even some gaming platforms are evolving to address multiple use cases, such as virtual concerts +being held in Fortnite. And while gaming is indeed the most common activity across all generations and +the most popular among Gen Z (87 percent of Gen Z respondents in our survey said they were engaged +in gaming), fitness, education, and shopping are popular among millennials, while baby boomers also +engage in shopping. That points to the existing and growing appetite among consumers to engage with +companies well beyond gaming: 62 percent of consumers we surveyed have engaged with one or more +branded virtual experiences, 36 percent are excited about technology brands entering the metaverse, +and 30 percent are excited about apparel, fashion, and luxury brands doing so. + +The metaverse is not Web3 +The first generation of the internet is typically defined as the period from 1991 to 2004, when web +pages were largely static and users simply consumed content. The next generation—Web 2.0—was +marked by the emergence of social networking and user-generated content.11 The metaverse sounds +a lot like Web3. But while Web3 contributes to the metaverse by espousing decentralization and +interoperability, it’s not the metaverse, which is anchored on immersive experiences that can be both +centralized or decentralized (for more on the difference, see sidebar “Advances from Web 2.0 to Web3 +give rise to the metaverse”). “Why do these two terms get mixed together?” Matthew Ball, managing +partner of EpyllionCo and McKinsey knowledge partner, said on McKinsey’s At the Edge podcast. “Well, +Web3, by definition, succeeds Web 2.0. The metaverse, by definition, succeeds our current computing +and networking paradigm. The fact that they both succeed what we experience as the internet today +naturally intertwines the two.” + +The metaverse is not only for a small group of users +We have already noted there are three billion gamers in the world, spanning geographies, generations, +and genders. For instance, the gaming platform Roblox reportedly had nearly 55 million daily average +users (DAUs) in February 202212 and generated $1.9 billion in revenue in 2021.13 Minecraft has about 140 +million monthly active users,14 and Fortnite about 80 million.15 Gaming has acclimated consumers to the +concept of the metaverse: our survey found the share of millennials very excited about the metaverse + + + +Value creation in the metaverse: The real business of the virtual world 13 + Advances fromfrom + Advances WebWeb + 2.0 to + 2.0Web3 givegive + to Web3 rise rise + to the + to metaverse. + the metaverse. + + Web 2.0 Web3 + Example virtual worlds Second Life Decentraland + Roblox The Sandbox + Fortnite Somnium Space + World of Warcraft Cryptovoxels + + + Platform Organizational structure Centrally owned Community governed, gener- + characteristics Decisions are based on ally through a foundation + adding shareholder value decentralized autonomous + organization (DAO) + Native tokens are issued and + enabled + Participation in governance + Decisions are based on user + consensus + + Data storage Centralized Decentralized (game assets) + + Platform format PC/console PC/console + Virtual reality/augmented Virtual reality/augmented + reality hardware reality hardware + Mobile/app Mobile/app coming soon + + Payments infrastructure Traditional payments (eg, Crypto wallets + credit/debit card) + + Digital assets ownership Leased within platform Owned through nonfungible + User interaction where purchased tokens (NFTs) + + Digital assets portability Locked within platform Transferable + + Content creators Game studios Community + and/or developers Game studios + and/or developers + + Activities Socialization Play-to-earn games + Multiplayer games Experiences + Game streaming Same activities as Web 2.0 + Competitive games (eg, + e-sports) + + Identity In-platform avatar Self-sovereign and + interoperable identity + Anonymous + private-key-based identities + + Commercial Payments In-platform virtual currency Cryptocurrencies and + (eg, Robux for Roblox) tokens + + Content revenues Platform or app store earns Peer-to-peer; developers + 30% of every game (content creators) directly + purchased; 70% goes to earn revenue from sales + developer (example model) Users/gamers can earn + through play or participation + in platform governance + Royalties on secondary + trades of NFTs to creators + + + Source: “Opportunities in the metaverse: How businesses can explore the metaverse and navigate the hype vs. reality,” Onyx by J.P. Morgan, JPMorgan.com, + January 19, 2022 + + + +14 Value creation in the metaverse: The real business of the virtual world + (35 percent and 33 percent respectively) was about 50 percent higher than that of Gen Z.16 In addition, + we found a relatively even split between metaverse users by gender: 53 percent of our respondents + identified as men; 46 percent identified as women. While overall excitement levels were consistent, there + were some differences in the metaverse activities each gender was excited by. Respondents identifying + as men prioritized connectivity with people and purchasing real estate, while those identifying as women + were most excited by the ability to customize avatars and attend concerts and events. + + + + The building blocks of the metaverse + Having explored what the metaverse is not, it is time to dive into what it actually is. As a concept, the + metaverse can be broken down into four core building blocks: content and experiences, platforms, + infrastructure and hardware, and enablers. Importantly, capital is flowing into this technology stack, + across ten component “layers” that constitute the physical and operational structure on which all + metaverse experiences are based—these range from back-end tech enablers (such as engines, + blockchain, and hardware devices) to platforms and virtual worlds (Exhibit 1). We also anticipate the + development and scaling of standards and protocols to enable interoperability. + + A big question is whether these building blocks and the layers they comprise will combine to form the + metaverse, at least as many envision it. That our digital lives are becoming more complex, immersive, and + + + + +Meeting the technology demands of the metaverse + +The technology required to power the — Network infrastructure. There are to enable AR and become the main way +metaverse is recent. Yet the technology two common issues with network of accessing the metaverse, access +required to truly realize its potential infrastructure today. High-latency may become more democratized. Yet +doesn’t exist and presents arguably the “lagging” creates a sensation of video significant advancements across all +greatest challenge to the development of and/or audio being slow when using features of AR/VR are required as +the metaverse of people’s imaginations. applications that require a high rate of the metaverse develops, and we don’t +The bottom line is that advancements will frames-per-second, such as gaming expect mainstream XR devices—such +be required in compute infrastructure, and metaverse socializing. And low- as contact lenses and brain-computer +network infrastructure, and devices: bandwidth “buffering” occurs when interfaces—to emerge for at least a + data cannot be transferred quickly decade. Additionally, a broad set of +— Compute infrastructure. Limits of enough, delaying access to content peripherals—from on- and off-body + concurrency today cap the number or stopping it when it is already in sensors to haptics—are still emerging, + of players on gaming experiences progress. and have the potential to significantly + without creative workarounds such as expand the market. + spacing players across a map to avoid — Interface hardware. Metaverse access + overloading processing resources. today is primarily through flat screens: + In a fully realized metaverse, many televisions, computers (PCs and + more users will need to be able to be laptops), and smartphones. We expect + online at once. In addition, low-quality them to dominate for another five years + rendering means devices without before transitioning to AR/VR and + graphics processing units (such as eventually extended reality (XR). It is + smartphones) cannot present the unclear what will shape the next wave + photorealistic environments required to of metaverse interfaces: for example, if + drive immersion. mobile phones evolve quickly enough + + + + + Value creation in the metaverse: The real business of the virtual world 15 + pervasive seems clear. Yet that does not mean the metaverse is guaranteed to develop into a melding of + our physical and digital lives. + + While incumbents are always at risk of being disrupted by innovation,17 there are questions about the + ability of current technology to result in a fully realized metaverse, particularly when it comes to issues of + speed and capacity (see sidebar “Meeting the technology demands of the metaverse”). There’s also the + issue of the user experience and how that may help—or hurt—the metaverse’s adoption and development. + + “If the metaverse follows the app-store model that we have today, a person has to go through the trouble + of downloading an app and clicking a lot of permissions—it’s a pretty large amount of friction to just try + something,” Niantic’s Hanke said. “If you think about the early days of the web, it was surfing around, + checking out 20 different websites at a session. They weren’t things that kept your attention for hours + and hours or that you were loyal to for years, but it was very easy for you to discover and try them. That + sort of allowed the whole ecosystem to sort of bootstrap and grow. And I think we need that kind of + experience for real-world AR, real-world metaverse.” + + + + + Exhibit 1 + + Today’s + Today’s metaverse + metaverseisismade + madeup + upofoften + tenlayers, + layers,which + whichfall + fallinto + intofour + fourcategories. + categories. + + Content & experiences + 10 Content: Enriches the metaverse experiences—including first-party + content, developer content, creator content and UGC, etc + 9 Applications: Tied to specific metaverse use cases—ranging from + learning to collaboration to events to industry specific applications + 8 Virtual worlds: Environments where large number of users can + gather, interact, create, and move in and out different experiences + + + Platforms + 7 Access and discovery: Platforms that facilitate distribution and + discovery of content, experiences, apps—including browsers, search/ + visual search, app stores, in-app storefronts + 8 + 6 Creators/3D development platforms: Core set of tools and + 9 platforms for building 3-D experiences—including design, game + 10 engines, AI services, creator tools + 7 + + 6 Infrastructure and hardware + 4 + 5 Devices, OS and accessories: Device hardware, components, + 5 3 accessories/peripherals and OS layers that are part of the human + 2 interface layer + 4 Infrastructure: Underlying infrastructure across cloud, + 1 semiconductors, networks, etc that powers the metaverse + + + Enablers + 3 Security, privacy, and governance: Security, identity and data + governance, privacy, and content moderation platforms + 2 Identity: Platforms that manage digital identity, avatars and social + graphs + 1 Payments and monetization: Platforms and tools (eg, advertising, + asset stores) to enable the metaverse economy + + + + +16 Value creation in the metaverse: The real business of the virtual world + ‘Web3, by definition, succeeds Web 2.0. The metaverse, + by definition, succeeds our current computing and + networking paradigm. The fact that they both + succeed what we experience as the internet today + naturally intertwines the two.’ + + –Matthew Ball, managing partner of EpyllionCo and McKinsey knowledge partner + + + +One example of this today is the ability to move between different websites within the same browser (or +tab). Applications and games are largely distinct, stand-alone experiences with limited interoperability. +Yet many news sites, for example, provide hyperlinks from articles to external destinations, including +competing news sources, allowing the user to seamlessly navigate to new websites. + +Every industry faces questions about whether and to what extent the metaverse may impact it, which +in turn raises questions about how companies respond. Issues of privacy and security are only likely to +intensify as the metaverse develops, raising questions for companies and governments alike. And the +broader issue of negative externalities—such as its potential societal impact—remain to be answered. +As Digital Play, LEGO Ventures managing director Rob Lowe told us, the ambition is “for the future to +become as open as the internet was when it was first launched.” He said, “That is is the kind of promise of +what a future metaverse could be for everybody, not this idea of individual, siloed experiences.” + +With each generation of screen technology, we’ve become closer to content: from televisions 12-feet +away, across the room, to personal computers three-feet away, to mobile devices just a foot from our eyes. +And with each shift, the degree of personalization and advertising revenue has increased—along with the +time we spend with devices, and their second-order social consequences. We may one day experience +the metaverse through glasses, contact lenses, and embedded technology. What may the future hold as +we move to fully immersive experiences? + + + + +Value creation in the metaverse: The real business of the virtual world 17 + 2 Following the money: What + is driving investment? + Interest in the metaverse has exploded. Global Google searches for “metaverse” skyrocketed 7,200 + percent last year,18 and metaverse online gaming platform Roblox reportedly hit over 55 million daily + active users in February 2022.19 Meta committed more than $10 billion into its Reality Labs division,20 + which makes metaverse-related hardware such as VR goggles. And Microsoft said its planned $69 billion + acquisition of gaming company Activision Blizzard would “provide building blocks for the metaverse.”21 + + Yet this booming interest has also made it difficult to separate hype from reality. This has always been the + case since the advent of the internet, or indeed all technological innovation. We go through periods of + heightened excitement about what is possible and may evolve, and it is hard today to avoid thinking back + to the early, tumultuous days of the internet. However, it is also worth remembering that while the bust + of the first dot-com boom resulted in the disappearance of scores of companies, the internet itself only + became ubiquitous. + + + + +18 Value creation in the metaverse: The real business of the virtual world + Beneath the hype, the metaverse’s development continues (Exhibit 2). Roblox, launched in 2006, has +attracted companies including Nike 22 and Gucci 23 as advertisers and partners. Fortnite has more than +20 million daily active users (DAUs), has hosted concerts (more than 27 million unique players attended +a Travis Scott performance last April 24), and generated more than $14 billion in transactions between +2018 and 2020. 25 Naver Z’s Zepeto—Asia’s largest metaverse platform—has over 300 million global +subscribers, 26 and in April partnered with Samsung for its Galaxy S22 Treasure Hunt campaign.27 + +Virtual real estate has also been in the spotlight—an anonymous user reportedly paid $450,000 to +purchase a plot of virtual land in The Sandbox next to Snoop Dogg’s virtual residence, “Snoopverse.”28 +Institutional investors cover a wide range, including brands like Adidas, Samsung, HSBC,29 and a fast- +growing crop of virtual real-estate companies like Republic Realm and Metaverse Group (majority owned +by Tokens.com). 30 And the supporting infrastructure is also quickly evolving, including virtual architecture +and advisory firms. Yet price increases are driven by scarcity that is designed into present-day platforms +like Decentraland and The Sandbox. That heightens the investment risk involved, even if organizations +making the investments aim to derive utility from their virtual real estate by, for instance, using it as their +metaverse base of consumer interactions. Their bet is not only on mass adoption of the metaverse in the +coming years, but also on adoption of the specific platform that the virtual land is bought in (given near- +zero interoperability between worlds for now). As with cryptocurrency and NFTs, the virtual real-estate +asset market will likely remain volatile in the near term. + +In the meantime, while there may be consolidation in the future, the list of metaverse platforms continues +to grow and diversify. + + + +Charting the acceleration of investment +Investment in new technologies does not necessarily guarantee their eventual success, although it does +underscore the extent to which companies and institutions have evaluated an opportunity and concluded +it is worth pursuing. More than $120 billion has flowed into the metaverse space already in 2022—more +than double the $57 million of 2021 31 —as large technology companies, start-ups, and established brands + + + +Exhibit 2 + +The metaverse is +The metaverse isaadeveloping + developingopportunity. + opportunity. + + Today + + ~$55 million ~$250 million ~$500 million +$10 billion ~11 million + daily active daily trading volume of metaverse real invested by Meta XR headsets + users on Roblox NFTs at peak estate sales into metaverse shipped, 80% + development produced by Meta + annually + + + + Tomorrow + + Expanded set of Fully immersive Interoperability Enhanced Ubiquitous AR/VR device + use cases environment between worlds concurrency digital–physical proliferation + overlays + + + + +Value creation in the metaverse: The real business of the virtual world 19 + Exhibit 3 + + Substantial + Substantial investment + investmentsignals + signalsconfidence + confidenceininthe + thepotential + potentialofofthe metaverse. + the metaverse. + + Value of metaverse-related investments, $ billions + + Venture capital (VC) & private equity (PE) M&A Internal corporate investment1 + + + Total investment, VC & PE funding and M&A, $ billions + $ billions, 2022 to date 2020–2022 to date + + ~95-105 + ~6-8 + ~6-8 + ~15-20 + ~80% p.a. + + + 57 + + 13 ~90-100 + + 29 + 6 + 44 + 23 + + ~90-100 + 2020 2021 2022TD + + + 1 + Internal corporate investment in 2022 derived for top 30 companies investing in the metaverse based on publicly announced investment amounts. + Source: Crunchbase (Jan 2020–May 2022) + + + + + seek to capitalize on the growth opportunity (Exhibit 3). For example, Andreessen Horowitz recently + launched Games Fund One, releasing $600 million in venture capital to invest in game studios, metaverse + infrastructure, and games themselves. 32 It is also worth noting that cryptocurrencies—while not the same + as the metaverse—saw investment of more than $30 billion in 2021. The common element seems to be + an underlying belief among investors that our technology paradigm is about to undergo a major reset (see + sidebar “The metaverse and Web3,” page 26). + + Total metaverse-related investment is also proving to be significantly larger than it was for AI, which + attracted $39 billion in investment in 2016—arguably a similar stage in its development trajectory to the + metaverse today. While total VC and PE investment is somewhat comparable—AI was $6 billion to $9 + billion in 2016; the metaverse is $6 billion to $8 billion so far this year—M&A activity is much bigger. We + attribute this to the fact the metaverse has emerged, for the most part, as a pure digital play for many + companies, exemplified by Microsoft’s intended purchase of Activision Blizzard for around $69 billion. 33 + + Meanwhile, the sectors leading metaverse adoption also plan to dedicate a significant share of their + digital investment budgets to the metaverse with energy (18 percent); automotive, machinery, and + assembly (17 percent); high tech (17 percent); tourism (15 percent); and media and entertainment + (15 percent) among those leading the charge in terms of allocating share of digital budget to metaverse- + related activity over the next three to five years (Exhibit 4). + + + + +20 Value creation in the metaverse: The real business of the virtual world + Exhibit 4 +Sectors leading metaverse adoption today also plan to dedicate a +Sectors leading metaverse adoption today also plan to dedicate a significant +significant share of their digital investment budgets to metaverse. +share of their digital investment budgets to metaverse. + 20 + Leading + Energy and resources + Automotive, machinery, and assembly High tech + + Tourism Media and entertainment + 15 + Consumer, AF&L1, and retail +Future Insurance and financial sector +metaverse Healthcare and public sector +investment, + Professional services +Avg future +metaverse Transport and logistics + 10 +investment, +share of digital Telecommunications +budget +(in 3-5 years) Construction + + + 5 + + + + + Falling behind + 0 + 0 10 20 30 40 50 60 70 80 90 100 + + Current metaverse adoption, + % of firms within industry that are metaverse adopters—have already launched + metaverse initiatives + +1 + Apparel, footwear, and luxury. + Source: McKinsey & Company Senior Executive Survey, April 2022 + + + + +The broader investment landscape is dominated by three categories of investors: + +— Large technology companies, including for example Meta, Microsoft, Nvidia, Apple, and Alphabet, + among others, are taking deliberate actions toward shaping the metaverse. The most prominent + example is Facebook’s name change to Meta, solidifying its intent to become a leader in the space, but + others include Microsoft’s intended Activision Blizzard acquisition, 34 Nvidia’s Omniverse, 35 the planned + release late this year of Sony’s PlayStation VR2 headset, 36 and the possibility of Apple entering the AR + space in 2023. 37 + +— Venture capital is investing heavily in the space. Examples include NFT marketplace OpenSea raising + $300 million at a $13.3 billion valuation in a Series-C funding round led by Paradigm and Coatue, 38 + metaverse technology company Improbable raising $150 million led by Andreessen Horowitz and + SoftBank, 39 Yuga Labs (creator of the Bored Ape Yacht Club) raising $450 million at a $4 billion valuation + to build a virtual world, 40 The Sandbox receiving $93 million from SoftBank, 41 and Niantic receiving $300 + million from Coatue. 42 + + + + +Value creation in the metaverse: The real business of the virtual world 21 + — Corporations and brands outside of tech are putting resources behind efforts to get ahead. Disney + appointed a senior executive to oversee its metaverse strategy, 43 for instance, while LEGO invested in + Epic Games (makers of Fortnite). 44 Epic Games also collaborated with luxury brand Balenciaga, which + has created a dedicated metaverse division and launched its latest collection inside a virtual space. 45 The + most recent technological trends and advancements such as e-commerce, smart devices, and social + media are arguably starting to reach a point of declining returns in terms of their ability to generate a + competitive advantage. In response, brands are seeking innovative ways to get ahead of the competition. + With its expanding number of use cases, the metaverse offers growth opportunities that first-mover + brands are keen to explore and develop. + + Of course, the distribution of investments across the metaverse ecosystem can be seen as either + troubling or inspiring. It is troubling if you view the metaverse at this point—unlike previous consumer-led + revolutions—as generating more excitement among technology companies and executives than from + actual consumers. Yet it is inspiring if you view the involvement of brands as a sign that they have learned + from previous consumer-led revolutions and want to be involved earlier this time around. + + “What does this mean collectively? It means that this idea that we’ve thought of for decades is now a little + bit more tangible, even if in the virtual sense,” McKinsey senior adviser Ball said. “There are hundreds + of millions of people connecting to these environments every day. There are many of the most storied + companies on earth building a presence, and we have commerce in the tens and soon to be hundreds of + billions of dollars.” + + In fact, this idea of connecting virtually that has been decades in the making is now increasingly real: as + of October 2021, Facebook had almost three billion users in virtual platforms, with gaming and e-sports + attracting a quarter of a billion and global crypto not far behind at 220 million. Decentralized finance and + blockchain gaming garnered 3.45 million and 2.36 million users respectively, while there are close to half + a million users of NFT platforms and approximately 50,000 users engaging in Web3 virtual worlds. 46 + + Like the current version of the internet, the metaverse is expected to show significant network and + synergy effects, meaning the value of each individual metaverse feature (such as owning digital assets) + will increase with the amount of use cases and consumer offerings. This means a fully integrated, end-to- + end ecosystem must be built if the metaverse is to reach its full value proposition. + + + + Factors driving investor enthusiasm + Although the long-term vision of the metaverse is still to be realized, the early version of the metaverse is + well established. More than three billion gamers globally are fueling it, and that proof of concept makes a + difference for investors. In fact, there are multiple factors driving their enthusiasm and the growing belief + we are at an inflection point where the metaverse as many imagine it will begin to materialize. + + Ongoing technological advances + The infrastructure required to run the metaverse has rapidly improved and opened new possibilities. + While significant technology challenges remain (see sidebar “Meeting the technology demands of the + metaverse”), we have already seen blockchain spark the decentralized creator economy and emerge + as the most promising current technology for achieving the promise of the future metaverse for + interoperability between worlds. The full rollout of 5G (and beyond) will enable processing these large + worlds on mobile devices. 47 A number of other advances will facilitate development of the metaverse: + + — Back-end engines erode barriers to creation. The improved availability of the back-end engines that + drive the user experience (in particular Unreal Engine and Unity) have reduced the barrier to creation, + + + +22 Value creation in the metaverse: The real business of the virtual world + as a wider audience of studios and creators have gained access to creating advanced games and + experiences. 48 This advancement is critical to the metaverse, as it enables the shift from more traditional + 2-D internet spaces to more immersive experiences. + +— Edge computing powers the metaverse. Edge computing, also known as multi-access edge + computing or mobile edge computing, will play an important role in driving the computing power required + to run the metaverse. At its core, edge computing enables data to be captured, stored, and processed + locally across smart devices and local networks rather than in the cloud. 49 By obviating the need to + send data to the cloud to be processed, edge computing helps solve problems of limited bandwidth and + latency—critical for an immersive, high-fidelity experience. + +— 5G will play a defining role. 5G technology solves the need for faster networks with lower latency to + enable vastly more connected devices to process data, including VR headsets or AI-powered bots + that will open up experiences such as the sense of touch, and AR that lets visitors have in-depth + conversations with AI hosts. 50 The full rollout of 5G is regarded as critical to facilitating edge computing, + although there is already discussion about the potential of 6G to enable more sophisticated uses of the + metaverse. 51 + +— Devices merge the physical and virtual world. While AR/VR devices aren’t yet mainstream, + they’re maturing fast. Meta shipped 10 million Oculus Quest 2 headsets in 2021,52 and new devices + including gloves and bodysuits—some with haptic feedback—are gaining traction.53 With companies + including Meta, Microsoft, Qualcomm, and Sony leaning into the space, it is not unrealistic to expect a + breakthrough in terms of adoption in the near future, as well as additional device types. + +— Software development drives metaverse applications. Leading software companies are betting on + the opportunity to build the “application layer” on top of the infrastructure. For example, Microsoft is + currently building and improving upon a number of metaverse enterprise solutions across the Microsoft + cloud (such as Dynamics 365 Connected Spaces, Microsoft Mesh, and Azure Digital Twins).54 + +Increasing stakeholder readiness +While gaming is already mainstream (and providing the largest current online worlds in terms of players), +additional use cases are emerging rapidly—including new AR/VR-powered social-media experiences, +immersive retail, entertainment, sports, and education. “Gaming is already incredibly social and you +have continuous innovation of social features,” Activision Blizzard chief strategy officer Ken Wee told us. + + + +‘Gaming is already incredibly social and you have + continuous innovation of social features. But as you’re + trying to draw in people who don’t self-identify as + gamers, a more extensive set of social-engagement + mechanisms is going to be required to convince them + to spend more time in the metaverse.’ + –Ken Wee, chief strategy officer at Activision Blizzard + + + +Value creation in the metaverse: The real business of the virtual world 23 + “But as you’re trying to draw in people who don’t self-identify as gamers, a more extensive set of social- + engagement mechanisms is going to be required to convince them to spend more time in the metaverse.” + + Company activity + Brands are also experimenting: luxury-goods company Gucci has a presence across many platforms, 55 + Nike has Nikeland in Roblox, 56 and fast-food company Wendy’s has had an event in Fortnite and has + a presence on Horizon Worlds. 57 In addition, less-talked-about but sizable enterprise use cases also + continue to scale, including specific categories such as retail, healthcare, and manufacturing, and also + cross-sector examples such as learning and development, remote collaboration, conferences and events, + and customer support. + + Consumer uses + We only expect more examples as the metaverse matures. “Use cases beyond gaming are not just in the + future, they’re already emerging,” the founder and CEO of XR Safety Initiative Kavya Pearlman told us. + “According to the United Nations, 1.6 billion children moved to online learning with the pandemic, 58 so this + is an area ripe for disruption where many people are looking for alternatives. We’re also seeing a lot of + experimentation within the medical field, such as using HoloLens for assisted surgeries.” + + We envision the fully developed, long-term version of the metaverse to encompass most daily activities, + spanning five core categories: + + 1. Gaming has been driving the development of the metaverse. + + 2. Socializing extends existing consumer behavior through platforms such as Decentraland, The Sandbox, + and Second Life. + + 3. Fitness often marries gaming and connectivity through providers such as Peloton. + + 4. Commerce includes Sotheby’s proprietary marketplace for curated NFT art,59 virtual-only fashion + company Fabricant,60 as well as start-ups promoting an immersive retail experience, including Obsess61 + and AnamXR.62 A primary question is whether the metaverse can be a channel for selling real products at + scale, and emerging technology enabling thousands of people to simultaneously interact may help.63 + + 5. Remote learning remotely groups individuals in virtual classrooms. + + The metaverse also has the potential to impact sectors Ball describes as “categories that have long + avoided digital disruption.” “My hope is that the metaverse and VR and AR will finally start to show actual, + tangible, measurable productivity improvements in education and healthcare,” he said. + + + + + ‘Use cases beyond gaming are not just in the future, + they’re already emerging.’ + –Kavya Pearlman, founder and CEO of XR Safety Initiative + + +24 Value creation in the metaverse: The real business of the virtual world + Enterprise solutions +The metaverse will enable incremental improvements in the enterprise solutions we know today alongside +entirely new innovations. Notable categories include the following: + +— Enhanced remote collaboration: An incremental improvement will see a move from 2-D screens to an + immersive 3-D space as online meetings in the metaverse further enable remote work and potentially + diminish the need for co-locating.64 As we move toward this transition, we expect to see a continuation of + the pandemic-induced rethinking of how organizations are structured. + +— Reimagined learning and development: Simulations of real-life settings and situations will allow for + a far more captivating learning process, opening possibilities both in onboarding new colleagues and + developing current personnel, which is increasingly important for organizations competing for talent on + a global scale. + +— Digital twins: We are also seeing new innovations such as BMW’s effort to build a digital factory twin + on Nvidia Omniverse,65 which is expected to drive efficiency improvements across its supply chain. + By building virtual replicas of physical settings and objects that generate data in real-time, far richer + analyses can be generated than previously to enable improved decision making. + +Business agendas and larger tech investments will likely focus on those that move the productivity needle, +such as automation and process visualization. Today, 50 percent of our work activities can be improved +with these technologies, which include robotics, digital twins, and 3-D or 4-D printing. 66 + +Public-sector activity +There is also a rapid expansion of use cases in the public sector. For instance, Dubai’s Virtual Assets +Regulatory Authority earlier this year established Metaverse HQ on The Sandbox, 67 making it the first +regulator in the emerging digital space. The Dubai Metaverse Strategy estimates the metaverse will add +$4 billion to its economy and support 42,000 jobs by 2030. 68 + + + + +‘We believe that with the metaverse we can create + higher-quality government services. Current + government services are demand driven. However, + we believe that in the future we can provide services + in advance of demand—we can provide a new form + of government services and, in that sense, it will be + very helpful to citizens. We also believe this metaverse + platform will help citizens see Seoul city in a different + perspective.’ + –Jong-Soo Park, CIO of Seoul’s Smart City Police Bureau + + + +Value creation in the metaverse: The real business of the virtual world 25 + The first city government is also set to join the metaverse: leaders in South Korea’s capital, Seoul, + announced a five-year “Metaverse Seoul Basic Plan” that will begin by creating a virtual Seoul City Hall, + plaza, and civil-service center. The CIO of Seoul’s Smart City Policy Bureau, Jong-Soo Park, told us the + objective was to “provide civic freedom, participation, engagement, and communication.” + + “We believe that with the metaverse we can create higher-quality government services,” he said. “Current + government services are demand driven. However, we believe that in the future we can provide services in + advance of demand—we can provide a new form of government services and, in that sense, it will be very + helpful to citizens. We also believe this metaverse platform will help citizens see Seoul city in a different + perspective.” + + There are also emerging examples of using the metaverse to address social issues, such as the Whole + Earth Foundation’s Guardians of Metal and Concrete game, 69 which crowdsources data collection to + + + + +The metaverse and Web3 + +While the metaverse is opening new Since digital assets are a core component larger systems), we expect the Web3 +opportunities for creators to create and of the Web3 technology stack, access to metaverse to advance rapidly, through +users to engage and experience, the these is central to future metaverse design. steps including the following: +Web3-enabled metaverse advances these Creators can freely launch new digital +opportunities with a new paradigm. assets on any blockchain they desire and — creating solutions to enable the digital + distribute these assets via Web3-native identification of users crossing over +Web3 heralds a new decentralized marketplaces with dramatically lower fee from the physical to virtual worlds +ecosystem, in which users begin to own, models than their Web 2.0 equivalents. +monetize, and utilize their data for their own In addition, the advent of noncustodial — improving the user interface and user +benefit, and creators can monetize their wallets enables users to access their digital experience of the wallet experience, +content and talents in different ways. It’s possessions by connecting their wallet to such as replacing traditional keys and +enabled by three core technologies: each metaverse venue. Digital assets in addresses with more familiar naming + such wallets can include cryptocurrencies, conventions +— blockchain offering a universal, public, digital equities, stablecoins,76 and NFTs in + permanent, single source of truth the form of skins, tools, and even virtual — advancing the graphical user interface + real estate. Assets are typically issued on of metaverse venues, from current 2-D +— digital assets issued on a blockchain, the same blockchain as the metaverse renderings and controls that can be + representing value portability and venue (for example, Ethereum, Polygon), clunky, to a more immersive VR-like + permanence but cross-chain bridges are enabling experience + greater portability of digital assets +— smart contracts containing conditional between different metaverse venues. — expanding the utility of Web3 + programming code that create utility by metaverse venues to generate true + facilitating self-executing applications Finally, core services will need to evolve value, such as unique access to + alongside emerging technologies in resources and experiences +As a result, metaverse applications built order for the Web3 metaverse to fulfill +on Web3 benefit from more permanence, its potential. Since much is typically The extent of untapped opportunity and +functionality, and interoperability than based on open-source and composable accelerating pace of development make +more traditional Web 2.0 VR experiences. code (classes and functions that can be the Web3-enabled metaverse a subject + combined to become building blocks of senior executives need to keep an eye on. + + + + +26 Value creation in the metaverse: The real business of the virtual world + ‘It’s going to be important to create a truly creator- + focused economy in the open metaverse, where + creators can realize the value of their creations and + not just be at the mercy of a gatekeeper that takes all + the profit off the top because they are at the gate and + they can do it.’ + –Marc Petit, VP of Epic Games’ Unreal Engine Ecosystem + + + +capture infrastructure conditions in real time so repairs can be made.70 “I’m quite interested in the aspect +of blockchain as an incentive scheme,” Square Enix’s Yosuke Matsuda said, referring to the game. “It’s +trying to solve social issues with games using the incentive scheme of blockchain. This is opening up +whole new possibilities.” + +Demographic tailwinds +If gaming is the forerunner of who uses the metaverse, the trends are positive: gaming demographics +are widening across age and gender. As of 2020, 48 percent of all gamers in China71 and 41 percent of all +US video-game players identified as female.72 In addition, data from the United States show 79 percent +of video-game players in 2020 were over the age of 18 and 41 percent older than 35.73 In addition, Gen +Z consumers—the oldest of which are in their mid-20s—are increasingly an income-earning force to be +reckoned with and are more familiar with virtual worlds and lives. + +A global community of independent developers and creators +Developing immersive, engaging content is increasingly shifting toward individual content creators— +evident in the more than 50 percent increase in “influencer” marketing over the past five years across +platforms from China’s WeChat and Pinduoduo to YouTube and Instagram in the Western world. This +bodes well for growth of the metaverse, as a significant share of innovative, engaging experiences will +likely come from these creator-users. + +A thriving creator economy has emerged, powering user-generated content diversity across virtual +platforms. As demonstrated by the rise of social media and games based on user-generated content, we +are seeing increased demand for digital self-expression and co-creation of virtual environments. “Most +game companies like us have been focused on creating content, but the metaverse will expand the +possibility and ease of providing the space for players to contribute and create,” Yosuke Matsuda said. A +survey of US consumers shows about 70 percent of general consumers (Gen Z to Gen X) rate their digital +identity as “somewhat important” or “very important.”74 We expect the creator economy to see further +tailwinds as decentralized Web3 platforms emerge. + +“It’s going to be important to create a truly creator-focused economy in the open metaverse, where + creators can realize the value of their creations and not just be at the mercy of a gatekeeper that takes all + + + + + Value creation in the metaverse: The real business of the virtual world 27 + ‘It’s a virtual immersion into the next generation of + the internet. The metaverse will be iterative, not any + one size or shape. And the capabilities we have within + it will all be unlocked by both open standards and + the devices that we wear or that we use to interact in + these worlds.’ + –Brian Solis, global innovation evangelist at Salesforce + + + + + the profit off the top because they are at the gate and they can do it,” the vice president of Epic Games’ + Unreal Engine Ecosystem, Marc Petit, told us. “We have to create a new generation of platforms that + implement a better economy for creators. And that’s where, for me, things need to be fair, open, and + interoperable. The technicality of making fully simulated worlds move from one platform to another is + complex but give us a few years and we’ll figure it out.” + + + + Growing consumer openness to a new kind of internet + Consumers are increasingly expressing discontent with many aspects of the internet as it has evolved + today, from the proliferation of misinformation to data and privacy concerns, how social-media platforms + generate user dependence, and their effect on users’ mental health. In parallel, creators are increasingly + expressing discontent with the way in which content is monetized and proceeds distributed. Both trends + are contributing to the Web3 movement gaining momentum globally, with the result potentially a major + disruption in value pools—which is why investors are staking a position early (see sidebar “The metaverse + and Web3”). “Every brand is going to go in and negotiate with every aspiring metaverse operator […] and + negotiate terms that ensure they can have a direct customer relationship,” Epic Games CEO Tim Sweeney + told the Financial Times75 with regard to how the economics may change. “We know this because we + were talking to all these companies and they’re all very consistent and adamant about remaining first- + class citizens in the metaverse and not being intermediated by any company they partner with.” + + The metaverse sits at this inflection point in its evolution due to factors ranging from the size of the + opportunity to drivers of expected growth and the amount being invested. We believe the intense + interest of the past year ignited dramatic corporate experimentation which has laid a foundation for + the metaverse’s evolution and will likely maintain momentum for the foreseeable future. “It’s a virtual + immersion into the next generation of the internet,” Salesforce global innovation evangelist Brian Solis + told us. “The metaverse will be iterative, not any one size or shape. And the capabilities we have within + it will all be unlocked by both open standards and the devices that we wear or that we use to interact in + these worlds.” + + + + +28 Value creation in the metaverse: The real business of the virtual world + 3 Scanning the horizon: How + is consumer and business + behavior evolving? + We have eagerly adopted technology for decades, both personally and professionally. In the past two + years alone, many have rapidly and largely seamlessly adjusted to carrying out more daily activities + virtually both on the job (videoconferencing) and in private (socializing, dating), while the pandemic + also swiftly accelerated the adoption of e-commerce, and we relied more than ever on technology to + live our lives. Our research finds consumers and executives are excited about what is next, with many + already using and experimenting with the metaverse and eager to realize its potential. Yet even as many + companies and industries push the digital frontier, others remain hesitant. + + + + How consumers view the metaverse + Almost 60 percent of consumers we surveyed are excited about the transition of everyday activities + to the metaverse (Exhibit 5), with connectivity being the number one driver of excitement. What kind + of connectivity are we talking about? When we asked consumers what they hoped to be doing in the + metaverse within the next five years, for many the answer was socializing and communicating with family + and friends (see sidebar “Our research methodology”). + + + + + Value creation in the metaverse: The real business of the virtual world 29 + Exhibit 5 + + Approximately 60 percent of consumers + percent of consumersare + areexcited + excitedabout + aboutthe + thetransition + transitionofof + activities to + everyday activities to the + the metaverse. + metaverse. + + Preference for at least one activity in virtual + world compared to physical alternative,1 + % of respondents Drivers of excitement for consumers who + prefer virtual immersive virtual experience + over similar activities in the physical world,2 + % of respondents + + Connectivity with people 44 + + Prefer at least one Explore digital worlds 26 + activity virtually vs 59 + physically Meet and collaborate with + 10 + remote colleagues + + Purchase and trade NFTs 5 + + Purchase and monetize + 4 + real estate + Create games and other VR + 4 + experiences + + Prefer all Customize avatars 4 + activities physically 41 + Purchase real and + 2 + virtual products + Attend concerts, trade + 1 + shows, and learning events + + 1 + Q: When you participate in the metaverse, do you prefer that virtual experience over the same activities in the physical world? (n=2,939). + 2 + Only for respondents who preferred at least one activity in the immersive virtual world compared to physical alternative; Q: What gets you most excited about + participation in the metaverse? (n=1,210). + Source: Intelli Metaverse Consumer Survey in Europe, the Middle East, and Asia (EMEA) and Asia–Pacific (APAC) (April 2022) + + + + +Our research methodology + +Both quantitative and qualitative research and the Americas to get a C-level view of the metaverse space for deeper insight +informed this report. We surveyed more the potential growth of the metaverse, as into how leaders think about this topic, +than 3,000 consumers spanning Asia, well as actions organizations have put in both within their businesses and in their +Europe, and the United States to gain place or intend to in the years ahead. This respective industries. Most interviews were +insight from current users of the metaverse was conducted partly to address gaps we conducted in May 2022. For more details +about their motivations, what they are identified in a literature review of business on our research, see Appendix C. +doing, and what they expect to do. We also leaders’ perspective on the metaverse. +surveyed almost 450 senior executives Finally, we conducted thirteen interviews +across the Asia–Pacific and China, Europe, with senior executives and experts in + + + + +30 Value creation in the metaverse: The real business of the virtual world + Yet connectivity also encompassed a broad range of activities offering commercial growth opportunities, +such as entertainment (66 percent of consumers responded they were “excited” or “very excited” about +attending live events such as concerts and sports, as well as seeing movies and attending festivals and +museums), gaming (66 percent), and shopping (64 percent). + +Travel is another activity respondents were “excited” or “very excited” about (62 percent). The main +themes in metaverse-specific travel related to the possibility of going beyond the limits of the physical +world: time travel, fantastical places, exotic places that are difficult to access, and space travel. The +survey also identified strong demand for travel to hospitals and care homes, further underlining the desire +for connectivity. + +What consumers are doing already +Of the two-thirds of consumers who have experienced the metaverse, our survey found 80 percent +appreciate shared virtual experiences with friends and family, 63 percent prefer virtual work meetings, +and 59 percent enjoy virtual education sessions more than in-person ones.77 We also found 62 percent +of those using the metaverse had engaged with one or more branded virtual experiences, indicating the +opportunity for companies to pursue those efforts. + + + + +Exhibit 6 + +Consumers +Consumers areare looking + looking forward to shifting + forward to shifting aa range + range of + of their + their activities + activities to + to the + the +virtual world. +virtual world. + +Preference for at least one activity in +immersive world compared to physical +alternative,1 % of respondents Top 5 activities most preferred in an + immersive world compared to traditional + alternatives,2 % of respondents + + + Shopping: Purchasing + 79 + physical or virtual goods + Social: Attending virtual 78 + Prefer at least one + events/games + activity virtually vs 59 + physically Fitness: VR exercise 76 + + Dating: Going on a date 73 + + Education: Classes/ 72 + learning events + + + + + Prefer all + activities physically 41 + + + + +1 + Q: When you participate in the metaverse, do you prefer that virtual experience over the same activities in the physical world? (n = 2,939). +2 + Q: Only for respondents who preferred at least one activity in the immersive virtual world compared to physical alternative; Compared to traditional, + non-immersive digital events or activities, how much did you enjoy the following? (n = 1,210). + Source: Intelli Metaverse Consumer Survey in Europe, the Middle East, and Asia (EMEA) and Asia–Pacific (APAC); Intelli Metaverse Consumer Survey in + United States + + + + +Value creation in the metaverse: The real business of the virtual world 31 + In addition, the wide adoption of virtual tools has legitimized gaming and virtual socialization, with early + metaverse platforms such as Roblox, Minecraft, and Fortnite experiencing accelerated popularity. + The conventional core audience for gaming continues to solidify the central role of gaming in today’s + entertainment landscape: 81 percent of Gen Z have played video games in the past six months, averaging + 7.3 hours per week.78 + + “You’re at the point where everyone engages in digital experiences in some way, shape, or form,” Activision + Blizzard’s Wee said. “COVID-19 accelerated it, but I view it as a secular trend that’s only grown over the + years. You look at our King mobile-gaming business,79 the audience skews female and is far less likely + to self-identify as a video gamer in the traditional sense of the word.” That demographic expansion + is reflected in the top five activities respondents most prefer in an immersive world compared with + traditional alternatives (Exhibit 6). + + Omnichannel commerce is now second nature to most consumers, with payment credentials often + embedded in the devices and software they use. “Social commerce”—integrating commerce with social- + media entertainment—is already estimated to comprise almost 15 percent of total retail in China, and is + rapidly growing globally as well. For the three billion gamers in the world today, the virtual goods economy + is estimated to comprise nearly 75 percent of global gaming revenues. + + That’s one reason why we believe consumer spending on digital assets in the metaverse will only grow + (Exhibit 7). Another reason? Excitement about the metaverse increases with income: 53 percent of + those who identified as higher income were very excited compared with 32 percent of respondents with + medium incomes and 25 percent among lower income earners. + + + + Exhibit 7 + + About + About 79 + 79 percent + percentof + ofconsumers + consumersactive + activeon + onthe + themetaverse + metaversehave + havemade + madea a + purchase, + purchase, mainly + mainly to enhance + enhance their + their online experience. + + Purchases in the metaverse,1 % of respondents Top 3 reasons for purchases in + the metaverse,2 % of respondents + + In-game purchases 47 + Improve my in-game + 56 experience + Virtual cosmetic items 37 + + Real-world items3 33 + + NFT (nonfungible token) 20 Gain benefit in + 27 games + Virtual real estate 13 + + None of these 21 10 Acquire an asset + + 1 + Q: When you are participating in activities in the metaverse, have you purchased any of the following products/services in past 12 months? (n=2,093). + 2 + Q: What was the main reason for the purchase(s) you made? (n=1,543). + Source: Intelli Metaverse Consumer Survey in Europe, the Middle East, and Asia (EMEA) and Asia–Pacific (APAC);Remesh Next Gen Consumer – Metaverse + Survey in United States + + + + +32 Value creation in the metaverse: The real business of the virtual world + How executives view the metaverse +While the metaverse is still evolving, one thing seems clear: senior executives’ belief in its potential. +Our research found 95 percent of senior executives expect the metaverse to have a positive impact +on their industry within five to ten years, and 61 percent expect it to moderately change the way their +industry operates (just 7 percent expect no change). In addition, almost two-thirds (65 percent) of senior +executives expect metaverse technology to drive more than 5 percent of their organization’s total revenue +in five years, while 24 percent of executives expect it to drive more than 15 percent of revenue. + +While the degree of confidence varies by industry, the findings hint at the size and scale of the opportunity +the metaverse presents. Indeed, we found companies with more proactive metaverse adoption were +already reporting greater financial success—89 percent of early adopters reported positive operating +margins of more than 5 percent, while 21 percent of companies still contemplating whether to become +involved reported negative operating profit. And, not surprisingly, innovators were far more likely to +expect further improvements in operating profit margins in the next three years. + + + +Exhibit 8 + +Metaverse +Metaverseadopters + adoptersare + arelooking + lookingfor + foraavaried + variedset + setofofcapabilities, + capabilities,including + including +content creation, corporate strategy, and cybersecurity. +content creation, corporate strategy, and cybersecurity. + +Top corporate capabilities needed to deliver metaverse strategy,1 % of senior executives + + Top 5 Other + +Business (model) building 53 + +Product development/coding 42 + +Infrastructure/back-end engineering 38 + +Blockchain/commerce/payments 37 + +Product design 35 + +Legal, risk, and compliance 35 + +Cybersecurity 33 + +Analytics 32 + +Content creation 29 + +Marketing/go to market 29 + +Brand/corporate strategy 28 + +Process engineering 21 + +Graphic design (eg, 3-D art, games) 19 + +Process engineering 12 + +Project management 10 + +CRM/community management 10 + + +1 + Q: What are the top five capabilities that your company needs most in order to deliver your metaverse strategy? Top 5 capabilities across industries were + identified based on these most often mentioned within ‘top 5’ by executives (n = 448). + Source: McKinsey & Company Senior Executive Survey, April 2022 + + + + +Value creation in the metaverse: The real business of the virtual world 33 + Early adopters are also seeking different capabilities compared with their peers (Exhibit 8). Early + adopters are most interested in capabilities around building business models, infrastructure and back- + end engineering, blockchain and e-commerce payments, product design, and branding and corporate + strategy. Contemplators share building business models, infrastructure and back-end engineering, + and product design among their top five capability needs, but also require legal, risk, and compliance + expertise, as well as analytics. + + While we found metaverse adopters have to date most commonly implemented marketing campaigns or + initiatives, some 63 percent have undertaken learning and development for employees and 53 percent + have held virtual meetings. The least-used metaverse initiatives were recruiting or on-boarding new + employees (31 percent) and allowing customers to pay with cryptocurrencies (22 percent). Yet executives + are most bullish about cryptocurrencies as a metaverse technology (Exhibit 9). + + + + Exhibit 9 + + Looking ahead, executives + Looking ahead, executives consider + considercryptocurrency, + cryptocurrency, AI, and AR/VR + AI, and AR/VRthe + thetop + top + three metaverse technologies. + three metaverse technologies. + + Top 3 metaverse technologies, points-based ranking1 + + Top 3 Other + + + Cryptocurrency 411 + + + Artificial intelligence 399 + + + AR/VR (new interfaces) 361 + + Web3 298 + + Virtual worlds (spatial computing) 254 + + + Blockchain 232 + + Cloud 206 + + + Nonfungible tokens 188 + + Creator economy 149 + + Edgecomputing 100 + + + Interoperability 90 + + + 1 + Q: What do you consider the top three metaverse technologies for businesses in the future? (Rank top 3); Points ranking assigned with 3 points for every 1st + ranked technology, 2 points for 2nd, 1 point for 3rd (n = 448). + Source: McKinsey & Company Senior Executive Survey, April 2022 + + + + +34 Value creation in the metaverse: The real business of the virtual world + Exhibit 10 + +Executives +Executives highlight + highlight revenue + revenue uncertainty as aa key + uncertainty as key barrier and worry + barrier and worryless + lessabout +about the technology +the technology involved. + involved. + +Top 3 barriers to entry, % of senior executives1 + + + + + 31 29 10 + Uncertain return on investment No business model for the Lack of managerial capability to + metaverse technology2 embed metaverse technology + into our business + + +Bottom 3 barriers to entry, % of senior executives1 + + + + + 1 4 4 + Lack sufficient computing Lack access to external funding Cannot access or integrate + infrastructure or hardware for technology investments data across systems to use + the metaverse technology + +1 + Q: What are the top three barriers for your company when adopting metaverse technology? Top 3 barriers across industries were identified based answer most + often indicated as top 1 barrier (n=448). +2 + Defined as core profit-making plan, or the way monetary value will be delivered. + Source: : McKinsey & Company Senior Executive Survey, April 2022 + + + + +Senior executives with high confidence in the metaverse driving revenue impact are already building +capabilities within their organizations. Yet respondents also cited several barriers to entry to the +metaverse, despite expressing less concern about required technology (Exhibit 10). In addition, senior +executives raised several risks that need to be addressed if the metaverse is to be successfully adopted. +The top two were data privacy and cybersecurity (86 percent and 85 percent respectively), followed by +ethics and regulatory compliance (60 percent), technological limitations (53 percent), brand image (45 +percent), and payment safety (40 percent). + + + + +Value creation in the metaverse: The real business of the virtual world 35 + 4 Envisioning the potential: How + significant could the metaverse’s + impact be? + History has no shortage of revolutionary ideas that fail to materialize, or take much longer than expected. + For all of the developments in AI technology in the past two decades—and its seeming ubiquity today—it + took the better part of 80 years for AI to mature, having formally emerged as a concept during World War II. + + The metaverse will likely be different. While it is in its early stages and far from its potential end state, the + metaverse’s underlying technology already exists. Users are accustomed to what it currently provides— + and excited about what it could become. And, crucially, early metaverse adopters are organizing + themselves differently to move at speed as it evolves. + + + + A possible $5 trillion impact + A few years ago, investment in artificial intelligence was estimated at up to $10 billion. It is now $93 + billion. 80 We expect the economic value of the metaverse to rise exponentially, driven by several factors: + its appeal spans genders, geographies, and generations; consumers are ready to spend on digital assets + (and are doing so already); they are open to adopting new technologies; companies are investing heavily + + +36 Value creation in the metaverse: The real business of the virtual world + in the development of metaverse infrastructure; and brands experimenting in the metaverse are reporting +positive consumer feedback. This adds up to substantial potential economic value for the metaverse. +While estimates vary widely, we forecast it may generate up to $5 trillion by 2030 (Exhibit 11). + +Our estimate of the metaverse’s potential impact by 2030 is based on a bottom-up view of consumer and +enterprise use cases, derived from discussions with around 20 internal and external experts. The most +relevant metaverse use cases during the next decade were identified, with the overall enterprise IT share of +spending dedicated to these metaverse use cases estimated and pressure-tested with experts. In short, our +forecast is our best estimate given the very high levels of technical, regulatory, and societal uncertainty (for +a detailed explanation of the methodology behind our sizing forecast, please refer to the Appendix81). + + + +Potential sector implications +The metaverse is also emerging as the biggest new growth opportunity for several industries in the +coming decade, given the sheer breadth of potential applications and uses and the degree of investment +from large technology companies, venture capital, and corporations and brands. Industries are already +implementing metaverse initiatives, although most efforts to date have been centered around marketing; + + + + +Exhibit 11 + +By +By 2030 + 2030the + themetaverse + metaversecould generate + could $4 trillion + generate to $5 + $4 trillion to trillion across + $5 trillion across con- +consumer and enterprise use cases. +sumer and enterprise use cases. +Metaverse impact potential by 2030, $ trillion + Relative 2030 use case potential + Low Med High + + Consumer use cases + 4–5 Virtual assets Education + Gaming Health and fitness + VR/AR hardware Ads + E-commerce Digital media + Live entertainment + + + Enterprise use cases + + Banking Local government + Construction Telecommunications + Discrete manufacturing Transportation + Education Utilities + Central government Wholesale + Healthcare provider Media + 0.2 0.3 Resource industries Consumer services + Professional services Process manufacturing + Retail Insurance + 2022 2030 Investment + + +Source: McKinsey analysis; For a detailed explanation of the methodology behind our sizing forecast, please refer to Appendix B + + + + +Value creation in the metaverse: The real business of the virtual world 37 + learning and development for employees; virtual meetings, events, or conferences; and product design or + digital twinning (Exhibit 12). + + There is no shortage of examples of how companies are experimenting in the metaverse (see sidebar + “Leading metaverse use cases”). In the following pages, we examine how five industries are already using + the metaverse: apparel, fashion, and luxury; consumer packaged goods; financial services; retail; and + telecommunications, media, and technology. We then explore broader societal implications and the + metaverse’s potential longer-term impact, both positive and negative. These industries are among those + most likely to harness the metaverse for both consumer and business uses, where we believe it can + generate impact across the value chain. + + The opportunity to do this is captured in Exhibit 13, which examines four types of use cases: + + — Net-new business models and revenue sources that project a company’s penetration further into + markets. An example would be retailers using the metaverse to drive the sale of physical products. + + — Operations that produce higher productivity and collaboration, and lower costs. In the technology sector, + for instance, that may be an efficient digital network of data centers in multiple locations at the same + time. + + + + + Exhibit 12 + + Initiative preferences vary by industry; meetings and events are of + Initiative preferences + particular vary by industry; + interest to healthcare, meetings + and travel, and events + transport, are of particular + and logistics. + interest to healthcare, and travel, transport, and logistics. + + Metaverse initiatives implemented to date, by industry,1 % of senior executives in each industry + + Adoption level + + High (>70%) Medium (40–70%) Low (<40%) + + + Learning Product Recruiting Customers + Marketing and devel- Meetings design or or onboard- can pay + campaign or opment for in the Events or digital ing new with crypto + Industry initiatives employees metaverse conferences twinning employees currency + + Technology 68 64 54 64 54 39 23 + + Media and telecommunications 82 36 36 43 54 18 25 + + Advanced industries 64 55 36 64 64 36 9 + + Financial sector and insurance 67 63 56 49 56 25 31 + + Consumer, AF&L, and retail 95 56 59 41 50 41 14 + + Energy and materials 54 85 69 46 69 31 8 + + Healthcare and public sector 10 59 79 72 59 38 34 + + Tourism, transport, and logistics 56 78 56 78 56 44 22 + + Total sample 67 63 53 52 52 31 22 + + + + 1 + Q: What metaverse features or capabilities have you implemented in your company to date? (n = 258). + Source: McKinsey & Company Senior Executive Survey, April 2022 + + + + +38 Value creation in the metaverse: The real business of the virtual world + Example use cases + +Companies spanning industries are — Brand loyalty: Adidas’ Bored Ape — Digital twins: BMW is experimenting +experimenting in the metaverse for Yacht Club NFT release provided with creating digital twins of entire +everything from marketing to education access to physical streetwear factories, and designing products using +and commerce. Here are some leading drops, driving loyalty and creating a Nvidia’s Omniverse technology.89 +examples: community around its virtual goods.85 + — Public services: Seoul’s plan is +— Product marketing: Coca-Cola — Customer service: Helpshift is rolling to become the first city to host a + launched digital assets to support out solutions for customer-support metaverse platform for public services + several marketing campaigns, such tools in the metaverse, including user by 2023.90 + as auctioning NFT collectibles for feedback, virtual identity verification, + International Friendship Day.82 and VR support.86 — Virtual tourism: Ariva Digital’s + Wonderland platform is working to +— Customer engagement: Gucci — Education: The University of California allow users to travel to imagined or + launched its Gucci Garden on Roblox, at San Diego’s Rady School of recreated destinations.91 + a set of brand-themed rooms that Management uses a virtual campus for + aligned with the launch of a similar real-time lectures, breakout spaces, + physical space.83 and outdoor areas.87 + +— Next-generation commerce: — Recruiting: The Havas Group + AnamXR uses game-engine launched a village within The Sandbox + technology to create cloud-based, that hosts recruitment services for + virtual e-commerce platforms for 3-D improved candidate and onboarding + immersive shopping experiences.84 experiences.88 + + + + + — Activities where companies promote themselves further with more engaging branding, marketing, and + user-experience activities. For example, financial institutions created branches in the metaverse, offering + immersive brand engagement. + + — New products and services that provide seamless discovery, purchase, and post-purchase journeys. + For manufacturers, that could mean fully personalized products given an XR layer, such as vehicles and + devices. + + Of all the potential drivers of the economic impact of the metaverse, e-commerce is the largest. We + estimate it may have a market impact of $2 trillion to $2.6 trillion by 2030 depending on whether a base + or upside case for the metaverse’s development is realized, a contribution which dwarfs sectors such as + academic virtual learning (an estimated $180 billion to $270 billion impact by 2030), advertising (a $144 + billion to $206 billion impact), and gaming (a $108 billion to $125 billion impact). As you can see in Exhibit + 13 and the industry examples in the following pages, realizing the potential for the metaverse to engage + consumers and open new sales opportunities is critical to its overall development. + + + + + Value creation in the metaverse: The real business of the virtual world 39 + Exhibit 13 + + The metaverse cancreate + metaverse can createimpact + impactacross + acrossthe + thevalue + valuechain + chainfor + forsectors. + sectors. + + Project Produce Promote Provide + Example use Innovating net-new Operations with Engaging New products and + cases business models higher productivity branding, services with + and revenue and collaboration, marketing, and seamless discovery, + sources and lower costs user experiences purchase, and + post-purchase + journey + + Apparel, Monetize on existing + Digital fashion & Almost no Immersive brand Branded virtual + luxury goods intellectual property production costs orengagement and assets development + fashion, + into new, immersive supply chain issuescampaigns with high profit + and luxury Immersive brand offerings (eg virtual for virtual assets supported by margin + engagement assets or experiences within + Collaborative, Consumer products + experiences) XR-enabled product virtual worlds (eg from static/offline to + design and virtual events to virtual/digital + development connect with the + Next-level product + community) + personalization + + + + Financial New metaverse Trusted digital Further digitized Contextual financial Revolutionized + products and services including payments and services, eg, for customer service + services + services (eg DeFi) payments, digital services consumer lending reducing employee + IDs, and signatures infrastructure or insurance cost and improving + Immersive brand customer experience + Lombard lending Decentralized Next-level digital + engagement (with virtual tools) + with digital collateral, financial (DeFi) customer + NFT financing, and structures driving acquisition Fully personalized + other innovations efficiency Immersive, financial offer + metaverse-enabled enabled by + brand engagement metaverse data + + + Healthcare Metaverse- Significant shift of XR-enabled R&D Fully immersive Metaverse-data + enabled revenue streams to Optimized hospital remote driven, fully + telemedicine the next generation operations, now telemedicine e- personalized health + telemedicine faster, safer, and healthcare services consultations, with + Collaborative without physical access to real-time + more accurate + R&D distance barriers data + Remote diagnostics + and procedures Metaverse-enabled + robots treating + patients solving for + employee shortages + + Manufacturing XR-enabled Offering XR-enabled Software, robotics, Full client/user New manufacturing + factory floor manufacturing platforms and apps visibility into supply services leveraging + solutions - next level to run and manage chain process interconnected + Collaborative industrialization for IoT manufacturing robotics, IoT and + R&D Project real-time + customers (eg, robot managed monitoring, tech via digital twins + Product w/ digital twin) collecting in the metaverse + personalization XR-enabled information and Fully personalized + revenues simulation for tracking data in MV products given XR + manufacturing and that can later be layer – eg vehicles + assembly, details up analyzed and devices + to “screw-level” + XR-enabled, + collaborative R&D + with increased safety + through remote work + + Retail XR1-enabled New revenue from Reduced need for Enhanced in-store Direct-to-consumer + retail of branded virtual physical stores and experience with shopping services + asset sales in the associated costs - tailored regardless of + Metaverse-to- metaverse as an driven by surroundings, eg physical distance + offline intermediary virtual-world only ski shop on the + conversion + Using metaverse to stores on metaverse slopes; XR-enabled + drive physical platforms and try-on + product sales XR-store Customization of +40 Value creation in the metaverse: The real business of the virtual world + enhancements in-store experience + solutions - next level to run and manage chain process interconnected + Collaborative industrialization for IoT manufacturing robotics, IoT and + R&D Project real-time + customers (eg, robot managed monitoring, tech via digital twins + Product w/ digital twin) collecting in the metaverse + personalization XR-enabled information and Fully personalized + revenues simulation for tracking data in MV products given XR + manufacturing and that can later be layer – eg vehicles + assembly, details up analyzed and devices + to “screw-level” +Exhibit 13 (continued) + XR-enabled, +The metaverse can create impact across the value chain for sectors. + collaborative R&D + with increased safety + through remote work + + Retail XR1-enabled New revenue from Reduced need for Enhanced in-store Direct-to-consumer + retail of branded virtual physical stores and experience with shopping services + asset sales in the associated costs - tailored regardless of + Metaverse-to- metaverse as an driven by surroundings, eg physical distance + offline intermediary virtual-world only ski shop on the + conversion stores on metaverse slopes; XR-enabled + Using metaverse to + drive physical platforms and try-on + product sales XR-store Customization of + enhancements in-store experience + + Immersive New net revenue Efficient digital Immersive content New, immersive + Technology + digital media through share of network of data delivery media/content + and experiences virtual asset sales centers at multiple experiences within offering + (eg commission locations at the the virtual space, Devices enabling + Hardware and basis) same time leveraging the next-level immersive + interfaces metaverse for the + New ad-based experience + revenue streams next level of digital regardless of + media engagement platform of + Profit from + metaverse tech technology (not only + stack and content VR headsets) + provision Metaverse- + tailored software and + tech stack + +1 + 1XR: Extended reality - Virtual Reality (VR) and Augmented Reality (AR). + Source: Expert interviews, McKinsey analysis + + + + + Apparel, fashion, and luxury + Shoppers already spend much of their day using digital screens and intend to spend the majority of their + daytime in the metaverse within the next five years.92 Is this where they will look to buy and wear fashion? + + The signs are promising. Decentraland’s Metaverse Fashion Week in March received far more industry + attention than any digital fashion event before it, attracting a wide variety of brands and creatives + including Dolce & Gabbana, Estée Lauder, and Etro, although some notable players in the metaverse such + as Gucci and Ralph Lauren did not participate. The experience was blockchain-based, created on “land” + and sold as NFTs, with digital fashion bought and worn as NFTs.93 + + It also underscored the extent to which the sector has evolved. In 2000, some believed e-commerce + could never be a luxury experience, yet today there is a deeper understanding that digital can lead to + enhanced client experiences. If luxury is about being part of a community, the metaverse has the potential + to enhance that. “There is probably an underestimation of the value being attached to individuals who + want to express themselves in a virtual world with a virtual product, [through] a virtual persona,” Gucci’s + executive vice president and chief marketing officer Robert Triefus said in our recent State of Fashion + 2022 report. “The idea that everything has to be physical is very quickly being disproven.”94 + + Because of the fashion industry’s ability to be both virtual and physical, we believe it will be at the + forefront of the metaverse shift. Many brands are already embracing the opportunity to launch virtual + clothing to tap into their consumers’ increasing appetite for creating digital identities. Consumers see + the unique value of fashion within these digital worlds, where creativity, status, exclusivity, and—most + + + + + Value creation in the metaverse: The real business of the virtual world 41 + importantly—self-expression play essential roles for all users. In fact, around 70 percent of US consumers + already say their digital identity is as important as their real-life identity,95 which is why fashion is the one + of the industries perhaps most uniquely positioned to shape the metaverse. It makes business sense too: + the gaming skins market reached about $40 billion in 2020,96 and platform reinventions could make the + metaverse the biggest growth opportunity for fashion since e-commerce. + + “Consumer behavior has largely shifted toward adopting digital personas, yet many brands have yet to + provide a solution,” AnamXR cofounder and CEO Irene-Marie Seelig told us. “This opens up a whole new + revenue model for brands who can supply digital assets like clothing, for example.” + + How companies currently use the metaverse + The fashion industry’s early experiments with virtual worlds have largely been via launches of virtual clothing + (in games such as Roblox, for instance, it’s normal for players to update their avatars daily). Several apparel + companies have flexed their creative muscle: for example, Balenciaga dropped a line of virtual gear and + apparel in Fortnite together with a physical collection, resulting in a more than 40 percent increase in + searches for its brand two days after launch.97 And fellow luxury-goods retailer Gucci sold a virtual version + of its Dionysus bag for the equivalent of $6 on Roblox, which later led to bids of more than $4,000 per bag + when resold on the second-hand market, which is higher than the price of the physical bag.98 + + Much of the frenzy about fashion metaverse launches has centered around NFTs—for instance, Adidas’ + NFT collaboration with Bored Ape Yacht Club resulted in sales of more than $100 million.99 We believe + the longer-term opportunity for fashion brands is engaging consumers with NFTs for more pragmatic + purposes, such as loyalty tokens or digital twins. NFTs from Gucci, Adidas, and The Hundreds, among + others, trigger loyalty benefits like early access to new NFT drops and physical products, essentially + serving as a membership program. NFT digital twins can host information about a physical or digital + product’s history, authenticity, and ownership—especially beneficial to luxury retailers battling + counterfeiting. + + + + + ‘Consumer behavior has largely shifted toward + adopting digital personas, yet many brands have + yet to provide a solution. This opens up a whole new + revenue model for brands who can supply digital + assets like clothing, for example.’ + + –Irene-Marie Seelig, cofounder and CEO of AnamXR + + + + +42 Value creation in the metaverse: The real business of the virtual world + Embracing the virtual world +Virtual experiences in various formats have also been popular. For example, Gucci launched the Gucci +Garden—a two-week art installation on Roblox that attracted 20 million visitors.100 Louboutin partnered +with the Korean gaming app Zepeto to launch a virtual “Loubi World,” where VIPs and press were able to +see its spring-summer 2021 collection while discovering Paris landmarks—and interact with a digital twin of +Christian Louboutin.101 Marni’s Wear We Are metaverse experience, powered by AnamXR, was an immersive +digital journey with interacting 3-D scanned models from Marni’s spring-summer 2022 fashion show.102 + +“For luxury brands, the metaverse provides a gateway to offer unique experiences for holders,” AnamXR’s + Irene-Marie Seelig said. “We are transforming our luxury metaverse platform to be a more evergreen, + always available experience for brands that are starting to venture beyond one-off campaigns, and we + have recently also introduced ‘token-gating’ for brands seeking to extend the sense of exclusivity to the + metaverse.” + +Gamified experiences have also proven a powerful channel. Vans’ “Vans World” on Roblox—where users +can skateboard and dress their avatars in Vans Apparel—tallied around 60 million visitors in the year since +it was launched in April 2021.103 Similarly, Nike launched NIKELAND on Roblox, attracting more than ten +million visitors from December 2021 through April 2022.104 Some companies have even developed video +games outside existing virtual worlds, such as Louis Vuitton releasing a game last year where players +could acquire NFT art while experiencing the life journey of the brand’s founder.105 + +What could come next +The creation of their own platforms and virtual worlds—which risks further fragmentation and issues with +interoperability—could be the next step for fashion and luxury brands in the metaverse. So far, companies +have been treading lightly, choosing less resource-intensive ways to enter the space. One exception is +virtual-only incumbents such as Fabricant, which has already partnered with various apparel companies +including Adidas, Under Armour, and Tommy Hilfiger.106 DressX, another virtual fashion start-up, features +more than 100 designers and 1,000 created items, and has partnered with well-known fashion brands +including H&M.107 + +As mentioned, luxury brands are developing immersive virtual spaces—as Australian designer Daniel +Avakian has. Customers can visit no matter where they are and have a boutique experience in a virtual +representation of his New York store, while staff can also work across both metaverse and physical +locations—when one is quiet, they can tend to the other.108 It is an early example of the kind of new +experience that can be developed. + +There are significant challenges, however. While pioneers have shown the metaverse provides +opportunities that echo or even improve those in the real world, their potential remains unclear—and most +companies are proceeding carefully. There is also concern about brand dilution, especially within luxury, +as companies contemplate association with digital items and how that may derail their image from core, +luxury brand positions. An additional consideration is the maturity of AR/VR technology, in which glitchy +applications can undermine the user experience of luxury goods, presenting an image and consumer +engagement threat. Brands should consider what is necessary to strike the right balance between testing +and learning, and ensure they are rigorous in thinking through potential outcomes of actions taken in this +new, exciting, and seemingly limitless space. + +There is also the issue of what a metaverse venture means organizationally. Generating sustainable +revenue from virtual worlds will require entirely new capabilities and an almost diametrical talent +shift in the creative design process as well as digital execution. Brands may need to review existing + + + + + Value creation in the metaverse: The real business of the virtual world 43 + organizational structures and skills, update their recruiting strategies, likely establish innovative + partnerships with metaverse platforms, and acquire start-ups in the space. + + Yet the level of connectivity in the metaverse for certain users already shows how the virtual world could + have a significant influence on consumer habits and trends in the physical world, not to mention how this + may inform which physical designs are ultimately produced and sold.109 + + + + Consumer packaged goods + Consumer packaged goods (CPG) companies may face challenges in the metaverse as their products + are traditionally connected with practicality and usability in the physical world. In virtual spaces, day-to- + day consumer activities such as eating, drinking, or cleaning will be replaced by immersive experiences. + Yet consumers seem excited to see CPG brands entering virtual worlds, which indicates there’s an + opportunity for companies to actively shape their destinies. + + How companies currently use the metaverse + Metaverse offerings may present high-margin revenue streams for CPG companies, which typically operate + under significant margin pressure. While it would likely remain far smaller than core revenue streams and + be more focused on marketing and consumer engagement in the near-term, we see opportunities for CPG + brands across two of the metaverse’s layers: content and experiences, and platforms. + + Digital assets and virtual experiences have so far been the most popular play. For example, Hasbro’s + popular toymaker Nerf launched Nerf Hub in Roblox, selling virtual in-game items,110 and Coca-Cola + launched a digital jacket to be worn in the 3-D virtual world Decentraland.111 Companies have also + launched NFTs, using them as an innovative way to foster customer loyalty by extending unique privileges + to NFT holders. + + With regard to virtual experiences, CPG brands are increasingly active. For example, P&G Beauty entered + the metaverse with a virtual storytelling world called BeautySphere112 and, in February this year, L’Oréal + filed 17 patents related to NFTs and the metaverse—a testament to its ambitions. More CPG brands are + likely to follow if consumers shift more experiences to the metaverse, especially considering companies’ + known engagement with events and sport sponsorships. As virtual worlds evolve and customer attention + increases, parts of capital devoted to sponsorships are likely to flow into virtual worlds, fueling virtual + experiences. + + What could come next + Just as Web 2.0 and social media were successors to offline marketing, these early virtual initiatives are + to some extent simply a new generation of promotional tools. CPG brands should consider how they can + use their brand power to venture into new business-building opportunities in the metaverse. And it will be + especially important if, as many believe, the digital world becomes even more dominant in our lives. + + It is not necessarily simple. As it has been noted, the metaverse vision is especially challenging for CPG + brands whose business models are deeply rooted in physical consumption. So far, they are exploring + digital assets and virtual experiences as promotional vehicles. There may come a point where they either + continue to focus on branding and promotion that drives metaverse-to-offline conversion, or explore the + opportunity to build virtual offerings creating long-term value independent of physical products. + + In the short term, it seems likely big-name brands will enter the metaverse first to secure their position, + with others following as the commercial use case is proved over time. In deciding when to enter, CPG + companies should carefully weigh potential first-mover advantages (including short-term promotion and + + + +44 Value creation in the metaverse: The real business of the virtual world + learning early lessons) against the inherent uncertainty this new opportunity entails. And in deciding how +to enter, CPG leaders should consider the organizational capabilities required to make their metaverse +plans a reality, especially if these extend to undertakings such as developing experiences, games, or +worlds. The preferred strategy may be to collaborate with established tech providers, as LEGO did with +Epic Games to shape a metaverse space for young players.113 + +One big question surrounds the resources CPG companies should direct to the metaverse. Many hold +immense advertising budgets: P&G’s global marketing spending was around $8 billion in 2021, for +example, while Unilever spent about $7 billion.114 Leaders will need to balance maximizing additional +customer engagement from the metaverse while maintaining a healthy ROI, especially when deciding +whether to explore high-investment, less proven options such developing their own gamified experiences +or virtual worlds. + +For brands and retailers in the medium to longer term, the metaverse will be about adding a new sales +channel to the omnichannel mix. This is also critical to unlocking the metaverse’s ultimate potential. It will +succeed in the consumer sector if it further blurs the line between the concepts of “online” and “offline” to +create a unified experience. And it may not only create rich, intense, and seamless customer experiences +that can span the physical and digital worlds, but also collect valuable new data points for understanding +customers in a cookie-less world. + + + +Financial services +The metaverse brings together online social networks, gaming, cryptocurrencies, and increasingly diverse +digital assets to enable novel services and experiences. Financial services companies have joined peers +across industries in exploring the potential opportunity in the metaverse, though few are yet attempting +this at scale. The likely future extent of the impact of the metaverse on the sector depends on the +evolution of the underlying technology (especially utilizing Web3) and on the degree to which platforms +are adopted as part of our daily interactions. + +How companies currently use the metaverse +There is already a clear distinction between how financial institutions have been engaging with the more +traditional Web 2.0 metaverse and experimentation in Web3-enabled metaverse venues. In the context of +Web 2.0, we see financial services companies utilizing the technology for employee training (for example, +Bank of America VR training115); creating virtual “financial towns,” telecommuting centers, and interaction +spaces (such as South Korea’s KB Kookmin Bank 116); and offering virtual investment advisory services (for +instance, NH Investment & Securities117 ). While these applications are quite mature, their impact on the +fundamental business model in financial services has been only modest. + +In the Web3-enabled metaverse, we are starting to see more creative models of engagement. For +example, HSBC has purchased virtual land in The Sandbox dedicated to engaging with e-sports +enthusiasts.118 As London-based fintech Sokin is building infrastructure for processing metaverse +payments, transactions, and investments,119 neobank Zelf is launching embedded banking for metaverse +gamers via its MetaPass in Discord.120 Several companies including North American technology company +TerraZero are providing back-end support for virtual real estate financing in the metaverse.121 + +There is no shortage of financial services companies exploring the utility of the latest evolution of the +metaverse. As its function transitions from primarily consumer entertainment to more commercial +applications—and from niche social interactions to become a social network—the opportunities for the +sector will only expand, including the following examples: + + + + +Value creation in the metaverse: The real business of the virtual world 45 + — Marketing: Institutions may create digital branches in the metaverse to build their brand and credibility + with users, demonstrate their ability to innovate, and even offer client interactions in a hybrid way with + more traditional digital or even physical channels. + + — Infrastructure: Financial institutions, especially more traditional ones, are uniquely positioned to + bridge the trust gap that has traditionally held back wider adoption of services such as digital IDs, digital + payments, or custody for NFTs, cryptocurrencies, or other digital assets. + + — Emerging products and services: As cyber insurance for companies and similar services become + more commonplace, insurers and cybersecurity companies are well positioned to capture parts of this + emerging value pool, maybe even in novel collaboration and models. + + What could come next + As the metaverse potentially captures a larger share of day-to-day human interactions, digital versions of + more sophisticated banking services could emerge to serve these users. Examples could include: + + — embedded bank-like services for wallet owners in native metaverse venues, such as multicurrency cash + management + + — back-end servicing for financial services, like virtual real-estate mortgage origination and warehousing + + — funds and investing services for metaverse projects, such as metaverse-specific investment funds + + — customer engagement enhancements, like gamified credit education and unique loyalty experiences + + — financialization of everything, as more digital assets get created with utility in a metaverse context, such + as being employed as collateral for loans + + Growth in these use cases will depend on the extent to which the metaverse is adopted. And the value + and convenience of financial services in the metaverse must exceed the current utility of online or bricks- + and-mortar servicing. If engagement in the metaverse gains momentum, more and more financial service + companies will need to decide between investing and entering at scale, establishing a minimal position, + or doing nothing for now. It’s a decision that depends on four factors: the willingness to bet on the future + value of the metaverse; the talent, capacity, and capability to develop a relevant position; the scale of + potential metaverse customers and relevance for the existing and future customer base; and the extent to + which the metaverse vision fits with the strategy and culture of a company and its employees. + + Not entering the metaverse is also a strategic choice. But while widespread metaverse adoption and + the development of significant revenue pools in financial services may take time, many companies may + decide an early investment is an appealing strategic hedge, especially with the increasing integration with + digitally native assets. + + + + Retail + Traditional retailers have in recent decades felt the squeeze of technological change, especially in the + past two years as physical retail has been forced to evolve into an omnichannel environment. Strong + competitive advantage is likely to now flow to retailers who understand how to use the metaverse to + enhance their stores and engage customers, build experiences, and foster their brand community. That + may require shopping concepts very different to those used traditionally, especially those used in bricks- + and-mortar stores. + + + +46 Value creation in the metaverse: The real business of the virtual world + How companies currently use the metaverse +The idea of virtual and digitally enhanced retail is not new. With experiments such as Farfetch’s Store of +the Future in 2017,122 among many others, the concept of merging the worlds of physical and digital for +stores is established. After all, 25 percent of consumers have shopped in a virtual store today—and about +70 percent of them made a purchase.123 Now the emergence of the metaverse has made the opportunity +clearer than ever. + +A range of metaverse-powered approaches and applications can be deployed in-store. Brands can +leverage VR/AR to offer a new level of experience: 3-D, navigable, and branded spaces allowing +customers to experience and buy virtual or physical goods, while also leveraging the technology to enable +customers to try out products not available in store. There is also another advantage: in addition to more +sales, there may also be fewer returns as consumers have a clearer sense of products being purchased. +Appliance company Dyson, for example, launched a digital store accessible through a VR headset, +allowing customers to “walk” through and test its products virtually.124 Meanwhile, multiple US furniture +retailers such as Crate & Barrel, Walmart, West Elm, and Wayfair have partnered with Pinterest to use AR +to enable consumers to see how furniture will look in their living rooms. + +The development of online, virtual worlds also allows retailers to expand their footprint. Instead of having +stores in every city, a brand can build one in the metaverse for customers globally. Some are already +exploring this path. Samsung launched a virtual store in Decentraland at the beginning of this year, +modeled on its physical Samsung 837 store in New York City, enabling customers to complete different +quests to earn NFT badges.125 Retailers including Ralph Lauren, Urban Outfitters, and Walmart have filed +trademarks related to opening virtual world stores,126 while a parcel of land within Decentraland was sold +for almost $1 million for the establishment of an online shopping mall.127 + +Finally, like apparel, fashion, and luxury-goods companies, retailers can use the metaverse for advertising, +brand activation, and recruiting purposes. For example, Chipotle established a virtual restaurant in Roblox +for a Halloween campaign, giving a voucher for a real-life burrito to any visitor wearing a costume. And +Carrefour even launched a metaverse-based recruitment effort as it pursues its goal of hiring 3,000 data +experts by 2026 to drive its digital transformation.128 + +What could come next +The metaverse presents an opportunity for retailers to reimagine and personalize the store environment +for individuals and groups of customers. For example, using VR technology, customers at a sporting- +goods retailer could shop in settings matching the specific sport they are buying equipment for, such +as shopping for ski equipment in a virtual version of the Alps and even trying skis in virtual reality.129 +Metaverse malls are also being created, featuring storefronts where users can interact through their +avatars. Boson Protocol, for example, has a mall in Decentraland allowing users to explore digital items +and buy an NFT voucher that can be redeemed for the item in the real world.130 + +The success of the metaverse in retail depends on the creation of a virtual world in which to engage, such +as stores and shopping malls. Consumers increasingly see their digital shopping experience becoming +a rich ecosystem across multiple online channels, and the metaverse may be a natural expansion of that. +The key is not just bridging the gap between the physical and digital, but creating a consistent customer +experience. Already, we see research showing that such multichannel formats and marketplaces will +drive the vast majority of sales growth in Europe and the United States during the next five years.131 In this +context, personalized promotions and privileges may be powerful marketing strategies for retailers in the +metaverse, with the potential for deeper relationships with customers. + + + + +Value creation in the metaverse: The real business of the virtual world 47 + Despite the substantial promise of the metaverse, the emergence of a new channel means retail + executives also have significant challenges and questions they will have to tackle. They will need to + consider how the metaverse could impact physical stores, for example, by further shifting consumers’ + preferred shopping channels. Retailers will need to seek the right balance between their existing physical + retail network and virtual-world offerings, aiming to develop a seamless connection between the two to + drive real-world sales. For example, Forever 21 recently opened a store on Roblox and capitalized on a + popular trend among metaverse users: the idea of “twinning” with your avatar, buying the same clothes + and accessories for your real-world self. The result? A best-selling virtual-only item on Roblox, a black + beanie hat, made its way to the company’s physical stores.132 + + Yet retailers need to carefully monitor how the metaverse develops. While its promise is incredibly + exciting, reality currently trails imagination. Retailers could bet on realizable use cases and customer- + friendly experiences, while continuing to scale their investment in in-store technology. Finally, while the + metaverse can be a boon to retailers, they need to ensure the maturity of the technology does not pose + risks to their brand. Already, pioneers experimenting with virtual stores have encountered technical + difficulties: for example, many customers were unable to access a high-tech company’s virtual store + during a launch event. + + + + Technology + The metaverse presents a massive opportunity for technology companies, both existing and yet to + be born. The metaverse technology stack consists of four core components made up of ten layers (as + described in Exhibit 1 on page 16), and reaching its full potential will require a broad range of technology + innovations. There are three areas in particular that are emerging as control points likely to capture the + lion’s share of value created: + + — Infrastructure: Metaverse environments need to deliver real-time 3-D experiences at scale to millions + (or even billions) of individuals. Latency is generally seen as the hard problem in delivering these + immersive and interactive experiences. Additionally, these experiences will require computational + efficiency to improve by two to three orders of magnitude, along with innovation across devices, edge + computing, and cloud capabilities. + + — Developer tools and platforms: Building 3-D experiences requires a very different set of developer + tools and platforms than the current developer stack on web and mobile. This ranges from design tools + (such as 3-D modeling, animation, and audio) to core engines and rendering to back-end services (for + example, LiveOps, multiplayer services). AI will also play a critical role in the metaverse, from tracking and + predicting motion to real-time rendering of worlds, content creation, and optimizing operations. + + — Virtual worlds and content: Today, there are more than 100 virtual worlds, most of which are focused on + gaming or social experiences and with wide variation in graphics fidelity, immersivity, and centralization. + While a few major platforms will emerge, we expect continued fragmentation, with higher levels of + interoperability. We also expect platforms attracting creators and optimizing creator economics will have + a significant competitive advantage. On the content side, there will be at least three archetypes that will + populate the metaverse: first-party content, developer content, and user-generated or creator content. + Brands are also likely to become creators and participate in the metaverse in a very different way from + traditional advertising models. + + + + +48 Value creation in the metaverse: The real business of the virtual world + ‘We don’t want to escape reality but rather embrace + and augment it with virtual content and experiences + that can make things more fulfilling and make us feel + more connected to our loved ones, more productive at + work, and happier people.’ + + –Cathy Hackl, chief metaverse officer and cofounder of Journey + + +Four technology enablers +Four key technology enablers will also be required for the metaverse to reach its full potential. The first +is devices across AR/VR, sensors, haptics, and peripherals. Devices are critical to driving adoption of +the metaverse and we are already seeing an accelerating pace of innovation. There are around ten major +AR/VR devices in the market today—ranging in price from about $300 to $3000—and up to ten more +major device launches are expected in the next year or two. Yet significantly more progress is needed +across display quality, usability factors such as weight and battery life, and computing power. While many +of these capabilities can be delivered in isolation today, balancing all of them in the right form factor is a +problem that will likely require years of innovation. + +The second technology enabler is interoperability and open standards. Interoperability is a nuanced +problem with user-facing components like identity and ownership as well as elements facing developers +and creators such as cross-platform development, file formats, the consistent behavior and physics of +objects in 3-D environments, distribution, and monetization. Web3 infrastructure potentially unlocks +some of these, as do emerging standards like USD, glTF, and OpenGPU. However, as with devices, we are +in early days and likely a few years from overcoming interoperability hurdles. + +The final two major enablers are platforms to facilitate the metaverse economy as well as tools for building +a safe and secure metaverse. For the economy we will need a new set of access and discovery tools, as +well as platforms that facilitate payments and monetization, including advertising. Security, identity, and +privacy concerns in the metaverse are greatly magnified given the increase in the level and complexity +of data collected, as well as increased risks around impersonation, harassment, and the potentially +increased need for content moderation in 3-D environments. + +Potential broader implications +The best intentions can have unintended consequences. Stakeholders need to be mindful of the broader +implications of their actions and, at a minimum, learn from past generations of online community and +platform builders to define a roadmap toward an ethical, safe, and inclusive metaverse experience. The +intent should not be to build another social web, but a societal-scale construct that puts people first. + +“Much of what we’ve read about the metaverse from sci-fi has been pretty dystopic, but I do think we need + to envision what it will look like so we can build toward a more positive view of the future,” Cathy Hackl, + chief metaverse officer and cofounder of Journey, told McKinsey’s At the Edge podcast. “We don’t want + to escape reality but rather embrace and augment it with virtual content and experiences that can make + things more fulfilling and make us feel more connected to our loved ones, more productive at work, and + happier people.” + +Value creation in the metaverse: The real business of the virtual world 49 + Maximizing the human experience + One filter through which all decisions around a company’s involvement in the metaverse should pass is to + ask: how will this augment and elevate the human experience? “The conversation needs to be about the + kind of platforms we want to create, and what we can learn from the past 15 years of mobile platforms,” + the VP of Epic Games’ Unreal Engine Ecosystem, Marc Petit, said. “If we want a creator economy—if + we want our kids to have jobs that we could not even dream of ourselves—how do we think about those + platforms as citizens, companies, and regulators? Because they are going to be hugely important for the + future, and we’ve already learned a lot from the social-media era that we need to factor in.” + + As the opportunities and challenges of the metaverse continue to evolve, we anticipate an evolving set + of design principles to help guide the creation of experiences that consider the needs of people from the + start. Designers often define a set of principles to establish an agreed-upon approach and boundaries + within which to ideate. We believe five design principles should guide initial iterations of the metaverse: + + 1. Build a people-first experience, always considering the needs of people and how outcomes can + potentially impact them. + + 2. Shift from social to societal, moving away from tools that simply allow communication to those + emphasizing relationships between people, places, and brands. + + 3. Design responsibly, creating stellar experiences for people that ensure they’re not disconnected from + reality. + + 4. Make accessibility and inclusivity a feature, enabling all people everywhere to participate and fully + express themselves. + + 5. Reduce the physical and mental friction by adapting decades of 2-D and 3-D user-experience design + to ensure we engage with each other in a more human way across worlds. + + Focusing on the human experience within the metaverse is a must, not an option. To reap the full benefits + and opportunities of the metaverse, brands, companies, and agencies have a responsibility to design + positive experiences for consumers, end-users, and citizens. “One of the biggest hurdles that the + metaverse is going to need to overcome to move forward is helping people see what they couldn’t see + before, know what they didn’t know before, and feel what they couldn’t feel or didn’t know to feel the day + before,” Salesforce’s global innovation evangelist Brian Solis said. “What the metaverse is really all about + is community. The value of belonging to this community. The role you can play as a user in this community + so that you feel like a stakeholder and not as a ‘user.’ These are some of the human-based hurdles that I’m + not hearing discussed enough.” + + + + Broader implications + There are clearly significant societal implications stemming from the development of the metaverse. It will + connect people not only to each other but to everything from brands, places, cities, governments, and services + in new, meaningful, and profound ways. Thinking of the metaverse through a societal lens imbues the user + experience with a sense of belonging and responsibility to one another. This mindset is crucial to building + worlds within the metaverse that are human and strengthen bonds to each other, to real places of belonging, + to agencies, and brands. “From a cybersecurity perspective, it’s not just about servers, nodes, or networks + anymore,” XR Safety Initiative’s Pearlman told us. “The attack surface has expanded to our human brain and + our living spaces because we can now extend screens and activities into our real-world surroundings.” + + + + +50 Value creation in the metaverse: The real business of the virtual world + ‘This is the right time to be thinking, okay, in real life, + you have playgrounds and schools. And very clearly, + they’re fun, playful spaces. But, equally, in the same + way that you wouldn’t have a child walking alone + after midnight in the middle of Soho, you wouldn’t + want the same thing to happen in the metaverse.’ + + –Rob Lowe, managing director of Digital Play at LEGO Ventures + + + + +Relying on the goodwill of those participating in the metaverse may not be enough: social media, for +example, has become one of the most influential forces of our time, for good and ill. “The internet was an +extremely decentralized concept from the beginning by design,” Niantic’s Hanke said. “But it evolved in a +certain direction, and it’s evolved so far in that direction that people are recognizing the limitation of that. +My feeling is it is swinging back towards a more open model, where people will attain more sovereignty +and control over their data and information.” + +Areas we believe may require guidelines include: + +— Data privacy, notably to ensure individuals retain control over their personal data. The metaverse promises + new types of personal data (such as eye tracking, sensor data, and room mapping) tied to an identity which, + with underdeveloped security capabilities, may endanger personal identity and privacy. + +— Security, not only in relation to cybersecurity but also to payments. + +— Ethics and regulatory compliance to ensure the metaverse is a safe environment, such as by moderating + content and addressing the use of online anonymity to commit crimes. + +— Physical health, such as measures to mitigate the risks of addiction, protect physical and mental + wellbeing, and promote outdoor activity (even potential issues such as vertigo need to be considered in a + VR environment). + + + + +Value creation in the metaverse: The real business of the virtual world 51 + — Sustainability, as the metaverse’s computing infrastructure is resource intensive; this applies to multiple + elements, from state-of-the-art VR—which may create about 2,000 pounds of carbon emissions over + five years—to the massive amount of computing power (and energy) required to process blockchain + transactions; as the United Nations Environment Programme notes, policymakers may “need to adjust + regulations to spur the development of future energy systems while mitigating environmental risks.”133 + + — Equity and fairness, seeking to eliminate bias in metaverse-driven decisions and promote diversity and + inclusion; today, fewer than a third of creators of interactive experiences are women, which affects the + types of experiences being created; also, women are also three times more likely to experience VR nausea. + + The metaverse may bring extensive societal change. People could be working in a virtual world, playing + games together, owning virtual assets, consuming virtual land and goods, socializing in virtual spaces, + and creating worlds and items. We are not suggesting holding back from experimenting in the metaverse + until the road map seems clear—that could place organizations at a competitive disadvantage that might + be hard to recover from. Rather, organizations should take care to develop products responsibly, taking + the opportunity to embed and engender digital trust while the metaverse is still in its formative stage. We + are already seeing allegations of disturbing behavior within metaverse worlds,134 underscoring the need to + address emerging issues before they potentially become systemic problems. + + “This is the right time to be thinking, okay, in real life, you have playgrounds and schools. And very clearly, + they’re fun, playful spaces,” LEGO Ventures’ Rob Lowe said. “But, equally, in the same way that you + wouldn’t have a child walking alone after midnight in the middle of Soho, you wouldn’t want the same thing + to happen in the metaverse. So, how can we build that in a way that allows kids to have these creative, + social experiences that they deserve and want to have, but build it in a way from the ground up so we’re + not trying to layer over it and fix it in the future?” + + + + +52 Value creation in the metaverse: The real business of the virtual world + 5 Moving at speed: How do + you capture value, and + what can you do today? + Those who spend time researching the nascent metaverse will understand its appeal. The question + for leaders then becomes two-fold: what role do you want your company to play, and how should you + prepare? Companies have various ways they can participate in and capitalize on the metaverse, ranging + from what we call “world builders” (building and orchestrating a proprietary digital world and platform) to + providing products and services to metaverse users or building hardware and software. Yet defining your + metaverse ambition is the just first step toward developing a strategic stance. + + + + Developing a business strategy for capturing value + It is always an option to simply not participate in the metaverse. In our view, that may result in a significant + competitive disadvantage: customers are moving toward the metaverse and, while the degree of any + company’s involvement may vary, it is important to consider how it may impact your business both + positively and negatively and formulate a strategy. + + + + + Value creation in the metaverse: The real business of the virtual world 53 + Consider a step-by-step approach (Exhibit 14) to prepare your business: + + + + Exhibit 14 + + Steps + Stepsto + toprepare + prepareyour + yourbusiness + businessfor + forthe + themetaverse. + metaverse. + Develop a value- + focused strategy Test, learn, adopt Prepare to scale + + + + Define your Determine Launch initial Monitor near- Learn more Identify and Embed in + metaverse the role you activities and term results about users start scaling business strategy + goals aim to play use cases and refine capabilities and operating + long-term model + potential + + + + + — Develop a value-focused strategic stance in two steps: + + 1. Define your metaverse goals, such as whether you want to generate demand across existing and new + segments, build communities, and create new revenue streams. + + 2. Determine the role you want to play, from building experiences to facilitating interactions and enabling + infrastructure. + + — Test, learn, and adopt in three steps: + + 1. Launch initial activities and use cases, exploring opportunities such as NFTs, immersive experiences, + native advertising, and having a metaverse presence. + + 2. Monitor near-term results to refine long-term potential by identifying the right metrics for initial + activations and testing long-term monetization options. + + 3. Learn more about users, examining behavior on different platforms and undertaking primary research. + + — Prepare to scale in two steps: + + 1. Identify and start scaling capabilities through sourcing the talent required and establishing the + necessary technology infrastructure and tooling. + + 2. Embed the metaverse in your business strategy and operating model, while clearly identifying who will + drive the initiatives in your organization. + + + + +54 Value creation in the metaverse: The real business of the virtual world + Actions for executives to consider +The metaverse is likely to impact not only how businesses interact with customers, but how companies +operate. Human resources will have new ways to undertake learning and development and recruiting. +Strategy teams will be able to examine new revenue streams and business models. Marketing is already +tapping the metaverse’s potential. Sales teams will be able to host and attend events and conduct +consultations and negotiations. Customer support may use the metaverse for service calls or to directly +demonstrate actions. Research and development will be accelerated through the use of digital twins +and new design tools. Even the operations function could leverage the metaverse for general and +administrative tasks. + +There is no avoiding the fact that if you want to both understand consumers and opportunities that may +be available to your organization, you need to be familiar with the metaverse. Make an effort to explore +Roblox, Fortnite, Minecraft, or a similar gaming experience. Explore The Sandbox or Decentraland—and +connect a MetaMask wallet.135 Join a Discord server or spend time on a Twitch channel. Check out the +NFT marketplace. Strap on a VR headset and try a new experience. Have a virtual meeting or event on a +platform such as Gather Town. You will be better armed for making informed decisions. + +“What I’ve seen over the past year is that a lot of companies and brands have begun to dip their toes in + the metaverse, maybe it was a marketing effort, but now they’re taking a step back and asking, ‘What + does it really mean?’” said Cathy Hackl, chief metaverse officer and cofounder of Journey. “They’re really + wondering what this means for their company, for their brand DNA, for everything that they stand for. + Some of those early assumptions and pilots might fail, but the brands might still get a pass. But if you + wait a year and a half or two years to do something, to have a clear strategy, and to start testing these + assumptions, it might be a little bit too late.” + + + +Actions for policymakers to consider +The challenges of regulating technology today will also exist in the metaverse—and some may be +amplified. The role of technology in all aspects of our lives—especially during COVID-19—has led to +renewed discussion around how regulation needs to evolve. As Charlie Bell, Microsoft’s executive vice +president of security, compliance, identity, and management, pointed out in a recent blog post: “The +problems of yesterday’s and today’s internet—impersonation, attempts to steal credentials, social +engineering, nation-state espionage, inevitable vulnerabilities—will be with us in the metaverse.”136 + +There is already debate on a number of critical topics, including open access to the metaverse; +competition and promoting innovation; intellectual property rights; commerce, monetization and +distribution models between stakeholders; promoting diversity, equity, and inclusion; securing user safety +and awareness; and ensuring data privacy. Policymakers will benefit from planning ahead and defining +the legal, policy, and governance of the metaverse and its broad implications in these discussions. This +includes addressing these issues, building the capacity to evolve policymaking while keeping up with +metaverse developments, and executing the policies in the market. For example, local government bodies +may define policies in line with local regulations, while collaborating with global government bodies +on standards and policies and engaging leading corporations and private groups to proactively guide +metaverse development. + +Public-sector entities also have an opportunity to reimagine public services and infrastructure in the +metaverse. For example, the metaverse opens new avenues to providing government-related and other +public services like education and healthcare, creating employment, and planning community spaces. +One key challenge will be enhancing the talent base in the public sector so it can shape priorities and a +road map for the greatest social good, and execute against them in partnership with technology providers. + + + +Value creation in the metaverse: The real business of the virtual world 55 + Early examples are already emerging of city governments outlining their metaverse strategies and + bringing their first initiatives live. As mentioned earlier, Dubai aims to increase the contribution of the + metaverse sector to its economy to $4 billion by 2030,137 and its Virtual Assets Regulatory Authority + announced plans to establish Metaverse HQ in The Sandbox platform.138 And the government of the + city of Seoul plans to spend at least $32 million on a metaverse ecosystem to improve city services as + well as planning, administration, and support for virtual tourism.139 “We want to create a free space for + participants to flexibly come together and communicate with one another,” the CIO of Seoul’s Smart City + Policy Bureau, Jong-Soo Park, said. “We then wish to provide custom administrative services without + restrictions of time and space.” + + National and local governments will need to define for themselves the right time to act. On one hand, + policymakers may find it difficult to develop detailed regulatory frameworks for governing the metaverse + while it remains so fluid. But, on the other, governments can already plan ahead and build the structures + and capacity to be able to stay abreast of changes and respond quickly when needed. This will also + allow them to engage with private-sector stakeholders, and proactively guide the development of the + metaverse—even outside of concrete regulation. + + + + +56 Value creation in the metaverse: The real business of the virtual world + Conclusion + +What will the metaverse be? And what will it do? Consumers and businesses are already beginning to +explore ways it can deepen connectivity and complement everyday activities. And, within a decade, the +metaverse has the potential to drive a very different world. + +By 2030, it is entirely plausible that more than 50 percent of live events could be held in the metaverse. +More than 80 percent of commerce could be impacted by something consumers do there, from discovering +brands to visiting a virtual store. Most learning and development could happen in a metaverse environment, +as could most virtual or hybrid collaboration. Asset-heavy enterprises such as manufacturers and +telecommunications companies may have virtually all assets and processes represented in a digital mirror, +and the same applies to the simulation of physical products and spaces to aid their design. We expect the +average internet user to spend up to six hours a day in metaverse experiences by 2030. + +Such generational changes rarely happen overnight. They tend to take years and are the result of an +accumulation of incremental advances, driven by an ethos of experimentation on platforms that allow +creativity to flourish. And because they ultimately result in fundamental changes to our lives, they may +also present risks for individuals and society. In describing an earlier era of technological disruption, then- +Senator John F. Kennedy in 1960 described automation as “a revolution bright with the hope of a new +prosperity for labor and a new abundance for America—but it is also a revolution which carries the dark +menace of industrial dislocation, increasing unemployment, and deepening poverty.”140 + +Stakeholders have an opportunity to shape the metaverse in a way that fosters greater social cohesion, +reduces inequality, widens access to education, and acts as a catalyst for social mobility. The metaverse +should not be a substitute for the real world or the in-person connections that bind us. It should complement +what people do and, like virtual and in-person offices, allow free movement between the virtual and physical +worlds in a way that expands our range of experiences rather than limiting them. But ensuring that happens +requires collective leadership to ensure the actions taken responsibly shape the evolution of this revolution. + +In the end, with its potential to generate up to $5 trillion in value by 2030, the metaverse is simply too big +to be ignored. It will have a major impact on our commercial and personal lives, which is why businesses, +policymakers, consumers, and citizens are well advised to explore and understand as much as they can +about this phenomenon, the technology that will underpin it, and the ramifications it will have for both our +economies and wider society. + + + + +Value creation in the metaverse: The real business of the virtual world 57 + Appendix A: + Estimate of investment in + metaverse technology + + Investment flows into metaverse technology were divided into two major categories: external + investments by funds and corporations, and internal corporate investments. + + The external investment category captures annual investment in metaverse-technology-related companies + by venture capital (VC) and private equity (PE) funds, as well as merger and acquisition (M&A) activity by + corporations. The values provided are estimates of the annual investment in the metaverse, based on data + available in the Capital IQ, Crunchbase, and PitchBook databases. These data were then triangulated with + press research on leading acquisitions, and further pressure tested with internal and external experts + across both metaverse technologies and industry. The estimate assumes all registered deals were + completed within the year of transaction. For VC and M&A deals, only metaverse companies whose core + technology is metaverse-related were included. This notably includes Microsoft’s planned $69 billion + acquisition of Activision Blizzard. For PE investment, target companies needed to be strongly related to + metaverse or virtual technology. Deals announced but not completed by the end of 2021 were excluded. + + The internal investment category includes expenditure on all corporate activities both for developing + metaverse-based products, services, or experiences and for building and leveraging a company’s + metaverse capabilities. It excludes M&A. The estimate of internal corporate investment is based on a + metaverse budget average for 30 major companies making strong plays in the space. The top 30 metaverse + adopters with publicly announced investments were consolidated. This notably includes the $10 billion + annual corporate investment announced by Meta. Companies that disclosed information on internal + metaverse expenditure were then used to estimate a cross-sector average for metaverse adopters. For + those enterprises that are known metaverse adopters but have not yet publicly shared an exact investment + amount, corporate investments were extrapolated using the average among players who are metaverse + technology adopters. + + + + +58 Value creation in the metaverse: The real business of the virtual world + Appendix B: Impact +model and investment +To forecast the potential value that may be created by metaverse technology by 2030, a bottom-up +assessment of the most relevant consumer and enterprise use cases was conducted across a set of +industries and sectors. The focus was on thinking through top use cases and the potential for value creation. +Given the uncertainty, these are inherently hard to predict. However, we believe this gives a directional view +of the potential and value at stake from metaverse technologies. + +In that calculation, the potential value of the metaverse results from expected market sizes and key +assumptions about industry-specific metaverse market penetration in 2030, informed by primary research +and subject-matter experts. The primary research conducted in May 2022 covered three categories: + +1. A global metaverse consumer survey (n = 3104) from countries across North America, Europe, and Asia + + 2. A survey of C-level executives from 448 companies spanning geographies and company sizes + + 3. Internal and external industry and technology expert interviews + +For each future scenario of consumer and enterprise use cases, the impact analysis draws a conservative +base case and an optimistic upside potential. This credits the inherent uncertainty about the metaverse +across dimensions such as consumer adoption, technology, and regulations. The estimate of potential total +value will almost certainly be incorrect in 2030 in either a conservative or optimistic direction, and can, +by definition, only be an estimate based on assumptions made today about future market conditions and +developments. + +The potential enterprise value from the metaverse is estimated by modeling the average annual enterprise +technology spend per sector and the future metaverse penetration rate in 2030, as a share of metaverse- +related corporate technology spending. Data for the innovation and technology spending was derived +from sources including Magna, Crunchbase, and IDC. Sector-specific penetration rates were derived from +and pressure-tested through 20 interviews with internal and external technology and industry experts. +The derived enterprise value calculation considers 19 industry sectors: banking, construction, discrete +manufacturing, education, federal and central government, healthcare providers, insurance, media, +personal and consumer services, process manufacturing, professional services, resource industries, retail, +securities and investment services, state and local government, telecom, transportation, utilities, and +wholesale. + +The potential consumer value potential is split between existing and net new and emerging metaverse +use cases. For existing consumer use cases, the value potential from the metaverse was estimated based +on the overall market size and expected future metaverse penetration in each industry in 2030. The +penetration rates were derived from expert consultation and internal extrapolation informed by technology + + + + +Value creation in the metaverse: The real business of the virtual world 59 + and industry journal articles. Calculations considered the most important consumer uses cases across ten + sectors: gaming, e-commerce, live entertainment, education, health and fitness, advertising, digital media, + AR/VR hardware, virtual real estate, and non-fungible tokens (including virtual fashion). Market sizes + were derived from a number of sources including Magna and IDC. The emerging use-case potential was + extrapolated based on assumptions and pressure tested with internal and external industry and technology + experts. + + The potential value of the metaverse is a bottom-up estimate based on assumptions about future + market conditions and developments. Our estimates are to be treated as directional rather than precise + at this stage, given the nature of the metaverse and the wide range of uncertainties involved (such as + developments in technology, the regulatory environment, and changes in consumer behavior). We have + triangulated these estimates across consumer and enterprise verticals, and will continue to refine them + in the future. Our team welcomes every challenge and input to refine the calculations. Please write to + metaverse.estimate@McKinsey.com to engage in the ongoing sizing discussion. + + + + +60 Value creation in the metaverse: The real business of the virtual world + Metaverse sizing methodology: Forecasting potential value by 2030 + +Consumer 1 Gaming software Discussions with Senior Executives of three globally leading + consumer technology and gaming companies + A significant share of gaming can evolve towards the metaverse - + more immersive, massively multiplayer expereinces that venture + towards broader digital entertainment - leading to increase in + time spent, and new monetization avenues + 2 eCommerce Discussions with eCommerce experts across McKinsey's Digital + and Analytics practice globally + eCom has been venturing towards socially-driven (incl. UGC) + commerce already, and will become immersive in the future - + offering a more compelling end-to-end experience (search, + browse, purchase, post-purchase), introducing new digital/virtual + assets, and becoming increasingly personalized + 3 Live entertainment Discussions with Head of Media & Entertainment Technology at + leading Hollywood entertainment consultancy; and former Digital + Media Practice Leader at a global Tech Services firm + Live Entertainment can leverage the metaverse for more + immersive online+offline experiences, and at greater scale + (catering to global audiences concurrently) and frequency + 4 Education Discussion with Senior Executive at globally leading educational + products and toys brand + Education within the metaverse can scale access to virtually + 'limiteless' participants (as hardware becomes more ubiquitous), + and enhance education delivery and quality, including for adult + training/learning experiences + 5 Health & Fitness Discussion with Head of Strategy & Operations at leading + technology company + Health and Fitness can continue to evolve towards remote (and + in the case of fitness - social) settings - and improve quality + through becoming more immersive (e.g., for service delivery) and + collaborative (e.g., in R&D) + 6 Advertising Discussions with Head of Strategy & Operations at leading + technology company; and Media and eCommerce expert within + McKinsey's Digital and Analytics practice + The metaverse is expected to assume a higher share of + advertising placements and budgets as consumers spend more + time in metaverse per day (up to 4-6hrs/d converting from + online time spent) and popular gaming worlds expand to broader + digital entertainment use-cases (e.g., concerts); with new, more + immersive metaverse-native ad-types emerging (e.g., visual + search, virtual billboards) + 7 Digital Media Discussions with Head of Media & Entertainment Technology at + leading Hollywood entertainment consultancy; and former Digital + Media Practice Leader at a global Tech Services firm + The metaverse can accelerate digital media via net-new revenue + streams (e.g., share of virtual asset sales), additional monetization + of existing IP, and larger-scale events - and finally, building + infrastructure required for the metaverse + 8 AR/ VR Hardware Discussion with Head of Strategy & Operations at leading + technology company + Metaverse device/ interface sales driven by widening appeal + for and access to more immersive experiences; with a number + of large tech companies ramping up production and expecting + decreasing costs over time + + + + +Value creation in the metaverse: The real business of the virtual world 61 + 9 Virtual Real Estate Discussion with Metaverse and NFT experts within McKinsey's + broader partner ecosystem + Virutal Real Estate is expected to become more popular + alongside XR, with an increasing number of use-cases, e.g., + increasing users and events/ activitiy in metaverse worlds; NFTs + of office buildings or architectural designs; and potentially as part + of asset diversification strategies for institutions over time + 10 NFTs Discussion with experts within McKinsey's Apparel, Luxury and + (inc. Pure Virtual Fashion) Fashion (AF&L) practice + Popularity of NFTs driven by more than just novelty over time, + e.g., traceability of IP ownership (artist), certification of originality + (fashion, sustainability), utility tokens; and the overall move of + physical consumer products to online+offline 'twinned' products + Enterprise 11 Banking Discussions with experts within McKinsey's Financial Services + practice + Banks can scale use-cases in the metaverse for new B2B + products/ services (e.g., insurance, payment systems, + infrastructure); DeFi structures driving efficiencies and improved + user engagement/ service on new products (e.g., contextual + finance) + 12 Construction Discussion with Founder/ CEO at leading AI supported + construction and manufacturing software company + The metaverse can transform the constrution process through + data, management, and development. Data: Project real-time + monitoring, collecting information and tracking data in metaverse + that can later be analyzed; Management: Central coordination + and project management of disparse locations (e.g., via IoT/ + digital twins); Development: Collaboraiton of dispersed units + or suppliers, XR-enabled simulation of planning, details up to + “screw-level” (e.g., building architecture) + 13 Discrete Manufacturing Discussion with Founder/ CEO at leading AI supported + construction and manufacturing software company + Manufacturing will see next-gen industrialization from central + coordination, maintanance and service of even locally dispersed + units (e.g., via IoT/digital twins); increase in collaboration on R&D; + and XR-enabled simulation of manufacturing and assembly- able + to plan details up to “screw-level”, while data collection allows + project real-time monitoring and ex-post analysis + 14 Education Discussions with McKinsey's North American Education and + Technology experts + Education within the metaverse can scale access to virtually + 'limiteless' participants (as hardware becomes more ubiquitous), + and enhance education delivery and quality, including for adult + training/learning experiences + 15 Government Discussion with Senior Executive of leading Asian Metropolitan + (Central/ Federal) Government Institution; and with McKinsey's experts in the public + sector practice + Government adoption of metaverse is driven by new avenues + to enhance government sector performance and productivity; + provide enhanced public services at scale; and the need for new + regulation and governance for the metaverse + 16 Healthcare Provider Discussions with McKinsey's healthcare experts across + geographies + Healthcare improvements can be driven by efficiency gains + (e.g., optimized hospital operations, now faster, safer, and + more accurate); and improvement in remote diagnostics and + procedures; and in remote collaboration + + + + +62 Value creation in the metaverse: The real business of the virtual world + 17 Insurance Discussions with experts within McKinsey's Financial Services + practice + Insurance will see efficiencies from decentralized structures; + as well as increased demand for new products (e.g., virtual real + estate) + 18 Media Discussions with Head of Media & Entertainment Technology at + leading Hollywood entertainment consultancy; and former Digital + Media Practice Leader at a global Tech Services firm + Media will adopt metaverse for new ad-based revenue streams + (e.g., applications/ platforms for the creator economy); and for + efficiencies in managing distributed networks (e.g., data centers) + 19 Personal/ Consumer Services Discussions with experts in McKinsey's Consumer/ Retail + practice + Personal and Consumer services can profit from more immersive + experiences; access at a larger scale, and efficiencies from + reduced production costs (and supply chain constraints) for + virtual assets + 20 Process Manufacturing Discussion with Founder/ CEO at leading AI supported + construction and manufacturing software company + Manufacturing will see next-gen industrialization from central + coordination, maintanance and service of even locally dispersed + units (e.g., via IoT/digital twins); increase in collaboration on R&D; + and XR-enabled simulation of manufacturing and assembly- able + to plan details up to “screw-level”, while data collection allows + project real-time monitoring and ex-post analysis + 21 Professional Services Discussion with experts within McKinsey's Technology, Media + and Telco (TMT) practice + 'Utilities' can profit from optimized operations (e.g., faster, safer, + and more accurate) and overall project real-time monitoring; + and from information and data collection metaverse that aids in + optimization + 22 Resource Industries Discussion with Founder/ CEO at leading AI supported + construction and manufacturing software company + 'Utilities' can profit from optimized operations (e.g., faster, safer, + and more accurate) and overall project real-time monitoring; + and from information and data collection metaverse that aids in + optimization + 23 Retail Discussions with experts in McKinsey's Consumer/ Retail + practice + Trade (retail and wholesale both) can adopt metaverse to enhance + shopping/in-store/product experience; capture efficiencies; + and explore net-new revenue streams (e.g., virtual goods and + services) + 24 Securities/ Investment Discussions with experts within McKinsey's Financial Services + practice + Securities and investment can leverage metaverse for new B2B + products/ services (e.g., investment systems); DeFi structures + driving efficiencies; and improved user engagement on new + products + 25 Government (Local/ State) Discussion with Senior Executive of leading Asian Metropolitan + Government Institution; and with McKinsey's experts in the public + sector practice + Government adoption of metaverse is driven by new avenues + to enhance government sector performance and productivity; + provide enhanced public services at scale; and the need for new + regulation and governance for the metaverse + + + + +Value creation in the metaverse: The real business of the virtual world 63 + 26 Telecommunication Discussion with Head of Commercial at leading + telecommunications Firm; and experts within McKinsey's + Tech,Media,Telecoms practice + Telcos expected to benefit from the need for and monetization + potential of enhanced infrastructure (e.g., 5G); as well as + productivity improvements in internal operations; and + improvements in customer experience (e.g., employee training, + service center operations) + 27 Transportation Discussions with McKinsey's logistics and infrastructure practice + experts + Transport sector can benefiy from central coordination and + project management (e.g., via IoT/digital twins), especially in + logistics; and real-time data collection for optimization + 28 Utilities Discussion with Head of Commercial at leading + telecommunications Firm; and experts within McKinsey's + Tech,Media,Telecoms practice; and experts within McKinsey's + Technology, Media and Telco (TMT) practice + 'Utilities' can profit from optimized operations (e.g., faster, safer, + and more accurate) and overall project real-time monitoring; + and from information and data collection metaverse that aids in + optimization + 29 Wholesale Discussions with experts in McKinsey's Consumer/ Retail + practice + Trade (retail and wholesale both) can adopt metaverse to enhance + shopping/in-store/product experience; capture efficiencies; + and explore net-new revenue streams (e.g., virtual goods and + services) + + + + +64 Value creation in the metaverse: The real business of the virtual world + Appendix C: Consumer +and executive surveys +We conducted two global surveys designed to understand trends in metaverse adoption, use, and +business implications by sector, geography, type of company, technology, and application. One focused on +global end-consumer adoption, the other corporate adoption. + +The consumer survey was conducted in May 2022. The final survey sample, after quality checks, +consisted of 3,104 end consumers. The survey targeted respondents who indicated, at a minimum, basic +understanding of the metaverse and had at least heard of or used one or more metaverse platforms from +the following list: Roblox, Fortnite, Decentraland, Second Life, The Sandbox, Somnium Space, Stageverse, +Spatial, World of Warcraft, Pokémon Go, Rec Room, VR Chat, Facebook Horizon Worlds, Microsoft +Altspace, Microsoft Mesh, Zepeto, Minecraft, and Animal Crossing. The survey sample covered 11 countries +(from Europe, North America, and Asia), excluding respondents working in the marketing, research, or +media/advertising industries due to professional focus on innovation and new technology beyond private +consumer use cases. + +In addition to basic information about respondents and their households, the survey consisted of four +groups of questions: + +— The first asked respondents about their awareness, excitement, and adoption of activities using + metaverse technologies or applications today, and expectations for the future. + +— The second asked about current and future user behavior of metaverse-related technology and + applications with regard to duration, preferences, and underlying motives. It also asked about + purchasing behavior, spending, and engagement with branded experiences. + +— The third investigated the usage of avatars, asking respondents to report current and future + customization efforts as well as spending on the metaverse for digital assets or awareness of digital + influencers. + +— The fourth addressed respondents’ satisfaction with metaverse experiences and underlying drivers + and barriers (risks) for engagement in virtual versus real-life activities across different domains in the + respondent’s life. + +The senior executive survey was conducted in May 2022. The final survey, after quality checks, consisted +of C-level executives from 448 companies. The survey targeted respondents who indicated, at a minimum, +basic understanding of at least two or more metaverse technologies or applications and their use in +business from the following list: cryptocurrencies, non-fungible tokens, the creator economy, Web3, virtual +world, edge computing, blockchain, AR/VR, and the cloud. The survey sample covered 15 sectors of the +economy, ten countries (from Europe, North America, and Asia), and companies with workforces ranging +from fewer than ten people to more than 10,000 employees. + + + + +Value creation in the metaverse: The real business of the virtual world 65 + In addition to basic information about the company and the respondent, the survey consisted of four groups + of questions: + + — The first asked respondents about their awareness and adoption rates of metaverse technologies or + applications. + + — The second asked about the current and future impact of the metaverse in the respondent’s sector, + including the most important metaverse technologies. It also asked about parts of the business in + which the metaverse was being deployed, and drivers and barriers for metaverse deployment in the + respondent’s business. + + — The third investigated the financial impact of the metaverse, asking respondents to report current and + future operating profit margins as well as spending on the metaverse as a share of digital investment. + + — The fourth addressed the organizational impact of metaverse technologies, specifically on levels of + employment and skills requirements. + + Finally, we interviewed 13 senior executives and metaverse experts for their insights into the current state of + the metaverse and its potential. + + + + +66 Value creation in the metaverse: The real business of the virtual world + Thanks to all interviewees + + Matthew Ball Kavya Pearlman + managing partner of EpyllionCo founder and CEO of XR Safety Initiative + and McKinsey knowledge partner + + + + + Cathy Hackl Marc Petit + chief metaverse officer and VP of Epic Games’ Unreal Engine Ecosystem + cofounder of Journey + + + + + John Hanke Irene-Marie Seelig + CEO of Niantic cofounder and CEO of AnamXR + + + + + Rob Lowe Brian Solis + managing director of Digital Play at global innovation evangelist at Salesforce + LEGO Ventures + + + + + Yosuke Matsuda Ken Wee + chief strategy officer at Activision Blizzard + CEO of Square Enix + + + + + Jong-Soo Park + CIO of Seoul’s Smart City Police Bureau + + + + + Value creation in the metaverse: The real business of the virtual world 67 + Bibliography + + Activision Blizzard, “Activision Blizzard completes Caldwell, Georgina, “Procter & Gamble ups ad spend + King acquisition, becomes the largest games to US$8.2 billion,” Global Cosmetics News, August + network in the world with over 500 million users,” 18, 2021. + February 23, 2016. + Carrefour, “Carrefour launched its first recruitment + Amed, Imran, Anita Balchandani, Achim Berg, operation in the metaverse,” May 18, 2022. + Saskia Hedrich, Jakob Ekeløf Jensen, Leila Le + Merle, and Felix Rölkens, “State of Fashion 2022: Caulfield, Brian, “NVIDIA, BMW blend reality, virtual + An uneven recovery and new frontiers,” McKinsey, worlds to demonstrate factory of the future,” NVIDIA, + December 2021. 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E  stimate of 2022 spending by corporations to develop and +2 + Nick Galov, “18 Second Life facts in 2022: What it means to live in a deploy metaverse-related products. VC value is an estimate of VC + virtual world,” Web Tribunal, April 6, 2022. investment in companies that are primarily metaverse focused. +3 + This term was first coined by Matthew Ball to describe the PE value is an estimate of PE investment in metaverse-related + metaverse at the current stage of its evolution. For more, see companies. M&A value is an estimate of metaverse deals done by + Matthew Ball, “The metaverse: What it is, where to find it, and who corporations. Includes only disclosed data available in databases, + will build it,” Matthew Ball, January 13, 2020. and assumes all registered deals were completed within the year +4 + “Number of video gamers worldwide in 2021, by region,” Statista, of transaction. Compound annual growth rate values rounded. + September 7, 2021. Venture capital, private equity, and M&A data from Crunchbase, +5 + Tom Wijman, “Games market revenues will pass $200 billion for January 2020 to May 2022. + 32 + the first time in 2022 as the U.S. overtakes China,” Newzoo, May 5, “ Venture capital giant Andreessen Horowitz launches new + 2022. $600,000,000 metaverse fund,” Daily Hodl, May 20, 2022. + 33 +6 + Ibid. “ Microsoft to acquire Activision Blizzard,” January 18, 2022. + 34 +7 + We surveyed almost 450 senior executives across Asia–Pacific Ibid. + 35 + and China, Europe, and the Americas to get a C-level view of the “NVIDIA omniverse,” NVIDIA. + 36 + potential growth of the metaverse, as well as actions organizations “PlayStation VF2,” PlayStation. + 37 + have put in place or intend to in the years ahead. We also conducted M  ark Gurman, “Apple shows AR/VR headset to board in sign of + 13 interviews with senior executives and experts in the metaverse. progress on key project,” Bloomberg, May 19, 2022. + 38 + All interviews were conducted in May 2022.  Lucas Matney, “NFT kingpin OpenSea lands monster $13.3B +8 + A s of this report’s publication, Merriam-Webster does not yet valuation in new raise,” TechCrunch, January 4, 2022. + 39 + define “metaverse,” while the Oxford English Dictionary describes it  Eliza Gkritsi, “Andreessen Horowitz, SoftBank lead $150M raise for + as “a slang term used to describe a virtual representation of reality metaverse startup improbable,” CoinDesk, April 7, 2022. + 40 + implemented by means of virtual reality software.” E  li Tan, “Bored Ape Yacht Club owner Yuga Labs raises $450M led +9 + Kevin Jiang, “What’s Facebook’s metaverse? Mark Zuckerberg says by A16z,” CoinDesk, March 22, 2022. + 41 + he’s crafting the future of the internet. Here’s why your data’s at risk,” Krystal Hu, “SoftBank leads $93 mln investment in NFT gaming firm + Toronto Star, November 3, 2021. The Sandbox,” Reuters, November 1, 2021. + 42 +10 + Ernest Cline, Ready Player One, first edition, New York: Penguin “ Niantic received $300 million investment from Coatue,” Niantic, + Random House, 2011. November 22, 2021. + 43 +11 + William L. Hosch, “Web 2.0,” Encyclopædia Britannica, June 7, 2007. A  lexander Lee, “The bridge-builder: Why Disney tapped a former +12 +  “ Roblox reports fourth quarter and full year 2021 financial results,” theme park executive to lead its metaverse strategy,” Digiday, + Roblox Corporation, February 15, 2022. February 17, 2022. + 44 +13 + I bid. “ Sony and KIRKBI invest in Epic Games to build the future of digital +14 + Z achary Boddy, “Minecraft boasts over 141 million monthly active entertainment,” Epic Games, April 11, 2022. + 45 + users and other impressive numbers,” Windows Central, October “Balenciaga brings high fashion to Fortnite,” Epic Games, + 16, 2021. September 20, 2021. + 46 +15 + Fortnite (@FortniteGame), “Fortnite now has over 350 million “ Total users of selected virtual platforms worldwide as of October + registered players! In April, players spent over 3.2 billion hours in 2021,” Statista, December 13, 2021. + 47 + game. Let’s keep the party going,” Twitter, May 6, 2020. Patrick R, “How 5G is transforming the world of mobile app +16 + Baby boomers are generally accepted to be people born between development,” Business of Apps, March 4, 2021. + 48 + 1946 and 1964; Generation X comprises people born between 1964 Brian Crecente, “Next-gen gaming: State of the industry,” Unreal + and 1980; millennials are those born between 1981 and 1997; and Engine, July 8, 2020. + 49 + Gen Z comprises people born between 1997 and 2012. For more, “What is edge computing?” CB Insights, March 11, 2021. + 50 + see Michael Dimock, “Defining generations: Where millennials end Adaora Udoji, “The Metaverse is coming — it just needed 5G,” + and Generation Z begins,” Pew Research Center, January 17, 2019. Verizon, November 18, 2020. + 51 +17 + Clayton +  M. Christensen, Rory McDonald, and Michael E. Raynor, C +  hris Donkin, “LG Electronics makes 6G, smart mobility pitch,” + “What is disruptive innovation?,” Harvard Business Review, Mobile World Live, May 17, 2022. + 52 + December 2015. C +  haim Gartenberg, “Meta’s Oculus Quest 2 has shipped 10 million +18 + “Metaverse,” Google Trends, May 27, 2022. units, according to Qualcomm,” Verge, November 16, 2021. + 53 +19 + Stefanie Notaney and Anna Yen, “Roblox reports fourth quarter “ Wearable gaming market by product type (VR headset, haptic + and full year 2021 financial results,” Roblox Corporation, February devices, wearable gaming body suit, wearable controller, others), + 15, 2022. by age group (below 15 years, 15-30 years, others), by user type +20 + J acob Kastrenakes and Alex Heath, “Facebook is spending at least (individual and commercial space), by region forecast to 2028,” + $10 billion this year on its metaverse division,” Verge, October Emergen Research, August 2021. + 54 + 25, 2021. John Roach, “Mesh for Microsoft Teams aims to make collaboration +21 +  “Microsoft to acquire Activision Blizzard to bring the joy and in the ‘metaverse’ personal and fun,” Microsoft, November 2, 2021. + 55 + community of gaming to everyone, across every device,” Microsoft, Isabelle Lee, “Gucci just bought a plot of virtual land in The Sandbox + January 18, 2022. to create themed experiences in the metaverse,” Business Insider, +22 + “Nike creates NIKELAND on Roblox,” Nike, November 18, 2021. February 10, 2022. + 56 +23 +  Maghan McDowell, “Inside Gucci and Roblox’s new virtual world,” “Nike creates NIKELAND on Roblox,” Nike, November 18, 2021. + 57 + Vogue Business, May 17, 2021. “ Welcome to the Wendyverse: Why Wendy’s has entered the +24 + W  illiam E. Ketchum III, “Fortnite’s Travis Scott concert was historic. metaverse,” Little Black Book, April 6, 2022. + 58 + But he’s not the only artist getting creative,” NBC News, April 30, “ How many children and young people have internet access at + 2020. home?,” Unicef, December 2020. + 59 +25 +  “Fortnite usage and revenue statistics,” May 4, 2022. “L.F.C.: Heroes Club,” Sotheby’s, March 30, 2022. + 60 +26 +  J oo-Wan Kim, “Metaverse platform Zepeto user base exceeds 300 “Digital fashion you can create. Trade. Wear.” Fabricant Studio, May + million,” Korea Economic Daily, March 4, 2022. 31, 2022. + 61 +27 + Kathy B., “Creating your own living space in the Metaverse,” New “ What is the metaverse? Find out from Neha Singh of Obsess,” + Straits Times, April 15, 2022. Medium, March 22, 2022. + 62 +28 + A  ndrea Day, Chris DiLella, “Investors are paying millions for virtual “ANAM: Your multiverse platform,” AnamXR, May 31, 2022. + 63 + land in the metaverse,” CNBC, January 12, 2022. “ Improbable Raises US$150m to Establish M² (MSquared), a +29 + K  risti Waterworth, “Six businesses that have bought land in the Metaverse Network and Ecosystem Powered by Its Morpheus + metaverse,” Motley Fool, February 11, 2022. Technology,” Business Wire, April 7, 2022. + 64 +30 + “Investors are paying millions,” January 12, 2022. Andrew Morse, Scott Stein, “The metaverse is on the way: Here’s + + + +Value creation in the metaverse: The real business of the virtual world 73 + what you need to know,” CNET, March 27, 2022. 100  + “Inside Roblox’s metaverse opportunity,” May 17, 2021. + 65 + B  rian Caulfield, “NVIDIA, BMW blend reality, virtual worlds to 101 +  “A whole new Loubi world,” Christian Louboutin, October 1, 2020. + demonstrate factory of the future,” NVIDIA, April 13, 2021. 102 +  Kati Chitrakorn, “Marni introduces digital fashion with new virtual + 66 +  J acomo Corbo, Nicolaus Henke, Ivan Ostojic, “The top trends in world,” Vogue Business, April 13, 2022. + tech,” McKinsey, October 2021. 103 +  “Vans World [S2],” Roblox, May 31, 2022. + 67 + “ Dubai’s virtual assets regulatory authority to establish metaverse 104 +  “NIKELAND,” Roblox, May 31, 2022. + HQ in world first,” Arabian Business, May 3, 2022. 105 +  Maghan McDowell, Maliha Shoaib, “Louis Vuitton to release new + 68 + A  nup Oommen, “Dubai’s metaverse sector to support 42,000 NFTs,” Vogue Business, April 14, 2022. + virtual jobs and add $4 billion to its economy by 2030,” Arabian 106 +  Steff Yotka, “Balenciaga and Fortnite team up for a digital-to- + Business, May 20, 2022. physical partnership,” Vogue Business, September 21, 2021. + 69 +  “Guardians of Metal and Concrete: Whole Earth Foundation unveils 107 +  “All clothing,” DressX, May 31, 2022. + its first ever infrastructure game,” Whole Earth Foundation, 108 +  C arrie LaFrenz, Jessica Sier, “How fashion brands are targeting + May 29, 2021. the emerging metaverse,” Australian Financial Review, May 27, + 70 + “ We democratize infrastructure management,” Whole Earth 2022. + Foundation, May 31, 2022. 109 +  Lucy Maguire, “Is the metaverse influencing real-life trends?,” + 71 + “China gamers report,” Niko, September 2020. Vogue Business, April 12, 2022. + 72 + J . Clement, “Distribution of video gamers in the United States from 110 +  Robert Hutchins, “Hasbro teams with Roblox to launch new Nerf + 2006 to 2021, by gender,” Statista, August 20, 2021. blasters and a Roblox Monopoly,” ToyNews, April 14, 2021. + 73 + “ 2020 essential facts about the video game industry,” 111 +  “NFTs are to be introduced by Coca-Cola in Decentraland,” + Entertainment Software Association, July 2020. Innovative India, August 2021. + 74 + D +  iana Lee, Rahul Malik, “The opportunity in digital fashion and 112 +  Chris Kelly, “P&G takes first step into the metaverse with + avatars,” Business of Fashion, November 3, 2021. BeautySphere,” Marketing Dive, January 6, 2022. + 75 + P +  atrick McGee, “Tim Sweeney: Epic will fight Apple and Google to 113 +  Tom Phillips, “Lego and Epic Games announce new partnership,” + keep the metaverse open,” Financial Times, May 25, 2022. Eurogamer, April 7, 2022. + 76 + Stablecoins are cryptocurrencies whose value is pegged to another 114 +  Georgina Caldwell, “Procter & Gamble ups ad spend to US$8.2 + currency, commodity, or financial instrument. billion,” Global Cosmetics News, August 18, 2021; Jennifer Faull, + 77 + National Research Group research of 4,500 people in the United “Unilever commits to €7bn marketing spend ahead of challenging + States. year,” Drum, October 21, 2021; A. Guttmann, “PepsiCo’s + 78 +  “State of Fashion 2022: An uneven recovery and new frontiers,” advertising expenses worldwide from 2013 to 2020,” Statista, June + McKinsey, December 2021. 5, 2021. + 79 + “Activision Blizzard completes King acquisition, becomes the 115 +  “Bank of America is First in Industry to Launch Virtual Reality + largest games network in the world with over 500 million users,” Training Program in Nearly 4,300 Financial Centers,” Bank of + Activision Blizzard, February 23, 2016. America, October 7, 2021. + 80 +  Matt Asay, “AI investments soared in 2021, but big problems 116 +  Fasika Zelealem, “South Korea’s KB Bank enters metaverse space,” + remain,” TechRepublic, March 25, 2022. Yahoo, November 30, 2021. + 81 + T  his future metaverse impact model is a bottom-up estimate based 117 +  Anna J. Park, “‘Metaverse’ becomes new growth engine of financial + on assumptions about future market conditions and developments. industry,” Korea Times, June 1, 2022. + Our team welcomes challenges and detailed input to refine the 118 +  “HSBC to become the first global financial services provider to + calculations. Please send feedback on our sizing estimate and the enter The Sandbox,” Medium, March 16, 2022. + methodology to metaverse.estimate@McKinsey.com. 119 +  Alexandra Leonards, “Sokin to launch e-commerce payments in + 82 + “Updated: Coca-Cola to offer first-ever NFT collectibles in the metaverse,” FStech, February 2, 2022. + International Friendship Day charity auction,” Coca-Cola, July 28, 120 +  “Play-to-earn revolution,” Zelf, 2022. + 2021. 121 +  Katie Murar, “Tech firm closes first metaverse mortgage for + 83 + M  aghan McDowell, “Inside Roblox’s metaverse opportunity,” Vogue acquisition in Decentraland,” Bisnow, January 27, 2022. + Business, May 17, 2021. 122 +  Vikram Alexei Kansara, “Inside Farfetch’s store of the future,” + 84 + “ANAM: Your multiverse platform,” AnamXR, May 31, 2022. Business of Fashion, April 12, 2017. + 85 + K  ati Chitrakorn, Maghan McDowell, “Adidas reveals new NFT 123 +  John Kernan et al., “Gen Z/millennials: Sustainability supports + project with Bored Ape Yacht Club,” Vogue Business, December durability,” Cowen, October 18, 2021. + 17, 2021. 124 +  Liz Flora, “Dyson enters Oculus store with VR shopping + 86 + “Are you prepared to support your users in the metaverse?,” experience,” Glossy, November 19, 2021. + Helpshift, 2022. 125 +  “Welcome to our immersive world,” Samsung, 2022. + 87 + “UCSD Launches Its International Micro-MBA Program,” Virbela, 126 +  L auren Thomas, “Walmart is quietly preparing to enter the + 2022. metaverse,” CNBC, January 16, 2022. + 88 + Lorella Gessa, Pierre Moriconi, “HAVAS Group opens its first 127 +  Dave Lee and Hannah Murphy, “Retailers seek real-world profits in + virtual village in the metaverse,” HAVAS Group, February 17, the metaverse,” Financial Times, February 23, 2022. + 2022. 128 +  “Carrefour launched its first recruitment operation in the + 89 + B  rian Caulfield, “NVIDIA, BMW blend reality, virtual worlds to metaverse,” Carrefour, May 18, 2022. + demonstrate factory of the future,” NVIDIA, April 13, 2021. 129 +  Doug Stephens, “The metaverse will radically change retail,” + 90 + J ulie Gaubert, “Seoul to become the first city to enter the Business of Fashion, June 7, 2021. + metaverse. What will it look like?” Euronews, November 11, 2021. 130 +  “Connecting the metaverse to real world commerce,” Boson + 91 + “A new dawn in tourism history,” Ariva Digital, 2022. Protocol, 2022. + 92 + Remesh Virtual World Adopters and Consumers survey (Feb 2022, 131 +  Shireen El Khatib, “How digitalization and the metaverse are + n=165), Metaverse consumer survey (Feb 2022, n=1,011). revolutionizing the retail industry,” World Economic Forum, May + 93 +  Maghan McDowell, “Metaverse Fashion Week: The hits and misses,” 25, 2022. + Vogue Business, March 29, 2022. 132 +  “Retailers seek real-world profits in the metaverse,” February 23, + 94 + “State of Fashion 2022,” December 2021. 2022. + 95 +  “The opportunity in digital fashion and avatars,” November 3, 2021. 133 +  Toyo Kawabata, “In battle against climate crisis, don’t overlook the + 96 +  Joseph DeAcetis, “NFTs, metaverse and gamefi are changing up blockchain,” UN Environment Programme, January 25, 2022. + the fashion business in 2022,” Forbes, December 22, 2021. 134 +  Michelle Shen, “Sexual harassment in the metaverse? Woman + 97 +  Google Trends. alleges rape in virtual world,” USA Today, January 31, 2022. + 98 +  “A digital Gucci bag sold for US$4,000 on gaming platform Roblox,” 135 +  “A crypto wallet & gateway to blockchain apps,” Metamask, 2022. + Jing Daily, June 7, 2021. 136  + Charlie Bell, “The metaverse is coming. Here are the cornerstones + 99 + Marc Bain, “How brands are using NFTs to keep customers hooked,” for securing it,” Microsoft, March 28, 2022. + Business of Fashion, March 31, 2022. + + + + +74 Value creation in the metaverse: The real business of the virtual world + 137 +  “Dubai’s metaverse sector to support 42,000 virtual jobs,” May + 20, 2022. +138 +  “Dubai’s virtual assets regulatory authority opens Sandbox-based + metaverse HQ,” PYMNTS, May 5, 2022. +139 +  Morgan Chittum, “South Korea to pour $187m into ‘world-class + metaverse ecosystem’,” Blockworks, February 28, 2022. +140 +  John F. Kennedy, “Remarks of Senator John F. Kennedy at the + AFL-CIO convention, Grand Rapids, Michigan, June 7, 1960,” JFK + Library, June 7, 1960. + + + + +Value creation in the metaverse: The real business of the virtual world 75 + June 2022 +Copyright © McKinsey & Company +McKinsey.com + @McKinsey + @McKinsey + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pdf_text/morgan_stanley_ai_entertainment_costs_2025_official_web_print.txt b/2d_to_3d_market_tech_reports/pdf_text/morgan_stanley_ai_entertainment_costs_2025_official_web_print.txt new file mode 100644 index 0000000000000000000000000000000000000000..0b062950c817a35723336a5d455e30629d6648e3 --- /dev/null +++ b/2d_to_3d_market_tech_reports/pdf_text/morgan_stanley_ai_entertainment_costs_2025_official_web_print.txt @@ -0,0 +1,185 @@ + How AI Benefits—and Threatens—the Entertainment + Industry INVESTOR MEDIA ALUMNI CLIENT LOGIN + RELATIONS RELATIONS + Jul 17, 2025  + Our What About Careers + The impact of generative AI on the production and distribution of TV, film and music offers cost + Insights We Do Us  + savings for media companies but could also upend the competitive landscape. + + + + +Key Takeaways + + • GenAI could lead to cost reductions of 10% across all the media industry, and as much as + 30% in TV and film. + + • New and smaller companies should be able to leverage technology to produce high-quality + content, challenging the major leaders of the industry. + + • Media companies could reinvest savings from GenAI in top talent and sports rights. + + • In music, the main opportunities from GenAI are in curation and personalization of content, + while concerts and sporting events are likely to benefit from increased demand for live + experiences. +  INVESTOR +Technology has always had a leading role in the MEDIA + entertainment industry, ALUMNI + changing CLIENTisLOGIN + the way content + RELATIONS RELATIONS +  +created, distributed and consumed – from turning black and white pictures to technicolor, and the + Our +gramophone to streaming music. Now, with generativeWhat About + artificial intelligence, Careers + technology’s impact is + Insights We Do Us  +likely to be even more profound: Media companies can produce high-quality content faster and at +lower costs, while curation and personalization are likely to increase audiences’ engagement. + + +Investors are watching closely, as these developments should open opportunities for industry leaders +to achieve higher margins, explore new revenue streams and make changes in their capital allocation. +At the same time, technology may also allow for new and smaller players to challenge the dominance +of the biggest names in the industry. + + +“While we generally frame generative AI technology as an opportunity for today's entertainment +market leaders, it can be a risk as well,” says Benjamin Swinburne, who leads equity research +coverage of the Media & Entertainment, Telecom & Cable Services, and Communications +Infrastructure industries at Morgan Stanley. “GenAI is available to both scaled incumbents and new +entrants, so it’s not difficult to imagine that individuals could produce relatively professional quality +output within the next five years.” + + +GenAI could also spur industry consolidation if major technology companies, which compete with +entertainment companies for global consumer attention, use their AI capabilities, marketing tools, +intellectual property portfolios and global distribution platforms to dominate the sector. + + +“The combination of an entertainment and technology asset portfolio under one corporate roof may +be the media conglomerate of 2030,” Swinburne says. + + + +Cutting Costs in TV and Film + +Creating, producing and distributing content for TV, film, music, books or other forms of media +usually involves substantial time and money. For example, a major studio recently took about five +years and $250 million to produce and release a blockbuster animated movie. But Morgan Stanley +Research estimates that major media companies could reduce their overall programming expenses +by around 10% as they begin to test GenAI tools. + + +For TV and film production companies, whose content capital spending accounts for about 50% of + total expenses, costs could fall as much as 30%. They can apply GenAI to activities such as script + INVESTOR +writing, production, editing, sound mixing and visual effects. + MEDIA ALUMNI CLIENT LOGIN + RELATIONS RELATIONS +  + Our What About Careers +Animation is an area where there mayInsights + be more opportunities Us enhancement and cost  + We Dofor both product +reductions. For example, GenAI applications can quickly help with character design, syncing lips to +recorded video, adding sound effects and dubbing the final film into a variety of languages. + + +“We expect that GenAI can meaningfully reduce the cost of production by replacing physical +production with digital or virtual components,” Swinburne says. “These savings extend to pre- and +post-production, reducing the need for re-shoots, the cost of script writing and editing, among other +opportunities.” + + +Media and entertainment companies can then reinvest a large share of the savings in their own value +chain, including marketing, talent and live sports rights. + + +“It’s a talent-driven business and, if there’s more money to be allocated, top talent would probably get +paid more,” Swinburne says. “In this attention economy, in which mega media platforms are battling +for consumer engagement, sports are unique and budgets for sports rights should increase as GenAI +tools free up resources.” + + + +Curating Music and Boosting Live Events + +The cost of recording and distributing music has fallen significantly in the past years as technology +has started offering capabilities previously available only at professional studios. GenAI is expanding +those capabilities, allowing artists to produce high-quality recordings from their own homes and then +to upload to streaming platforms. + + +As a result of that shift, music labels could benefit from a higher volume of songs and more chances +of developing artists. But they will also face the challenge of a more fragmented audience. + + +Then enters GenAI with curation and personalization. Technology could help deliver the right track to +the right consumer at the right time. That translates to more engagement, which supports consumer +retention and higher pricing power. + + +At the same time, GenAI is driving additional demand for live experiences. +  INVESTOR MEDIA ALUMNI CLIENT LOGIN + RELATIONS + “Because AI changes how we communicate with RELATIONS + each other digitally, it probably causes consumers to  + treasure ‘in-the-moment,’ communal Our + experiences evenWhat + more,” says Cameron + AboutMansson-Perrone, + Careers who + Insights + leads Music and Live Entertainment coverage We + at Morgan Do “Also, as + Stanley. UsAI creates more consumer  + demand, it might lead to more financial incentive for artists to tour.” + + + + + Sign up to get Morgan Stanley Ideas delivered to + your inbox. + + Email Address (Required) + + + + + SUBSCRIBE + + + + +Stablecoins Offer Singapore’s Next +Another Way to RESEARCH Chapter +Move Money Stablecoins Offer + Another Way to + Move Money + + + 01 / 03 + + + + + Investor Corporate + Relations Governance + Disclosures INVESTOR Newsroom + MEDIA ALUMNI Careers + CLIENT LOGIN + RELATIONS RELATIONS +  + Our What About Careers + Insights We Do Us  + Contact Us Global Offices Equal Employment Opportunity Cybersecurity Terms of Use + Privacy & Cookies Your Privacy Choices + + + + + © 2026 Morgan Stanley. All rights reserved. + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pdf_text/movielabs_industry_forum_spring_summit_2026.txt b/2d_to_3d_market_tech_reports/pdf_text/movielabs_industry_forum_spring_summit_2026.txt new file mode 100644 index 0000000000000000000000000000000000000000..0e3325f1a4dcf98b4eaa00468470ef816afe204d --- /dev/null +++ b/2d_to_3d_market_tech_reports/pdf_text/movielabs_industry_forum_spring_summit_2026.txt @@ -0,0 +1,1524 @@ +SP RI NG 2 0 2 6 SUMMI T + SP RI NG 2 0 2 6 SUMMI T +Leon Silverman +Chair +MovieLabs Industry Forum + Antitrust Reminder + Competitors who work together must be + mindful of antitrust issues + Antitrust law forbids agreements that restrain trade + Agreement is broadly construed. Discussion of + commercially sensitive topics plus parallel conduct is + enough. + • Interstate Circuit + • Ticket prices + • Future licensing decisions + + Key – no discussion of commercially sensitive topics + that could harm competition + • Any form of price + • Nonpublic future business plans + Significant latitude for competitor +GOOD NEWS collaborations on tech topics that: + + • Improve Efficiency faster and with less + waste + + • Enhance Interoperability – improved + interoperability promotes competition + and increases output + + • Reduces Information Costs – common + ontology + Industry success through open +OUR GOAL exchange and open collaboration + + So please + • Do share your industry expertise + • Do share input and feedback + • Do not share anything confidential + • Do not share anything competitively + sensitive (e.g., future business plans) + AGENDA FOR TODAY +• Interop Read Out/Update +• Mini Keynote: What is a Common Message and why is it important? + Submit Questions in +• OMC Read Out/Update +• Mini Keynote: OMC in Action: Connecting the Dots +• Security Read Out/Update +• Mini Keynote: What does Zero Trust Look Like in Practice? +• AI Read Out/Update +• Mini Keynote: Training Models for Professional Media Creation +• Q &A DISCUSSSION +• NETWORKING BREAK +• Greenlight: Behind the Scenes of 2026 HPA Demo +• 2030 is Real and Deployed Now! – Case Studies/Speed Dates +• Mini Keynote – 2030 in the Age of AI +• Creative Conversation in partnership with UTA +• WRAP/OPEN DISCUSSION 6:00 PM RECEPTION + THANK YOU + Eric Iverson Hana Strickfaden + PT Clement Brendan Fay + Aiden Feurer Brandon Travillion + Kasey Covaleski Dane Manaloto + + Clyde Bessy Kelly Pratt + + + Joyce Nunokawa + Forum Focus Areas + Updates and Readout + AI + Workflow Ontology for Artificial + Security +Interoperability Media Creation Intelligence + FORUM WORKSTREAM ACTIVITIES + Implementation Groups + (Convening group) Inform and update, e.g., latest + 1 - 2 per Focus + releases, lessons learned + Area each year Workflow Interoperability + Ontology for Media Creation + Security + Artificial Intelligence + + + + + E.g., Topic 101s, deep dives, + One offs + Topic Sessions detailed updates, discussions + + + + + Defined outputs, e.g., updates + Limited recurring series + Drafting Groups to specifications + FORUM FOCUS AREA UPDATE + + + +WORKFLOW +INTEROPERABILITY +Jim Helman +CTO +MovieLabs + The Evolving Landscape for Interoperability + • In the 2030 Vision, interop has always been a big tent + • All of our Forum workstreams have projects to advance interoperability + • Data interoperability, including Ontology + • Ontology for Media Creation + • Creative Vocabularies for AI + • Common Communication Framework for AI (approvals) + • Software-Defined Workflow interoperability + • API-first everywhere to enable 2030 Vision automation + • Programmatic control of security + • Common messaging for event-driven workflows + • Big impacts of AI + • Agentic AI needs ground truths to be reliable -> OMC more important than ever + • Agentic AI & AI coding dramatically increasing need for and use of APIs + • Easier to shim different APIs -> functionality more important than standard APIs? + FORUM MINI-KEYNOTE + + + + What is a Common Message + and Why is it Important? +Doug Sherman +VP, Technology / Fellow / Architect +Dreamworks + MovieLabs +Comon +Messaging +Format +Doug Sherman, VP Technology +April 16, 2026 + + + © 2026 DreamWorks Animation LLC. All Right Reserved. + Overview + 01 + The Format + + + 02 + The Opportunity + + + 03 + The Results + MovieLabs Common Messaging Format Example Pt.1 +{ + "header": { + "messageSchema": "" + "messageType": "com.movielabs.transferCompleted.aspera", + "messageTypeVersion": "0.0", + "sender": { + "schemaVersion": "https://movielabs.com/omc/json/schema/v2.6", + "entityType": "Participant", + "identifier": [{ + "identifierScope": "dreamworks.com", + "identifierValue": "Doug Sherman" + }], + }, + routingKey: "0000-cd0578a8-a828-4cf2-a487-87a39c071d80@request", + “messageCreationDate”: “2025-04-22T11:22:07.018-0700”, + "source": { + "schemaVersion": "https://movielabs.com/omc/json/schema/v2.6", + "identifier": [ + { + "identifierScope": "dreamworks.com", + "identifierValue": "GLD" + } + ] + }, + MovieLabs Common Messaging Format Example Pt.2 +"correlationID": "1096bfbe81a94efab61abd5b085bf4ec", + "history": [ + { + "date": "2025-04-22T11:22:07.023-0700", + "value": "receivedTimestamp" + } + ] + }, + "body": { + “contents”: { + "details": { + "service": "package", + "direction": "push", + "transferID": "0000-cd0578a8-a828-4cf2-a487-87a39c071d80@request", + "destination": +"/path-to-remote-vendor-aspera-server/2026/03/27/0000-cd0578a8-a828-4cf2-a487-87a39c071d80@request", + "files": [ + "1122-cd3053ba-a8ef-4032-89dc-a17c36d45ab8@request" + ], + "description":"SHOW_20260327_DWA_001", + }, + MovieLabs Common Messaging Format Example Pt.3 + +"production": { + "schemaVersion": "https://movielabs.com/omc/json/schema/v2.6", + "entityType": "CreativeWork", + "identifier": [ + { + "identifierScope": "dreamworks.com", + "identifierValue": "REALLY BIG SHOW" + } + ], + } + }, + "additional": { + "address": "http://vendor.host.com:8880/complete", + "meta": { + "notificationType": "webhook", + "messageType": "transfer.push", + }, + "destinations": [ + "local" + ] + } + } +} + The +Opportunity +● Asset Exchange between + Studios sparks innovation + +● Real-Time Alert for File + Transfer Completions + +● Automate triggered + behaviors upon successful + receipt + Exchange Results and Impact + ● Successfully exchanged prototype digital + messages between Studios on an active + production + + ● The digital message exchange was + successful via a webhook + + ● Demonstrated successful real-time asset + exchange capabilities + The Takeaway Message +● The common message format could be + potentially reduced in complexity. +● Utilized specific portions of the full + message structure. +● A custom, more terse message format + was ultimately exchanged. +● Full utilization of the common format + offers future potential. +● A shared common messaging format + maintains significant value. + Q&A + Comments? + Have expertise and want to participate in drafting groups? + + Which FOCUS AREA notification lists should you be on? +WORLFLOW INTEROP ONTOLOGY FOR MEDIA CREATION SECURITY AI + + +LET US KNOW: industryforum@movielabs.com + FORUM FOCUS AREA UPDATE + + +Ontology for Media +Creation +Raymond Drewry +VP, EMEA Operations, Principal Scientist +MovieLabs + OMC 3.0 Release Plan +• Guided by + • Drafting groups + • Will meet less frequently starting in May, mostly for review and specialized work + • Feedback from application developers + • Underlying technical changes in schemas +• Purpose + • Fill in missing pieces getting from capture into Editorial + • Support developers in targeted application areas +• Main Features + • On-set and production data and documents + • Video pipeline through Editorial + • Camera etc. Infrastructure and metadata + • Improved connection between Narrative and Production + OMC 3.0 – All Releases Include… + + • For new/changed features + • Base documentation + • RDF and JSON schemas + • JSON examples + • JSON Validator, providing semantic as well as syntactic validation + • Quick release notes + • Developer education and outreach + + + Note: Some small items may move to earlier or later releases + OMC 3.0 2026 RELEASE SCHEDULE + May June July Sep Dec + JSON & RDF changes + Creative Refs, Art + Initial Video pipeline + Compound Essence Provenance + On-set, Prod docs Official Release + Infrastructure model Extensions Feature Complete +Features + + + + + Concepts & Vendor support in + Metadata for camera, Audio Full Documentation + Depictions • Script Tools + lens CG Asset Turntables Bug Fixes + Narrative to • Production Mgmt + More video pipeline Formalized Final Vocab + Production • Editorial + Editorial shots, seqs Transforms + Bug fixes +Target Implementors + + + + + Narrative, Script Apps On-set + On-set Data Editorial DCCs Everybody especially + Collection Dailies Providers Everybody All implementors + MAM Vendors + Production Mgmt Camera/Lens + Apps Manufac. + + + + + Targeted implementors meetings to coincide with releases + After 3.0 + + • Bug fixes + • Formal inclusion of discovered best practices + + • More examples + • Connected ontologies + • Episodic works + + • Logo Program – TBD + + • IBC Accelerator Project with RAI (Italian broadcaster) + After 3.0 + + • VFX + • We’re learning a lot from Greenlight, and will start a drafting + group to review/amend that + • Already working with the VFX community (VES and others) + • Conform and Mastering + • Connection to distribution + • Archiving + • Narrative Extensions + FORUM MINI-KEYNOTE + + + +Building Stuff +New release and supporting adoption + +Chris Vienneau +Advisor, Technology Specialist +MovieLabs + Ontology for Media Creation + + + + + Script & Pre-Production + + + + Production Planning + + + On-Set + + + Dailies, Review & Approve + + + Post Production & VFX + THREE USE CASES + + Ready to Share Sneak Peak + + + + + Script Hub 3D Layout Assist Frame.io TD + Features + + + + + Access OMC APIs + Access OMC APIS Access OMC APIs + Metadata Audit + Merge IDs Create 2D Reference + QC + Connected Ontology Create 3D Reference + Import/Export + Graph Exports Connect to Story + AI workflows + NARRATIVE HUB +Objective: Leverage OMC to drive AI +structured analysis + •Character Relationships + •Story Arc + •Location Analysis + +1. Import Narrative Data via OMC APIs + a) Scripto + b) Yamdu + c) Filmustage + d) Scriptation +2. Use connected narrative Ontologies + a) ETC/Disney + b) Drammar + Narrative hub + 3D LAYOUT ASSIST +Objectives: +• Connect auto-generated AI content to asset +management (Perforce) and production management +(Flow) +•Bring context to 3D assembly + +1. Import Narrative Context into 3D layout via OMC + APIs +2. Leverage OMC to drive AI structured analysis + a) Object segmentation and classification +3. Drive Generative 2D and 3D UI with OMC context +4. Connect OMC to content creation open source + a) AOUSD + b) MaterialX + c) OpenEXR +5. Connect auto-generated AI content to asset + management (Perforce) and production + management (Flow) + 3D layout + Frame.io TD +• Import Narrative Context to Dailies via OMC +API +• Leverage upstream OMC narrative and +onset data from: + •Scripto + •Yamdu + •Konsol + •Scriptation + •ScriptE +• OMC driven experience in dailies (Frame v4) +• Leverage OMC to drive AI structured +analysis + •Video QC, Lora training, sentiment, etc. + frame.io tD + Q&A + Comments? + Have expertise and want to participate in drafting groups? + + Which FOCUS AREA notification lists should you be on? +WORLFLOW INTEROP ONTOLOGY FOR MEDIA CREATION SECURITY AI + + +LET US KNOW: industryforum@movielabs.com + FORUM FOCUS AREA UPDATE + + + + SECURITY + +Spencer Stephens +SVP, Production Technology and Security +MovieLabs + SECURITY UPDATE + + • Forum Drafting Groups + • DG1: Authorization policies + • DG2: Programmatic security + + • Next Implementation Group Meeting late June + WHAT THE PRODUCTION WANTS + The assistant + The VFX editors are + supervisor will ready to import + be transferring The colorist is proxies into an + The director is plates to the going to use the Avid bin + ready to VFX vendor BaseLight to What exactly + review dailies + render the do you all + conform want?!!? + + + + +Producer Production System team: SaaS + Assistant infrastructure + and security + { PARTICIPANT, ACTION, TARGET } + The assistant + The VFX editors are + supervisor will ready to import + be transferring The colorist is proxies into an + The director is plates to the going to use the Avid bin + ready to VFX vendor BaseLight to Translate + review dailies + render the triplet to + conform system + + + + +Producer Production System team: SaaS + Assistant infrastructure + and security + WHAT THE PRODUCTION WANTS + The assistant + The VFX editors are + supervisor will ready to import + be transferring The colorist is proxies into an + The director is plates to the going to use the + ready to VFX vendor BaseLight to + Avid bin + What about + review dailies + render the + conform + what I do?? + + + +Producer Production System team: SaaS + Assistant infrastructure + and security + SECURITY UPDATE + + • Agentic Security Topic Session target mid-June + • Joint meeting w/AI Workstream + • Expected agenda to include + • Protecting agentic workflows + • Agentic AI in cybersecurity + + + • TPN Zero Trust assessment + FORUM MINI-KEYNOTE + + + + What does Zero Trust + Look Like In Practice? +Ahmad Mahdi +VP, Content & Information Security +Walt Disney Studios + Content Security at Disney +Content Security is made up of ten key functions, all working together to support our Studios stakeholders and business partners. + + + + + APP & CLOUD BUSINESS ENGINEERING PIRACY POLICY + SECURITY ADVISORY INTELLIGENCE + + + + Perform technical and Proactively secure the Provide the applications Provide meaningful and Develop, maintain, and + functional assessment of content lifecycle, provide and services needed to actionable piracy insights to update the content security + application and cloud stakeholder advisory, and support managing risk tied inform strategies policies for all of Studios + environments implement process to the storytelling process + improvements + + + + + PRODUCTION S T R AT E G Y & TRAINING & VENDOR & SITE W O R K F LO W + SECURITY O P E R AT I O N S AWARENESS SECURITY ASSESSMENTS + + + + + Advise on vendors, apps, Enable Content Security Develop trainings based on Risk assessment and Assessment and analysis of + and workflows utilized to achieve organizational content security materials approval service for internal internal workflows to ensure + during production goals and share with internal and and third-party facilities content is handled securely + third-party staff + + + 48 + Zero Trust in 2026+ + + + + What is Zero Trust Architecture anyway? + Key Principles of Zero Trust Security + + • Continuous Verification: Always authenticate and authorize users and devices + • Least Privilege Access: Restrict user access to only the necessary resources + • Assume Breach: Operate under the assumption that threats already exist, + allowing for faster detection and reduced damage + • Micro-segmentation: Break networks into small, secure zones to isolate + workloads and prevent lateral movement + Core Components of a Zero Trust Architecture + + • Strong Identity: Using multi-factor authentication (MFA) and single sign-on + (SSO) to verify users + • Device Security: Validating the security posture of devices (e.g., ensuring they + are patched) before granting access + • Data Protection: Encrypting and restricting access to data based on user roles + and risk + • Network Security: Using software-defined, micro-segmented perimeters + AI E N ABL E D ACCES S , AU N THE N TI CATI ON +AN D AU THORI ZATI ON + + + This will present some real opportunities: + AI Access controls will evaluate + dozens to hundreds of signals to + imagine reviewing in real time… + make fine-grained, real-time where someone sits in the org chart + access decisions, removing what their title is + What their role / job is + complex static group What device they are accessing requesting access from + management and manual That devices’ compliance status / OS integrity, end point security status + Where are they physically/ geo located? + reviews. When was the last time the user took a particular compliance training + Which projects have they been assigned to? + Have they recently been invited to meetings that discuss relevant details? + Etc. + Practical next steps + + • Phishing resistant multi-factor authentication – NOT OPTIONAL + • Next Generation Endpoint Security solutions - NOT OPTIONAL + • Protect your administrative and elevated accounts + • Continuous monitoring / red teaming and penetration testing + • Understand your workflows ---- Critical for Content Protection! + • You get access to what you need, when you need it, from where you + need it ---- Don’t over-permission + • Defense in depth / assume breach mindset + Q&A + Comments? + Have expertise and want to participate in drafting groups? + + Which FOCUS AREA notification lists should you be on? +WORLFLOW INTEROP ONTOLOGY FOR MEDIA CREATION SECURITY AI + + +LET US KNOW: industryforum@movielabs.com + FORUM FOCUS AREA UPDATE + + +ARTIFICIAL AI +INTELLIGENCE +Jim Helman +CTO +MovieLabs + AI Ongoing Efforts + Creative Vocabulary DG + • Industry common creative terminology goals + • Guide AI model builders to align models for creative use and control by + industry professionals + • Provide consistent vocabulary for tagging assets (by AI-driven tagging + solutions and asset management systems) improving asset discovery + using creative terms + • Initial scope: Cinematography + • Version 1 (Lens, Shot Size, Camera Angle, Camera Movement) – May + release + • Version 2 (Depth of Field, Framing, Composition, …) – Fall release + AI Ongoing Efforts + AI Communication Framework DG + • Common framework for communicating AI capabilities, + requirements, and use between and among studios, tool vendors, + and service providers, for + • Use in AI tool usage reviews and approvals + • Design of production AI use guidelines + • Documenting AI-based workflows + • Initial scope: Top level communication needs and basic term + definitions + • Version 1 – June target + Upcoming: GenAI Asset Provenance DG + GenAI Asset Provenance DG + • Define what provenance GenAI workflows should capture (inputs, + systems, configurations, ...) about how Assets were produced + • Industry and use-case driven (governance, copyright, attribution, + repeatability) + • Provenance data that tools and models could make available + • Align with other efforts from vendors and standards like C2PA for things + that they cover + • Foundation for interoperable GenAI system provenance + • Launch: Summer + Upcoming: Other Meetings + AI Implementation Group Meeting + • Discuss ongoing efforts + • Expert panels & discussions on select topics + • Focusing on practical application and industry alignment + • Target for May + + + Topic Session: Agentic Security + • Joint w/security workstream + + Have expertise and wanting to participate? – Send us a note: industryforum@movielabs.com + FORUM MINI-KEYNOTE + + + + AI Training Models for + Professional Media Creation +Doug Bloom +VP, Generative AI – Media & Entertainment +Bria.ai + Training Models +for Professional Use +MovieLabs Industry Forum Spring Summit +April 16th 2026 +Doug Bloom, VP Media & Entertainment · Bria AI · doug@bria.ai + SETTING THE STAGE + + + + + We all agree: + AI needs frameworks. + It also needs to be built + for the people using it. + Today: a few ideas we have put into practice around training models + specifically for professional creative use. + + The goal: systems that understand creative intent quickly — so you spend more time exploring and less + time convincing. + +2 + LOST IN TRANSLATION + + + + + → + [ ILLUSTRATION PLACEHOLDER ] + + + + + 1st AD: "Hey folks, stay focused, Meanwhile, on set... + this is the martini shot!" + + DP: "Where is that reflection + from? Someone kill that baby!" +3 + LOST IN TRANSLATION + + Prompt: "Try a little dutch on this one." + + + + + vs. [ BRIA FIBO-EDIT IMAGE ] + + + + + Intended: canted frame, tense corridor, What was delivered: A “little” bit of Dutch + strong shadows, psychological unease + ✓ What was meant ✗ What was delivered + + MovieLabs Creative Vocabulary for Cinematography Also known as: + Dutch Angle · Canted angle + · German angle + A camera tilt rotating the frame on the lens axis to create a canted horizon. + · Tilted frame + Create unease or tension to the viewer by showing the subject from the tilted perspective · Batman angle +4 + The language was never + the problem. + The problem is models that were not listening. + + + + +5 + THE PROBLEM WITH MOST MODELS + + + + Physics isn't directing. Optimized for everyone + means optimized for no one here. + + + + The whole job of a creative professional + is to diverge from average. + + + + + Technically impressive, physically plausible, + A model optimized for average is structurally at odds with craft. + emotionally inert. + This is not fixed with better prompting. + + + + +6 + INTENT IS THE REAL SIGNAL + + + What makes an audience feel something + is not the tears. It is the decision. + + + + + vs. + + + + + Wide shot, normal framing, balanced, correct. Tight close-up, long lens, frame held. + Emotionally neutral. Nothing wrong, nothing decided. Intimate. The image a viewer cannot look away from. + + + What average looks like What craft looks like + +7 + TRAINING FOR PROFESSIONAL USE + + + + What you train on + is what the model learns to see. + Train on structured, + Rearchitect the data, + Train on short prompts vocabulary-rich + not the model + descriptions + + Precision and disentanglement + Fills gaps toward the most common Every attribute declared. Every emerge from training data. No new + answer it has seen. department addressed. architecture required to achieve + them. + + + Generating an Image From 1,000 Words: Enhancing Text-to-Image With Structured Captions + +8 + Published — arxiv 2511.06876 + TRAINING FOR PROFESSIONAL USE + + + A picture is worth a thousand words. + So we trained on a thousand words per picture. + + Natural Language Structured Specification Language (VGL) + Interior of a pre-war apartment kitchen, + Setting: characterized by aged wooden cabinets, a deep + "establishing shot, interior of a porcelain sink… + A woman with dark, shoulder-length hair, wearing an + pre-war apartment building... Subject: elegant dark dress. She stands with her back mostly + two people are looking out the to the viewer… + + window…" → Lighting: + Primarily backlit from the window, with a gentle + overhead fill. + Standard lens (e.g., 35mm-50mm). Eye-level, + Model fills the rest. Camera: positioned from within the kitchen, looking towards + the window. + Framing: Two Shot + Sharp focus on couple and kitchen counter, with the + Focus: city lights outside slightly softened. + + Every parameter declared. Nothing left to chance. +9 Reproducible. Auditable. + Lighting + TRAINING FOR PROFESSIONAL USE + "conditions": "Dim, ambient light from the city outside, supplemented by a single, soft overhead light in the kitchen.", + "direction": "Primarily backlit from the window, with a gentle overhead fill.", + "shadows": "Long, soft shadows are cast by the figures and objects, extending towards the foreground, contributing to the serious + mood." + + + What the model actually sees + Female + "description": "A woman with dark, shoulder-length hair, wearing an elegant dark dress. She stands with her back mostly to the viewer, + her left hand lightly touching the window frame. Her posture is slightly rigid, conveying a sense of unease or contemplation.", + "action": "Looking out the window, quietly contemplating.", + "appearance_details": "Subtle sheen on her dress, suggesting a luxurious material.", + "clothing": "A dark, elegant, perhaps silk or satin, cocktail dress that reaches just below the knee.", + "expression": "Her profile suggests a serious, pensive expression, with a slight furrow in her brow.", + "gender": "female", + "location": "center-left, by the window", + "orientation": "Facing away from the viewer, looking towards the city.", + "pose": "Standing upright, slightly turned away from the interior, left hand resting on the window sill.", + "relationship": "Standing next to the man, looking out at the city, creating a sense of shared but distant contemplation.", + "relative_size": "large within frame", + "shape_and_color": "Slender, dark silhouette against the city lights", + "skin_tone_and_texture": "Light olive skin with a soft, even texture.", + "texture": "Smooth fabric of her dress" + + + + + Camera + "depth_of_field": "Deep, allowing both the foreground kitchen elements and the distant city lights to be in reasonable focus.", + "focus": "Sharp focus on the couple and the immediate kitchen counter, with the city lights outside slightly softened.", + "lens_focal_length": "Standard lens (e.g., 35mm-50mm), providing a natural and immersive perspective." + +Male + "description": "A man with short, neatly combed dark hair, dressed in a dark suit jacket and a white shirt, no tie. He stands slightly behind and to +the right of the woman, also looking out the window. His right hand is in his pocket, and his left arm is slightly bent, indicating a relaxed but +thoughtful stance.", + "action": "Looking out the window, deep in thought.", + "appearance_details": "Well-tailored suit, indicating a formal occasion.", + "clothing": "Dark, well-fitted suit jacket over a white dress shirt, no tie.", + "expression": "His profile shows a serious, somewhat melancholic expression, his jawline set.", + "gender": "male", + "location": "center-right, by the window", Props and Set Dressing + "orientation": "Facing away from the viewer, looking towards the city.", + "pose": "Standing upright, with his right hand in his pocket and his left arm slightly bent, looking out the window.", + "description": "A vintage, slightly chipped ceramic bowl with some remnants of a dessert, perhaps a scoop of melting ice cream or + "relationship": "Standing near the woman, sharing the view but maintaining a subtle distance, suggesting unspoken tension.", + a few fruit slices, indicating the end of the meal.", + "relative_size": "large within frame", + "appearance_details": "Small decorative rim, a faint crack visible on one side.", + "shape_and_color": "Broad-shouldered, dark silhouette against the city lights", + "location": "mid-ground, center of the counter", + "skin_tone_and_texture": "Medium fair skin with a clear, smooth texture.", + "orientation": "Upright", + "texture": "Smooth wool of his suit jacket and crisp cotton shirt" + "relationship": "Completes the narrative of a recently concluded meal, adding to the lived-in feel of the kitchen.", + "relative_size": "small", + "shape_and_color": "Round, off-white with a subtle pattern", +11 "texture": "Smooth, slightly rough where chipped" + TRAINING FOR PROFESSIONAL USE + + + Every department gets its own voice. + +ENVIRONMENT CAMERA + + +setting · season · time of day angle · lens · depth of field + + + + +LIGHTING CHARACTER + SCENE +conditions · direction · shadows pose · expression · action + + + + +MOOD WARDROBE + + clothing · accessories +atmosphere · color palette · style + (addressed independently) + + + + + Each is addressable. Each is independent. Just like on set. + TRAINING FOR PROFESSIONAL USE + + + Change one thing. Only one thing changes. + + + + + [ BRIA VGL IMAGE ] [ BRIA VGL IMAGE ] [ BRIA VGL IMAGE ] + + ORIGINAL LIGHTING → CAMERA → + + + + + ORIGINAL LIGHTING → CAMERA → + Direction shifted only. Camera changed. + Base scene + Wardrobe and camera unchanged. Lighting and wardrobe unchanged. + + + + + One parameter changed. Nothing else moved. + This is a property of how the model was trained — not how it was built. +11 + CREATIVE DIRECTION + PRECISION + + + + + "A bit warmer." + "More teal." + "Move it left." + + This is not imprecision. + + This is how creative direction works. And it should work with AI too. + + + + +12 + CREATIVE DIRECTION + PRECISION + + + The problem is when the vagueness goes all the way through. + + + + Creative Precision + Understanding Execution + Direction Controls + + → → RGB values, Coordinates... → + Expressive intent. Vocabulary shared. Exact output. + The right altitude Context received. Reproducible. + for the conversation. Intent recognized. No drift. + + + + + "More teal" → understood as a warmth and color temperature intention → RGB value set precisely + + + + Creative direction stays expressive. Execution becomes exact. + +13 + OPEN MEANS EXTENSIBLE + + + Your show. Your characters. Your shorthand. + ENVIRONMENT Standard specification fields + Why this matters for professional use. + LIGHTING Standard specification fields + Foundation data may not include your production's IP. Open + weights closes that gap. + CAMERA Standard specification fields + + + + CHARACTER Standard specification fields + Structured training quality outperforms parameter count. + That's a research finding. + MOOD Standard specification fields + + + + CUSTOM FIELDS — your production adds this + When the shared vocabulary grows, the model grows with it. + No rebuild required. + character.wardrobe.look_id · environment.sequence_palette + style.production_tone · camera.lens_fx + + + + +14 + SHARED STANDARDS + + + The vocabulary already exists. + The structure already has a place for it. + + MovieLabs Creative Vocabulary for Cinematography Structured Specification Field (VGL) + + + + Dutch Angle → camera.camera_angle: dutch_angle + + + + Two-Shot → camera.framing: two_shot + + + + Motivated Light → lighting.conditions: source_motivated + + + + Dolly Zoom → camera.movement: dolly_zoom + + + + Golden Hour → lighting.source: natural__golden_hour + + + + +15 + Adopting the MovieLabs Creative Vocabulary for Cinematography into our structured + visual specification language (VGL) and the foundation models trained on it. + + + + We are not building a tool + you have to fight to use. + We are building a tool + that speaks your language. +16 + Language gives you control. + Control makes AI yours. + + + Bria AI · bria.ai + Q&A + Comments? + Have expertise and want to participate in drafting groups? + + Which FOCUS AREA notification lists should you be on? +WORLFLOW INTEROP ONTOLOGY FOR MEDIA CREATION + SECURITY AI + + + LET US KNOW: + SP RI NG 2 0 2 6 SUMMI T + NETWORKING BREAK + Behind the Scenes of the +2026 HPA Greenlight Presentation + HPA 2026 THEME + GREENLIGHT SCENARIOS 1-3 + + +Scenario 1 Scenario 2 Scenario 3 – Shot Change in Post +Pre-Production Reshoot Metadata + + + + +Draft & Revise Production Prep / Manage Physical Camera Color & + Script Design & Art Production Production Editorial VFX Conform + OCF + + + + + VFX Dailies Sound Create + Assets Proxies Edit & Mix VFX Assets + + + +Replay Available Now Replay Available Now +at MovieLabs.com at MovieLabs.com + PRODUCTION HUBS ON +“WORST DOUBLE DATE OF ALL TIME” + Pre-Production & On-Set Dailies + Narrative Development + + + + + Central Aggregator Knowledge Graph + + Shared Cloud Storage for Assets + Populating the Narrative Production Hub + Interrogating the Knowledge Graph + Part 2 - EDITORIAL TURNOVERS AND SYNC ON ETC ‘EUROPA’ + + 1-3 DAYS 10Mins + + + + Color & VFX Hub + Dailies Hub +Editorial + Hub + + + + + Sound Hub Audio Mix + Shared Assets + Storage (Multi- + Cloud) + Live Without a Net + + + + +Konsol panel for Avid Media Composer +creating a shot, packaging and sending to VFX + Receiving shot, loading into Flow Production + Tracking and then to Nuke, pushing shot back + to AVID + And Finally… + Gaps and Work for 2026 +1. Automated Zero Trust Security + • On Microsoft chatbot used user driven security + • Used static access controls and API keys instead of dynamic + permissions-based access + • We’re working towards fine grain workflow driven user security +2. Incomplete OMC Messaging + • Webhooks instead of Message Queue + • Not a common format or envelop + • Required intermediary (BIND) to get it to ShotGrid and Nuke. +3. Common file storage across all components in the workflow + • There wasn’t truly 1 cloud source of truth for files +4. Integrating and Testing OMC 3.0 (inc. video pipeline) + Behind the Scenes: Knowledge Graphs and Agents + + + + +Mark Turner +Program Director +Production Technology + Leonard Arul Chris Vienneau Jim Helman +MovieLabs + Director, Strategy Production Technology CTO + Media and Telco Specialist MovieLabs +Moderator MovieLabs + Microsoft + SECURITY + + Central Aggregator Knowledge Graph + + Triggered or Scheduled + Updates + + Insight Cards + + + + + Internet Access + MICROSOFT AGENTIC AI REFERENCE ARCHITECTURE + SECURITY + + Central Aggregator Knowledge Graph + + Triggered or Scheduled + Updates + + Insight Cards + + + + + User’s Other + Projects Projects + Internet Access + Behind the Scenes: Storage, Security & Messaging + + + + +Chris Vienneau +Production Technology +Specialist +MovieLabs + +Moderator + Jason Fotter Lisa Watts Pete Harrow Daryll Strauss + CEO CEO CTO Production Technology + Bind Studio CREE8 The Rebel Fleet Specialist + MovieLabs + Part 2 - EDITORIAL TURNOVERS AND SYNC ON ETC ‘EUROPA’ + + 1-3 DAYS 10Mins + + + + Color & VFX Hub + Dailies Hub +Editorial + Hub + + + + + Sound Hub Audio Mix + Shared Assets + Storage (Multi- + Cloud) + Q&A + Comments? + Have expertise and want to participate in drafting groups? + + Which FOCUS AREA notification lists should you be on? +WORKLFLOW INTEROP ONTOLOGY FOR MEDIA CREATION SECURITY AI + + + LET US KNOW: industryforum@movielabs.com + 2030 is REAL ! +and Deployed NOW ! + Fast off the Blocks + MovieLabs +“Immediatelies” + From Dailies to “Immediatelies” + + Principle 1: All assets go to the Principle 6: Identity-based + Cloud Security + + + Principle 9: Non-destructive + Principle 2: Applications move to + dynamic workflows using + Media + Common Data Formats + + + Principle 3: Publish-based Principle 10: Real-time iteration + Distribution and feedback + • Capture: Blackmagic Cine Ursa output to Signiant Jet. + Growing files to Cloud Storage + +Demo Case • Visibility: Content indexed via Signiant Media Engine. Run + through AWS AI & Wasabi AiR for identification. Tagged to + Movie Labs Ontology for Media. + + • Access: Claude AI access via Signiant MCP server. Full + Signiant security. + + • Action: Manual or Agentic search for specific scene or + trigger. Play of assets direct from storage via HLS with + watermark. + Video Demo + Bending +Time + + +Peter Postma + Vlado Struhar, Director + Principle 9 Case Study +Non-Destructive On- + Set + Color Grading + Introduction to +On-Set Color Grading + “ +I am pleased to see QTAKE has been leading the way for a +centralised metadata collection point. The ability to send LUT +and CDL values from LiveGrade to QTAKE was particularly +helpful. + +By recording clips in a log format and including these values as +metadata rather than baked into the recorded image, we were +able to provide playback in multiple colourspaces +simultaneously. + +For example, we could send P3 to an onset cinema, Rec709 to +onset monitors and HDR to a dedicated display. + Benefits +• Post-recording assessment of the original image +• Creative look comparison +• Automatic dailies creation +• Proxy media still has baked-in look + Key Learnings +• Small changes can have great impact +• Specific use cases can become broadly applicable + Thank +You + Overview + JioStar Creates 16,000+ Mktg. Collaterals & Promos per Month + + Prior State Current State - Postudio + + + India's largest + media company + (Disney+Viacom + India) + Physical studios; Repeated media transfer; Cloud-hosted assets, Virtual editing +30K+ hrs of Original + generic chat collaboration; manual project Environments, and fully integrated workflows - + Content/ Yr + tracking & physical access control all accessed through Postudio platform +100+ TV Channels & + JioHotstar (OTT) + + 20K+ hrs of VM usage & 30%+ more cost effective Full migration in less than + 1000+ staff per month than On-Prem 6 months + Our Solution + + Central Storage App Marketplace Workflow Suite + Solution Fully integrated with Apps & 15+ industry standard softwares Collaboration + Workflows & virtual machines for creative + Overview tasks like Editing + Project & Team Mgmt. + Optimized & Support All data Data Transfer + types In-house AI tools like ProDub + Access Control & Security + + + + + Postudio Platform + Production House + New Content + + JioStar +Deployment + Editors working Creators Admin tracking Cloud based MAM + on VMs via Thin collaborating on usage & For publishing + Cloud based MAM Clients the go performance + Archival Content + Key Outcomes + Real-world implementation of Vision 2030 — at Production Scale + + ● 30%+ more cost effective requiring 85% lesser IT staff + Cost Efficiency + ● Zero CAPEX & obsolescence risk, and 100% utilization + + ● On demand scalability + Work Flexibility + ● Supports JioStar’s hybrid work culture + + ● Live in < 6 months from project start +Deployment Ease + ● Seamless integration & minimal learning + + ● Better content security with robust access control + Content Security + ● Zero Trust Architecture with ISO 27001/42001 & TPN+ Gold + + + Now expanding into Original Content Post as well as AI Localization + Testimonials & Accolades + + + Testimonial Accolades + + + + + Gajendra Tijare Transformational Project Award + Head of Broadcast Tech. & Ops, JioStar IABM Impact Awards at IBC 2025 + Vision 2030 Alignment + + Assets Don’t Move Identity and Permissions + All assets are created or brought straight Each person has a unique identifier + into the cloud workspace and once and a set of permissions to access + they’re there, they don’t move assets, systems, and services + + Thank you! Applications come to Media Secure Environment +Please reach out at Creative work happens in browser- Pre-air work stays inside a controlled + based virtual workstations accessing environment with strict security built +harish@postud.io cloud based assets around workflows; not hardware + to know more + Dist. is a “Publish” function Real-time feedback + Project admins decide who can access Frame-accurate comments and + which asset and at what point in the annotations, notifications for reviews, + process- basically a “publish” function and live collaboration sessions + + + + + Open for Questions!!! + Q&A + Comments? + Have expertise and want to participate in drafting groups? + + Which FOCUS AREA notification lists should you be on? +WORLFLOW INTEROP ONTOLOGY FOR MEDIA CREATION SECURITY AI + + +LET US KNOW: industryforum@movielabs.com + FORUM MINI-KEYNOTE + + + + AI in the Age of 2030 +Steve Newcomb +JumpCut Studios + Shepard’s Tone Series + Creative Conversations + + + + + Eric Iverson Adi Shankar +CTO, United Talent Agency Creator & Showrunner of 'Devil May Cry' on Netflix + Moderator Co-Founder DAMLA + Adi Shankar at a Glance + DEVIL MAY CRY + Q&A + Comments? + Have expertise and want to participate in drafting groups? + + Which FOCUS AREA notification lists should you be on? +WORLFLOW INTEROP ONTOLOGY FOR MEDIA CREATION SECURITY AI + + +LET US KNOW: industryforum@movielabs.com + THANK YOU + SPRING SUMMIT: HIGH-LEVEL AGENDA +Leadership Council - Morning Session – April 16 @ UTA +9:00 – 9:30 – Arrivals + +9:30 – 10:00 – MovieLabs Panel + +Topics include: MovieLabs Perspective and Guidance on Key Forum Focus Areas + +10:00 – 11:00 – Roundtable Discussion + +Topics will be curated from pre meets with Leadership Council members + +11:00 – 11:30 – Greenlight Steering + +11:30 – 11:45 – Wrap Up/Next Steps + +Noon – 1:00 – Lunch and networking with General Forum Members + SPRING SUMMIT: HIGH-LEVEL AGENDA +1:05 – 1:15 – Kick Off, Housekeeping, Anti Trust Reminder +1:15 – 1:35 Interop Read Out/Update + Mini Keynote: What is a Common Message and why is it important? – Doug Sherman, DreamWorks +1:35 – 2:00 OMC Read Out/Update + Mini Keynote: OMC in Action: Connecting the Dots – Chris Vienneau, MovieLabs +2:00 – 2:25 Security Read Out/Update + Mini Keynote: What does Zero Trust Look Like in Practice? – Ahmad Mahdi, Disney +2:50 – 2:55 Wrap Focus Areas/Additional Q&A +2:55 – 3:15 NETWORKING BREAK +3:15 – 4:05 Greenlight: Behind the Scenes of 2026 HPA Demo + Panel: Knowledge Graphs and Agents – MovieLabs, Microsoft + Panel: Behind the Scenes: Storage, Security and Messaging – MovieLabs, Bind Studio, CREE8, The Rebel Fleet +4:05 – 4:55 2030 is Real and Deployed Now! – Case Studies/Speed Dates Signiant, FilmLight, Qtake, Postudio, +4:55 – 5:17 Mini Keynote – 2030 in the Age of AI – Steve Newcomb +5:17 – 5:54 Creative Conversations - Eric Iverson, Jon Erwin and Adi Shankar +5:54 – 6:00 WRAP/NEXT STEPS 6:00 – 7:00 RECEPTION + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pdf_text/netflix_q2_2026_earnings_call_transcript_ai_cost.txt b/2d_to_3d_market_tech_reports/pdf_text/netflix_q2_2026_earnings_call_transcript_ai_cost.txt new file mode 100644 index 0000000000000000000000000000000000000000..ef47bb4bcdeb4abfa2b7e661e1fc2984bd0ec841 --- /dev/null +++ b/2d_to_3d_market_tech_reports/pdf_text/netflix_q2_2026_earnings_call_transcript_ai_cost.txt @@ -0,0 +1,619 @@ +Netflix, Inc. NasdaqGS:NFLX +FQ2 2026 Earnings Call Transcripts +Thursday, July 16, 2026 8:45 PM GMT +S&P Global Market Intelligence Estimates + -FQ2 2026- -FQ3 2026- -FY 2026- -FY 2027- + + CONSENSUS ACTUAL SURPRISE CONSENSUS GUIDANCE CONSENSUS CONSENSUS + + EPS Normalized 0.79 0.80 1.27 0.82 0.82 3.51 NA + + Revenue (mm) 12582.53 12559.94 (0.18 %) 12860.00 12860.00 51383.90 NA +Currency: USD +Consensus as of Jul-16-2026 10:41 PM GMT + + + + + - EPS NORMALIZED - + + CONSENSUS ACTUAL SURPRISE + + FQ3 2025 0.70 0.59 (15.71 %) + + FQ4 2025 0.55 0.56 1.82 % + + FQ1 2026 1.32 1.23 (6.82 %) + + FQ2 2026 0.79 0.80 1.27 % + + + + +COPYRIGHT © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All rights reserved 1 +spglobal.com/marketintelligence + Contents + + + + +Table of Contents + +Call Participants .................................................................................. 3 +Presentation .................................................................................. 4 +Question and Answer .................................................................................. 5 + + + + +COPYRIGHT © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All rights reserved 2 +spglobal.com/marketintelligence + NETFLIX, INC. FQ2 2026 EARNINGS CALL JUL 16, 2026 + + + + +Call Participants +EXECUTIVES + +Gregory K. Peters +Co-CEO, President & Director + +Spencer Wang +Vice President of Finance, Corporate +Development & Investor Relations + +Spencer Adam Neumann +Chief Financial Officer + +Theodore A. Sarandos +Co-CEO, President & Director + + + + +Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. +spglobal.com/marketintelligence 3 + NETFLIX, INC. FQ2 2026 EARNINGS CALL JUL 16, 2026 + + + + +Presentation +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Good afternoon, and welcome to the Netflix Q2 2026 Earnings Interview. I'm Spencer Wang, VP of Finance and Capital Markets. +Joining me today are Co-CEOs, Ted Sarandos and Greg Peters; and CFO, Spence Neumann. As a reminder, we will be making +forward-looking statements, and actual results may vary. + + + + +Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. +spglobal.com/marketintelligence 4 + NETFLIX, INC. FQ2 2026 EARNINGS CALL JUL 16, 2026 + + + + +Question and Answer +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +We'll now take questions submitted by the analyst community. We'll begin with a question on our guidance and our business outlook, +and this question comes from Steve Cahall of Wells Fargo. What is the main driver of FX-neutral revenue growth slowing from 12% +year-over-year in 2Q to 11% year-over-year as the guidance for the third quarter suggests. + +Spence, do you want to take that? +Spencer Adam Neumann +Chief Financial Officer +Yes, sure. Sure. Thanks, Steve. So look, we don't manage the business on a quarter-to-quarter basis. Our goal is to sustain healthy +revenue and profit growth. We talked about that in our letter every quarter. We're guiding, as you say, to 12% revenue growth in +Q3 reported, 11% FX neutral. The Q3 revenue drivers are very similar to Q2. It's primarily growth in our subscription revenue from +increases in memberships and pricing and higher ads revenue. We continue to see healthy acquisition and retention trends on the +membership side and our recent price adjustments are going well on the pricing side. + +Now recall, there is a little bit of quarter-to-quarter choppiness in growth because last year was more back half weighted. So that may +be a little bit of what you see in the deceleration. But honestly, it's not what we manage to. We manage to the full year. And halfway +through the year, we're making strong progress against our goals, and we're tracking to our financial plan for 2026. We expect to +deliver another strong year with, as we saw -- as you see in the guide, 13% to 14% top line growth for the full year. That's roughly +12% FX neutral or about $6 billion of incremental revenue year-over-year. + +And by the way, when we finish 2026, it's worth saying also that in many ways, we're still just getting started as a company. We're +entertaining an audience approaching 1 billion people with still lots of room to grow into our addressable market on every measure. +We're under 45% penetrated into addressable households around the world. It's roughly 800 million addressable households. We're +capturing, we think, just 7% of addressable revenue market. It's about $670 billion of addressable revenue in the countries and +categories in which we operate today. And we estimate that we're only about 5% of TV view share globally. So we're delivering on +our 2026 plan, and we believe we've got lots and lots of runway for solid growth ahead of us. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Thanks, Spence, for that thorough answer. I'll now move us along to a topic on the topic of engagement where we do have several +questions. This first one is from Rob Sanderson of Loop Capital Markets. His question is, management has stated that engagement +quality is improving even as reported viewing hours per member have softened. Can you help investors understand what internal +metrics provide confidence and how these translate into lower churn, pricing power, higher ads monetization, et cetera? At what point +would slow growth in total viewing hours become a concern? +Gregory K. Peters +Co-CEO, President & Director +I'll take this one and unpack it a bit since I know that there's plenty of interest in this topic. Start by saying there is not a linear +relationship between view hours and revenue and profit because all hours are not created equal. All hours don't provide the same kind +of value to the business. And a really great example of this is live programming. So live events do a lot of lifting for us for acquisition. +They're good for monetization. They drive ad revenue, fandom. They're also a promotional platform, but they do not yield typically as +many raw view hours. So live, we expect will be 5% of our content budget this year, but we think that will only be 1% of view hours. + +Having said that, 6 out of top 10 new member sign-up days over the past 5 years have come from live events. And if you compare +that to another content category, take animation series, kids family TV, it's also about 5% of our content spend, so the same amount +of spend, but it's going to drive, we expect 8% of view hours. So same spend and 8x the raw view hours. You can see the differences +there, even though because as indicated by the amount that we're investing in both those categories being the same, we think they're +doing the same value for the business. + + + +Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. +spglobal.com/marketintelligence 5 + NETFLIX, INC. FQ2 2026 EARNINGS CALL JUL 16, 2026 + + + +So we're constantly looking to improve across every dimension of engagement. We look at these as 3 dimensions: quality, variety, +quantity, because they, taken collectively, drive acquisition, they drive retention, they drive the value that our consumers and our +advertising partners ascribe to our service. We described in the last few earnings calls the progress that we've made on quality over the +years. We're not going to go into the details of that quality metrics because, frankly, it's taken years for us to develop it and vet it and +assess it and improve it, and we think that those details are a competitive advantage. +We're also continuing to expand the variety of our entertainment offering. You see us launch new types of content like live, like video +podcast, cloud TV games. Those are all doing things, different things in our portfolio to support different needs from our members. +And then on quantity, view hours grew 2% in the first half of 2026. That's an incremental 1.5 billion hours relative to the same period +last year. It's a slight acceleration compared to 1.5% growth in 2025. And just to be very clear, like all those other dimensions, we +remain focused on continuing to grow that number. + +And better understanding how we are doing at delivering member value, member love is critical to our business. We get it. We geek +out on improving that understanding, operationalizing that understanding. And with regard to engagement, when I started about 20 +years ago, we had one number to describe engagement, hours, just flat hours, no weighting, no adjustments and very similar to how +we've evolved other metrics in the business. Since then, we've gone through about a dozen major iterations of our understanding that. +We get more and more sophisticated because we know, ultimately, it's combined quality, variety and quantity of engagement that +translates into satisfaction and value for members. And that drives the strong business outcomes we see right now, industry-leading +retention. We see increased willingness to pay, strong advertiser demand. And those ultimately drive the top-level metrics of our +business, revenue and operating profit, which are really the ultimate signs of our health. +Spencer Adam Neumann +Chief Financial Officer +[indiscernible] the visual of you geeking out, Greg. It's hard to see Spencer geeking out, but I can see us geeking out. +Theodore A. Sarandos +Co-CEO, President & Director +Those are 20 years of debate and wonkiness. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Well, let me geek out on the next question, which comes from Steve Cahall of Wells Fargo. His question is, amortization expense +for content growth is accelerating in 2026. How is the slate performing? And what metrics are we watching to see how this growth in +content drives increased member value? How do we think about the expense acceleration converting into revenue acceleration? +Theodore A. Sarandos +Co-CEO, President & Director +I'm going to take that, Steve. Look, I think when it comes to programming spend, there are 3 really important takeaways. First, to +remember is that the vast majority of our programming spend goes into the core TV series and film, where we have a really strong +track record, more than a decade of translating those investments into value for our members and returns for the business. I'm going to +come back to that core in just a second. + +But the second one is that we're really disciplined investors. So there isn't some hyper acceleration of content investment. We grow +the content spend slower than revenue while we're continuing to invest in a huge addressable market. So we're forecasting content +expense up about 10% this year. It's a little higher than the 8% we averaged over the last 5 years and below the 14% that we averaged +over the past decade. + +The third thing we want you to remember here is that when we expand into new entertainment offerings, new initiatives, we do it +gradually. We do it where we believe we can add more value for our members, and we do it where we believe we have the right to +win. And then we look for the positive signals before we invest at material scale. This is our MO. It's been our MO for some time. + +You asked how the slate is performing. There's a lot to be happy with in Q2. I Will Find You. It was our biggest launch of original +series this year. Swapped is on track to become the second biggest original animated film right behind KPop Demon Hunters, which +is exciting. Speaking of K-pop, we have K-dramas like Teach You a Lesson, which is on track to become the second most watched +South Korea show ever globally. And it's on track to be our biggest series in South Korea of all time. + + +Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. +spglobal.com/marketintelligence 6 + NETFLIX, INC. FQ2 2026 EARNINGS CALL JUL 16, 2026 + + + +There's a show called The Polygamist. You probably -- is not on your radar, maybe, Steve, but it's out of EMEA. It's another great +example of the -- of our understanding of the local markets and the local regions. The Polygamist was a popular novel from Zimbabwe +more than 10 years ago, from an author named Sue Nyathi. And the teams adapted that into a soapie series for South Africa, where it's +now a huge hit and is traveling all over the region and all over the world. +In Latin America, we've got a big season that just came back for Rosario Tijeras. This was a show that started its life as a licensed +show from TV Azteca in Mexico. After 3 successful seasons, we picked it up and produced an original Season 4, Season 5 and just +screened out Season 6. So you're seeing the slate perform around the world, which is in a real differentiated part of our business. + +Now with that said, with the core, we're also really pleased with the investment so far in our live programming. It plays a really +important role, as Greg mentioned earlier, driving acquisition, accelerating ad revenue, fueling conversation, helping us to launch new +shows. It's helped us build our -- and it's also helping us to understand what are the benefits of live over the entire catalog. So we're +ramping up our live event slate. You saw The Kevin Hart Roast (sic) [ The Roast of Kevin Hart ] in Q2, the Major League Baseball +Home Run Derby earlier this week. What was really fun at Derby, we had -- we produced an original and exclusive Hot Ones special +that we shot on a baseball field to promote Will Ferrell's new series, The Hawk, which just launched today actually. + +And I think it's a cool example of the intersection between our core, that core series, The Hawk, our expansion of the new exclusive +creator content with Hot Ones with Sean Evans as a best-in-class creator. We're thrilled to be in business together, plus live sports, all +coming together on a baseball field and on Netflix around the world. The result there is a highly attractive, scalable return on content +investment, and it ladders up to healthy business metrics that Greg just detailed and our strong growth in revenue, dollar profit and +profit margin. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Thanks, Ted. Our next question on engagement comes from David Joyce of Seaport Research Partners. The question is, attention +is being raised that your second season viewing of series is dropping and therefore, affecting engagement growth. How would you +address this? Are you going to revert to releasing one episode at a time or making longer seasons with more episodes or managing the +production process so there is less time between seasons? + +Ted, do you want to take that? +Theodore A. Sarandos +Co-CEO, President & Director +Yes. Thanks for asking, David. I really appreciate the question because in aggregate, we are not seeing any material change in our +second season viewing compared to season 1. Our second seasons are performing well within our bands of expectation. Very often, +we see drop-off from Season 1 to Season 2. It's very common in the industry. And it's even more so with us because we launch our +shows so big. So our global reach, our discovery mechanism, releasing all at once, this enables us to find a very large audience early. + +So our shows tend to start really big, while most other places, their shows start pretty small and occasionally grow from there. For +example, I just mentioned The Polygamist from South Africa. That show has already had 24 million views in 5 weeks, and it's still +charting. When we look across the entire portfolio, across all the regions, all the content categories, our season 2 falloff is actually +slightly improved this year relative to last year. + +Now of course, you can pick any 5 data points to tell any story you want. But I'm going to repeat this. Our season 2 falloff is actually +slightly improved this year relative to last year. So no changes in release strategies. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Thanks, Ted. The next question comes from Vikram Kesavabhotla of Baird. Last quarter, you shared that the World Baseball Classic +was a significant driver of sign-ups in Japan. What have you observed with respect to the retention and engagement of these members +since then? How has this influenced your perspective on the value of regional live programming? +Theodore A. Sarandos +Co-CEO, President & Director +Yes. Thanks for asking. Our -- we talked about this a lot last quarter. It was -- World Baseball Classic on Netflix in Japan was a huge +hit. It became our most watched program ever in Japan. It was the biggest baseball streaming event ever. World Baseball Classic is + +Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. +spglobal.com/marketintelligence 7 + NETFLIX, INC. FQ2 2026 EARNINGS CALL JUL 16, 2026 + + + +kind of like these other big live events, and they behave a lot like our returning seasons of our big shows. They drive disproportionate +sign-ups. And because of that acceleration, they can exhibit slightly higher churn. But the results are exactly consistent with that trend +and in line with our expectations in all of our modeling. + +So we're thrilled and we're continuing to see -- to lean into live events because they have a big outsized positive on the business. They +drive conversation, drive net acquisition. So we're going to continue to build out that global live event calendar and include -- expand +it to include some regional live events as well. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Great. I'll now move us on to a series of questions around content strategy. We have actually 2 that are pretty similar, so I will do my +best to combine them. They're from Robert Fishman of MoffettNathanson and Rich Greenfield of LightShed Partners. + +First from Robert Fishman, what is your openness to leverage Netflix's leading global scale to bundle with other streaming services +like Peacock or even consider a streaming channel store to compete with Amazon, YouTube, or Roku? +On a related point, Rich Greenfield asks, while it's only been a few weeks, the integration of TF1 in France, is that integration driving +higher engagement for Netflix, including non-TF1 content? Do you think there is a meaningful opportunity for Netflix to become a +distributor or platform for third-party streaming services around the world? +Gregory K. Peters +Co-CEO, President & Director +Yes, I can take this one. Since the very beginning when we launched our streaming service, we've always sought to expand the +entertainment offering we've got in that service. We wanted to provide more value for our members. Our members consistently tell +us that they want more from us. We see that in sort of usage behavior. We see it in any kind of testing or modeling we do around the +space. And I would say that fulfilling on that customer desire for more has really been the driver for growth for our business for the +last 2 decades. + +This partnership with TF1 is yet just another approach to expanding that offering. We're just adding to the range of capabilities that +we have to do that and the mechanisms we have to do that. We've built a leading streaming entertainment service by combining an +unparalleled selection of high-quality programming, best-in-class product experience. We've got a global footprint, big reach and the +ability then to deliver huge audiences, deep engagement, industry-leading monetization. So whether through licensing or through new +partnerships like TF1, we believe that we can help other producers, other services maximize the value, the relevance of the content +that they invest in by finding those bigger audiences. And we have many, many examples of this effect, including now in this new +model with TF1. + +We also believe that such partnerships are good for our members. They enhance the variety of our offering. They're also effective +for our business. And it's early in the TF1 partnership. We're literally 4 weeks in. So there's a bunch that we'll learn through this +process, but we are pleased with the performance we are seeing in that integration. We've been able to enhance our already compelling +service for our French members with even more local French programming, programming we know that they want to watch. We've +seamlessly integrated the TF1 product experience in a way where it supports their brand, but it also keeps things distinct. And we +actually think this approach is advantageous for both them and for us. And the early results from how members are reacting, how +they're interacting are very promising. + +So we don't have anything new to announce today. We're going to continue to learn. There's a lot that we'll dig into over time. We also +think that there's a lot we can improve in the product experience already that we've seen. But if we see additional deals that similarly +serve our members that work for our partner, that work for us, we'll certainly consider them. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Thanks, Greg. Robert Fishman has another question in this category. What's the opportunity for Netflix to launch a FAST platform +given the rapid engagement growth in that space? Could Netflix library programming be used as an on-ramp for new subscribers? Or +would you be open to adding third-party license content to compete with other FAST channels for incremental ad dollars? +Gregory K. Peters +Co-CEO, President & Director + + +Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. +spglobal.com/marketintelligence 8 + NETFLIX, INC. FQ2 2026 EARNINGS CALL JUL 16, 2026 + + + +Yes. So if you go back more than a decade when we transitioned from one tier, one offering to sort of a set of offerings, we've been +consistently seeking to expand the range of those offerings. So think about that as price and plan choices and widen the spread of +those, give customers more options, more range of choice, both at the lower end and also on the premium side. Maintaining and +increasing accessibility, especially as we expand our content offering around the world, add new customer segments, that's a critical +focus and goal for us. Also optimizing long-term revenue is the other big goal. +A free offering could make sense in some markets, but we have to be thoughtful about cannibalization of paid tiers. We've got +to ensure that we've got the right offering, the right differentiation of that offering. It's probably also worth noting that having an +effective scaled ads business in any candidate country for such an offering is clearly an important enabling factor to make those +economics work. So that's all to say that free is something that we're going to continue to consider, but we have no near-term plans to +launch something. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Great. Thanks, Greg. From -- next is from John Hodulik of UBS. With the addition of video games and more recently, vertical video +clips and podcasts, what other content formats are interesting from a long-term road map perspective? And how should we gauge the +success of these initiatives? +Theodore A. Sarandos +Co-CEO, President & Director +Well, let's not get into areas that we may be exploring here and let's not preannounce anything. But I am pleased with the early +progress we're making with vertical clips for choosing on mobile and certainly video podcasting. We mentioned in the letter, we +announced a partnership with the publishers like Conde Nast and Hearst and People. So we're going to bring on some lifestyle content +on the service next month. And with the podcast, we're super encouraged with the viewing patterns that we're seeing. They have +convinced us that this viewing is definitely incremental for us. We're seeing that in daytime viewing. So we're engaging our members +outside of prime time where we historically have done most of the engagement on Netflix. And keeping in mind since professional +long-form content is a pretty small part of mobile. + +It's exciting to see that our video podcasts are out-indexing on mobile for us. So it's a really great progress on both fronts. It's really +important for us to meet our members where they are with the kind of entertainment that they're trying to enjoy. So we've been +building out this great lineup of podcasters include a mix of owned and licensed with creators like Martha Stewart, Kate and Oliver +Hudson have a great new one. We're thrilled to have Jay Shetty's On Purpose exclusively on Netflix. And our members are starting +their day with The Breakfast Club. They're loving the official Bridgerton podcast, Bill Simmons, Pete Davidson, Brian Williams, just +to name a few. These are examples of us continuing to evolve and deliver members more entertainment value and in more ways to +engage with stuff they love. + +But to take a step back and kind of contextualize this, over the last 15 years, the definition of TV has broadened and our definition +has changed along with it. So it's easy to forget. But if you rewind the clock to, say, 2013, we had a single prestige English language +scripted drama show. No unscripted, no local language, no originals, no comedies, no competition shows. And now we're the #1 +creative original programming around the world. Just this week, the Emmy nominations were announced, and we have an Emmy +nomination in nearly every category. We didn't even know back in that first year if House of Cards would qualify for the Emmys. +There was a bunch of debate as to whether or not it was TV. + +So these just announced nominations, I think, are a testament to the quality, the quantity and the variety of our original programming. +These expansions are evolutionary, not revolutionary. They are expansions on the same continuum that we started on years ago, +adding new things as they become available to us as we see signals that our consumers will get value, including in their Netflix +subscription. That continuum has served our members and our business really well. So we're really excited about the progress. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Thanks, Ted. I'll shift us now to a new topic, which is monetization, and I'll begin with advertising. The question is from Steve +Cahall also of Wells Fargo. As you look at the ad tier average revenue per membership today, what are the biggest opportunities for +increasing that monetization? +Gregory K. Peters +Co-CEO, President & Director + +Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. +spglobal.com/marketintelligence 9 + NETFLIX, INC. FQ2 2026 EARNINGS CALL JUL 16, 2026 + + + +Yes. Maybe worth starting by noting that we manage the ads business for total revenue, total revenue growth. So those are the +optimization functions, ARM and fill rates sort of come along for the ride in achieving those goals. Having said that, there's still a gap +between ad tier ARM and then ARM for our standard without ads tier. But that gap is narrowing. And I think of that gap is essentially +near-term underrealized revenue growth. So it represents an opportunity for us. As we improve ads capabilities, we can close that gap +over the time. And you've seen us do exactly that over the last year. +How have we done it? We've expanded demand sources. We continue to execute quickly on our own ad tech stack. We're adding +features. We're adding more ads products. We're adding more measurement. We're making it easier for us -- for folks to transact +with us. Those all drive demand. They drive competitiveness. That yields increased fill rates. It pushes ads arm higher. Those +improvements are really the bulk of the opportunity we have to improve unit performance and monetization for the next few years. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Thanks, Greg. From Sean Diffley of Morgan Stanley, there's a question on pricing. Has there been any change in the receptivity to +price hikes this cycle? And how do you think about the timing and magnitude of taking price? In other words, first quarter versus +fourth quarter seasonality, which is historically a stronger period? +Gregory K. Peters +Co-CEO, President & Director +Yes. Our first half price changes, these are markets like U.S., Mexico, Spain. They've gone well. The results are consistent with prior +price changes. They're consistent with our expectations. So we aren't seeing any real changes in that performance. And then with +regard to timing and magnitude, we really go back to that top-level macro question we've got of have we delivered sufficient value to +our members. We're constantly looking at the signals that help us understand that question, of course, plan selection, plan movement. +We've got retention, which is industry-leading. + +So we see improvements in value delivered start to move well in advance of making price adjustments, and then we price behind that +value that we are delivering. Those same signals inform all of our price change. They include the ones that we've made in the first half +of this year, and they help us determine that timing and magnitude that you're getting at. I think also I would be remiss if I didn't use +this opportunity to state that I believe that we are delivering one of the best entertainment values that has ever existed. + +As a comparison point, if you go to the U.S. and you take what Netflix subscribers are paying, they pay the least per hour of viewing +compared to comparable SVOD offerings. In some cases, they would have to pay twice as much per hour for a competitive service. +And our ads plan at $8.99 in the United States, we think, is an amazing entry point. It's an incredible value, highly accessible. If you +think about all the entertainment you get for that, it's a pretty good deal. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Thanks, Greg. The next question is from Rich Greenfield of LightShed Partners. How should we think about reports of Netflix +bringing back free trials in select markets? What provoked these tests? And are they a function of increased competition, market +saturation or both? +Gregory K. Peters +Co-CEO, President & Director +Rich, you know well. We are always testing. We're always assessing and trying to improve the service. That definitely includes +trying to understand the best ways to bring new members into Netflix. And our investment in several product capabilities over the +last several years for a variety of reasons have now given us even greater flexibility and capabilities to test different approaches in +different markets, different market segments, different conditions to see how we best bring those folks on. + +So for example, we've tested a low-cost first month in Japan that was coincident with the World Baseball Classic. That served us +incredibly well. We've been testing "upgrade on us" options in various different countries and various different conditions around the +world. And as a general part of this test-and-learn strategy now, we're testing free trials for non-rejoining new members in a number of +countries. And obviously, we'll see how they perform and then we'll react appropriately. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations + + +Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. +spglobal.com/marketintelligence 10 + NETFLIX, INC. FQ2 2026 EARNINGS CALL JUL 16, 2026 + + + +Our next question is from Vikram Kesavabhotla of Baird. His question is, Netflix has made progress on its cloud-first video game +strategy this year, including the addition of several new titles. How are these games performing on the platform so far? And how +should we expect the video game offering to evolve going forward? +Gregory K. Peters +Co-CEO, President & Director +Yes, I'll start by reminding folks of the market opportunity here. This is roughly $150 billion in consumer spend ex China, ex Russia, +doesn't include ads revenue. We've been building some solid foundations and now we're seeing exciting positive signals that help +inform and give us increased conviction in our future growth and the nature of that growth here. So you mentioned the cloud-based +strategy, those cloud-based TV games, we really see it working. FIFA and Unhinged became our 2 most successful cloud game +debuts, really solid numbers that put it in the top tier of game performance for us. + +Another big positive sign is that since last October, so 8 months ago, when we really sort of scaled up this cloud initiative, monthly +active players for cloud games have increased 11x and adoption is significantly ahead of that curve that we had for mobile games with +even higher retention value. So we're definitely excited about that and focused on scaling up cloud games. +We're also seeing positive signals with kids games. So Netflix Playground, which is our app for kids games, no ads, no in-app +purchases, curated set of games, very safe space. We've seen 3x growth in daily players since that launch. That's driven more +engagement in kids mobile games, which is up 600% year-over-year. So that's super exciting to see as well. + +Again, we're just getting started here. We're scratching the surface in terms of what we think the total potential of the space offers for +us. You're going to see us continue to calibrate and refine our level of investment here, which is still very small relative to our overall +content spend based on demonstrated performance based on what is working for our members and what's delivering returns to our +business. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Thanks. I'll move us on now to a question from Jessica Reif Ehrlich of Bank of America. Given Netflix's global footprint of +approximately 330 million subscription households, how do you think about leveraging that scale as a strategic asset? How does the +currently consolidating media landscape impact these decisions? +Theodore A. Sarandos +Co-CEO, President & Director +I'll take that. So you're right, Jessica, we do benefit in a number of ways from the tremendous scale that we worked so hard to build +over the last 20 years. We've invested in a number of areas of the business. Look at our tech investment where we spend billions +of dollars every year. And as a result, we have best-in-class discovery, personalization, plus a bunch of great R&D and innovation, +including in production, in distribution, in data that we can draw on to constantly improve every aspect of the business and the breadth +and depth of our content catalog. + +These in combination all deliver this kind of flywheel of advantages. We have the biggest, most engaged audience in the world. +Creators and advertisers love that. We lead the industry in monetization. We have better programming ROI because we amortize +across this global footprint and that -- very often, that programming is very travelable. This is good for our members. It's good for our +business. It creates a really healthy model for organic growth. Greg mentioned TF1 earlier. I think it's being able to bring that scale +to work with partners like TF1 in France to bring content to our members in multiple ways and multiple business models. I think that +really helps when we could bring that distribution scale to local players. + +And finally, Jessica, I'd say regarding consolidation, the industry has been consolidating for over 10 years. So this isn't new. We focus +all of our energy on pleasing our members and sustaining healthy growth for the business. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Thanks, Ted. Our next question comes from Sean Diffley of Morgan Stanley. What have been the early learnings from the +InterPositive deal? And how should we think about potential cost savings in content creation? Could the impact of your $20 billion +cash content budget -- could this impact your $20 billion cash content budget on a go-forward basis? Or is it more likely to be +reinvested into more content and better compensating talent? + + +Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. +spglobal.com/marketintelligence 11 + NETFLIX, INC. FQ2 2026 EARNINGS CALL JUL 16, 2026 + + + +Ted? +Theodore A. Sarandos +Co-CEO, President & Director +Well, look, it's early days for InterPositive, but we're broadly seeing that gen AI is starting to have an impact across hundreds of +our productions. So important to note that we have other gen AI tools in addition to InterPositive. We're thrilled with all the speed +they're bringing to market for us. But we also have Eyeline and we have our animation lab. And what's cool is that they're all working +together to drive innovation. + +We said in the letter, but gen AI is scaling quickly across the entire creative process, from concept to pre-vis through post and +delivery. We're making higher quality output more quickly and efficiently than we could have using traditional methods. So gen AI +workflows now have been used in roughly 300 of our titles with the largest concentration right to date is on post-production. But we're +leveraging gen AI for really complicated shots and sequences. We called this out in the letter, but things like enhancing crowds or +historical battle scenes, those kind of things. + +And keep in mind that in many of the cases, productions would have left out those key shots because they just wouldn't have been able +to afford them, they wouldn't have been able to do them in the time frames that they're working on. So those sequences are saved by +the availability and access to these Gen AI tools. On the content side, we believe it takes great artists to make something great, and +AI is not changing that. AI will give creators better tools to bring their visions to life. Movies are being made by people who make +movies. AI provides them with better tools to make them even better. + +So today, our talent leverages tools for things like set references and pre-vis and VFX and sequence prep and shot planning, which +all makes the production itself so much more smooth and efficient and fast. And that's just the beginning. We're seeing it across the +entire production life cycle and AI -- those use cases are scaling faster and faster. So our documentary series we just released called +American Experiment. That series features 17 minutes of AI-enhanced footage. It enabled us to expand the scope of the series in ways +that just wouldn't have been feasible before. Those 17 minutes, Sean, they were produced twice as fast and at half the cost of previous +options. + +So by equipping creators with these tools, we believe they're going to enhance their abilities, and we are going to have better and more +impact for every dollar we spend on our programming. So content creation time lines can be shortened and quality can be enhanced. +So the cost savings will likely be reinvested into more content on the service, which fuels high-quality engagement and that whole +kind of revenue profit flywheel that's going to come from that, that we've been talking about from day 1. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Thanks, Ted. We have time for one last question, and we'll take that from [ Dan Kurnos ] of StoneX. And it's a question around capital +allocation. Given recent reports around Lionsgate that Netflix has denied and broader speculation around interest in NBCUniversal, +how should investors think about the line between opportunistic IP and library acquisitions and larger-scale M&A that could change +Netflix's capital allocation or strategic profile? +Theodore A. Sarandos +Co-CEO, President & Director +Well, I'll take this, if you don't mind, guys. Dan, we're not going to comment on market speculation, but I'd like to take the opportunity +to remind everyone about our core philosophy. We have multiple ways to achieve our goals, producing, licensing, partnering, +and we're constantly seeking ways to allocate our resources in the most attractive options to maximize value for our members and +delivering for a return for our investors. As we've said, we are primarily builders, not buyers, and that remains the case today. So +others will speculate about our intent to -- here because they have their own reasons for that. But our track record is clear that we have +a very high bar to do any big M&A. + +Spence, do you want to add anything? +Spencer Adam Neumann +Chief Financial Officer +Maybe I'll chime in a little bit specific to capital allocation, Ted. So Thanks, Dan. So look, there's -- I just want to be really clear, there +is no change to our capital allocation philosophy. We invest in the business, both organically and opportunistically through M&A. + + +Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. +spglobal.com/marketintelligence 12 + NETFLIX, INC. FQ2 2026 EARNINGS CALL JUL 16, 2026 + + + +And again, as Ted said, we are primarily builders, not buyers. We also maintain strong liquidity and a strong, healthy balance sheet. +And lastly, we return excess cash to shareholders through share repurchase. + +And on that last point, you can see that very clearly. In Q2, we repurchased $4.7 billion of shares this quarter. That's our largest +quarter of share repurchase in our history. And we still have about $27 billion of capacity on our remaining authorization. So we +feel really good about our growth path. As Ted said, we've got a really high bar, and we have no change in our capital allocation +philosophy. +Spencer Wang +Vice President of Finance, Corporate Development & Investor Relations +Great. Thank you, Spence, and thank you all for your questions and for joining us for our quarterly earnings call, and we will see you +next quarter. Thank you. + + + + +Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. +spglobal.com/marketintelligence 13 + NETFLIX, INC. FQ2 2026 EARNINGS CALL JUL 16, 2026 + + + +Copyright © 2026 by S&P Global Market Intelligence, a division of S&P Global Inc. 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All Rights reserved. +spglobal.com/marketintelligence 14 + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pdf_text/netflix_q2_2026_shareholder_letter_ai_production.txt b/2d_to_3d_market_tech_reports/pdf_text/netflix_q2_2026_shareholder_letter_ai_production.txt new file mode 100644 index 0000000000000000000000000000000000000000..c867591df12a622717e7bf7afedbc5133f7e85bb --- /dev/null +++ b/2d_to_3d_market_tech_reports/pdf_text/netflix_q2_2026_shareholder_letter_ai_production.txt @@ -0,0 +1,669 @@ +July 16, 2026 + +Fellow shareholders, + + ●​ Our financial performance remains solid and we’re on track to meet our objectives for the year: + ○​ Q2 revenue grew 13% year over year (+12% on a FX-neutral basis1) to $12.6B, and + operating margin was 33%. Both were in-line with our guidance. + ○​ For 2026, we’ve narrowed our forecasted revenue range to $51.0-$51.4B and continue + to forecast an operating margin of 31.5%, both consistent with our prior guidance. + ●​ We’re delivering increasing value to our members; engagement is healthy, reflecting the quality, + quantity, and variety of our offering: + ○​ Harlan Coben’s I Will Find You is our most viewed new original series debut in 2026 and + Swapped is on its way to becoming our second most viewed original animated film ever. + ○​ View hours grew +2% in H1’26 vs. +1.5% growth in 2025, despite the competitive impact + of the Winter Olympics and the World Cup this year. + ○​ To better satisfy members, we’re continuing to expand the variety of our entertainment + offering with video podcasts, creators like Danny Go! and Salish & Jordan Matter, and + cloud TV games. + ●​ The results of our recent price changes are consistent with prior changes and our expectations. + ●​ We are leveraging AI to provide a more personalized, immersive and interactive experience for + members, enhance ads capabilities for brands, and improve the quality of our series and films. + ●​ The entertainment industry remains dynamic and competitive. We aim to stay ahead by + executing against our three areas of focus: delivering more entertainment value, leveraging + technology to improve every aspect of our service, and improving monetization. + +Our summary results, and forecast for Q3, are below. +(in millions except per share Q3'26 + Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 +data) Forecast +Revenue $11,079 $11,510 $12,051 $12,250 $12,560 $12,860 +Y/Y % Growth 15.9% 17.2% 17.6% 16.2% 13.4% 11.7% +Operating Income $3,775 $3,248 $2,957 $3,957 $4,193 $4,268 +Operating Margin 34.1% 28.2% 24.5% 32.3% 33.4% 33.2% +Net Income $3,125 $2,547 $2,419 $5,283 $3,401 $3,452 +Diluted EPS $0.72 $0.59 $0.56 $1.23 $0.80 $0.82 + + +Net cash provided by operating +activities $2,423 $2,825 $2,112 $5,290 $1,744 +Free Cash Flow $2,267 $2,660 $1,872 $5,094 $1,525 +Shares (FD) 4,349 4,340 4,317 4,298 4,261 + + +1 + Excluding the year over year effect of foreign exchange rate movements and the impact of hedging gains/losses realized as +revenues. Assumes foreign exchange rates remained constant with foreign exchange rates from each of the corresponding +months of the prior-year period. + + + ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 + Q2 Results and Forecast +Q2 revenue of $12.6B was in-line with forecast and grew 13% year over year (+12% on a foreign +exchange (F/X) neutral basis), driven primarily by membership growth, pricing and increased ad revenue. +We delivered double digit revenue growth in all regions, surpassing the quarterly revenue mark of $4.0B +in EMEA and $1.5B in both LATAM and APAC. In UCAN, Q2 revenue growth of 10% reflects only a partial +quarter impact from our recent price change, which has gone well and as expected. + +Operating income in Q2 was $4.2B, up 11% year over year, and operating margin was 33.4% versus +34.1% in Q2’25. Q2 operating income and margin were slightly ahead of forecast due to the timing of +expenses. As we noted in previous letters, operating income in Q2 grew slower than revenue because +our content amortization growth is higher in the first half of the year; we continue to expect content +amortization to grow slower in the second half of the year and to increase ~10% for 2026. Diluted EPS for +the quarter amounted to $0.80 vs. $0.72 in Q2’25 (+11% year over year), slightly above our forecast. + +As a reminder, the guidance we provide is our actual internal forecast at the time we report and we +strive for accuracy. Our primary financial metrics are revenue for growth and operating margin for +profitability. Our goal is to sustain healthy revenue growth, expand operating profit and margin, and +deliver growing free cash flow. + +For Q3, we expect revenue growth of 12% (or 11% F/X neutral) driven by growth in memberships, +pricing, and ad revenue. We project an operating margin of 33.2% compared with 28.2% in the year ago +quarter. + +Our 2026 outlook is consistent with our prior forecast: we are narrowing our revenue forecast to +$51.0-$51.4B, which represents 13%-14% growth (~12% F/X neutral), driven by growth in memberships +and pricing, and a projected rough doubling of our ads revenue to approximately $3 billion. We continue +to anticipate an operating margin of 31.5% for 2026 both on a reported basis and based on F/X rates as +of January 1, 2026 vs. 29.5% in 2025. Our forecast implies annual operating income growth of 20%+ for +2026. + +Our Focus +As we outlined in our last letter, we have three main areas of focus: + +First, delivering more entertainment value. +We want to win the most valuable moments of truth and thrill our members. We’ve used “engagement” +as a shorthand for the value we deliver members. But, as we’ve developed an increasingly sophisticated +understanding of how consumers ascribe value to our service, we know not all hours are equal. Time +spent is just one aspect of strong engagement - quality and variety also matter. The key is to improve +across all of those dimensions: quality, variety, and quantity. + +Quality is defined by how much our members enjoy and love a title. We work every day to raise the bar +on our core series and film offering, which we have successfully done since we launched streaming in +2007. Animation is a good example of how patient and focused execution can pay off. We started original +animation in 2018, kept improving, and last year produced a true breakout global phenomenon with +KPop Demon Hunters. It became our first title to surpass over 52 consecutive weeks in the Global Top 10. + + + ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 + We built on that momentum in Q2 with Swapped* (137M views2) which is loved by our members and on +its way to becoming our second most viewed3 original animated film ever. + +In addition to a high-quality slate, we also need a wide variety of programming because we serve a +massive audience (approaching 1B people) with broad and diverse tastes, moods and needs. Different +types of content impact our business differently – some drive more acquisition, some primarily aid +retention, and some make the service feel indispensable. For example, in 2026, we expect live +programming to account for just over 5% of our content spend but only ~1% of view hours. Yet, live +event programming accounted for six of the top 10 new member sign-up days over the last five years +(and we've only been doing live events since 2023). + +Quantity of engagement is also important and, as detailed in our bi-annual What We Watched report, in +the first half of 2026, our members watched more than 97 billion hours, up 2% year over year. This was +slightly faster than the 1.5% growth in 2025, despite the competitive impact of the Winter Olympics and +the World Cup this year. Non-English content again drove more than a third of all viewing this half, with +standout titles from Korea, Japan, Spain, and India. + +Our Q2 slate delivered a host of titles that our members loved and were broadly viewed, including +Harlan Coben’s I Will Find You* (87M views) - our biggest new original series debut in 2026 so far, +Legends* from the UK (20M views), K-drama Teach You a Lesson* (55M views) - which is on track to +become our second-most viewed Korean show globally4, Berlin and The Lady with an Ermine* (28M +views) from Spain, The Polygamist* (24M views) from South Africa, Flunked* (11M views) from France, +and Rosario Tijeras S5* (6M views) from Mexico. We also continued to strengthen our film slate, +delivering hits across multiple genres, like action with Apex* (131M views) starring Charlize Theron, +rom-coms with Office Romance* (63M views) featuring Jennifer Lopez and Voicemails for Isabelle* (71M +views), drama with the Emmy nominated feature, Remarkably Bright Creatures* (53M views) starring +Sally Field, and documentaries with Maternal Instinct* (54M views) and The Crash* (67M views). + +Beyond series and films, we continually evolve and expand our entertainment offering to better meet +the needs of members and strengthen our engagement. + + ●​ For instance, approximately half of our viewing occurs in the evening, but our recently launched + video podcasts over-index on viewing during the day and on mobile devices, an indicator that + this engagement is incremental. We recently added Jay Shetty’s On Purpose and Allegedly, as + well as announced podcasts featuring Kate Hudson and Oliver Hudson, Lele Pons and Martha + Stewart through our partnership with iHeartMedia. + ●​ We have a history of working with the most talented storytellers from around the world and, + increasingly, that includes top creators from open content platforms. We’ve had success with + creators including Danny Go!, Ms. Rachel, Mark Rober, and Salish & Jordan Matter, and recently + announced collaborations with the Stokes Twins, Alan Chikin Chow, Nick DiGiovanni, and + Mythical. Ms. Rachel has spent 27 weeks in the Global Top 10 since debuting on Netflix last year + +2 + A view is defined as hours viewed divided by runtime for each title. Views for a title are based on the first 91 days since the +release of each episode (less than 91 days denoted with an asterisk and data is from launch date through July 12, 2026). We +publish our top titles based on views each week at Netflix Top 10. +3 + Based on expected 91 day views. +4 + Based on expected 91 day views (behind Squid Game). + + + ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 + and, more recently, Salish & Jordan Matter and Danny Go! have spent eight and seven weeks, + respectively, in the Global Top 10 since coming to Netflix in April. We also announced + partnerships with leading publishers including Condé Nast, Hearst, and People, to bring their + lifestyle content to members in the US and several other countries beginning in August. + ●​ To deepen our local programming in France, last month we launched a partnership with leading + local French broadcaster TF1. Netflix members in France are now able to experience TF1 + programming as part of their subscription at no additional cost. This fully integrated experience + includes TF1’s linear channels as well as TF1+’s on-demand content, including a wide array of + scripted, unscripted and major live sports programming. While still early, we’re pleased with the + initial performance. Our French members are discovering and engaging with this content (with + view hours of TF1 content growing each week), a TF1 title, Secret Story has already reached our + Top 10 list in France, and we’re gratified to see our partner is also seeing strong early results. + ●​ Our cloud-based TV games are gaining traction. In June, we had our two most successful cloud + game debuts, with the releases of FIFA World Cup: Launch Edition and Unhinged. And Netflix + Playground, our app for kids games, has experienced 3x growth in daily players since its launch in + April, and has fueled growth in our kids mobile games engagement, which is up 600% year over + year5. While off a small base, these early signals give us increasing confidence that we are + building a foundation with exciting future growth potential. + +Overall, our engagement remains healthy and as with all things we do, we’re working hard to improve +every day. We have an exciting Q3 slate including new films like 72 HOURS with Kevin Hart, The Last +House with Greta Lee & Wagner Moura, The Whisper Man with Robert DeNiro, and Call My Agent! from +France, and series such as The Hawk with Will Ferrell, the fifth and final season of Outer Banks, Little +House on the Prairie, the fourth installment of Ryan Murphy’s anthology series, Monster: The Lizzie +Borden Story, The Gentlemen S2 from the UK, The East Palace from Korea, The Doll from Poland, and +Lovesick from Mexico. We’ll continue to build out our live programming – we have two Major League +Baseball events (Home Run Derby and Field of Dreams game) in Q3, as well as the Tyson Fury vs. Anthony +Joshua fight later this year. We also recently announced an expanded agreement with the NFL, securing +a premium slate of games that includes a week-one matchup in Q3, as well as a Thanksgiving Eve game +and NFL Christmas Gameday in Q4, and a final week contest in Q1 of next year. + +Second, leveraging technology to improve every aspect of our service and our business. +To support our growing content offering, we continue to evolve our product to create more personalized, +immersive, and interactive experiences for our members. We are leveraging LLMs to improve title +discovery and to better understand member preferences. We’re also enhancing search for our members +with new voice search functionality and AI-powered natural language search. + +Across the production lifecycle, from concept and pre-visualization through post and delivery, GenAI +utilization by our creative partners is scaling quickly. In 2026, GenAI workflows have been used in roughly +300 of our titles, with the largest concentration of work in post-production. We are increasingly +leveraging these tools to deliver higher quality output more quickly and at a lower cost than traditional +methods. In some cases, productions would have had to leave out key shots and sequences in the +absence of GenAI technology. For example, Glory (India), Brasil 70: A Saga do Tri (Brazil), and The + +5 + Game play hours are not included in our What We Watched report. + + + ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4 + American Experiment (US) utilized GenAI tools to create highly complex sequences (e.g., enhanced +crowds, historical battle sequences, and worldbuilding establishing shots). + +In our ads business, we continue to invest in developing a premium ad experience which delivers highly +engaged and attentive audiences to advertisers. In Q2, we expanded our AI-powered tools across the full +advertising lifecycle, from planning and creative production to campaign management, optimization, and +reporting. We're also automating more of the workflow around how advertisers transact with us by +extending programmatic access to Pause Ads and live inventory this summer. This reduces the manual +effort that has historically limited access for smaller buyers, opening Netflix to a broader range of +advertisers over time. These investments enhance the value of our existing inventory and lay the +groundwork for the next phase of growth in our ads business. + +Third, improving monetization. +Building out our ads business continues to be a top priority and we remain on track to deliver +approximately $3 billion in ads revenue in 2026. Our US upfront negotiations are in advanced stages, and +we expect commitments to close in the next few weeks. We are seeing strong interest in our Live events +lineup — Women's World Cup, an expanded NFL slate, WWE, MLB events and more — alongside +continued demand for our unparalleled breadth of entertainment titles. The growth in our ads business +is being fueled by the strength and variety of our slate combined with our investments in AI powered +tools and workflows, the Netflix Ads Suite and broader programmatic capabilities. + +We offer a wide range of plans and feature sets at accessible price points to provide the best value for +members. As we expand and improve our entertainment offering, we occasionally adjust prices so that +we can reinvest in our service. Our first half price changes, in markets like the US, Mexico and Spain, +have gone well with the impact consistent with prior price changes and our expectations. + +We are constantly testing, assessing, and improving the membership lifecycle. Over the years, +investments in our product capabilities (e.g. TV and mobile UI) have given us greater flexibility to +evaluate the best ways to attract and retain members in different markets. We’ve tested a variety of +methods, including a low cost first month in Japan to coincide with the WBC, and an “upgrade on us” +offer in various countries around the world. As part of this test and learn strategy, last week we began +re-testing free trials for non-rejoining new members in a number of markets around the world (excluding +the US and UK). + +Evolving Our View Hours Disclosure +Engagement is important to our business. But as discussed above, engagement is not just the quantity of +view hours, but also refers to the quality and variety of our offering. To make this clearer, we’re making a +change to our view hours disclosure. + +After today’s What We Watched report, which covers the first half of 2026, we will shift to publishing this +report annually in the first quarter, beginning in 2027. The goal of separating the publication of the +report from our earnings results is to keep the focus on our primary financial metrics – revenue and +operating profit. With this change, we will still report industry-leading title-by-title and total view hours +data (including our weekly Top 10 lists for movies and series in more than 90 countries). + + + + ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5 + Cash Flow and Capital Structure +Net cash generated from operating activities was $1.7B vs $2.4B in the prior year period. Free cash flow +(FCF)6 in Q2’26 totaled $1.5B vs. $2.3B in Q2’25. This included higher cash tax payments due in part to +the Warner Bros. termination fee. For the full year, we continue to expect FCF of approximately $12.5B, +and an annual cash content spend to amortization ratio of ~1.1x. + +Our capital allocation approach is unchanged. We prioritize reinvestment in the business, both +organically and through selective M&A, while maintaining a healthy balance sheet and ample liquidity, +and then returning excess cash to shareholders via share repurchases. In April, our Board of Directors +authorized the repurchase of an additional $25B of our stock on top of the $6.8B of capacity we had +remaining as of the end of Q1. In Q2, we bought back $4.7B of stock, our largest quarter of share +repurchases, and we currently have $27.1B of capacity left in our remaining authorizations. We ended +the quarter with gross debt of $14.4B and cash and cash equivalents of $9.1B. We have $1B of debt +maturing later this year, which we plan to refinance. + +Environmental, Social, and Governance (ESG) +We recently published our 2025 Environmental, Social, and Governance (ESG) report. Key updates for +2025 include how we continue to decarbonize our operations, including the productions of our films, +series and games; invest in our people and the next generation of talent around the world, while +contributing to local economies; and maintain our corporate governance structure to support healthy +growth and create long-term shareholder value. + +During Q2, we launched The Netflix Effect — a comprehensive look at the impact our films and series +have had on economies, industries and culture over the last decade. Netflix is deeply embedded and +invested in the creative industries around the world, producing TV series and films in more than 50 +countries, and contributing more than $325 billion in gross value to the global economy. + +Reference +For quick reference, our past investor letters can be found here. + + + + +6 + Defined as cash provided by (used in) operating activities less purchases of property and equipment. + + + ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6 + Regional Breakdown +(in millions) Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 +UCAN: +Revenue $4,929 $5,072 $5,339 $5,245 $5,432 +Y/Y % Growth 15% 17% 18% 14% 10% +F/X Neutral Y/Y % Growth 15% 17% 18% 14% 10% + + +EMEA: +Revenue $3,538 $3,699 $3,873 $3,998 $4,034 +Y/Y % Growth 18% 18% 18% 17% 14% +F/X Neutral Y/Y % Growth 16% 15% 15% 12% 11% + + +LATAM: +Revenue $1,307 $1,371 $1,418 $1,497 $1,584 +Y/Y % Growth 9% 10% 15% 19% 21% +F/X Neutral Y/Y % Growth 23% 20% 20% 18% 16% + + +APAC: +Revenue $1,305 $1,369 $1,421 $1,509 $1,510 +Y/Y % Growth 24% 21% 17% 20% 16% +F/X Neutral Y/Y % Growth 23% 20% 19% 19% 18% +F/X Neutral revenue growth excludes the year over year effect of foreign exchange rate movements and the impact of hedging +gains/losses realized as revenues. Assumes foreign exchange rates remained constant with foreign exchange rates from each of +the corresponding months of the prior-year period. + +July 16, 2026 Earnings Interview, 1:45pm PT +Our live video interview will be on youtube/netflixir at 1:45pm PT today. Co-CEOs Greg Peters and Ted +Sarandos, CFO Spence Neumann and VP of Finance & Capital Markets, Spencer Wang, will all be on the +video to answer questions submitted by sellside analysts. + + + IR Contact: ​ ​ ​ PR Contact: ​ + Lowell Singer Comms@netflix.com + VP, Investor Relations 415 254-4462 + 818 434-2141 ​ ​ + + +Use of Non-GAAP Measures +This shareholder letter and its attachments include reference to the non-GAAP financial measures of F/X +neutral revenue and adjusted operating profit and margin, free cash flow and net debt. Management + + + ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7 + believes that free cash flow is an important liquidity metric because it measures, during a given period, +the amount of cash generated that is available to repay debt obligations, make strategic acquisitions and +investments and for certain other activities like stock repurchases. Management believes that F/X neutral +revenue and adjusted operating profit and margin allow investors to compare our projected results to +our actual results absent year-over-year and intra-year currency fluctuations. Management believes net +debt is a useful measure of the company's liquidity, capital structure, and leverage. However, these +non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, +net income, operating income (profit), operating margin, diluted earnings per share and net cash +provided by (used in) operating activities, or other financial measures prepared in accordance with +GAAP. Reconciliation to the GAAP equivalent of these non-GAAP measures are contained in tabular form +on the attached unaudited financial statements and in the F/X neutral operating margin disclosure +above. We are not able to reconcile forward-looking non-GAAP financial measures because we are +unable to predict without unreasonable effort the exact amount or timing of the reconciling items, +including property and equipment, and the impact of changes in currency exchange rates. The variability +of these items could have a significant impact on our future GAAP financial results. + +Forward-Looking Statements +This shareholder letter contains certain forward-looking statements within the meaning of the federal +securities laws, including statements regarding our expected results for the fiscal quarter ending +September 30, 2026 and fiscal year ending December 31, 2026; priorities for 2026; adoption and growth +of streaming entertainment; growth strategy and outlook; market opportunity; competitive landscape +and position; expectations regarding series, films, games, live programming and video podcasts; +partnerships; engagement; slate strength; pricing and plans strategy; ad-supported tier and its prospects; +advertising, including our ad-tech platform; product strategy; use of artificial intelligence technologies in +content production and product development; frequency of our engagement disclosures; impact of +foreign exchange rates and hedging activities; stock repurchases; advertising revenue; revenue and +revenue growth; membership growth; operating income, operating margin, net income, earnings per +share, capital allocation, debt refinancing, free cash flow, content spend and content amortization. The +forward-looking statements in this letter are subject to risks and uncertainties that could cause actual +results and events to differ, including, without limitation: our ability to attract new members and engage +and retain existing members; our ability to compete effectively, including for consumer engagement with +different modes of entertainment; failing to improve the variety and quality of entertainment offerings; +adoption of the ads plan and paid sharing; maintenance and expansion of device platforms for +streaming; fluctuations in consumer usage of our service; service disruptions; production risks; +macroeconomic conditions; content slate and timing of content releases. A detailed discussion of these +and other risks and uncertainties that could cause actual results and events to differ materially from such +forward-looking statements is included in our filings with the Securities and Exchange Commission, +including our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on +January 23, 2026. The Company provides internal forecast numbers. Investors should anticipate that +actual performance will vary from these forecast numbers based on risks and uncertainties discussed +above and in our Annual Report on Form 10-K. We undertake no obligation to update forward-looking +statements to reflect events or circumstances occurring after the date of this shareholder letter. + + + + + ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 8 + Netflix, Inc. +Consolidated Statements of Operations +(unaudited) +(in thousands, except per share data) + + Three Months Ended Six Months Ended + June 30, March 31, June 30, June 30, June 30, + 2026 2026 2025 2026 2025 +Revenues $ 12,559,938 $ 12,249,757 $ 11,079,166 $ 24,809,695 $ 21,621,967 + Cost of revenues 6,036,965 5,888,238 5,325,311 11,925,203 10,588,458 + Sales and marketing 823,838 842,217 713,265 1,666,055 1,401,635 + Technology and development 1,007,675 959,696 824,683 1,967,371 1,647,506 + General and administrative 498,850 602,609 441,213 1,101,459 862,675 +Operating income 4,192,610 3,956,997 3,774,694 8,149,607 7,121,693 +Other income (expense): + Interest expense (175,685) (262,077) (182,649) (437,762) (366,821) + Interest and other income (expense) 51,661 2,852,166 39,630 2,903,827 90,529 +Income before income taxes 4,068,586 6,547,086 3,631,675 10,615,672 6,845,401 +Provision for income taxes (667,172) (1,264,295) (506,262) (1,931,467) (829,637) +Net income $ 3,401,414 $ 5,282,791 $ 3,125,413 $ 8,684,205 $ 6,015,764 +Earnings per share*: + Basic $ 0.81 $ 1.25 $ 0.74 $ 2.06 $ 1.41 + Diluted $ 0.80 $ 1.23 $ 0.72 $ 2.03 $ 1.38 +Weighted-average shares of common stock outstanding*: + Basic 4,189,303 4,222,787 4,252,112 4,205,952 4,262,347 + Diluted 4,261,300 4,298,437 4,348,825 4,279,776 4,359,167 + + +* Share and per share amounts have been retroactively adjusted to reflect the ten-for-one forward stock split which was effected on November 14, +2025. + + + + + 9 + Netflix, Inc. +Consolidated Balance Sheets +(in thousands) + + As of + June 30, December 31, + 2026 2025 + (unaudited) +Assets +Current assets: + Cash and cash equivalents $ 9,099,232 $ 9,033,681 + Short-term investments 28,678 28,678 + Other current assets 4,725,393 3,957,832 + Total current assets 13,853,303 13,020,191 +Content assets, net 33,837,573 32,778,392 +Property and equipment, net 2,398,848 2,004,350 +Other non-current assets 8,360,717 7,794,060 + Total assets $ 58,450,441 $ 55,596,993 +Liabilities and Stockholders' Equity +Current liabilities: + Current content liabilities $ 3,866,522 $ 4,084,854 + Accounts payable 814,551 900,612 + Accrued expenses and other liabilities 3,172,611 3,220,869 + Deferred revenue 1,797,456 1,775,730 + Short-term debt 2,483,758 998,865 + Total current liabilities 12,134,898 10,980,930 +Non-current content liabilities 1,625,600 1,579,476 +Long-term debt 11,825,548 13,463,971 +Other non-current liabilities 2,712,343 2,957,128 + Total liabilities 28,298,389 28,981,505 +Stockholders' equity: + Common stock 7,670,503 7,286,410 + Treasury stock at cost (28,387,657) (22,372,658) + Accumulated other comprehensive loss (97,117) (580,382) + Retained earnings 50,966,323 42,282,118 + Total stockholders' equity 30,152,052 26,615,488 + Total liabilities and stockholders' equity $ 58,450,441 $ 55,596,993 + + +Supplemental Information +Total streaming content obligations* $ 25,106,705 $ 24,039,228 + + +* Total streaming content obligations are comprised of content liabilities included in "Current content liabilities" and "Non-current content +liabilities" on the Consolidated Balance Sheets and obligations that are not reflected on the Consolidated Balance Sheets as they did not yet meet +the criteria for recognition. + + + + + 10 + Netflix, Inc. +Consolidated Statements of Cash Flows +(unaudited) +(in thousands) + Three Months Ended Six Months Ended + June 30, March 31, June 30, June 30, June 30, + 2026 2026 2025 2026 2025 + Cash flows from operating activities: + Net income $ 3,401,414 $ 5,282,791 $ 3,125,413 $ 8,684,205 $ 6,015,764 + Adjustments to reconcile net income to net cash provided by + operating activities: + Additions to content assets (4,927,523) (4,846,917) (3,835,813) (9,774,440) (7,385,470) + Change in content liabilities (181,794) 45,216 (214,052) (136,578) (625,305) + Amortization of content assets 4,311,309 4,217,900 3,832,074 8,529,209 7,655,186 + Depreciation and amortization of property, equipment and + intangibles 100,530 98,575 80,013 199,105 160,080 + Stock-based compensation expense 131,312 140,405 80,862 271,717 152,839 + Foreign currency remeasurement loss (gain) on debt (8,813) (10,110) 55,238 (18,923) 83,785 + Other non-cash items 141,356 198,227 120,139 339,583 234,869 + Deferred income taxes 81,260 58,819 (135,755) 140,079 (299,683) + Changes in operating assets and liabilities: + Other current assets 111,713 (704,640) (176,683) (592,927) (308,050) + Accounts payable (157,397) 154 11,046 (157,243) (265,380) + Accrued expenses and other liabilities (1,249,793) 1,295,904 (267,235) 46,111 39,178 + Deferred revenue 54,008 (32,282) 118,635 21,726 207,548 + Other non-current assets and liabilities (63,770) (453,837) (370,624) (517,607) (452,904) + Net cash provided by operating activities 1,743,812 5,290,205 2,423,258 7,034,017 5,212,457 + Cash flows from investing activities: + Purchases of property and equipment (218,644) (196,130) (155,889) (414,774) (284,166) + Acquisitions — (585,744) — (585,744) — + Purchases of investments — — (1,650) — (157,665) + Proceeds from maturities and sales of investments — — 962,413 — 1,732,367 + Other investing activities — — (36,190) — (36,190) + Net cash provided by (used in) investing activities (218,644) (781,874) 768,684 (1,000,518) 1,254,346 + Cash flows from financing activities: + Repayments of debt — — (1,033,450) — (1,833,450) + Proceeds from issuance of common stock 59,980 49,310 169,066 109,290 520,668 + Repurchases of common stock (4,714,403) (1,270,588) (1,654,327) (5,984,991) (5,190,723) + Taxes paid related to net share settlement of equity awards (6,631) (29,230) (6,114) (35,861) (33,984) + Other financing activities (8,573) 19,694 21,957 11,121 6,305 + Net cash used in financing activities (4,669,627) (1,230,814) (2,502,868) (5,900,441) (6,531,184) + Effect of exchange rate changes on cash, cash equivalents, and + restricted cash (19,628) (49,838) 287,471 (69,466) 437,617 + Net increase (decrease) in cash, cash equivalents, and + restricted cash (3,164,087) 3,227,679 976,545 63,592 373,236 + Cash, cash equivalents and restricted cash at beginning of + period 12,266,873 9,039,194 7,204,028 9,039,194 7,807,337 + Cash, cash equivalents and restricted cash at end of period $ 9,102,786 $ 12,266,873 $ 8,180,573 $ 9,102,786 $ 8,180,573 + + + + + 11 + Netflix, Inc. +Non-GAAP Information +(unaudited) +(in thousands, except percentages) + + +Non-GAAP Free Cash Flow + + + Three Months Ended Six Months Ended + June 30, March 31, June 30, June 30, June 30, + 2026 2026 2025 2026 2025 + Non-GAAP free cash flow reconciliation: + Net cash provided by operating activities $ 1,743,812 $ 5,290,205 $ 2,423,258 $ 7,034,017 $ 5,212,457 + Purchases of property and equipment (218,644) (196,130) (155,889) (414,774) (284,166) + Non-GAAP free cash flow $ 1,525,168 $ 5,094,075 $ 2,267,369 $ 6,619,243 $ 4,928,291 + + + + +Non-GAAP Constant Currency Information + + The tables below provide a non-GAAP reconciliation of reported and constant currency revenue growth by region for the +quarters ended June 30, 2025, September 30, 2025, December 31, 2025, March 31, 2026, and June 30, 2026. The regions presented +in the tables below include United States and Canada ("UCAN"), Europe, Middle East, and Africa ("EMEA"), Latin America ("LATAM"), +and Asia-Pacific ("APAC"). + + Three Months Ended Three Months Ended Change + June 30, June 30, + 2025 2024 Q2'25 vs. Q2'24 + + Hedging Hedging + Constant (Gains) Losses Constant (Gains) Losses Revenues Constant + Currency Included in Currency Included in Less Hedging Reported Currency + As Reported Adjustment Revenues Revenues As Reported Revenues Impact Change Change +UCAN $ 4,929,003 $ 8,036 $ (6,431) $ 4,930,608 $ 4,295,560 $ (3,183) $ 4,292,377 15 % 15 % +EMEA 3,538,175 (122,664) 42,049 3,457,560 3,007,772 (15,344) 2,992,428 18 % 16 % +LATAM 1,306,735 161,306 14,033 1,482,074 1,204,145 (1,759) 1,202,386 9% 23 % +APAC 1,305,253 (16,166) (12,266) 1,276,821 1,051,833 (13,015) 1,038,818 24 % 23 % + + + Three Months Ended Three Months Ended Change + September 30, September 30, + 2025 2024 Q3'25 vs. Q3'24 + + Hedging Hedging + Constant (Gains) Losses Constant (Gains) Losses Revenues Constant + Currency Included in Currency Included in Less Hedging Reported Currency + As Reported Adjustment Revenues Revenues As Reported Revenues Impact Change Change +UCAN $ 5,071,781 $ 1,816 $ (2,196) $ 5,071,401 $ 4,322,476 $ (3,265) $ 4,319,211 17 % 17 % +EMEA 3,699,052 (199,597) 113,580 3,613,035 3,133,466 (1,857) 3,131,609 18 % 15 % +LATAM 1,370,913 53,678 26,300 1,450,891 1,240,892 (34,654) 1,206,238 10 % 20 % +APAC 1,368,561 (14,750) (8,319) 1,345,492 1,127,869 (8,408) 1,119,461 21 % 20 % + + + + + 12 + Three Months Ended Three Months Ended Change + December 31, December 31, + 2025 2024 Q4'25 vs. Q4'24 + + Hedging Hedging + Constant (Gains) Losses Constant (Gains) Losses Revenues Constant + Currency Included in Currency Included in Less Hedging Reported Currency + As Reported Adjustment Revenues Revenues As Reported Revenues Impact Change Change +UCAN $ 5,339,270 $ 3,801 $ (6,612) $ 5,336,459 $ 4,517,018 $ (5,564) $ 4,511,454 18 % 18 % +EMEA 3,872,743 (198,888) 87,364 3,761,219 3,287,604 (12,789) 3,274,815 18 % 15 % +LATAM 1,417,939 (1,052) 27,711 1,444,598 1,229,771 (28,307) 1,201,464 15 % 20 % +APAC 1,420,810 28,413 (19,274) 1,429,949 1,212,120 (7,107) 1,205,013 17 % 19 % + + + Three Months Ended Three Months Ended Change + March 31, March 31, + 2026 2025 Q1'26 vs. Q1'25 + + Hedging Hedging + Constant (Gains) Losses Constant (Gains) Losses Revenues Constant + Currency Included in Currency Included in Less Hedging Reported Currency + As Reported Adjustment Revenues Revenues As Reported Revenues Impact Change Change +UCAN $ 5,245,298 $ (20,306) $ (463) $ 5,224,529 $ 4,617,098 $ (14,552) $ 4,602,546 14 % 14 % +EMEA 3,998,419 (418,871) 113,651 3,693,199 3,404,676 (105,225) 3,299,451 17 % 12 % +LATAM 1,497,058 (60,512) 31,286 1,467,832 1,261,934 (13,936) 1,247,998 19 % 18 % +APAC 1,508,982 (40,823) (11,957) 1,456,202 1,259,093 (31,083) 1,228,010 20 % 19 % + + + Three Months Ended Three Months Ended Change + June 30, June 30, + 2026 2025 Q2'26 vs. Q2'25 + + Hedging Hedging + Constant (Gains) Losses Constant (Gains) Losses Revenues Constant + Currency Included in Currency Included in Less Hedging Reported Currency + As Reported Adjustment Revenues Revenues As Reported Revenues Impact Change Change +UCAN $ 5,431,667 $ (4,883) $ (3,284) $ 5,423,500 $ 4,929,003 $ (6,431) $ 4,922,572 10 % 10 % +EMEA 4,033,515 (130,725) 58,490 3,961,280 3,538,175 42,049 3,580,224 14 % 11 % +LATAM 1,584,290 (67,459) 11,494 1,528,325 1,306,735 14,033 1,320,768 21 % 16 % +APAC 1,510,466 28,880 (19,070) 1,520,276 1,305,253 (12,266) 1,292,987 16 % 18 % +Total Revenues $ 12,559,938 $ (174,187) $ 47,630 $ 12,433,381 $ 11,079,166 $ 37,385 $ 11,116,551 13 % 12 % + + + + + 13 + Non-GAAP F/X Neutral Operating Margin + +To provide additional transparency around our operating margin, we disclose each quarter our year-to-date (YTD) operating margin +based on F/X rates at the beginning of each year. This will allow investors to see how our operating margin is tracking against our +target (which was set in January of 2026 based on F/X rates at that time), absent intra-year fluctuations in F/X. + + YTD 2026 +As Reported +Revenue $ 24,809,695 +Operating Expenses 16,660,088 +Operating Profit $ 8,149,607 +Operating Margin 32.8 % + + +FX Impact +Revenue $ 87,127 +Operating Expenses 20,139 +Operating Profit $ 66,988 + + +Adjusted* +Revenue $ 24,722,568 +Operating Expenses 16,639,949 +Operating Profit $ 8,082,619 +Operating Margin 32.7 % +* Based on F/X rates at the beginning of each year including our F/X hedges at that time. Note: Excludes F/X impact on content amortization, as +titles are amortized at a historical blended rate based on timing of spend. YTD 2026 through June 30, 2026. + + + +Non-GAAP Net Debt + As of + June 30, + 2026 +Non-GAAP Net Debt reconciliation: +Total debt $ 14,309,306 +Add: Debt issuance costs and original issue discount 48,985 +Add: Fair value hedging adjustment 13,809 +Less: Cash and cash equivalents (9,099,232) +Less: Short-term investments (28,678) +Net debt $ 5,244,190 + + + + + 14 + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pdf_text/primefocus_investor_presentation_jan_2026.txt b/2d_to_3d_market_tech_reports/pdf_text/primefocus_investor_presentation_jan_2026.txt new file mode 100644 index 0000000000000000000000000000000000000000..f99610475965e62c0fe245f36c3e24d26b4a4877 --- /dev/null +++ b/2d_to_3d_market_tech_reports/pdf_text/primefocus_investor_presentation_jan_2026.txt @@ -0,0 +1,640 @@ +START WITH IMPOSSIBLE + + JANUARY 2026 + CONTENTS + +About Prime Focus + +Business verticals +● Visual Effects and Animation services: DNEG +● AI/ Technology: BRAHMA AI +● Production: Prime Focus Studios + +Financial overview + PRIME FOCUS. AI + + “I am incredibly enthused by the journey of the Prime Focus Group thus far. Our investments in technology over the + years have started bearing significant results. + + While DNEG, our multiple-Oscar-winning VFX and animation business, continues to go from strength to strength, the + real game changer for our business is the rapid scaling of our AI platform, BRAHMA AI. We are already seeing tremendous + success in the creation of world-class digital avatars, alongside the continued advancement of our proprietary AI tools. + This gives us immense confidence that we are on a clear path to becoming a global leader in the AI-driven transformation + now unfolding at scale. + + DNEG is already the world’s no. 1 VFX and animation services platform. We continue to partner with top-tier A+ + filmmakers and studios with a strong line up of projects for 2026, including The Odyssey, Dune: Part 3, Masters of the + Universe, Rings of Power S3 and Blade Runner 2099 amongst others. + + To further augment DNEG’s underlying business, we have also built a highly successful platform for content co- +NAMIT MALHOTRA production. Following the spectacular creative and financial success of The Garfield Movie, our 2026 line-up of content +Founder and Group CEO includes: Animal Friends (Legendary and Warner Bros.); The Angry Birds Movie 3 (Paramount); and our very own + Ramayana, slated for release in Diwali 2026. + + With these three pillars, we see a significant growth runway over the next 5-10 years for the Prime Focus group.” + + + + + 3 + LEADING, DIVERSIFIED VISUAL EFFECTS (VFX) + & ANIMATION SERVICES COMPANY + THREE KEY VERTICALS + +CREATIVE AI/ TECHNOLOGY PRODUCTION + + + +● World’s No. 1 independent VFX and ● Secure, end-to-end enterprise AI platform ● Selective strategic co- + animation services provider productions with top tier studios + ● Brahma AI has 2 key product offerings: +● Premium Film and Episodic Visual Effects and film makers + ● Brahma CORE An enterprise media management +● Key creative partnerships with the world’s ● Prime Focus group has been able + (MAM) platform for governing, searching, and + biggest studios and directors to leverage into its relationships + localising large-scale unstructured audio-visual + with studios and film makers to +● Creating original animation of the highest content. + partner on tentpole projects + quality that delivers for each filmmaker’s ● Brahma STUDIO a creative AI suite for content + unique vision ● Additional VFX & animation + generation, enhancement, and multilingual + services revenues create a natural +● Expansion beyond film and TV into Theme delivery. featuring + hedge for content investments + Parks, Digital Concerts, Immersive ATMAN - Highest fidelity Digital Human system + Experiences and Games ● Strong growth driver for services + VAANI - Highest fidelity lip sync language business while delivering high +● 7 Oscars in the last 10 years localisation margins across the co-production +● On target for reaching $1bn services ● Addressable market size to be over $130bn by 2030 slate + revenue by 2030 + + + + + 4 + KEY STATS +9,800+ 27 yrs+ 90%+ ~$775 mn +Global Customer Revenue from Order book & visible pipeline +Employees relationships recurring customers for Q4 FY26 and beyond + + + +INR 3,322 cr. INR 1,078 cr. 8 VFX +$ 385 mn $ 125 mn Oscars +YTD Q3 FY26 Revenue YTD Q3 FY26 EBITDA 7 in the last 10 years + + + + +BLUE CHIP CUSTOMERS + + + + + 5 + A GLOBAL FOOTPRINT ADVANTAGE + Prime Focus Limited’s global footprint provides a massive competitive advantage, allowing the company to + provide services worldwide and at a significantly lower cost due to a large India-based workforce + + + + 9,800+ + EMPLOYEES + 24 + LOCATIONS GLOBALLY + + + + + LEEDS MOHALI + SOFIA + BUDAPEST + + + NOIDA + LONDON + PATNA +VANCOUVER BARCELONA + RAJAHMUNDRY + + MONTREAL KOLKATA + TORONTO + NEW YORK VISAKHAPATNAM + CHENNAI + HYDERABAD + BANGALORE + THIRUVANANTHAPURAM + + ABU DHABI GOA +LOS ANGELES + MUMBAI + + + SYDNEY + + 6 + VISUAL EFFECTS (VFX) +AND ANIMATION SERVICES + + + + + 7 + DNEG VFX & ANIMATION SHOWREELS + +Film_VFX_SHOWREEL 2.jpg DN_Animation_SHOWREEL_Thumbnail-03_V2.png + + + + + VFX Showreel Animation Showreel + + + + + 8 + TURNKEY SOLUTION PROVIDER + DNEG has complete end-to-end capabilities available to partner with the world’s + premier content creators. + + Film & Feature & Episodic + Episodic VFX Animation + Full Service, End-to-end + Capabilities Across: + Stereo + Conversion + End-to-end Production Services Studios + Media Content and Equipment Rentals ● Pre-production + Processing Ecosystem + ● Production + ● Post-production + Front-End Immersive & Experiential ● Visual effects +Creative Services Services Motion Capture + ● Animation + ● Gaming + Virtual Production & Global Content Processing ● Mastering and Distribution + Real-Time Services & Distribution + + + + + 9 + DNEG IS FULLY INTEGRATED INTO THE CONTENT CREATION PROCESS +Revenues are not dependent on release date, but rather work completion, taking no production risk + + (Months before release) + CONTENT RELEASED + + PRE-PRODUCTION + CONCEPT ART + Contributes majority of + the Revenue + BLADE RUNNER + + + + + ~17-19 months + CASE STUDY + + + + + ~13-14 months + + ~14 months + + PRODUCTION 1-3 months + POST PRODUCTION + + FINAL DELIVERY + TYPICAL PAY + SCHEDULE + + + + + Final payment + Upfront payment at Rental & other Contracted work milestone + Change orders contribute + signing of up to 10- income on studio payments based on completion, + additional c. 15% of the + 20% of contract space & services not release + base contract value + + + 10 + DNEG IS RECOGNIZED FOR ITS GLOBAL, +PREMIUM CONTENT + 25 YEARS + OF CLIENT RELATIONSHIPS +80+ DNEG has won many prestigious industry awards over recent +Industry leading years, further enhancing an already stellar reputation +VFX Supervisors + + + + +8 ACADEMY + AWARDS 8 BAFTA + AWARDS 26 VISUAL EFFECTS + SOCIETY AWARDS 4 PRIMETIME + EMMY + AWARDS + + + + +INCEPTION INTERSTELLAR BLADE RUNNER FIRST MAN TENET DUNE: PART DUNE: PART CHERNOBYL THE LAST OF DUNKIRK THE LORD OF HARRY + 2049 ONE TWO US THE RINGS POTTER + + + + + 11 + DNEG DELIVERS THE WORLD’S MOST PREMIUM CONTENT + + + + + 12 + RECURRING REVENUE STREAMS FROM THE + WORLD’S LARGEST CONTENT CREATORS + % REVENUE FROM RECURRING CUSTOMERS(a) VISUAL EFFECTS & ANIMATION SERVICES + DNEG HAS DELIVERED LARGE SCALE CONTENT + (excluding BRAHMA AI & PRIME FOCUS STUDIOS) + FOR WORLD’S LARGEST CONTENT CREATORS + ORDER BOOK AND VISIBLE PIPELINE AT Dec ‘25(b) + + Contracted & Confirmed Highly Visible Pipeline Studio-wise last 7 years approx. revenue + + + + + $444m $367m $335m + c.$720 mn + Order book & visible pipeline for + Q4 FY26 and beyond + + + + + $315m $210m $185m + + ● Order book consists of 70+ projects + ● Additional addressable market revenue + opportunities of $500 mn+ + $125m $120m $135m + +Note: FY ending March 31st. +(a) % of total in-year revenue from customers 13 +(b) Order book and pipeline defined as contracted and confirmed revenue and revenue from highly visible pipeline of projects + TAM GROWTH AVENUES + THEME PARKS & DIGITAL CONCERTS +DNEG’s award winning VFX talent and cutting edge technology make the Group a pre-eminent vendor of choice + for immersive experience clientele, from Universal Theme Parks (Harry Potter rides) to Digital Avatar concerts + + + + THEME PARKS DIGITAL CONCERTS + DNEG successfully delivered world-class visual media for the Harry Immortality and the future of performance and live entertainment. + Potter rides for Universal Destinations and Experiences for Orlando. + DNEG is currently working on 2 full length digital concerts with revenues + The Harry Potter rides are some of the biggest attractions for in excess of USD $60 mn for FY26 and beyond. + Universal. The rollercoaster ride is a mix of physical and screen-based + The advancements in technology and photorealism has completely + content. DNEG delivered the screen-based content. + blurred the lines between real and digital, and digital concerts make + The market size for screen-based content for Theme Parks is rapidly audiences believe and feel as if they are attending a live concert. + growing, with each new ride incorporating extensive content to give + The market for digital concert live experiences is at an inflexion point, + the ultimate immersive experience to the ride goers. + with 100+ digital concerts expected to be launched over the next 1-5 + DNEG is quickly establishing its presence in this segment, which years. + continues to grow with Disney and Comcast theme parks and + The success of ABBA Voyage in London, which is pulling in over USD + attractions clocking in revenues over USD $40bn in 2025 and + $1bn in annual revenues from one location, has opened the market for all + growing. + other artists. Similar to ABBA Voyage, the immersive adaptation of ‘The + Wizard of Oz’, playing at the Sphere in Las Vegas, has sold over 2 million + tickets. + 14 + SECURE END-TO-END ENTERPRISE AI PLATFORM +FOR MANAGING, CREATING, AND DISTRIBUTING + CONTENT AT SCALE + + + 15 + ENTERPRISES ARE INCREASINGLY USING AV CONTENT +Enterprises now generate and consume Yet the market is fragmented, ungoverned and +more AV content than ever before non-integrated + + +Organizations now communicate, train, and engage The AI content creation marketplace is growing faster than it is organizing, +through audiovisual (AV) content, transforming how resulting in unstructured and incomplete array of solutions +they operate, sell, and scale in a story-driven economy + + Fragmented Tools Lack of Data + THIS DRIVES A NEW SET OF URGENT CHALLENGES and Ecosystems Foundation + FOR THE ENTERPRISES + 1 2 + ● How to create content that is relevant, + 6 3 + No Governance + enterprise-data-driven, contextual, personalized Workflow and Security + and compliant? Disruption Standards + + ● How to ensure it drives engagement and delivers + impact? 5 4 + ● How to create such content with efficiencies of Rapid Hype, Slow ROI Uncertainty + speed, scale, and cost? Enterprise Adoption + + + + + Enterprises lose significant revenue and cost-saving opportunities by + failing to activate and scale their content ecosystems + 16 + A GLOBAL $130BN+ MARKET OPPORTUNITY IN + ENTERPRISE CONTENT TRANSFORMATION UP FOR GRABS + MEDIA ASSET GENERATIVE AI MARKETING + MANAGEMENT (MAM) CONTENT CREATION ORCHESTRATION 2025 + + + + + IN USD BN IN USD BN IN USD BN + + + + +MANAGE: BRAHMA AI CORE CREATE: BRAHMA AI STUDIO DISTRIBUTE: BRAHMA AI CORE + Source: Media Asset Management Source: Generative AI In Content Creation Source: AI Orchestration Market worth $30.23bn + Market by Markets Research Future Market (2025 - 2030) by Grand View Research by 2030 by MarketsandMarkets + + + + 17 + THE PLATFORM + AV DATA INPUT NEW / ENHANCED CONTENT CREATION + • Raw unstructured/semi structured AV Assets • Tagged and indexed content libraries + • Rights Cleared Training Data • Hyper realistic digital human + • Untagged and Unindexed enterprise archives • Authentic Face & Voice localization / + articulation + + DATA INPUT BRAHMA AI INTELLIGENCE CREATION + + + BRAHMA AI provides a single secure, end-to-end enterprise AI platform that ingests, stores and contextualizes enterprise + data and manages the entire content lifecycle, from management to creation to distribution + + + + +CENTRALIZE & GOVERN ACCELERATE TIME- STREAMLINE UNLOCK COST SCALE GLOBALLY +CONTENT WORKFLOWS TO-MARKET PRODUCTION EFFICIENCY WITH CONFIDENCE + + Reduce compliance and Transform AI into Breaks down data silos Cut redundant spend Creative pipeline that + security risks a competitive advantage with one unified platform and eliminating meets brand, regulatory, + rather than a liability operational friction and governance standards + with IP Protection + and Provenience + + + 18 + The Age of Mind² YouTube Thumbnail.jpg + + + + + 19 + TARGET CUSTOMERS AND USER CASES + Scaling personalized, trusted content across industries + + + + + Media & Entertainment Broadcasting & News Sports & Athletics Healthcare & Pharma +Anchor & + Phase 1 ● Localize and scale IP libraries ● Multilingual news anchors ● Digital athletes for fan ● Digital physicians for + ● Personalize content for ● Dynamic content localization engagement patient communication + Growth global audiences ● Archive IP monetization ● Localized athlete-led ● Avatars in regulated + ● Multilingual marketing campaigns workflows + ● Real-time event-driven ● Telehealth, hybrid care + content & clinical training + + + + + Phase 2 +Expansion + Education Enterprise Communications Financial Services Retail & Consumer Brands + + + + + 20 + STRONG REVENUE VISIBILITY +Quick traction in the Brahma AI product business + + + + In February 2025, Brahma AI + acquired Metaphysic, a + $153m generative AI company + + + + Abu Dhabi-based United Al + $70m Saqer Group (UASG) led the + investment round in to Brahma + in February 2025 which valued + Brahma AI at $1.43bn + Visible Revenue + + +Note: + 21 +Brahma AI revenue includes certain portion that’s being charged to DNEG Services which will get eliminated on PFL consolidation. + STRATEGIC CO-PRODUCTIONS + + + + + 22 + STRATEGIC CO-PRODUCTIONS +● Prime Focus opportunistically joins as a co-producer on select marquee projects +● Helps solidify the Visual Effects & Animation order book +● DNEG’s unique positioning in the content creation ecosystem enables Prime Focus to + capture additional revenue opportunities across the value chain + +KEY PILLARS + + INVESTMENT + INNER CIRCLE RISK HEDGED, CONTROL OF PRODUCTION + FRAMEWORK + VISIBILITY CASH ACCRETIVE SCHEDULES + ● Minority stakes at + ● Visibility on marquee ● High services margin ● Better control of + preferred positions + content due to client creates natural work turnover for co- + relationships ● Opportunity for sequels hedge at 2x to 3x of + and spin-offs production shows + ● Diversified client investment + ● Assists with management + base and locks in ● Long-term strategic ● Project margin + of staff utilization and + multi-project opportunity with planned at healthy + efficiency + pipelines specific clients or levels even in + markets downside scenario + + + 23 + KEY CO-PRODUCTIONS + + Releases Diwali 2026 + + + + INDEPENDENT + + + + +COMPLETED PENDING + CONTRACTING + + + + + 24 + BUILDING LONG-TERM + STRATEGIC RELATIONSHIPS + Case Study: The Success of + + + + + Statistics for The Garfield Movie +Content Investment partnership +● Co-produced by Alcon Entertainment & Prime ● Investment in preferred position above common equity + Focus Studios ● Global box office of $257m+ +● Theatrical distribution by Sony, streaming ● Animation contract for DNEG over 3x of Investment + partner Netflix + ● Attractive ROI on initial investment + ● Sequel in development + ● Perpetual royalty benefits + ● Helped DNEG establish Animation + leadership position + + + + + 25 + PRIME FOCUS STUDIOS +INDIA'S LARGEST INTEGRATED PRODUCTION +FACILITY +● Prime Focus Studios owns and operates + one of India’s largest production studio + facilities and offers a full range of + production equipment, technology and + 200,000 SQ.FT. 8 PURPOSE-BUILT CONCRETE FLOORS, SECURE CAMPUS - + services. STUDIO COMPLEX SOUND STAGES, ELEPHANT DOORS, IN THE HEART OF + 50-55 FEET CLEARANCE CATWALKS FILM CITY, MUMBAI +● Located within Mumbai's Film City, + Prime Focus Studios offers 8 + soundstages, ample parking, two + helipads, and a backlot spanning 7 acres. +● Our world-class facility supports + Feature Films, Episodic Series, + Commercials, Web Series, and Special INTEGRATED DESIGNED BY STATE OF THE ART + Events. Designed by top architects and PART OF THE GLOBAL WYLIE CARTER MOTION CAPTURE + DNEG OFFERING ARCHITECTS FACILITY POWERED BY + engineers from Los Angeles and India, FROM LOS ANGELES BRAHMA + our state-of-the-art studio offers + unmatched support and personalized + service. + + + 26 + FINANCIALS + + + + + 27 + FINANCIAL PERFORMANCE + INR cr + + + + Operating + Revenue + (including Other + income) + Visual Effects & Animation: + Key Stats Q3 FY26 + + 28% 40% 25% 33% 32% + 87% 44% + EBITDA + UTILISATION GROSS + (including Forex CONTRIBUTION % + gain/loss) + + + + + 90% 75% + RECURRING INDIA + CUSTOMERS HEADCOUNT + + PAT + + (458) + + + + +Note: Utilisation as % of 251 working days annually EBITDA Margin 28 + APPENDIX + + + + + 29 + DNEG VFX & ANIMATION BREAKDOWN REELS + +MEGASWRD_VFX_THUMB-05.jpg TC_Thumb.png + + + + + VFX - ‘The Last of Us’ S2 Breakdown ANIMATION - ‘That Christmas’ Breakdown + + + + + 30 + SELECTED IN PRODUCTION SHOWS + + + ANIMAL + FRIENDS + + + + + KLARA +AND THE + SUN + + + + + 31 + THANK YOU + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pdf_text/pwc_global_entertainment_media_outlook_2025_2029.txt b/2d_to_3d_market_tech_reports/pdf_text/pwc_global_entertainment_media_outlook_2025_2029.txt new file mode 100644 index 0000000000000000000000000000000000000000..d9889e46c768251bb181fe5a37c29de9d54f2342 --- /dev/null +++ b/2d_to_3d_market_tech_reports/pdf_text/pwc_global_entertainment_media_outlook_2025_2029.txt @@ -0,0 +1,726 @@ +Global Entertainment & +Media Outlook 2025-2029 +Hong Kong summary + + + + +13 August, 2025 + • Overview: Entertainment & + Media Outlook – Global and + Hong Kong + • Segment deep dive + • Generative AI + + + + +Contents + +PwC Global Entertainment & Media Outlook 2025-2029 – Hong Kong summary 2 + Overview: Entertainment & +Media Outlook - +Global and Hong Kong + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 3 + The Outlook covers five-year projections of consumer and advertiser +spending data across 12 segments and 54 territories + + 12 Segments 54 Territories + +• AI • Music, radio and podcasts • Chinese Mainland • United Kingdom + + • Newspaper, consumer • Hong Kong • France +• Business-to-Business + magazines and books + • United States • India +• Cinema • Out-of-home (OOH) + • Japan • Brazil +• Internet advertising • OTT video • Germany • … and more + +• Internet data consumption • Traditional TV + Projected E&M revenue in 2029 and +• Mixed reality • Video games and esports + growth 2024-2029 (CAGR) + + Global Hong Kong + 3.66% 2.26% + (US$3,509 Bn) (US$15 Bn) + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 4 + Global E&M revenue: steady growth at 3.7% CAGR, set to reach US$3.5 +trillion by 2029 +Global entertainment and media revenue (US$ Tn) vs annual growth (%), +2020-2029 + • Among the challenges faced by the industry are rising global trade + tensions, including tariffs, and the fundamental task of persuading +4.00 9.4% 10.0% + CAGR 3.7% consumers to allocate more of their discretionary income to E&M + 3.42 3.51 9.0% +3.50 3.30 products and services. These factors create significant headwinds, + 3.20 + 3.06 8.0% +3.00 + 2.93 requiring a strategic response from the sector. + 2.78 + 2.66 7.0% + 2.53 • Companies are expected to be shifting towards ad-based models +2.50 2.31 5.5% 6.0% and investing in high-growth E&M areas such as gaming and live + 5.0% + 4.7% +2.00 4.5% 4.3% 5.0% events, and utilising AI for efficiency and value creation. + + 3.4% 3.4% 4.0% +1.50 + 2.7% 3.0% +1.00 + 2.0% +0.50 + 1.0% + +0.00 0.0% + 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 + Total entertainment and media revenue Annual growth + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 5 + Unleashing agility in a rapidly changing world + + + 01 02 03 04 + Advertising spend forecast to grow Non-digital categories – such as live Global cinema revenue expected to Global video games revenue forecast + three times as fast (6.1%) as E&M music, cinema and events – continue rise from $33 billion in 2024 to $41 to grow from $224 billion in 2024 to + consumer spending (2%) – as AI set to lead consumer sector revenue, billion in 2029, as international $295 billion in 2029 – exceeding + to transform advertising models and accounting for 61% of sector spending audiences continue to spend more on movie and music industry revenues + drive hyper-personalisation in 2024 locally produced films combined + + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 6 + Advertising spending surpasses consumer spending in 2024 + +Total Global E&M Revenue on ad spending, consumer spending and +connectivity, 2020-2029 (US$ Tn) Advertising is the leading form of direct E&M revenue + and a key driver of global sector growth. + 1.60 + + 1.40 • In 2024, global advertising and consumer revenue were nearly + equal, but advertising is projected to surpass consumer revenue by + 1.20 + US$300 billion by 2029. Leading this growth is Internet + 1.00 + advertising, closely followed by OTT video and Cinema segments. +US$ trillions + + + + + 0.80 • Among these three sub-sectors, consumer spending is expected to + remain relatively stable. + 0.60 + • The gap between advertising revenue and consumer spending will + 0.40 + continue to widen. Advertising spending is set to grow more than + 0.20 three times as fast, with a CAGR of 6.1% over the forecast period, + + 0.00 compared to a 2.0% CAGR for consumer spending. + 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 + Advertising Connectivity Consumer + + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 7 + Projections show E&M growth in Hong Kong will be steady, with a +CAGR of 2.26% between 2024 and 2029 +Total HK E&M revenue and year-on-year growth (%), 2020-2029 (US$ Mn) + + 2029 • Hong Kong's E&M sector is experiencing healthy + US$15Bn growth, primarily driven by the robust +16,000 + performance of Internet advertising +14,000 • Hong Kong E&M revenue is expected to reach +12,000 US$15Bn in 2029. + +10,000 • Hong Kong’s GDP was estimated to be US$407Bn + in Q4 2024. + 8,000 + + 6,000 + + 4,000 + + 2,000 + + - + 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 + Total E&M + +Note: 2024 is the latest available data. 2025-2029 values are forecast projections +Source: PwC Global Entertainment & Media Outlook 2025-2029, www.pwc.com/outlook + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 8 + Hong Kong’s E&M revenue is shifting towards advertising, in line with the +global trend (excluding the Chinese Mainland) +E&M revenue (Global [excl. the Chinese Mainland], Singapore, Hong Kong) +(2020 - 2029 consumer and advertising revenue %) Shifting from consumer spending to advertising + spending + Global (excl. the Chinese Mainland) + Consumer Advertising Consumer Advertising Consumer shift to digital: The rise of digital platforms and + 75.4% 24.6% 66.1% 33.9% streaming services are prompting changes in consumer behaviour, + with more people opting for digital content over traditional forms + like printed media. + 2020 2029 + Singapore Subscription model adoption: Many Hong Kong E&M + companies are transitioning to subscription-based models, causing + Consumer Advertising Consumer Advertising + a decline in physical media sales revenue. + 68.6% 31.4% 59.1% 40.9% + Evolving consumer preferences: Consumers increasingly + 2020 2029 demand personalised and immersive experiences, spurring + companies to offer high-quality content and services to attract + Hong Kong spending. + Consumer Advertising Consumer Advertising Advertising growth drivers: Hong Kong’s key sub-segments + 77.9% 22.1% 68.8% 31.2% fuelling advertising growth are Internet advertising, Cinema, + and Video games & esports, with a CAGR of 7.4%, 5.6%, and + 2020 2029 3.8%, respectively. + +Note: 2024 is the latest available data. 2025-2029 values are forecast projections +Source: PwC Global Entertainment & Media Outlook 2025-2029, www.pwc.com/outlook + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 9 + Hong Kong summary & macro trends + +2024-2029 Compound Annual Growth Rate (CAGR) of market segments + Hong Kong’s CAGR in all segments + 9.19 + Internet advertising 8.45 + 7.36 demonstrate steady year-on-year growth + 8.67 + OTT video 4.59 6.36 + 5.49 + Cinema 4.70 + 4.15 + • Hong Kong’s E&M industry has consistently + 5.11 + Video games & esports 5.71 thrived despite the dynamic global and local + 3.01 + economic challenges. + Mobile Services + • This year, Internet advertising is at the forefront of + OOH advertising + growth, followed closely by OTT videos and + Business-to-business + Cinema segments. + Music, radio & podcast • As digital advertising becomes the leading channel, + Traditional TV the printed media sector continues to experience a +Newspaper, consumer magazine and books decline. + + -4 -2 0 2 4 6 8 10 + 2024-2029 CAGR (%) + Asia Pacific (excl. Japan and Chinese Mainland) Global Hong Kong + +Note: 2024 is the latest available data. 2025-2029 values are forecast projections +Source: PwC Global Entertainment & Media Outlook 2025-2029, www.pwc.com/outlook + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 10 + Segment +deep dives + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 11 + 2.1 +Internet advertising +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 12 + Hong Kong’s video advertising has the highest projected growth in +Internet advertising: Set to reach 29.31% of the market by 2029 +Global – Internet advertising revenue, % of total Hong Kong – Internet advertising revenue, % of total + + 2020 2029 2.74% 2020 2029 + 3.78% 1.47% + 5.44% + + 17.93% + 25.87% 27.11% 29.32% + 35.28% 33.04% + 42.50% + 48.15% + 41.34% 20.96% + 38.35% 26.71% + + + + + Classified Internet advertising Other display Internet advertising Classified Internet advertising Other display Internet advertising + Paid search Internet advertising Video Internet advertising + Paid search Internet advertising Video Internet advertising + + + • Global video advertising revenues will grow at a CAGR of 10.32% for 2024- • Hong Kong’s video advertising revenues will grow at a CAGR of 8.51% for + 2029, compared to 8.45% for the whole Internet advertising segment. 2024-2029, compared to 7.36% for the whole Internet advertising segment. + +Note: Not all figures add up to 100%, as a result of rounding percentages. 2024 is the latest available data. 2025-2029 values are forecast projections +Source: PwC Global Entertainment & Media Outlook 2025-2029, www.pwc.com/outlook + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 13 + Video Ads will be the key driver for Internet advertising growth + +Hong Kong Internet advertising 2020-2029 (US$ Mn) + Drivers of video Internet advertising +Revenue +(US$ Mn) 2024-2029 + CAGR • Video is the fastest-growing market category and is +1,200 6.70% + expected to expand at a 8.5% CAGR over the +1,000 forecast period. + 2024-2029 + CAGR + 800 • Year-on-year growth was 14.3% in 2024 and will + 8.51% + 600 slow to 4.9% by 2029, reflecting the maturation of + 2024-2029 + CAGR the market. + 400 + 7.68% • Big tech leads the Hong Kong market. Google + 200 + captures most of the search ad spend, while Meta + 0 + 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 is a major player in the social media space. + + + Classified Internet advertising Other display Internet advertising + Paid search Internet advertising Video Internet advertising + + +Note: 2024 is the latest available data. 2025-2029 values are forecast projections +Source: PwC Global Entertainment & Media Outlook 2025-2029, www.pwc.com/outlook + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 14 + 2.2 +OTT video +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 15 + Hong Kong’s OTT market is expected to expand at 4.6% CAGR from +2024 to 2029 +OTT video, revenue in US$ Mn and year-on-year growth (%) from 2024 - 2029 + Hong Kong OTT market’s revenue growth + Hong Kong + 2024-2029 at 4.6% CAGR + CAGR + 700 9% + 8.16% 4.60% + 8% • Hong Kong’s OTT market has grown rapidly in the + 600 6.42% + 7% last two years, reaching US$490Mn in 2024. + 500 + 6% • The market will continue to expand at a 4.6% + 400 + 3.72% 5% CAGR to reach US$613Mn in 2029. + + 4% • The streaming market is competitive, with Netflix, + 300 2.74% + 2.00% Disney+, Amazon Prime Video and Apple TV+ + 3% + 200 competing with local services such as ViuTV and + 2% + 100 MyTV Super. + 1% + • Now TV benefits from exclusive rights to the + - 0% + 2024 2025 2026 2027 2028 2029 popular English Premier League, with PCCW + + OTT video revenue Growth rate having secured the renewed rights for a further + three seasons in September 2024. +Note: 2024 is the latest available data. 2025-2029 values are forecast projections +Source: PwC Global Entertainment & Media Outlook 2025-2029, www.pwc.com/outlook + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 16 + Hong Kong’s OTT revenue will continued dominance by subscription video on +demand (“VOD”) platforms, exceeding 80% of total OTT revenue in 2029 +OTT revenue (Hong Kong, Indonesia, Malaysia) (in terms of Advertising VOD, +Transactional VOD, & Subscription VOD 2020 – 2029 %) OTT revenue by segments, 2020 vs. 2029 + + Transactional Transactional Advertising + Hong Kong Advertising + 14.2% • Hong Kong’s subscription VOD revenue will grow at a CAGR of + 8.9% 19.2% 5.6% + 5.08% from 2024-2029, compared to 4.59% for the whole OTT + video segment. + Subscription + Subscription 80.2% + • Hong Kong’s OTT revenue CAGR is below Malaysia and + 71.8% + 2020 2029 Indonesia, with growth of 4.59% compared to 10.34% and + Indonesia Transactional Transactional 11.59% respectively. + 4.3% 0.7% + • Subscription VOD growth is expected in the forecasts for Hong + + Subscription + Advertising Subscription Advertising Kong and Malaysia, while Indonesia’s is projected to remain + 32.8% 64.9% 34.4% + 62.9% stable. + + 2020 2029 + Malaysia Transactional Advertising Transactional Advertising + 24.7% 15.3% 5.0% 9.5% Note: 2024 is the latest available data. 2025-2029 values are forecast projections + Source: PwC Global Entertainment & Media Outlook 2025-2029, + www.pwc.com/outlook + Subscription + 85.6% + Subscription + 60.1% 2020 2029 + + Advertising VOD Subscription VOD Transactional VOD + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 17 + 2.3 +Cinema +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 18 + Box office revenue in Hong Kong is projected to rise steadily from 2025 +to 2029 +Box office revenue – Hong Kong 2020-2029 (US$ Mn) + Hong Kong experiences a drop in box + office revenue in 2024 + - 6.4% - 6.0% + + + 250 • Hong Kong’s mercurial film market continues to + oscillate but is still showing underlying growth. In + 200 + 2024, overall box office revenues fell to US$172Mn. + 150 • Hong Kong cinema ticket prices are more + 100 expensive than in other Asian markets. The + average admission cost was US$10.36 in 2024. + 50 + Even so, this is a film-loving community, with high + 0 + average admissions per capita. Box office revenue + 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 + is on course to rise to US$210Mn by 2029, the end + Hong Kong of the current forecast cycle. + + + +Note: 2024 is the latest available data. 2025-2029 values are forecast projections +Source: PwC Global Entertainment & Media Outlook 2025-2029, www.pwc.com/outlook + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 19 + Cinema in Hong Kong to rise steadily to US$210Mn in 2029 at a 4.14% +CAGR +Year on year revenue (US$ Mn) 2024-2029 + + 2024-2029 • Two local films made headlines in 2024: The Last +250 CAGR + 4.14% Dance (破地獄) grossed US$20.3 million & + Twilight of the Warriors: Walled In (九龍城 +200 + 寨之圍城) grossed 13.7 million. Both received + extremely good reviews and attracted millions of +150 + moviegoers back to the cinemas. + • In January 2025, public body Hong Kong Film +100 + Development Council (FDC), which oversees film + activities, launched a revised film production + 50 financing scheme (2.0) which will increase + government support for production, thereby + - “promoting the sector's long-term development”. + 2024 2025 2026 2027 2028 2029 + Cinema + +Note: 2024 is the latest available data. 2025-2029 values are forecast projections +Source: PwC Global Entertainment & Media Outlook 2025-2029, www.pwc.com/outlook + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 20 + Hong Kong remains a major film distribution hub in the Asia-Pacific +region +Top ten highest-grossing movies of 2025 (as of 21 July 2025) + Hong Kong Cinema + + Ranking 2025 Hong Kong box office 2025 Global box office Globalisation and Localisation + + 1. Ne Zha 2 Ne Zha 2 + • In 2025, a Chinese Mainland animated movie, Ne + 2. F1: The Movie Lilo & Stitch + Zha 2 (哪吒之魔童闹海) , achieved US$1.8 billion + 3. Lilo & Stitch A Minecraft Movie grossing world-wide. The film received excellent + 4. The Prosecutor Jurassic World: Rebirth reviews and attracted millions of viewers. It earned + + 5. Thunderbolts* How to Train Your Dragon a place amongst the highest grossing films in + history, alongside Avatar and Avengers: + 6. Jurassic World: Rebirth Mission: Impossible - The Final Reckoning + Endgame. + 7. Papa F1: The Movie + • In Hong Kong, Ne Zha 2 (哪吒之魔童闹海) was + 8. A Minecraft Movie Captain America: Brave New World leading the local box office, ahead of F1: the + 9. Captain America: Brave New World Superman Movie, by US$1.4 million. + + 10. How to Train Your Dragon Thunderbolts* • Two local Hong Kong films, The Prosecutor and + Papa, ranked 4th and 7th in box office grossing in + Hong Kong. +Source from: Box Office Mojo by IMDbPro + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 21 + 2.4 +Live music +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 22 + Hong Kong’s live music market projected revenues of US$207Mn in +2025 and is set to further increase to US$218Mn by 2029 +Hong Kong live music revenue + Hong Kong live music’s revenue projected to reach +Revenue US$218Mn in 2029 +US$ Mn Hong Kong live music revenue + 220 + • Live music in Hong Kong is expected to reach US$207Mn in 2025, + 215 + well up on the US$193Mn reported in 2023. This figure should + 210 + continue to grow in the years ahead, hitting US$218Mn in 2029. + 205 + • The Hong Kong Government has dedicated significant effort to + 200 + boosting the city's presence in the live music scene. They have + 195 + invited top global artists and DJs to perform. Concerts and music + 190 + festivals now feature renowned global talents. + 185 • With the successful hosting of Clockenflap in late 2024, the festival + 180 is set to return in December 2025. + 2023 2024 2025 2029 + + Live music + + +Note: 2024 is the latest available data. 2025-2029 values are forecast projections +Source: PwC Global Entertainment & Media Outlook 2025-2029, www.pwc.com/outlook + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 23 + Kai Tak stadium elevates Hong Kong’s live music scene + +Date Upcoming happenings (as of July 2025) + • With the opening of the New Kai Tak Stadium in +Aug 2025 G.E.M. + March 2025, numerous renowned international +Aug 2025 NCT DREAM artists are anticipated to be drawn to perform here. +Sep 2025 SEVENTEEN • The new stadium gives Hong Kong more options + +Nov 2025 MAMA Awards to host celebrated artists at multiple locations. The + larger venue will also be able to bring in more +Dec 2025 TWICE + revenue and attract more tourists to visit, boosting +Jan 2026 BLACKPINK + tourism and other industries. + • Coldplay attracted 184,000 spectators over four + days when they performed at the newly completed + Kai Tak Sports Park in April 2025. + • Blackpink have announced a performance in the + new stadium for January 2026, selling out tickets + in just over 90 minutes. + + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 24 + Generative AI + + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 25 + AI is poised to have a greater influence on many key sectors, especially +advertising, acting as an amplifier of ingenuity + Traditional Broadcast TV Advertising + in 2029 + • Connected TV revenue is poised to surge by utilising AI-powered + hyper-personalisation. + + 45% • Connected TV advertising revenue has grown rapidly, from 5.9% in + 55% + 2020 to 22% in 2024. It's projected to reach US$51 billion by + 2029, comprising 45% of traditional broadcast TV advertising. + • Connectivity remains the largest category, expected to reach + Connected TV Ad Revenues + Traditional TV Ad Revenues US$1.3 trillion by 2029 with a CAGR of 2.8%, primarily driven by + mobile internet service revenue. However, rapidly increasing + advertising spending will reduce the gap with connectivity by + 2029 2029. + + + 2024 + + + 2020 + + 0 50 100 150 + + Connected TV ad Traditional TV ad + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 26 + Existing sectors +significantly impacted by +AI + +• GenAI is revolutionising video advertising production by + cutting costs and time, while advances in programmatic TV + are democratising access, driving growth in the connected TV + market. + +• Connected TV advertising revenue represented 5.9% of the + total traditional broadcast TV advertising in 2020 and + increased to 21.5% by 2024. It is on course to surge even + further, accounting for 44.7% by 2029. + +• AI adoption in E&M mirrors past tech waves—initially + driving cost savings and efficiency in back-office operations + to boost profitability and valuations. + +• The potential for value creation using AI is likely greater + than any previous technology, with the capacity to develop + new business models and provide more personalised, + relevant, and compelling experiences for customers. + + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 27 + Have AI-enabled performances lived up to CEO’s expectations across +China? +Q. Expected and actual productivity gains of generative AI in the last 12 months (showing response of “net increases”) + + + 90% + 80% + 70% + 60% + 50% + 40% + 30% + 20% + 10% + 0% + Chinese Hong Kong Global Chinese Hong Kong Global Chinese Hong Kong Global Chinese Hong Kong Global + Mainland SAR Mainland SAR Mainland SAR Mainland SAR + Efficiencies in my own time at work Efficiencies in my employees' time at Revenue Profitability + work + Expected Actual + + + +Source: 28th Annual Global CEO Survey China Report + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 28 + Responsible AI integration still has a long way to go + +Q: AI integration into business processes in the next three years (showing responses of “to a large” and “very large extent”) + + + + Technology platforms + + + Business processes and workflows + + + Workforce and skills + + + New products/services development + + + Core business strategy + + + 0% 10% 20% 30% 40% 50% 60% + + Chinese Mainland Hong Kong SAR Global + + +Source: 28th Annual Global CEO Survey China Report + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 29 + AI contributes to net headcount growth in China as workers embrace +GenAI innovations +Q: Reported headcount change as a result of AI adoption in the last 12 months + + + + Chinese Mainland + + + + + Hong Kong SAR + + + + + Global + + + + 0% 20% 40% 60% 80% 100% 120% + + + Increase Little to no change Decrease Don't know + + + +Source: 28th Annual Global CEO Survey China Report + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 30 + Key contacts + + + + + Wilson Chow Cecilia Yau Beretta Ching Andrew Wong + PwC Global TMT Industry Leader PwC Chinese Mainland and E&M Industry Partner, E&M Industry Partner, + wilson.wy.chow@cn.pwc.com Hong Kong Media Leader PwC Hong Kong PwC Hong Kong + cecilia.yau@cn.pwc.com beretta.yp.ching@cn.pwc.com andrew.cy.wong@cn.pwc.com + + + + +PwC Global Entertainment & Media Outlook 2025-2029: Hong Kong summary 31 + Thank you + + + This content is for general information purposes only and should not be used as a substitute for + consultation with professional advisors. + © 2025 PricewaterhouseCoopers Limited. All rights reserved. PwC refers to the Hong Kong member firm, + and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see +pwchk.com www.pwc.com/structure for further details. +PwC + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pdf_text/pwc_global_entertainment_media_outlook_2026_2030_official_web_print.txt b/2d_to_3d_market_tech_reports/pdf_text/pwc_global_entertainment_media_outlook_2026_2030_official_web_print.txt new file mode 100644 index 0000000000000000000000000000000000000000..7b666c0a7a844677d7f61ab4d73c22638c93fd6d --- /dev/null +++ b/2d_to_3d_market_tech_reports/pdf_text/pwc_global_entertainment_media_outlook_2026_2030_official_web_print.txt @@ -0,0 +1,833 @@ +Index +Seize tomorrow’s tech to reinvent your business Today’s issues Reinvention insights Outlook +Introduction + + Global Entertainment & Media Outlook 2026–30 +Shared reality + + Digital innovation drives demand for human +The future of streaming + experiences +Centralisation versus decentralisation + +Human connection at scale with advertising + +AI as a strategic advantage + +Author + +Methodology Humans depicted in this image are AI generated + + + + + Insight 22 minute read June 22, 2026 + + Share + + + + The E&M industry’s global revenue will grow to US$4.2 trillion + by 2030, fuelled by technology and live events. + + + + The takeaways + + + PwC’s Global Entertainment & Media Outlook + forecasts that spending in the vast industry will rise + at a 3.4% compound annual growth rate (CAGR) + through 2030, when total revenues will reach $4.2 + trillion. +Index + In an age of digital innovation, live and immersive +Introduction experiences, including sports, concerts, and trade + shows, will show significant growth as consumers +Shared reality + seek in-person experiences. +The future of streaming + Advertising, enabled by AI, will grow rapidly, +Centralisation versus decentralisation + topping $1.4 trillion by 2030, as marketers seek to + meet consumers where they are accessing content +Human connection at scale with advertising + and making retail decisions. +AI as a strategic advantage + +Author + The global entertainment and media (E&M) industry grew 5.3% in 2025, with total +Methodology + revenue from advertising, connectivity, and consumer spending reaching US$3.5 + trillion, and it should rise another 4.6% in 2026. The industry remains on a firm + growth trajectory. According to PwC’s Global Entertainment & Media Outlook + 2026–30, which charts growth in 12 segments across 53 territories (see + Methodology for more information on the segments), the global E&M market will + grow at a CAGR of 3.4% for the next five years, reaching $4.2 trillion in 2030. This + expansion, unlocking $600 billion in new revenues in 2030, will be overwhelmingly + driven by digital ecosystems across the E&M landscape. + + + Players in the E&M ecosystem who want to capture their share of those new + revenues—and then turn those revenues into profit—will have to act quickly. + Innovation has forged change in the creative industries, and it will continue to do + so. Increasingly powerful digital technologies centred on AI will disrupt and change + the way E&M products and services are created, distributed, and monetised. + These shifts will alter profit pools along the value chain, open the door for new + business models, and transform consumer expectations. + + + But AI won’t change what people expect and need from entertainment and media. + No matter how digital and algorithmic the user experience becomes, at its root, +Index + E&M remains an industry built on human craft and human experiences. Expertise, + judgement, creativity, nuance, emotions, needs, relationships: these fundamentally +Introduction + human attributes drive engagement, interest, and passion. Going forward, + technology, and especially AI, will enable more effective and efficient means of +Shared reality + connecting people to one another, and connecting marketers to consumers. The +Themost + futurerapidly + of streaming + growing of the big three E&M sectors—advertising—is geared + towards reaching individuals wherever they experience and interact with content, +Centralisation versus decentralisation + and precisely when and where they choose to make purchasing decisions. +Human connection at scale with advertising + Among the clear findings in our forecast: +AI as a strategic advantage + +Author Consumers in 2030 will want choice, low prices, and digital access—even if + their willingness to pay for these things remains limited. +Methodology + + In a digital world, people will be increasingly attracted to real-world experiences + that are immersive, emotional, contextual, and personal. + + + Advertisers will keep spending more to meet customers where they want to be. + Advertising surpassed $1 trillion for the first time in 2025, and it will rise to $1.4 + trillion in 2030. + The global E&M industry is on a solid +Index + growth trajectory + Connectivity stays on top, but advertising overtakes consumer +Introduction spending. + Total industry revenue by category +Shared reality + Connectivity Consumer + (+2.3% CAGR, 2021–30) (+2.5% CAGR, 2021–30) +The future of streaming + Advertising + (+5.6% CAGR, 2021–30) + +Centralisation versus decentralisation + US$ billions +Human connection5,000 + at scale with advertising + +AI as a strategic advantage + 4,000 + +Author + 3,000 +Methodology + 2,000 + + + + 1,000 + + + + + Source: Global Entertainment & Media Outlook 2026–30, PwC, Ampere Analysis + + + + + Humans depicted in this image are AI generated + + + + + Shared reality + Sphere, a massive, immersive concert and media venue in Las Vegas, has proven +Index + to be a powerful attraction. In 2025, it reported revenues of $781 million, with + programming including 4D screenings of The Wizard of Oz and Eagles concerts. Its +Introduction + parent company is now planning expansion elsewhere in the US and in Dubai. + +Shared reality + Small screens may dominate people’s personal and professional lives. But through +The2030, + futurewe will continue to see growth in content experiences centred on one-time + of streaming + events and activities taking place in public, in real life, and in real time—at Sphere, +Centralisation versus decentralisation + Cosm, and other ‘shared reality’ venues. Live, immersive shared reality + experiences +Human areatbecoming + connection increasingly valuable because they function as social + scale with advertising + currency: proof points that can be broadcast across social media to project status, +AI as a strategic advantage + taste, and cultural relevance to the younger consumers who place high values on + these experiences. +Author + +Methodology + Several of the segments that will chart growth in the coming five years fall under + the broad live-and-in-person umbrella. These include movie box office, live music, + and the rapidly growing gambling segment, which centres around live sports and + other events. Other areas that depend on in-person, out-of-home (OOH) + experiences, like B2B trade shows and B2C OOH advertising, are making up a + larger piece of the E&M pie as well. + The appeal of shared reality +Index In-person experiences continue to grow, with cinema continuing + its post-pandemic recovery. +Introduction Total live experiences revenue by category + + + Cinema Live music Out of home Trade shows Online betting +Shared reality + +The future of streaming + Box office (+3.5% CAGR, 2021–30) + Cinema advertising (+3.2% CAGR, 2021–30) + +Centralisation versus decentralisation + US$ billions +Human connection60 + at scale with advertising + +AI as a strategic advantage + +Author + +Methodology 40 + + + + + 20 + + + + + 0 + 2021 2022 2023 2024 2025 + + + Source: Global Entertainment & Media Outlook 2026–30, PwC, Ampere Analysis + + + + + Live on a big screen + + + The live music vibe + Out of home +Index + + Face-to-face at trade shows +Introduction + +Shared reality + Betting on rising revenues +The future of streaming + +Centralisation versus decentralisation + +Human connection at scale with advertising + +AI as a strategic advantage + +Author + + Humans depicted in this image are AI generated +Methodology + + + The future of streaming + + + Of course, the audiences that can attend live music and sporting events are limited + by venue capacity. Advertisers will pay a premium to reach the largest possible + groups of people. And here the synergies between sports and streaming are + evident. One of the few formats capable of delivering audiences at scale at a + specific time is live sports. The 2026 World Cup in North America is likely to be + among the longest shared reality experiences in history. Millions of people will + attend in person; billions of people will stream, watch, or listen; and many others + will gamble on the event. + + + More marquee sporting events are taking place on streaming platforms. In the US, + Amazon Prime Video has steadily expanded its live sports footprint since acquiring + NFL rights. Netflix and Paramount+ also are hosting an increasing variety of live + events, including UFC bouts and WWE wrestling. In France, a notable share of + Ligue 1 matches are now delivered via the direct-to-consumer service Ligue 1+. +Index + The movement of live event viewing to online media may have much further to run, + given the streamers’ deep pockets and desire to appeal to subscribers and +Introduction + advertisers alike. (Read more in PwC’s Sports Industry Outlook 2026.) + +Shared reality + The streamers’ challenge +The future of streaming + Sports are one piece of the puzzle for streamers as they look to the future. Total +Centralisation versus decentralisation + over-the-top (OTT) revenues—including consumer spending on video, advertising + spending, +Human and TV + connection delivered + at scale only by traditional broadcasters—rose an impressive + with advertising + 13.9% in 2025 to $226.6 billion from $199 billion in 2024. But the pace of this +AI as a strategic + growth advantage + will slow. In maturing streaming markets such as Australia, + Spain, and South Korea, consumers are beginning to exhibit ‘subscription fatigue.’ +Author + The industry may be confronting the limits of consumers’ willingness to pay for +Methodology + multiple subscriptions. Through 2030, OTT revenues will grow at a CAGR of 6.1% + to reach $304 billion. That represents $77.4 billion in new revenues over 2025. One + notable trend is that as consumers resist paying for continually rising numbers of + subscriptions, advertising will assume a more prominent role. OTT ads, now 19.4% + of revenues, will grow at a 9.4% CAGR so that in 2030 they will represent 22.6% of + revenues. + + + The forces at work in the streaming economy will push greater consolidation and + bigger bundles of content and services. In 2030, as streamers strive to drive higher + per-user revenue growth and minimise churn, their offerings will look different than + they do today. Big streaming platforms will strive to be the entertainment hub of + the home, offering access to television, movies, video games, music, sports, social + media, and user-generated content. In other words, they will offer bigger bundles + of content. + Ads gain importance in streaming’s +Index + success + Total over-the-top revenue is projected to rise to nearly $300 +Introduction billion by 2030. + +Shared reality Total OTT video revenue Advertising VOD revenue + Subscription VOD revenue Transactional VOD revenue + +The future of streaming + US$ billion +Centralisation versus + 400decentralisation + + +Human connection at scale with advertising + +AI as a strategic advantage + 300 + +Author + +Methodology + 200 + + + + + 100 + + + + + 0 + 2021 2022 2023 2024 2025 + + + + + Humans depicted in this image are AI generated + Index + Centralisation versus decentralisation + +Introduction + + The opposing +Shared reality forces of platform centralisation and content decentralisation will + continue to shape the media and entertainment industry, as they have since the +The future of streaming + birth of the World Wide Web. + +Centralisation versus decentralisation + On the one hand, we expect growing concentration of advertising revenues among +Human connection + a handful at scale + of huge with + global advertising + players and more M&A megadeals as streamers seek + scale. These companies, and the advertisers they sell to, want to aggregate the +AI as a strategic advantage + largest possible collections of users. Yet these platforms increasingly rely on the + human spark of creativity among millions of creators, influencers, and streamers +Author + who are building their own audiences on platforms like YouTube, Instagram, +Methodology + Substack, and TikTok. + + + Through 2030, audiences will increasingly discover content through feeds rather + than schedules, creators rather than commissioners, and recommendation + systems rather than editorial curation. As smartphones, platform tools, AI, and low- + cost production reduce barriers to entry, livestreaming and short-form user- + generated content (UGC) videos will shift media further away from centrally + controlled distribution and towards a more democratised environment. China and + India present interesting case studies in decentralisation in the OTT/streaming + space. After a decade of rapid OTT expansion led by major domestic platforms like + Youku, iQIYI, and Tencent Video, China’s competitive landscape is fragmenting, + with smaller and more specialised services gaining traction, particularly short-form + video ecosystems such as Douyin and Kuaishou. In India, competition is + dominated by domestic platforms—notably JioHotstar and Sun NXT—focused on + local language content, Bollywood catalogues, and cricket rights. + + + Centralisation in new ecosystems + Countervailing forces are pushing the E&M industry towards increasing +Index + centralisation and the creation of new bundles in several dimensions. Connectivity, + including what people pay for internet access, is the largest of the three major E&M +Introduction + sectors (advertising, connectivity, and consumer spending). Thanks in part to the + growth of social platforms and decentralised content creation, revenue growth in +Shared reality + connectivity, the largest E&M sector, will slow through 2030. Annual global service +Therevenue + future offor + streaming + providing internet access will increase steadily at a 2.3% CAGR from + $1.3 trillion in 2025 to $1.5 trillion in 2030. Wider adoption and usage of fixed and +Centralisation versus decentralisation + mobile broadband will account for the bulk of this growth, as paid voice services + are further +Human commoditised + connection at scale withby cheap or free IP-based alternatives and the + advertising + prevalence of messaging apps. (PwC’s Global Telecom Outlook goes into more +AI as a strategic advantage + depth on how muted growth will influence business strategy.) Meanwhile, global + traditional TV revenues fell 2.7% in 2025 to $360.5 billion and will continue to fall at +Author + a CAGR of –01.1% to $341.2 billion by 2030. +Methodology + + In response, traditional TV and telecom operators are going back to the future. + Bundling, the business concept that underlies the declining cable industry, now + has renewed currency. Companies such as Sky, Comcast, Rogers, and Jio are + combining pay TV, broadband, and third-party streaming subscriptions within + single offers. Bundling can help operators reduce churn and retain relevance even + as audiences continue to shift away from linear viewing. Distributors including + Amazon Prime Video, Apple TV, and YouTube TV are offering bundled third-party + streaming subscriptions. Increasingly sophisticated bundling and aggregation + models, such as Disney+ offering bundled subscription plans with Hulu and Max, + seek to embed streaming services more deeply into consumption habits. + + + OTT’s encroachment into key content genres like live events has spurred the + traditional media industry to move away from direct competition and into + collaborative partnerships. In the UK, the BBC’s agreement in 2026 to produce + YouTube-specific content under a partnership with the streaming giant reflected a + recognition by traditional broadcasters that younger audiences are now more + readily reached on third-party platforms than through their own video on demand + (VOD) services. In France, TF1’s agreement with Netflix shows how incumbent +Index + broadcasters are using global streaming platforms to monetise content libraries— + bringing the traditional partner a bigger audience reach while providing the global +Introduction + platform with high-quality local content. + +Shared reality + Centralisation through +The future of streaming + consolidation + +Centralisation versus decentralisation + The current M&A cycle differs from + prior waves. Not only are audiences +Human connection at scale with advertising + fragmenting, but legacy profit pools + are increasingly dependent on companies’ bargaining +AI as a strategic advantage + power over distribution and access to advertising. +Author Large companies with significant investments in + existing systems, including advertising, cable, and +Methodology + streaming, must position themselves for a future of + comparatively slower growth. The Omnicom–IPG + merger in 2025 created the world’s largest advertising + agency holding group. Canal+, seeking to gain + exposure to rapidly growing markets, in 2025 + completed the acquisition of MultiChoice, the video + provider in South Africa. Paramount was acquired by + Skydance, and then merged with Warner Bros. + Discovery, creating a significantly larger streaming, + production, and distribution platform. In the OOH + segment, as companies are eager to reach people + closer to the point of economic decision-making, a + number of transformative corporate restructuring + moves have consolidated inventory and technological + capabilities into fewer, more powerful entities. In 2025, + T-Mobile bought programmatic DOOH platform Vistar + Media, and Clear Channel Outdoor (CCO) sold its units + in Northern Europe to Bauer Media Group and in Brazil +Index to an affiliate of Eletromidia, in order to focus on its + core US and airports businesses. +Introduction + +Shared reality + +The future of streaming + +Centralisation versus decentralisation + +Human connection at scale with advertising + Humans depicted in this image are AI generated + +AI as a strategic advantage + Human connection at scale with advertising +Author + +Methodology + Consolidation and centralisation are also evident in the fastest-growing of the three + major sectors: advertising. The global internet advertising market accelerated by + 12.2% year-on-year in 2025 to reach $755.6 billion. Internet ad revenue will rise at + an impressive 7.2% CAGR through 2030, when it will reach nearly $1.1 trillion. US- + based tech companies will continue to enjoy a leading position, especially when + China (which has its own players) is taken out of the equation. Google and Meta + remain the driving forces behind global growth; they use AI to better manage, + target, and customise campaigns based on improved understanding of consumers. + In May 2026, to better position itself for changing trends, Publicis agreed to spend + $2.2 billion to acquire LiveRamp, a major player in data, identity, and agentic media + buying. Agency consolidation provides advertising buyers with more integrated + planning, execution, and accountability across an increasingly platform-mediated + advertising ecosystem. + + + The world of internet advertising, the ultimate disruptor of the E&M ecosystem, is + changing rapidly in several dimensions. Witness the rise of online retail ads at the + expense of traditional paid search. More disruption is on the way as large language + model (LLM)–powered conversational search gains share from traditional search. +Index + Brands need to rethink where and how they show up, whether their online visibility + is paid (advertising) or earned (content optimisation, PR). +Introduction + +Shared reality + 1 of 2 + +The future of streaming + Marketers are eager to reach shoppers +Centralisation versus decentralisation + online +Human connectionInternet + at scaleadvertising revenue by category + with advertising + + Retail paid search Traditional paid search +AI as a strategic advantage + +Author US$ billion + 300 +Methodology + + + + + 200 + + + + + 100 + + + + + 0 + 2021 2022 2023 2024 2025 + + + Source: Global Entertainment & Media Outlook 2026–30, PwC, Ampere Analysis + + + + A key distinction here is between paid search, where advertisers pay platforms + like Google, Bing, and Baidu to serve their ads to relevant consumers, and retail +Index + search, where retail media ads are displayed on online marketplaces such as + Amazon.com and Walmart.com, powered by first-party customer data. The latter +Introduction + aims to reach individuals at the point of purchase. A third concept to add to the + mix is conversational search powered by AI tools such as Gemini and ChatGPT, +Shared reality + which poses a long-term threat to the entire traditional paid search advertising +Thebusiness + future of streaming + model. More broadly, the way brands make themselves visible is + changing—it’s moving from search engine optimisation to generative engine +Centralisation versus decentralisation + optimisation, experiencing a shift in digital public relations strategy, and developing + a greater +Human reliance + connection on influencers. + at scale Major players like Google, Meta, and Tencent are + with advertising + responding by embedding AI to great effect into their search and advertising +AI as a strategic advantage + models. +Author + As e-commerce, streaming, and social media have grown in scale and +Methodology + sophistication, they’ve also strengthened their ability to combine audience reach + with richer first-party data and more measurable commercial outcomes. Although + paid search overall will expand at a 6.1% CAGR to $402.7 billion in 2030, the + traditional component will expand at a CAGR of just 3.8% to $214.5 billion. + Meanwhile, retail paid search will rise at a far faster 9.3% CAGR to reach a + total value of $188.2 billion in 2030, at which point it will account for 46.7% of + global paid search advertising revenue. That compares with just 40.4% today. + + + We will also see a continuing shift in the display advertising market. Amazon’s + reported advertising revenue surpassed $50 billion in 2024 and rose to $68 billion + in 2025. Other major retailers are actively growing their retail media business: + Walmart’s retail media advertising revenue, for example, topped $4 billion in 2024 + and rose to $6.4 billion in 2025. + + + Streaming companies are working hard to drive advertising revenues as their + subscription revenue growth slows. Going forward, digital advertising will be + increasingly layered onto other platforms—with Amazon Prime Video, Disney+, + Spotify, and Netflix all successfully developing their advertising businesses. Netflix + reported that its advertising revenue more than doubled in 2025, to over $1.5 +Index + billion. By 2030, video will account for 27% of global internet advertising revenue, + up from around 19% in 2021. +Introduction + +Shared reality + +The future of streaming + +Centralisation versus decentralisation + +Human connection at scale with advertising + Humans depicted in this image are AI generated + +AI as a strategic advantage + AI as a strategic advantage +Author + +Methodology + AI is already having transformational impacts along the E&M content value chain, + from production to recommendation, discovery, personalisation, presentation, and + consumption, as well as in advertising. But the rationale for its adoption in the + industry is evolving. Initially seen as an enabler of greater efficiency, AI is now + being harnessed as a driver of value. Its strongest areas of impact? Boosting ad + revenues, and interacting with the other trends we’ve highlighted, especially in + enhancing shared reality experiences. + + + Paradoxically, AI, which aims to take some of the human element out of decision- + making, is enabling a greater possibility for connections in two important vectors: + between brands and marketers, and between brands and individual consumers. + Advertisers are increasingly favouring formats that offer greater measurability, more + precise targeting, and closer links to commercial outcomes. Looking ahead, + momentum will be driven by newer formats such as connected TV and shoppable + video, which combine digital reach with stronger attribution and closer proximity to + transactions. + The ability to observe users’ behaviour directly, understand patterns of +Index + engagement, and connect exposure to outcomes is ever more central to + monetisation. Companies with large logged-in user bases and strong direct +Introduction + customer relationships are better placed to refine targeting, improve + recommendations, and demonstrate value to advertisers. Put another way, AI is +Shared reality + another force favouring centralisation, because having large troves of proprietary +Theaudience + future of streaming + data will become a key defensive moat as AI models become more + ubiquitous. +Centralisation versus decentralisation + + AI will +Human influenceatcountless + connection scale with ways of working in the E&M industry in 2030. Content + advertising + creators such as musicians and filmmakers will use AI tools to develop narratives +AI as a strategic advantage + and polish their output. AI won’t stop people from going outdoors to see billboards + and other signs. It will help marketers reach people with more dynamically timed +Author + content and offerings when they do see those signs. Platforms will deploy AI to +Methodology + understand their customers’ preferences more effectively. Ad agencies will shift + away from charging clients for time and expenses to charging for the performance + they can deliver via targeted campaigns. + + + In each of these instances, while AI is an important tool—perhaps the most + important tool—control remains firmly in the hands of the craft, experience, and + delivery capabilities of the service providers. + + + + + Methodology + + + + Additions + + + Territories + Segments +Index + + Historic data collection +Introduction + +Shared reality + Forecasting methods +The future of streaming + + Permission to cite +Centralisation versus decentralisation + +Human connection at scale with advertising + Contributors + +AI as a strategic advantage + +Author + + Author +Methodology + + + + + Bart Spiegel + Global Entertainment & Media Sector Leader, Partner, PwC United States + + Email + + + + + Sports Industry Outlook 2026 + From AI-fueled fan engagement to athlete-driven economics, PwC unpacks the hottest + trends. + + + Explore + Index + Subscribe to the Outlook + Get 12 months of access to data and commentary for segments across 53 countries and +Introduction + territories, and access to dashboards and visualisations, including heat maps and + comparisons of GDP and growth rates. +Shared reality + + Findof +The future out more + streaming + +Centralisation versus decentralisation + +Human connection at scale with advertising + + Related +AI as content + a strategic advantage + +Author + +Methodology + + + + + Media and telecommunications: US Deals 2026 outlook + Explore how streaming consolidation, gaming and sports IP, and telecom infrastructure deals… + Index + +Introduction + +Shared reality + +The future of streaming + +Centralisation versus decentralisation + +Human connection at scale with advertising + +AI as a strategic advantage + +Author + Global M&A trends in technology, media and +Methodology + telecommunications: 2026 mid-year outlook + Companies rethink control, using M&A, partnerships, minority investments, and capacity… + Index + +We help you meet tomorrow’s tech +Introduction + +demands +Shared reality + + + +so you can +The future of streaming + +Centralisation versus decentralisation + +compete at a speed that rewrites the +Human connection at scale with advertising + +rules +AI as a strategic advantage + +Author + See how +Methodology + + + + +PwC office locations Site map Contact us + Index + +Introduction +© 2017 - 2026 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its +member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further +Shared reality +details. This content is for general information purposes only, and should not be used as a substitute for +consultation with professional advisors. This website contains content generated by or created with the +The future of streaming +assistance of AI. + +Centralisation versus decentralisation +Legal notices Privacy Cookie policy Legal disclaimer Terms and conditions + +Human connection at scale with advertising + +AI as a strategic advantage + +Author + +Methodology + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pdf_text/wef_ai_in_media_entertainment_sport_2025.txt b/2d_to_3d_market_tech_reports/pdf_text/wef_ai_in_media_entertainment_sport_2025.txt new file mode 100644 index 0000000000000000000000000000000000000000..fbaa70bbfada2380002a01fd8423341a5dabdc51 --- /dev/null +++ b/2d_to_3d_market_tech_reports/pdf_text/wef_ai_in_media_entertainment_sport_2025.txt @@ -0,0 +1,1619 @@ + AI Governance + Alliance + + +In collaboration with Accenture + + + Transformation of Industries in the Age of AI + + +Artificial Intelligence in Media, +Entertainment and Sport +WHITE PAPER +JANUARY 2025 + Images: Getty Images + + + + +Contents +Reading guide 3 + +Foreword 4 + +Executive summary 5 + +1 Context and industry trends 6 + + 1.1  + Context 6 + + 1.2  + Trends 6 + +2 Industry adoption 8 + + 2.1  + Present scenario 8 + + 2.2  + Opportunities and use cases 9 + +3 Enablers and other considerations  18 + + 3.1  + Industry governance 18 + + 3.2  + Workforce 20 + +4 Future outlook 21 + + 4.1  + Potential disruptions 21 + + 4.2  + Collaboration opportunities 22 + +Conclusion 23 + +Contributors 24 + +Endnotes 26 + + + + +Disclaimer +This document is published by the +World Economic Forum as a contribution +to a project, insight area or interaction. +The findings, interpretations and +conclusions expressed herein are a result +of a collaborative process facilitated and +endorsed by the World Economic Forum +but whose results do not necessarily +represent the views of the World Economic +Forum, nor the entirety of its Members, +Partners or other stakeholders. +© 2025 World Economic Forum. All rights +reserved. No part of this publication may +be reproduced or transmitted in any form +or by any means, including photocopying +and recording, or by any information +storage and retrieval system. + + + + Artificial Intelligence in Media, Entertainment and Sport 2 + Reading guide + The World Economic Forum’s AI Transformation of This white paper series explores the transformative + Industries initiative seeks to catalyse responsible role of AI across industries. It provides insights + industry transformation by exploring the strategic through both broad analyses and in-depth + implications, opportunities and challenges of explorations of industry-specific and regional deep + promoting artificial intelligence (AI)-driven innovation dives. The series includes: + across business and operating models. + + + + Cross industry Regional specific + Impact on industrial ecosystems Impact on regions + + AI Governance In collaboration with AI Governance AI Governance AI Governance + Alliance PwC Alliance Alliance Alliance + + + In collaboration with Accenture In collaboration with Accenture In collaboration with the Global Cyber Security In collaboration with Accenture + Leveraging Generative AI Capacity Centre, University of Oxford + + Transformation of Industries in the Age of AI + for Job Augmentation and Transformation of Industries in the Age of AI + Transformation of Industries in the Age of AI + Transformation of Industries in the Age of AI + + Workforce Productivity: + AI in Action: Beyond Artificial Intelligence’s Blueprint to Action: + Scenarios, Case Studies Artificial Intelligence + Experimentation to Energy Paradox: Balancing China’s Path to AI-Powered + and a Framework for Action and Cybersecurity: + Transform Industry Challenges and Opportunities Industry Transformation + Balancing Risks + INSIGHT REPORT + FL AGSHIP WHITE PAPER SERIES + NOVEMBER 2024 + WHITE PAPER + and Rewards WHITE PAPER + JANUARY 2025 JANUARY 2025 JANUARY 2025 + WHITE PAPER + JANUARY 2025 + + + + +AI in Action: Beyond Leveraging Artificial Intelligence’s Artificial Intelligence Blueprint to Action: +Experimentation to Generative AI for Job Energy Paradox: and Cybersecurity: China’s Path to +Transform Industry Augmentation and Balancing Challenges Balancing Risks AI-Powered Industry + Workforce Productivity and Opportunities and Rewards Transformation + + + + + Industry or function specific + Impact on industries, sectors and functions + +Advanced Media, +manufacturing Financial entertainment +and supply chains services and sport Healthcare Transport Telecommunications Consumer goods + + In collaboration with Boston Consulting Group AI Governance AI Governance In collaboration with Boston Consulting Group In collaboration with + Alliance Alliance McKinsey & Company + + Transformation of Industries in the Age of AI Transformation of Industries in the Age of AI + In collaboration with Accenture In collaboration with Accenture Transformation of Industries in the Age of AI + + + Frontier Technologies The Future of AI-Enabled Health: + Transformation of Industries in the Age of AI Transformation of Industries in the Age of AI + Intelligent Transport, + in Industrial Operations: Leading the Way + Artificial Intelligence Artificial Intelligence in Media, Greener Future: + The Rise of Artificial WHITE PAPER + AI as a Catalyst to + Intelligence Agents in Financial Services Entertainment and Sport JANUARY 2025 + Decarbonize + WHITE PAPER + WHITE PAPER WHITE PAPER + JANUARY 2025 + Global Logistics + JANUARY 2025 JANUARY 2025 + WHITE PAPER + JANUARY 2025 + + + + +Frontier Technologies Artificial Intelligence Artificial Intelligence in The Future of Intelligent Transport, Upcoming Upcoming +in Industrial in Financial Services Media, Entertainment AI-Enabled Health: Greener Future: industry report: industry report: +Operations: The and Sport Leading the Way AI as a Catalyst Telecommunications Consumer goods +Rise of Artificial to Decarbonize +Intelligence Agents Global Logistics + Additional reports to be announced. + + + + + As AI continues to evolve at an unprecedented and stakeholders engaged in AI strategy and + pace, each paper in this series captures a unique implementation across organizations. + perspective on AI – including a detailed snapshot + of the landscape at the time of writing. Recognizing Together, these papers offer a comprehensive + that ongoing shifts and advancements are already view of AI’s current development and adoption, + in motion, the aim is to continuously deepen and as well as a view of its future potential impact. + update the understanding of AI’s implications Each paper can be read stand-alone or alongside + and applications through collaboration with the the others, with common themes emerging + community of World Economic Forum partners across industries. + + + + + Artificial Intelligence in Media, Entertainment and Sport 3 + January 2025 Artificial Intelligence in Media, + Entertainment and Sport + + + + + Foreword + Francesco Venturini + Minos Bantourakis + Senior Managing Director; + Head, Media, Entertainment + Communications & Media + and Sport Industry, World + Industry Global Lead, + Economic Forum + Accenture + + + + + Generative artificial intelligence (genAI) has sparked a common understanding of the emerging + a wave of global enthusiasm due to its remarkable opportunities, challenges and key enablers. + capabilities and potentially transformative impact + on society, both in the personal and professional The report goes beyond the hype, offering + sphere. In the media, entertainment and sport guidance to business leaders and other + industry, this powerful technology is reshaping the stakeholders across society on proactively + way content is created, distributed and consumed, adapting, innovating and collaborating to rethink + with a unique impact on human creativity. While and reinvent traditional business and operating + genAI presents significant opportunities, it also models. The development of robust governance + raises legitimate concerns about responsible and and multistakeholder partnerships is key to + successful adoption that can only be addressed with facilitating responsible adoption and ensuring + a whole-of-society and human-centric approach. this revolution will benefit humanity. + + The World Economic Forum, in collaboration with With the technology and its adoption evolving + Accenture, has developed this white paper to help the rapidly, this initiative will continue to engage + industry better understand genAI and the disruption its stakeholders across sectors, uncovering new + adoption could bring. We have worked closely with a insights, identifying emerging opportunities and + community of industry leaders, innovators, academia challenges as they unfold, and offering a platform + and technology experts, and labour representatives to for knowledge exchange to drive collective action + gather insights and real-life experiences, developing for responsible adoption. + + + + + Artificial Intelligence in Media, Entertainment and Sport 4 + Executive summary +Generative AI is poised to revolutionize +the creative process, yet its impact and +challenges require ethical considerations +and governance frameworks. + +As part of a series that addresses the impact risk of misinformation and disinformation, +of generative artificial intelligence (genAI) across uncertainty of return on investment (ROI), the +industries, this white paper delves into its need for harmonized governance frameworks and +transformative potential on the media, entertainment practices to advance trust and transparency, the +and sport industry. It does not cover cross-industry technological readiness, and the implementation +topics but aims to clarify potential opportunities, of foundational requirements, including digital +challenges and disruptions, providing leaders and core infrastructure. +key stakeholders with insights to navigate these +transformative times. Given the industry’s societal Readiness varies across the workforce. While some +impact, it is important for players to develop a shared creators embrace genAI’s democratizing effects of +and comprehensive understanding of genAI’s role in lowering technical barriers to high-quality content +the evolution of the creative landscape. creation, others remain cautious due to concerns + over job displacement, intellectual property (IP) +GenAI’s impact on the media, entertainment and and likeness rights. Education and upskilling are +sport industry is expected to be more profound crucial to ensure the responsible and transparent +than on other industries. It can not only drive development of genAI products and features, and +efficiency and productivity, enhance audience for effective governance and accountability. +engagement and optimize revenues, but also +impact the core of the industry by augmenting This paper also identifies potential future +human creativity, acting as a collaborator, and disruptions. These include a shift from search- +empowering humans to overcome previous based to AI-driven content discovery, new +limitations. It can support every stage of content consumption experiences through the convergence +creation, distribution and consumption. In the early of emerging technologies, and AI-enabled +stages, it can speed up prototyping of alternative creativity sparking a new era in content creation, +ideas. By analysing vast amounts of data and with AI contributing to expand productions. In +providing actionable insights, it can form an iterative this landscape, collaborations, such as those +feedback loop, where insights from each stage between technology companies and publishers, +inform the others. This content innovation loop could be the key to navigating the unknown. These +can enhance creativity and improve the ability to developments open groundbreaking possibilities +predict audience preferences, in turn optimizing but also call for a re-evaluation of traditional +distribution and engagement, expanding reach business and operating models. +and increasing revenues. Society will benefit from +expanded access to information and content, as While genAI has the potential to transform the +translation and format barriers will be removed. industry, successful, responsible adoption at scale + hinges on a holistic, transparent and human- +Adoption has already accelerated in recent years, centric approach, requiring strategic leadership, +with both AI-native organizations and established workforce development, robust technical infrastructure +players investing heavily in it. and wide adoption of governance frameworks and + practices. It calls for multistakeholder collaboration +Despite genAI’s potential, however, the report across society, including industry, governments, +highlights challenges that must be addressed. civil society, labour and leading experts from +The industry needs to pay close attention to the scientific and humanistic disciplines. + + + + + Artificial Intelligence in Media, Entertainment and Sport 5 + 1 Context and + industry trends + AI-powered tools are propelling content + development and contributing to expand + the industry by lowering technical and + accessibility barriers. + + 1.1  + Context + + Aided by The media, entertainment and sport industry is They also help distribute entertainment content, +technology, vast and dynamic, encompassing various sectors, such as movies and music. +the revolution each playing a critical role in shaping the way +in content creation content is created, distributed and consumed. While technology, with its deep connection to +that began in the The industry plays a pivotal role in engaging people content, has propelled the ascent of the creator + by providing trustworthy and reliable content economy and transformed distribution across the +mid-2000s shows + that informs, entertains, educates and facilitates industry, generative artificial intelligence (genAI) +no signs of + individual and collective narratives. is amplifying this growth, exponentially increasing the +slowing down. volume of content available online. Experts estimate + Aided by technology, the revolution in content that AI-generated content could account for as much + creation that began in the mid-2000s shows no as 90% of information on the internet in a few years.2 + signs of slowing down. The emergence of user- GenAI makes content production easier, empowering + generated content platforms has initiated the more people to join the creator economy. AI-powered + creator economy, democratizing content creation tools facilitate low-cost automated translation, + across the industry. Once almost exclusively the dubbing and content localization across geographies. + purview of large studios, content creation has Text-to-voice and text-to-video tools facilitate broader + become accessible to storytellers everywhere accessibility; emerging dubbing technologies enable + across news media, publishing and broadcasting, more natural and fluid tones and intonation.3 + advertising and communication, gaming, + entertainment, music, film and sport. Passive As digital content grows, authentic in-person + content distributors – including social media experiences providing emotional depth, like + platforms and search engines – aid in the concerts, cinema and sport events, are becoming + distribution of this content and make it widely increasingly valuable and are the key growth + available to new audiences, thus expanding the sectors in the industry. Movie box office and music + industry. As of 2023, 50 billion global creators ticket sales accounted for 39% of net increase + contribute to a $250 billion total addressable in consumer spending worldwide in 2023. Live + market, and both figures are expected to grow music revenue increased by 26% and represents + significantly.1 Alongside passive distributors, more than half of the overall music market.4 GenAI + active content distributors play a crucial role by enhances these in-person experiences, creating + providing news and information in every field to help new ways for consumers to enjoy live events and + individuals and businesses make informed decisions. immersive interactions. + + + + + 1.2  + Trends + + AI has been a transformative force in the media, processes in video production, music, journalism, + entertainment and sport industry, driving gaming and photography, among other areas. + significant advancements in content production, + monetization and consumer experience. In short-form content, AI started the trend of + democratizing content creation by providing editing + In content production, genAI, supporting human tools that can enhance the quality of user-generated + creators, has the potential to further enhance creative content without the need for deep technical skills. + + + Artificial Intelligence in Media, Entertainment and Sport 6 + GenAI can It has also helped platforms drive users’ This helps marketers identify individual preferences +enhance and engagement through ranking and recommendation and enables content-aware advertising. By using +streamline algorithms. GenAI tools can amplify this trend via these insights and automating aspects of the +every phase of creative AI platforms, such as automated video creative process, genAI can optimize ad creation, +the production creation and editing. By offering creators real-time targeting and distribution, allowing marketers and + feedback and suggestions at the idea generation advertising agencies to develop hyper-personalized +of scripted + phase, genAI can help them refine their work advertising campaigns. They can tailor ads that +content from story as they go, thereby boosting the overall quality resonate on a deeper level with specific audience +development and of content. segments and place their ads more strategically, +character creation increasing the likelihood of conversions. +to dialogue writing. AI-generated audience preference insights currently + help long-form content creators (both scripted and AI already enhances consumer experience by + non-scripted) optimize scripts, narrative structures delivering personalized content recommendations + and pacing. Real-time analytics and insights for on streaming platforms, social media, search + live events allow producers to adjust on the fly and engines and media outlets, improving customer + improve audience engagement during broadcasts. engagement and retention. It also enhances + content moderation’s effectiveness and efficiency + GenAI can potentially further enhance long-form in supporting the detection and removal of harmful + content creation and make it even more efficient. content. With genAI’s advanced contextual + It can enhance and streamline every phase of understanding of policies and community + the production of scripted content – like movies, guidelines, moderation can go beyond static + editorials, video games and commercials – from decision trees to better reflect the complexities + story development and character creation to of the real world. GenAI can expand the canvas of + dialogue writing, helping creators generate fresh possibility for highly individualized content delivery + ideas and reducing production time. In post- and interactive and immersive experiences. This + production, it can automate complex tasks like includes both virtual and in-person applications, + visual effects, 3D animation and computer- like virtual assistants and intelligent agents, + generated imagery, enabling the creation of hyper- working along extended reality technologies. It + realistic environments and characters at a fraction also covers seamless ways to create and access + of the usual cost and time. content through conversational interfaces, such + as generating images and videos or searching + For non-scripted productions such as live TV, archives anytime, anywhere. In addition, genAI + concerts and sport, genAI can advance real- can increase the relevance of social media search + time content editing, highlight generation and results and, with intentional design choices, can + multi-camera operations. Content creators can enhance algorithms to encourage positivity and the + use conversational interfaces to automate time- emotional well-being of users and communities. + consuming tasks like creating video clips from + existing content; editors request edits and video Emerging trends and rapid technological + assembly through natural language prompts, and advancements fuel optimistic outlooks for the + the model processes and executes the tasks. global AI market in media, entertainment and sport. + Furthermore, genAI enables the continuous analysis Revenues are projected to reach approximately + of audience engagement data, ensuring that $120 billion by 2032, with a compound annual + content remains engaging throughout the event. growth rate of 26% from 2023 to 2032.5 However, + It thus enhances both the creative and strategic high upfront costs, fundamental infrastructure gaps, + aspects of content creation and distribution. particularly high data debt (e.g. low data quality, lack + of accurate metadata) and unclear business value + When it comes to monetization, AI has raise concerns about long-term profitability. This + transformed advertising by boosting return on leads to a high AI project failure rate, estimated at + investment (ROI) through predictive analytics and 30% to 80%.6,7 Moreover, as discussed later, several + real-time dynamic pricing. Predictive analytics challenges must be addressed to responsibly adopt + uses machine learning (ML) algorithms to forecast the technology and ensure this revolution benefits + consumer behaviour, helping media companies humanity and enhances the creative landscape. + manage their digital inventory and deliver ads + to the right audience at the right time. Dynamic Uniquely human elements, such as the conception + pricing adjusts advertising rates based on of original ideas and the stories behind them, + demand, competition and engagement metrics, the emotional resonance, cultural nuance and + maximizing profitability for both advertisers and moral judgement will remain essential. Human + content platforms. accountability and creative oversight will continue + to play a pivotal role. In the future, creators and + GenAI is set to revolutionize media planning and users will need to be educated to navigate evolving + buying by enhancing audience targeting through sensitivities around trust and information integrity, + even more granular analysis of detailed audience especially as younger generations bring different + behaviour patterns, including unstructured data. sensitivities around these concepts. + + + + + Artificial Intelligence in Media, Entertainment and Sport 7 + 2 Industry adoption + GenAI is transforming content creation, + distribution and monetization into a + dynamic, data-driven and iterative process. + + This section highlights key opportunities emerging and processes, such as human resources, finance + for the media, entertainment and sport industry. and legal, are covered in the AI in Action: Beyond + The impact of genAI on industry-agnostic functions Experimentation to Transform Industry Value paper. + + + + + 2.1  + Present scenario + GenAI is reshaping every sector in the industry. innovation loop, where each phase informs the + The content development process has evolved others, serves audiences’ needs as they emerge, + from sequential (create, distribute, monetize) to embedding insights from the monetization stage + circular, where insights from each stage inform and into distribution strategies, and more. For example, + influence others. With a strong and secure data genAI can instantly tailor marketing assets based + foundation and informed user consent, genAI can on early audience engagement or recommend + enhance this dynamic. It can process vast datasets creative adjustments in films by analysing script + on audience behaviour, preferences and trends to performance data. Similarly, personalized content + create actionable strategies and even implement distribution algorithms enable targeted, direct + them. Content creators can use genAI-powered advertising campaigns by refining targeting + insights to adapt their output through conversational strategies in real time based on performance + interfaces, using genAI once again to augment, analytics, ensuring that campaigns reach the + simplify or automate tasks. This responsive content most responsive demographics. + + + FIGURE 1 Illustrative example of the shift from a content development process to a genAI-powered + content innovation loop + + + + + Content/asset creation Content/asset management + Streamline production and post-production Enhance media/digital assets’ daily + processes, shaving off time and budget workflows and content management + + + + + GenAI + + +Customer experience Monetization +Increase audience engagement through More effective marketing campaigns, +highly individualized content, and reduce increasing customer conversion rate +customer service interaction times + + + + + Distribution + Build hyper-personalization capabilities, + enhancing sales volume and ROI + + + + Artificial Intelligence in Media, Entertainment and Sport 8 + A dynamic innovation ecosystem is emerging, – Creating new products and services that + fuelled by a whole new generation of AI-native push the boundaries, such as search generative + startups, with $27 billion invested in it between April experiences and text-to-audio/video solutions + and June 2024 alone.8 These organizations are + expanding the industry by: – Acting as enablers, supporting the evolution + of the content innovation loop, by providing + – Reinventing existing products, making them infrastructure and solutions for emerging + more accessible and engaging, and enhancing needs, such as the implementation of content + established business and operating models to authenticity standards, attribution models and + drive efficiency and productivity remuneration frameworks + + + BOX 1 Emerging innovation ecosystem + + Reinventing existing products empowering for everyone. It builds general purpose + multi-modal simulators, accelerating research- + Inworld AI provides a suite of AI tools and to-production timelines from years to weeks and + infrastructure for game development and embedding research into engineering and product + gameplay. Inworld’s AI engine helps game teams instead of having each team work in isolation.10 + developers create content more efficiently while + enabling new game mechanics that increase Acting as enablers + immersion, personalization and replayability.9 + ProRata.ai enables AI pay-per-use with new + Creating new products and services technology that analyses generative responses, + attributing content sources, enabling the sharing + Runway is at the forefront of AI media, making of revenues between technology players and + content creation accessible, controllable and content providers.11 + + + + + 2.2  + Opportunities and use cases + This section outlines the most relevant opportunities – Enhance audiences’ engagement and + for generative-AI-driven transformation across optimize revenues: GenAI supports the + content creation, asset management, monetization, production and delivery of hyper-personalized, + distribution and customer experience. It provides an engaging content at scale. In turn, this helps + overview of how businesses across the industry are businesses enhance user experience, reduce + using genAI at each stage of the content innovation churn and optimize revenue streams through + loop. These examples, grouped by impacted stage strategic advertising placements, dynamic + of the loop and the opportunity they enable, are pricing and improved content yield. + illustrative rather than exhaustive. + – Boost efficiency and productivity: GenAI + Opportunities automates repetitive tasks, such as copyediting + for grammar, summarization and metadata + – Augment human creativity: GenAI augments + tagging, and optimizes content editing + creativity and democratizes content production + workflows in production and post-production + by lowering entry barriers such as technical + phases. It provides real-time audience and + skills and investment. This allows a broader + performance insights that allow creators to + spectrum of creators to participate and enables + quickly adapt and improve content through + studios with limited resources to enhance their + conversational interfaces. This enables the + production, ultimately expanding the industry. + industry to deliver high-quality content faster + But the real promise of genAI lies not in merely + and more effectively. + enhancing existing workflows or generating + assets, but in creating entirely new and + previously unimaginable experiences. + + + INSIGHT 1 GenAI and creators + + + +52% 92% 90% +of creators state that using AI helped of creators say they have already used feel like they are not using genAI +them to be more creative while also genAI in some capacity (vs. only 34% to its fullest potential.14 +saving them time.12 in November 2023).13 + + + + Artificial Intelligence in Media, Entertainment and Sport 9 + Augment human creativity, enhance audience + engagement and optimize revenues + FIGURE 2 How genAI can augment the creative process and help engage audiences + + +Augment human creativity, enhance audience +engagement and optimize revenues + + + + +Content/asset Content/asset Monetization Distribution Customer +creation management experience + +Creation of previously Real-time analysis and Analysis of previously Audience reach Increasingly immersive and +impossible and highly sorting of live content to consumed content to expansion through interactive experiences +engaging content reassemble it in a more create dynamic and automatic translation driven by passive +combining new and engaging way innovative ad formats and conversion of personalization engines +pre-existing assets and automatically content, and generation + adapt campaigns of promotional artwork + that adapts to individual + users’ preferences + + + + + Augment human creativity: Enhance audiences’ engagement and optimize revenues: + + + + In total of chief marketing officers expect + Text-to-image genAI enhances genAI and related technology + human creative productivity by + approximately 25%.15 + 25% 93% to change the relationship with + customers within the next five years.18 + + + + GenAI can help writers with low divergent association Harnessing the power of genAI to enhance marketing by + task (DAT) scores improve the writing quality of a story, tailoring communications to individual customer profiles + increasing enjoyment by about 20-25%, putting them can boost conversion rates by 15-30%.19 + on par with more creative writers.16 + + + Approximately Around Inaccurate or incomplete Companies can + + + 75% 62% + data often results in lose up to + + 15-25% + incorrect business + decision-making, failure to + indicate content meet customer needs and + of marketers have of revenues due to + creation as the top reduced competitiveness. + implemented AI bad data.20 + into their workflows. use case.17 + + + + + Artificial Intelligence in Media, Entertainment and Sport 10 + Content/asset creation + +Creators can use genAI’s ability to interpret It enables the near real-time generation of high- +extensive content archives in real time to quickly quality content, combining new and pre-existing +discover emerging trends, get inspired and gain assets.21 Organizations can also use genAI to deliver +fresh perspectives. In the idea innovation stage, previously impossible, highly engaging experiences. +genAI can help brainstorm concepts, provide For instance, genAI-based game engines can +topic suggestions tailored to specific audiences, dynamically expand levels and adapt environments +offer inspiration to kickstart the creative process, and visuals to gamers’ preferences and profiles. They +generate preliminary drafts and serve as a can develop intelligent non-player characters and +catalyst for new ideas that are not possible with generative agents that are not constrained by limited +conventional methods. narrative options and predefined decision trees. + + + + + CASE STUDY 1 + Augmenting music creation – artists’ voices in videos + +YouTube recently tested Dream Track in YouTube this experiment. It allowed a select group of US +Shorts to explore how AI can deepen connections creators to type in an idea and choose the voice of +between artists, creators and their fans. Nine one of the participating artists to produce an original +artists, including Charli XCX, Demi Lovato, John AI-generated soundtrack of up to 30 seconds. They +Legend and T-Pain, partnered with YouTube for could then use this soundtrack on their Shorts. + + + + + CASE STUDY 2 + Enhancing in-game experiences – the superhuman racer + +Sony AI, in collaboration with Polyphony Digital employed novel deep reinforcement learning +and Sony Interactive Entertainment, developed techniques using state-of-the-art algorithms and +Gran Turismo Sophy, a revolutionary superhuman training scenarios developed by Sony AI using +racing agent designed to compete against Gran Turismo Sport, a real driving simulator, +top Gran Turismo Sport drivers and enhance and Sony Interactive Entertainment’s cloud +their gaming experience. Sophy’s training gaming infrastructure.22 + + + + + Artificial Intelligence in Media, Entertainment and Sport 11 + Content/asset management + +Organizations can use genAI’s conversational fans with enhanced, immersive experiences +interface to analyse, sort and manipulate content using game highlights clips, game summaries +in real time and reassemble it in a more engaging and player statistics across multiple platforms.23 +format. For instance, producers can provide sport + + + + CASE STUDY 3 + Facilitating access to information via AI-powered + summarization and multimodal AI research assistance + +Google Labs developed NotebookLM, a relationships and suggesting follow-up questions. +personalized AI research assistant built with Users can upload up to 50 sources into individual +multimodal technology. It helps users efficiently project notebooks. NotebookLM’s Audio Overview +process and organize complex information feature transforms content into podcast-style +by synthesizing documents, videos and even discussions with two AI hosts.24 +books into insightful summaries, identifying key + + + + + CASE STUDY 4 + Automating and personalizing sport highlights creation + +In partnership with Intel, the International Highlights Generation feature creates personalized +Olympic Committee (IOC) has introduced highlights for 14 sports to boost audience +cutting-edge AI solutions to transform the engagement through AI models trained with +Olympic experience for fans, organizers, athletes Intel Geti AI tools that use the Olympic sports +and viewers across the globe. The Automatic video archive.25 + + + + +Monetization + +GenAI can help enhance content monetization by any overexposure or underexposure, maximizing +processing real-time data, such as from live events, sponsorship value. GenAI also enables innovative, +to make immediate adjustments that enhance audience-tailored, dynamic ad formats in real time to +engagement and revenues. During sport events, create visually engaging assets that offer customers +for example, AI analyses livestreams captured by new ways to interact and shop, driving ad performance +autonomous drones, and based on these real-time and higher click-through rates. For instance, in +insights on brand visibility, generative-AI-powered advertising, it allows campaigns to dynamically +agents adjust the drones’ positioning to correct for adapt to target audiences, increasing effectiveness. + + + + + CASE STUDY 5 + Enhancing user engagement via hyper-personalization + +Monks agency revolutionized Hatch’s advertising a personalized, effective ad campaign in +strategy by overcoming the challenge of costly unprecedented time. This genAI-powered +and time-intensive ad development for their workflow improved user engagement, resulting +new Restore 2 product. Using genAI tools such in an 80% higher click-through rate (CTR) and +as Google Gemini for persona development 31% better cost-per-action (CPA) and halving +and the Monks Flow platform, they delivered production costs.26 + + + + + Artificial Intelligence in Media, Entertainment and Sport 12 + Distribution + +Creators and producers can use genAI tools to Journalists, for example, can translate their articles +expand their reach by tailoring content to user needs into multiple languages or convert them into videos +and preferences, for instance, by automatically to reach low-literacy communities. +translating or converting it to different formats. + + + + + CASE STUDY 6 + Removing format barriers – AI-generated + videos from news articles + +Hubert Burda Media uses genAI to create news programming interface (API). To nurture consumer +videos from journalistic, text-based articles using its trust, Burda labels all AI-generated videos. The tool +proprietary “Magic AI Tool”, which integrates Eleven is currently used internally and being optimized in +Labs (text-to-speech), ChatGPT and D-ID (video collaboration with a market research institute that +creation) connected modularly via an application analyses user engagement.27 + + + + +Customer experience + +GenAI is transforming user experiences, making engines provide accurate content recommendations, +them more immersive and interactive via intelligent facilitating a shift from a one-size-fits-all to a highly +agents that enable conversational and personalized individualized approach. GenAI also supports the +engagement with content, such as semantic search integration of other emerging technologies to offer +or genAI-powered search engines. AI personalization new, rich and engaging ways to interact with content. + + + + + CASE STUDY 7 + Providing immersive financial summaries + +Bloomberg enhances its Terminal app on Apple’s Vision Pro headset with AI-Powered +Earnings Call Summaries that help financial professionals quickly and efficiently consume +key information from the call transcripts.28 + + + + + CASE STUDY 8 + Encouraging well-being through intentional algorithmic design + +Pinterest uses AI-driven computer vision and and tailor search results. They have significantly +object detection technology to generate more enhanced user experience; among Gen Z, there +inclusive search results. These tools analyse the has been a 225% increase in hair pattern searches +image library to recognize specific attributes like and 66% higher engagement rate per session with +skin tone, hair pattern and body shape to refine body type ranges. + + + +To unlock the technology’s full potential, co-worker enhances creativity, complementing +undertaking a collaborative approach to genAI is human ingenuity and pushing the boundaries +required. An iterative, conversational engagement of what’s possible. Companies should focus on +with precise prompts promotes a focused, applications that empower creatives to produce +productive interaction that can elevate both higher-quality work, rather than replacing them with +ideas and outcomes. Approaching genAI as a AI-generated content.29 + + + + + Artificial Intelligence in Media, Entertainment and Sport 13 + INSIGHT 2 GenAI as creative collaborator rather than an “infallible oracle” + + An experiment showed how + genAI helped teams produce + + + + 8% + more ideas than teams working without it, + Underperforming teams tended to use genAI + as a problem solver, rather than a collaborative + but also led to more average and less partner with whom to discuss and brainstorm + “A-graded” ideas.30 until reaching the most creative outcomes.31 + + + + + Boost efficiency and productivity + FIGURE 3 How genAI can help organizations be more productive and reduce costs + + + +Boost efficiency and productivity + + + + +Content/asset Content/asset Monetization Distribution Customer +creation management experience + +Increase of efficiency by Reduction of manual Continuous content Automation of time- Minimization of time +automating various stages content processing time optimization and adaptive consuming activities needed and resources needed +of the production process thanks to automatic ad placement to improve for meeting accessibility and to deliver cohesive and + extraction of relevant campaigns’ outcomes localization requirements tailored experiences + metadata + + + + +LLMs can potentially reduce Companies that will automate By 2026, genAI will take up + marketing tasks with genAI will + +72% increase productivity by + 42% +of editors’ work time, freeing up time +for more creative and strategic work.32 + 40% of traditional marketing’s mundane tasks + such as search engine optimization (SEO) + during the next five years.33 and content and website optimization.34 + + + + Artificial Intelligence in Media, Entertainment and Sport 14 + Content/asset creation + +GenAI can significantly reduce costs and effort by content. For live events, genAI can help streamline +streamlining production stages. “Co-pilots” can advanced features such as instant slow-motion +automatically generate clips, playlists and stories replays and dynamic camera configurations, +while enabling real-time metadata tagging, making accelerating the production of high-quality content +it easier for creators to manage and enhance their at lower costs. + + + + + CASE STUDY 9 + Simplifying editing through intelligent + image and video recognition + +Meta’s Segment Anything Model 2 (SAM 2) can its memory attention feature, which tracks objects +significantly simplify labour-intensive content across multiple frames. In post-production, SAM +creation tasks by automating video and image 2 can be used to make real-time adjustments like +editing. SAM 2 allows creators to quickly identify changing backgrounds or adding special effects +and isolate objects in both images and videos with without manually editing each frame.35 + + + + +Content/asset management + +GenAI can use advanced models – such as image activities, like content moderation, and reduces +and object recognition – and natural language content processing time by automating repetitive +processing (NLP) to automatically enrich extracted tasks like metadata generation, tagging and content +metadata with semantic context, generating, organization. Market researchers, for instance, can +for example, narrative patterns and scene use genAI to optimize dataset processing and +descriptions. This supports human oversight provide insights more accurately and efficiently. + + + + + CASE STUDY 10 + Powering sport performance adding co-pilots to the team + +The Deutscher Fußball-Bund (German Football matches. This reduces manual tasks for analysts +Association) works with the sports management and allows them to quickly respond to queries +suite SAP Sports One’s AI co-pilot to enhance from team members preparing for a match, such +match preparation, automatically analysing data as the opposing team’s game patterns, strengths +and extracting insights from opponents’ past and weaknesses.36 + + + + + CASE STUDY 11 + Intelligent asset management + +Accenture Song uses models trained on bespoke searchability, activation and analysis across the +client taxonomies to generate and apply metadata enterprise, potentially reducing related operating +to both new and existing assets at scale. This costs by up to 75%.37 +enhances asset use and value by improving their + + + + + Artificial Intelligence in Media, Entertainment and Sport 15 + Monetization + +GenAI can streamline advertising and marketing by improve campaign outcomes. For example, it can +rapidly generating multiple advertising variations, automate and accelerate A/B testing, leading to +enhancing ad placement, analysing performance more effective advertising strategies while reducing +in real time and continuously optimizing content to manual effort. + + + + + CASE STUDY 12 + Designing the ideal advertising media mix + +NBCUniversal’s “One Platform Total Audience” defining and extensive content portfolio and +advertising solution uses AI to automate budget robust first party and advertisers’ data sets, the +allocation across linear and streaming media, solution reaches key consumers at unparalleled +identifying the ideal mix to engage precise audience scale with programme-level transparency +segments. Leveraging NBCUniversal’s culture- for brands.38 + + + +Distribution + +GenAI can enhance content distribution by browse through content more easily with +automating accessibility and localization tasks and semantic search engines, and streaming platforms +predicting consumer behaviour and trends. For can predict traffic volumes and specific content +instance, visual content can be quickly dubbed requests to optimize network resources. +for consumption by broader audiences, users can + + + + + CASE STUDY 13 + Simplifying content retrieval via advanced in-video search + +Netflix has developed an advanced in-video search and text embeddings, enabling accurate searches +system to help creators quickly find specific scenes based on text input. This streamlines the retrieval +or elements (such as objects, emotions or actions) of clips for trailer creation and promotional videos, +from their vast library of films and shows. Using reducing manual search time and allowing creatives +ML, particularly contrastive learning, it creates video to work more effectively.39 + + + + + Artificial Intelligence in Media, Entertainment and Sport 16 + Customer experience + + GenAI can automate real-time data analysis and experiences. This is particularly impactful for live + visualization, minimizing the time and resources events, where fans can access or request content + required to gather and interpret relevant information, and insights, such as player statistics, that are + enabling cohesive, data-driven consumer automatically generated by genAI. + + + + + CASE STUDY 14 + Enhancing fan experience during live sport events + + World Sailing, in collaboration with SAP, launched insights. Expensive wind sensors have been + an AI initiative enabling real-time analysis and replaced with virtual sensors that capture more than + visualization of race rankings, average speeds, 160,000 wind directions annually. This technology + manoeuvres and other key data, enhancing the has been deployed at international sailing events + fan experience. Since 2021, more than 1.9 million such as the Olympic Games and the World + sailing enthusiasts have benefited from these Cup Series.40 + + + + + Out of the key use cases for media entertainment and sport, 12 emerge as top priority + plays at the industry level:41 + + + FIGURE 4 GenAI use cases – value vs. readiness + + + + High + Automated content Windowing strategy Smart ad Personalized content + Marketing optimization + curation placements recommendation + Archive transformation Intelligent editing analytics + + Content Content creation Targeted dynamic ad + moderation content generation Viewer journey + Scale distribution + Launch Metadata tagging analytics + scheduling and generation Storyboard/script +Value creation Format conversion + Interactive Smart idea generation +Revenue increase Translation and localization + narrative/gaming + Auto-dubbing Content search using LLM +Spend reduction +Risk minimalization Production + Video Chatbot Content feedback Content viewing + Optimized captioning enhancement evaluation patterns + planning +Sustainability experience Optimized posting + Content engagement schedule +Safety Topic trend Whitespace analysis + Content summarization + analysis analysis Automated email and synthesis + campaigns + Content + copywriting Sentiment analysis + generation for campaign + evaluation Conversion + propensity + Low + + Low Readiness (technology, data, operations and people) High + + + Content/asset creation Content/asset management Distribution Monetization Customer experience + +Source: Accenture Research. + + + Artificial Intelligence in Media, Entertainment and Sport 17 + 3 Enablers and other + considerations + A responsible adoption requires addressing + concerns about dis- and misinformation, + intellectual property and impact on the workforce. + + This section gives an overview of the key challenges responsible and sustainable AI adoption at scale. + and enablers for the responsible adoption of Other important enablers, such as technology and + genAI in the industry. While not an exhaustive infrastructure, are covered in the AI in Action: Beyond + list, it identifies areas that play a role in ensuring Experimentation to Transform Industry Value paper. + + + + + 3.1  + Industry governance + + As genAI advances rapidly, it presents complex of deepfake tools on the dark web grew by + challenges that must be overcome to make this 223%,42 and AI-generated images surged from + revolution work for humanity. This section does approximately 8,000 in 2018 and 15,000 in + not aim to provide comprehensive solutions but 2019 to approximately 15.5 billion in 2023.43 + highlights critical areas that require multistakeholder, This underscores the need for robust content + industry-level and company-level consideration. moderation, enforcement, transparency, AI + Key challenges include: usage disclosure and source attribution.44 + Concerns focus on synthetic media’s potential + – Deepfakes and misinformation: By reducing impact on the trustworthiness and integrity + production costs, genAI exacerbates the of the information ecosystem, especially in + risk of mis- and disinformation spreading at elections and conflicts, and the proliferation of + an unprecedented speed and scale, and of harmful content targeting individuals, such as + deepfakes being used with harmful intent. non-consensual image sharing.45 + From Q1 2023 to Q1 2024, the exchange + + +INSIGHT 3 Disinformation in the genAI era + + According to Reuters, more than half By 2028, + + + + 50% + of respondents + + + + 59% + are concerned about disinformation.46 + of enterprises will adopt products, services or + features to address disinformation, up from less + than 5% in 2024.47 + + + – Data ownership and data rights: AI-generated content to ensure that celebrities + The collection and use of user data raise and individuals can exert stronger control over + questions around IP protection and how their image, voice and recognizable attributes, + privacy rights are protected. A debate is are also gaining traction with policy-makers. + ongoing as to whether copyright frameworks The development of robust frameworks is + are still fit for purpose, striking the appropriate essential to protect creators and promote + balance between incentivizing creativity while responsible innovation in this complex + ensuring society can benefit from it. This landscape. For example, how do we define the + has implications for accessibility to content IP framework for synthetic content and handle + for model training and the potential for AI to cases where someone draws a portrait of an + expand content distribution. Related issues, actor and then uses AI to generate images/ + such as how to protect likeness rights over videos based on it? + + + Artificial Intelligence in Media, Entertainment and Sport 18 + INSIGHT 4 Intellectual property implications + + A recent survey found that + + + + 52% 25% + of respondents view IP infringement report actively working to implement + as a significant risk. measures to mitigate it.48 + + + + Accuracy and bias: GenAI outputs can amplify and content value. Poor representation of diverse + existing biases in training data and produce communities in model training datasets increases + discriminatory outputs or generate hallucinations algorithmic bias, risking the marginalization of + (false information), which can erode consumer trust certain voices and reduction of models’ accuracy.49 + + + INSIGHT 5 Accuracy + + Research highlights a growing concern + around genAI inaccuracy, with + + + + 63% + of respondents considering it a relevant risk. + 38% + declared that they are working to mitigate it.50 + + + + Addressing these challenges is essential for industry cross-industry standards like ISO-4200152 + leaders and society to ensure AI’s sustainable and can streamline review and approval processes. + responsible adoption. It calls for a human-centric + and holistic approach. As regulation varies and – Fairness: Companies should use AI models + evolves at a different pace across regions, there that minimize bias and mitigate unintended + is opportunity for industry self-governance to consequences in content creation and + complement regulation (“co-regulation”) through distribution. This will ensure equitable treatment, + methods like collective bargaining, binding inclusivity and fairness across content platforms + commitments, best practices and voluntary while safeguarding user data rights. + standards. Key governance themes have been + defined and examined as part of the World – Transparency: Nurturing consumers’ trust + Economic Forum’s Digital Trust Framework.51 requires organizations to inform about AI- + They include: generated content and its use through + appropriate labelling and disclosures within the + – Accountability: Organizations are defining product experience – whether auto-generated, + principles for responsible AI adoption. Some auto-generated with human oversight or + are establishing governance bodies, like human-generated. Information on related data + supervisory boards and AI councils, as well practices, safety policies and potential risks + as human oversight processes to ensure (such as bias and privacy) of the AI model used + ethics and transparency standards are in genAI products should be made available + Companies upheld. These committees should consider via accessible documentation. Standards +should use AI diverse perspectives from technologists, and technical solutions to ensure content + ethicists, legal experts, creators and others to authenticity, such as digital watermarking, +models that + effectively assess genAI products and features. content origin and history, and blockchain- +minimize bias They should be responsible for reviewing based rights management, are currently +and mitigate AI practices, identifying potential risks and under development to support a trustworthy +unintended ensuring compliance with both internal policies information ecosystem. However, successful +consequences in and external regulations. Defining evaluation adoption at scale requires policy frameworks +content creation frameworks based on different categories of AI that are aligned with common principles, rules +and distribution. models, data sources and use cases, along with and technological standards.53 + + + + + Artificial Intelligence in Media, Entertainment and Sport 19 + 3.2  + Workforce + + GenAI has the potential to revolutionize current adoption roadmaps and guidelines for genAI + ways of working, necessitating workforce upskilling use. Regulation and self-governance are also + and reskilling. Its integration can transform needed to ensure the responsible use of digitally + content creation and reshape job roles, such as replicated likenesses and performances. + in production, editing, distribution and marketing. + By automating repetitive and technical tasks, it – Skill augmentation: Employees will need + can create opportunities for professionals to focus acquire new skills, particularly in AI and data + on higher-order creativity and strategy. However, management, to remain competitive in the + this shift requires a robust investment in workforce labour market. + development to build both the technical skills and + ethical awareness needed for working with genAI. According to Accenture research,54 the media and + A holistic training approach and a safe environment entertainment industry ranks among the top five + for experimentation are vital for adoption. industries with high automation potential (refer + Key workforce challenges include: to the AI in Action: Beyond Experimentation to + Transform Industry Value paper for an overview). + – Job transition: AI-driven automation may + reduce the need for certain roles, requiring – On average, 50% of working hours in the + proactive workforce management and strategies industry can be transformed by LLMs, as + to transition workers to new roles. The impact they have a high potential to be automated + will vary across industry sectors and areas, so or augmented.55 + organizations will need to tailor their strategies + to rebalance labour demands. – A total of 24% of tasks are susceptible + to automation, particularly in manual and + – Cautious adoption by the workforce: Many routine roles.56 + workers are cautious and concerned about + the large-scale adoption of AI. To support – A total of 26% of tasks could be augmented, + effective onboarding, organizations must enhancing roles that involve creativity and + offer comprehensive training, transparent strategic decision-making.57 + + + FIGURE 5 Potential large language model (LLM) impact distribution on work time in media + and entertainment + + +Weighted by employment levels + + +Publishing activities 28% 35% 22% 15% + + +Information service activities 30% 31% 23% 15% + + +Advertising and market research 28% 32% 26% 15% + + +Programming and broadcasting activities 22% 35% 22% 21% + + +Motion picture, video and television programme production, 22% 32% 21% 26% +sound recording and music publishing activities + +Gambling and betting activities 28% 24% 18% 30% + + +Creative, arts and entertainment activities 21% 28% 22% 29% + + +Sports activities and amusement and recreation activities 20% 21% 24% 34% + + +Printing and reproduction of recorded media 22% 15% 13% 50% + + + + Higher potential for automation Higher potential for augmentation Lower potential for augmentation or automation Non-language tasks + + +Source: Accenture research analysis based on O*NET and national statistical databases from 22 countries and 19,000 work tasks. + + + Artificial Intelligence in Media, Entertainment and Sport 20 + 4 Future outlook + To successfully navigate a fast-evolving + and potentially disrupted landscape, + industry players should innovate and + engage in new collaborations. + + 4.1  + Potential disruptions + + As AI adoption increases across the industry, rapid content discovery journey can face a significant + advancements point towards profound shifts on shift, as genAI powered products are emerging, + the horizon, requiring businesses to prepare for a capable of directly answering users’ queries, + range of scenarios. To navigate this transformative aggregating and elaborating information collected + landscape, businesses must be ready to innovate from multiple sources. These AI “answer engines” + and adapt to emerging realities. This section could play a pivotal role in the future of content + explores three potential disruptions that could discovery,58 impacting how people access, find, + redefine the industry: share and experience information and content, with + potential implications across the industry. Further, + Evolution of the content discovery journey genAI-powered agents may proactively engage with + users and on their behalf, learning their preferences + Historically, information and content reached the and interests and acting as intermediaries and + public through the media; then new avenues for filtering content and ads. Brands and content + content discovery emerged, with search engines producers will need to capture the attention of + and social media platforms becoming a prominent agents, not just users. Media outlets and other + access point for people on the web. The digital players will need to adapt to this scenario. + + +INSIGHT 6 Consumers and AI assistants + + + + + 77% of global consumers want an AI assistant to vet + advertisement and promotions on their behalf by 2035.59 + + + + Revolution in how consumers engage the internet of things (IoT), can transform user + with content engagement with content from static to interactive. + For example, users could engage with news via + Along with existing consumer engagement smart glasses and engage in dialogue with a genAI- + models and formats (TV, text-based articles), powered agent instead of reading static articles, + the convergence of AI and other emerging and even use it to schedule activities based on + technologies, like extended reality (XR) and weather and traffic forecasts. + + + + + Artificial Intelligence in Media, Entertainment and Sport 21 + INSIGHT 7 Consumers and immersive experiences + + A total of By 2028, + + + + 57% + of global consumers are interested in smart + 20% + of people are expected to have an immersive + glasses that overlay information onto their experience once a week, up from less than 1% + real-life surroundings.60 in 2023.61 + + + + AI-driven creativity sparking a new era in monetize their likeness, and fans can enjoy timeless + content creation performances. GenAI can break down format + and language barriers and enable cross-border + With legal and informed consent, AI can recreate, distribution of content, enabling broader access to + modify and simulate the image, age, likeness, cultures across the globe. However, concerns over + voice, gestures and unique traits of celebrities in likeness rights, informed consent and transparency + real time, allowing for direct review by cast and are fuelling an ongoing debate in the industry about + crew. Celebrities can benefit from new ways to ethical boundaries and practices. + + + + + 4.2  + Collaboration opportunities + + GenAI presents a unique opportunity for – Partnerships with the public sector can + multistakeholder and cross-industry collaborations, further expand innovation. They could + enabling organizations to innovate, adapt and improve public services like education and + harness its transformative potential to thrive amidst public safety and unlock new possibilities + industry disruption: at the intersection of technology, content + and public interest. + – New avenues for industry and cross-industry + collaboration are emerging. Industry players – Publishers and content providers can + can explore genAI and other emerging collaborate on shared licensing frameworks + technologies to expand their market and create and common technology infrastructure, such + new business models and revenue streams. as an API layer, strengthening LLM training and + Partnerships with technology companies, as promoting cross-platform content distribution. + in the case of recently signed partnerships, One potential model could be aggregated + blend trustworthy information with cutting-edge content platforms, along the lines of music + technology (like LLM training on proprietary streaming platforms, allowing access to content + information), resulting in innovative models (such from a variety of sources, facilitating shared + as licensing revenues) and expanding the reach access, distribution and monetization within + of their content (such as integration in new a unified ecosystem. + consumer products or across markets). + + + + + Artificial Intelligence in Media, Entertainment and Sport 22 + Conclusion +Successful and responsible adoption of this actors across society, industry, governments, civil +powerful and potentially disruptive technology society, labour, and leading experts across scientific +requires organizations to navigate the adoption and humanistic disciplines. +journey. This will involve defining a clear strategy +and roadmap, engaging in new collaborations Embracing emerging opportunities, while +and partnerships, onboarding the workforce, and addressing the challenges outlined in this paper, +defining and adopting robust ethical guidelines. can enable humanity to benefit from a richer and + more diverse creative landscape. In this new era, +To make this revolution work for humanity and the individual creators and professional productions can +creative industries, a holistic and human-centric expand their reach, and audiences can engage in +approach is needed, requiring a whole-of-society new forms of content tailored to their preferences +and multistakeholder collaboration, involving key and personas. + + + + + Artificial Intelligence in Media, Entertainment and Sport 23 + Contributors +World Economic Forum Accenture + +Minos Bantourakis Kathryn White Krumpholz +Head, Media, Entertainment and Sport Industry Managing Director, Innovation Incubation; Executive + Fellow, AI Governance Alliance +Maria Basso +Manager, Digital Technologies Portfolio, Centre for Matteo Orsenigo +the Fourth Industrial Revolution Digital Technologies Senior Manager, Communications and Media Industry + +Francisco Betti Swati Vyas +Head, Global Industries Team; Member of the Lead, Communications and Media Research +Executive Committee + +Daniel Dobrygowski +Head, Governance and Trust, Centre for the Fourth +Industrial Revolution Digital Technologies + +Benedikt Gieger +Project Fellow, SAP, AI Governance Alliance + +Jill Hoang +Lead, Initiatives, AI and Digital Technologies, +Centre for the Fourth Industrial Revolution +Digital Technologies + +Cathy Li +Head, AI, Data and Metaverse; Member of the +Executive Committee, Centre for the Fourth +Industrial Revolution Digital Technologies + + + + +Acknowledgements + +Martin Adams Geoff Campbell +Co-Founder, Metaphysic Senior Vice-President, Strategy and Business + Development, Condé Nast +Henry Ajder +Founder, Latent Space Advisory Duncan Crabtree-Ireland + National Executive Director and Chief Negotiator, +Stefan Atanassov Screen Actors Guild-American Federation of +Chief Product Officer, Hubert Burda Media Television and Radio Artists + +Moritz Baier-Lentz Cüneyt Deliktaş +Partner and Head, Gaming and Interactive Media, Chief Technology Officer, Ihlas Holding +Lightspeed Venture Partners + Brian Demitros +Brian Buchwald Innovation Lead, Dentsu +Global Chair, AI and Product, Daniel J. Edelman + Petra Ehmann +Cansu Canca Group Chief Innovation and AI Officer, Ringier +Director, Responsible AI Practice, Institute for +Experiential AI; Research Associate Professor Sandeep Grover +in Philosophy, Northeastern University Trust and Safety Leadership, TikTok + + + + + Artificial Intelligence in Media, Entertainment and Sport 24 + Mark Howard Behnam Tabrizi +Chief Operating Officer, TIME Director and Teaching Faculty of Executive + Program, Stanford University +Reena Jana +Head, AI Transparency and Standards, Google Tejas Totade + Chief Technology Officer, Ruder Finn +Jeff Jarvis +Visiting Professor, Stony Brook University School David Towers +of Communication and Journalism Senior Partner, Wavemaker, WPP + +Jae Sung Lee Jasmine R. Vasquez +Co-Founder and Chief Executive Officer, Head, Public Policy, Americas, Pinterest +Twelve Labs + Sonali Verma +Katharina Neubert Generative AI Initiative Lead, International News +Vice-President, Strategy and Investments, Media Association +Holtzbrinck Publishing Group + Ingrid Verschuren +Christophe Nicolas Executive Vice-President, Data and AI; +Senior Vice-President and Founder, General Manager, Europe, Middle East and Africa, +Kudelski Security; Group Chief Information Dow Jones +Officer, Kudelski Group + Daniel Verten +Joshua Ogawa Strategy Partner, Synthesia +Managing Editor, Visual Journalism Center, Nikkei + +Katherine Oyama Production +Global Director, Government Affairs and Public +Policy, YouTube + Laurence Denmark +Diahanna Post Creative Director, Studio Miko +Senior Vice-President, Nielsen + Rose Chilvers +David Rosenberg Designer, Studio Miko +Head, Machine Learning Strategy, Office of the +CTO, Bloomberg Will Liley + Editor, Studio Miko +Lewis Smithingham +Senior Vice-President, Innovation, Monks, S4Capital + +Michael Spranger +Chief Operating Officer, Sony Research; President, +Sony AI + + + + + Artificial Intelligence in Media, Entertainment and Sport 25 + Endnotes +1. 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The state of AI in early 2024: Gen AI adoption spikes and starts to generate value. + https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-state-of-ai#/. +51. World Economic Forum. (2022). Earning Digital Trust: Decision-Making for Trustworthy Technologies. https://www.weforum. + org/publications/earning-digital-trust-decision-making-for-trustworthy-technologies/. +52. International Organization for Standardization (ISO). (2023). ISO/IEC 42001:2023: Information technology — Artificial + intelligence — Management system. https://www.iso.org/standard/81230.html. +53. Coalition for Content Provenance and Authenticity (C2PA). (n.d.). Home. https://c2pa.org/. +54. Accenture research analysis based on O*NET and national statistical databases from 22 countries and 19,000 work tasks. +55. Ibid. +56. Ibid. +57. Ibid. +58. Brooks, B. (2024). AI search could break the web. MIT Technology Review. https://www-technologyreview-com.cdn. + ampproject.org/c/s/www.technologyreview.com/2024/10/31/1106504/ai-search-could-break-the-web/amp/. +59. Dentsu. (2024). Consumer Vision 2035: The Era of the Insight to Foresight Pivot. info.dentsu.com/l/579173/2024-05-15/ + fk7hjm/579173/1715764205zcAVWgTi/dentsu_Consumer_Vision_2035___Global_Edition.pdf. +60. Ibid. +61. Alvarez, G. (2024). Gartner Top 10 Strategic Technology Trends for 2025. https://www.gartner.com/en/articles/top- + technology-trends-2025. + + Artificial Intelligence in Media, Entertainment and Sport 27 + The World Economic Forum, +committed to improving +the state of the world, is the +International Organization for +Public-Private Cooperation. + +The Forum engages the +foremost political, business +and other leaders of society +to shape global, regional +and industry agendas. + + + + +World Economic Forum +91–93 route de la Capite +CH-1223 Cologny/Geneva +Switzerland +Tel.: +41 (0) 22 869 1212 +Fax: +41 (0) 22 786 2744 +contact@weforum.org +www.weforum.org + \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/primefocus_investor_presentation_jan_2026.pdf b/2d_to_3d_market_tech_reports/primefocus_investor_presentation_jan_2026.pdf new file mode 100644 index 0000000000000000000000000000000000000000..40b1dd66d28251e71a53a88c39bb02255c3624fd --- /dev/null +++ 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参考资料13 +记录更改历史 +序号 +更改原因 +版本 +作者 +更改日期 +备注 +1 +形成项目方案初稿 +V1.0 +项目组 +2026-07-12 +建立多阶段总体架构 +2 +按参考文档结构重构 +V1.2 +项目组 +2026-07-12 +聚焦项目自身框架 +文档定位 本稿用于搭建2D视频转3D视频项目的统一框架,明确Depth、Warp、Inpaint三个阶段的职责、接口与验证方式。各阶段的具体算法和论文创新由后续专项材料补充。 +1 项目概况 +1.1 研究背景 +随着VR/AR头显、空间计算终端、裸眼3D显示和沉浸式影院的发展,立体视频内容需求持续增长。与双目或多目实拍相比,普通单目视频数量巨大、获取成本低,但缺少左右眼之间的视差,无法直接形成稳定的空间感知。对已有电影、短视频、纪录片、动画和用户拍摄内容进行自动立体化,是扩大3D内容供给的重要途径。 +专业双目拍摄需要两台相机在时间、曝光、焦距和几何位置上保持同步,还要完成标定、机位设计、视差控制与后期校正。该流程适合高预算制作,却难以覆盖海量存量视频。自动2D转3D的目标是在不改变原视频主体内容的前提下,根据场景层次合成另一眼视图,以较低成本获得可在立体设备上播放的左右眼视频。 +人眼依靠双眼视差、遮挡关系、透视、相对尺度和运动视差等线索感知空间。2D转3D并不是对原画面做统一水平平移:近处物体通常需要更明显的视差变化,远处背景变化较小;当前景遮挡背景时,另一视点会出现原图中不可见的新显露区域;视差还必须控制在设备和观看距离允许的范围内。 +从技术流程看,单目视频立体化包含三个相互依赖的问题。首先,需要从视频中获得稳定的场景几何层次,为每个像素确定合理的视差;其次,需要依据视差把左视图内容变换到右视点,并识别无法从原图可靠获得的区域;最后,需要利用相邻帧和上下文修补遮挡区域,同时保持左右眼内容与时间维度的一致性。 +单一端到端模型虽然能够直接预测右视图,但会把几何估计、像素搬移和内容生成混合在一起,难以定位错误来源,也不利于团队成员围绕不同方向开展研究。本项目因此采用Depth—Warp—Inpaint多阶段框架:Depth阶段负责几何与视差,Warp阶段负责确定性视图变换和遮挡分析,Inpaint阶段负责缺失区域修补与最终融合。 +项目组在三个方向均有成员开展专项论文研究。本框架不预先限定各阶段必须采用某一种网络或损失,而是先统一输入输出、坐标规则、数据格式和评价协议,使后续研究成果可以独立替换并在同一系统中验证。 +核心问题 +框架中的处理阶段 +主要输出 +对最终结果的影响 +场景几何与视差 +Depth +深度/逆深度、视差、置信度 +决定立体层次与观看舒适度 +像素对应与遮挡 +Warp +右视图初值、有效掩码、遮挡区域 +决定边界清晰度与内容保真 +新显露内容补全 +Inpaint +修补结果、融合权重 +决定遮挡自然度与时序稳定性 +模块协同与输出 +System +左右眼视频、质量报告 +决定整体质量、速度和可用性 +1.2 应用场景 +影视内容立体化:将电影、电视剧、纪录片、动画和网络长视频转换为左右眼或SBS格式,重点保证长时间稳定、镜头间深度节奏统一、字幕清晰和观看舒适。 +VR/AR与空间计算:为头戴设备和空间显示终端提供双目内容,根据设备分辨率、视场角、瞳距和显示模式调节视差范围。 +短视频与直播:对用户上传视频或直播流生成右视图,重点关注单卡延迟、显存、镜头切换和流式状态管理。 +裸眼3D与商业展示:以双目转换作为基础,后续扩展到多个连续视点,服务裸眼屏、车载显示和商业展示。 +专业后期工具:提供深度预览、视差强度、零视差平面、局部修补区域和输出格式等可编辑参数。 +不同场景对质量、速度和可控性的权重不同。影视制作允许离线处理,更关注内容保真和舒适度;直播强调实时性;头显场景对视差抖动和左右眼冲突更敏感;专业后期还需要可视化中间结果。因此,系统采用模块化结构,通过配置不同模型规模、视差策略和修补范围适配应用。 +1.3 实验环境 +项目采用多卡训练、单卡验证和部署的基本配置。训练阶段分别完成三个模块的预训练与联合微调;验证阶段覆盖480P、720P、768×1280和1080P等分辨率,并设置短片段、长视频、快速运动、人物、字幕、夜景和复杂边界等测试类型。 +软件环境以PyTorch及常用视频处理工具为基础,统一使用相同的视频解码、颜色空间、帧率和分辨率设置。实验记录不仅包含网络前向时间,还应包含视频编解码、分块、融合和格式封装开销。硬件型号、训练步数和数据规模在具体模块方案确定后补充。 +团队组织采用模块负责人和系统集成并行的方式。Depth、Warp、Inpaint分别维护独立训练代码和评价脚本,系统侧维护统一数据接口、坐标规范、视差符号、掩码定义与端到端推理流程,避免不同研究线因数据和指标不一致而无法组合。 +环境类别 +建议配置 +主要用途 +重点记录 +训练环境 +多张高显存GPU +模块训练、联合微调 +训练步数、显存、收敛曲线 +验证环境 +单卡GPU +统一质量与速度测试 +FPS、延迟、峰值显存 +视频规格 +480P至1080P +分辨率与长视频验证 +帧率、片段长度、分块数量 +显示环境 +头显/立体显示器 +主观立体体验评价 +舒适度、双影、空间层次 +2 国内外研究现状 +2.1 视频深度估计 +单目深度估计旨在从单幅图像或视频恢复场景的相对或绝对几何。早期方法依赖消失点、纹理梯度、运动和显著性等人工线索,能够提供粗略层次,但在复杂场景中泛化有限。深度学习方法通过大规模图像与合成数据学习单目几何,使开放场景的深度预测精度和边界细节得到显著提升。 +单图深度模型逐帧应用于视频时,会出现尺度漂移、边界闪烁和运动物体不一致。为解决这一问题,国内外研究逐渐引入光流对齐、时序卷积、时空注意力、视频生成先验、关键帧记忆和跨片段融合等机制,使深度在较长视频中保持一致。 +对于2D转3D任务,常规深度指标并不等同于立体效果。相对深度只保证前后排序,不能直接决定显示视差;仿射不变的深度在不同镜头间可能产生尺度变化;人物头发、透明物体、反射和细线结构的边界误差会在视图变换后被进一步放大。因此,深度阶段除了输出几何数值,还需要提供稳定性、置信度和可用于视差控制的信息。 +现有研究主要沿两个方向发展:一类利用大型图像或视频模型获得更强泛化和细节;另一类强调轻量化与长视频效率。前者适合离线高质量转换,后者适合实时或长视频处理。本项目在框架层面兼容两类方法,不在当前文档中限定具体网络。 +研究方向 +主要思路 +优势 +现存问题 +单图深度 +大规模数据学习相对/绝对深度 +细节丰富、泛化较强 +逐帧使用时易闪烁 +视频深度 +时序建模与跨帧约束 +时间一致性更好 +计算量和显存较大 +长视频深度 +分段、关键帧与状态传播 +可处理长片段 +片段间尺度可能漂移 +立体任务深度 +深度到视差映射与舒适度控制 +直接服务双目生成 +缺少统一评价协议 +2.2 视图变换 +基于深度的视图变换是2D转3D的经典技术路线。系统先将深度映射为视差,再把源视图像素投影到目标视点。该路线具有几何可解释、视差可控制和可靠区域内容保真的优点,至今仍是自动转换和专业后期的重要基础。 +常用变换可分为反向采样和前向投影。反向采样从目标像素回查源图,连续且易于梯度传播,但可能在前景背景边界混合不同表面,也不容易自然识别真实遮挡。前向投影把源像素送到目标位置,能够显式暴露新显露区域,但会产生离散空点和多像素竞争问题。 +为改善上述问题,研究者引入亚像素Splatting、深度排序、分层表示、可见性权重、软掩码和不确定度估计。视图变换模块的目标不只是产生一幅Warp结果,还应同时输出哪些区域具有可靠来源、哪些区域属于真实遮挡、哪些边界受深度误差影响。 +视频场景还要求投影结果跨帧稳定。深度轻微抖动会导致掩码边界闪烁,快速运动和镜头切换会使历史信息失效,高分辨率分块可能破坏全局坐标。当前研究趋势是把几何变换、可见性和时间一致性统一考虑,并通过可微算子与学习模块结合提高适应性。 +变换方式 +特点 +主要优势 +主要问题 +反向采样 +目标到源的连续采样 +实现简单、易微分 +边界混合、遮挡不显式 +硬前向投影 +源像素投到离散位置 +边界较锐、空洞明确 +亚像素错位与非遮挡空点 +软前向投影 +亚像素核累积贡献 +覆盖更连续 +需要处理多表面竞争 +分层/可见性投影 +结合深度排序与可靠性 +遮挡关系更合理 +计算与实现更复杂 +2.3 视频修补 +视频修补的目标是在给定掩码的情况下,利用当前帧上下文和相邻帧信息恢复缺失内容。传统方法依赖补丁匹配和光流传播,适合从其他帧复制可见内容;深度学习方法进一步采用时空卷积、特征传播和Transformer建模长距离对应;生成式方法具有更强的语义补全能力。 +立体视频修补与一般物体移除不同。需要修补的区域主要分布在深度边界,面积较小但结构复杂;结果必须与另一眼严格对应,不能只追求单眼合理;掩码附近既包含真实遮挡,也可能包含深度误差、插值误差和前后景混合。 +国内外研究通常通过光流或特征传播优先复用其他帧中的真实信息,再由时空网络补全仍不可见的区域。扩散和流匹配模型能够生成复杂纹理,但推理成本较高,且生成范围过大时容易改变可靠区域。对于2D转3D,更适合将生成限制在遮挡及其邻域。 +视频修补模块还要处理颜色一致、边界融合和长视频状态。若每帧独立修补,纹理会闪烁;若历史状态传播过强,镜头切换后会出现残影。当前趋势是联合使用掩码、运动、深度、视差和源视图特征,并根据场景自动调整传播与生成比例。 +修补路线 +主要信息来源 +优势 +对本项目的启示 +补丁/像素传播 +当前帧和邻帧像素 +内容真实、速度较快 +优先复用可见内容 +光流/特征传播 +跨帧运动与特征 +时间一致性较好 +需要可靠运动信息 +时空Transformer +长距离视频上下文 +可处理复杂运动 +注意显存与长视频效率 +生成式修补 +数据先验与条件特征 +可恢复真正不可见区域 +严格限制生成范围 +综合来看,Depth、Warp和Inpaint分别对应几何理解、视图重建和内容补全。现有研究在单个方向上已有较强基础,但将三者组合为可控、高清、时序稳定的2D转3D系统时,仍面临接口不统一、误差逐级传播、评价指标分离和工程效率不足等问题。本项目首先搭建统一框架,为后续模块论文和联合优化提供载体。 +3 项目规划 +3.1 整体目标 +构建一个面向真实视频的多阶段2D转3D系统。输入普通单目视频,系统依次完成视频深度估计、视差生成、视图变换、遮挡分析、视频修补与融合,输出几何合理、内容保真、时间稳定且视差可控制的左右眼视频。 +建立统一的数据处理、坐标定义、视差符号、掩码格式和评价协议。 +形成Depth、Warp、Inpaint三个可独立训练和替换的阶段。 +支持视差强度、零视差平面、输出格式和分辨率等系统参数。 +完成从短片段基线到高清长视频转换的分阶段验证。 +为三个方向的后续论文研究、专利和演示系统提供统一平台。 +3.2 技术贡献点 +说明 当前项目的贡献定位是搭建统一框架与验证体系,不预先声明Depth、Warp、Inpaint阶段的具体算法创新。各阶段创新由后续论文材料补充。 +提出面向2D视频转3D的模块化多阶段框架,将几何估计、视图变换和内容生成分离,便于分析误差来源和替换模块。 +建立统一的阶段接口与置信度传递机制,使Depth输出的几何和可靠性能够被Warp使用,Warp输出的遮挡与不确定区域能够约束Inpaint。 +构建覆盖图像质量、几何质量、时序稳定、立体舒适度和推理效率的联合评价体系。 +形成从模块独立训练、系统集成到高清长视频部署的完整工程流程,为后续研究成果提供可复现载体。 +图1 三个阶段与系统集成关系(示意图) +阶段 +框架职责 +输入 +输出 +Depth +恢复时序几何并生成视差条件 +单目视频 +深度/逆深度、视差、置信度 +Warp +完成视图变换并分析遮挡 +左视图、视差、置信度 +右视图初值、有效/遮挡掩码 +Inpaint +修补缺失区域并融合输出 +初值、掩码、视频上下文 +右视图、融合权重 +System +组织推理、控制参数和评价 +三个阶段输出 +双目视频、指标与可视化 +4 实施方案 +4.1 问题定义 +给定单目视频 V_L={I_t^L},系统将输入作为左视图,估计时序深度或逆深度 D_t,并根据虚拟基线、视差强度和零视差平面映射为目标视差 d_t。随后对左视图进行视图变换,得到右视图几何初值 W_t、有效区域 M_t和遮挡区域 O_t;视频修补模块在O_t及不可靠区域生成内容,最终输出右视图 V_R={I_t^R}。 +V_L → Depth → D,d → Warp → W,M,O → Inpaint/Fusion → V_R +框架要求原左视图保持不变,右视图在可靠区域尽量来自几何变换,仅在无法从左图获得的区域生成内容。系统还应保存深度、视差、掩码和不确定度,便于模块分析、人工校正和后续论文实验。 +符号 +含义 +数据形式 +使用阶段 +V_L +输入左视图视频 +T×H×W×3 +全部阶段 +D / d +深度与目标视差 +T×H×W +Depth、Warp +W +变换后的右视图初值 +T×H×W×3 +Warp、Inpaint +M / O +有效区域与遮挡区域 +T×H×W +Warp、Inpaint +V_R +最终右视图视频 +T×H×W×3 +输出与评价 +4.2 视频深度估计阶段 +Depth阶段负责从单目视频获得稳定的几何层次。当前框架只规定输入输出,不限定采用图像深度模型、视频深度模型、生成式几何模型或其他专项论文方案。模块必须支持批量视频输入,输出与原视频分辨率对齐的深度或逆深度,以及可选的像素置信度。 +为服务立体转换,Depth阶段还需完成深度到视差的接口映射。系统通过场景级参数控制整体视差强度和零视差平面,并允许针对镜头或设备调整。该映射作为独立控制层存在,避免把显示风格固化在深度网络中。 +视频处理强调跨帧稳定。模块可以在内部使用时序网络、光流、关键帧、特征记忆或后处理,但对系统侧统一暴露相同接口。镜头切换时应重置状态,长视频可采用分段估计与重叠融合。 +输入:标准化单目视频及镜头切分信息。 +输出:深度/逆深度、目标视差、像素置信度和场景级控制参数。 +基本检查:前后景排序、边界质量、跨帧抖动、视差范围和处理速度。 +接口要求:保持时间和空间尺寸信息,支持独立替换与离线缓存。 +4.3 视图变换与遮挡分析阶段 +Warp阶段依据视差将左视图变换到右视点,目标是在可靠区域最大限度保留原视频纹理,并明确标记新显露和不可靠区域。当前框架不限定反向Warp、前向Warp、Splatting、分层投影或后续论文提出的其他方法,只规定结果和掩码接口。 +模块需要处理亚像素位置、多源像素竞争、画面边界和深度不连续。除了右视图初值,还应输出有效采样权重、遮挡掩码和可选的不确定度。掩码不能只依赖黑色空洞判断,因为边界混合和错误采样也需要交给后续修补。 +为了保证视频稳定,Warp使用统一的完整图像坐标系。若高分辨率需要分块,应先在全局坐标中确定视差与投影关系,再对局部区域执行计算,避免不同Tile产生独立视差。 +输入:左视图、目标视差、Depth置信度及输出尺寸。 +输出:右视图初值、有效掩码、遮挡掩码和不确定度。 +基本检查:空洞率、边界重影、细结构保持、跨帧掩码稳定和执行速度。 +接口要求:统一掩码取值、坐标方向和视差正负号。 +4.4 视频修补与融合阶段 +Inpaint阶段只处理Warp无法可靠获得的内容。输入包括右视图初值、有效/遮挡掩码、左视图、深度或视差、相邻帧上下文和可选的中间特征。当前框架不限定传播网络、Transformer、扩散模型、流匹配模型或后续论文的其他方案。 +模块应优先复用原视频和相邻帧中的真实内容,在确实不可见的区域生成新内容。可靠区域通过旁路或强重建约束保持不变,边界区域采用软融合,防止修补结果覆盖字幕、人物细节和高频纹理。 +输出融合需要同时考虑空间和时间。空间上避免掩码边缘色差、亮度突变和接缝;时间上避免纹理闪烁和历史残影;镜头切换后清空传播状态。系统保留修补前后结果,便于独立评价模块收益。 +输入:Warp初值、掩码、源视频、几何条件和视频上下文。 +输出:修补后的右视图、融合权重和可选质量置信度。 +基本检查:遮挡自然度、内容忠实、时序闪烁、细节清晰度和推理开销。 +接口要求:生成范围受掩码控制,可输出中间结果用于消融。 +4.5 多阶段协同与系统扩展 +图2 多阶段2D视频转3D视频总体流程 +三个阶段先独立训练和验证,再进行系统集成。第一步使用固定模块组合建立可运行基线;第二步逐个替换专项论文模型,保持其他阶段不变以判断真实收益;第三步根据实验结果决定是否进行局部联合微调。 +系统侧维护统一配置,包括视频分辨率、片段长度、视差范围、零视差平面、掩码膨胀范围、修补步数和输出格式。所有实验通过同一脚本生成左右视图、中间可视化与指标报告,避免模块团队使用不同评测设置。 +框架可扩展至多视点生成、实时直播、裸眼3D和其他新视点合成任务。扩展时保留Depth—Warp—Inpaint的阶段接口,只修改视差控制、目标相机数量、推理调度和输出封装。 +集成阶段 +主要工作 +输入状态 +阶段输出 +基线搭建 +连接三个可用模块 +固定模型与参数 +可运行端到端流程 +模块替换 +逐阶段接入专项模型 +固定其他阶段 +模块收益与失败案例 +联合调整 +校准接口与必要的联合训练 +稳定模块组合 +整体质量提升 +部署优化 +分块、缓存、蒸馏、量化 +最终模型 +高清长视频系统 +5 实验部分 +5.1 实现细节 +实验采用统一的数据划分、视频长度、输出分辨率和随机种子。三个模块分别保存版本号、配置和权重,系统记录每次实验使用的完整组合。训练和推理均保存深度、视差、Warp初值、掩码、修补结果和最终右视图,支持逐阶段排查问题。 +数据包括合成双目、真实双目、单目训练视频和内部测试视频。合成数据用于几何定量评价,真实双目用于最终右视图评价,单目视频用于扩展内容分布,内部测试集用于持续回归和头显观察。具体数据规模由模块论文与数据授权情况补充。 +指标类别 +建议指标 +评价对象 +说明 +图像质量 +PSNR、SSIM、LPIPS、清晰度 +最终右视图 +反映重建与细节 +几何质量 +视差EPE、坏点率、分布统计 +Depth/Warp +反映空间对应 +时序质量 +跨帧误差、闪烁和漂移 +全部阶段 +反映视频稳定 +立体体验 +视差范围、舒适度、主观评分 +双目输出 +反映实际观看 +系统效率 +NFE、FPS、延迟、峰值显存 +端到端流程 +反映部署能力 +5.2 对比实验 +对比实验覆盖传统DIBR、直接右视图生成、多阶段几何修补和项目框架。所有方法使用相同输入、分辨率、片段长度和硬件,分别比较图像质量、视差、时序稳定、主观立体体验与速度。无真值视频采用头显A/B测试和专家评价。 +对比类别 +主要特点 +重点比较内容 +传统DIBR +深度、投影、简单补洞 +视差可控、空洞与边界质量 +直接生成 +从左视图直接生成右视图 +内容完整、幻觉与可控性 +常规多阶段 +Depth + Warp + Inpaint +模块质量与时序稳定 +项目框架 +统一接口和系统协同 +可替换性、整体收益与效率 +5.3 多阶段框架的优势 +可解释:深度错误、投影错误和修补错误能够分别定位,不会全部隐藏在最终右视图中。 +可替换:三个阶段具有稳定接口,后续论文模型可单独接入并与基线公平比较。 +内容保真:可靠区域由Warp直接迁移,减少整帧生成改变原视频内容的风险。 +可控制:视差强度、零视差平面、掩码和修补范围可以独立配置。 +便于协作:团队成员可以并行研究不同阶段,系统组负责统一数据、接口和评价。 +便于部署:可根据场景使用轻量或高质量模块,并对最耗时阶段单独优化。 +5.4 消融实验 +阶段必要性:分别移除Depth时序处理、遮挡分析、视频修补和融合,验证各阶段作用。 +接口信息:比较只传深度、增加置信度、增加不确定度和增加中间特征的效果。 +误差传播:使用真值/预测Depth、真值/预测掩码组合,确定主要性能瓶颈。 +训练方式:比较完全独立训练、局部联合微调和端到端微调。 +分辨率与长视频:比较无分块、分块、全局引导分块以及不同片段重叠长度。 +效率配置:比较模块规模、推理步数、缓存、蒸馏和量化对质量与速度的影响。 +实验组 +Depth +Warp +Inpaint +目的 +A +基础 +基础 +基础 +建立端到端基线 +B +专项模块 +基础 +基础 +验证Depth收益 +C +固定 +专项模块 +基础 +验证Warp收益 +D +固定 +固定 +专项模块 +验证Inpaint收益 +E +专项组合 +专项组合 +专项组合 +验证系统协同 +6 成果展示 +6.1 演示系统 +开发可视化演示系统,支持上传单目视频、选择输出格式、设置视差强度与零视差平面,并查看Depth、Warp、掩码、Inpaint和最终双目结果。系统可导出左右眼、SBS或其他目标格式,同时输出质量与速度报告。 +6.2 论文 +项目框架为Depth、Warp、Inpaint三个方向提供统一的训练和验证平台。各方向论文分别补充具体问题、方法、损失和实验;系统性论文重点总结多阶段协同、统一评价、高清长视频处理与整体性能。论文结论以专项实验和消融结果为准。 +6.3 专利 +在模块方案和系统接口稳定后,可围绕视差控制、模块协同、遮挡分析、视频修补调度、高清长视频处理和立体舒适度评价等方向开展专利检索与申请;同时形成推理SDK、演示平台、数据工具和软件著作权。 +7 未来展望 +后续可从固定双目扩展到连续多视点生成,适配不同头显、裸眼3D和车载显示设备;从离线转换扩展到实时直播;从固定视差配置扩展到内容、设备和用户舒适度自适应。 +随着三个阶段的专项论文研究推进,框架将逐步接入更稳定的视频几何、更准确的视图变换和更高效的视频修补模型。系统层面继续关注接口标准化、错误置信度传播、长视频状态管理和质量—速度权衡,使研究成果可以形成可复现、可部署的完整产品原型。 +8 参考资料 +Zhang L., Vazquez C., Knorr S. 3D-TV Content Creation: Automatic 2D-to-3D Video Conversion. IEEE Transactions on Broadcasting, 2011. +Xie J., Girshick R., Farhadi A. Deep3D: Fully Automatic 2D-to-3D Video Conversion with Deep Convolutional Neural Networks. ECCV, 2016. +Yang L., Kang B., Huang Z., et al. Depth Anything V2. arXiv:2406.09414, 2024. +Chen S., Guo H., Zhu S., et al. Video Depth Anything: Consistent Depth Estimation for Super-Long Videos. arXiv:2501.12375, 2025. +Hu W., Gao X., Li X., et al. DepthCrafter: Generating Consistent Long Depth Sequences for Open-world Videos. arXiv:2409.02095, 2024. +Niklaus S., Liu F. Softmax Splatting for Video Frame Interpolation. CVPR, 2020. +Zhou S., Li C., Chan K. C. K., Loy C. C. ProPainter: Improving Propagation and Transformer for Video Inpainting. ICCV, 2023. +Zhao S., Hu W., Cun X., et al. StereoCrafter: Diffusion-based Generation of Long and High-fidelity Stereoscopic 3D from Monocular Videos. arXiv:2409.07447, 2024. +Zhang J., Jia Q., Liu Y., et al. SpatialMe: Stereo Video Conversion Using Depth-Warping and Blend-Inpainting. arXiv:2412.11512, 2024. +Wang Z., Bovik A. C., Sheikh H. R., Simoncelli E. P. Image Quality Assessment: From Error Visibility to Structural Similarity. IEEE TIP, 2004. +Zhang R., Isola P., Efros A. A., et al. The Unreasonable Effectiveness of Deep Features as a Perceptual Metric. CVPR, 2018. \ No newline at end of file diff --git a/2d_to_3d_market_tech_reports/pwc_global_entertainment_media_outlook_2025_2029.pdf b/2d_to_3d_market_tech_reports/pwc_global_entertainment_media_outlook_2025_2029.pdf new file mode 100644 index 0000000000000000000000000000000000000000..d7f9910dd0e6fcb5b02329f13d42b8b5fc19a93c --- /dev/null +++ b/2d_to_3d_market_tech_reports/pwc_global_entertainment_media_outlook_2025_2029.pdf @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:13d65678ecbcfe6d1d57852a11d5346fc83307b8057cf94065b4e348977e64eb +size 1504448 diff --git a/2d_to_3d_market_tech_reports/pwc_global_entertainment_media_outlook_2026_2030_official_web_print.pdf b/2d_to_3d_market_tech_reports/pwc_global_entertainment_media_outlook_2026_2030_official_web_print.pdf new file mode 100644 index 0000000000000000000000000000000000000000..f8fd074dbfedf1415abaafb1bb136a29dce8c1ee --- /dev/null +++ b/2d_to_3d_market_tech_reports/pwc_global_entertainment_media_outlook_2026_2030_official_web_print.pdf @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:77b8c132b8880cd5a72ced627dfa1e97bc834f664c094a19d586fa93c1a7c4a3 +size 2824283 diff --git a/2d_to_3d_market_tech_reports/report_to_project_mapping.md b/2d_to_3d_market_tech_reports/report_to_project_mapping.md new file mode 100644 index 0000000000000000000000000000000000000000..4a604c714c9cde518fd6c752d9ab792ba5cede27 --- /dev/null +++ b/2d_to_3d_market_tech_reports/report_to_project_mapping.md @@ -0,0 +1,110 @@ +# 市场报告与“多阶段深度变换与修补”项目的对应关系 + +整理日期:2026-07-22 + +## 1. 结论先行 + +现有公开资料足以支持以下三层论证,但不能把三层数字混成一个“2D 转 3D 市场规模”: + +1. **市场总盘**:PwC 预计全球娱乐与媒体收入由 2025 年的 3.5 万亿美元增至 2030 年的 4.2 万亿美元;这是电影、OTT、广告、游戏、连接等组成的总盘。 +2. **相邻需求空间**:PwC 预计全球 OTT 收入 2030 年达到 3040 亿美元;McKinsey、Citi、Accenture 对沉浸式/元宇宙给出万亿美元级远期情景,说明空间内容存在潜在消费入口。 +3. **直接产业验证**:Prime Focus/DNEG 在 2026 年投资者材料中仍把 `Stereo Conversion` 列为端到端内容处理能力;Netflix、Deloitte、Morgan Stanley、MovieLabs 提供了影视制作和后期自动化的降本提效证据。 + +项目文档最稳妥的写法是:**本项目并非占有整个万亿美元娱乐市场,而是面向其中需要立体化、空间化和沉浸式版本生产的内容转换环节。** + +## 2. 与项目能力对应的应用方向 + +| 应用方向 | 项目能力映射 | 可引用证据 | 建议表述 | +|---|---|---|---| +| 电影、剧集和存量片库立体化 | 深度估计、视图变换、遮挡修补、SBS 输出 | DNEG 第 9 页;Deloitte 第 7 页;Netflix 第 12 页 | 在不重新组织双机位拍摄的情况下,为部分存量或新增 2D 内容生成双目版本,降低立体版本制作门槛。 | +| 影院大画幅和 3D 电影版本 | 双目质量控制、视差调节、零视差平面、影院格式交付 | PwC 2026 官方网页及打印件第 6 页 | 全球电影票房预计 2030 年达到 395 亿美元,影院持续投资家庭环境难以复制的高规格视听体验;该数字是全部票房而非 3D 票房。 | +| OTT 与家庭/个人消费 | 长视频时序一致性、批处理、空间视频格式 | PwC 2026 第 8 页;PwC 2025 第 16 页 | OTT 是增长中的下游内容市场,空间显示设备需要持续的适配内容供给。 | +| XR、头显和空间计算 | 可调视差、零视差平面、双目/空间输出 | McKinsey 第 37 页;Citi 第 12 页;Accenture 第 10 页 | 沉浸式市场预测可作为长期需求上限,但必须注明预测口径包含硬件、电商、游戏和基础设施。 | +| 广告、短视频和 UGC | 自动化、低边际成本、批量处理 | PwC 2025 第 27 页;WEF 第 10、14 页 | GenAI 正压缩视频广告制作时间与成本,自动转换有利于扩充不同显示终端的内容版本。 | +| 主题乐园、数字演出、裸眼 3D 大屏 | 大视差内容、显示格式适配、专业后期 | Prime Focus/DNEG 第 14 页 | 头部 VFX 服务商已把沉浸式体验和数字演出列为增长方向,可作为专业市场落地旁证。 | +| 沉浸式场馆和 4D 放映 | 空间内容适配、立体版本生产、专业质量控制 | PwC 2026 第 5 页 | Sphere 2025 年报告收入 7.81 亿美元并包含 4D 电影放映,证明沉浸式内容已进入商业场馆;收入不能归因于立体转换。 | + +## 3. 成本价值证据如何使用 + +| 成本问题 | 外部证据 | 对本项目的解释 | 不应作出的推断 | +|---|---|---|---| +| 重拍与复杂后期昂贵 | Deloitte:高预算影片重拍占最终制作成本 5%-20% 甚至更多;高预算科幻/奇幻片 VFX 可达总预算 20% | 以已有 2D 素材进行立体转换,可减少部分为立体版本重新拍摄的需求;自动修补可减少逐帧处理工作量 | 不能直接宣称本项目必然节省总预算的 20% | +| AI 后期可缩短周期 | Netflix:17 分钟 AI 增强画面以 2 倍速度、半成本完成 | 说明生成式画面处理进入大厂真实后期流程,并能改变原本不可承受的镜头成本 | 不能把单一案例的 50% 成本下降外推到整部影片或所有素材 | +| 影视 GenAI 有行业级降本空间 | Morgan Stanley:媒体约 10%,电视/电影最多约 30% | 本项目位于后期、VFX、数字/虚拟组件等主要降本环节 | 30% 是广义 GenAI 估计,不是立体转换实测结果 | +| 云化、模块化可降低工程成本 | MovieLabs/JioStar:成本低 30% 以上,IT 人员少 85% | 支撑长视频批处理、统一接口、弹性资源和服务化部署的工程价值 | 该数字衡量云编辑平台,不是算法成本 | +| 自动化减少重复劳动 | WEF:创意生产力约提升 25%;编辑工作时间潜在减少 72%;资产管理运营成本最多降低 75% | 支撑自动深度、掩码、跨帧跟踪、修补和资产处理的自动化方向 | 三个数字来自不同任务和研究,不能累加或统一成项目 ROI | + +## 4. 建议放入项目文档的图表 + +### 市场规模部分 + +1. `key_charts/01_market_size/pwc_2025_p05_global_em_revenue.png` + 用途:全球 E&M 2020-2029 收入和增速,适合作为行业总盘主图。 +2. `key_charts/01_market_size/pwc_2026_p08_global_ott.png` + 用途:OTT 2025-2030 收入预测,适合作为视频内容下游需求证据。 +3. `key_charts/01_market_size/pwc_2026_p06_cinema_live_experiences.png` + 用途:影院和现场体验增长趋势;正文另引用官方网页的 2030 年 395 亿美元票房预测。 +4. `key_charts/01_market_size/pwc_2026_p05_sphere_immersive.png` + 用途:Sphere 的 4D 放映、沉浸式场馆收入和扩张案例。 +5. `key_charts/01_market_size/mckinsey_2022_p37_metaverse_impact.png` + 用途:空间内容长期应用场景及 4 万亿-5 万亿美元经济影响情景。 +6. `key_charts/01_market_size/citi_2022_p12_metaverse_tam.png` + 用途:展示万亿美元预测依赖的渗透率假设,正文必须写“情景估计”。 + +### 降本与价值部分 + +1. `key_charts/02_cost_value/deloitte_2024_p07_virtual_production_cost.png` + 用途:重拍 5%-20%、VFX 最高约 20% 的传统成本基线。 +2. `key_charts/02_cost_value/netflix_2026_p12_ai_cost_case.png` + 用途:大厂真实内容生产案例,2 倍速度、半成本。 +3. `key_charts/02_cost_value/morgan_stanley_2025_p01_cost_estimate.png` + 用途:媒体 10%、电视/电影最高 30% 的 GenAI 降本估计。 +4. `key_charts/02_cost_value/autodesk_2025_p07_digital_transformation_roi.png` + 用途:数字化转型改善幅度的调查图表;正文不要把它写成已审计的财务 ROI。 +5. `key_charts/02_cost_value/movielabs_2026_p148_jiostar_outcomes.png` + 用途:云端媒体工作流的成本和 IT 人员案例。 + +### 竞品与产业验证部分 + +1. `key_charts/03_competitor_product/primefocus_2026_p09_stereo_conversion_capability.png` + 用途:最直接的竞品能力图,显示 DNEG 的 Stereo Conversion 位于端到端媒体生态。 +2. `key_charts/03_competitor_product/primefocus_2026_p14_immersive_business.png` + 用途:主题乐园、数字演出等沉浸式应用。 +3. `key_charts/03_competitor_product/primefocus_2026_p04_business_and_products.png` + 用途:头部 VFX 企业向 AI 内容平台扩展的产品布局。 + +## 5. 后续写入项目文档时的建议结构 + +### 5.1 行业背景与内容供给缺口 + +- 全球 E&M 和 OTT 保持增长,终端和分发渠道持续扩张。 +- 空间显示、XR 和沉浸式场景需要大量双目/空间内容。 +- 原生多机位立体拍摄涉及设备、同步、标定、现场调度和后期校正,难以覆盖海量存量 2D 内容。 + +### 5.2 可服务市场分层 + +- `TAM`:娱乐传媒和沉浸式内容相关总盘,仅作为上限背景。 +- `SAM`:电影/剧集片库、OTT、广告、主题乐园、数字演出中存在立体版本需求的内容处理支出。 +- `SOM`:项目近期能够覆盖的片长、分辨率、类型、交付格式和客户区域对应的实际订单规模。 + +目前公开报告足以写 TAM 背景,但 **SAM/SOM 必须结合项目报价、每分钟处理成本、目标客户数量、年处理分钟数和转化率自行测算**。 + +### 5.3 降本模型 + +建议在项目文档中加入可审计的内部测算表: + +`单分钟节省 = 传统人工立体转换单价 - 本系统单分钟推理成本 - 人工复核成本` + +`年度净价值 = 年处理分钟数 x 单分钟节省 - 年度固定研发与运维成本` + +`交付周期缩短率 = (传统周期 - 本系统周期) / 传统周期` + +外部报告用于证明“行业存在成本压力和自动化价值”,内部试点数据用于证明“本项目实际能节省多少”。这两类证据应分表展示。 + +## 6. 引用纪律 + +1. 对 PwC、McKinsey、Citi 的万亿美元数字使用“预计”“潜在影响”“情景 TAM”等限定词。 +2. 任何地方都不要写“2D 转 3D 市场达到 4.2 万亿美元/13 万亿美元”。 +3. Netflix 的半成本案例注明“17 分钟 AI 增强画面”和“相较此前方案”。 +4. Deloitte、Morgan Stanley、MovieLabs 的节省比例分别对应虚拟制作、广义 GenAI、云编辑,不能当作本项目实测结果。 +5. 项目自身降本结论应由试点项目的 GPU 时长、人工工时、返修率、单分钟成本和交付周期支撑。 diff --git a/2d_to_3d_market_tech_reports/salesforce_ai_media_entertainment_redefined.pdf b/2d_to_3d_market_tech_reports/salesforce_ai_media_entertainment_redefined.pdf new file mode 100644 index 0000000000000000000000000000000000000000..3fe5d9bbf4e4d4b6dbd0171919395e2dc8e7a640 --- /dev/null +++ b/2d_to_3d_market_tech_reports/salesforce_ai_media_entertainment_redefined.pdf @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:2cbea211175d7036e3de75dde185f75180bcf6145034c4ae5339b528b37b0d2d +size 1348485 diff --git a/2d_to_3d_market_tech_reports/sources.csv b/2d_to_3d_market_tech_reports/sources.csv new file mode 100644 index 0000000000000000000000000000000000000000..cd133a84e31ae87955440bf2ab13f9cbd8a39f33 --- /dev/null +++ b/2d_to_3d_market_tech_reports/sources.csv @@ -0,0 +1,25 @@ +category,organization,title,year,type,local_file,official_url,relevance +cost_value,Netflix,FQ2 2026 Earnings Call Transcript,2026,earnings_transcript_pdf,netflix_q2_2026_earnings_call_transcript_ai_cost.pdf,https://s22.q4cdn.com/959853165/files/doc_financials/2026/q2/Netflix-Inc-_Earnings-Call_2026-07-16T00_00_00_English-1.pdf,AI-enhanced footage produced twice as fast and at half the cost; directly supports cost-saving argument. +cost_value,Netflix,Q2 2026 Shareholder Letter,2026,shareholder_letter_pdf,netflix_q2_2026_shareholder_letter_ai_production.pdf,https://ir.netflix.net/files/doc_financials/2026/q2/FINAL-Q2-26-Shareholder-Letter.pdf,Netflix official letter mentioning GenAI tools for complex sequences and AI-powered creative production. +cost_value,Deloitte,The Future of Content Creation: Virtual Production,2024,industry_report_pdf,deloitte_virtual_production_future_content_creation_2024.pdf,https://www.deloitte.com/content/dam/assets-zone3/us/en/docs/industries/technology-media-telecommunications/2024/us-tmt-the-future-of-content-creation-virtual-production.pdf,Hollywood production efficiency; reshoots 5-20% of final cost; VFX up to 20% of budget. +industry_ai,World Economic Forum,Artificial Intelligence in Media Entertainment and Sport,2025,industry_report_pdf,wef_ai_in_media_entertainment_sport_2025.pdf,https://reports.weforum.org/docs/WEF_Artificial_Intelligence_in_Media_Entertainment_and_Sport_2025.pdf,AI opportunities across media creation asset management monetization and audience experiences. +competitor,Prime Focus / DNEG,Investor Presentation January 2026,2026,investor_presentation_pdf,primefocus_investor_presentation_jan_2026.pdf,https://www.primefocus.com/wp-content/uploads/2026/01/PFL-Investor-Presentation-January-2026-1.pdf,DNEG lists Stereo Conversion and immersive services; over $130B addressable market by 2030. +hollywood_workflow,MovieLabs,Industry Forum Spring Summit 2026 Presentation Deck,2026,forum_deck_pdf,movielabs_industry_forum_spring_summit_2026.pdf,https://movielabs.com/prodtech/Industry-Forum-Spring-Summit-2026-Presentation-Deck.pdf,Hollywood production tech forum; AI and 2030 Vision deployment; case study includes 30%+ cost effective and 85% less IT staff. +market_size,PwC,Global Entertainment & Media Outlook 2025-2029 Hong Kong Summary,2025,market_report_pdf,pwc_global_entertainment_media_outlook_2025_2029.pdf,https://www.pwchk.com/en/tmt/entertainment-and-media-outlook-2025-2029.pdf,Global E&M revenue forecast to reach about $3.5T by 2029. +market_size,PwC,Global Entertainment & Media Outlook 2026-2030,2026,official_web_print_pdf,pwc_global_entertainment_media_outlook_2026_2030_official_web_print.pdf,https://www.pwc.com/gx/en/issues/business-model-reinvention/outlook/insights-and-perspectives.html,Official PwC page says E&M reaches $4.2T by 2030 and global OTT reaches $304B; local PDF is a web print for archival use. +market_size,McKinsey,Value Creation in the Metaverse,2022,market_report_pdf,mckinsey_value_creation_in_the_metaverse_2022.pdf,https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/value-creation-in-the-metaverse,Up to $5T metaverse impact by 2030; used as long-term immersive market background. +market_size,Citi GPS,Metaverse and Money: Decrypting the Future,2022,market_report_pdf,citi_metaverse_and_money_2022.pdf,https://www.citigroup.com/global/insights/metaverse-and-money_20220330,Metaverse TAM estimated at $8T-$13T by 2030 with potential around 5B users. +market_size,Accenture,Metaverse: Evolution Then Revolution,2023,market_report_pdf,accenture_metaverse_evolution_before_revolution_2023.pdf,https://www.accenture.com/content/dam/accenture/final/accenture-com/document/Accenture-Metaverse-Evolution-Before-Revolution.pdf,4.2% of company revenues from metaverse-related offerings; about $1T value; 3200 executive survey. +hollywood_workflow,MovieLabs,The Evolution of Media Creation: 2030 Vision,2019,whitepaper_pdf,movielabs_2030_vision_evolution_media_creation.pdf,https://movielabs.com/prodtech/ML_2030_Vision.pdf,Hollywood studio technology vision; cloud workflows asset reuse automation and XR/immersive formats. +hollywood_workflow,MovieLabs,Software-Defined Workflows,2020,whitepaper_pdf,movielabs_software_defined_workflows.pdf,https://movielabs.com/prodtech/sdw/ML_Software_Defined_Workflows.pdf,Supports modular automatic media workflows analogous to Depth-Warp-Inpaint pipeline. +hollywood_workflow,MovieLabs,Interoperability in Media Creation,2021,whitepaper_pdf,movielabs_interoperability_media_creation.pdf,https://movielabs.com/prodtech/ML_Interoperability.pdf,Supports standardized interfaces metadata and lower switching costs in media creation. +industry_ai,Salesforce,Media and Entertainment Redefined: How AI is Reshaping the Industry,2024,industry_report_pdf,salesforce_ai_media_entertainment_redefined.pdf,https://www.salesforce.com/en-us/wp-content/uploads/sites/4/documents/PDF/media-and-entertainment-redefined.pdf,GenAI impact on content creation marketing advertising subscriber growth and loyalty. +industry_ai,Deloitte,The Future of Media and Entertainment,2024,industry_report_pdf,deloitte_future_of_media_and_entertainment_2024.pdf,https://www.deloitte.com/content/dam/assets-zone3/us/en/docs/services/consulting/2024/us-future-of-media-and-entertainment-new-final.pdf,Media disruption; content growth; generative AI and format/device changes. +industry_ai,Deloitte,State of Generative AI in the Enterprise,2024,research_report_pdf,deloitte_state_of_gen_ai_enterprise_2024.pdf,https://www.deloitte.com/content/dam/assets-shared/docs/services/consulting/2024/gx-state-of-gen-ai-report.pdf,Enterprise GenAI benefits including efficiency productivity and cost reduction. +spatial_ai,Accenture,Technology Vision 2025,2025,technology_report_pdf,accenture_technology_vision_2025.pdf,https://investor.accenture.com/~/media/Files/A/accenture-v4/investors/home/quick-links/accenture-Tech-Vision-2025.pdf,Large-company technology trend report covering AI autonomy and enterprise AI workflows. +spatial_ai,Accenture,Getting Your Workforce Ready for AI and Spatial Computing,2024,technology_report_pdf,accenture_ai_spatial_computing_workforce_2024.pdf,https://www.accenture.com/content/dam/accenture/final/accenture-com/document-2/Accenture-POV-Getting-your-workforce-ready-for-AI-and-Spatial-Computing.pdf,AI plus spatial computing; immersive collaboration and content creation; operational cost reduction. +spatial_ai,OECD,An Immersive Technologies Policy Primer,2025,policy_report_pdf,oecd_immersive_technologies_policy_primer_2025.pdf,https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/03/an-immersive-technologies-policy-primer_aa2e7910/cf39863d-en.pdf,Immersive technology applications and policy context; productivity and cost implications. +competitor,DNEG,From 2D to 3D Behind the Stereo Conversion of Godzilla x Kong,2024,web_article,,https://www.dneg.com/news/from-2d-to-3d-behind-the-stereo-conversion-of-godzilla-x-kong-the-new-empire,Recent stereo conversion production case from a leading VFX vendor. +cost_value,Morgan Stanley,How AI Benefits and Threatens the Entertainment Industry,2025,official_web_print_pdf,morgan_stanley_ai_entertainment_costs_2025_official_web_print.pdf,https://www.morganstanley.com/insights/articles/ai-in-media-entertainment-benefits-and-risks,Estimates GenAI cost reductions of 10% across media and up to 30% in TV and film; local PDF is a web print for archival use. +market_size,Grand View Research,Immersive Content Creation Market,2025,web_market_report,,https://www.grandviewresearch.com/industry-analysis/immersive-content-creation-market-report,Immersive content creation market estimate: $15.7B in 2024 to $56.2B by 2030. +industry_ai,Autodesk,2025 State of Design & Make,2025,industry_survey_pdf,autodesk_state_design_make_2025.pdf,https://adsknews.autodesk.com/app/uploads/2025/04/2025-SDM-Report-%E2%80%93-Final.pdf,Survey of 5594 leaders with charts on digital transformation returns cost control and AI impact in media and entertainment. diff --git a/2d_to_3d_market_tech_reports/wef_ai_in_media_entertainment_sport_2025.pdf b/2d_to_3d_market_tech_reports/wef_ai_in_media_entertainment_sport_2025.pdf new file mode 100644 index 0000000000000000000000000000000000000000..fafdba9bc65af21b04f26062dd05707fe3d8a808 --- /dev/null +++ b/2d_to_3d_market_tech_reports/wef_ai_in_media_entertainment_sport_2025.pdf @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:0005f0c21f9987391bcfe3c4a5861ca1db480b9304dc548b0d310984cf2c8b23 +size 1226471 diff --git a/2d_to_3d_verified_product_technical_reports/01_direct_conversion_products/acer_spatiallabs_official_web_report_print_2026.pdf 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sha256:2dbc610161ed28d58071c122ae2180a7331996d2d75bfebdb03c84738c49366d +size 2506071 diff --git a/2d_to_3d_verified_product_technical_reports/02_display_and_delivery_products/continental_post_ces_2023_3d_display_technology_one_pagers.pdf b/2d_to_3d_verified_product_technical_reports/02_display_and_delivery_products/continental_post_ces_2023_3d_display_technology_one_pagers.pdf new file mode 100644 index 0000000000000000000000000000000000000000..d91cdbe799b9f953b93c611b80ac0f9392332407 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/02_display_and_delivery_products/continental_post_ces_2023_3d_display_technology_one_pagers.pdf @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:de6903f620511985d4051893e324f398a87131273b6355ee65e9f88204de058f +size 3348941 diff --git a/2d_to_3d_verified_product_technical_reports/02_display_and_delivery_products/samsung_display_solutions_spatial_signage_catalog_2026.pdf b/2d_to_3d_verified_product_technical_reports/02_display_and_delivery_products/samsung_display_solutions_spatial_signage_catalog_2026.pdf new file mode 100644 index 0000000000000000000000000000000000000000..a8280731e8d4f561fbb816da23daf2eb0fb66541 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/02_display_and_delivery_products/samsung_display_solutions_spatial_signage_catalog_2026.pdf @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:ba350150166b0b8de565a32ca97bef7b0502a1551c43410a769123df4c47ff8a +size 7344009 diff --git a/2d_to_3d_verified_product_technical_reports/03_hollywood_postproduction_products/README.md b/2d_to_3d_verified_product_technical_reports/03_hollywood_postproduction_products/README.md new file mode 100644 index 0000000000000000000000000000000000000000..2f79d3bcdcace82d0674f00e4cb13405928251b2 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/03_hollywood_postproduction_products/README.md @@ -0,0 +1,11 @@ +# 影视后期产品与服务说明 + +本轮没有找到近几年由 Disney、DNEG 或 Prime Focus 正式公开、并完整画出电影级 2D 转 3D 内部算法架构的产品技术 PDF。这类公司公开的通常是项目案例、产品能力页或学术论文,完整生产管线属于商业机密。 + +保留的两项官方资料位于: + +- `../official_web_archives/foundry_ocula_product_technology/`:Foundry Ocula 商业产品页,说明 disparity、alignment、color/focus matching 和 Nuke 立体后期工具集。 +- `../official_web_archives/dneg_godzilla_x_kong_stereo_conversion_case_2024/`:DNEG 对实际电影立体转换项目的官方案例;公开技术细节有限,因此只作为产品化场景证据。 + +Disney Research 的相关论文和产品用户指南没有收入本目录。 + diff --git a/2d_to_3d_verified_product_technical_reports/PDF_SHA256SUMS.txt b/2d_to_3d_verified_product_technical_reports/PDF_SHA256SUMS.txt new file mode 100644 index 0000000000000000000000000000000000000000..8341dd0204c0c987fd72b0955e76ca76c360f432 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/PDF_SHA256SUMS.txt @@ -0,0 +1,8 @@ +cfd42368c50fb220779e890b8fb9e7ac5f751a3f7e8f0fbf7fabdf0eb4a48927 01_direct_conversion_products/acer_spatiallabs_official_web_report_print_2026.pdf +cacf4f19f108b9a867d8adb7353f642a32b1aac504e630cf3c1c8b6440a0b3a7 01_direct_conversion_products/immersity_ai_technical_backgrounder_2024.pdf +0147efcd8161b65b7f7995a413c33c86b9b6a3f92ab01e4055248c5c1ff64cd4 01_direct_conversion_products/lenovo_thinkvision_27_3d_product_datasheet_2025.pdf +091574b137d694583a54a0db187ea9e76c99ab9981d4dec7abf8d495af8be81f 01_direct_conversion_products/samsung_odyssey_3d_g90xf_product_datasheet_2025.pdf +c863ddf5b5e73b37f9ed5a1638d1439c76701f83eb5f1e9205a782a98806ccaa 02_display_and_delivery_products/apple_hevc_stereo_video_interoperability_profile_2023.pdf +2dbc610161ed28d58071c122ae2180a7331996d2d75bfebdb03c84738c49366d 02_display_and_delivery_products/apple_stereo_video_isobmff_extensions_2025.pdf +de6903f620511985d4051893e324f398a87131273b6355ee65e9f88204de058f 02_display_and_delivery_products/continental_post_ces_2023_3d_display_technology_one_pagers.pdf +ba350150166b0b8de565a32ca97bef7b0502a1551c43410a769123df4c47ff8a 02_display_and_delivery_products/samsung_display_solutions_spatial_signage_catalog_2026.pdf diff --git a/2d_to_3d_verified_product_technical_reports/README.md b/2d_to_3d_verified_product_technical_reports/README.md new file mode 100644 index 0000000000000000000000000000000000000000..464d6470643e9cfe1568ddf27a0f64a8ddb692e0 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/README.md @@ -0,0 +1,62 @@ +# 2D 视频转 3D 产品技术资料(严格筛选版) + +归档日期:2026-07-22 + +## 筛选口径 + +本目录依据《基于多阶段深度变换与修补的 2D 视频转 3D 视频项目文档》重新筛选。纳入资料必须对应已经推出的产品、平台或商业服务,并至少说明产品组成、技术实现、系统结构、数据/渲染流程或工程部署中的一项。 + +本次明确排除了:CVPR、SIGGRAPH、arXiv 等论文,纯用户手册,只有营销口号而没有技术说明的新闻,以及无法证明对应实际产品的团队研究成果。 + +你们项目的主链路可概括为: + +`单目视频 -> 时序深度/视差 -> 新视角变换 -> 遮挡区域识别 -> 受掩码约束的视频修补 -> 左右眼/SBS/空间视频输出` + +## 最值得先看的资料 + +1. `01_direct_conversion_products/immersity_ai_technical_backgrounder_2024.pdf` + - 最接近项目核心。它把正式产品拆为 Neural Depth Engine、Navigator、Enhancer、Composer,并说明深度图生成、视点生成、训练数据、实时预览和 2D 到 3D 转换。 +2. `official_web_archives/immersity_4_product_release_2025/extracted_text.md` + - 补足上一份 PDF 没有充分说明的遮挡修补:产品会分离前景/背景层、逐层渲染,并用 inpainting 重建原先被遮挡的内容。 +3. `official_web_archives/xreal_real_3d_engineering_report_2026/extracted_text.md` + - 明确对应已发布 REAL 3D 产品;说明 X1 芯片 NPU、端侧实时深度估计、连续 2D 转 3D 和重构后的渲染管线。 +4. `01_direct_conversion_products/acer_spatiallabs_official_web_report_print_2026.pdf` + - Acer 官方产品技术页的本地打印版,说明眼动跟踪、立体显示、实时渲染、AI 深度映射、SpatialLabs Go/Player 和开发者生态。 +5. `official_web_archives/samsung_odyssey_3d_engineering_interview_2025/extracted_text.md` + - 对应 Odyssey 3D G90XF;介绍双目相机眼动跟踪、view mapping、柱状透镜、深度学习眼动算法和 2D 视频转换 Hub。 +6. `official_web_archives/sony_spatial_reality_display_whitepaper_2025/extracted_text.md` + - 不是 2D 转 3D 核心算法,但它是正式产品白皮书,系统总图非常适合参考你们文档的架构图表达。 +7. `official_web_archives/asus_spatial_vision_technology_2023/extracted_text.md` + - 对应已上市 Spatial Vision 产品;包含光学层爆炸图以及双摄像头眼动感知、实时渲染与图像编织说明。 +8. `02_display_and_delivery_products/apple_hevc_stereo_video_interoperability_profile_2023.pdf` 和 `apple_stereo_video_isobmff_extensions_2025.pdf` + - 对应项目末端的左右眼、多视图编码、MV-HEVC 和空间视频封装,不是转换算法。 + +## 与项目模块的对应关系 + +- 深度估计:Immersity Neural Depth Engine、XREAL REAL 3D、Acer SpatialLabs Go。 +- 视点生成/立体渲染:Immersity Navigator、XREAL 渲染管线、Acer、Samsung Odyssey 3D。 +- 遮挡修补:公开产品资料中,Immersity 4.0 对“分层 + 隐藏区域 inpainting”的披露最直接。 +- 实时和端侧部署:XREAL X1 NPU、Acer 实时转换、Samsung 显示端处理。 +- 双目显示架构:Sony、ASUS、Samsung、Continental。 +- 输出封装:Apple HEVC Stereo Video 和 Stereo Video ISOBMFF Extensions。 +- 专业影视后期:Foundry Ocula 和 DNEG Stereo 案例;两者公开内容不足以还原单目转双目的完整内部算法。 + +## 目录说明 + +- `01_direct_conversion_products/`:与 2D 转 3D 产品直接相关的原生 PDF、数据表或官方网页打印版。 +- `02_display_and_delivery_products/`:立体显示、光场显示和双目视频交付规范。 +- `03_hollywood_postproduction_products/`:影视后期产品/服务的公开资料说明。 +- `official_web_archives/`:官方网页的原始 HTML、提取文本、图片和来源清单。 +- `key_figures/`:从 PDF 或官方网页中单独提取的关键图页,便于改写项目文档。 +- `pdf_text/`:PDF 的可检索文本。 +- `qualification_matrix.md`:逐项判断资料是否真正符合“产品技术报告”。 +- `sources.csv`:本地文件与官方来源地址的对应表。 + +## 重要结论与限制 + +目前没有找到符合口径的 Disney/Marvel/Pixar 官方“2D 视频转 3D 产品技术报告”。Disney Research 公开材料主要是论文,不能证明其对应已发布商业转换产品,因此没有为了凑数而收入。 + +大厂通常不会公开电影级单目转双目系统的完整网络、损失函数、时序一致性和修补架构。就公开产品资料而言,最接近你们完整链路的是将 Immersity 2024 Technical Backgrounder 与 Immersity 4.0 产品说明合并阅读;XREAL、Acer 和 Samsung 则更适合补充实时部署、产品组成和终端呈现。 + +`acer_spatiallabs_official_web_report_print_2026.pdf` 是对 Acer 官方网页的本地打印保存,并非 Acer 原生发布的 PDF。其来源和提取文本已同时归档,避免误判资料性质。 + diff --git a/2d_to_3d_verified_product_technical_reports/__pycache__/archive_official_pages.cpython-312.pyc b/2d_to_3d_verified_product_technical_reports/__pycache__/archive_official_pages.cpython-312.pyc new file mode 100644 index 0000000000000000000000000000000000000000..b6e281bf9e92976198bf41b8d511441d3d829976 Binary files /dev/null and b/2d_to_3d_verified_product_technical_reports/__pycache__/archive_official_pages.cpython-312.pyc differ diff --git a/2d_to_3d_verified_product_technical_reports/archive_official_pages.py b/2d_to_3d_verified_product_technical_reports/archive_official_pages.py new file mode 100644 index 0000000000000000000000000000000000000000..713d85144c1677264eee59fe6fe638312477e9f1 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/archive_official_pages.py @@ -0,0 +1,311 @@ +#!/usr/bin/env python3 +"""Archive official product technical pages and their diagrams for offline review.""" + +from __future__ import annotations + +import csv +import hashlib +import html +import mimetypes +import re +from html.parser import HTMLParser +from pathlib import Path +from urllib.parse import urljoin, urlparse + +import requests + + +ROOT = Path(__file__).resolve().parent +ARCHIVE_ROOT = ROOT / "official_web_archives" +USER_AGENT = ( + "Mozilla/5.0 (X11; Linux x86_64) AppleWebKit/537.36 " + "(KHTML, like Gecko) Chrome/131.0 Safari/537.36" +) + +PAGES = [ + { + "slug": "xreal_real_3d_engineering_report_2026", + "category": "direct_conversion", + "vendor": "XREAL", + "product": "REAL 3D / XREAL One", + "date": "2026-02-02", + "url": "https://www.xreal.com/kr/blog/how-we-built-real-3d-en", + }, + { + "slug": "acer_spatiallabs_product_technology", + "category": "direct_conversion", + "vendor": "Acer", + "product": "SpatialLabs / SpatialLabs Go", + "date": "current", + "url": "https://www.acer.com/in-en/spatiallabs/index.html", + }, + { + "slug": "samsung_odyssey_3d_engineering_interview_2025", + "category": "direct_conversion", + "vendor": "Samsung", + "product": "Odyssey 3D G90XF / Odyssey 3D Hub", + "date": "2025", + "url": "https://news.samsung.com/global/interview-transforming-the-monitor-experience-expanding-the-boundaries-with-odyssey-3d", + }, + { + "slug": "immersity_product_launch_technical_overview_2024", + "category": "direct_conversion", + "vendor": "Immersity AI", + "product": "Neural Depth Engine / 2D-to-3D Video", + "date": "2024-05-22", + "url": "https://immersity.ai/news-articles/introducing-immersity-ai", + }, + { + "slug": "immersity_4_product_release_2025", + "category": "direct_conversion", + "vendor": "Immersity AI", + "product": "Immersity AI 4.0", + "date": "2025-03-26", + "url": "https://immersity.ai/news-articles/immersity-4-0", + }, + { + "slug": "lenovo_thinkvision_27_3d_product_technology", + "category": "direct_conversion", + "vendor": "Lenovo", + "product": "ThinkVision 27 3D / 3D Explorer", + "date": "current", + "url": "https://www.lenovo.com/pk/en/monitors/thinkvision-27-3d/", + }, + { + "slug": "sony_spatial_reality_display_whitepaper_2025", + "category": "display_delivery", + "vendor": "Sony", + "product": "Spatial Reality Display", + "date": "2025-12-12 (updated 2026-01-28)", + "url": "https://xyn.sony.net/en/developer/technical/spatial-reality-display/whitepaper", + }, + { + "slug": "asus_spatial_vision_technology_2023", + "category": "display_delivery", + "vendor": "ASUS", + "product": "Spatial Vision", + "date": "2023", + "url": "https://www.asus.com/content/asus-spatial-vision-technology/", + }, + { + "slug": "samsung_spatial_signage_technology_2026", + "category": "display_delivery", + "vendor": "Samsung", + "product": "Spatial Signage", + "date": "2026-03-05", + "url": "https://insights.samsung.com/2026/03/05/how-samsung-spatial-signage-works-inside-the-technology-behind-glasses-free-3d/", + }, + { + "slug": "looking_glass_product_software_stack", + "category": "display_delivery", + "vendor": "Looking Glass Factory", + "product": "Looking Glass Software Stack", + "date": "current", + "url": "https://lookingglassfactory.com/software", + }, + { + "slug": "foundry_ocula_product_technology", + "category": "hollywood_postproduction", + "vendor": "Foundry", + "product": "Ocula for Nuke", + "date": "current", + "url": "https://www.foundry.com/products/ocula", + }, + { + "slug": "dneg_godzilla_x_kong_stereo_conversion_case_2024", + "category": "hollywood_postproduction", + "vendor": "DNEG", + "product": "DNEG Stereo conversion service", + "date": "2024", + "url": "https://www.dneg.com/news/from-2d-to-3d-behind-the-stereo-conversion-of-godzilla-x-kong-the-new-empire", + }, + { + "slug": "prime_focus_stereo_conversion_product_service", + "category": "hollywood_postproduction", + "vendor": "Prime Focus", + "product": "View-D / Stereo conversion service", + "date": "current", + "url": "https://www.primefocus.com/what-we-do/creative-services", + }, +] + + +class PageParser(HTMLParser): + BLOCK_TAGS = { + "article", "blockquote", "br", "dd", "div", "dl", "dt", "figcaption", + "footer", "h1", "h2", "h3", "h4", "h5", "h6", "header", "li", "main", + "nav", "ol", "p", "section", "table", "td", "th", "tr", "ul", + } + + def __init__(self) -> None: + super().__init__(convert_charrefs=True) + self.skip_depth = 0 + self.text_parts: list[str] = [] + self.images: list[tuple[str, str]] = [] + self.title = "" + self.in_title = False + + def handle_starttag(self, tag: str, attrs: list[tuple[str, str | None]]) -> None: + tag = tag.lower() + attr = {key.lower(): value or "" for key, value in attrs} + if tag in {"script", "style", "noscript", "svg"}: + self.skip_depth += 1 + return + if self.skip_depth: + return + if tag == "title": + self.in_title = True + if tag in self.BLOCK_TAGS: + self.text_parts.append("\n") + if tag == "img": + source = attr.get("data-src") or attr.get("data-original") or attr.get("src") + if source: + self.images.append((source, attr.get("alt", ""))) + srcset = attr.get("data-srcset") or attr.get("srcset") + if srcset: + self.images.append((srcset.split(",")[-1].strip().split()[0], attr.get("alt", ""))) + if tag == "source" and attr.get("srcset"): + self.images.append((attr["srcset"].split(",")[-1].strip().split()[0], "source")) + if tag == "meta" and attr.get("property") in {"og:image", "twitter:image"}: + if attr.get("content"): + self.images.append((attr["content"], attr.get("property", "meta image"))) + + def handle_endtag(self, tag: str) -> None: + tag = tag.lower() + if tag in {"script", "style", "noscript", "svg"}: + self.skip_depth = max(0, self.skip_depth - 1) + return + if self.skip_depth: + return + if tag == "title": + self.in_title = False + if tag in self.BLOCK_TAGS: + self.text_parts.append("\n") + + def handle_data(self, data: str) -> None: + if self.skip_depth: + return + if self.in_title: + self.title += data + self.text_parts.append(data) + + def clean_text(self) -> str: + raw = html.unescape("".join(self.text_parts)).replace("\xa0", " ") + lines = [re.sub(r"\s+", " ", line).strip() for line in raw.splitlines()] + cleaned: list[str] = [] + for line in lines: + if line and (not cleaned or line != cleaned[-1]): + cleaned.append(line) + return "\n\n".join(cleaned) + + +def extension_for(response: requests.Response, url: str) -> str: + content_type = response.headers.get("content-type", "").split(";", 1)[0].strip() + ext = mimetypes.guess_extension(content_type) if content_type else None + if ext == ".jpe": + ext = ".jpg" + if not ext: + ext = Path(urlparse(url).path).suffix.lower() + if not ext or len(ext) > 6: + ext = ".bin" + return ext + + +def archive_page(session: requests.Session, page: dict[str, str]) -> dict[str, str | int]: + output_dir = ARCHIVE_ROOT / page["slug"] + assets_dir = output_dir / "assets" + assets_dir.mkdir(parents=True, exist_ok=True) + response = session.get(page["url"], timeout=(10, 30), allow_redirects=True) + response.raise_for_status() + raw_html = response.text + (output_dir / "index.html").write_text(raw_html, encoding="utf-8") + + parser = PageParser() + parser.feed(raw_html) + text_header = ( + f"# {parser.title.strip() or page['product']}\n\n" + f"- Vendor: {page['vendor']}\n" + f"- Product: {page['product']}\n" + f"- Material date: {page['date']}\n" + f"- Official source: {response.url}\n" + f"- Archived HTML: index.html\n\n" + "## Extracted text\n\n" + ) + (output_dir / "extracted_text.md").write_text( + text_header + parser.clean_text() + "\n", encoding="utf-8" + ) + + image_rows: list[dict[str, str | int]] = [] + seen: set[str] = set() + for raw_url, alt in parser.images: + image_url = urljoin(response.url, raw_url) + if image_url.startswith("data:") or image_url in seen: + continue + seen.add(image_url) + if len(image_rows) >= 30: + break + try: + image_response = session.get(image_url, timeout=(8, 25), stream=True) + image_response.raise_for_status() + length = int(image_response.headers.get("content-length", 0) or 0) + if length > 10 * 1024 * 1024: + continue + content = image_response.content + if not content or len(content) > 10 * 1024 * 1024: + continue + digest = hashlib.sha1(image_url.encode("utf-8")).hexdigest()[:10] + stem = re.sub(r"[^a-zA-Z0-9_-]+", "_", (alt or "image").strip())[:48].strip("_") + stem = stem or "image" + filename = f"{len(image_rows) + 1:02d}_{stem}_{digest}{extension_for(image_response, image_url)}" + (assets_dir / filename).write_bytes(content) + image_rows.append( + { + "local_file": f"assets/{filename}", + "alt_text": alt, + "source_url": image_url, + "bytes": len(content), + } + ) + except requests.RequestException as exc: + image_rows.append( + {"local_file": "DOWNLOAD_FAILED", "alt_text": alt, "source_url": image_url, "bytes": str(exc)} + ) + + with (output_dir / "image_manifest.csv").open("w", encoding="utf-8", newline="") as handle: + writer = csv.DictWriter(handle, fieldnames=["local_file", "alt_text", "source_url", "bytes"]) + writer.writeheader() + writer.writerows(image_rows) + return { + **page, + "http_status": response.status_code, + "final_url": response.url, + "title": parser.title.strip(), + "images_recorded": len(image_rows), + "archive_dir": str(output_dir.relative_to(ROOT)), + } + + +def main() -> None: + ARCHIVE_ROOT.mkdir(parents=True, exist_ok=True) + session = requests.Session() + session.headers.update({"User-Agent": USER_AGENT, "Accept-Language": "en-US,en;q=0.9"}) + rows: list[dict[str, str | int]] = [] + for page in PAGES: + print(f"Archiving {page['vendor']}: {page['product']}", flush=True) + try: + rows.append(archive_page(session, page)) + except Exception as exc: # Keep a complete audit of blocked pages. + rows.append({**page, "http_status": "FAILED", "final_url": "", "title": "", "images_recorded": 0, "archive_dir": "", "error": str(exc)}) + print(f" FAILED: {exc}", flush=True) + fields = [ + "category", "vendor", "product", "date", "url", "http_status", "final_url", + "title", "images_recorded", "archive_dir", "error", + ] + with (ROOT / "web_archive_manifest.csv").open("w", encoding="utf-8", newline="") as handle: + writer = csv.DictWriter(handle, fieldnames=fields, extrasaction="ignore") + writer.writeheader() + writer.writerows(rows) + + +if __name__ == "__main__": + main() diff --git a/2d_to_3d_verified_product_technical_reports/key_figures/README.md b/2d_to_3d_verified_product_technical_reports/key_figures/README.md new file mode 100644 index 0000000000000000000000000000000000000000..82f446b7ffd02ae9d069b009b5b2a881e6ee28b2 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/key_figures/README.md @@ -0,0 +1,16 @@ +# 关键图页索引 + +- `immersity_backgrounder/`:产品技术组件、深度图新旧版本对比、2D 图像到深度图说明。 +- `acer_spatiallabs/`:官方产品技术页打印版中的 AI 深度映射、SpatialLabs Go 和开发生态页面。 +- `samsung_odyssey_3d/`:Odyssey 3D 产品数据表。 +- `lenovo_thinkvision_27_3d/`:ThinkVision 27 3D 产品能力和软硬件生态。 +- `apple_stereo_delivery/`:左右眼 view ID、MV-HEVC 解码配置和连接图。 +- `samsung_spatial_signage/`:Spatial Signage 产品与 3D plate 说明。 +- `continental_3d_display/`:13-view 车载光场显示技术 one-pager。 +- `official_web_diagrams/sony_srd_system_overview.png`:Sony 产品系统总图,包含眼动感知、Runtime、Unity/Unreal、左右眼图像和显示器。 +- `official_web_diagrams/asus_spatial_vision_optical_stack_section.png`:ASUS 六层光学结构爆炸图。 +- `official_web_diagrams/asus_spatial_vision_eye_tracking_section.png`:ASUS 双摄眼动与实时渲染视区图。 +- `official_web_diagrams/acer_spatiallabs_go_product_pipeline.png`:Acer SpatialLabs Go 产品、2D 视频输入与 AI 深度映射说明。 + +这些图片仅用于快速定位官方报告中的图示。正式引用时应同时标注 `sources.csv` 中的官方来源。 + diff --git a/2d_to_3d_verified_product_technical_reports/key_figures/acer_spatiallabs/page-04.png b/2d_to_3d_verified_product_technical_reports/key_figures/acer_spatiallabs/page-04.png new file mode 100644 index 0000000000000000000000000000000000000000..82af3b8c912528c51744ffdaddb2db72fca559b7 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/key_figures/acer_spatiallabs/page-04.png @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:af7c34344a5df8a55653b89c1aee92fbf5bd8ea9044282b275d6d69d029c0705 +size 550558 diff --git a/2d_to_3d_verified_product_technical_reports/key_figures/acer_spatiallabs/page-05.png b/2d_to_3d_verified_product_technical_reports/key_figures/acer_spatiallabs/page-05.png new file mode 100644 index 0000000000000000000000000000000000000000..07e7730fcb59e1a4f0f296d62304637740e38047 --- /dev/null +++ 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SpatialLabs™ Stereoscopic 3D Solutions | Acer India + +- Vendor: Acer +- Product: SpatialLabs / SpatialLabs Go +- Material date: current official page, archived 2026-07-22 +- Official source: https://www.acer.com/in-en/spatiallabs/index.html +- Preservation: Selenium page source and WebDriver print-to-PDF + +## Extracted text + +Acer SpatialLabs™ Stereoscopic 3D Solutions | Acer India + +Skip to content + +Select your region to see content and shop in your location. + +Singapore + +Select your region + +Continue + +Acer Brands + +Discover the Best Deals at Acer Store – Shop Now! + +My Profile + +My Products + +Register a Product + +My Community + +Sign Out + +Sign In + +Sign Up + +What’s Acer ID + +Your cart is empty + +Store + +AI + +Products + +Copilot+ PC + +Laptops + +By Category + +Copilot+ PC + +AI PCs + +Gaming + +OLED Display + +Thin & Powerful + +Everyday Laptops + +Professional + +Learning + +Chromebooks + +By Series + +Predator + +Swift + +Aspire + +Nitro + +TravelMate + +Extensa + +TravelLite + +Windows + +Acer AMD Ryzen™ Series Laptops + +Desktops + +By Category + +Predator + +Gaming + +Sustainable Products + +Business + +Education + +Components + +By Series + +Acer Aspire All in Ones + +Acer Aspire Classic Desktops + +Nitro + +Acer Veriton Business Desktops + +Acer Veriton All in Ones + +Acer Veriton Workstations + +Add-In-One + +Chromebox + +Mini PCs + +Windows + +Acer Chromebooks + +By Category + +Business + +Everyday + +Education + +By Solution + +Chromebook Plus + +ChromeOS Enterprise Solutions + +Tablet and Phones + +By Series + +Iconia + +Smartphones + +Monitors + +By Category + +Predator + +Sustainable Products + +Entertainment + +Business + +Everyday + +Gaming + +Acer SpatialLabs™ + +Touch + +Acer Smart Monitor + +Acer ProDesigner + +Acer Display Technology + +Digital Signage + +By Category + +IWB and Touch + +Appliances + +By Type + +Air Purifiers + +Air Circulators​ + +Accessories + +Featured + +Acerpure Cool AC551-50W + +Acerpure Pro AP551-50W + +Acerpure Cozy AF551-20W + +Acerpure Filter ACF173 + +Business + +Education + +Support + +Events + +Acer Brands + +Acer ID + +My Profile + +My Products + +Register a Product + +My Community + +Sign Out + +Sign In + +Sign Up + +What’s Acer ID + +Store + +AI + +Products + +Copilot+ PC + +Laptops + +Desktops + +Acer Chromebooks + +Tablet and Phones + +Monitors + +Digital Signage + +Appliances + +By Category + +Copilot+ PC + +AI PCs + +Gaming + +OLED Display + +Thin & Powerful + +Everyday Laptops + +Professional + +Learning + +Chromebooks + +By Series + +Predator + +Swift + +Aspire + +Nitro + +TravelMate + +Extensa + +TravelLite + +Windows + +Acer AMD Ryzen™ Series Laptops + +By Category + +Predator + +Gaming + +Sustainable Products + +Business + +Education + +Components + +By Series + +Acer Aspire All in Ones + +Acer Aspire Classic Desktops + +Nitro + +Acer Veriton Business Desktops + +Acer Veriton All in Ones + +Acer Veriton Workstations + +Add-In-One + +Chromebox + +Mini PCs + +Windows + +By Category + +Business + +Everyday + +Education + +By Solution + +Chromebook Plus + +ChromeOS Enterprise Solutions + +By Series + +Iconia + +Smartphones + +By Category + +Predator + +Sustainable Products + +Entertainment + +Business + +Everyday + +Gaming + +Acer SpatialLabs™ + +Touch + +Acer Smart Monitor + +Acer ProDesigner + +Acer Display Technology + +By Category + +IWB and Touch + +By Type + +Air Purifiers + +Air Circulators​ + +Accessories + +Featured + +Acerpure Cool AC551-50W + +Acerpure Pro AP551-50W + +Acerpure Cozy AF551-20W + +Acerpure Filter ACF173 + +Business + +Education + +Support + +Events + +Your cart is empty + +Acer SpatialLabs™ Stereoscopic 3D Solutions | Acer India + +Home + +Acer SpatialLabs™ + +Acer SpatialLabs™ Stereoscopic 3D Solutions + +Acer SpatialLabs™ delivers intuitive interaction and immersive sensation via advanced optical display, and real-time rendering solutions. It features the combination of an eye-tracking solution, a stereoscopic 3D display, real-time rendering, AI technologies, along with the newest shaders and drivers. + +Pro + +Gaming + +3D Camera + +Acer SpatialLabs™ View Pro 27 3D Display + +Experience 3D on a grand scale with 27 inches of immersive brilliance. + +Learn More + +Acer SpatialLabs™ View Pro 3D Portable Display + +3D visualization, redefined for professionals. + +Learn More + +Acer Aspire 3D 15 SpatialLabs™ Edition 3D Laptop + +A stereoscopic 3D laptop that unlocks a world of immersive possibilities. + +Learn More + +Powerful 3D Visualization Across Industries + +Transform ideas into 3D presentations that bridge the virtual and real worlds. Designers can accelerate the journey from concept to final design, medical professionals can visualize the human body in true-to-life 3D for enhanced diagnosis or instruction, while marketers and educators engage audiences with deeper immersion. + +Expanding Stereo 3D Creation with Game Engines + +With support for Unreal and Unity Engines, Acer SpatialLabs Pro empowers developers to build immersive 3D applications across industries. Across education, AEC, GIS, medical, and countless other fields, creators can push the boundaries of stereo 3D content and redefine reality. + +Acer OpenXR Runtime with Control Panel Optimized for Acer SpatialLabs + +Acer OpenXR Runtime provides developers with an industry-standard framework for SpatialLabs integration. Software applications with OpenXR support, including Autodesk VRED, Blender, and Twinmotion, can now interoperate effortlessly with SpatialLabs. The accompanying Acer OpenXR Control Panel lets users easily switch between VR and Display modes, adjust scene zoom levels, and fine-tune 3D pop-out intensity. + +VR Developers Welcome: Introducing Acer SteamVR Bridge + +Acer SteamVR Bridge enables developers to adapt SteamVR content for Acer SpatialLabs Pro devices, delivering glasses-free immersive experiences. Virtual tours to artistic and educational content, this proprietary driver expands creative possibilities, supporting lifelike engagement in stereoscopic 3D. + +Acer SpatialLabs Go: One-Click to Stereoscopic 3D + +Acer SpatialLabs Go generates immersive stereoscopic 3D with just one click, whether working with side-by-side 3D content or 2D video streams. Native 3D images such as medical scans can be instantly rendered into true stereoscopic 3D, while regular 2D content is enhanced through AI-generated depth mapping for added immersion. + +Enhancing 3D Creativity with Intuitive Interaction + +Acer SpatialLabs enables interaction with 3D content, opening up a vast array of engagement possibilities. Create dynamic experiences where your content intuitively responds to you, fostering deeper creativity, exploration, and immersion in stereoscopic 3D environments. + +Seamless Web-Based 3D Experiences with WebXR Support + +Acer SpatialLabs lowers deployment barriers through WebXR support, allowing a wide range of web developers to deploy immersive 3D contents without additional app development. This approach ensures compatibility with emerging tools and ecosystems, giving developers and businesses confidence that their experiences are future-ready and scalable. + +Acer Model Viewer Pro: Seamless 3D Visualization Across Formats + +Acer SpatialLabs Model Viewer Pro streamlines 3D visualization with broad file format support and enhanced FBX and glTF importing. Easily import models from vast 3D libraries like Sketchfab while preserving important details and attributes, delivering an immersive stereoscopic 3D experience. + +One Click to Preview in Stereoscopic 3D + +Acer SpatialLabs Model Viewer Pro lets you preview your 3D models in full stereoscopic 3D with a single click. Our seamless add-ons for ZBrush, Rhinoceros 3D, and other software simplify the export and import process, so you can jump straight from modeling to immersive review—no extra steps required. + +Immersive 3D Showcases, Tailored to Your Brand + +More than just a viewer, Model Viewer Pro seamlessly showcases and autoplays multiple 3D models, creating immersive showroom and exhibition experiences. With advanced features like HDRI import, custom backgrounds, and overlay images, you can tailor each presentation for a truly branded experience. + +Panoramic View: Expanding Immersive 3D Displays + +Connect three Acer SpatialLabs Pro devices to create an ultra-wide stereoscopic 3D experience. With Acer OpenXR Runtime, expand your canvas for a broader, more dynamic view—ideal for flight simulation and other applications where real-time 3D depth enhances training, immersion, and precision. + +Acer SpatialLabs Developer Site: Development tools & Resources + +Access powerful plugins and detailed documentation to build cutting-edge 3D applications with SpatialLabs technology. Explore real-world use cases and get technical support to accelerate your development process. Visit the Acer SpatialLabs Developer Site to start building today. + +Explore + +Acer SpatialLabs Experience Center Pro + +Acer SpatialLabs Experience Center + +Acer SpatialLabs Model Viewer + +Model Viewer Pro + +Model Viewer + +Acer SpatialLabs Add-ons for Model Viewer + +O + +- + +Acer SpatialLabs Unreal Plug-in + +O + +- + +Acer SpatialLabs Unity Plug-in + +O + +- + +Acer OpenXR Runtime + +O + +- + +Acer SteamVR Bridge + +O + +- + +Acer SpatialLabs TrueGame + +- + +O + +Acer SpatialLabs Go + +O + +Acer SpatialLabs Player + +O + +Developer site & Developer Support + +O + +- + +Acer Aspire 3D 15 SpatialLabs Edition + +Acer SpatialLabs View Pro + +Acer SpatialLabs View Pro 27 + +Predator Helios 3D 15 SpatialLabs Edition + +Predator Helios 300 SpatialLabs Edition + +Acer Nitro SpatialLabs View + +Predator SpatialLabs View 27 + +Get Acer SpatialLabs Experience Center: Your Gateway to 3D + +Download + +Predator SpatialLabs™ View 27 3D Gaming Monitor + +Dive into gaming like never before with 27 inches of vibrant, glasses-free 3D realism. + +Learn More + +Acer Nitro SpatialLabs™ View Portable 3D Monitor + +Immerse yourself in stunning 3D gaming and entertainment with portability. + +Learn More + +PREDATOR HELIOS 3D 15 SpatialLabs™ Edition Gaming Laptop + +Experience Stunning 3D Gaming and Entertainment with a Stereoscopic 3D Laptop. + +Learn More + +Unleashing 3D for Ultimate Gaming & Entertainment + +Acer SpatialLabs TrueGame is built for gamers who want to experience their favorite titles with stunning 3D realism and smooth performance. It delivers the thrill of immersion—whether exploring breathtaking new worlds or rediscovering classic adventures with added depth. With the SpatialLabs entertainment suite, 3D content comes to life beyond gaming, letting enthusiasts enjoy movies, media, and user-generated content in an entirely new dimension. With SpatialLabs, 3D redefines how entertainment is experienced. + +Acer SpatialLabs TrueGame: A Transformative Stereo 3D Gaming Experience + +Dive into stunning stereo 3D worlds with Acer SpatialLabs TrueGame. Powered by proprietary stereoscopic rendering technology, it delivers true geometric depth and ultra-immersive gameplay. With multiple 3D modes, adjustable 3D intensity, and one-click activation, experience your favorite games like never before, exactly as developers intended. + +Explore + +An Ever-Growing Library of Supported 3D Games + +Dive into a vast and ever-expanding library of stereoscopic 3D-enhanced games with Acer SpatialLabs TrueGame. Enjoy a growing collection of AAA titles and beloved classics, optimized for immersive depth and realism. With hundreds of game titles supported and new games added regularly, there’s always a fresh 3D adventure waiting for you! + +Game List + +Real-time 2D to 3D Conversion with AI + +With our patented technology and AI model, Acer SpatialLabs GO instantly converts diverse 2D digital content into immersive stereo 3D. Elevate your experience of watching YouTube videos, playing web games, or everyday tasks like browsing photos and videos, all without requiring a discrete GPU.* + +*Intel 12th Gen equivalent and above + +Unlock Full Control Over 3D Viewing & Streaming + +Acer SpatialLabs Player transforms media enjoyment with AI-powered immersive 3D. Effortlessly play side-by-side videos, stream from YouTube, or convert any 2D content into stunning stereoscopic 3D in real time. Fine-tune depth settings, switch audio tracks and subtitles, and take full command of your viewing experience—all within SpatialLabs Player. + +Instant 3D Fun: One-Click Model Viewing + +Explore 3D models with unprecedented detail using Acer SpatialLabs Model Viewer. Rotate, zoom in for incredible detail, or step back for a full perspective. You're adding a new dimension to fun when exploring your AI-generated 3D model of your imagination or a replica of your 3D scanned action figures. + +Acer SpatialLabs Experience Center Pro + +Acer SpatialLabs Experience Center + +Acer SpatialLabs Model Viewer + +Model Viewer Pro + +Model Viewer + +Acer SpatialLabs Add-ons for Model Viewer + +O + +- + +Acer SpatialLabs Unreal Plug-in + +O + +- + +Acer SpatialLabs Unity Plug-in + +O + +- + +Acer OpenXR Runtime + +O + +- + +Acer SteamVR Bridge + +O + +- + +Acer SpatialLabs TrueGame + +- + +O + +Acer SpatialLabs Go + +O + +Acer SpatialLabs Player + +O + +Developer site & Developer Support + +O + +- + +Acer Aspire 3D 15 SpatialLabs Edition + +Acer SpatialLabs View Pro + +Acer SpatialLabs View Pro 27 + +Predator Helios 3D 15 SpatialLabs Edition + +Predator Helios 300 SpatialLabs Edition + +Acer Nitro SpatialLabs View + +Predator SpatialLabs View 27 + +Get Acer SpatialLabs Experience Center: Your Gateway to 3D + +Download + +Acer SpatialLabs™ Eyes 3D Camera + +Capture and share in 3D with the Acer SpatialLabs Eyes 3D Camera—immersive and intuitive. + +Learn More + +Effortless 3D Content Editing and Presentation + +Enhance your 3D creations using Acer SpatialLabs Player, included with all Acer SpatialLabs devices. Easily trim videos, zoom with pinch gestures, and capture screenshots in 3D mode. Enjoy immersive 3D content with effortless control to refine your work and create stunning slideshows that showcase your captured moments. + +Professional 3D Streaming and Preview with SpatialLabs Player + +Connect the Acer SpatialLabs Eyes 3D Camera with SpatialLabs devices harnessed the power of SpatialLabs Player 3.0 for real-time 3D previews, seamless streaming, and easy recording. Your SpatialLabs displays and notebooks can be your extended monitor and recording device while the SpatialLabs Eyes capturing stunning 8K video. Perfect solution for 3D video content creators. + +Explore + +Engage with 3D Video Calls to Create More Meaningful Connections + +Transform video calls with immersive 3D using the Acer SpatialLabs video call widget. Whether on Teams, Zoom, Google Meet and more, showcase products, prototypes, or presentations with true depth and realism. Engage in more dynamic, lifelike discussions—all powered by the Acer SpatialLabs Eyes 3D Camera. + +Game List + +Create 3D Content for VR, AR, and More + +Take your 3D content beyond the screen with Acer SpatialLabs Eyes. Generate side-by-side 3D visuals for VR headsets like Apple Vision Pro and Meta Quest, or showcase immersive depth on 3D projectors and monitors—so your vision is not just seen, but truly experienced. + +Check for Latest Firmware Update + +Download + +Back To Top + +Products + +Laptops + +Desktops + +Acer Chromebooks + +Tablet and Phones + +Monitors + +Projectors + +Digital Signage + +Electronics & Accessories + +Networking + +eMobility + +Handheld Gaming + +Appliances + +Sustainable Products + +Support + +Acer ID + +Register a Product + +Acer Community + +Drivers and Manuals + +Acer Answers + +Contact Support + +Resources + +Acer Corner + +Acer Global Account Portal + +Find a Store + +Acer Technologies + +McAfee + +About Acer + +Contact Us + +Investor Relations + +Press + +Awards + +Events + +Sustainability + +Corporate Social Responsibility + +Product Carbon Footprint + +Project Humanity + +Earthion + +Privacy Policy + +Cookie Policy + +Legal Notice + +Additional Legal Information + +Accessibility Policy + +Cookies Settings + +India - English + +© 2026 Acer Inc. + +We use cookies to detect preferences, improve website navigation, to generate user statistics to make our website more user friendly and to offer personalized content and advertisements. + +By clicking on “Accept All”, you agree to the use and placement of all cookies by Acer in accordance with our Cookie policy, which consent can be withdrawn anytime. 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Please also note that you have the right to access personal data Criteo hold about you and to ask that your personal data be corrected, erased, or transferred. You may also have the right to object to, or request that Criteo restrict, certain processing, by addressing your request at dpo@criteo.com. + +Cookies Details‎ + +Acer ID Account Cookie + +Acer ID Account Cookie Active + +If you are a registered user and login to our websites with your AcerID, the information collected from our websites is not anonymous and we may use this information along with other information we know or infer about you, including your preferences to tailored content, services, advertising and offers for you. If applicable laws require so, we will send you direct e-mails only upon your consent. + +Cookies Details‎ + +Online Chat Cookies + +Online Chat Cookies Active + +This refers to cookies that allow us to provide you with online chat functionality (human or AI assisted) to answer your questions or support you when you visit our website. + +Cookies Details‎ + +Cookie List + +Consent Leg.Interest + +checkbox label label + +Clear + +checkbox label label + +Apply Cancel + +Confirm My Choices + +Allow All diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/acer_spatiallabs_product_technology/image_manifest.csv b/2d_to_3d_verified_product_technical_reports/official_web_archives/acer_spatiallabs_product_technology/image_manifest.csv new file mode 100644 index 0000000000000000000000000000000000000000..5d150f2402c8f0ddfeeb41e9ee5dacea0c39ef15 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/acer_spatiallabs_product_technology/image_manifest.csv @@ -0,0 +1,2 @@ +local_file,alt_text,source_url,bytes +See key_figures/official_web_diagrams,Acer product technical sections,official page screenshots, diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/acer_spatiallabs_product_technology/index.html b/2d_to_3d_verified_product_technical_reports/official_web_archives/acer_spatiallabs_product_technology/index.html new file mode 100644 index 0000000000000000000000000000000000000000..1fd9c71c3dc9f431ba6f5e64d8bc8254a797dcc1 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/acer_spatiallabs_product_technology/index.html @@ -0,0 +1,5033 @@ + + + + + + + + Acer SpatialLabs™ Stereoscopic 3D Solutions | Acer India + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +
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Acer SpatialLabs™ Stereoscopic 3D Solutions | Acer India

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Acer SpatialLabs™ Stereoscopic 3D Solutions

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Acer SpatialLabs™ delivers intuitive interaction and immersive sensation via advanced optical display, and real-time rendering solutions. It features the combination of an eye-tracking solution, a stereoscopic 3D display, real-time rendering, AI technologies, along with the newest shaders and drivers.

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Acer SpatialLabs™ View Pro 27 3D Display

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Experience 3D on a grand scale with 27 inches of immersive brilliance.

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Acer SpatialLabs™ View Pro 3D Portable Display

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3D visualization, redefined for professionals.

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Acer Aspire 3D 15 SpatialLabs™ Edition 3D Laptop

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A stereoscopic 3D laptop that unlocks a world of immersive possibilities.

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Powerful 3D Visualization Across Industries

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Transform ideas into 3D presentations that bridge the virtual and real worlds. Designers can accelerate the journey from concept to final design, medical professionals can visualize the human body in true-to-life 3D for enhanced diagnosis or instruction, while marketers and educators engage audiences with deeper immersion.

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Expanding Stereo 3D Creation with Game Engines

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With support for Unreal and Unity Engines, Acer SpatialLabs Pro empowers developers to build immersive 3D applications across industries. Across education, AEC, GIS, medical, and countless other fields, creators can push the boundaries of stereo 3D content and redefine reality.

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Acer OpenXR Runtime with Control Panel Optimized for Acer SpatialLabs

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Acer OpenXR Runtime provides developers with an industry-standard framework for SpatialLabs integration. Software applications with OpenXR support, including Autodesk VRED, Blender, and Twinmotion, can now interoperate effortlessly with SpatialLabs. The accompanying Acer OpenXR Control Panel lets users easily switch between VR and Display modes, adjust scene zoom levels, and fine-tune 3D pop-out intensity.

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VR Developers Welcome: Introducing Acer SteamVR Bridge

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Acer SteamVR Bridge enables developers to adapt SteamVR content for Acer SpatialLabs Pro devices, delivering glasses-free immersive experiences. Virtual tours to artistic and educational content, this proprietary driver expands creative possibilities, supporting lifelike engagement in stereoscopic 3D.

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Acer SpatialLabs Go: One-Click to Stereoscopic 3D

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Acer SpatialLabs Go generates immersive stereoscopic 3D with just one click, whether working with side-by-side 3D content or 2D video streams. Native 3D images such as medical scans can be instantly rendered into true stereoscopic 3D, while regular 2D content is enhanced through AI-generated depth mapping for added immersion.

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Enhancing 3D Creativity with Intuitive Interaction

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Acer SpatialLabs enables interaction with 3D content, opening up a vast array of engagement possibilities. Create dynamic experiences where your content intuitively responds to you, fostering deeper creativity, exploration, and immersion in stereoscopic 3D environments.

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Seamless Web-Based 3D Experiences with WebXR Support

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Acer SpatialLabs lowers deployment barriers through WebXR support, allowing a wide range of web developers to deploy immersive 3D contents without additional app development. This approach ensures compatibility with emerging tools and ecosystems, giving developers and businesses confidence that their experiences are future-ready and scalable.

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Acer Model Viewer Pro: Seamless 3D Visualization Across Formats

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Acer SpatialLabs Model Viewer Pro streamlines 3D visualization with broad file format support and enhanced FBX and glTF importing. Easily import models from vast 3D libraries like Sketchfab while preserving important details and attributes, delivering an immersive stereoscopic 3D experience.

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One Click to Preview in Stereoscopic 3D

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Acer SpatialLabs Model Viewer Pro lets you preview your 3D models in full stereoscopic 3D with a single click. Our seamless add-ons for ZBrush, Rhinoceros 3D, and other software simplify the export and import process, so you can jump straight from modeling to immersive review—no extra steps required.

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Immersive 3D Showcases, Tailored to Your Brand

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More than just a viewer, Model Viewer Pro seamlessly showcases and autoplays multiple 3D models, creating immersive showroom and exhibition experiences. With advanced features like HDRI import, custom backgrounds, and overlay images, you can tailor each presentation for a truly branded experience.

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Panoramic View: Expanding Immersive 3D Displays

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Connect three Acer SpatialLabs Pro devices to create an ultra-wide stereoscopic 3D experience. With Acer OpenXR Runtime, expand your canvas for a broader, more dynamic view—ideal for flight simulation and other applications where real-time 3D depth enhances training, immersion, and precision.

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Acer SpatialLabs Developer Site: Development tools & Resources

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Access powerful plugins and detailed documentation to build cutting-edge 3D applications with SpatialLabs technology. Explore real-world use cases and get technical support to accelerate your development process. Visit the Acer SpatialLabs Developer Site to start building today.

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+Acer SpatialLabs Experience Center ProAcer SpatialLabs Experience Center
Acer SpatialLabs Model ViewerModel Viewer ProModel Viewer
Acer SpatialLabs Add-ons for Model ViewerO-
Acer SpatialLabs Unreal Plug-inO-
Acer SpatialLabs Unity Plug-inO-
Acer OpenXR RuntimeO-
Acer SteamVR BridgeO-
Acer SpatialLabs TrueGame-O
Acer SpatialLabs GoOO
Acer SpatialLabs PlayerOO
Developer site & Developer SupportO-
+Acer Aspire 3D 15 SpatialLabs Edition +
+Acer SpatialLabs View Pro +
+Acer SpatialLabs View Pro 27
Predator Helios 3D 15 SpatialLabs Edition +
+Predator Helios 300 SpatialLabs Edition +
+Acer Nitro SpatialLabs View +
+Predator SpatialLabs View 27
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Get Acer SpatialLabs Experience Center: Your Gateway to 3D

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Predator SpatialLabs™ View 27 3D Gaming Monitor

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Dive into gaming like never before with 27 inches of vibrant, glasses-free 3D realism.

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Acer Nitro SpatialLabs™ View Portable 3D Monitor

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Immerse yourself in stunning 3D gaming and entertainment with portability.

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PREDATOR HELIOS 3D 15 SpatialLabs™ Edition Gaming Laptop

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Experience Stunning 3D Gaming and Entertainment with a Stereoscopic 3D Laptop.

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Unleashing 3D for Ultimate Gaming & Entertainment

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Acer SpatialLabs TrueGame is built for gamers who want to experience their favorite titles with stunning 3D realism and smooth performance. It delivers the thrill of immersion—whether exploring breathtaking new worlds or rediscovering classic adventures with added depth. With the SpatialLabs entertainment suite, 3D content comes to life beyond gaming, letting enthusiasts enjoy movies, media, and user-generated content in an entirely new dimension. With SpatialLabs, 3D redefines how entertainment is experienced.

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Acer SpatialLabs TrueGame: A Transformative Stereo 3D Gaming Experience

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Dive into stunning stereo 3D worlds with Acer SpatialLabs TrueGame. Powered by proprietary stereoscopic rendering technology, it delivers true geometric depth and ultra-immersive gameplay. With multiple 3D modes, adjustable 3D intensity, and one-click activation, experience your favorite games like never before, exactly as developers intended.

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An Ever-Growing Library of Supported 3D Games

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Dive into a vast and ever-expanding library of stereoscopic 3D-enhanced games with Acer SpatialLabs TrueGame. Enjoy a growing collection of AAA titles and beloved classics, optimized for immersive depth and realism. With hundreds of game titles supported and new games added regularly, there’s always a fresh 3D adventure waiting for you!

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Real-time 2D to 3D Conversion with AI

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With our patented technology and AI model, Acer SpatialLabs GO instantly converts diverse 2D digital content into immersive stereo 3D. Elevate your experience of watching YouTube videos, playing web games, or everyday tasks like browsing photos and videos, all without requiring a discrete GPU.* +
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+*Intel 12th Gen equivalent and above

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Unlock Full Control Over 3D Viewing & Streaming

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Acer SpatialLabs Player transforms media enjoyment with AI-powered immersive 3D. Effortlessly play side-by-side videos, stream from YouTube, or convert any 2D content into stunning stereoscopic 3D in real time. Fine-tune depth settings, switch audio tracks and subtitles, and take full command of your viewing experience—all within SpatialLabs Player.

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Instant 3D Fun: One-Click Model Viewing

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Explore 3D models with unprecedented detail using Acer SpatialLabs Model Viewer. Rotate, zoom in for incredible detail, or step back for a full perspective. You're adding a new dimension to fun when exploring your AI-generated 3D model of your imagination or a replica of your 3D scanned action figures.

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+Acer SpatialLabs Experience Center ProAcer SpatialLabs Experience Center
Acer SpatialLabs Model ViewerModel Viewer ProModel Viewer
Acer SpatialLabs Add-ons for Model ViewerO-
Acer SpatialLabs Unreal Plug-inO-
Acer SpatialLabs Unity Plug-inO-
Acer OpenXR RuntimeO-
Acer SteamVR BridgeO-
Acer SpatialLabs TrueGame-O
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Acer SpatialLabs PlayerOO
Developer site & Developer SupportO-
+Acer Aspire 3D 15 SpatialLabs Edition +
+Acer SpatialLabs View Pro +
+Acer SpatialLabs View Pro 27
Predator Helios 3D 15 SpatialLabs Edition +
+Predator Helios 300 SpatialLabs Edition +
+Acer Nitro SpatialLabs View +
+Predator SpatialLabs View 27
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Get Acer SpatialLabs Experience Center: Your Gateway to 3D

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Acer SpatialLabs™ Eyes 3D Camera

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Capture and share in 3D with the Acer SpatialLabs Eyes 3D Camera—immersive and intuitive.

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Effortless 3D Content Editing and Presentation

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Enhance your 3D creations using Acer SpatialLabs Player, included with all Acer SpatialLabs devices. Easily trim videos, zoom with pinch gestures, and capture screenshots in 3D mode. Enjoy immersive 3D content with effortless control to refine your work and create stunning slideshows that showcase your captured moments.

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Professional 3D Streaming and Preview with SpatialLabs Player

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Connect the Acer SpatialLabs Eyes 3D Camera with SpatialLabs devices harnessed the power of SpatialLabs Player 3.0 for real-time 3D previews, seamless streaming, and easy recording. Your SpatialLabs displays and notebooks can be your extended monitor and recording device while the SpatialLabs Eyes capturing stunning 8K video. Perfect solution for 3D video content creators.

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Engage with 3D Video Calls to Create More Meaningful Connections

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Transform video calls with immersive 3D using the Acer SpatialLabs video call widget. Whether on Teams, Zoom, Google Meet and more, showcase products, prototypes, or presentations with true depth and realism. Engage in more dynamic, lifelike discussions—all powered by the Acer SpatialLabs Eyes 3D Camera.

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Create 3D Content for VR, AR, and More

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Take your 3D content beyond the screen with Acer SpatialLabs Eyes. Generate side-by-side 3D visuals for VR headsets like Apple Vision Pro and Meta Quest, or showcase immersive depth on 3D projectors and monitors—so your vision is not just seen, but truly experienced.

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0000000000000000000000000000000000000000..b93c38d4a4d6fea98cda6ce65d153544cf53c6a1 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/asus_spatial_vision_technology_2023/extracted_text.md @@ -0,0 +1,417 @@ +# ASUS Spatial Vision – Let your creativity shine in 3D | ASUS Global + +- Vendor: ASUS +- Product: Spatial Vision +- Material date: 2023 +- Official source: https://www.asus.com/content/asus-spatial-vision-technology/ +- Archived HTML: index.html + +## Extracted text + +ASUS Spatial Vision – Let your creativity shine in 3D | ASUS Global + +Skip to content + +Accessibility help + +Gaming + +Business + +Environment + +AI + +Mobile / Handhelds + +Laptops + +Displays / Desktops + +Motherboards / Components + +Networking / IoT / Servers + +Accessories + +Support + +ZenTalk + +Drivers and manuals + +Check repair status + +MyASUS + +Customer’s request on personal data + +My Account + +Gaming + +ROG - Republic of Gamers + +TUF Gaming + +Business + +Environment + +Support + +ASUS Spatial Vision + +World’s first glasses-free 3D OLED technology + +ASUS Spatial Vision technology bridges two worlds to bring you the world’s first glasses-free 3D OLED autostereoscopic laptop displays1, with built-in eye-tracking. Incorporating breakthrough optical and real-time rendering technology, along with exclusive software tools, Spatial Vision delivers an unforgettable 3D experience that will change the way you create, forever. + +Watch Now + +3D, without the hassle + +Now you can experience immersive 3D on your laptop – without having to wear special glasses! Selected ASUS creator laptops include groundbreaking next-generation autostereoscopic 3D OLED technology, which we call ASUS Spatial Vision technology. + +Glasses-free stereo 3D + +Experience stereoscopic 3D images without wearing a headset or glasses. + +Best-in-class visuals with minimal crosstalk2 + +Eye-tracking system and OLED advantages enable full 3D look-around. + +2D/3D immersive switch + +Switch smoothly between 2D and 3D visualization with one click. + +Recommended 3D OLED laptop + +Vivobook Pro 16X 3D OLED + +Vivobook Pro 16X 3D OLED has all the power you need to create with fun, delivering maximum productivity and entertainment to get for everyday creativity. + +Learn more + +ProArt Studiobook 16 3D OLED + +The new ProArt Studiobook 16 3D OLED is a maxed-out workstation that exceeds all expectations and goes far beyond the extraordinary. It’s the ideal companion for content creators, in the studio or on the go. + +Learn more + +ASUS 3D OLED + +Bringing your creations to life + +At the heart of ASUS Spatial Vision are our unique, specially designed ASUS 3D OLED displays. We chose OLED as it delivers benefits that other displays can’t achieve, such as high contrast, deep blacks, ultravivid colors and, importantly, ultrafast refresh rates and response times. + +1,000,000:1 + +Contrast ratio for more vivid 3D objects + +0.2 ms + +Ultra-fast response time can reduce crosstalk + +120 Hz + +Refresh Rate for smooth 3D Experience + +Ready to Get Immersed in 3D? + +HOW IT WORKS + +Making the magic happen + +ASUS Spatial Vision technology adds specially crafted optical layers to the surface of an OLED display. It’s like a high-tech glass sandwich that’s bonded to the OLED panel with optical resin. The ‘filling’ consists of a lenticular lens layer that directs the stereo images separately to each eye, and a switchable liquid crystal layer that lets you turn the 3D effect on and off. + +OLED panel + +Optical resin + +Glass panel + +2D/3D liquid crystal switching layer + +Lenticular lens layer + +Glass front panel with AR coating + +EYE-TRACKING TECHNOLOGY + +See 3D from any position + +ASUS Spatial Vision includes an eye-tracking camera system that allows you to see 3D images from different viewing positions, for a truly immersive 3D experience. The dual cameras continuously detect the precise position of each of your eyes, and use this information to perform real-time image rendering and weaving to create a 3D image that automatically adjusts as you move your head around. + +Position B + +Position A + +Eye Tracking + +FOV + +POV + +Position A + +Position B + +Right + +Left + +Right + +AUTOSTEREOSCOPY + +Lenticular lens technology + +The OLED display is covered with a specially crafted lenticular lens, which ensures that separate stereo images are sent to your left and right eyes. This lets you see stereoscopic 3D visuals with your naked eyes, an effect known as autostereoscopy. + +USER SCENARIOS + +Let your creativity shine in 3D + +ASUS Spatial Vision technology offers new and enhanced experiences for creativity, entertainment and more — such as visualization, 3D design, video streaming and gaming. It also offers great potential for rapidly-growing metaverse applications. + +VISUALIZATION + +Demonstration + +Presentation + +3D DESIGN + +Content creation + +Product design + +GAMING + +3D games, VR games + +VIDEO + +3D movies + +METAVERSE + +Virtual meetings, avatars + +COMPATIBILITY + +Works with everything + +To maximize compatibility, now and in the future, ASUS Spatial Vision technology supports a wide range of creative software and file formats. It also supports OpenXR, the latest open standard that is embraced by leading brands and industries. + +Learn more about OpenXR + +Industrial standards & platforms + +Support + +Most popular 3D applications + +Support + +Most 3D file formats + +Support + +APPS + +Explore the possibilities with ASUS Spatial Vision Hub + +ASUS Spatial Vision Hub software brings you a superb collection of ASUS apps and features to enhance your 3D experiences, including Model Viewer, Player, Photo Viewer, and Connector. + +ASUS Spatial Vision Hub + +Model Viewer + +Player + +Photo Viewer + +Connector + +Model Viewer + +Easily view your 3D project, or showcase your creations to your customers. + +Player + +Enjoy amazingly smooth visual experiences while watching 3D movies or other 3D videos, in any format. + +Photo Viewer + +Easily convert your side-by-side stereo photos (shot with a 180° camera) into stereoscopic 3D images. + +Connector + +Download the plug-in and use it with various 3D apps and tools, so you can easily view any project in 3D. + +Interested in ASUS Spatial Vision technology? + +Contact us + +As of November 15, 2022 based on internal ASUS market analysis, comparing ASUS Spatial Vision technology to competing laptops with an autostereoscopic 3D display, ASUS is the first to use an OLED display with this technology. + +Based on internal tests, the autostereoscopic 3D effect might vary between different users. There is still a possibility of users experiencing dizziness or crosstalk due to other reasons, and this varies according to the individual. + +Shop and Learn + +Mobile / Handhelds + +Phones + +Tablets + +Gaming Handhelds + +Wearable & Healthcare + +Healthcare Solutions + +Accessories + +Laptops + +For Home + +For Work + +For Creators + +For Students + +For Gaming + +Accessories + +Software + +Technology / Innovations + +AI PC + +Copilot+ PC + +Displays / Desktops + +Monitors + +Direct View LED + +Glasses + +Projectors + +All-in-One PCs + +Tower PCs + +Gaming Tower PCs + +NUCs + +Mini PCs + +Workstations + +Accessories + +Software + +Warranty + +Motherboards / Components + +Motherboards + +Graphics Cards + +Cases + +Cooling + +Power Supply Units + +Optical Drives + +Data Storage + +External Graphics Docks + +AI Accelerator + +Single Board Computers + +Sound Cards + +Software + +Networking / IoT / Servers + +Routers + +Whole Home Mesh Systems + +Wireless Adapters + +Range Extenders + +Wired Solutions + +Business Network Solutions + +Intelligent Robots + +AIoT & Industrial Solutions + +Desktop AI supercomputer + +Servers + +Smart Home + +Accessories + +Keyboards + +Mice and Mouse Pads + +Headsets and Audio + +Streaming Kits + +Apparel Bags and Gear + +Cases and Protection + +Adapters and Chargers + +Wireless Charger + +Docks Dongles and Cable + +Power Banks + +Stylus + +Controller + +Gimbal + +Gaming IP + +Global / English + +©ASUSTeK Computer Inc. 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Click here! + +Video unavailable + +This content is blocked because advertising cookies have been declined. Please accept cookies in your privacy settings to view this video. + +Change your privacy settings here. + +Back to top + +Join us + +EN | FR + +Our workDNEG VFXDNEG AnimationDNEG IXPDNEG ArtDNEG Technology + +ContactAwardsAbout usNews hub + +Back to top + +Join us + +ReDefine + +BRAHMA AI + +Prime Focus Studios + +Prime Focus Limited + +EN | FR + +Follow Us + +DNEG 2026. 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From 2D to 3D: Behind The Stereo Conversion of 'Godzilla x Kong: The New Empire'!

Learn how our stereo team brought the titans to new heights (and depths!).

12.06.24
Uncover how our Stereo Conversion team turned 'Godzilla x Kong: The New Empire' into an immersive visual extravaganza!

Get a behind-the-scenes look at how our amazing DNEG Stereo team brought the MonsterVerse’s latest instalment to new heights (and depths) with this ‘From 2D to 3D’ featurette!

+

From Kong’s giant hand emerging from Hollow Earth to the zero-gravity fight scene, get a closer look at the creative and technical process here:

+

Want even more insights into our work on Godzilla x Kong: The New Empire? Click here!

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https://www.foundry.com/products/ocula +- Archived HTML: index.html + +## Extracted text + +Ocula® | Stereoscopic Images and Effects + +Menu Home + +Products + +Nuke Hiero Modo Mari Katana Cara VR Flix Ocula Colorway Production Collective Trial & Buy + +Community + +Support + +Learn + +Insights Hub + +About Us + +About Foundry News and Awards Events Careers Contact us Find Reseller + +Ocula Ocula + +About Ocula for Nuke + +Product Info + +Product Info Back + +Features Tech Specs + +Learn Ocula + +Learn Ocula Back + +Installation Guide Release Notes User Guide Tutorials + +Licensing + +Download + +Ocula - Stereoscopic Imagery Plug-ins for Nuke + +Contact sales + +Produce High-quality Stereo VFX Faster + +Ocula® is a unique and powerful collection of 16 workflow plug-in tools for Nuke that help take the headache out of stereo post-production. + +Fix common stereoscopic problems + +Ocula’s fine-level control makes producing high-quality stereo VFX faster and easier, with the ability to correct color and focus, automatically correct alignment, retime stereo views and more. + +Create sharp and accurate images + +Image-building tools match original footage without depth tearing, while additional tools enable you to calculate clean and stable stereo disparity without depth roll-off. + +Turn around shots in less time + +Built-in automation allows corrections to be scripted for offline work, while advanced GPU acceleration speeds up interactive processing, with the same results as the CPU. + +Who's Using Ocula + +Learn why our customers love using Ocula for stereo post-production on major feature films and more. + +See all the new features + +Previous Next + +FILM. + +Patricia Llaguno — Lead Compositor, Framestore + +Foundry always offer excellent product support and they maintain an active relationship with their software users to deliver outstanding software. + +FILM. + +Henning Glabbart — 2D Supervisor/Deputy Head of 2D, Milk + +When it comes to stereo, Ocula is the go-to software. It’s super efficient and gets better with every new version. Plus the licensing model is really flexible. + +FILM. + +Alicia Aguilera — Lead Compositor, Double Negative + +Foundry’s commitment to development and support of their software, and to the vfx industry, is evident. As a compositor, I do not see another package on the horizon that offers or will offer the depth of capabilities in Nuke. + +User guides & release notes + +Access help & release notes + +Ocula tutorials + +Develop your Ocula skills with this series of free training videos that walk through key features and best practices. + +Show me more + +Vibrant community + +Ask questions and engage with our knowledgeable community anytime you need feedback or a fresh set of eyes on the situation. + +Go to community + +Buy Ocula + +If you would like to purchase this product please contact our sales team. + +Contact sales + +Home The Foundry Visionmongers Limited is registered in England and Wales. + +Help + +Careers Find a reseller Licensing help Product Downloads Sitemap Students and Educators User guides + +Legal information + +Candidate privacy notice Cookie policy End User License Agreements ENVIRONMENT POLICY ESG Mission Statement License Compliance License transfer policy Modern Slavery Act Statement Privacy notice Privacy rights request form Website terms and conditions diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/foundry_ocula_product_technology/image_manifest.csv b/2d_to_3d_verified_product_technical_reports/official_web_archives/foundry_ocula_product_technology/image_manifest.csv new file mode 100644 index 0000000000000000000000000000000000000000..2d82f8c45f352d8981367355b92e55d43bc71035 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/foundry_ocula_product_technology/image_manifest.csv @@ -0,0 +1,14 @@ +local_file,alt_text,source_url,bytes +assets/01_Ocula_software_being_used_in_film_for_stereo_0a48f4f8d2.jpg,Ocula software being used in film for stereo,https://www.foundry.com/sites/default/files/styles/scb_image_left_375_x_365/public/2017-01/intro_module_ocula.jpg?itok=Fu857GIb,41343 +assets/02_Ocula_icon_36c8f2b7d3.png,Ocula icon,https://www.foundry.com/sites/default/files/styles/logo_sm/public/media/image/2026-06/iconoculargbyellow-01.png?itok=Lmf7ysJP,1309 +assets/03_Ocula_icon_0c0f04f328.png,Ocula icon,https://www.foundry.com/sites/default/files/styles/logo_sm/public/media/image/2026-06/iconoculargbyellow-01@2x.png?itok=Lmf7ysJP,2691 +assets/04_Animal_logic_logo_-_they_love_the_360_plug-in_fo_fb21c680c7.png,Animal logic logo - they love the 360 plug-in for Nuke,https://www.foundry.com/sites/default/files/styles/logo/public/logo_gallery/2016-12/Logos-proteus_animka-logic.png?itok=H7e5PQsn,4762 +assets/05_Double_negative_have_been_using_Ocula_for_stereo_18e7e980f9.png,Double negative have been using Ocula for stereoscopic post productions in film,https://www.foundry.com/sites/default/files/styles/logo/public/paragraphs/logo-gallery/Logos-Dneg_1.png?itok=EHZ4NApQ,4070 +assets/06_Milk_are_big_fans_of_the_Ocula_software_a_plug-i_49fb77d5bf.png,"Milk are big fans of the Ocula software, a plug-in for Nuke",https://www.foundry.com/sites/default/files/styles/logo/public/logo_gallery/2016-12/Logos-proteus_milk_0.png?itok=ZEy5V9P2,4403 +assets/07_Pixomondo_are_proud_Ocula_users_02651b81c6.png,Pixomondo are proud Ocula users,https://www.foundry.com/sites/default/files/styles/logo/public/paragraphs/logo-gallery/Logos-proteus_pixomondo_0.png?itok=6X8CAbJY,4771 +DOWNLOAD_FAILED,"Patricia Llaguno Lead Compositor, Framestore",https://www.foundry.com/sites/default/files/paragraph/carousel_slide/Patricia_2.jpg ,404 Client Error: Not Found for url: https://www.foundry.com/sites/default/files/paragraph/carousel_slide/Patricia_2.jpg%20 +DOWNLOAD_FAILED,"Henning Glabbart 2D Supervisor/Deputy Head of 2D, Milk",https://www.foundry.com/sites/default/files/paragraph/carousel_slide/Henning.jpg ,404 Client Error: Not Found for url: https://www.foundry.com/sites/default/files/paragraph/carousel_slide/Henning.jpg%20 +DOWNLOAD_FAILED,"Alicia Aguilera Lead Compositor, Double Negative",https://www.foundry.com/sites/default/files/paragraph/carousel_slide/Alicia_2.jpg ,404 Client Error: Not Found for url: https://www.foundry.com/sites/default/files/paragraph/carousel_slide/Alicia_2.jpg%20 +assets/11_Get_online_help_and_user_guides_for_Ocula_the_st_294d14a3ea.png,Get online help and user guides for Ocula the stereoscopic plug-in for Nuke,https://www.foundry.com/sites/default/files/styles/ad_image/public/2017-02/OCULA_userguides_asset.png?itok=12ClviR_,116226 +assets/12_Get_going_with_free_online_tutorials_from_Foundr_3e903d36e8.jpg,"Get going with free online tutorials from Foundry for Ocula, 360 plug-in for Nuke",https://www.foundry.com/sites/default/files/2017-01/OCULA-Learning-packages-module.jpg,307794 +assets/13_Find_out_what_you_need_to_know_from_experts_in_t_48f6d33db4.png,Find out what you need to know from experts in the community answering questions and providing free training and support,https://www.foundry.com/sites/default/files/2016-12/NUKe-VibrantCommunity-box-01_2.png,258802 diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/foundry_ocula_product_technology/index.html b/2d_to_3d_verified_product_technical_reports/official_web_archives/foundry_ocula_product_technology/index.html new file mode 100644 index 0000000000000000000000000000000000000000..9bad0cf530364a429267369ea3f4f3f96e59b2d4 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/foundry_ocula_product_technology/index.html @@ -0,0 +1,3 @@ +Ocula® | Stereoscopic Images and Effects

Ocula - Stereoscopic Imagery Plug-ins for Nuke

Ocula software being used in film for stereo

Produce High-quality Stereo VFX Faster

Ocula® is a unique and powerful collection of 16 workflow plug-in tools for Nuke that help take the headache out of stereo post-production.

Fix common stereoscopic problems

Ocula’s fine-level control makes producing high-quality stereo VFX faster and easier, with the ability to correct color and focus, automatically correct alignment, retime stereo views and more.

Create sharp and accurate images

Image-building tools match original footage without depth tearing, while additional tools enable you to calculate clean and stable stereo disparity without depth roll-off.

Turn around shots in less time

Built-in automation allows corrections to be scripted for offline work, while advanced GPU acceleration speeds up interactive processing, with the same results as the CPU.

Who's Using Ocula

Learn why our customers love using Ocula for stereo post-production on major feature films and more.

See all the new features
  • Animal logic logo - they love the 360 plug-in for Nuke
  • Double negative have been using Ocula for stereoscopic post productions in film
  • Milk are big fans of the Ocula software, a plug-in for Nuke
  • Pixomondo are proud Ocula users
Patricia Llaguno Lead Compositor, Framestore

FILM.

Patricia Llaguno — Lead Compositor, Framestore

Foundry always offer excellent product support and they maintain an active relationship with their software users to deliver outstanding software.

Henning Glabbart 2D Supervisor/Deputy Head of 2D, Milk

FILM.

Henning Glabbart — 2D Supervisor/Deputy Head of 2D, Milk

When it comes to stereo, Ocula is the go-to software. It’s super efficient and gets better with every new version. Plus the licensing model is really flexible.

Alicia Aguilera Lead Compositor, Double Negative

FILM.

Alicia Aguilera — Lead Compositor, Double Negative

Foundry’s commitment to development and support of their software, and to the vfx industry, is evident. As a compositor, I do not see another package on the horizon that offers or will offer the depth of capabilities in Nuke.

User guides & release notes

Get online help and user guides for Ocula the stereoscopic plug-in for Nuke Access help & release notes

Ocula tutorials

Develop your Ocula skills with this series of free training videos that walk through key features and best practices.

Show me more
Get going with free online tutorials from Foundry for Ocula, 360 plug-in for Nuke

Vibrant community

Ask questions and engage with our knowledgeable community anytime you need feedback or a fresh set of eyes on the situation.

Go to community
Find out what you need to know from experts in the community answering questions and providing free training and support

Buy Ocula

If you would like to purchase this product please contact our sales team.

Contact sales
 
 
 
 
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+- Product: Immersity AI 4.0 +- Material date: 2025-03-26 +- Official source: https://immersity.ai/news-articles/immersity-4-0 +- Archived HTML: index.html + +## Extracted text + +Immersity Now Reveals Hidden Details | Newsroom + +Use Cases + +immersity Devices + +Spatial Intelligence + +About Leia Inc. + +News + +Update + +Mar 26, 2025 + +Immersity Now Reveals Hidden Details in Any Digital Image + +New 4.0 Release Creates Deeper, Smoother Immersive Experiences from 2D Photos + +‍‍ + +‍MENLO PARK, Calif. — March 26, 2025 — Leia Inc., the global technology platform providing immersive experiences on any device, has unveiled Immersity 4.0. With Immersity, users can add depth and motion to their images and control perspectives via zooming, panning, and tracking. The 4.0 update uses Neural Depth Rendering to fill in previously obscured details and provide greater flexibility when changing viewpoints within shots. + +‍ + +Immersity 4.0 now intelligently processes an image into distinct layers, creating smoother camera transitions and a more natural sense of depth. The result is a more immersive scene, ideal for artists who want to add a new dimension to their digital artwork or amateur photographers who wish to add flair to their photos. + +‍ + +"Depth is essential to how we perceive and interact with the world, which is why Immersity is such a powerful tool for professionals and amateurs alike," said Fabio Esposito, CEO at Leia Inc. "Immersity 4.0’s refined depth rendering adds a more realistic feel to digital images, giving viewers a feeling like they are inside the scene experiencing a different time and place, an invaluable way to capture the attention of friends, family and potential customers online." + +‍ + +Left: Without | Right: With Neural Depth Rendering + +Benefits of Immersity 4.0‍ + +For Content Creators and Digital Artists: Immersity 4.0 brings a new level of depth and dimension to creative work, allowing for more dynamic storytelling and thumb-stopping social media content. The enhanced layer separation and individual layer rendering provide artists with new creative possibilities. + +For Everyday Consumers: Immersity 4.0 offers a more natural and dynamic viewing experience, making images more engaging. Users can share and revisit memories in a new way, discovering hidden details and experiencing greater immersion. + +‍How Immersity 4.0 Works + +Immersity 4.0 uses a Neural Depth Rendering process that separates an image’s foreground and background into distinct layers and then renders them individually, creating a new viewpoint and introducing a more realistic motion effect. By refining layer separation and processing, the technology ensures fewer distortions and more angles, leading to a more fluid and consistent viewing experience — all without requiring additional input from the user. + +‍Interconnected Technology‍ + +Following the recently added support for Apple Music's Album Motion artwork exports, Immersity 4.0 is another step for Leia Inc. to bring immersive and enjoyable experiences to everyone, whether they use a traditional display or a 2D-to-3D switchable device. This commitment to accessibility and reaching a broad user base has helped fuel impressive growth for Immersity, which now boasts over five million users. + +‍Pricing and Availability + +Immersity offers flexible pricing plans to suit every need. Users can get started for free with watermarked conversions and limited resolution or upgrade to monthly subscription plans for enhanced features like 4K resolution and commercial use rights. + +‍ + +Image plans start at $4.99/month for 500 credits and go up to $14.99/month for 1,700 credits. Video plans range from $29.99/month for 3,300 credits to $99.99/month for 20,000 credits. Visit the Immersity pricing page for detailed plan information or to subscribe. + +Keep Reading + +View All + +Articles + +Jun 25, 2026 + +AWE 2026: The Expanding Reach of Immersive Experiences + +Articles + +Feb 19, 2026 + +The Next Differentiation Layer in Mobile: Immersive Experiences + +Articles + +Jan 23, 2026 + +CES 2026: What We Saw, What’s Shifting, and Where Immersive Experiences Are Headed + +Webinars + +Jan 1, 2026 + +Immersive Experiences on Any Device + +Join Our Newsletter + +Stay up to date with the latest news and updates. + +Thanks for joining our newsletter + +Something went wrong while submitting the form. + +Immersity + +Use Cases + +immersity Devices + +Spatial Intelligence + +About Leia Inc. + +Platform + +Software + +Hardware + +SDK + +FAQ + +Resources + +Company + +Careers + +Newsroom + +Contact + +Apps + +For Mobile + +For Web + +Go to Web App + +Copyright © 2026 Leia Inc. - Immersity + +Privacy PolicyTerms & ConditionsCookies diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/immersity_4_product_release_2025/image_manifest.csv b/2d_to_3d_verified_product_technical_reports/official_web_archives/immersity_4_product_release_2025/image_manifest.csv new file mode 100644 index 0000000000000000000000000000000000000000..c6ca012e5c38deb0694e1760474058abd2026043 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/immersity_4_product_release_2025/image_manifest.csv @@ -0,0 +1,9 @@ +local_file,alt_text,source_url,bytes +assets/01_og_image_3b3317e999.png,og:image,https://cdn.prod.website-files.com/6852eeb9878f79ec6225a129/69418442eed2e7f6be81f9df_IM4.0_Newsletter_250321.png,519791 +assets/02_image_9f640d9ed4.svg,,https://cdn.prod.website-files.com/684b15b38863077bd3c46420/684b15b38863077bd3c46438_placeholder.svg,403 +assets/03_image_d606b7a41a.jpg,,https://cdn.prod.website-files.com/6852eeb9878f79ec6225a129/687fc395092f289835e0dbd8_67e3f0938e6db9e26f1cf6fb_67e2f2271f5ae128b6bbad95_67e2d6ab6cf248685d626a1a_Comparison.jpeg,144365 +assets/04_image_4a307c821d.jpg,,https://cdn.prod.website-files.com/6852eeb9878f79ec6225a129/6a3d845cf65fc58e2995d388_JPEG%20image-429E-B936-3E-0.JPG,467495 +assets/05_image_accbbd4c1e.png,,https://cdn.prod.website-files.com/6852eeb9878f79ec6225a129/699dbf5320b89ff8db29d922_SocialMedia_Phone_1.png,607750 +assets/06_image_29148429fb.png,,https://cdn.prod.website-files.com/6852eeb9878f79ec6225a129/698a30bb8a93deac1f0d030c_CES%202026_%20Team%20Photo.png,2010267 +assets/07_image_bd7836f5c1.jpg,,https://cdn.prod.website-files.com/6852eeb9878f79ec6225a129/698f2a150d710816a513e383_Inside%20Immersity_Fabio%20Esposito.jpg,780343 +assets/08_image_787346f83f.avif,,https://cdn.prod.website-files.com/684b15b38863077bd3c46420/6852cfa7cf1686c477f10423_im-bg-wave.avif,4639 diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/immersity_4_product_release_2025/index.html b/2d_to_3d_verified_product_technical_reports/official_web_archives/immersity_4_product_release_2025/index.html new file mode 100644 index 0000000000000000000000000000000000000000..1a4697728b4d6ab6dc3af04a762e5c67ee6df441 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/immersity_4_product_release_2025/index.html @@ -0,0 +1,817 @@ + +Immersity Now Reveals Hidden Details | Newsroom + + + + +
+ + +
+ +
Update
Mar 26, 2025

Immersity Now Reveals Hidden Details in Any Digital Image

New 4.0 Release Creates Deeper, Smoother Immersive Experiences from 2D Photos

MENLO PARK, Calif. — March 26, 2025 — Leia Inc., the global technology platform providing immersive experiences on any device, has unveiled Immersity 4.0. With Immersity, users can add depth and motion to their images and control perspectives via zooming, panning, and tracking. The 4.0 update uses Neural Depth Rendering to fill in previously obscured details and provide greater flexibility when changing viewpoints within shots.

Immersity 4.0 now intelligently processes an image into distinct layers, creating smoother camera transitions and a more natural sense of depth. The result is a more immersive scene, ideal for artists who want to add a new dimension to their digital artwork or amateur photographers who wish to add flair to their photos.

"Depth is essential to how we perceive and interact with the world, which is why Immersity is such a powerful tool for professionals and amateurs alike," said Fabio Esposito, CEO at Leia Inc. "Immersity 4.0’s refined depth rendering adds a more realistic feel to digital images, giving viewers a feeling like they are inside the scene experiencing a different time and place, an invaluable way to capture the attention of friends, family and potential customers online."
Left: Without | Right: With Neural Depth Rendering


Benefits of Immersity 4.0

  • For Content Creators and Digital Artists: Immersity 4.0 brings a new level of depth and dimension to creative work, allowing for more dynamic storytelling and thumb-stopping social media content. The enhanced layer separation and individual layer rendering provide artists with new creative possibilities.
  • For Everyday Consumers: Immersity 4.0 offers a more natural and dynamic viewing experience, making images more engaging. Users can share and revisit memories in a new way, discovering hidden details and experiencing greater immersion.

How Immersity 4.0 Works

Immersity 4.0 uses a Neural Depth Rendering process that separates an image’s foreground and background into distinct layers and then renders them individually, creating a new viewpoint and introducing a more realistic motion effect. By refining layer separation and processing, the technology ensures fewer distortions and more angles, leading to a more fluid and consistent viewing experience — all without requiring additional input from the user.

Interconnected Technology

Following the recently added support for Apple Music's Album Motion artwork exports, Immersity 4.0 is another step for Leia Inc. to bring immersive and enjoyable experiences to everyone, whether they use a traditional display or a 2D-to-3D switchable device. This commitment to accessibility and reaching a broad user base has helped fuel impressive growth for Immersity, which now boasts over five million users.

Pricing and Availability

Immersity offers flexible pricing plans to suit every need. Users can get started for free with watermarked conversions and limited resolution or upgrade to monthly subscription plans for enhanced features like 4K resolution and commercial use rights. 

Image plans start at $4.99/month for 500 credits and go up to $14.99/month for 1,700 credits. Video plans range from $29.99/month for 3,300 credits to $99.99/month for 20,000 credits. Visit the Immersity pricing page for detailed plan information or to subscribe.

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+Immersity AI — New 2D-to-3D Video Conversion Tool Released Today Powered by Next-Gen Neural Depth Engine + +Big news today for our community! LeiaPix is now Immersity AI, a new platform for 2D-to-3D conversion that can now transform 2D images and videos into immersive 3D experiences. + +We’ve been building a new neural network behind the scenes for over a year. This update is pretty amazing because our Neural Depth Engine adds much more depth and motion than previously, featuring higher definition and speed in converting images and video from 2D to 3D. + +Enhanced Capabilities for Depth Mapping + +What makes Leia’s Neural Depth Engine so special? + +Our engine is at the heart of Immersity AI. Without getting too technical (but if you want to geek out, here’s our technical backgrounder), its continuous training and fine-tuning of 3D captures gives it the ability to create the world’s most accurate depth maps in seconds. If you want to learn more about the breadth of Neural Depth technology at play, we can nerd out more on this in a future blog post. + +Why should I care about depth maps? + +Depth maps are crucial for unlocking the third dimension in digital imaging, providing essential information about the spatial relationships within a scene. This depth information enables many transformative applications such as in-picture 3D motion, 2D-to-3D conversion, and photorealistic enhancements. + +We perceive depth through the slight differences between what each eye sees, and even minor discrepancies can disrupt the 3D illusion, making the scene feel unnatural. So, the accuracy of a depth map is critical — it ensures that the rendering looks good and feels right to the viewer. And as we begin converting 2D video into 3D, depth map accuracy only becomes more crucial. + +With Immersity AI’s new video converter, you can add more spatial intrigue to travel videos, digital animation, and more. It’s sure to leave people scratching their heads about how you created it. And if you have the means, we highly recommend checking out the videos on an XR device like Meta Quest 3 or Apple Vision Pro. + +So, want to give it a go? Try it now using a few easy steps! + +Import an image or video into Immersity AI: You can drag and drop the file or upload it. + +Choose your video settings: Immersity AI offers many different options to bring your creation to life, such as animation style, amount of motion, animation length, focus point, and edge dilation. Experiment and have fun with it! + +Begin conversion: Once you’re satisfied with your video, now’s the time to begin converting it from 2D to 3D. + +‍ + +View, download, and share your creation: Now that you have your 3D video, you can download and share it with your friends and family. We love seeing what you create. + +If you want to dive even deeper into more complex creations, there’s a lot of good info in our Immersity AI tutorials. + +We’ve got new features already in the works, including an app for iOS and Android users, and new options to share your creations on social media. An XR app and enhanced API for businesses are also coming later this year, so stay tuned for more information. + +If you post any creations on social media, please feel free to use the #immersityAI hashtag and join our Discord server if you’d like to give us your thoughts in greater detail. + +Immersity AI marks a new chapter for us and we can’t wait to share more! + +Keep Reading + +View All + +Articles + +Jun 25, 2026 + +AWE 2026: The Expanding Reach of Immersive Experiences + +Articles + +Feb 19, 2026 + +The Next Differentiation Layer in Mobile: Immersive Experiences + +Articles + +Jan 23, 2026 + +CES 2026: What We Saw, What’s Shifting, and Where Immersive Experiences Are Headed + +Webinars + +Jan 1, 2026 + +Immersive Experiences on Any Device + +Join Our Newsletter + +Stay up to date with the latest news and updates. + +Thanks for joining our newsletter + +Something went wrong while submitting the form. + +Immersity + +Use Cases + +immersity Devices + +Spatial Intelligence + +About Leia Inc. + +Platform + +Software + +Hardware + +SDK + +FAQ + +Resources + +Company + +Careers + +Newsroom + +Contact + +Apps + +For Mobile + +For Web + +Go to Web App + +Copyright © 2026 Leia Inc. - Immersity + +Privacy PolicyTerms & ConditionsCookies diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/immersity_product_launch_technical_overview_2024/image_manifest.csv b/2d_to_3d_verified_product_technical_reports/official_web_archives/immersity_product_launch_technical_overview_2024/image_manifest.csv new file mode 100644 index 0000000000000000000000000000000000000000..2b51068f4ed914d8ba6cbf4bc042eb8ac58d7f1f --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/immersity_product_launch_technical_overview_2024/image_manifest.csv @@ -0,0 +1,9 @@ +local_file,alt_text,source_url,bytes +assets/01_og_image_9c8add9f60.png,og:image,https://cdn.prod.website-files.com/6852eeb9878f79ec6225a129/687fc1e0bb824135a5806708_66db06eb97593d241448d0f0_New%2520version.png,3198952 +assets/02_image_9f640d9ed4.svg,,https://cdn.prod.website-files.com/684b15b38863077bd3c46420/684b15b38863077bd3c46438_placeholder.svg,403 +assets/03_image_f483e057ee.jpg,,https://cdn.prod.website-files.com/6852eeb9878f79ec6225a129/687fc1dfbb824135a58066e9_66daf238dd0f55d13a46f2a7_664e31e475053ae23c98497d_BLOG_240521_IAI%252520Depth%252520Map.jpeg,486616 +assets/04_image_4a307c821d.jpg,,https://cdn.prod.website-files.com/6852eeb9878f79ec6225a129/6a3d845cf65fc58e2995d388_JPEG%20image-429E-B936-3E-0.JPG,467495 +assets/05_image_accbbd4c1e.png,,https://cdn.prod.website-files.com/6852eeb9878f79ec6225a129/699dbf5320b89ff8db29d922_SocialMedia_Phone_1.png,607750 +assets/06_image_29148429fb.png,,https://cdn.prod.website-files.com/6852eeb9878f79ec6225a129/698a30bb8a93deac1f0d030c_CES%202026_%20Team%20Photo.png,2010267 +assets/07_image_bd7836f5c1.jpg,,https://cdn.prod.website-files.com/6852eeb9878f79ec6225a129/698f2a150d710816a513e383_Inside%20Immersity_Fabio%20Esposito.jpg,780343 +assets/08_image_787346f83f.avif,,https://cdn.prod.website-files.com/684b15b38863077bd3c46420/6852cfa7cf1686c477f10423_im-bg-wave.avif,4639 diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/immersity_product_launch_technical_overview_2024/index.html b/2d_to_3d_verified_product_technical_reports/official_web_archives/immersity_product_launch_technical_overview_2024/index.html new file mode 100644 index 0000000000000000000000000000000000000000..30ee35611f722e9e149dc4342f6ceb13bc7996f1 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/immersity_product_launch_technical_overview_2024/index.html @@ -0,0 +1,816 @@ +Introducing Immersity AI! | Newsroom + + + + +
+ + +
+ +
News
May 22, 2024

introducing-immersity-ai

Immersity AI — New 2D-to-3D Video Conversion Tool Released Today Powered by Next-Gen Neural Depth Engine

Big news today for our community! LeiaPix is now Immersity AI, a new platform for 2D-to-3D conversion that can now transform 2D images and videos into immersive 3D experiences.

We’ve been building a new neural network behind the scenes for over a year. This update is pretty amazing because our Neural Depth Engine adds much more depth and motion than previously, featuring higher definition and speed in converting images and video from 2D to 3D.

Enhanced Capabilities for Depth Mapping

What makes Leia’s Neural Depth Engine so special?

Our engine is at the heart of Immersity AI. Without getting too technical (but if you want to geek out, here’s our technical backgrounder), its continuous training and fine-tuning of 3D captures gives it the ability to create the world’s most accurate depth maps in seconds. If you want to learn more about the breadth of Neural Depth technology at play, we can nerd out more on this in a future blog post.

Why should I care about depth maps?

Depth maps are crucial for unlocking the third dimension in digital imaging, providing essential information about the spatial relationships within a scene. This depth information enables many transformative applications such as in-picture 3D motion, 2D-to-3D conversion, and photorealistic enhancements.

We perceive depth through the slight differences between what each eye sees, and even minor discrepancies can disrupt the 3D illusion, making the scene feel unnatural. So, the accuracy of a depth map is critical — it ensures that the rendering looks good and feels right to the viewer. And as we begin converting 2D video into 3D, depth map accuracy only becomes more crucial.

With Immersity AI’s new video converter, you can add more spatial intrigue to travel videos, digital animation, and more. It’s sure to leave people scratching their heads about how you created it. And if you have the means, we highly recommend checking out the videos on an XR device like Meta Quest 3 or Apple Vision Pro.

So, want to give it a go? Try it now using a few easy steps!

  1. Import an image or video into Immersity AI: You can drag and drop the file or upload it.
  1. Choose your video settings: Immersity AI offers many different options to bring your creation to life, such as animation style, amount of motion, animation length, focus point, and edge dilation. Experiment and have fun with it!
  1. Begin conversion: Once you’re satisfied with your video, now’s the time to begin converting it from 2D to 3D.
  2. View, download, and share your creation: Now that you have your 3D video, you can download and share it with your friends and family. We love seeing what you create.

If you want to dive even deeper into more complex creations, there’s a lot of good info in our Immersity AI tutorials.

We’ve got new features already in the works, including an app for iOS and Android users, and new options to share your creations on social media. An XR app and enhanced API for businesses are also coming later this year, so stay tuned for more information.

If you post any creations on social media, please feel free to use the #immersityAI hashtag and join our Discord server if you’d like to give us your thoughts in greater detail.

Immersity AI marks a new chapter for us and we can’t wait to share more!

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0000000000000000000000000000000000000000..3e9e554a876d303e4018e4129747ec9fa03ec596 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/lenovo_thinkvision_27_3d_product_technology/assets/14_My_Lenovo_Rewards_b7a8b2f532.svg @@ -0,0 +1,5 @@ + + + + + diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/lenovo_thinkvision_27_3d_product_technology/extracted_text.md b/2d_to_3d_verified_product_technical_reports/official_web_archives/lenovo_thinkvision_27_3d_product_technology/extracted_text.md new file mode 100644 index 0000000000000000000000000000000000000000..ecd0d2393ed3d1d5c8fa48f83c60c42742504cc3 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/lenovo_thinkvision_27_3d_product_technology/extracted_text.md @@ -0,0 +1,369 @@ +# ThinkVision 27 3D - Glasses-free, 2D/3D Compatible Display | Lenovo Pakistan + +- Vendor: Lenovo +- Product: ThinkVision 27 3D / 3D Explorer +- Material date: current +- Official source: https://www.lenovo.com/pk/en/monitors/thinkvision-27-3d/ +- Archived HTML: index.html + +## Extracted text + +ThinkVision 27 3D - Glasses-free, 2D/3D Compatible Display | Lenovo Pakistan + +ThinkVision 27 3D - Glasses-free, 2D/3D Compatible Display + +skip to main content + +ThinkVision 27 3D Monitor + +Features + +Tech Specs + +Discover More + +Home + +Monitors + +Lenovo ThinkVision 27 3D Monitor + +ThinkVision 27 3D Monitor + +Immersive experiences in 3D + +now becomes glasses-free! + +4K UHD Display | Hybrid 2D/3D | Glasses-free + +Glasses-free & AI-webcam + +Immersion Becomes Glasses-free + +Relying on glasses for 3D content is a thing of the past with switchable lenticular lens. Experience seamless 3D even when moving your head around with real-time eye-tracking. + +High Refresh Rate & 4K & 99% DCI-P3 + +Accurate Color Reproduction + +View your favorite 3D content in unparalleled clarity without any dips in refresh rate! Relish sharp and color accurate content with 4K resolution and 99% DCI-P3 and Adobe RGB color space coverage. + +2D/3D Seamless Transition + +Hybrid 2D/3D for Hyper Creativity + +Automatically switch to 2D or 3D modes based on content signal. Connect with convenience using single cable USB-C docking and stack*support. + +3D Features + ++ + +2D/3D Switchable:Yes + +3D Resolution:1920 x 2160 + +Optimal Viewing Distance:70 cm ~ 90 cm + +Optimal Viewing Angle:Horizontal : ± 20°, Vertical : ± 20° + +Number of Viewers:1 + +Eye Tracking:Yes + +Environmental Conditions:0 lx - 1000 lx + +3D Explorer + +Integrated 3D ecosystem + +Instant 3D Content Display + +Always stay at the cutting edge of 3D workflows with Lenovo’s suite of continuously developed and upgraded apps. + +Enjoy a rich and smooth user experience while using our host of 3D tools and softwares, all designed to provide great 3D viewing pleasure. + +Software Supported + ++ + +Tailored Software + +3D Explorer** + +(available from Lenovo Accessories and Display Manager***- ThinkColour) + +3D Master + +(3D viewing App), Design Engine, 2D-to-3D Converter, Plugins, SDK + +Third-party Software**** + +Microsoft 365, PTC Creo, Autodesk 3ds Max + +Autodesk VRED, Autodesk Maya, Trimble SketchUp Pro, + +Blender, Lumiscaphe Patchwork 3D, Dassault Systems Deltagen, + +Unity, C++ & Unreal (via SDK) + +Offload 3D processing to the monitor with the built-in 3D engine to get peak performance from your computer. + +Minimum PC Requirements***** + ++ + +GPU:NVIDIA® GeForce® GTX 1050 (or AMD, Intel® graphics card with equivalent performance) + +System:Windows 10 64-bit + +Memory:DDR5, 8GB + +Hard Disk:Available Space 50GB + +CPU:i5 7400/3.00GHz + +Versatile Interfaces, Seamless Connectivity + +Unleash Potential with Boundless Expansion and Connections + +Dual HDMI 2.1 + DP 1.4: High-bandwidth video interfaces for seamless connection between high-performance hosts and professional equipments. + +Full-featured USB Type-C: Offers one-cable connection with 96W power delivery, supporting the use of other USB-A interfaces upon connection. + +USB HUB: Connect peripherals like keyboards, mice, headphones, and power supply for USB interface devices. + +Type-C: Powers mobile devices (up to 15W) and facilitates data transfer. + +Ethernet Port: Supports 10M/100M/1000M local area networks. + +Tech Specs + +DISPLAY + +Panel Size + +27 inches + +Resolution + +3840 x 2160 + +Aspect ratio + +16:9 + +Pixel Pitch + +0.155 mm x 0.155 mm + +Dot/Pixel Per Inch (DPI/PPI) + +163 + +Response Time + +4ms (Extreme Mode), + +6ms (Normal Mode) + +Brightness (Typical) + +310 cd/m2 + +Refresh Rate + +60Hz + +Contrast Ratio (Typical) + +1200:1 + +Dynamic Contrast Ratio (Typical) + +3M:1 + +CONNECTIVITY + +Video Signal + +USB Type-C**(DP 1.4 Alt Mode, up to 100W) + +2 x HDMI 2.1*** + +1 x DP 1.4 + +Audio Signal + +1 x Audio Out (3.5 mm) + +POWER + +Power Consumption(Typ./Max.) + +43.8W/246.0W + +Power Consumption Sleep/Off Mode + +< 0.5W + +Power Consumption Switch-off Mode + +< 0.3W + +Voltage Required + +AC 100 to 240 V (50-60 Hz) + +MECHANICAL + +Tilt Angle (front/back) + +-5°/23.5° + +Swivel Angle (Left/Right) + +-45°/45° + +Lift (Max. Range) + +155 mm + +Pivot + +-90°/90° + +VESA Mount Capability + +Yes (100 x 100 mm) + +DIMENSION + +Size Packed (D x H x W) + +165.0 x 520.0 x 720.0 mm + +6.50 x 20.47 x 28.35 inches + +Size Unpacked with Stand (D x H x W, mm/inch) + +222.7 x 568.0 x 614.8 mm + +8.77 x 22.36 x 24.20 inches + +Weight Packed + +12.4 kg + +Weight Unpacked + +8.9 kg + +CERTIFICATIONS + +Windows Certification + +Windows 10, Windows 11 + +TÜV Rheinland Eye Comfort + +Yes + +RoHS (2011/65/EU) + +Yes + +Volatile Organic Compound Certification + +Yes + +Discover More + +ThinkVision P49w-30 49" Dual QHD MonitorLearn more > + +Lenovo C32u-40 32" UHD MonitorLearn more > + +* Utilize our stack support to easily add Lenovo’s Webcam and Soundbar. Sold separately + +** USB Type-C® and USB-C® are registered trademarks of USB Implementers Forum. + +*** Supports 4K @ 60Hz as specified in HDMI 2.1. + +Enter email to receive Lenovo marketing and promotional emails. Review our Privacy Statement for more details. + +Email + +Please enter the correct email address! + +Email address is required + +Lenovo Email Signup + +× + +Lenovo Email Signup + +Select Country / Region: + +PrivacySite MapTerms of Use + +Compare + +() + +x + +Call + +You will be automatically signed in and redirected to your shopping experience after + +seconds or click the “Continue” button to go there immediately. + +Continue + +Success! + +You now have a verified Lenovo Education account, and your discounts will automatically be applied to eligible products. Enjoy your benefits for a full year! + +We Have Updated our Lenovo Pro Terms And Conditions + +Select the links to review the updated documents. Once you’ve reviewed the documents, check the box and click Accept to agree to the documents to continue using the site. + +I have read and accept the terms and conditions for joining Lenovo Pro and the Lenovo Pro Community.* + +Accept + +My Lenovo Rewards + +Join My Lenovo Rewards For Free + +Join Rewards + +By joining, you agree to the Terms of Use and Privacy Policy and you are opting in to receive Lenovo marketing communications via email. + +Sign In + +Success! + +You will be automatically signed in and redirected to your shopping experience after + +seconds or click the “Continue” button to go there immediately. + +Continue + +Success! + +You now have a verified Lenovo Education account, and your discounts will automatically be applied to eligible products. Enjoy your benefits for a full year! + +My Lenovo Rewards + +Join My Lenovo Rewards For Free + +By joining, you agree to the Terms of Use and Privacy Policy and you are opting in to receive Lenovo marketing communications via email. + +Join Rewards + +Thank you for joining Lenovo Universe + +Discover more + +☰ diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/lenovo_thinkvision_27_3d_product_technology/image_manifest.csv b/2d_to_3d_verified_product_technical_reports/official_web_archives/lenovo_thinkvision_27_3d_product_technology/image_manifest.csv new file mode 100644 index 0000000000000000000000000000000000000000..bd55f329bd57b19780559f57814b5dd592a91319 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/lenovo_thinkvision_27_3d_product_technology/image_manifest.csv @@ -0,0 +1,15 @@ +local_file,alt_text,source_url,bytes +assets/01_Lenovo_Logo_db437cb9af.png,Lenovo Logo,https://p4-ofp.static.pub/fes/cms/2022/11/14/h82es5y402b4rh1089sf86ay7n9sdl721044.png,20902 +assets/02_image_558cc71b02.png,,https://p4-ofp.static.pub/ShareResource/indirect/Visuals/images/thinkvision-27-3d/ThinkVision-27-3d-front-facing-right.png,269073 +assets/03_image_2e1ba504fd.jpg,,https://p4-ofp.static.pub/ShareResource/indirect/Visuals/images/thinkvision-27-3d/06_Monitor_27_Still_Life_Instant_2D_to_3D_with_AI_Webcam.png,20242 +assets/04_image_b2b6bc34bb.jpg,,https://p1-ofp.static.pub/ShareResource/JPResource/JP-Images/content-page/thinkvision-27-3d/lenovo-thinkvision-27-3d-lifestyle-img01.jpg,67164 +assets/05_image_1111f3b94b.png,,https://p2-ofp.static.pub/ShareResource/indirect/Visuals/images/thinkvision-27-3d/11a_Monitor_27_Closeup_Front_Bezel.png,169652 +assets/06_image_0dc18ebce3.png,,https://p1-ofp.static.pub/ShareResource/indirect/Visuals/images/thinkvision-27-3d/04_Monitor_27_Still_Life_3D_Explorer.png,595237 +assets/07_image_34d2bd2ef0.png,,https://p2-ofp.static.pub/ShareResource/indirect/Visuals/images/thinkvision-27-3d/09_Monitor_27_Hero_Bottom_Ports_filtered.png,1170044 +assets/08_image_cbe6115be7.png,,https://p4-ofp.static.pub/ShareResource/indirect/Visuals/images/p-series/p49w-30/01_ThinkVision_P49w-30_Front.png,77987 +assets/09_image_b53bb623b0.png,,https://p2-ofp.static.pub/ShareResource/indirect/Visuals/images/c-series/c32u-40/01_Lenovo_D32u-40_Front.png,80517 +assets/10_Facebook_679939b9fe.gif,Facebook,https://p1-ofp.static.pub/fes/cms/2022/04/24/9acl3tplp3k9x0wntpftwilmf04bdr060873.gif,1435 +assets/11_image_f39e58d026.gif,,https://p3-ofp.static.pub/fes/cms/2022/03/29/fxq8k26aghm6xril1qzikh2in7osfc415110.png,43 +assets/12_image_8cae4f5aad.svg,,https://p2-ofp.static.pub//fes/cms/2024/11/09/ecv57lowd0faze7xcoggogic3ji7cn017166.svg,286 +assets/13_image_d4f9b96d3a.svg,,https://p3-ofp.static.pub//fes/cms/2025/03/24/41k1twe5vlabeze1ncuq7dqaiz3fak530495.svg,516 +assets/14_My_Lenovo_Rewards_b7a8b2f532.svg,My Lenovo Rewards,https://p4-ofp.static.pub//fes/cms/2025/04/30/22khpxfbgsqk1hvaskuroui7n67v4e529160.svg,799 diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/lenovo_thinkvision_27_3d_product_technology/index.html b/2d_to_3d_verified_product_technical_reports/official_web_archives/lenovo_thinkvision_27_3d_product_technology/index.html new file mode 100644 index 0000000000000000000000000000000000000000..c80c39b631f768f1a61047451782fbff5fac7f80 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/lenovo_thinkvision_27_3d_product_technology/index.html @@ -0,0 +1,2230 @@ + + + + + + ThinkVision 27 3D - Glasses-free, 2D/3D Compatible Display | Lenovo Pakistan + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +

ThinkVision 27 3D - Glasses-free, 2D/3D Compatible Display

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ThinkVision 27 3D Monitor
ThinkVision 27 3D Monitor
Immersive experiences in 3D
now becomes glasses-free!
4K UHD Display | Hybrid 2D/3D | Glasses-free

Glasses-free & AI-webcam
Immersion Becomes Glasses-free
Relying on glasses for 3D content is a thing of the past with switchable lenticular lens. Experience seamless 3D even when moving your head around with real-time eye-tracking.
High Refresh Rate & 4K & 99% DCI-P3
Accurate Color Reproduction
View your favorite 3D content in unparalleled clarity without any dips in refresh rate! Relish sharp and color accurate content with 4K resolution and 99% DCI-P3 and Adobe RGB color space coverage.
2D/3D Seamless Transition
Hybrid 2D/3D for Hyper Creativity
Automatically switch to 2D or 3D modes based on content signal. Connect with convenience using single cable USB-C docking and stack*support.

3D Features

+

2D/3D Switchable:Yes

3D Resolution:1920 x 2160

Optimal Viewing Distance:70 cm ~ 90 cm

Optimal Viewing Angle:Horizontal : ± 20°, Vertical : ± 20°

Number of Viewers:1

Eye Tracking:Yes

Environmental Conditions:0 lx - 1000 lx

3D Explorer
Integrated 3D ecosystem
  • Instant 3D Content Display

    Always stay at the cutting edge of 3D workflows with Lenovo’s suite of continuously developed and upgraded apps.

  • Enjoy a rich and smooth user experience while using our host of 3D tools and softwares, all designed to provide great 3D viewing pleasure.

    Software Supported

    +

    Tailored Software

    3D Explorer**
    (available from Lenovo Accessories and Display Manager***- ThinkColour)

    3D Master
    (3D viewing App), Design Engine, 2D-to-3D Converter, Plugins, SDK

    Third-party Software****

    Microsoft 365, PTC Creo, Autodesk 3ds Max

    Autodesk VRED, Autodesk Maya, Trimble SketchUp Pro,

    Blender, Lumiscaphe Patchwork 3D, Dassault Systems Deltagen,

    Unity, C++ & Unreal (via SDK)

  • Offload 3D processing to the monitor with the built-in 3D engine to get peak performance from your computer.

    Minimum PC Requirements*****

    +

    GPU:NVIDIA® GeForce® GTX 1050 (or AMD, Intel® graphics card with equivalent performance)

    System:Windows 10 64-bit

    Memory:DDR5, 8GB

    Hard Disk:Available Space 50GB

    CPU:i5 7400/3.00GHz

Versatile Interfaces, Seamless Connectivity
Unleash Potential with Boundless Expansion and Connections
  1. Dual HDMI 2.1 + DP 1.4: High-bandwidth video interfaces for seamless connection between high-performance hosts and professional equipments.
  2. Full-featured USB Type-C: Offers one-cable connection with 96W power delivery, supporting the use of other USB-A interfaces upon connection.
  3. USB HUB: Connect peripherals like keyboards, mice, headphones, and power supply for USB interface devices.
  4. Type-C: Powers mobile devices (up to 15W) and facilitates data transfer.
  5. Ethernet Port: Supports 10M/100M/1000M local area networks.
Tech Specs
DISPLAY
Panel Size
27 inches
Resolution
3840 x 2160
Aspect ratio
16:9
Pixel Pitch
0.155 mm x 0.155 mm
Dot/Pixel Per Inch (DPI/PPI)
163
Response Time
4ms (Extreme Mode),
6ms (Normal Mode)
Brightness (Typical)
310 cd/m2
Refresh Rate
60Hz
Contrast Ratio (Typical)
1200:1
Dynamic Contrast Ratio (Typical)
3M:1
CONNECTIVITY
Video Signal
USB Type-C**(DP 1.4 Alt Mode, up to 100W)
2 x HDMI 2.1***
1 x DP 1.4
Audio Signal
1 x Audio Out (3.5 mm)
POWER
Power Consumption(Typ./Max.)
43.8W/246.0W
Power Consumption Sleep/Off Mode
< 0.5W
Power Consumption Switch-off Mode
< 0.3W
Voltage Required
AC 100 to 240 V (50-60 Hz)
MECHANICAL
Tilt Angle (front/back)
-5°/23.5°
Swivel Angle (Left/Right)
-45°/45°
Lift (Max. Range)
155 mm
Pivot
-90°/90°
VESA Mount Capability
Yes (100 x 100 mm)
DIMENSION
Size Packed (D x H x W)
165.0 x 520.0 x 720.0 mm
6.50 x 20.47 x 28.35 inches
Size Unpacked with Stand (D x H x W, mm/inch)
222.7 x 568.0 x 614.8 mm
8.77 x 22.36 x 24.20 inches
Weight Packed
12.4 kg
Weight Unpacked
8.9 kg
CERTIFICATIONS
Windows Certification
Windows 10, Windows 11
TÜV Rheinland Eye Comfort
Yes
RoHS (2011/65/EU)
Yes
Volatile Organic Compound Certification
Yes
Discover More

* Utilize our stack support to easily add Lenovo’s Webcam and Soundbar. Sold separately

** USB Type-C® and USB-C® are registered trademarks of USB Implementers Forum.

*** Supports 4K @ 60Hz as specified in HDMI 2.1.

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86" + +Early Access + +musubi + +pre-order + +Light Field Displays (For Developers) + +LFD Overview + +6" Light Field Developer Kit (LKG Go) + +SALE + +16" Light Field Display + +SALE + +27" Light Field Display + +Software + +HLD + +Create content + +HLD Author + +Other tools + +Light Field + +Software downloads + +Liteforms + +About + +Shop HLD + +Shop Light Field + +View store + +Account + +Log out + +Login + +Software Downloads + +Unity Plugin + +Native SDK (OpenGL, DX, Metal) + +Looking Glass Studio + +Model viewer + +Looking Glass Receives SID 2026 Display of the Year Award for Hololuminescent™ Display Technology + +Light Field Display Software + +A Robust Software Stack for Complex 3D Challenges + +Touchscreen monitor and Computer are not included. + +From real-time Unity development to drag-and-drop media playback and spatial video capture, the Looking Glass software stack gives creators, agencies, brands, and research teams the tools they need to design, preview, and deploy 3D experiences on our Looking Glass holographic displays. + +Try Unity plugin + +Explore full stack + +What Will You Build? + +Whether you’re showing off a product, playing back 3D video, or building an immersive experience, Looking Glass software makes it possible. + +Look & See Real 3D + +No training, headsets or eye-tracking required. + +Flexible Software & Plugins + +Generate images, video and real-time applications from 2D or 3D content. + +Exhibit Real Life Effects + +Showcase multiple perspectives, lighting, reflection and shine. + +Zero friction + +No headsets, no training. Just look and see 3D. + +Real-World Footage + +Turn Real-World Footage into Holograms + +Turn everyday moments into holographic videos. Play them back on any Looking Glass display using Looking Glass Studio. + +Record depth video with iPhone 15 or newer + +Create playlists with Looking Glass Studio + +Plays RGBD and light field (quilt) images and videos + +Product & Retail Display + +Showcase Your + +3D Model Instantly + +Use the Looking Glass Model Viewer to showcase compelling products by loading a 3D model - no complex configuration or programming required. + +Import 3D model formats like .glTF, .FBX, .OBJ, .STEP, .STL, and .PLY + +Frame your content by adjusting focus and lighting settings in real-time + +Import multiple models to create a holographic presentation + +XR Installations + +Deploy Interactive Holograms at Scale + +From museums to trade shows, Looking Glass displays power experiences that stop people in their tracks. Use our Unity Plugin and SDKs to create interactive, narrative, or ambient installations with cross-compatibility for any Looking Glass display + +Works on all Looking Glass displays (Go, 16" and 27") + +Unity scripting + external input support (e.g. Leap Motion, iPad) + +Plays RGBD and light field (quilt) images and videos + +Tool Overview for Creators & Developers + +Unity Plugin + +For developers building native holographic apps. + +Use Unity to create real-time holographic content — build interactive scenes and export to production-ready formats. + +Key features + +Real-time holographic rendering + +Render interactive 3D content directly to any Looking Glass display from within the Unity Editor or in standalone builds. + +Interactive controls + +‍Navigate and interact with holographic scenes using intuitive mouse controls + +Broad compatibility + +‍Compatible with Unity's Built-in and Universal Render Pipelines (URP). + +Turnkey deployment + +‍Build your application like normal for Windows, MacOS, and iOS - our plugin handles the rest. + +Download Plugin + +Read Developer Docs + +Model Viewer + +Load gITF, FBX, OBJ, STL, and PLY models into any Looking Glass display to view models in true 3D. + +Key feature + +Built-in interactive controls to for rapid exploration + +Pan, rotate, and zoom in and out on your model. + +Visuals that are optimized to pop + +‍Choose from four different 3D backgrounds, adjust lighting and replicate realism with true-to-life shadow casting. + +Supports a wide range of the most popular 3D model formats + +‍gITF, GLB, FBX, OBJ, STEP, STL, and PLY with animations. + +Download Looking Glass Model Viewer + +Looking Glass Studio + +For effortless playback of holographic media — no coding required. Designed for creators, curators, and retail teams. Just drag and drop any RGB-D or quilt images or videos. + +Key features + +Seamless media playback + +Effortlessly view and manage images and videos on any Looking Glass display. + +Multi-format media support + +‍Import and display a variety of media types - RGB-D and quilt images and videos. + +Intuitive user interface + +‍Designed for creators of all skill levels, from beginners to professionals. + +Optimized for Looking Glass displays + +‍Tailored to maximize the capabilities of Looking Glass holographic displays. + +Download Looking Glass Studio for PC & MacOS + +Download Looking Glass Studio for iOS + +Bridge SDK + +Integrate Looking Glass holographic rendering into your own stack. + +The Bridge SDK is a modular set of tools that lets developers integrate their own applications - from web apps to custom renderers - with our displays. + +Use it when + +You’re building interactive or custom pipelines. + +You want open-source examples. + +You need to customize your own 3D renderer. + +‍ + +View Bridge SDK Developer Docs + +A Powerful Software Stack + +Looking Glass software includes tools for developers, designers, and storytellers — each designed to help get from idea to hologram in the fastest way possible. + +James was here + +Beginner + +Looking Glass Studio + +Take 2D images, record Cinematic video with your iPhone, and see it as a hologram in seconds. Ideal for museums, memory capture, and immersive messaging. + +Download + +Intermediate + +Model Viewer + +Drag-and-drop 3D models directly into the Looking Glass— no code or development required. Perfect for retail displays and showrooms. + +Download + +James was here + +Advanced + +Unity Plugin + +Build and deploy interactive 3D apps directly to Looking Glass displays. Includes live preview, depth tuning, and camera control. + +Download + +Expert + +Bridge SDK + +Integrate holographic rendering into your own pipelines using open-source tooling. Ideal for developers familiar with graphics APIs. + +See docs + +James was here + +What Our Customers Are Building + +Our holographic displays are used by companies across retail, museums, and experiential design. See some of these in action: + +Case Study + +Advancing Telepresence and Next-Generation Digital Human Technology with NVIDIA Maxine + +This platform empowers you to deploy cutting-edge AI features that enhance audio and video quality and enable augmented reality effects. + +Learn more + +Case Study + +Democratizing Immersive Experiences with Nvidia AI + +The AMRI team at NVIDIA Research presents novel immersive 3D experiences at GTC 2025 that allows users to move around in a streaming video, in 3D, in real-time. This allows for a highly immersive video viewing experience, especially when paired with 3D displays such as the Looking Glass Go. + +Learn more + +Case Study + +New NVIDIA Digital Human Technologies Enhance Customer Interactions Across Industries + +At SIGGRAPH, NVIDIA previewed “James,” an interactive digital human that can connect with people using emotions, humor and more. James is based on a customer-service workflow using NVIDIA ACE, a reference design for creating custom, hyperrealistic, interactive avatars. + +Learn more + +Case Study + +Timbaland and Roy Nachum’s New Museum Exhibit Explores the Possibilities of A.I.: ‘Imperfection is Perfection’ + +The two artists sat down with Billboard to talk about 'Maestros and the Machines,' their new exhibit at Mercer Labs. + +Learn more + +Case Study + +Umber Majeed + +J😊Y TECH + +03.16.25 – 01.18.26 + +Umber Majeed: J😊Y TECH uses speculative fiction to offer a counter-narrative of the Pakistan Pavilion at the 1964–1965 New York World’s Fair. + +Learn more + +Case Study + +Inside the Inavation Award-winning White House immersive experience + +D&P’s cutting-edge AV integration at this exciting Washington attraction has redefined how visitors engage with one of the world’s most iconic residences and landed the integrator the 2025 Inavation Award for Best Museum & Heritage Project. + +Learn more + +Build with Looking Glass + +Explore our software tools, download what you need, and bring your content into 3D. If you’re just getting started, shop our 16” or 27” displays or talk to our team to plan your deployment. + +Looking Glass + +Go + +The Looking Glass Go is a portable holographic display that brings your favorite 3D memories and creations to life — no headset needed. Compact, Wi-Fi connected, and easy to use anywhere. + +Looking Glass + +16" + +The Looking Glass 16" is a desktop holographic display for 3D creators and devs. It delivers lifelike depth and integrates seamlessly with Unity, Unreal, and other spatial tools. + +Looking Glass + +27" + +The Looking Glass 27" is the largest group-viewable holographic display, designed for high-impact experiences in enterprise, retail, and museums. Plug in and bring spatial content to life — no wearables required. + +Shop Displays + +Talk to Sales + +Stay engaged + +Sign up to receive ongoing updates about new product launches, events and announcements. + +Subscribe + +By signing up, you agree to our Privacy Policy and Terms of Service. We may send you occasional newsletters and promotional emails about our products and services. You can opt-out at any time. + +Contact Sales + +About + +Resources + +Resellers + +Press + +Careers + +Copyright © + +2026 Looking Glass + +The technology behind the Looking Glass hardware and software is protected by patents granted and pending around the world. + +Terms & ConditionsPrivacy PolicySecurity Policy + +By clicking “Accept”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information. + +DenyAccept + +Privacy Preferences + +Essential cookies + +Required + +Marketing cookies + +Essential + +Personalization cookies + +Essential + +Analytics cookies + +Essential + +Reject all cookiesAllow all cookiesSave preferences diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/looking_glass_product_software_stack/image_manifest.csv b/2d_to_3d_verified_product_technical_reports/official_web_archives/looking_glass_product_software_stack/image_manifest.csv new file mode 100644 index 0000000000000000000000000000000000000000..7e01732eef8bea847552ab22c86cd5331742999e --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/looking_glass_product_software_stack/image_manifest.csv @@ -0,0 +1,31 @@ +local_file,alt_text,source_url,bytes +assets/01_og_image_13fe37066b.jpg,og:image,https://cdn.prod.website-files.com/6287baba42d48260dec3a37a/67e1a49db16cbd3f912e8bef_27l-aquarium.jpg,1154294 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white,https://cdn.prod.website-files.com/6287baba42d48260dec3a37a/65f26b778271b5b81f565a56_lkg-logo-white.svg,630 +assets/28_discord_icon_bcef2e00c7.svg,discord icon,https://cdn.prod.website-files.com/6287baba42d48260dec3a37a/628bc96f3cbcaa46105e68c4_icon-discord.svg,1528 +assets/29_The_Looking_Glass_Linked_In_page_8bc2c65245.svg,The Looking Glass Linked In page,https://cdn.prod.website-files.com/6287baba42d48260dec3a37a/669ab99efaf0fb2fd37d4df9_linkedIn-icon.svg,1761 +assets/30_The_Looking_Glass_X_formally_Twitter_account_a985af81e1.svg,The Looking Glass X (formally Twitter) account,https://cdn.prod.website-files.com/6287baba42d48260dec3a37a/669ab9827f9a8f770fedbdee_X-icon.svg,454 diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/looking_glass_product_software_stack/index.html b/2d_to_3d_verified_product_technical_reports/official_web_archives/looking_glass_product_software_stack/index.html new file mode 100644 index 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Light Field Display Software

A Robust Software Stack for Complex 3D Challenges

Touchscreen monitor and Computer are not included.

From real-time Unity development to drag-and-drop media playback and spatial video capture, the Looking Glass software stack gives creators, agencies, brands, and research teams the tools they need to design, preview, and deploy 3D experiences on our Looking Glass holographic displays.

What Will You Build?

Whether you’re showing off a product, playing back 3D video, or building an immersive experience, Looking Glass software makes it possible.

Look & See Real 3D
No training, headsets or eye-tracking required.
Flexible Software & Plugins
Generate images, video and real-time applications from 2D or 3D content.
Exhibit Real Life Effects
Showcase multiple perspectives, lighting, reflection and shine.
Zero friction
No headsets, no training. Just look and see 3D.
Real-World Footage
Turn Real-World Footage into Holograms
Turn everyday moments into holographic videos. Play them back on any Looking Glass display using Looking Glass Studio.
  • Record depth video with iPhone 15 or newer
  • Create playlists with Looking Glass Studio
  • Plays RGBD and light field (quilt) images and videos
Product & Retail Display
Showcase Your
3D Model Instantly
Use the Looking Glass Model Viewer to showcase compelling products by loading a 3D model - no complex configuration or programming required.
  • Import 3D model formats like .glTF, .FBX, .OBJ, .STEP, .STL, and .PLY
  • Frame your content by adjusting focus and lighting settings in real-time
  • Import multiple models to create a holographic presentation
XR Installations
Deploy Interactive Holograms at Scale
From museums to trade shows, Looking Glass displays power experiences that stop people in their tracks. Use our Unity Plugin and SDKs to create interactive, narrative, or ambient installations with cross-compatibility for any Looking Glass display
  • Works on all Looking Glass displays (Go, 16" and 27")
  • Unity scripting + external input support (e.g. Leap Motion, iPad)
  • Plays RGBD and light field (quilt) images and videos

Tool Overview for Creators & Developers

Unity Plugin

For developers building native holographic apps.
Use Unity to create real-time holographic content — build interactive scenes and export to production-ready formats.

Key features

  • Real-time holographic rendering
    Render interactive 3D content directly to any Looking Glass display from within the Unity Editor or in standalone builds.
  • Interactive controls
    Navigate and interact with holographic scenes using intuitive mouse controls
  • Broad compatibility
    Compatible with Unity's Built-in and Universal Render Pipelines (URP).
  • Turnkey deployment
    Build your application like normal for Windows, MacOS, and iOS - our plugin handles the rest.

Model Viewer

Load gITF, FBX, OBJ, STL, and PLY models into any Looking Glass display to view models in true 3D.

Key feature

  • Built-in interactive controls to for rapid exploration
    Pan, rotate, and zoom in and out on your model.
  • Visuals that are optimized to pop
    Choose from four different 3D backgrounds, adjust lighting and replicate realism with true-to-life shadow casting.
  • Supports a wide range of the most popular 3D model formats
    gITF, GLB, FBX, OBJ, STEP, STL, and PLY with animations.

Looking Glass Studio

For effortless playback of holographic media — no coding required. Designed for creators, curators, and retail teams. Just drag and drop any RGB-D or quilt images or videos.

Key features

  • Seamless media playback
    Effortlessly view and manage images and videos on any Looking Glass display.
  • Multi-format media support
    Import and display a variety of media types - RGB-D and quilt images and videos.
  • Intuitive user interface
    Designed for creators of all skill levels, from beginners to professionals.
  • Optimized for Looking Glass displays
    Tailored to maximize the capabilities of Looking Glass holographic displays.

Bridge SDK

Integrate Looking Glass holographic rendering into your own stack.
The Bridge SDK is a modular set of tools that lets developers integrate their own applications - from web apps to custom renderers - with our displays.

Use it when

  • You’re building interactive or custom pipelines.
  • You want open-source examples.
  • You need to customize your own 3D renderer.

A Powerful Software Stack

Looking Glass software includes tools for developers, designers, and storytellers — each designed to help get from idea to hologram in the fastest way possible.

Beginner

Looking Glass Studio

Take 2D images, record Cinematic video with your iPhone, and see it as a hologram in seconds. Ideal for museums, memory capture, and immersive messaging.

Download

Intermediate

Model Viewer

Drag-and-drop 3D models directly into the Looking Glass— no code or development required. Perfect for retail displays and showrooms.

Download

Advanced

Unity Plugin

Build and deploy interactive 3D apps directly to Looking Glass displays. Includes live preview, depth tuning, and camera control.

Download

Expert

Bridge SDK

Integrate holographic rendering into your own pipelines using open-source tooling. Ideal for developers familiar with graphics APIs.

See docs

What Our Customers Are Building

Our holographic displays are used by companies across retail, museums, and experiential design. See some of these in action:

Case Study

Advancing Telepresence and Next-Generation Digital Human Technology with NVIDIA Maxine

This platform empowers you to deploy cutting-edge AI features that enhance audio and video quality and enable augmented reality effects.

Case Study

Democratizing Immersive Experiences with Nvidia AI

The AMRI team at NVIDIA Research presents novel immersive 3D experiences at GTC 2025 that allows users to move around in a streaming video, in 3D, in real-time. This allows for a highly immersive video viewing experience, especially when paired with 3D displays such as the Looking Glass Go.

Case Study

New NVIDIA Digital Human Technologies Enhance Customer Interactions Across Industries

At SIGGRAPH, NVIDIA previewed “James,” an interactive digital human that can connect with people using emotions, humor and more. James is based on a customer-service workflow using NVIDIA ACE, a reference design for creating custom, hyperrealistic, interactive avatars.

Case Study

Timbaland and Roy Nachum’s New Museum Exhibit Explores the Possibilities of A.I.: ‘Imperfection is Perfection’

The two artists sat down with Billboard to talk about 'Maestros and the Machines,' their new exhibit at Mercer Labs.

Case Study

Umber Majeed
J😊Y TECH
03.16.25 – 01.18.26

Umber Majeed: J😊Y TECH uses speculative fiction to offer a counter-narrative of the Pakistan Pavilion at the 1964–1965 New York World’s Fair.

Case Study

Inside the Inavation Award-winning White House immersive experience

D&P’s cutting-edge AV integration at this exciting Washington attraction has redefined how visitors engage with one of the world’s most iconic residences and landed the integrator the 2025 Inavation Award for Best Museum & Heritage Project.

Build with Looking Glass

Explore our software tools, download what you need, and bring your content into 3D. If you’re just getting started, shop our 16” or 27” displays or talk to our team to plan your deployment.

Looking Glass

Go

The Looking Glass Go is a portable holographic display that brings your favorite 3D memories and creations to life — no headset needed. Compact, Wi-Fi connected, and easy to use anywhere.

Looking Glass

16"

The Looking Glass 16" is a desktop holographic display for 3D creators and devs. It delivers lifelike depth and integrates seamlessly with Unity, Unreal, and other spatial tools.

Looking Glass

27"

The Looking Glass 27" is the largest group-viewable holographic display, designed for high-impact experiences in enterprise, retail, and museums. Plug in and bring spatial content to life — no wearables required.

Looking Glass logo white

Stay engaged

Sign up to receive ongoing updates about new product launches, events and announcements.

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+1,373 @@ +# [Interview] Transforming the Monitor Experience: Expanding the Boundaries With Odyssey 3D – Samsung Global Newsroom + +- Vendor: Samsung +- Product: Odyssey 3D G90XF / Odyssey 3D Hub +- Material date: 2025 +- Official source: https://news.samsung.com/global/interview-transforming-the-monitor-experience-expanding-the-boundaries-with-odyssey-3d +- Archived HTML: index.html + +## Extracted text + +[Interview] Transforming the Monitor Experience: Expanding the Boundaries With Odyssey 3D – Samsung Global Newsroom + +skip to content + +Corporate + +People & Culture + +Technology + +Design + +More Stories + +Products + +Mobile + +TV/Display & AV + +Home Appliances + +Semiconductor + +More Products + +Social Impact + +CSR + +Environment + +Sustainability + +Press Resources + +Press Releases + +Video News + +Media Library + +Statements + +Fast Facts + +Search open + +Nation choice page link + +Menu open + +Title+Body + +Tag + +Images + +X + +Search + +Suggestions + +Galaxy Unpacked July 2026 + +Galaxy S26 Series + +Milan Design Week + +The First Look 2026 + +AI + +Bespoke + +SmartThings + +One UI + +Samsung Art Store + +Custom range + +Any time + +Past week + +Past month + +Past year + +Custom range + +Category + +All + +Corporate + +Products + +Social Impact + +Content Type + +All + +Article + +Press Release + +Worldwide + +Search close + +[Interview] Transforming the Monitor Experience: Expanding the Boundaries With Odyssey 3D + +on May 12, 2025 + +AUDIO Play + +Download + +Share open + +Print + +“The Odyssey 3D marks the beginning of a new era of experiences.” + +— Taekwan Lee, Samsung Electronics + +3D content has often been associated with inconvenience. Enjoying it typically required specialized equipment such as 3D glasses or head-mounted displays (HMDs). Imperfections in the delivery of 3D images caused crosstalk, potentially leading to dizziness. These discomforts would chip away the immersion of 3D content. + +Samsung Electronics is changing that narrative with the introduction of the Odyssey 3D (G90XF) — a finely tuned glasses-free 3D gaming monitor. Featuring eye-tracking and view-mapping technology, the Odyssey 3D marks a paradigm shift in immersive viewing and gaming experiences. + +Samsung Newsroom sat down with Donghwa Lim from the Enterprise R&D Lab and Taekwan Lee from the Product Innovation Lab, both part of the Visual Display (VD) Business at Samsung Electronics, to discuss how the Odyssey 3D is redefining perceptions of 3D. + +▲ Donghwa Lim and Taekwan Lee break down the Odyssey 3D’s technology and components. + +The Three Core Technologies Behind Odyssey 3D + +3D displays create a sense of dimension using binocular disparity, in which the brain perceives depth by processing the slightly different images seen by each eye. Leveraging this principle, the Odyssey 3D delivers a glasses-free 3D experience by precisely presenting different images to each eye without the need for external equipment. The eye-tracking technology is designed to recognize users’ eyes even when they are wearing glasses. + +“It’s incredibly rewarding to bring to market a technology that once seemed out of reach.” + +— Donghwa Lim, Samsung Electronics + +At the heart of the Odyssey 3D are three key technologies — eye tracking, view mapping and a lenticular lens. + +▲ Odyssey 3D features a myriad of technologies to deliver an immersive, glasses-free 3D experience + +Eye tracking is enabled by a stereo camera mounted at the top of the monitor, detecting and tracking the user’s eye movements in real time. + +“Because the two cameras capture different images, much like human eyes, they can determine the exact position of the user’s eyes and distance between the eyes and the monitor in real time,” said Lim. “This real-time eye position detection allows us to deliver a precise 3D image, even when the user moves.” + +▲ (From left) View mapping and the lenticular lens + +Based on this data, the system calculates the correct pixel positioning for each eye and reconstructs a single image through a process called view mapping. The final mapped images are then separately delivered to each eye through the lenticular lens, allowing the images from the display panels to be visible to each eye by utilizing light refraction. + +What’s more, the Odyssey 3D isn’t limited to 3D gameplay alone. Since the Odyssey 3D was developed as a gaming monitor, it performs exceptionally well in terms of picture quality and response speed, even when used for 2D gameplay. The lenticular lens activates only when a 3D mode is enabled by Odyssey 3D Hub. + +Minimizing Crosstalk With Samsung’s Advanced Display Technology + +While 3D effects offer new levels of immersion, even minor visual inconsistencies can disrupt the experience. Samsung has dedicated significant resources to ensuring premium 3D visuals. + +“Crosstalk occurs when the images perceived by the left and right eyes aren’t properly aligned,” said Lim. “It can lead to dizziness and other visual discomforts, so we developed several techniques to reduce it.” + +▲ Donghwa Lim, Enterprise R&D Lab, Visual Display Business at Samsung Electronics, explains how technologies were meticulously put together to minimize crosstalk + +“Even the slightest misalignments during the production or assembly of camera and display components can affect image accuracy,” he noted. “To address this, Samsung applies post-assembly calibration for both the camera and display panel and stores unit-specific data into a dedicated chip inside the monitor.” + +In addition to hardware calibration, the Odyssey 3D features a deep learning-based eye-tracking algorithm and a specially engineered display cell coating designed to reduce light distortion and glare — all contributing to minimizing crosstalk and delivering a refined 3D experience. + +Driving 3D Gaming Innovation Through Industry Partnerships + +The true strength of the Odyssey 3D comes to life during gameplay. Samsung has made high-quality 3D gaming content available through Odyssey 3D Hub — a Windows-based 3D content platform that also supports the conversion of 2D photos and videos into 3D. + +“When industry-leading companies join forces, the benefits are ultimately passed on to gamers.” + +— Taekwan Lee, Samsung Electronics + +To bring immersive and personalized gaming experiences to users, Samsung is actively collaborating with industry partners to optimize games for glasses-free 3D. + +▲ Taekwan Lee, Product Innovation Lab, Visual Display Business at Samsung Electronics, explains that cross-industry efforts are key in expanding the 3D market + +Joint efforts are also underway to expand 3D gaming content. + +“Game developers are constantly exploring ways to offer new experiences to users,” said Lee. “One of those directions is 3D gaming.” + +While the 3D gaming market is still emerging, Lee emphasized that industry-wide collaboration is key to accelerating its growth. + +“The First Berserker: Khazan” — a recently published game developed by Nexon Korea and Neople — stands as a notable example of how 3D immersion can come to life through collaboration with Samsung during development. + +“Through this partnership, Nexon, Neople and Samsung have been working closely to tailor the 3D visuals, carefully adjusting them based on the composition of characters and backgrounds. We ensured that everything from scene-specific factors to cinematic transitions could be presented more vividly on Odyssey 3D monitor,” he explained. + +▲ A scene from “The First Berserker: Khazan” + +“Creating effects like drifting particles, fast-moving flames and cinematic cutscenes1 was technically challenging, but I’m proud of what we achieved through teamwork,” Lee added. “In particular, the snowy mountain scene in Khazan gives the impression that snowflakes are flying directly toward the player when played on the Odyssey 3D. It’s an experience I would strongly recommend trying firsthand.” + +“Our research is a journey to connect users to the future.” + +— Taekwan Lee, Samsung Electronics + +With the Odyssey 3D, Samsung is elevating the gaming experience to new levels of immersion. + +“We are in discussions with local and global game developers to expand the 3D gaming market,” he emphasized. “Our goal is to collaborate with more developers to bring a broader range of 3D games to users. When industry-leading companies join forces, the benefits are ultimately passed on to gamers.” + +From Impossible to Possible: Leading the Future of 3D Monitors + +Lim reflected on how far technology has come over the past decade. + +“Way back when I first joined Samsung, I attended a meeting on 3D technology where the lenticular lens was deemed ‘not feasible’ with existing technology,” he said. “Now, years later, we’ve not only made it possible, but we’ve also brought it to market. It’s incredibly remarkable and deeply rewarding to see a product launch built on technology that once seemed out of reach.” + +▲ Donghwa Lim and Taekwan Lee are excited about the market potential of 3D content and monitors + +“Our research to create new experiences is a journey to connect users to the future. The Odyssey 3D marks the beginning of a new era in expanding the boundaries of technology-driven experiences,” said Lee. “Games played on the Odyssey 3D are sure to deliver a ‘wow’ factor — not just at specific moments, but throughout the entire experience.” + +As Samsung continues to lead the gaming monitor market, the Odyssey 3D stands as a powerful example of how the company is redefining immersive experiences and pushing the limits of display innovation. + +* This article has been updated for accuracy. + +1 Short storytelling clips shown between stages during gameplay. + +3D + +3D Technology + +Gaming Monitors + +Odyssey 3D + +Samsung Gaming Monitors + +Samsung Odyssey + +VIDEO NEWS + +Products + +TVs & Displays + +For any issues related to customer service, please go to Customer Support pagefor assistance. + +For media inquiries, please click Media Contactto move to the form. + +Related Articles + +Samsung Launches World’s First 500Hz OLED Gaming Monitor: Odyssey OLED G6 + +May 11, 2025 Press Release + +Samsung Electronics Ranked No.1 in Global Gaming Monitor Market for Six Consecutive Years + +April 17, 2025 Press Release + +Samsung Launches Next-Gen Odyssey Gaming Monitors That Showcase Immersive 3D and OLED Excellence + +March 24, 2025 Press Release + +Samsung Partners With Nexon To Deliver Unparalleled 3D Gaming Experience With ‘The First Berserker: Khazan’ + +January 19, 2025 Press Release + +slide prev + +slide next + +More on Latest + +Download + +No files found + +Copy text + +Copied to clipboard + +Share + +Close + +X + +Facebook + +LinkedIn + +Tumblr + +e-mail + +WhatsApp + +Copy link + +top + +Sitemap + +Terms of Use + +Privacy and Cookies + +Media Contact + +SAMSUNG.COM + +Copyright© SAMSUNG All Rights Reserved. + +Start date + +End date + +Cancel + +OK + +Sitemap + +Close + +Corporate + +People & Culture + +Technology + +Design + +More Stories + +Products + +Mobile + +TV/Display & AV + +Home Appliances + +Semiconductor + +More Products + +Social 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[Interview] Transforming the Monitor Experience: Expanding the Boundaries With Odyssey 3D

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+ on May 12, 2025

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“The Odyssey 3D marks the beginning of a new era of experiences.
+ Taekwan Lee, Samsung Electronics

+

3D content has often been associated with inconvenience. Enjoying it typically required specialized equipment such as 3D glasses or head-mounted displays (HMDs). Imperfections in the delivery of 3D images caused crosstalk, potentially leading to dizziness. These discomforts would chip away the immersion of 3D content.

+

Samsung Electronics is changing that narrative with the introduction of the Odyssey 3D (G90XF) — a finely tuned glasses-free 3D gaming monitor. Featuring eye-tracking and view-mapping technology, the Odyssey 3D marks a paradigm shift in immersive viewing and gaming experiences.

+

Samsung Newsroom sat down with Donghwa Lim from the Enterprise R&D Lab and Taekwan Lee from the Product Innovation Lab, both part of the Visual Display (VD) Business at Samsung Electronics, to discuss how the Odyssey 3D is redefining perceptions of 3D.

+
+

▲ Donghwa Lim and Taekwan Lee break down the Odyssey 3D’s technology and components.

+

The Three Core Technologies Behind Odyssey 3D

+

3D displays create a sense of dimension using binocular disparity, in which the brain perceives depth by processing the slightly different images seen by each eye. Leveraging this principle, the Odyssey 3D delivers a glasses-free 3D experience by precisely presenting different images to each eye without the need for external equipment. The eye-tracking technology is designed to recognize users’ eyes even when they are wearing glasses.

+

“It’s incredibly rewarding to bring to market a technology that once seemed out of reach.
+ Donghwa Lim, Samsung Electronics

+

At the heart of the Odyssey 3D are three key technologies — eye tracking, view mapping and a lenticular lens.

+

▲ Odyssey 3D features a myriad of technologies to deliver an immersive, glasses-free 3D experience

+

Eye tracking is enabled by a stereo camera mounted at the top of the monitor, detecting and tracking the user’s eye movements in real time.

+

“Because the two cameras capture different images, much like human eyes, they can determine the exact position of the user’s eyes and distance between the eyes and the monitor in real time,” said Lim. “This real-time eye position detection allows us to deliver a precise 3D image, even when the user moves.”

+

▲ (From left) View mapping and the lenticular lens

+

Based on this data, the system calculates the correct pixel positioning for each eye and reconstructs a single image through a process called view mapping. The final mapped images are then separately delivered to each eye through the lenticular lens, allowing the images from the display panels to be visible to each eye by utilizing light refraction.

+

What’s more, the Odyssey 3D isn’t limited to 3D gameplay alone. Since the Odyssey 3D was developed as a gaming monitor, it performs exceptionally well in terms of picture quality and response speed, even when used for 2D gameplay. The lenticular lens activates only when a 3D mode is enabled by Odyssey 3D Hub.

+

+

Minimizing Crosstalk With Samsung’s Advanced Display Technology

+

While 3D effects offer new levels of immersion, even minor visual inconsistencies can disrupt the experience. Samsung has dedicated significant resources to ensuring premium 3D visuals.

+

“Crosstalk occurs when the images perceived by the left and right eyes aren’t properly aligned,” said Lim. “It can lead to dizziness and other visual discomforts, so we developed several techniques to reduce it.”

+

▲ Donghwa Lim, Enterprise R&D Lab, Visual Display Business at Samsung Electronics, explains how technologies were meticulously put together to minimize crosstalk

+

“Even the slightest misalignments during the production or assembly of camera and display components can affect image accuracy,” he noted. “To address this, Samsung applies post-assembly calibration for both the camera and display panel and stores unit-specific data into a dedicated chip inside the monitor.”

+

In addition to hardware calibration, the Odyssey 3D features a deep learning-based eye-tracking algorithm and a specially engineered display cell coating designed to reduce light distortion and glare — all contributing to minimizing crosstalk and delivering a refined 3D experience.

+

+

Driving 3D Gaming Innovation Through Industry Partnerships

+

The true strength of the Odyssey 3D comes to life during gameplay. Samsung has made high-quality 3D gaming content available through Odyssey 3D Hub — a Windows-based 3D content platform that also supports the conversion of 2D photos and videos into 3D.

+

“When industry-leading companies join forces, the benefits are ultimately passed on to gamers.”
+— Taekwan Lee, Samsung Electronics

+

To bring immersive and personalized gaming experiences to users, Samsung is actively collaborating with industry partners to optimize games for glasses-free 3D.

+

▲ Taekwan Lee, Product Innovation Lab, Visual Display Business at Samsung Electronics, explains that cross-industry efforts are key in expanding the 3D market

+

Joint efforts are also underway to expand 3D gaming content.

+

“Game developers are constantly exploring ways to offer new experiences to users,” said Lee. “One of those directions is 3D gaming.”

+

While the 3D gaming market is still emerging, Lee emphasized that industry-wide collaboration is key to accelerating its growth.

+

The First Berserker: Khazan” — a recently published game developed by Nexon Korea and Neople — stands as a notable example of how 3D immersion can come to life through collaboration with Samsung during development.

+

“Through this partnership, Nexon, Neople and Samsung have been working closely to tailor the 3D visuals, carefully adjusting them based on the composition of characters and backgrounds. We ensured that everything from scene-specific factors to cinematic transitions could be presented more vividly on Odyssey 3D monitor,” he explained.

+

▲ A scene from “The First Berserker: Khazan”

+

“Creating effects like drifting particles, fast-moving flames and cinematic cutscenes1 was technically challenging, but I’m proud of what we achieved through teamwork,” Lee added. “In particular, the snowy mountain scene in Khazan gives the impression that snowflakes are flying directly toward the player when played on the Odyssey 3D. It’s an experience I would strongly recommend trying firsthand.”

+

“Our research is a journey to connect users to the future.”
+ Taekwan Lee, Samsung Electronics

+

With the Odyssey 3D, Samsung is elevating the gaming experience to new levels of immersion.

+

“We are in discussions with local and global game developers to expand the 3D gaming market,” he emphasized. “Our goal is to collaborate with more developers to bring a broader range of 3D games to users. When industry-leading companies join forces, the benefits are ultimately passed on to gamers.”

+

From Impossible to Possible: Leading the Future of 3D Monitors

+

Lim reflected on how far technology has come over the past decade.

+

“Way back when I first joined Samsung, I attended a meeting on 3D technology where the lenticular lens was deemed ‘not feasible’ with existing technology,” he said. “Now, years later, we’ve not only made it possible, but we’ve also brought it to market. It’s incredibly remarkable and deeply rewarding to see a product launch built on technology that once seemed out of reach.”

+

▲ Donghwa Lim and Taekwan Lee are excited about the market potential of 3D content and monitors

+

“Our research to create new experiences is a journey to connect users to the future. The Odyssey 3D marks the beginning of a new era in expanding the boundaries of technology-driven experiences,” said Lee. “Games played on the Odyssey 3D are sure to deliver a ‘wow’ factor — not just at specific moments, but throughout the entire experience.”

+

As Samsung continues to lead the gaming monitor market, the Odyssey 3D stands as a powerful example of how the company is redefining immersive experiences and pushing the limits of display innovation.

+

* This article has been updated for accuracy.

+

1 Short storytelling clips shown between stages during gameplay.

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a/2d_to_3d_verified_product_technical_reports/official_web_archives/samsung_spatial_signage_technology_2026/extracted_text.md b/2d_to_3d_verified_product_technical_reports/official_web_archives/samsung_spatial_signage_technology_2026/extracted_text.md new file mode 100644 index 0000000000000000000000000000000000000000..736c05ed096ec0e5443236fa9bf286be907591ab --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/samsung_spatial_signage_technology_2026/extracted_text.md @@ -0,0 +1,617 @@ +# How Samsung Spatial Signage works: Inside the technology behind glasses-free 3D - Samsung Business Insights + +- Vendor: Samsung +- Product: Spatial Signage +- Material date: 2026-03-05 +- Official source: https://insights.samsung.com/2026/03/05/how-samsung-spatial-signage-works-inside-the-technology-behind-glasses-free-3d/ +- Archived HTML: index.html + +## Extracted text + +How Samsung Spatial Signage works: Inside the technology behind glasses-free 3D - Samsung Business Insights + +Samsung Business Insights + +Close Menu + +Open Search + +Search for: + +Search + +Topics + +Computing & Monitors + +Digital Signage + +Memory & Storage + +Mobile Productivity + +Mobile Security + +Trending Tech + +Industries + +Education + +Finance + +Food & Beverage + +Gaming & Esports + +Government + +Healthcare + +Hospitality + +Live Events & Sports + +Manufacturing + +Retail + +Small Business + +Spectaculars & DOOH + +Transportation + +Resources + +Case Studies + +Infographics + +Videos + +White Papers + +About Us + +About Samsung Insights + +Our Experts + +Shop Now + +Samsung Business Insights + +Topics + +Computing & Monitors + +Digital Signage + +Memory & Storage + +Mobile Productivity + +Mobile Security + +Trending Tech + +Industries + +Education + +Finance + +Food & Beverage + +Gaming & Esports + +Government + +Healthcare + +Hospitality + +Live Events & Sports + +Manufacturing + +Retail + +Small Business + +Spectaculars & DOOH + +Transportation + +Resources + +Case Studies + +Infographics + +Videos + +White Papers + +About Us + +About Samsung Insights + +Our Experts + +Search for: + +Search + +Open Search + +Open Menu + +Close Menu + +Shop Now + +Home + +/ Digital Signage + +Video Digital Signage + +How Samsung Spatial Signage works: Inside the technology behind glasses-free 3D + +Published on Mar 5, 2026 + +By Samsung for Business + +Creating believable depth on a flat display can be a technical challenge. Human vision is sensitive to inconsistencies in scale, motion and focus. When those cues don’t align, 3D quickly appears awkward and artificial. That’s why most three-dimensional displays have historically required glasses or headsets. + +The 85” Spatial Signage SM85HX-P Commercial Display takes a different approach. Instead of trying to simulate depth through software alone, it changes how images are formed inside the display itself. The award-winning technology controls how light reaches the eye, so depth cues stay consistent without requiring any wearable equipment. Here’s how it works. + +What you’re seeing in Spatial Signage + +When you stand in front of Samsung Spatial Signage, the image appears dimensional immediately. There’s no calibration process or special gear required. Depth is perceptible from the start. + +Because the display manages how light is directed toward the eye, it avoids the conflicting visual signals that often make traditional 3D experiences fatiguing or unstable. Instead, the experience is closer to looking through a window than at a surface. Objects appear to occupy space rather than sit on a flat plane, and motion reinforces the effect instead of disrupting it. Depth also stays consistent because it’s not tied to a single viewing position or a narrow field of alignment. + +Stability is the key differentiator here. Spatial Signage delivers consistent depth cues because the image formation system is integrated end to end, from panel architecture to processing. Rather than rely on a perceptual illusion, it produces dimension that aligns with how the visual system naturally interprets space. + +The technology behind Spatial Signage + +Samsung Spatial Signage starts with a high-quality digital display. The image you see begins as a crisp, stable 2D visual, rendered with the same expectations around clarity, resolution and color accuracy that apply to any premium commercial display. + +Depth only feels convincing when the underlying image holds up on its own. Soft edges, uneven contrast or motion artifacts would break the illusion immediately. Spatial Signage avoids that failure by making image quality the first requirement, not something corrected later. + +A clean, stable image preserves motion integrity and maintains detail before any dimensional cues are introduced. Depth can then extend from a reliable visual surface instead of trying to disguise weaknesses underneath. This is the point where Samsung Spatial Signage separates from standard displays and dimensionality starts to emerge. + +When 3D technology enters the picture + +With a stable 2D image in place, Spatial Signage can begin shaping how light behaves across the display surface. Then, it’s actually the hardware itself, not the content, that creates depth. Here’s what happens behind the scenes of Samsung Spatial. + +The role of the 3D plate + +At the center of Spatial Signage is a dedicated optical layer known as the 3D plate. The 3D plate doesn’t generate imagery or apply effects. It redirects how light exits the display, so visual elements no longer share the same plane. + +Light guided through the 3D plate creates separation between foreground and background elements. Edges gain clarity, spatial relationships become legible, and objects appear positioned relative to one another instead of compressed into a single surface. + +With light already separated as it leaves the display, you don’t need to infer depth or mentally reconstruct space. The image arrives with spatial cues intact, allowing dimensionality to register immediately without exaggerated motion or manipulation. + +Precision backlighting + +Behind both the image layer and the 3D plate, precision LED backlighting determines how convincingly depth holds together. Brightness and contrast influence how near and far elements appear, anchoring highlights and defining recession. + +Consistent backlighting prevents depth from collapsing during motion. Elements move through space rather than sliding across a plane. Contrast remains controlled instead of blooming or flattening as content changes. + +The 3D plate and backlighting function as a single system. As a result, light is directed, reinforced and delivered with purpose. That coordination allows Samsung Spatial Signage to maintain depth that feels stable and believable. + +Why Spatial Signage works in almost any business setting + +Many depth effects lose credibility once the viewer moves. A slight shift in position can flatten the image or distort perspective, breaking the sense of authenticity. A distinct advantage of Spatial Signage is that it doesn’t depend on a fixed viewing point. + +As people pass by or approach from different angles, the image is always legible because depth cues are carried by how light exits the display. There is no preferred place to stand or transition point where the effect suddenly engages. + +Shared environments raise the bar for depth to behave reliably. Retail floors, lobbies, showrooms and event spaces introduce constant motion, varied sight lines and brief moments of attention. Spatial Signage accommodates those conditions by distributing spatial information across the display rather than concentrating it in a narrow alignment zone. Viewers encounter depth immediately, without instruction or adjustment, allowing the experience to register as natural rather than technical, which instinctually draws eyes to it. + +Start with what you already have + +Samsung Spatial Signage doesn’t discard existing visuals or require a new library of assets. Images, graphics, GIFs and videos that already communicate clearly in 2D are completely usable. Familiar visuals gain spatial presence as the system separates planes, reinforces contrast and preserves motion clarity. To put it simply, Spatial Signage expands on what existing content can do, rather than demanding something entirely new. + +More space, more opportunity + +When space is at a premium, Samsung Spatial Signage shines bright. That’s because the revolutionary technology inside actually seems to create more, expanding the canvas for the businesses and organizations employing it. With the added space comes new opportunities to project the brand, display products and capture attention. + +Discover the latest Samsung display technology and see what’s possible with a new take on 3D image rendering. Also learn more about how Samsung Spatial Signage is bringing depth and dimension to in-store retail experiences. + +Speak to a Digital Signage solutions expert + +Speak to an Expert + +Shop Now + +Share This: + +Subscribe to Insights + +Get the latest insights from Samsung delivered right to your inbox. + +Email address* + +See our Privacy Policy + +Written By + +Samsung for Business + +A global leader in enterprise mobility and information technology, Samsung offers a diverse portfolio of business technologies from smartphones, wearables, tablets and PCs, to digital displays and storage solutions. We are committed to putting the business customer at the core of everything we do, serving diverse industries including education, finance, government, healthcare, hospitality, public safety, retail and transportation. 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How Samsung Spatial Signage works: Inside the technology behind glasses-free 3D

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Creating believable depth on a flat display can be a technical challenge. Human vision is sensitive to inconsistencies in scale, motion and focus. When those cues don’t align, 3D quickly appears awkward and artificial. That’s why most three-dimensional displays have historically required glasses or headsets.

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The 85” Spatial Signage SM85HX-P Commercial Display takes a different approach. Instead of trying to simulate depth through software alone, it changes how images are formed inside the display itself. The award-winning technology controls how light reaches the eye, so depth cues stay consistent without requiring any wearable equipment. Here’s how it works.

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What you’re seeing in Spatial Signage

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When you stand in front of Samsung Spatial Signage, the image appears dimensional immediately. There’s no calibration process or special gear required. Depth is perceptible from the start.

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Because the display manages how light is directed toward the eye, it avoids the conflicting visual signals that often make traditional 3D experiences fatiguing or unstable. Instead, the experience is closer to looking through a window than at a surface. Objects appear to occupy space rather than sit on a flat plane, and motion reinforces the effect instead of disrupting it. Depth also stays consistent because it’s not tied to a single viewing position or a narrow field of alignment.

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Stability is the key differentiator here. Spatial Signage delivers consistent depth cues because the image formation system is integrated end to end, from panel architecture to processing. Rather than rely on a perceptual illusion, it produces dimension that aligns with how the visual system naturally interprets space.

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The technology behind Spatial Signage

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Samsung Spatial Signage starts with a high-quality digital display. The image you see begins as a crisp, stable 2D visual, rendered with the same expectations around clarity, resolution and color accuracy that apply to any premium commercial display.

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Depth only feels convincing when the underlying image holds up on its own. Soft edges, uneven contrast or motion artifacts would break the illusion immediately. Spatial Signage avoids that failure by making image quality the first requirement, not something corrected later.

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A clean, stable image preserves motion integrity and maintains detail before any dimensional cues are introduced. Depth can then extend from a reliable visual surface instead of trying to disguise weaknesses underneath. This is the point where Samsung Spatial Signage separates from standard displays and dimensionality starts to emerge.

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When 3D technology enters the picture

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With a stable 2D image in place, Spatial Signage can begin shaping how light behaves across the display surface. Then, it’s actually the hardware itself, not the content, that creates depth. Here’s what happens behind the scenes of Samsung Spatial.

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The role of the 3D plate

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At the center of Spatial Signage is a dedicated optical layer known as the 3D plate. The 3D plate doesn’t generate imagery or apply effects. It redirects how light exits the display, so visual elements no longer share the same plane.

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Light guided through the 3D plate creates separation between foreground and background elements. Edges gain clarity, spatial relationships become legible, and objects appear positioned relative to one another instead of compressed into a single surface.

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With light already separated as it leaves the display, you don’t need to infer depth or mentally reconstruct space. The image arrives with spatial cues intact, allowing dimensionality to register immediately without exaggerated motion or manipulation.

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Precision backlighting

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Behind both the image layer and the 3D plate, precision LED backlighting determines how convincingly depth holds together. Brightness and contrast influence how near and far elements appear, anchoring highlights and defining recession.

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Consistent backlighting prevents depth from collapsing during motion. Elements move through space rather than sliding across a plane. Contrast remains controlled instead of blooming or flattening as content changes.

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The 3D plate and backlighting function as a single system. As a result, light is directed, reinforced and delivered with purpose. That coordination allows Samsung Spatial Signage to maintain depth that feels stable and believable.

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Why Spatial Signage works in almost any business setting

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Many depth effects lose credibility once the viewer moves. A slight shift in position can flatten the image or distort perspective, breaking the sense of authenticity. A distinct advantage of Spatial Signage is that it doesn’t depend on a fixed viewing point.

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As people pass by or approach from different angles, the image is always legible because depth cues are carried by how light exits the display. There is no preferred place to stand or transition point where the effect suddenly engages.

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Shared environments raise the bar for depth to behave reliably. Retail floors, lobbies, showrooms and event spaces introduce constant motion, varied sight lines and brief moments of attention. Spatial Signage accommodates those conditions by distributing spatial information across the display rather than concentrating it in a narrow alignment zone. Viewers encounter depth immediately, without instruction or adjustment, allowing the experience to register as natural rather than technical, which instinctually draws eyes to it.

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Start with what you already have

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Samsung Spatial Signage doesn’t discard existing visuals or require a new library of assets. Images, graphics, GIFs and videos that already communicate clearly in 2D are completely usable. Familiar visuals gain spatial presence as the system separates planes, reinforces contrast and preserves motion clarity. To put it simply, Spatial Signage expands on what existing content can do, rather than demanding something entirely new.

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More space, more opportunity

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When space is at a premium, Samsung Spatial Signage shines bright. That’s because the revolutionary technology inside actually seems to create more, expanding the canvas for the businesses and organizations employing it. With the added space comes new opportunities to project the brand, display products and capture attention.

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Discover the latest Samsung display technology and see what’s possible with a new take on 3D image rendering. Also learn more about how Samsung Spatial Signage is bringing depth and dimension to in-store retail experiences.

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Written By

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Samsung for Business

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A global leader in enterprise mobility and information technology, Samsung offers a diverse portfolio of business technologies from smartphones, wearables, tablets and PCs, to digital displays and storage solutions. We are committed to putting the business customer at the core of everything we do, serving diverse industries including education, finance, government, healthcare, hospitality, public safety, retail and transportation. Follow Samsung for Business on Twitter: @SamsungBizUSA

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index.html + +## Extracted text + +White Paper(ELF-SR1 only)|Technical Specifications|XYN Web Portal Site + +Skip to content + +Developer Top + +News + +SDK・Plugin + +Setup + +App Select + +Manual + +JA + +EN + +CN + +OPEN MENU + +Table of Contents + +Spatial Reality Display + +Top + +CLOSE MENU + +White Paper(ELF-SR1 only) + +OPEN MENU + +Table of Contents + +Spatial Reality Display + +Top + +CLOSE MENU + +White Paper(ELF-SR1 only) + +Publication Dec. 12, 2025 | + +Last Updated Jan. 28, 2026 + +Technical Background + +Delivering the dream + +Science fiction movies like the original Star Wars depict volumetric displays showing 3D objects that appear to occupy real space, just as in life. You can examine the top, bottom and sides of displayed objects when you move your head, bringing them dramatically closer to the appearance of physical reality. + +Of course, in this dream scenario, there are no 3D glasses. + +In reality, such a display would be a game-changer for anyone who designs 3D objects: industrial designers, architects, engineers, game developers and computer graphics artists for motion pictures. Such a display would also constitute a breakthrough for detailed scientific visualization of 3D objects in biochemistry, geology, Geographic Information Systems and other disciplines. + +Sony’s Spatial Reality Display is the realization of that dream. + +Sony’s Spatial Reality Display works with a PC and a 3D computer graphics platform to deliver glasses-free stereoscopic 3D viewing and images that pivot immediately in response to head movement. The result is visual magic: an overwhelming impression of 3D reality. Even jaded design and computer graphics professionals are blown away. + +Industry experts have acclaimed Sony’s Spatial Reality Display. + +How it works + +A breakthrough for viewing 3D computer graphics, the ELF-SR1 Spatial Reality Display consists of a 15.6” diagonal 4K LCD panel angled in the supplied stand at 45°. The panel, which has over 8 million pixels, displays independent left- and right-eye images, each with about half the pixels. A micro optical lens in front of the LCD panel separates the two images and directs each to the correct eye. This creates the powerful illusion of a 3D scene that extends in front of the screen surface. While impressive, the effect becomes even more compelling as you move your head. The system immediately pivots the 3D scene in response to movement, maintaining the illusion of real 3D objects. You’re free to look around, exploring the scene from different angles. + +The system follows eye movement down to the millisecond and the image pivots in sync as you tilt or move your head up and down, left and right—even forward and back. The result is an overpowering sensation of 3D reality. + +Overview of the Spatial Reality Display system. + +The secret is an eye sensing camera built into the bezel of the display. This outputs video data via USB 3.2 to a Windows® 10 PC. An advanced real-time rendering algorithm in Sony’s Spatial Reality Display Runtime Software interprets the eye sensing data and directs supported game engines to immediately pivot the scene according to your head motions. + +The Spatial Reality Display is supported by two of the world’s top 3D content production platforms: Unity® and Unreal® Engine*1 . In this way, the Spatial Reality Display is ready to work with a large library of existing virtual reality content. + +*1 Recommend use of "high resolution, quality images" created using Unity or Unreal Engine 4 software. Computer required with a recommended CPU of Intel Core i7-9700K @3.60 GHz or faster; and a graphics card such as NVIDIA GeForce RTX 2070 SUPER or faster. Only Windows 10 (64-bit) is supported. + +Advantages + +Unique in configuration and brimming with proprietary technology, Sony’s Spatial Reality Display empowers you to see what could never be seen before. For designers, researchers and content creation professionals, the benefits are profound. + +Glasses-free Stereoscopic 3D of exceptional quality. Some 3D displays are prone to Left/Right ghosting, also known as crosstalk, where each eye sees some of the image intended for the other. The micro optical lens is meticulously engineered to minimize crosstalk. The result is a convincing 3D effect that has won rave reviews from discerning professionals. + +One secret to the system’s convincing 3D effect is the extraordinary precision of the micro optical lens that directs left-eye and right-eye images. + +Down-to-the-millisecond response to head motion with six degrees of freedom. The Spatial Reality Display sustains the powerful illusion of a solid volumetric scene by adjusting the view as you move your head. The system senses and smoothly responds to your head motion with six degrees of freedom. There are three axes of motion: up/down, left/right and forward/back up to the limits of the display’s viewing “cone.” Within limits, the display can also accommodate roll (tilting your head left and right), pitch (tilting your head up and down) and yaw (pivoting your head left and right). Time delay (latency) between your head motion and the resulting display adjustment would degrade the illusion. For maximum effect, the system operates in real time, with millisecond response and high accuracy. Sony accomplishes these goals with hardware, firmware and software advances including a high-speed camera, sophisticated face detection and eye sensing technology and a proprietary real-time rendering algorithm. + +The high-speed camera (left) provides down-to-the-millisecond data for face tracking and eye sensing. + +High resolution. The Spatial Reality Display has an uncanny ability to convey object details and textures thanks to a 4K (3840 x 2160) native display panel featuring over 8 million pixels total. To optimize the 3D immersive experience, Sony applies a unique masked bezel edge. About half the pixels are delivered to each eye. + +Viewing comfort and convenience. Where VR headsets isolate the user from the computer keyboard and input devices, the Spatial Reality Display functions as a secondary desktop monitor. It works alongside traditional 2D monitors empowering you to seamlessly transition between 2D and 3D evaluation. And while some users can experience nausea or discomfort with VR headsets, the Spatial Reality Display minimizes discomfort. + +Content creation in Unity 2018.4. + +Accommodates existing workflows. The Spatial Reality Display will fit right in wherever professionals create 3D computer graphics. The system works with a Windows® 10 PC fitted with the CPU and GPU power typical of 3D computer graphics houses. Sony provides plug-in support for two of the world’s top 3D content production platforms: Unity and Unreal Engine. The ELF-SR1 can also display existing content already authored for Virtual Reality, either directly or with minor modification, depending on the content. + +Applications + +Since the first public demonstrations at CES 2020, the Spatial Reality Display has generated intense interest across many professions. Feedback from customer trials with evaluation samples has given us a preliminary glimpse at the potential markets. + +Automotive design. Car companies are recognizing the potential of this technology. “At Volkswagen, we've been evaluating Sony's Spatial Reality Display from its early stages, and we see considerable usefulness and multiple applications throughout the ideation and design process, and even with training," commented Frantisek Zapletal, Virtual Engineering Lab US, Volkswagen Group of America, Inc. + +Industrial design. Spatial Reality represents a completely new way for designers to preview their 3D creations. After working with a prototype, product designer So Morimoto said, “When I check my designs, I often change the angle of light to check the texture. I naturally tilt my head while I’m looking at things and what is amazing is that this display precisely reflects those natural movements.” Product designer and mechanical engineer Tatsuhito Aono said, “Even when working remotely like between Tokyo and Shanghai… we could share designs with this kind of presence.” + +Architecture. Architects are constantly striving to communicate 3D concepts. “This really feels like a step toward remotely communicating in shapes and being able to send ‘things’ to many different people,” said Keisuke Toyota, co-founder of noiz, an architecture practice in the Meguro section of Tokyo. + +Game development. Compatible with the Unity and Unreal Engine platforms that so many game developers are already using, the Spatial Reality Display is a natural fit for both conventional 2D and VR projects. You can readily evaluate 3D attributes without leaving your work environment. + +Entertainment/content creation. We sent a sample to The Mill, a leading production studio with offices in London, New York, Los Angeles, Chicago, Berlin and Bangalore. According to Dan Philips, executive producer of emerging technology, “You're literally looking at magic happen on the screen, wondering how it's working. Every single person I’ve seen observing this display is just like, ‘I’ve never seen anything like it.’” Sony Pictures Entertainment and Columbia Pictures subsidiary Ghost Corps worked on Ghostbusters: Afterlife. Says Eric Reich, brand and franchise executive at Ghost Corps, “The display offers a new approach to visualizing concepts and characters, making understanding the finished product that much easier.” + +cientific visualization. Whether you’re trying to understand complex proteins, mineral deposits, or structural stress, there are applications where two dimensions just aren’t enough. The Spatial Reality Display enables powerful 3D visualization without the need for cumbersome VR headsets or the complexity of CAVE automatic virtual environments. + +Why Sony? + +In the words of company co-founder Akio Morita, “We do what others don’t.” The Spatial Reality Display is an expression of that ambition. Of course, the display also reflects Sony’s technological leadership in three fields. + +A leader in displays from the production monitors on Hollywood soundstages to the award-winning critical evaluation monitors in color grading suites to retail and corporate digital signage to home televisions. + +A leader in image sensing. The system takes advantage of a proprietary high-speed vision sensor. + +A leader in computer generated image processing in generation after generation of PlayStation® consoles, leading up to PlayStation 5. + +The Spatial Reality Display represents a first-of-its-kind integration of all these world-class technologies. This is a compelling 3D experience you won’t find anywhere else. + +Appendix 1: 3D depth perception and the Spatial Reality Display + +As most professionals reading this document know, humans rely on depth perception every time we drive a car, reach for a pencil or hit a tennis ball. Since depth perception is so fundamental, it takes advantage of a broad range of visual cues. These include many cues evident in 2D monitors and projectors and even visible in Renaissance painting: occlusion, relative size and aerial perspective. 2D moving pictures provide another cue: camera motion parallax. + +To appreciate the Spatial Reality Display, it pays to examine three additional cues that are crucial to depth perception and then see how different display technologies succeed or fail to employ them. + +Binocular disparity. Thanks to the spatial separation between eyes, the left eye image is slightly different from the right. This one cue is solely responsible for the difference between 2D and 3D cinema presentation. In this conceptual view of superimposed left and right images in 3D cinema, the spoon has disparity to appear in front of the screen, the mug has zero disparity to appear at the screen and the apple has negative disparity to appear behind the screen. + +Head motion occlusion. In real life, your motion changes the way foreground objects obstruct background objects. Scene 2 simulates moving your head to the right, revealing more of the apple. + +Head motion parallax. It’s not just occlusion. Scene 2 simulates moving your viewpoint up and to the right. This shifts the entire perspective and reveals the top of the mug. + +When we compare how different display types employ these depth cues. It’s clear that Sony’s Spatial Reality Display addresses the same cues as Virtual Reality headsets and CAVE automatic virtual environments. + +3D display types + +Visual Cue + +Stereoscopic 3D monitors & projectors + +Commercially available multi-view 3D monitors + +VR headsets + +CAVE automatic virtual environments + +Sony’s Spatial Reality Display + +Binocular disparity + +Yes + +Horizontal head motion occlusion + +- + +Yes + +Vertical head motion occlusion + +- + +Yes + +Forward/backward head motion occlusion + +- + +Yes + +Horizontal head motion parallax + +- + +Yes + +Vertical head motion parallax + +- + +Yes + +Forward/backward head motion parallax + +- + +Yes + +Appendix 2: Sony’s Spatial Reality versus other volumetric 3D displays + +VR headsets + +VR headsets have gained traction for gaming and selected consumer and professional applications. For all their advantages, they place the user into an isolated environment divorced from the working world. You need to take off the headset to accomplish everything from most design tasks to answering emails and picking up the phone. The Spatial Reality Display acts like a second computer monitor, enabling you to instantly switch from 3D evaluation to all the other tasks that make up your day. + +In addition, some users report a degree of discomfort while using VR. The Spatial Reality Display minimizes these issues. + +CAVE automatic virtual environments + +CAVE automatic virtual environments continue to be the gold standard in 3D viewing. We’re proud that leading CAVE installations have selected Sony’s SXRD® 3D video projectors. However, CAVE viewing is not for everyone. You need a dedicated room – a substantial investment in real estate – in addition to the cost of multiple projectors, displays and CGI computers. CAVE also requires meticulous engineering, precise installation, careful calibration and 3D glasses. While CAVE is ideal for well-endowed research facilities, it’s out of reach for everyone else. + +In addition, CAVE, like VR headsets, is not a good fit with the everyday work environment. While Spatial Reality literally fits on a desk, CAVE viewing takes researchers away from their desks altogether. + +Multi-view 3D monitors + +At first glance, Sony’s Spatial Reality Display appears to serve the same function as commercially available multi-view 3D monitors. A deeper dive reveals important differences and suggests substantially different applications and possibilities. While Sony’s Spatial Reality Display serves one user at a time, multi-view 3D monitors can serve several users simultaneously. Naturally, this capability involves significant tradeoffs. + +Step-wise rendering. According to Sony’s survey of commercial products as of February 2021, multi-view displays typically offer 45 views. In comparison, the PC in Sony’s Spatial Reality system can render literally hundreds of views, each precisely calculated for the user’s exact position. With just 45 views, the image changes in discrete steps as you move your head. Step-wise rendering can be moderated by allowing each eye of the user to see two or more adjacent views, but that entails considerable blurring on parts of the image that extend in front and behind the display’s “zero parallax plane.” Step-wise rendering can also be moderated by intentional blurring during content creation. But once again, this sacrifices image detail. + +Limited resolution. Using the example of 45 views, each user typically sees 2/45 of the display’s native resolution. This means as much as 95% of the display pixels are devoted to views you’re not seeing. The engineers of multi-view 3D displays thus face a challenging tradeoff. On one hand, they can maximize resolution. On the other, they can provide lots of views. They can’t do both. + +No response to up/down or forward/back head motion. According to Sony’s survey of published claims, you cannot change your view of the object by moving vertically, toward the display or away. The view changes in response to side-to-side head movement only. + +These differences suggest that the Spatial Reality Display and multi-view 3D monitors offer substantially different performance. + +Specifications + +DIMENSIONS AND WEIGHT + +DIMENSIONS + +Approx. 15-1/8 x 9-1/4 x 9-1/8" (383 x 232 x 231 mm) 15-1/8 x 9-1/4 x 9-3/4" (383 x 232 x 247 mm) (including accessories) + +WEIGHT WITH ACCESSORIES + +Approx. 10.8 lbs. (4.9 kg) + +WEIGHT WITHOUT ACCESSORIES + +Approx. 10.2 lbs. (4.6 kg) + +SENSOR + +HIGH-SPEED VISION SENSOR + +Eye-sensing vision sensor built in + +VIEWING DISTANCE + +12–30 inches (30 cm–75 cm) + +VIEWING ANGLE + +Up 20 degrees, down 40 degrees, left and right 25 degrees; Landscape use only + +NUMBER OF USERS AT A TIME + +One*2 + +DISPLAY + +SIZE (MEASURED DIAGONALLY) + +15.6 inches + +LUMINANCE + +500 nits + +CONTRAST + +1400:1 + +GAMUT + +Adobe RGB approx. 100% + +COLOR TEMPERATURE + +6500K + +PANEL RESOLUTION + +3,840 x 2,160 pixels*3 + +AUDIO + +SPEAKERS + +5.5 W (1.5 W + 1.5 W + 2.5 W) + +CONNECTIVITY + +HDMI INPUT + +1 + +CONTROL TERMINAL + +1 (USB 3.2 Gen1 Type-C) + +POWER + +DC IN, 12V 2.0A + +POWER AND ENERGY SAVING + +POWER CONSUMPTION (ON) + +24 W + +POWER CONSUMPTION (STANDBY) + +0.5 W + +ENVIRONMENT + +ILLUMINANCE + +100 lux—1,000 lux with a minimum of 100 lux on the user’s face to support the eye sensing camera + +TEMPERATURE + +32–104 °F (0–40 °C) + +HUMIDITY + +20–80 % (No condensation) + +SUPPORTED GAME ENGINES + +Unity + +2019.4 (recommended), 2018.4, 2020.3 + +Unreal Engine 4: + +4.25 (recommended), 4.24, 4.26 + +LANGUAGE + +DISPLAY LANGUAGE + +English/French + +PC SOFTWARE + +English/French + +ACCESSIBILITY + +TEXT TO SPEECH + +Yes + +WHAT'S IN THE BOX + +AC adapter (1) + +Power cord (1) + +USB Type-C cable (1) + +HDMI cable (1) + +Warranty card (1) + +Instruction manual (1) + +Side panels (2) (left and right) + +Top flange (1) + +Bottom stand (1) + +Cleaning cloth (1) + +PC SYSTEM REQUIREMENTS + +OPERATING SYSTEM + +Windows® 10 (64-bit) + +PROCESSOR + +Intel® Core i7-9700K @3.60GHz or faster (8 cores or more) (Benchmark: Geekbench score >7000) + +GPU + +NVIDIA® GeForce® RTX 2070 SUPER or faster (Benchmark: 3DMark score (Fire Strike) > 25,000) + +RAM + +16.0GB or more + +STORAGE + +Content-dependent + +*2 Eye sensing may not always work as intended depending on viewing conditions. + +*3 Pixels close to the bezel are masked for a better 3D experience. A little pattern of lines may appear depending on conditions and content, due to the display structure. + +copied + +Was this article helpful? + +YES + +NO + +license + +Developer Contact・ + +Commercial Use + +Contact + +Products + +All list + +XYN Spatial Scan + +XYN Spatial Renderer Plugin + +XYN Spatial Scan Navi + +XYN Motion Studio + +mocopi + +mocopi VR + +mocopi + +Spatial Reality Display + +XR Head-Mounted Display + +XYN Spatial capture solution + +About XYN + +Use Cases + +Film Production + +Virtual Produciton + +News + +News Release + +Case Studies + +Learn + +Support + +Developer + +Business + +Business Contact + +Copyright 2025 Sony Corporation + +JA + +Logo Guideline + +Trademarks + +Contact list + +Terms and Conditions + +Privacy Policy + +Cookie Policy + +Accessibility Policy + +Manage Cookies diff --git a/2d_to_3d_verified_product_technical_reports/official_web_archives/sony_spatial_reality_display_whitepaper_2025/image_manifest.csv 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Technical Background

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Science fiction movies like the original Star Wars depict volumetric displays showing 3D objects that appear to occupy real space, just as in life. You can examine the top, bottom and sides of displayed objects when you move your head, bringing them dramatically closer to the appearance of physical reality.

+

Of course, in this dream scenario, there are no 3D glasses.

+

In reality, such a display would be a game-changer for anyone who designs 3D objects: industrial designers, architects, engineers, game developers and computer graphics artists for motion pictures. Such a display would also constitute a breakthrough for detailed scientific visualization of 3D objects in biochemistry, geology, Geographic Information Systems and other disciplines.

+

Sony’s Spatial Reality Display is the realization of that dream.

+

Sony’s Spatial Reality Display works with a PC and a 3D computer graphics platform to deliver glasses-free stereoscopic 3D viewing and images that pivot immediately in response to head movement. The result is visual magic: an overwhelming impression of 3D reality. Even jaded design and computer graphics professionals are blown away.

+

awardIndustry experts have acclaimed Sony’s Spatial Reality Display.

+ +

A breakthrough for viewing 3D computer graphics, the ELF-SR1 Spatial Reality Display consists of a 15.6” diagonal 4K LCD panel angled in the supplied stand at 45°. The panel, which has over 8 million pixels, displays independent left- and right-eye images, each with about half the pixels. A micro optical lens in front of the LCD panel separates the two images and directs each to the correct eye. This creates the powerful illusion of a 3D scene that extends in front of the screen surface. While impressive, the effect becomes even more compelling as you move your head. The system immediately pivots the 3D scene in response to movement, maintaining the illusion of real 3D objects. You’re free to look around, exploring the scene from different angles.

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dinosaursThe system follows eye movement down to the millisecond and the image pivots in sync as you tilt or move your head up and down, left and right—even forward and back. The result is an overpowering sensation of 3D reality.

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overview_systemOverview of the Spatial Reality Display system.

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The secret is an eye sensing camera built into the bezel of the display. This outputs video data via USB 3.2 to a Windows® 10 PC. An advanced real-time rendering algorithm in Sony’s Spatial Reality Display Runtime Software interprets the eye sensing data and directs supported game engines to immediately pivot the scene according to your head motions.

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The Spatial Reality Display is supported by two of the world’s top 3D content production platforms: Unity® and Unreal® Engine*1 . In this way, the Spatial Reality Display is ready to work with a large library of existing virtual reality content.

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*1 Recommend use of "high resolution, quality images" created using Unity or Unreal Engine 4 software. Computer required with a recommended CPU of Intel Core i7-9700K @3.60 GHz or faster; and a graphics card such as NVIDIA GeForce RTX 2070 SUPER or faster. Only Windows 10 (64-bit) is supported.

+ +

Unique in configuration and brimming with proprietary technology, Sony’s Spatial Reality Display empowers you to see what could never be seen before. For designers, researchers and content creation professionals, the benefits are profound.

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    +
  • Glasses-free Stereoscopic 3D of exceptional quality. Some 3D displays are prone to Left/Right ghosting, also known as crosstalk, where each eye sees some of the image intended for the other. The micro optical lens is meticulously engineered to minimize crosstalk. The result is a convincing 3D effect that has won rave reviews from discerning professionals.
  • +
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opt_lensOne secret to the system’s convincing 3D effect is the extraordinary precision of the micro optical lens that directs left-eye and right-eye images.

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    +
  • Down-to-the-millisecond response to head motion with six degrees of freedom. The Spatial Reality Display sustains the powerful illusion of a solid volumetric scene by adjusting the view as you move your head. The system senses and smoothly responds to your head motion with six degrees of freedom. There are three axes of motion: up/down, left/right and forward/back up to the limits of the display’s viewing “cone.” Within limits, the display can also accommodate roll (tilting your head left and right), pitch (tilting your head up and down) and yaw (pivoting your head left and right). Time delay (latency) between your head motion and the resulting display adjustment would degrade the illusion. For maximum effect, the system operates in real time, with millisecond response and high accuracy. Sony accomplishes these goals with hardware, firmware and software advances including a high-speed camera, sophisticated face detection and eye sensing technology and a proprietary real-time rendering algorithm.
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sensorThe high-speed camera (left) provides down-to-the-millisecond data for face tracking and eye sensing.

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  • High resolution. The Spatial Reality Display has an uncanny ability to convey object details and textures thanks to a 4K (3840 x 2160) native display panel featuring over 8 million pixels total. To optimize the 3D immersive experience, Sony applies a unique masked bezel edge. About half the pixels are delivered to each eye.
  • +
  • Viewing comfort and convenience. Where VR headsets isolate the user from the computer keyboard and input devices, the Spatial Reality Display functions as a secondary desktop monitor. It works alongside traditional 2D monitors empowering you to seamlessly transition between 2D and 3D evaluation. And while some users can experience nausea or discomfort with VR headsets, the Spatial Reality Display minimizes discomfort.
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unity_editorContent creation in Unity 2018.4.

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  • Accommodates existing workflows. The Spatial Reality Display will fit right in wherever professionals create 3D computer graphics. The system works with a Windows® 10 PC fitted with the CPU and GPU power typical of 3D computer graphics houses. Sony provides plug-in support for two of the world’s top 3D content production platforms: Unity and Unreal Engine. The ELF-SR1 can also display existing content already authored for Virtual Reality, either directly or with minor modification, depending on the content.
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Since the first public demonstrations at CES 2020, the Spatial Reality Display has generated intense interest across many professions. Feedback from customer trials with evaluation samples has given us a preliminary glimpse at the potential markets.

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  • Automotive design. Car companies are recognizing the potential of this technology. “At Volkswagen, we've been evaluating Sony's Spatial Reality Display from its early stages, and we see considerable usefulness and multiple applications throughout the ideation and design process, and even with training," commented Frantisek Zapletal, Virtual Engineering Lab US, Volkswagen Group of America, Inc.
  • +
  • Industrial design. Spatial Reality represents a completely new way for designers to preview their 3D creations. After working with a prototype, product designer So Morimoto said, “When I check my designs, I often change the angle of light to check the texture. I naturally tilt my head while I’m looking at things and what is amazing is that this display precisely reflects those natural movements.” Product designer and mechanical engineer Tatsuhito Aono said, “Even when working remotely like between Tokyo and Shanghai… we could share designs with this kind of presence.”
  • +
  • Architecture. Architects are constantly striving to communicate 3D concepts. “This really feels like a step toward remotely communicating in shapes and being able to send ‘things’ to many different people,” said Keisuke Toyota, co-founder of noiz, an architecture practice in the Meguro section of Tokyo.
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  • Game development. Compatible with the Unity and Unreal Engine platforms that so many game developers are already using, the Spatial Reality Display is a natural fit for both conventional 2D and VR projects. You can readily evaluate 3D attributes without leaving your work environment.
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  • Entertainment/content creation. We sent a sample to The Mill, a leading production studio with offices in London, New York, Los Angeles, Chicago, Berlin and Bangalore. According to Dan Philips, executive producer of emerging technology, “You're literally looking at magic happen on the screen, wondering how it's working. Every single person I’ve seen observing this display is just like, ‘I’ve never seen anything like it.’” Sony Pictures Entertainment and Columbia Pictures subsidiary Ghost Corps worked on Ghostbusters: Afterlife. Says Eric Reich, brand and franchise executive at Ghost Corps, “The display offers a new approach to visualizing concepts and characters, making understanding the finished product that much easier.”
  • +
  • cientific visualization. Whether you’re trying to understand complex proteins, mineral deposits, or structural stress, there are applications where two dimensions just aren’t enough. The Spatial Reality Display enables powerful 3D visualization without the need for cumbersome VR headsets or the complexity of CAVE automatic virtual environments.
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In the words of company co-founder Akio Morita, “We do what others don’t.” The Spatial Reality Display is an expression of that ambition. Of course, the display also reflects Sony’s technological leadership in three fields.

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  • A leader in displays from the production monitors on Hollywood soundstages to the award-winning critical evaluation monitors in color grading suites to retail and corporate digital signage to home televisions.
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  • A leader in image sensing. The system takes advantage of a proprietary high-speed vision sensor.
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  • A leader in computer generated image processing in generation after generation of PlayStation® consoles, leading up to PlayStation 5.
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The Spatial Reality Display represents a first-of-its-kind integration of all these world-class technologies. This is a compelling 3D experience you won’t find anywhere else.

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Appendix 1: 3D depth perception and the Spatial Reality Display

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As most professionals reading this document know, humans rely on depth perception every time we drive a car, reach for a pencil or hit a tennis ball. Since depth perception is so fundamental, it takes advantage of a broad range of visual cues. These include many cues evident in 2D monitors and projectors and even visible in Renaissance painting: occlusion, relative size and aerial perspective. 2D moving pictures provide another cue: camera motion parallax.

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To appreciate the Spatial Reality Display, it pays to examine three additional cues that are crucial to depth perception and then see how different display technologies succeed or fail to employ them.

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+ Binocular disparity. Thanks to the spatial separation between eyes, the left eye image is slightly different from the right. This one cue is solely responsible for the difference between 2D and 3D cinema presentation. In this conceptual view of superimposed left and right images in 3D cinema, the spoon has disparity to appear in front of the screen, the mug has zero disparity to appear at the screen and the apple has negative disparity to appear behind the screen. + + cup_and_apple_1 +
+ Head motion occlusion. In real life, your motion changes the way foreground objects obstruct background objects. Scene 2 simulates moving your head to the right, revealing more of the apple. + + cup_and_apple_2 +  +
+ Head motion parallax. It’s not just occlusion. Scene 2 simulates moving your viewpoint up and to the right. This shifts the entire perspective and reveals the top of the mug. + + cup_and_apple_3 +  +
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When we compare how different display types employ these depth cues. It’s clear that Sony’s Spatial Reality Display addresses the same cues as Virtual Reality headsets and CAVE automatic virtual environments.

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+    + + 3D display types + +    + +    + +    + +    +
+ Visual Cue + + Stereoscopic 3D monitors & projectors + + Commercially available multi-view 3D monitors + + VR headsets + + CAVE automatic virtual environments + + Sony’s Spatial Reality Display +
+ Binocular disparity + + Yes + + Yes + + Yes + + Yes + + Yes +
+ Horizontal head motion occlusion + + - + + Yes + + Yes + + Yes + + Yes +
+ Vertical head motion occlusion + + - + + - + + Yes + + Yes + + Yes +
+ Forward/backward head motion occlusion + + - + + - + + Yes + + Yes + + Yes +
+ Horizontal head motion parallax + + - + + Yes + + Yes + + Yes + + Yes +
+ Vertical head motion parallax + + - + + - + + Yes + + Yes + + Yes +
+ Forward/backward head motion parallax + + - + + - + + Yes + + Yes + + Yes +
+
+ +
+

Appendix 2: Sony’s Spatial Reality versus other volumetric 3D displays

+
+ +

VR headsets have gained traction for gaming and selected consumer and professional applications. For all their advantages, they place the user into an isolated environment divorced from the working world. You need to take off the headset to accomplish everything from most design tasks to answering emails and picking up the phone. The Spatial Reality Display acts like a second computer monitor, enabling you to instantly switch from 3D evaluation to all the other tasks that make up your day.

+

In addition, some users report a degree of discomfort while using VR. The Spatial Reality Display minimizes these issues.

+
+
+ +

CAVE automatic virtual environments continue to be the gold standard in 3D viewing. We’re proud that leading CAVE installations have selected Sony’s SXRD® 3D video projectors. However, CAVE viewing is not for everyone. You need a dedicated room – a substantial investment in real estate – in addition to the cost of multiple projectors, displays and CGI computers. CAVE also requires meticulous engineering, precise installation, careful calibration and 3D glasses. While CAVE is ideal for well-endowed research facilities, it’s out of reach for everyone else.

+

In addition, CAVE, like VR headsets, is not a good fit with the everyday work environment. While Spatial Reality literally fits on a desk, CAVE viewing takes researchers away from their desks altogether.

+
+ +

At first glance, Sony’s Spatial Reality Display appears to serve the same function as commercially available multi-view 3D monitors. A deeper dive reveals important differences and suggests substantially different applications and possibilities. While Sony’s Spatial Reality Display serves one user at a time, multi-view 3D monitors can serve several users simultaneously. Naturally, this capability involves significant tradeoffs.

+
    +
  • Step-wise rendering. According to Sony’s survey of commercial products as of February 2021, multi-view displays typically offer 45 views. In comparison, the PC in Sony’s Spatial Reality system can render literally hundreds of views, each precisely calculated for the user’s exact position. With just 45 views, the image changes in discrete steps as you move your head. Step-wise rendering can be moderated by allowing each eye of the user to see two or more adjacent views, but that entails considerable blurring on parts of the image that extend in front and behind the display’s “zero parallax plane.” Step-wise rendering can also be moderated by intentional blurring during content creation. But once again, this sacrifices image detail.
  • +
  • Limited resolution. Using the example of 45 views, each user typically sees 2/45 of the display’s native resolution. This means as much as 95% of the display pixels are devoted to views you’re not seeing. The engineers of multi-view 3D displays thus face a challenging tradeoff. On one hand, they can maximize resolution. On the other, they can provide lots of views. They can’t do both.
  • +
  • No response to up/down or forward/back head motion. According to Sony’s survey of published claims, you cannot change your view of the object by moving vertically, toward the display or away. The view changes in response to side-to-side head movement only.
  • +
+

These differences suggest that the Spatial Reality Display and multi-view 3D monitors offer substantially different performance.

+

Specifications

+
+ + +
+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +
+ DIMENSIONS AND WEIGHT + +    +
+ DIMENSIONS + + Approx. 15-1/8 x 9-1/4 x 9-1/8" (383 x 232 x 231 mm) 15-1/8 x 9-1/4 x 9-3/4" (383 x 232 x 247 mm) (including accessories) +
+ WEIGHT WITH ACCESSORIES + + Approx. 10.8 lbs. (4.9 kg) +
+ WEIGHT WITHOUT ACCESSORIES + + Approx. 10.2 lbs. (4.6 kg) +
+ SENSOR + +    +
+ HIGH-SPEED VISION SENSOR + + Eye-sensing vision sensor built in +
+ VIEWING DISTANCE + + 12–30 inches (30 cm–75 cm) +
+ VIEWING ANGLE + + Up 20 degrees, down 40 degrees, left and right 25 degrees; Landscape use only +
+ NUMBER OF USERS AT A TIME + + One*2 +
+ DISPLAY + +    +
+ SIZE (MEASURED DIAGONALLY) + + 15.6 inches +
+ LUMINANCE + + 500 nits +
+ CONTRAST + + 1400:1 +
+ GAMUT + + Adobe RGB approx. 100% +
+ COLOR TEMPERATURE + + 6500K +
+ PANEL RESOLUTION + + 3,840 x 2,160 pixels*3 +
+ AUDIO + +    +
+ SPEAKERS + + 5.5 W (1.5 W + 1.5 W + 2.5 W) +
+ CONNECTIVITY + +    +
+ HDMI INPUT + + 1 +
+ CONTROL TERMINAL + + 1 (USB 3.2 Gen1 Type-C) +
+ POWER + + DC IN, 12V 2.0A +
+ POWER AND ENERGY SAVING + +    +
+ POWER CONSUMPTION (ON) + + 24 W +
+ POWER CONSUMPTION (STANDBY) + + 0.5 W +
+ ENVIRONMENT + +    +
+ ILLUMINANCE + + 100 lux—1,000 lux with a minimum of 100 lux on the user’s face to support the eye sensing camera +
+ TEMPERATURE + + 32–104 °F (0–40 °C) +
+ HUMIDITY + + 20–80 % (No condensation) +
+ SUPPORTED GAME ENGINES + +    +
+ Unity + + 2019.4 (recommended), 2018.4, 2020.3 +
+ Unreal Engine 4: + + 4.25 (recommended), 4.24, 4.26 +
+ LANGUAGE + +    +
+ DISPLAY LANGUAGE + + English/French +
+ PC SOFTWARE + + English/French +
+ ACCESSIBILITY + +    +
+ TEXT TO SPEECH + + Yes +
+ WHAT'S IN THE BOX + +    +
+    + + AC adapter (1)
Power cord (1)
USB Type-C cable (1)
HDMI cable (1)
Warranty card (1)
Instruction manual (1)
Side panels (2) (left and right)
Top flange (1)
Bottom stand (1)
Cleaning cloth (1) +
+ PC SYSTEM REQUIREMENTS + +    +
+ OPERATING SYSTEM + + Windows® 10 (64-bit) +
+ PROCESSOR + + Intel® Core i7-9700K @3.60GHz or faster (8 cores or more) (Benchmark: Geekbench score >7000) +
+ GPU + + NVIDIA® GeForce® RTX 2070 SUPER or faster (Benchmark: 3DMark score (Fire Strike) > 25,000) +
+ RAM + + 16.0GB or more +
+ STORAGE + + Content-dependent +
+
+ +
+
+
+
+
+
 
+
 
+
+
+

*2 Eye sensing may not always work as intended depending on viewing conditions.
*3 Pixels close to the bezel are masked for a better 3D experience. A little pattern of lines may appear depending on conditions and content, due to the display structure.

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Developer Contact・
Commercial Use

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b/2d_to_3d_verified_product_technical_reports/official_web_archives/xreal_real_3d_engineering_report_2026/extracted_text.md new file mode 100644 index 0000000000000000000000000000000000000000..3ececa68d026576cadeb167e74db5e9ffa38dd55 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/official_web_archives/xreal_real_3d_engineering_report_2026/extracted_text.md @@ -0,0 +1,123 @@ +# Inside REAL 3D: How XREAL Built It and How the X1 Chip Paves the Way + +- Vendor: XREAL +- Product: REAL 3D / XREAL One +- Material date: 2026-02-02 +- Official source: https://www.xreal.com/kr/blog/how-we-built-real-3d-en +- Archived HTML: index.html + +## Extracted text + +Inside REAL 3D: How XREAL Built It and How the X1 Chip Paves the Way + +대한민국 / 한국어 + +AURA 🕶 + +Products + +Support + +Where to Buy + +Shop + +Products Categories + +Most Popular + +AR Glasses + +Beam Pro + +Accessories + +xbx a01+ + +ROG XREAL R1 + +Supersize Your Victory + +XREAL 1S + +Escape That Fits in Your Pocket + +XREAL One Pro + +Wear Every World + +XREAL Eye + +Floating Visuals, Just within Reach + +XREAL Beam Pro + +All Your Apps in AR + +Shop + +AURA 🕶 + +Products + +Support + +Where to Buy + +Feb 02, 2026 + +Inside REAL 3D: How XREAL Built It and How the X1 Chip Paves the Way + +When XREAL rolled out REAL 3D, the response from reviewers, consumers and the broader community was immediate. Users began rediscovering their favorite movie and tv show scenes, and experiencing retro games in a new way – now rendered with depth and immersion that wasn’t possible on lightweight AR glasses before. According to XREAL Founder and CEO Chi Xu, that reaction is exactly what the team hoped for. + +“Seeing people re-experience content they love in a new way is why we build these products,” Xu shared. “REAL 3D is just a glimpse at what the X1 chip was designed to unlock.” + +The Technology Behind REAL 3D + +At the heart of REAL 3D is the XREAL X1 spatial computing chip, purpose-built for wearable AR. Unlike conventional solutions that rely heavily on host devices or GPU-intensive processing, X1 includes a dedicated Neural Processing Unit (NPU) designed to run AI workloads efficiently on the glasses themselves. + +This NPU enables real-time depth estimation and 2D-to-3D conversion directly on-device, without excessive power draw or performance penalties. To make this possible, XREAL’s engineering team rebuilt the rendering pipeline from the ground up, enabling REAL 3D to run continuously, smoothly, and natively on the glasses. + +“This isn’t something we bolted on,” Xu explained. “It’s new technology that only works because X1 was designed specifically for spatial computing.” + +Just the Beginning + +REAL 3D’s current release marks version 1.0, and the team is clear that it’s only the start. Based on community feedback, XREAL is already testing 60Hz support, with optimizations underway to improve smoothness and visual consistency across content types. + +REAL 3D is being treated as a living feature, one that will continue to evolve based on real-world usage. Xu also pointed to a broader industry reality: features like REAL 3D and stable, drift-free 3DoF tracking are difficult to achieve without specialized hardware. + +Many competing devices rely on off-the-shelf components that lack NPUs or sufficient compute headroom for real-time AI processing. Without that foundation, software updates alone can’t deliver similar results. + +Equally important is calibration. Every XREAL device undergoes deep, sensor-level calibration before leaving the factory. This is a process that significantly reduces drift and instability over time. It’s an invisible but critical layer of engineering that can’t be retrofitted later. + +“These are the kinds of investments that don’t show up on a spec sheet,” Xu noted, “but they’re a key reason experiences with XREAL devices always feel solid.” + +REAL 3D is one example of a broader philosophy at XREAL: features that feel simple on the surface often require deep, purpose-built technology underneath. And with X1, the company believes it’s only scratching the surface of what’s possible. + +XREAL Announces Strategic Partnership with ASUS Republic of Gamers, Unveils ROG XREAL R1 AR Gaming Glasses + +First Look: Project Aura — The Next Step in XR for Android XR and Gemini + +Stay X. Stay REAL. + +Stay X. + +Stay REAL. + +Products + +xbx a01+AURAROG XREAL R1XREAL 1SXREAL One ProXREAL EyeXREAL Beam Pro + +Support + +Firmware UpgradeReturn & Refund PolicyWarranty Policy + +Developer + +Developer HomeSDK Download + +About + +About UsContact UsJoin UsWhere to buyVisionaries Program + +© XREAL, Inc. 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Inside REAL 3D: How XREAL Built It and How the X1 Chip Paves the Way

+
+When XREAL rolled out REAL 3D, the response from reviewers, consumers and the broader community was immediate. Users began rediscovering their favorite movie and tv show scenes, and experiencing retro games in a new way – now rendered with depth and immersion that wasn’t possible on lightweight AR glasses before. According to XREAL Founder and CEO Chi Xu, that reaction is exactly what the team hoped for. + + +

“Seeing people re-experience content they love in a new way is why we build these products,” Xu shared. “REAL 3D is just a glimpse at what the X1 chip was designed to unlock.”

+

The Technology Behind REAL 3D

+

At the heart of REAL 3D is the XREAL X1 spatial computing chip, purpose-built for wearable AR. Unlike conventional solutions that rely heavily on host devices or GPU-intensive processing, X1 includes a dedicated Neural Processing Unit (NPU) designed to run AI workloads efficiently on the glasses themselves.

+

This NPU enables real-time depth estimation and 2D-to-3D conversion directly on-device, without excessive power draw or performance penalties. To make this possible, XREAL’s engineering team rebuilt the rendering pipeline from the ground up, enabling REAL 3D to run continuously, smoothly, and natively on the glasses.

+

“This isn’t something we bolted on,” Xu explained. “It’s new technology that only works because X1 was designed specifically for spatial computing.” +

+

Just the Beginning

+

REAL 3D’s current release marks version 1.0, and the team is clear that it’s only the start. Based on community feedback, XREAL is already testing 60Hz support, with optimizations underway to improve smoothness and visual consistency across content types.

+

REAL 3D is being treated as a living feature, one that will continue to evolve based on real-world usage. Xu also pointed to a broader industry reality: features like REAL 3D and stable, drift-free 3DoF tracking are difficult to achieve without specialized hardware.

+

Many competing devices rely on off-the-shelf components that lack NPUs or sufficient compute headroom for real-time AI processing. Without that foundation, software updates alone can’t deliver similar results.

+

Equally important is calibration. Every XREAL device undergoes deep, sensor-level calibration before leaving the factory. This is a process that significantly reduces drift and instability over time. It’s an invisible but critical layer of engineering that can’t be retrofitted later.

+

“These are the kinds of investments that don’t show up on a spec sheet,” Xu noted, “but they’re a key reason experiences with XREAL devices always feel solid.”

+

REAL 3D is one example of a broader philosophy at XREAL: features that feel simple on the surface often require deep, purpose-built technology underneath. And with X1, the company believes it’s only scratching the surface of what’s possible.

+
\ No newline at end of file diff --git a/2d_to_3d_verified_product_technical_reports/pdf_text/acer_spatiallabs_official_web_report_print_2026.txt b/2d_to_3d_verified_product_technical_reports/pdf_text/acer_spatiallabs_official_web_report_print_2026.txt new file mode 100644 index 0000000000000000000000000000000000000000..4742935b1a06aa45f3f0ca771fe2af5e2f9f7af8 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/pdf_text/acer_spatiallabs_official_web_report_print_2026.txt @@ -0,0 +1,226 @@ +Select your region to see content and shop in your location. ✕ + + Singapore ▼ Continue + + + Discover the Best Deals at Acer Store – Shop Now! + + + 🔍 🛒 +Home / Acer SpatialLabs™ + + + + + Acer SpatialLabs™ Stereoscopic 3D Solutions + Acer SpatialLabs™ delivers intuitive interaction and immersive sensation via advanced + optical display, and real-time rendering solutions. 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With support for Unreal and Unity +Designers can accelerate the journey Engines, Acer SpatialLabs Pro +from concept to final design, medical empowers developers to build +professionals can visualize the human immersive 3D applications across +body in true-to-life 3D for enhanced industries. Across education, AEC, GIS, +diagnosis or instruction, while medical, and countless other fields, +marketers and educators engage creators can push the boundaries of +audiences with deeper immersion. stereo 3D content and redefine reality. + Acer OpenXR Runtime VR Developers Welcome: +with Control Panel Introducing Acer +Optimized for Acer SteamVR Bridge +SpatialLabs Acer SteamVR Bridge enables +Acer OpenXR Runtime provides developers to adapt SteamVR content +developers with an industry-standard for Acer SpatialLabs Pro devices, +framework for SpatialLabs integration. delivering glasses-free immersive +Software applications with OpenXR experiences. 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All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 1 + fi + June 21, 2023 + + +Introduction 3 + +References 3 + +Apple HEVC Stereo Video Pro le 4 + Constraints on the Movie and Track 4 + Constraints on Sample Description / Sample Entry 4 + Constraints on Video Frame Samples 8 + Diagram of decoder con gurations and a sample 9 + File Type Brand 9 + + +Annex A—Establishing left and right view IDs 10 + Overview 10 + Algorithm description 10 + Diagram of view ID connection 13 + + +Document Revision History 14 + + + + + Copyright © 2023 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 2 + fi + fi + June 21, 2023 + + + + Introduction + The ability to carry stereoscopic video views for the left and right eyes produces a richer user + experience. Stereoscopic video—sometimes called “3D video”—presents one image to the + user’s left eye and another image (typically correlated) to the user’s right eye to produce the + stereopsis effect, de ned as: + the perception of depth produced by the reception in the brain of visual stimuli from both + eyes in combination; binocular vision. + + While the production and display of this e ect and its implementation and storage of views + varies, this document describes use of an HEVC de ned technique enabling professional and + consumer work ows at more distribution-friendly bit rates. + Annex G of the HEVC Speci cation (Recommendation ITU-T H.265 or ISO/IEC 23008-2), build- + ing on Annex F, de nes how multiple layers corresponding to related views may be represented + and decoded using HEVC. Syntax allows several related layers within encoded video bit- + streams. A use anticipated is multiview HEVC having left-eye and right-eye stereoscopic views. + This document describes a highly focused pro le for video with stereo views, using the syntax + and tools in the HEVC Speci cation, with the goal of providing a clear target for le writers and + le readers that maximizes interoperability. + Video tracks with stereo views encoded in this manner may be stored in QuickTime Movie les + and MPEG-4 les. + Note: The QuickTime Movie File Format Speci cation and the ISO Base Media File Format + Speci cation use different terminology for broadly equivalent concepts: atoms and box- + es; sample descriptions and sample entries. This document uses the former speci ca- + tion's terminologies without loss of generality. + Note: The words "may", "should", and "shall" are used in the conventional speci cation sense, + that is, respectively, to denote permitted, recommended, or required behaviors. + + + + + References + [QTFF] QuickTime File Format Speci cation (QTFF), 2016 + + [HEVC] ISO/IEC 23008-2:2020 “High e ciency video coding” or ITU-R H.265:2021 “High + e ciency video coding” + + [ISOBMFF] ISO/IEC 14496-12:2020(E) ISO Base Media File Format + + [ISONALU] ISO/IEC 14496-15:2019(E) “Carriage of network abstraction layer (NAL) unit + structured video in the ISO base media le format” + + + + +  Copyright © 2023 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 3 +fi + ffi + fi + fi + fl + fi + fi + fi + fi + fi + ffi + fi + ff + fi + fi + fi + fi + fi + fi + fi + June 21, 2023 + + + + Apple HEVC Stereo Video Pro le + In order for a QuickTime Movie le [QTFF] or MPEG-4 le [ISOBMFF, ISONALU] to conform to + this pro le, the following constraints must be satis ed. + Adhering to the principle that writers of an interoperable data format should be conservative in + what they write, while readers should be somewhat exible in what they accept, this document + • Recommends speci c values for writers to use for the left and right stereo layers’ nuh_lay- + er_id, SPS ID, and PPS ID + • Recommends that readers implement their support in a way that is not fragile in the face of + les using alternative ID values, where they are used consistently with the HEVC Speci ca- + tion [HEVC] + • Constraints from Section 9 of [ISONALU] should be followed along with additional restric- + tions described in this document. + • Other uses of“base layer” and “enhancement layer” within HEVC than speci ed for multiview + carriage in HEVC are not constrained by this pro le. + + + Note: Figure 1 below is a diagram relating sample descriptions, decoder con gurations, and a + representative video-frame sample. It may be useful for reference in reading the follow- + ing sections. + + + Constraints on the Movie and Track + • A single video track shall contain both the corresponding primary (or base) eye’s view layer + and the secondary eye’s view layer. The primary eye view may be the left or right viewer + eye. The secondary eye view should be the other viewer eye (i.e., if primary is left then sec- + ondary is right, if primary is right then secondary is left). + • A reader supporting HEVC but not multiview HEVC should be able to decode the video track + as a single view corresponding to the base layer. This allows Apple HEVC Stereo Video In- + teroperability Pro le tracks to be deployed that offer backwards compatibility with already + deployed HEVC playback. + + + Constraints on Sample Description / Sample Entry + • The codec type shall be ‘hvc1’. + • Both left-eye and right-eye views shall be carried in each video sample of the track (i.e., + both views are in the same video frame media sample, so DTS/PTS timings are the same + for the two views). One of the two stereo eyes is referred to here as the primary eye and the + second as the secondary eye. + • The primary eye may be either the left or the right eye. The secondary eye is the right eye if + the primary is the left. Or, the secondary eye is the left eye if the primary is the right. + + + + +  Copyright © 2023 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 4 +fi + fi + fi + fi + fi + fi + fi + fl + fi + fi + fi + fi + fi + June 21, 2023 + + + • There shall be both an HEVC Decoder Con guration Record (‘hvcC’) and a L-HEVC De- + coder Con guration Record (‘lhvC’) which together describe the layers for the primary view- + er eye and the secondary viewer eye. + • The HEVC Decoder Con guration Record (‘hvcC’) carries the con guration of only + the primary stereo view layer. + • The L-HEVC Decoder Con guration Record (‘lhvC’) carries the con guration of the + secondary stereo view layer. + • The con guration of the base and secondary stereo layers should be the same in all charac- + teristics other than the assignment to the left stereo eye versus right stereo eye. This is + termed “homogenous” here. + • A reader that does not support multiview video should be able to decode the base layer of + the video track for presentation without a stereoscopic treatment. This is to ensure a degree + of backwards compatibility. Note that the stereoscopic or monoscopic decoded video may + still have other characteristics that make them unsuitable for playback as-is. The mechanism + signaling these other characteristics is not described by this document. + • High dynamic range signaling (a.k.a., HDR signaling or HDR metadata) shall be the same + for both the left-eye and right-eye views. + • Pro les for the layers: + • Base layer shall be Main or Main10 pro le. + • Secondary eye layer shall be Multiview Main or Multiview Main10 pro le, corre- + sponding to the same bit depth as the base layer (i.e., both 10 bit or not). + • To support left and right stereo eye views, there is a Sequence Parameter Set (SPS) pair + and a Picture Parameter Set (PPS) pair that are nearly identical differing only in stereo eye + assignment and binding to nuh_layer_id values: + • Two Sequence Parameter Sets (SPS): + • Both Sequence Parameter Sets shall have sps_video_parameter_set_id + equal to 0. + • Both Sequence Parameter Sets shall indicate the same characteristics for + both stereo eye views such as width, height, bitDepth, chromaFormat and + conformanceWindow. This can be accomplished in the second layer by using + update_rep_format=1 or by explicitly setting the same values for the corre- + sponding seq_parameter_set_rbsp elds + • The base layer SPS may have vui_parameters that indicates video_ful- + l_range_ ag = 0 or video_full_range_ ag = 1. Both layers should have the + same ag. + • Both Sequence Parameter Sets shall indicate the same luma and chroma bit + depth, but can be either 8-bit or 10-bit: + • To use 8-bit luma and chroma, the Sequence Parameter Set shall in- + dicate bit_depth_luma_minus8 equal to 0 and bit_depth_chroma_mi- + nus8 equal to 0 (per HEVC Speci cation G.11.1.1). + + + +  Copyright © 2023 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 5 +fi + fl + fi + fl + fi + fi + fi + fi + fi + fl + fi + fi + fi + fi + fi + June 21, 2023 + + + • To use 10-bit luma and chroma, the Sequence Parameter Set shall + indicate bit_depth_luma_minus8 equal to 2 and bit_depth_chro- + ma_minus8 equal to 2. + • Two Picture Parameter Sets (PPS): + • One for the base layer, with nuh_layer_id equal to 0, with pps_seq_parame- + ter_set_id equal to 0, and with pps_pic_parameter_set_id equal to 0. This + corresponds to the primary eye. + • One for the secondary eye layer, with nuh_layer_id equal to the secondary + eye nuh_layer_id, and with pps_seq_parameter_set_id equal to the sec- + ondary eye layer SPS ID, and with pps_pic_parameter_set_id equal to a non- + zero number referred to here as the secondary eye layer PPS ID. + • All reference pictures must have the same CTB size as the picture that refers + to them. + • Speci cally, the sum of log2_min_luma_coding_block_size_minus3 + and log2_diff_max_min_luma_coding_block_size in the layers' Se- + quence Parameter Sets must be the same. + • sps0.log2_min_luma_coding_block_size_minus3 + sps0.log2_diff_- + max_min_luma_coding_block_size == sps1.log2_min_luma_cod- + ing_block_size_minus3 + sps1.log2_diff_max_min_luma_cod- + ing_block_size + • These values are de ned in [HEVC], 7.4.3.2.1 General sequence pa- + rameter set RBSP semantics + • The Video Parameter Set (VPS) for the whole sequence identi es nuh_layer_id values in + this sequence + • The HEVC Decoder Con guration Record ('hvcC') shall contain the following parameter sets + corresponding to the primary stereo eye: + • One Video Parameter Set (VPS) with nuh_layer_id equal to 0, and with vps_video_- + parameter_set_id equal to 0, and containing a vps_extension. + • The vps_max_layers_minus1 shall be at least 1 to allow two layers, one + for the left eye and one for the right eye. Only texture layers are sup- + ported. + • The base layer shouldshall be present in the MV-HEVC bitstream - i.e, + vps_base_layer_internal_ ag and vps_base_layer_available_ ag in + VPS should have a value of 1. + • The vps_extension, following the syntax in F.7.3.2.1.1, shall indicate values + for layer_id_in_nuh[], scalability_mask_ ag[], dimension_id [][], view_id_val[], + and direct_dependency_ ag[][] syntax elements to associate texture layers + with the left eye and for the right eye and map to viewIDs used in the three- + _dimensional_reference_displays_info SEI message. See Annex A in this + document for a description how the left_view_id[0] and right_view_id[0] are + established from nuh_layer_ids. + + + +  Copyright © 2023 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 6 +fi + fi + fi + fl + fl + fl + fi + fl + June 21, 2023 + + + • One Sequence Parameter Set (SPS) corresponding to the HEVC compatible base + layer for the primary stereo eye + • With nuh_layer_id equal to 0, and with sps_seq_parameter_set_id equal to 0. + • One Picture Parameter Set (PPS) corresponding to the primary stereo eye: + • With nuh_layer_id equal to 0, with pps_seq_parameter_set_id equal to 0, and + with pps_pic_parameter_set_id equal to 0. + • One 3D Reference Displays Information SEI message NAL unit (per G.14.2.3), with + nuh_layer_id equal to 0, and with the following values: + • To indicate the display width value is unspeci ed by using 0, use: + • prec_ref_display_width = 31 + • exponent_ref_display_width = 0 + • mantissa_ref_display_width = 0 + • ref_viewing_distance_ ag = 0 + • prec_ref_viewing_dist syntax element skipped + • num_ref_displays_minusl = 0 + • left_view_id[ 0 ] is set to reference the texture layer used for the viewer’s left + eye using values in vps_extension (per F.7.3.2.1.1) + • right_view_id[ 0 ] is set to reference the texture layer used for the viewer’s + right eye using values in vps_extension (per F.7.3.2.1.1) + • additional_shift_present_ ag[ 0 ] = 0 + • exponent_ref_viewing_distancel 0 ], mantissa_ref_viewing_distance[ 0 ], + num_sample_shift_plus512[ 0 ] syntax elements are skipped +• The L-HEVC Decoder Con guration Record ('lhvC') shall contain the following parameter + sets corresponding to the secondary stereo eye: + • One Sequence Parameter Set (SPS): + • The nuh_layer_id shall be equal to the secondary eye nuh_layer_id, and with + sps_seq_parameter_set_id equal to a non-zero number referred to here as + the secondary eye SPS ID. + • It is recommended to use 1 for the secondary eye SPS ID. + • Readers should be prepared to accept a non-zero value for the secondary + eye layer SPS ID, and recognize the value in the secondary eye PPS's pp- + s_seq_parameter_set_id eld. + • One Picture Parameter Set (PPS): + • The nuh_layer_id shall be equal to the secondary eye nuh_layer_id, and with + pps_seq_parameter_set_id equal to the secondary eye SPS ID, and with pp- + + + + + Copyright © 2023 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 7 + fl + fl + fi + fi + fi + June 21, 2023 + + + s_pic_parameter_set_id equal to a non-zero number referred to here as the + secondary eye PPS ID. + • It is recommended that writers use 1 for the secondary eye PPS ID. + • Readers should be prepared to accept a non-zero value for the secondary + eye PPS ID, and recognize the value in the secondary eye portion of video + frames, in video slice slice_pic_parameter_set_id elds. + + +Constraints on Video Frame Samples +• Every video frame in the video track shall contain a HEVC compatible base layer NAL unit + sequence and a secondary stereo eye layer NAL unit sequence. While the frame type and + reference scheme differ between the base and secondary layer, dependency information + shall stay the same. +• Both layers of every video frame shall have the same frame type and dependency structure. + (This is necessary because there is only one sample table for the track, and readers need to + use that single sample table's set of dependency information to determine which frames + need to be decoded during random access or any kind of trick play.) +• All base layer NAL units shall have nuh_layer_id 0. +• All secondary stereo layer NAL units shall have nuh_layer_id equal to the secondary eye + nuh_layer_id speci ed in the VPS and vps_extension. +• All video slices in the base layer NAL units shall have slice_pic_parameter_set_id set to the + the base layer PPS ID (0). +• All video slices in the secondary stereo view layer NAL units shall have slice_pic_parame- + ter_set_id set to the the secondary eye layer PPS ID. + + + + + Copyright © 2023 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 8 + fi + fi + June 21, 2023 + + + Diagram of decoder configurations and a sample + Movie atom HEVC Decoder Configuration Record (hvcC) + + Track atom + Common Video Parameter Set + vps_video_parameter_set_id = 0 + Media atom + + + + + slice_pic_parameter_set_id, pps_seq_parameter_set_id, sps_video_parameter_set_id references + … + Video media information atom + + Sample table atom Base Layer Sequence Parameter Set + sps_seq_parameter_set_id = 0 + Sample description atom … + + Base Layer Picture Parameter Set + Codec type + pps_pic_parameter_set_id = 0 + hvc1 … + + three_dimensional_reference_displays_info SEI + hvcC … + + + + L-HEVC Decoder Configuration Record (lhvC) + lhvC Secondary Stereo Layer Sequence Parameter Set + sps_seq_parameter_set_id = 1* + … + + Secondary Stereo Layer Picture Parameter Set + pps_pic_parameter_set_id = 1* + … + + + + + Key: + Every HEVC video frame + Base Layer NAL unit with nuh_layer_id = 0 + Base Layer NAL units + Secondary Stereo Layer NAL unit with nuh_layer_id = 1* + Secondary Stereo Layer NAL units + * recommended + + + Figure 1. HEVC and L-HEVC Decoder Con guration Records, Parameter Sets and Video + Frames + + + File Type Brand + Movie les and MPEG-4 les containing tracks conforming to this pro le are not required to sig- + nal this by including a speci c minor brand in the File Type Brand atom but are not restricted in + doing so. + + + + +  Copyright © 2023 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 9 +fi + fi + fi + fi + fi + June 21, 2023 + + + +Annex A—Establishing left and right view IDs +Overview +The two images corresponding to the stereo left eye and stereo right eye are signaled in the +three_dimensional_reference_displays_info SEI using the left_view_id[0] +and right_view_id[0] syntax elements. While the HEVC specification [HEVC] provides de- +tail sufficient to specify relevant elements of the Video Parameter Set (VPS) extension, it might +not be obvious. This informative annex attempts to describe the mapping from nuh_layer_id +values for the left and right eye layers to the relevant values for left_view_id[0] and +right_view_id[0].A layer is used for each of the two stereo images and specified with one +of two assigned nuh_layer_id values that occur in relevant syntax elements such as NAL units. +One layer is termed the base layer corresponding to the base stereo layer. The other is the sec- +ondary stereo layer and corresponds to the secondary stereo eye. The base layer and view may +be the left or the right stereo eye with the secondary stereo layer being for the other stereo eye- +.Requirements and recommendations are: +• All base layer NAL units shall have nuh_layer_id 0. This is the base layer nuh_layer_id. +• All secondary stereo layer NAL units shall have nuh_layer_id equal to the secondary eye + nuh_layer_id. This is the secondary layer nuh_layer_id. It is recommended that this be 1 for + writers but other values can be chosen. Readers must be prepared for any value of secondary + stereo layer nuh_layer_id. +In the HEVC specification [HEVC], Section G.14.2.3 3D reference displays information SEI mes- +sage syntax carries left_view_id[] and right_view_id[] fields that must be established to identify +the relevant portions of video frame samples for each stereo eye to be processed to produce +the corresponding stereo eye image. These are established by syntax elements of the Video Pa- +rameter Set extension. +Section F.7.3.2.1.1 Video parameter set extension syntax [HEVC] carries the relevant syntax el- +ements to establish the video is multiview and to indicate the left and right view IDs. These VPS +extension syntax elements are used in the algorithm description: + - layer_id_in_nuh[] + + - scalability_mask_flag[] + + - dimension_id [][] + - view_id_val[] + + - direct_dependency_flag[][] + +Other intermediate values are calculated for the purposes of the algorithm described next. + + +Algorithm description +1. Associate each layer s nuh_layer_id to a layer number: + • layer_id_in_nuh[0] = 0 where the assignment of 0 is for the base layer nuh_lay- + er_id and the indexed 0 is the 0th layer index + + + + Copyright © 2023 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 10 + ’ + June 21, 2023 + + + • layer_id_in_nuh[1] = secondary nuh_layer_id + + +2. Establish a reverse mapping by computing an algorithm LayerIdxInVps[nuh_layer_id] to map + a nuh_layer_id to the layer index from layer_id_in_nuh[]: + • LayerIdxInVps[0] = 0 + • LayerIdxInVps[secondary nuh_layer_id] = 1 + + +3. Specify scalability_mask_flag[] values to indicate that it is multiview: + • scalability_mask_flag[1] = 1 where the index is for Multiview + + +4. Associate each scalability value to each Layer number using dimension_id[Layer #] + [Scalability #]: + • dimension_id[0][1] = 0 to indicate this is a new view order index (i.e., 0) + • dimension_id[1][1] = 1 to indicate this is a new view order index (i.e., 1) + + +5. Associate each view order index ViewOrderIdx to arbitrary view_id_val using + view_id_val[ViewOrderIdx]: + • view_id_val[0] = base view ID + • view_id_val[1] = secondary view ID + Assigning 0 to base view ID and 1 to secondary view ID is recommended but not required. + Also, setting the left_view_id[0] as the base view ID and right_view_id[0] as the + secondary view ID of the three_dimensional_reference_displays_info SEI is recommended + but again not required. + + +6. Compute an algorithm ViewId[nut_layer_id] corresponding to ViewId[ nuhLayerId ] = + view_id_val[ViewOrderIdx[nuhLayerId]]: + • ViewId[0] = base view ID + • ViewId[secondary nuh_layer_id] = secondary view ID + + + + +7. Specify the base view ID and secondary view ID in the three_dimensional_refer- + ence_displays_info SEI left_view_id[0] and right_view_id[0] syntax ele- + ments: + • left_view_id[0] = base view ID + + + + + Copyright © 2023 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 11 + June 21, 2023 + + + • right_view_id[0] = secondary view ID + As mentioned in step 5, assigning 0 to base view ID and 1 to secondary view ID is recom- + mended but not required. Also, setting the left_view_id[0] as the base view ID or the + recommended 0 and right_view_id[0] as the secondary view ID or the recommended + 1 is recommended but not required. +Figure A-1 shows the vps_extension() and three_dimensional_reference_displays_info SEI fields +set with nuh_layer_id = 0 and nuh_layer_id = 1 for the base and secondary layers and assign- +ments of a base video ID and secondary view ID. + + + + + Copyright © 2023 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 12 + June 21, 2023 + + +Diagram of view ID connection + + + + HEVC Decoder Configuration Record (hvcC) + + Common Video Parameter Set + vps_extension() + vps_extension() + + … + scalability_mask_flag[0]==10////multiview + scalability_mask_flag[1] texture + scalability_mask_flag[0] + … = 1 // multiview + … + layer_id_in_nuh[0] =0 + layer_id_in_nuh[0] + layer_id_in_nuh[1] =0 + = 1* // secondary layer ID + layer_id_in_nuh[1] = 1*…// secondary layer ID + … + dimension[0][1] =0 + dimension_id[0][0] = 0; dimension[0][1] + dimension[1][1] =1 =0 + dimension_id[1][0] =… 0; dimension[1][1] = 1 + view_id_val[0] =… 0* // base view ID SEI + three_dimensional_reference_displays_info + view_id_val[0] + view_id_val[1] base view ID + = 1* //= secondary view ID + three_dimensional_reference_displays_info + view_id_val[1] = … secondary view ID SEI + … + direct_dependency_flags[1][0] =0 + left_view_id[0]… = base view ID= 0 + direct_dependency_flags[1][0] + right_view_id[0] =… secondary view ID + + + three_dimensional_reference_displays_info SEI + + + left_view_id[0] = 0* // base view ID + right_view_id[0] = 1* // secondary view ID + + + + Key: + Base Layer NAL unit with nuh_layer_id = 0 + Secondary Stereo Layer NAL unit with nuh_layer_id = 1* + Base view ID = 0* + Secondary view ID = 1* + * recommended + + Figure A-1. Setting up left_view_id[0] and right_view_id[0] in + HEVC Decoder Configuration Record + + + + + Copyright © 2023 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 13 + June 21, 2023 + + + +Document Revision History +This table describes the changes to Apple HEVC Stereo Video Interoperability Pro le + + Date Revision Notes + 2023-06-21 0.9 First publication + + + + + Copyright © 2023 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 14 + fi + \ No newline at end of file diff --git a/2d_to_3d_verified_product_technical_reports/pdf_text/apple_stereo_video_isobmff_extensions_2025.txt b/2d_to_3d_verified_product_technical_reports/pdf_text/apple_stereo_video_isobmff_extensions_2025.txt new file mode 100644 index 0000000000000000000000000000000000000000..fdd47914ee4cd29fdac0c71fcfd01cfc8cb18ccd --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/pdf_text/apple_stereo_video_isobmff_extensions_2025.txt @@ -0,0 +1,2361 @@ + +QuickTime and ISO Base Media +File Formats and Spatial and +Immersive Media +Format additions + + + +Version 1.9.8 (Beta) +June 9, 2025 + + + + + Note: The information contained within this document is + preliminary and is subject to change. + + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. | 2022-07-08 + June 9, 2025 1.9.8 (Beta) + + + + +Introduction ....................................................................................................3 +References ......................................................................................................4 +Stereo Video ...................................................................................................4 + Stereoscopic, Stereopsis and Stereo Media ....................................................................4 + Stereoscopic Video Tracks ................................................................................................5 + Multiview Video Tracks and MV-HEVC Compression.....................................................5 +Video Extended Usage ....................................................................................6 + Video Extended Usage Box Hierarchy ..............................................................................6 + 1. Video Extended Usage (‘vexu’) box ..............................................................................8 + 1.2. Required box types (‘must’) box ...............................................................................11 + 1.3. Video stereo-view signaling .....................................................................................14 + 2. Video projection signaling ............................................................................................21 + 3. Video view packing .......................................................................................................27 + 4.Lens collection information..........................................................................................28 +Use of other signaling extensions .................................................................41 + Horizontal field-of-view box ............................................................................................41 +Auxiliary Video Track Handler Type ..............................................................42 +Spatial Audio .................................................................................................42 + Spatial Audio Technologies .............................................................................................42 +Timed Metadata and Spatial Media...............................................................43 + New data types .................................................................................................................43 + Caption-parallax timed metadata items ........................................................................44 + Motion timed metadata items .........................................................................................44 + Comfort-related motion-analysis timed-metadata items ............................................47 +Conclusion ....................................................................................................48 +Document Revision History ..........................................................................49 + + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 2 + June 9, 2025 1.9.8 (Beta) + + + +Introduction +This document describes Apple extensions of, or specialized use of, the ISO Base Media File +Format (a.k.a. ISOBMFF) to support spatial media. These extensions also apply to the +QuickTime File Format. Spatial media is intended to produce a richer experience for the user; +whether a richer audio experience, a richer visual experience, or a combination of the two. +This document also introduces features that can be referenced from movie profiles, which are +collections of allowed media essence carried in tracks and metadata, associated media +signaling, and required relationships among the former, to ensure suitability for playback to +devices or production for such delivery. Production, delivery and other aspects of profiles +indicate use of particular tools such as encoded media with their own media profiles and levels, +required metadata, or other signaling. If an implementation supports the movie profile's tools +individually, they are well positioned to support the movie profile required in a broader +ecosystem. This document introduces new format tools, and also movie profiles that make use +of existing and new format tools. Movie profiles are documented separately. +Like the QuickTime File Format (QTFF) upon which it is based, the ISOBMFF format is meant to +serve as a container of media using tracks and movie-level structures. The movie format of that +media continues to evolve, from the earliest “postage stamp” (i.e., very low-resolution) video, +with one- and two-channel uncompressed or barely compressed audio, to modern formats +performing remarkable levels of visual compression for 4K and even 8K video, with very rich +multichannel, ambisonic and object-based audio encoding. This is coupled with facilities to +carry and present captions, such as WebVTT text tracks or closed captions embedded with +video. Static and timed metadata can be carried to augment the presented media. Still other +kinds of media tracks have been supported and will likely get added. +To support media that delivers rich spatial experiences, the QTFF and ISOBMFF foundations are +being extended with new media formats, extensions to supported media formats, and new +constructs to inform relationships among the new and earlier supported media. Some of these +extensions are specific to their spatial nature, whereas others are fundamental and used by the +former. This is all intended to be done in a way—where possible—so an existing ISOBMFF or +QTFF player or processor can interact with the spatial media, possibly in a reduced but +compatible form, while allowing new playback or processing to take fuller advantage of the +newly afforded richness. +This document describes new and updated file format structures to support spatial media. +Some of these structures are accessible through Apple AVFoundation and CoreMedia +framework interfaces, and those serve as the preferred alternative to direct structural access +when running on a platform with Apple frameworks available. Those reading or writing the +format directly—pursuant to relevant licensing—should however be able to accomplish their +goals with the structural descriptions in the following sections. +Another consideration for ISOBMFF is that it is used in a fragmented movie form for HTTP- +based delivery technologies such as HTTP Live Streaming. The support in standalone MP4 files +and fragmented MP4 resources is much the same. + Note: The words “may," “should," and "shall" are used in the conventional specification + sense—that is, respectively, to denote permitted, recommended, or required + behaviors. + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 3 + June 9, 2025 1.9.8 (Beta) + + + Note: All coordinate systems used in this specification are right-handed unless otherwise + specified. Following conventions, +X is to the right and +Y upward, as in quadrant 1 of + a 2D Cartesian coordinate system. The Z-axis corresponds to the optical axis, and +Z + points into or toward the camera. + + + + +References +[QTFF] QuickTime File Format (QTFF), 2016 +[ISOBMFF] ISO/IEC 14496-12:2020 ISO Base Media File Format +[ISONALU] ISO/IEC 14496-15:2019 “Carriage of network abstraction layer (NAL) unit structured +video in the ISO base media file format” +[HEVC] ISO/IEC 23008-2:2020 “High efficiency video coding” +[HEIF] ISO/IEC 23008-12:2022 "Image File Format" +[METADATA] “Video Contour Map Payload Metadata within the QuickTime Movie File Format— +Format Additions” +[OMNI] C. Mei and P. Rives. Single View Point Omnidirectional Camera Calibration from Planar +Grids. In ICRA, 2007. + + + +Stereo Video +Stereoscopic, Stereopsis and Stereo Media +Just as stereo audio indicates different audio for the left and the right ear, visual media can be +stereoscopic, in which a view is available to be presented to the left eye and another view is +available to be presented simultaneously to the right eye. The presentation of both the left and +right views allows for an effect known as stereopsis, which can be defined as: + the perception of depth produced by the reception in the brain of visual stimuli from both + eyes in combination; binocular vision. +The production and display of this is sometimes referred to in cinema as 3D, and the +implementation and storage of the views can vary. This cinema use of 3D should be +distinguished from 3D rendering, involving a framework like Apple's Metal framework, where +geometry, materials, lighting and cameras are modeled and rendered by a GPU or CPU. In the +latter case, such three-dimensional rendering might produce a view as seen from the left eye +and a simultaneous view seen from the right eye and therefore be stereoscopic. Rendering of a +scene might however produce a single view that is not stereoscopic. This is sometimes called +monoscopic. +Stereoscopic media can also be captured photographically, where two cameras are offset +horizontally to produce video where the left-eye view and the right-eye view are each encoded. +In this case, there’s not necessarily any modeling of the scene or any GPU rendering. Playback +presents the left-captured view to the viewer’s left eye and the right-captured view to the +viewer’s right eye. These left- and right-captured views might also have been processed. + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 4 + June 9, 2025 1.9.8 (Beta) + + +Although storage strategies can vary, this document describes how to store stereoscopic +content using standardized ISO/ITU formats and extensions to QTFF/ISOBMFF. + + +Stereoscopic Video Tracks +QTFF/ISOBMFF standalone and fragmented movies can include a single video track associated +with both the left and the right eye. This video track’s access units carry both a base and +secondary layer that correspond to a primary stereo eye view (left or right) and the +complementary stereo eye (i.e., right if the primary is the left, left if the primary is the right). +Another option, available to production processes only, is to use frame packing, in which both +left and right stereo eye views are carried adjacently in the decoded image in a single layer +(either side-by-side or over-under). +The expectation is that both stereo-eye views (i.e., the left-eye view and right-eye view) are +shown to their corresponding eyes simultaneously. Both stereo views are available and +synchronized according to the movie timeline. When played, stereopsis is achieved. + Note: The ability to produce a movie with just one stereo eye video track (whether left or + right) can be useful in production workflows. Two tracks in the same movie or in two movies + might be useful. These might be combined into a new movie either by encoding with both + views in one video track or, less commonly, by carrying two video tracks. Though + potentially applicable to QTFF/ISOBMFF, it is not a described use case here. + + +This document introduces a VisualSampleEntry extension that can signal, among other +things, whether the associated video track is stereoscopic and which stereo eyes are carried in +that video track. This new signaling is referred to as video extended usage and is described in a +later section of this document. For now, the point is that this allows a movie reader to detect +stereo-related video tracks and to identify the stereo eyes contributed by that track so it can +configure presentation or other processing. Whereas the video track itself uses a video- +compression format and signals it has a left and right stereo view, the video extended usage is +meant to be more easily parsed and to be applicable to non-multiview video (i.e., not MV-HEVC +video). + + +Multiview Video Tracks and MV-HEVC Compression +A QTFF movie (i.e., .mov) or ISOBMFF (e.g., .mp4) movie video track carries video as either +uncompressed or encoded video media samples. In the case of compressed video, High +Efficiency Video Coding [HEVC] defines extensions to encode more than one view in the +compressed bitstream for each coded video frame (or access unit). Defined in Annex G of the +HEVC spec [HEVC], Multiview High Efficiency Video Coding defines how layers corresponding +to views can be encoded and associated. This is sometimes written as MV-HEVC, for Multiview +HEVC. +The QuickTime ImageDescription or ISOBMFF VisualSampleEntry (each referred to as +visual sample entry) shall include a video extended usage visual sample-entry extension box +(described later in this document) indicating which stereo eye views—left, right, or both—are +carried in the MV-HEVC video track. For MV-HEVC, both left- and right-eye views should be +available. A hero eye, indicating the default stereo eye, may optionally be signaled. This +construct allows a client to determine the stereoscopic nature of the video track without +needing to parse for MV-HEVC bitstream details in the decoder configuration. + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 5 + June 9, 2025 1.9.8 (Beta) + + +The video bitstream requirements of MV-HEVC coding, visual sample entry, and video media +samples are described in the document Apple HEVC Stereo Video Interoperability Profile. +The described use with MV-HEVC encoded video should not be seen as a limitation on +applicability to other multilayered or multiview encoding. + +Video Extended Usage +This specification introduces an optional visual sample-entry extension that can signal +additional aspects regarding the use of the video track’s decoded frames. The new extension, +called the video extended usage, uses the box type ‘vexu’ (optionally pronounced as “vex +you”). Details necessary for video-frame decoding are still carried in the visual sample-entry +header (e.g., the compression type or the dimensions), as well as in other visual sample-entry +extensions (e.g., ‘colr’ and compression type specific decoder configurations). The ‘vexu’ +extension describes aspects beyond fundamental decode. For instance, it may specify that the +video frames are stereoscopic or otherwise organized, requiring the video frames to be +processed or displayed in a special way before presenting to the viewer. +Traditionally, a video track within a movie file or movie fragments can be decoded and +immediately presented with little additional processing, other than perhaps scaling, cropping +and placement. For video captured in the real world, such as from a camera or computer, this is +the norm. Even non-linear editing mostly works with video as stored in the movie files, perhaps +applying effects, but otherwise encoding video that is directly presentable. +Increasingly today, a video track may be used as input into a rendering process and may not be +suitable to show a viewer immediately. For example, a stereoscopic “3D” movie should present +the left-eye view to the viewer’s left eye, and the right-eye view to the viewer’s right eye. To do +this, it is important to know first that the video track delivers stereoscopic views, and secondly +which of those views are available. For MV-HEVC video, the presence of [HEVC] and [ISONALU] +constructs (such as the ‘hvcC’ and ‘lhvC’ extension data) might seem sufficient, but +unfortunately requires all readers to parse significant HEVC detail. Generally, a guiding principle +is not to rely upon codec-level signaling to understand things that are needed at the container +level. Here, the video track’s ‘vexu’ visual sample-entry extension serves the role of easy-to- +interpret signaling that the video is stereoscopic. The ‘vexu’ visual sample-entry extension must +be consistent with what is signaled in the decoder configuration. +Beyond MV-HEVC, it may be desirable to use other video-compression formats (e.g., non- +Multiview HEVC) or uncompressed video to carry stereoscopic video without requiring their +fundamental decoded bitstream to signal the stereo use—something the format might not +support. A video extended usage extension can be added, indicating that a video track carries +two stereo eyes or is for only one of the two stereo eyes. A ‘vexu’ extension can also be added, +indicating that the decoded video is organized in some other way described in a future version +of this specification. This can be combined with stereoscopic detail that there is both a left and +a right stereo eye view. Here, playback and processing need to understand the video track uses +this alternative organization so it can route the left-view and the right-view portions of the +decoded frame to the respective viewer eye. + + +Video Extended Usage Box Hierarchy +The video extended usage extension box specifies the usage of the decode of the video +samples, and details relevant to that usage. This is an optional extension and needed only when + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 6 + June 9, 2025 1.9.8 (Beta) + + +special or useful interpretation of the video in playback or processing is required. If the state +signaled is not required for playback or processing, the extension may still be present, but there +is no expectation the reader understands it. + Note: VisualSampleEntry extensions parallel to this new video extended usage extension + box may exist for additional, sometimes legacy, signaling (e.g., the horizontal field of + view extension box with 'hfov' box type, described in the section "Horizontal field of + view box" later in this document). +This extension box is a box hierarchy, and contains further boxes signaling particular aspects of +the video. These contained boxes may be leaf boxes—typically a FullBox—or box hierarchies +themselves. There is also a mechanism to indicate that contained boxes must be understood by +a reader and, if not, that that part of the box hierarchy has failed to be processed. That error can +propagate upwards, failing within a local subtree or even in the entire video extended usage box +extension. This can in turn indicate the video should not be presented or processed, as the +reader’s implementation lacks sufficient support. + Note: The structure of the video extended usage box is made up of boxes, each described + in following sections. Each box description indicates the mandatory nature of that + box. In some cases, a box may be marked as No for Mandatory, in that the structure + of the container box does not require this child box to exist. However, a particular + movie profile (described in a parallel Movie Profiles document) may indicate that the + box is required for conformance with that profile. This document does not indicate + within each box definition which profiles require its presence. A profile feature table + serves that purpose. + + +Table 1. Current box types defined in the ‘vexu’ box hierarchy + FourCC FourCC FourCC FourCC FourCC FourCC Box syntax element + + vexu VideoExtendedUsageBox + + must1 RequiredBoxTypesBox + + eyes StereoViewBox + + must1 RequiredBoxTypesBox + + stri StereoViewInformationBox + + hero HeroStereoEyeDescriptionBox + + cams StereoCameraSystemBox + + blin StereoCameraSystemBaselineBox + + cmfy StereoComfortBox + + dadj StereoComfortDisparityAdjustmentBox + + proj ProjectionBox + + must1 RequiredBoxTypesBox + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 7 + June 9, 2025 1.9.8 (Beta) + + + FourCC FourCC FourCC FourCC FourCC FourCC Box syntax element + + prji ProjectionInformationBox + + . . . One of different per projection type boxes if + needed + + pack ViewPackingBox + + must1 RequiredBoxTypesBox + + pkin ViewPackingInformationBox + + lnsc CameraSystemLensCollectionBox + + lens CameraSystemLensBox (one or more) + + lnhd CameraSystemLensHeaderBox + + rdim CameraSystemLensReferenceDimensions + + lnin CameraSystemLensIntrinsicsBox + + ldst CameraSystemLensDistortionsBox + + lfad CameraSystemLensFrameAdjustmentBox + + lnex CameraSystemLensExtrinsicsBox (one per + lens) + + must1 RequiredBoxTypesBox + + corg CameraSystemOriginSourceBox + + cxfm CameraSystemTransformBox + + uqua CameraSystemUnitQuaternionTransformBox + + hfov HorizontalFieldOfViewBox + +Note: must1: A must box may occur as a child box in any box hierarchy, to indicate reader +responsibility for understanding any child boxes of the must box's parent box. These locations +are not enumerated in the above table. Exemplar must boxes are included in the table, but these +positions should not be considered exhaustive. + +1. Video Extended Usage (‘vexu’) box +This section describes how the video extended usage extension box is organized and the +constituent boxes. + +1.1. Definition +Box Type: ‘vexu’ +Container: Visual sample entry (different coding types) + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 8 + June 9, 2025 1.9.8 (Beta) + + +Mandatory: No +Quantity: Zero or one +The video extended usage extension is a QuickTime File Format atom [QTFF], which is the same +as Box in ISO/IEC 14496-12 [ISOBMFF]. As we use the bitstream syntax from ISO/IEC +14496-12, we use box interchangeably with atom. References to ImageDescription for QTFF are +also interchangeable with references to the ISO 14496-12 VisualSampleEntry. +The video extended usage box is held in a VideoExtendedUsageBox and has the ISO box +type of ‘vexu’, for video extended usage. +As a box, it can contain zero or more child boxes that together signal the nature of the +associated track samples’ extended usage. Having no child boxes is valid but likely not useful. +Having only child free-space boxes (i.e., a FreeSpaceBox) is appropriate if the intention is to +reserve space in the VisualSampleEntry. +To allow new or otherwise unknown VideoExtendedUsageBox child boxes to be introduced +while allowing older readers to know they do not understand enough to process or present the +video track, a mechanism is introduced to indicate mandatory and, by implication, optional child +boxes. Additionally, child boxes can indicate whether their own structure can be optional, so +readers can recognize versions they do not support. +New boxes should not be introduced into the VideoExtendedUsageBox unless documented in +this specification or in a successor version of this specification. + +1.2. Syntax +aligned(8) class VideoExtendedUsageBox extends Box(‘vexu’) { + RequiredBoxTypesBox(); // optional if no required boxes +specified + StereoViewBox(); // optional + ViewPackingBox(); // optional + ProjectionBox(); // optional + CameraSystemLensCollectionBox() // required if lens signaling present + Box() any_box; // other optional boxes with FreeSpaceBox() +reserved for its expected use +} + +1.3.Semantics +The VideoExtendedUsageBox contains zero or more child boxes that signal +something about the use of the video. Child boxes will be defined in this specification +now or in the future. Child boxes might be defined in external specifications, but the +box_type used there should be registered so as not to collide with boxes introduced in +this or related specifications. The order of child boxes in the +VideoExtendedUsageBox, and in all contained boxes recursively, is not prescribed. +A reader should be prepared to find boxes in any order. + Note: As FreeSpaceBox (‘free’) has a very common meaning in ISOBMFF and + QTFF, one or more free-space boxes may occur among the child + boxes and should be interpreted as having no other meaning than taking + up space. There is no guarantee that the payload of a FreeSpaceBox + contains exclusively zero (0) bytes, but that is encouraged. + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 9 + June 9, 2025 1.9.8 (Beta) + + + Note: An empty VideoExtendedUsageBox (i.e., containing no child boxes) is + allowed but should generally not be included in the VisualSampleEntry. It + may however be useful to reserve space by including a + VideoExtendedUsageBox in concert with a contained FreeSpaceBox + (‘free’). +New child boxes may be introduced in the future that are not described in this spec. +There is a mechanism in the structure of VideoExtendedUsageBox to signal the set of +child boxes that an implementation must understand in order to usefully process the +video track. This allows future boxes to be introduced, and older implementations to +know they should not present the video with newer signaled features. +Besides standard boxes, the VideoExtendedUsageBox may contain zero or more +boxes that describe specific kinds of signaling. In the following section, each kind of box +is described. +Note that a VideoExtendedUsageBox should carry only one child box for a specific +feature. So, for example, there should not be more than one feature box for stereo-view +signaling. + + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 10 + June 9, 2025 1.9.8 (Beta) + + +A VideoExtendedUsageBox with contained boxes might look like the following: + + + + vexu + + eyes + + stri hero + + has left, has right left + + + + must + + [ eyes ] + + abcd free + + ???? 000…0 + + + + +This ‘vexu’ box contains an ’eyes’ box and another box. The second box, the 'abcd' +box, is optional, but if its type is included in the ‘must’ box, that indicates that it must be +understood by the reader. ‘free’ boxes allow space to be reserved. The other box (i.e., +'abcd') represents an unknown but not required box. +The order of child boxes within a box may vary. Readers should not expect a fixed order +of child boxes at any level. A writer should not include a child box of a particular type +more than once if it is documented to occur only once. +1.2.Required box types (‘must’) box + +1.2.1.Definition +Box Type: ‘must’ +Container: A video box within the video extended usage box (‘vexu’) or within contained +boxes +Mandatory: No +Quantity: Zero or one +If a parent box at any level within the VideoExtendedUsageBox has a 'must' box, +that 'must' box contains a list of box types corresponding to boxes that are peers to the +'must' box and that the reader must successfully interpret in order for the parent box to +be successfully interpreted. In other words, if the reader does not recognize a required +box type, or if it fails to parse that box or any required child box of that box, the reader +must consider that to be a failure to parse the parent box. If the + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 11 + June 9, 2025 1.9.8 (Beta) + + +VideoExtendedUsageBox box is considered failed, the track is to be ignored by the +reader. +Each kind of child box within a VideoExtendedUsageBox might serve to signal a +feature according to this specification. The set of boxes is interpreted by the reader to +understand what the video represents (e.g., it uses stereo views). Some of the signaling +is necessary for further processing. Other boxes may be informative but not strictly +required for interpretation. It’s important to understand all required boxes. +RequiredBoxTypesBox enables the adding of new boxes in the future that may be +required for interpretation and further processing. +Each box within the VideoExtendedUsageBox may contain any hierarchy of boxes +suitable to signal some aspect about the video. Some of these may be boxes with a +hierarchy of other boxes, and some may be full boxes. The RequiredBoxTypesBox +enumerates the box types of its sibling boxes, corresponding to required boxes. If not +enumerated within the RequiredBoxTypesBox, the child box’s interpretation is +optional. +The RequiredBoxTypesBox contains an array of FourCCs, corresponding to box +types. If an entry is 0, the entry is reserved and is not interpreted as a required box type. +Free-space boxes of box type ‘free’ should not be included in a +RequiredBoxTypesBox. If a RequiredBoxTypesBox includes a box type that +doesn’t correspond to a child box, the reader can ignore the absence but might want to +log this for diagnostic purposes. The use of box types of missing boxes within a +RequiredBoxTypesBox is, however, discouraged. +The FreeSpaceBox box type of ‘free’ should not be referenced from a +RequiredBoxTypesBox. +The RequiredBoxTypesBox can also occur within other boxes within the +VideoExtendedUsageBox box hierarchy that are themselves box hierarchies. These +uses of RequiredBoxTypesBox serve to indicate local requirements on boxes that +must be recognized and understood for local parsing to be valid. A local box can fail, +and that influences the validity of the parent box if the parent box itself is referenced +from another RequiredBoxTypesBox that is a sibling of the parent box. + +1.2.2.Syntax +aligned(8) class RequiredBoxTypesBox extends FullBox(‘must’, 0, 0 ) { + unsigned int(32) required_box_types[]; +} + +1.2.3.Semantics + required_box_types is an array of zero or more box types corresponding to + sibling boxes that must be understood by readers, to properly process the video + associated with the VideoExtendedUsageBox. For each non-zero entry in + required_box_types[], the reader should confirm the box type is recognized. A + value of zero (0) in a required_box_types[] entry can be ignored, allowing for + space for entries to be reserved. + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 12 + June 9, 2025 1.9.8 (Beta) + + +1.2.4.Reader Behavior and RequiredBoxTypesBox +A reader of a movie-file video track with an associated VideoExtendedUsageBox +should be able to detect whether it understands enough about the +VideoExtendedUsageBox contents to process the video beyond fundamental decoding. +This further processing, interpretation and/or rendering is what extended refers to +within the identifier name “VideoExtendedUsageBox”. +This specification is intended to be extended in future versions. A particular video track +may carry several kinds of signaling that differ from other video tracks within the movie +file, or in other movie files. The kind of signaling within a box can itself evolve over time. +In all these cases, it is important to know if the set of child boxes of a box must be +understood. Although the most obvious case is child boxes of +VideoExtendedUsageBox, the approach can apply to any box serving as the root of +a box hierarchy within the larger hierarchy. +The following describes reader behavior that is aware of RequiredBoxTypesBox: + 1. Read (or start processing) the box hierarchy (e.g., VideoExtendedUsageBox). + 2. Retrieve the contained RequiredBoxTypesBox child box, if any. + 1. If present, confirm all non-zero entries of required_box_types[] are + recognized box types, and if not, treat the parent box of the + RequiredBoxTypesBox as not processable. + 2. Ignore all zeroed entries of required_box_types[]. + 3. Enumerate each non-zero box type in the required_box_types[] of the + child RequiredBoxTypesBox of the VideoExtendedUsageBox, using an + index from 0 to the length of required_box_types[] minus 1, and confirm + the referenced box is understood. + 1. For each successive index, retrieve the child box with + required_box_types[index] and confirm understanding of its + structure. + 1. For a child FullBox, the reader should consider the version and + flags to confirm understanding, as well as anything else that may + be relevant to its interpretation. + 2. For child boxes that are box hierarchies themselves and allow + RequiredBoxTypesBox, the reader should descend into the + box, retrieve the optional contained RequiredBoxTypesBox + and perform this algorithm recursively. + 3. If the parsing of the FullBox or the child box hierarchy fails, the + reader should treat the current level as invalid and propagate that + failure upwards. Any semantics discovered at the current level + should not be propagated upwards, as partial semantics is + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 13 + June 9, 2025 1.9.8 (Beta) + + + misleading (e.g., stereo view and something else both being + required should not signal stereo views if the other parsing fails). +The VideoExtendedUsageBox parsing follows this same algorithm. In this case, +however, failing to parse required child boxes of VideoExtendedUsageBox means +the track has failed to parse. This can best be interpreted as though the entire video +track is unavailable. +1.3.Video stereo-view signaling +The StereoViewBox signals if the video track represents stereo 3D content. This can +take the form of a track that delivers both a left and a right stereo-eye view, or a track +that carries only the left or the right stereo eye. +If both left and right stereo eyes are carried, the views might be combined in one image +and organized in some way, or they might be contained in some kind of multiview +coding. +If the left stereo eye is in one video track and the right stereo eye is in a second video +track, each carries its own VideoExtendedUsageBox with a StereoViewBox. The +indication of which eye is carried is appropriate for each corresponding video track. +For completeness, it is also possible to signal monoscopic video, which is to say no +stereo-view carriage. If this is the case, however, the StereoViewBox can be +eliminated from the VideoExtendedUsageBox. If the VideoExtendedUsageBox +would be left with no child boxes, the VideoExtendedUsageBox can be eliminated +from the VisualSampleEntry as well. +If the recorded stereo video has a designated “hero” eye, the StereoViewBox carries +a HeroStereoEyeDescriptionBox. There are rules that require signaling when the +stereo eye video is separated into two video tracks, with each track carrying only one of +the stereo eyes. + +1.3.1.Definition +Box Type: ‘eyes’ +Container: Video extended usage box (‘vexu’) +Mandatory: No +Quantity: Zero or one + +1.3.2.Syntax +aligned(8) class StereoViewBox extends Box(‘eyes’) { + RequiredBoxTypesBox(); // as needed + StereoViewInformationBox(); + HeroStereoEyeDescriptionBox(); // optional + StereoCameraSystemBox(); // optional + StereoCameraSystemBaselineBox(); // optional + Box[]; // other optional boxes +} + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 14 + June 9, 2025 1.9.8 (Beta) + + +1.3.3.Semantics + StereoViewInformationBox is a required box indicating which stereo eyes are + present. + RequiredBoxTypesBox indicates the box types for other boxes that must be + understood to interpret the current version of the StereoViewsBox. The + StereoViewInformationBox box type of ‘stri’ is required within + RequiredBoxTypesBox if a RequiredBoxTypesBox is used. +Other boxes indicate additional detail about the stereo-view representation and are +described in later sections of this document. The set of boxes may evolve. + +1.4. Stereo-view information (‘stri’) + +1.4.1. Definition +Box Type: ‘stri’ +Container: Video stereo-view box (‘eyes’) +Mandatory: Yes +Quantity: One +The StereoViewInformationBox can carry the stereography-related information, +indicating the presence of particular stereo eyes (i.e., left stereo eye, right stereo eye), as well as +some other flags. + +1.4.2.Syntax +aligned(8) class StereoViewInformationBox extends FullBox(‘stri’, 0, 0) { + unsigned int(4) reserved; // reserved, set to 0 + unsigned int(1) eye_views_reversed; + unsigned int(1) has_additional_views; + unsigned int(1) has_right_eye_view; // video contains a right-eye view + unsigned int(1) has_left_eye_view; // video contains a left-eye view +} + +1.4.3.Semantics + has_left_eye_view: Indicates the stereo left eye is present in video frames. + has_right_eye_view: Indicates the stereo right eye is present in video frames. + has_additional_views: Indicates that one or more additional views may be + present beyond stereo left and stereo right eyes (e.g,. a “centerline” view). + eye_views_reversed: Indicates that the order of the stereo left eye and stereo + right eye is reversed from the default order (left being first and right being second). + reserved: 4 bits reserved for future versions of this specification; for this version of + this specification, writers should set it to 0, and readers should treat any non-zero + values as if this box is invalid. + +Because there is a flag field for the left eye and a field for the right eye, both fields +should be set to indicate that both eyes are represented in video frames. Moreover, both + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 15 + June 9, 2025 1.9.8 (Beta) + + +has_left_eye_view and has_right_eye_view can be set to 0 to indicate that +the frame is monoscopic. + Note: If the video is monoscopic, the StereoViewBox can also be absent + from the VideoExtendedUsageBox. If the only signaling is of + monoscopic video, the VideoExtendedUsageBox can be absent from + the VisualSampleEntry, too. +If an alternative organization is signaled in the future, the default order of stereo eyes in +video will be left eye first, then right eye. Setting the eye_views_reversed field +reverses the order, so the right view appears to the left of the frame, and the left view +appears to the right of the frame. For multiview coding, there is no implied ordering, and +the eye_views_reversed field should be set to 0. + Note: It may be useful to signal in a multiview coding approach the presence of + the left stereo eye, the right stereo eye and a third view, which is the + centerline or “down-the-nose” view between these and is neither the left + nor the right. It may not be possible or appropriate to use the left or the + right eye for this central view. There may be coding efficiencies from + being able to include such a view in multiview coding. +The has_left_eye_view and has_right_eye_view fields specify the presence +of the left and right stereo eye views, but the fields do not signal how those are stored. +That is accomplished with other child boxes of StereoViewBox. +Note that the has_additional_views field indicates that views beyond those for +the left eye and the right eye are present. One example of this might be a centerline +view. Note that signaling the presence of the centerline is not necessary if both the left +and right eye flags are zeroed, indicating a monoscopic view. + +1.5.Hero Stereo-Eye Description + +1.5.1.Definition +Box Type: ‘hero’ +Container: Video stereo-view box (‘eyes’) +Mandatory: No +Quantity: Zero or one +The HeroStereoEyeDescriptionBox indicates which stereo eye, if any, has been +denoted as the hero eye. If so signaled, this indicates that the specified stereo eye view +may be useful when choosing which eye to use in a monoscopic viewing environment. If +neither eye is the hero eye, the HeroStereoEyeDescriptionBox does not need to +be included in the StereoViewBox. If the hero eye is not known, a +HeroStereoEyeDescriptionBox might not appear in the StereoViewBox. +It is possible to include a HeroStereoEyeDescriptionBox but set the flags to +indicate that neither the left nor the right stereo eye is set. Though unconventional, this +allows an implementation to reserve space for the box, to potentially set later in + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 16 + June 9, 2025 1.9.8 (Beta) + + +processing. Readers should be prepared to recognize such a +HeroStereoEyeDescriptionBox that signals no hero eye. + +1.5.2.Syntax +aligned(8) class HeroStereoEyeDescriptionBox extends FullBox(‘hero’, 0, 0) +{ + unsigned int(8) hero_eye_indicator; // 0 = none, 1 = left, 2 = right, >= +3 reserved +} + +1.5.3.Semantics + HeroStereoEyeDescriptionBox is used to indicate which of the left or right + stereo eye is the hero eye, if any. + hero_eye_indicator: Used in the HeroStereoEyeDescriptionBox, to + signal which hero eye, if any, is specified. Defined values are: + 0: The hero eye is not specified. + 1: Indicates the left eye is the hero eye. + 2: Indicates the right eye is the hero eye. + >= 3: Reserved, and should not be used for implementation of this version of this + specification. If a reserved value is read, a reader should treat the signaling as + though no hero eye is specified. If the hero eye is not specified, it is recommended + that HeroStereoEyeDescriptionBox not be included in the StereoViewBox. + The value of 0 is allowed, as it can be used to reserve space for the + HeroStereoEyeDescriptionBox that might be adjusted later. +The HeroStereoEyeDescriptionBox signals the left or the right stereo eye +independently of whether or not the stereo-view box’s +StereoViewInformationBox indicates that the order of the stereo eyes is reversed. +The hero left eye is always the left stereo eye, and the hero right eye is always the right +stereo eye. + +1. Stereo Camera-System Box + +1.1. Definition +Box Type: ‘cams’ +Container: Stereo-view box (‘eyes’) +Mandatory: No +Quantity: Zero or one +Stereo views are typically produced through capture by a camera system of some kind. +Characteristics of that camera system may be useful for rendering or other processing. +Moreover, the kinds of information associated with a camera system may vary now or in the +future. As such, it seems prudent to allow one or more kinds of information to be carried for +consideration by the processing client. It is also the case that this information is optional, as +some stereo recording might not use a physical camera system. It may, however, be the case + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 17 + June 9, 2025 1.9.8 (Beta) + + +that the camera system is virtual, so being able to include information that a physical camera +system produces also seems useful to allow. +To signal information about the stereo nature of the camera system, the +StereoCameraSystemBox is introduced. This is an optional Box instead of a FullBox +so that a hierarchy of boxes and full boxes related to the camera system can be carried. + +1.2. Syntax +aligned(8) class StereoCameraSystemBox extends Box(‘cams’) { + RequiredBoxTypesBox(); // optional + StereoCameraSystemBaselineBox(); // optional + Box[]; // other boxes that signal information about the camera system +} + + +1.3. Semantics +StereoCameraSystemBaselineBox is used to describe the baseline dimension +between centers of the stereo lenses of the camera system. It is optional. There is no +default interpretation when this box is absent. + + +2.Stereo Camera-System Baseline Box + +2.1. Definition +Box Type: ‘blin’ +Container: Stereo camera-system box (‘cams’) +Mandatory: No +Quantity: Zero or one +Stereo camera systems may provide a number of characteristics that may prove useful to +downstream rendering and processing of stereo frames captured by a camera system. One +such characteristic is the distance between the optical centers of the left and right stereo eye +camera lenses. +To signal information about the camera-system baseline, the +StereoCameraSystemBaselineBox is used. This is an optional FullBox that holds a +field with the distance in micrometers between the lenses. As distances in a camera system are +typically expressed in millimeters, this use of micrometers can also be seen as being expressed +in thousandths of a millimeter. The value is a fixed-point number expressed as an integer (i.e., +63123 micrometers is 63.123 millimeters). + Note: Although StereoCameraSystemBaselineBox is not mandatory in the + overall box structure of VideoExtendedUsageBox, its presence is + required for the containing movie file to be considered "spatial media" by + visionOS 2. + + +2.2. Syntax +aligned(8) class StereoCameraSystemBaselineBox extends FullBox(‘blin’) { + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 18 + June 9, 2025 1.9.8 (Beta) + + + unsigned int(32) baseline_value; +} + + +2.3. Semantics + baseline_value holds the baseline dimension between centers of the stereo + lenses of the camera system. It is an unsigned 32-bit integer that is interpreted in + micrometers or thousandths of a millimeter (e.g., 63123 micrometers is 63.123 + millimeters). + + +3.Stereo-Comfort Box + +3.1. Definition +Box Type: ‘cmfy’ +Container: Stereo-view box (‘eyes’) +Mandatory: No +Quantity: Zero or one +Stereo views are presented to the left and the right eye in a display system. How that is +performed can influence comfort. To allow different kinds of information related to stereo +comfort to be carried with the stereo video frames, it is useful to allow one or more pieces of +information to be carried. +To signal information influencing viewer comfort, the StereoComfortBox is introduced. +This is a Box instead of a FullBox, so that a hierarchy of boxes and full boxes related to +stereo comfort can be carried. This box is optional unless there are contained boxes. Only +StereoComfortDisparityAdjustmentBox is currently defined. + +3.2.Syntax +aligned(8) class StereoComfortBox extends Box(‘cmfy’) { + RequiredBoxTypesBox(); // optional + StereoComfortDisparityAdjustmentBox(); // optional + Box[]; // other boxes that signal information about stereo comfort +} + + +3.3. Semantics + StereoComfortDisparityAdjustmentBox is used to describe any adjustment + in the disparity between the stereo views of the current frame. The absence of this + box or a zero value in the disparity_adjustment field of the box indicates no + change in stereo disparity. + + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 19 + June 9, 2025 1.9.8 (Beta) + + +4.Stereo-Comfort Disparity Adjustment Box + +4.1.Definition +Box Type: ‘dadj’ +Container: Stereo-comfort box (‘cmfy’) +Mandatory: No +Quantity: Zero or one +Stereo view comfort can be improved by allowing an adjustment in disparity to be specified. The +source of this disparity is not specified, but the value’s carriage is. As this adjustment is +optional, this information may not be present. +To signal information about changes to the stereo comfort disparity, the +StereoComfortDisparityAdjustmentBox is introduced. This is a FullBox holding a +field that indicates the amount of disparity to apply. If the value is 0, there is no disparity +adjustment. The value is a signed 32-bit integer that is interpreted as a uniform number over the +range [-1.0…0.0…+1.0]. The valid range of the integer is from -10000 to +10000, which maps +from -1.0 to +1.0. The interval of 0.0 to 1.0 and 0.0 to -1.0 are each mapped over the width of a +view’s image. Half of this value is applied to each stereo eye view. +The value is interpreted this way: + - Half the disparity is added to pixels in the left stereo eye view. + - Half the disparity is subtracted from pixels in the right stereo eye view. +As the disparity value is signed, adding a negative value to the left stereo eye is equivalent to +subtracting the absolute value of the disparity value. The right stereo eye’s subtraction of a +negative disparity value is likewise equivalent to adding the absolute value of the disparity +value. +Another interpretation of the sign of the disparity value is that positive denotes increased +disparity with respect to the parallel view direction (e.g., horizontal) and negative denotes +increased negative disparity with respect to the parallel view direction. Negative disparity is +toward the viewer. +If the disparity adjustment value is 0, the StereoComfortBox need not contain a +StereoComfortDisparityAdjustmentBox. If the StereoComfortBox would be left +with no child boxes, the StereoComfortBox can itself be missing. There are rules, however, +requiring the StereoComfortBox to exist. + Note: Although StereoComfortDisparityAdjustmentBox is not + mandatory in the overall box structure of VideoExtendedUsageBox, + its presence is required for the containing movie file to be considered + "spatial media" by visionOS 2. + + +4.2.Syntax +aligned(8) class StereoComfortDisparityAdjustmentBox extends +FullBox(‘dadj’) { + int(32) disparity_adjustment; +} + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 20 + June 9, 2025 1.9.8 (Beta) + + +4.3.Semantics + disparity_adjustment holds a value describing an optional adjustment in stereo + disparity. A value of 0 indicates there is no disparity adjustment and can also be + represented by not including a StereoComfortDisparityAdjustmentBox in + StereoComfortBox. The value is a signed 32-bit integer measured in the range of + -10000 to 10000, mapping to the uniform range [-1.0…1.0]. The interval of 0.0 to 1.0 + or 0 to 10000 maps onto the stereo eye view image width. The negative interval 0.0 + to -1.0 or 0 to -10000 similarly maps onto the stereo eye view image width. + + + Note: This is not measured as a percentage but instead as a uniform value. To + express 1.5%, the value 0.015 as a uniform value, or as the signed integer + 150 (expressed over 10000), can be used. + Note: If the video is frame packed, for example, as side-by-side, the image width + is for one stereo eye rather than the total image width of the side-by-side + views. Other kinds of packings or arrangements also use the image width of + the view, however stored or represented. + + +2. Video projection signaling + +Projections +A projection is a mathematical model mapping 3D world points onto 2D points such as +an image or sensor. This mapping in a camera system can be achieved through optical +elements such as lenses, through software or through a combination of the two. + +2.1. Definition +Box Type: ‘proj’ +Container: Video stereo-view box (‘eyes’) +Mandatory: No +Quantity: Zero or one +If the video frame has some form of projection or other mathematical transform, the projection +box may be used to indicate the algorithm and the approach taken. Downstream rendering likely +needs to perform a mapping to present the frame in a way the viewer understands. +ProjectionBox signals that a form of projection is required to present the video +track. Its contents signal one kind of projection. + +2.2. Syntax +aligned(8) class ProjectionBox extends Box(‘proj’) { + RequiredBoxTypesBox(); + ProjectionInformationBox(); + FullEquirectangularProjectionBox();// optional: one of the kinds of the +possible projections + HalfEquirectangularProjectionBox();// optional: one of the kinds of the +possible projections + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 21 + June 9, 2025 1.9.8 (Beta) + + + FisheyeProjectionBox(); // optional: one of the kinds of the possible +projections + ParametricImmersiveMediaProjectionBox(); // optional: one of the kinds +of the possible projections + RectilinearProjectionBox(); // optional: one of the kinds of the +possible projections (default if absent) + Box[]; // other kinds of boxes +} + +2.3. Semantics + ProjectionInformationBox indicates the kind of projection described by the + ProjectionBox. Each possible projection kind may be associated with a sibling + box with additional parameters for that projection kind. + RequiredBoxTypesBox indicates the box types for other boxes that must be + understood to interpret the current version of the ProjectionBox. + FullEquirectangularProjectionBox indicates that the projection is an + equirectangular projection covering 360 degrees. More detail is found later in this + specification. + HalfEquirectangularProjectionBox indicates that the projection is an + equirectangular projection covering 180 degrees. More detail is found later in this + specification. + FisheyeProjectionBox indicates that the projection is a fisheye projection. More + detail is found later in this specification. + ParametricImmersiveMediaProjectionBox indicates that the projection +uses the parametric lens projection. + RectilinearProjectionBox indicates that the projection is a rectilinear + projection. More detail is found later in this specification. + Other kinds of projections may be introduced in future versions of this specification. + Current versions of projections may also be extended in the future. + + + Note: The projection kinds may not require any additional parameterization, so + child box types for a particular projection kind may not exist. + Nevertheless, the box_type for such projection kinds is reserved. + +3.Projection information (‘prji’) + +3.1. Definition +Box Type: ‘prji’ +Container: Projection box (‘proj’) +Mandatory: No +Quantity: One + + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 22 + June 9, 2025 1.9.8 (Beta) + + +The kinds of projections described by a ProjectionBox can vary according to this +specification, and in future versions of this specification. The +ProjectionInformationBox indicates the kind of projection carried. + +3.2.Syntax +aligned(8) class ProjectionInformationBox extends FullBox(‘prji’, 0, 0) { + unsigned int(32) projection_kind; // a FourCC for the kind of +projection +}; + +3.3. Semantics +projection_kind is a FourCC corresponding to the kind of projection. These +currently include ‘rect’, ’equi’, ‘hequ’ and ’prim’ with the reserved ’fish’ kind. + The ProjectionInformationBox can specify one kind of video projection for a + video track. With this version of the specification, it should be one of the following + projection_kind FourCCs with the corresponding projection kind of box: + • 'equi' : with optional FullEquirectangularProjectionBox, indicates a + 360-degree projection; + • 'hequ' : HalfEquirectangularProjectionBox indicates a 180-degree + projection; + • 'fish' : FisheyeProjectionBox indicates a projection of a fisheye lens, but + reserved for legacy use; + • 'prim' : ParametricImmersiveMediaProjectionBox indicates a flexible + approach to describing parameterized projection; and + • 'rect' : RectilinearProjectionBox indicates that the projection is + rectilinear (with straight features), and serves as the default in the absence of + the ProjectionBox within the VideoExtendedUsageBox. Because it is + the default, this is likely not seen in movie files. +The ProjectionBox containing the ProjectionInformationBox may optionally have a +child box, using a box type that corresponds to the projection_kind. This child box is a +sibling of ProjectionInformationBox. It signals any parameters specific to that kind of +projection, and reserves the corresponding box types. Although no occurrences +of such boxes are defined in this specification, such usage is reserved for the future. + +4.Rectilinear projection + +4.1. Definition +Box Type: ‘rect’ +Container: Projection box (‘proj’) +Mandatory: No +Quantity: Zero or one +The rectilinear projection is the default for video. There is no further processing +necessary to present video marked with just this projection. As the default, this can be + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 23 + June 9, 2025 1.9.8 (Beta) + + +signaled by not including a ProjectionBox, or even by not including a +VideoExtendedUsageBox if there is no other signaling. +If this projection is used, the sibling ProjectionInformationBox +projection_kind should be set to ‘rect’. +It is possible to use this box to make it obvious what the intention is. + +4.2.Syntax +aligned(8) class RectilinearProjectionBox extends FullBox(‘rect’, 0, 0) { + // fields reserved for future use +}; + +4.3.Semantics +RectilinearProjectionBox signals a rectilinear projection. No fields are currently +defined within the box, but a child box of type 'rect' is reserved for future addition to this +specification. + + + +6.Full Equirectangular projection + +6.1. Definition +Box Type: ‘equi’ +Container: Projection box (‘proj’) +Mandatory: No +Quantity: Zero or one +The FullEquirectangularProjectionBox indicates that the type of projection is a +360-degree projection using the equirectangular type. If no constraint on the angular limits is +specified elsewhere, the limits are 0º to 360º. +If this projection is used, the sibling ProjectionInformationBox +projection_kind should be set to ‘equi’. + +6.2.Syntax +aligned(8) class FullEquirectangularProjectionBox extends FullBox(‘equi’, +0, 0) { + // fields reserved for future use +}; + +6.3.Semantics +FullEquirectangularProjectionBox signals a 360-degree equirectangular +projection. No fields are currently defined within the box, but a child box of type 'equi' is +reserved for future addition to this specification for use of further details about the 360- +degree projection. + + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 24 + June 9, 2025 1.9.8 (Beta) + + +7. Half-equirectangular projection + +7.1. Definition +Box Type: ‘hequ’ +Container: Projection box (‘proj’) +Mandatory: No +Quantity: Zero or one +The HalfEquirectangularProjectionBox indicates that the type of projection is a +180-degree projection based upon the equirectangular type. If no constraint on the angular +limits are specified elsewhere, the limits should be 0º to 180º. +If this projection is used, the sibling ProjectionInformationBox +projection_kind should be set to ‘hequ’. + +7.2. Syntax +aligned(8) class HalfEquirectangularProjectionBox extends FullBox(‘hequ’, +0, 0) { + // fields reserved for future use +}; + +7.3. Semantics +HalfEquirectangularProjectionBox signals a 180-degree half equirectangular +projection. No fields are currently defined within the box, but a child box of type 'hequ' +is reserved for future addition to this specification for use of further details about the +180-degree projection. + Note: The FourCC ‘hequ’ can optionally be pronounced “heck you.”. + + + - + +8.Fisheye projection + +8.1. Definition +Box Type: ‘fish’ +Container: Projection box (‘proj’) +Mandatory: No +Quantity: Zero or one +The fisheye projection is a projection from a hemisphere (typically a special lens). This +kind of lens is often termed a fisheye lens, and so the projection uses the term fisheye. It +is not, however, necessary to have captured with such a lens to produce a fisheye +projection. +If this projection is used, the sibling ProjectionInformationBox +projection_kind should be set to ‘fish’. + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 25 + June 9, 2025 1.9.8 (Beta) + + +The projection kind 'fish' is reserved for a particular legacy implementation case and is +not expanded upon here. For more general spherical projection, look at the +ParametricImmersiveMediaProjectionBox ('prim') instead. + +8.2.Syntax +aligned(8) class FisheyeProjectionBox extends FullBox(‘fish’, 0, 0) { + // fields reserved for future use +}; + +8.3.Semantics +FisheyeProjectionBox signals a fisheye projection typically covering a 180-degree +field of view. No fields are currently defined within the box, but a child box of type 'fish' +is reserved for future addition to this specification for further details about the fisheye +projection. + - + + + +9.Parametric Immersive Media projection + +9.1. Definition +Box Type: ‘prim’ +Container: Projection box (‘proj’) +Mandatory: No +Quantity: Zero or one +The parametric immersive projection is a generalized spherical projection and is +designed for significant flexibility. +If this projection is used, the sibling ProjectionInformationBox +projection_kind should be set to ‘prim’. A child box +ParametricImmersiveMediaProjectionBox may be introduced to describe +specific parameters needed, but currently none exist. Nevertheless, the child box of +type 'prim' is reserved for future use. +The parametric immersive projection requires that the VideoExtendedUsageBox +contains a CameraSystemLensCollectionBox characterizing the lens or lenses. +This describes the lens intrinsics and extrinsics and other relevant information +necessary for the projection to be applied. + +9.2.Syntax +aligned(8) class ParametricImmersiveMediaProjectionBox extends +FullBox(‘prim’, 0, 0) { + // fields reserved for future use +}; + + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 26 + June 9, 2025 1.9.8 (Beta) + + +9.3. Semantics +ParametricImmersiveMediaProjectionBox signals a parametric spherical +projection, typically covering a 180-degree field of view. Unlike other current projections +defined (i.e., 'rect', 'equi', 'hequ' and 'fish'), this projection does have a concrete child +box of the ProjectionBox, specifically +ParametericImmersiveMediaProjectionBox. + + + + +3.Video view packing + +3.1. Definition +Box Type: ‘pack’ +Container: Video extended usage box (‘vexu’) +Mandatory: No +Quantity: Zero or one +A use of video tracks can be to encode more than one view in the same video frame. Different +areas of the decoded frame produce different images. The ViewPackingBox can signal +packing-related information. Types of packings can include frame-packed views and texture +atlases. + Note: Multiview encoding encodes multiple views in a way that no view is combined with + another view in what is delivered. Packing, or frame-packing, involves multiple + elements, combined in the same video frame and requiring addressing to extract + just that view. Multiview coding allows individual views to be accessed without + having to exclude portions of what is returned. + +3.2.Syntax +aligned(8) class ViewPackingBox extends Box(‘pack’) { + RequiredBoxTypesBox(); + ViewPackingInformationBox(); + Box[]; // other boxes +} + +3.3. Semantics + RequiredBoxTypesBox indicates the box types for other boxes that must be + understood to interpret the current version of the PackingBox. + Other boxes may occur. Some may be required by future versions of this + specification. + + + - + + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 27 + June 9, 2025 1.9.8 (Beta) + + +3.4. View Packing information + +3.4.1. Definition +Box Type: ‘pkin’ +Container: Packing box (‘pack’) +Mandatory: No +Quantity: One +The kinds of packing described by a ViewPackingBox can vary according to this +specification and in future versions of this specification. The +ViewPackingInformationBox indicates the kind of packing used. + +3.4.2. Syntax +aligned(8) class ViewPackingInformationBox extends FullBox(‘pkin’, 0, 0) { + unsigned int(32) view_packing_kind; // a FourCC for the kind of +projection +}; + +3.4.3. Semantics +view_packing_kind is a FourCC corresponding to the kind of packing performed. +These currently include ‘side’ and ‘over’. + The ViewPackingInformationBox can specify a single-current kind of video + packing. It should be one of the following, with the corresponding value of + view_packing_kind: + ‘side’: Indicates a side-by-side arrangement of full-resolution video views + arranged horizontally, where the width of each view is half the width of the + containing video frame. + ‘over’: Indicates an over-under arrangement of full-resolution video views + arranged vertically, where one view is above the other and where the height of each + view is 1/2 the height of the containing video frame +The absence of packing can be specified by not including a ViewPackingBox. +Alternatively, a value of 0 can be specified for view_packing_kind, as a placeholder +that might be specified later. + + +4.Lens collection information +Some projections and associated processing may require signaling for each of the +lenses in the camera system. This information might include the lens pinhole intrinsics +matrix, extensions beyond the basic matrix, and/or other parameters. The number of +lenses might correspond to two for those needed in a stereo use case. Other lenses can +be introduced in the future. + +2.4.Definition +Box Type: ‘lnsc’ +Container: Video extended usage box (‘vexu’) + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 28 + June 9, 2025 1.9.8 (Beta) + + +Mandatory: No +Quantity: Zero or one + +2.5. Syntax +aligned(8) class CameraSystemLensCollectionBox extends Box(‘lnsc’) { + RequiredBoxTypesBox(); // as needed + CameraSystemLensBox()[]; // one or more + CameraSystemExtrinsicsBox(); // extrinsics for the camera +system + Box[]; // other optional boxes +} + +2.6. Semantics + A CameraSystemLensBox is a required box for each relevant lens. If the camera + system has lenses that are not important for the projection algorithm, a ‘lens’ box is + not required for that lens. + RequiredBoxTypesBox indicates the box types for other boxes that must be + understood to interpret the current version of the + CameraSystemLensCollectionBox. The CameraSystemLensBox box type of + ‘lens’ is required within RequiredBoxTypesBox if a RequiredBoxTypesBox is + used. +If there are no lenses, the ‘lnsc’ box should not be included in +VisualExtendedUageBox. Boxes contained within each 'lens' box indicate additional +detail about the camera-system lens and are described in later sections of this +document. The set of boxes may evolve. + +1.3. Camera system lens (‘lens’) + +1.3.1.Definition +Box Type: ‘lens’ +Container: Camera-system lens collection box (‘lnsc’) +Mandatory: Yes +Quantity: One or more +The CameraSystemLensBox carries the lens-related information for one lens in the camera +system. There should be at least one ‘lens’ box if the camera-system projection +algorithm requires information about the lenses. + +1.3.2.Syntax +aligned(8) class CameraSystemLensBox extends FullBox(‘lens’, 0, 0) { + RequiredBoxTypesBox() must_box; // as needed + CameraSystemLensHeaderBox() header_box; // identifier and algorithm + CameraSystemLensReferenceDimensionsBox reference_dims; + s() intrinsic_matrix; + CameraSystemExtrinsicsBox(); // as needed + Box[]; // other optional boxes +} + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 29 + June 9, 2025 1.9.8 (Beta) + + +1.3.3.Semantics + CameraSystemLensHeaderBox: Indicates the lens reference identifier and the + algorithm associated with why lens parameters are signaled. + CameraSystemLensReferenceDimensionsBox: Indicates the dimensions + (width and height) of the image of the lens projection (typically the entirety of the + encoded buffer for multiview encoding, or the relevant horizontal or vertical half using + frame-packing). + CameraSystemLensIntrinsicsBox: Signals the basic pinhole model intrinsics + matrix, along with other values needed for the projection used by the lens. + CameraSystemExtrinsicsBox: Indicates the extrinsics that relate this lens to the + overall camera system. + RequiredBoxTypesBox: Indicates the box types for other boxes that must be + understood to interpret the current version of the CameraSystemLensBox. The + CameraSystemLensHeaderBox box type of ‘lnhd’ is required within + RequiredBoxTypesBox if a RequiredBoxTypesBox is used. + + +Though unlikely, different lenses can be described by ‘lens’ boxes with differing +algorithms, requiring different parameters. This might be useful in the future if a camera +system combines color-based lenses and depth-based lenses. + Note: The current spec version only supports lenses that capture color pixels. + This may be extended in the future. If that is done, a new box may be + introduced and signaled in the contained ‘must’ box. + +3.5.Lens header information + +3.5.1. Definition +Box Type: ‘lnhd’ +Container: Camera-system lens box (‘lens’) +Mandatory: Yes +Quantity: One +The CameraSystemLensBox can vary according to this specification, and in future +versions of this specification. The CameraSystemLensHeaderBox indicates a unique +identifier that can be used to reference this lens from other parts of the +VisualExtendedUsageBox. It also signals the kind of algorithm so that the +interpretation of parameters is possible. + +3.5.2. Syntax +aligned(8) class CameraSystemLensHeaderBox extends FullBox(‘lnhd’, 0, 0) { + unsigned int(32) lens_identifier; // an integer unique to the +enclosing CameraSystemLensBox + unsigned int(32) lens_algorithm_kind; // a FourCC for the kind of +projection + unsigned int(32) lens_domain; // a FourCC for the kind of lens +(e.g., color) + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 30 + June 9, 2025 1.9.8 (Beta) + + + unsigned int(32) lens_role; // a FourCC indicating which lens +this is (e.g., left or right for a stereo system) +}; + +3.5.3. Semantics +lens_identifier is a big-endian 32-bit integer that can be referenced from other +structures in the VisualExtendedUsageBox. There is no prescribed interpretation of +lens_identifier. The reading process can read values that differ if written out, so +long as any references from other ‘vexu’ structures are updated consistently. +lens_algorithm_kind: Indicates the algorithm that makes use of the parameters held in the +CameraSystemLensBox. + The ProjectionInformationBox projection_kind field specifies the current + projection algorithm. In the current version of this specification, extended parameters + should only be used with a projection_kind of ‘prim’. The corresponding value + of lens_algorithm_kind indicates what additional lens collection signaling is + required: + ‘prim’: Indicates the “ProIM” algorithm [OMNI]. This algorithm requires both a + sibling CameraSystemLensIntrinsicsBox and a + CameraSystemLensDistortionsBox, with an optional + CameraSystemLensFrameAdjustmentBox. + 0: Indicates that the lens only describes its basic intrinsic matrix. That requires only + a CameraSystemLensIntrinsicMatrixBox. +lens_domain: Indicates the type of sensor readings this lens produces. The value is a FourCC +with one of these values: + + The lens_domain can hold the value 'colr' to indicate that it produces color signaling + such as RGB or YCbCr samples. For convenience, a value of 0 is equivalent to 'colr'. + + In the future, lens_domain might indicate depth or another useful representation, such as + from a Lidar sensor. +lens_role: Indicates the particular use of the lens in the camera system. For a stereoscopic +camera system where a CameraSystemLensCollection is required, there should be an identifier +for the left lens and another for the right lens. + 'left': Indicates that this is the left lens in a stereoscopic camera system. + 'rght': Indicates that this is the right lens in a stereoscopic camera system. + 'mono': Indicates that this is the main or only camera lens in a monoscopic camera system. + 0: Is a reserved value that should not be written in a movie, except in the case that the + containing CameraSystemLensHeaderBox is written as all zeros (0s) to reserve space. + + In the future, other values for lens_role, for other lenses, may be introduced. + + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 31 + June 9, 2025 1.9.8 (Beta) + + + Note: The lens_role should be used to indicate what purpose a lens serves. The + lens_identifier values should not be assigned fixed values that are inferred as + to the role of that lens (i.e., do not always use 1 to mean left lens and 2 to mean right + lens). There may be correlation between the writer's assignment of + lens_identifier and lens_role, but that should be treated only as + coincidence. + +3.6.Lens reference dimensions + +3.6.1. Definition +Box Type: ‘rdim’ +Container: Camera-system lens box (‘lens’) +Mandatory: Yes +Quantity: One +The CameraSystemLensBox corresponding to a specific lens benefits from having +the horizontal and vertical dimensions that may need to be interpreted by algorithms +related to that lens. The CameraSystemLensReferenceDimensionsBox indicates +the pixel width and height for the buffer processed by the lens. This should match the +view bounds and doesn't necessarily correspond to the VisualSampleEntry dimensions +(e.g., for frame-packed cases). + +3.6.2. Syntax +aligned(8) class CameraSystemLensReferenceDimensionsBox extends +FullBox(‘rdim’, 0, 0) { + unsigned int(32) reference_width; + unsigned int(32) reference_height; +}; + +3.6.3. Semantics +reference_width and reference_height are big-endian 32-bit integers for the +pixel width and height of the buffers that the lens algorithm processes. If this does not +match the VisualSampleEntry buffer width and height, the values used can be scaled by +the ratio of reference_width to image buffer width and reference_height to +image buffer height. + +3.7.Lens intrinsic matrix + +3.7.1. Definition +Box Type: ‘lnin’ +Container: Camera-system lens box (‘lens’) +Mandatory: Yes +Quantity: One +The CameraSystemLensIntrinsicsBox describes the camera-system intrinsics for the containing lens. If +the camera system is a single-lens system, this corresponds to the intrinsics of the camera. + +The intrinsic matrix is a 3x3 matrix of this form for a pinhole camera: + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 32 + June 9, 2025 1.9.8 (Beta) + + + + fx s cx + 0 fy cy + 0 0 1 + +where +- fx and fy are the horizontal and vertical focal length in pixels. For square pixels, they + have the same value. +- s is an optional skew factor. +- cx and cy are the coordinates of the principal point. The origin is the upper left of the + image frame. + Note: The HEIF specification [HEIF] describes a 'cmin' CameraIntrinsicMatrixProperty but + does not signal the cells with default values (matrix[0][1] = 0, matrix[1][0] = 0, matrix [2][0] + and matrix [2][1] = 0, matrix[2][2] = 1). We adopt that practice here, using named fields + instead of a general matrix 3x3 form. HEIF allows matrix[0][1] to be an optional non-zero + skew_factor. + Note: Most cameras have square pixels, with no skew. In this case, fx and fy are equal and + skew s is zero (0). +The values of the intrinsic matrix can be calculated as follows: + The variable denominator is set equal to (1 << denominatorShiftOperand) where + denominatorShiftOperand is in the value of the field + denominator_shift_operand + The variable skewDenominator is set equal to (1 << skewDenominatorShiftOperand) + where skewDenominatorShiftOperand is the value of the field + skew_denominator_shift_operand. + fx = focal_length_x * image_width / denominator + fy = focal_length_y * image_height / denominator + cx = principal_point_x * image_width / denominator + cy = principal_point_y * image_height / denominator + s = skew_factor / skewDenominator +image_width and image_height come from +CameraSystemLensReferenceDimensionsBox reference_width and +reference_height fields. + + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 33 + June 9, 2025 1.9.8 (Beta) + + +3.7.2. Syntax +aligned(8) class CameraSystemLensIntrinsicsBox extends FullBox(‘lnin’, +version = 0, flags) { + signed int(16) denominator_shift_operand; + signed int(16) skew_denominator_shift_operand; + signed int(32) focal_length_x; + signed int(32) principal_point_x; + signed int(32) principal_point_y; + if (flags & 1) { + signed int(32) focal_length_y; + signed int(32) skew_factor; + } + if (flags & 2) { + BEFloat32 projection_offset; + } +}; + +3.7.3. Semantics +A 3x3 matrix is not recorded in the CameraSystemLensBox but instead the +CameraSystemLensIntrinsicsBox carries fields that can be used to calculate the +cells of an equivalent 3x3 intrinsic matrix. + Note: Unlike the HEIF 'cmin' property item box [HEIF], the denominators are explicitly + carried as discrete fields instead of being "hidden" in the FullBox flags. +The fields are: + denominator_shift_operand : The number of arithmetic shifts left to calculate + the variable denominator (i.e., 1 << denominator_shift). + skew_denominator_shift_operand : The number of arithmetic shifts left to + calculate the variable skewDenominator (i.e., 1 << skew_denominator_shift). + focal_length_x : The horizontal focal length measured in image widths. + principal_point_x : The principal point x-coordinate in image widths. + principal_point_y : The principal point y-coordinate in image heights. + focal_length_y : The vertical focal length, measured in image heights. If not + specified by flags, the value of fy is equal to fx. + skew_factor : The camera-system lens skew factor. If not present, the value is + implied to be zero (0). + projection_offset: projection_offset is sometimes referred to as xi. + + + + +3.8.Lens distortions +Distortions in a lens may need to be characterized. This requires some kind of signaling +to do this. It might be a set of parameters. It might be something more complex such as +a 2D map of areas of the lens. For the parametric immersive projection, the lens + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 34 + June 9, 2025 1.9.8 (Beta) + + +distortions can currently be characterized with four parameters (k1, k2, p1, and p2) and +an optional radial limit carried in a new box as fields. + +3.8.1. Definition +Box Type: ‘ldst’ +Container: Camera-system lens box (‘lens’) +Mandatory: No +Quantity: One + +3.8.2. Syntax +aligned(8) class CameraSystemLensDistortionsBox extends FullBox(‘ldst’, +version = 0, flags) { + BEFloat32 k1; // radial parameter k1 + BEFloat32 k2; // radial parameter k2 + BEFloat32 p1; // tangential parameter p1 + BEFloat32 p2; // tangential parameter p2 + if (flags & 1) { + BEFloat32 calibration_limit_radial_angle; + } +}; + +3.8.3. Semantics +The fields are: + k1 specifies radial parameter k1 according to the Brown-Conrady distortion model. + k2 specifies radial parameter k2 according to the Brown-Conrady distortion model. + p1 specifies tangential parameter p1 according to the Brown-Conrady distortion + model. + p2 specifies tangential parameter p2 according to the Brown-Conrady distortion + model. + calibration_limit_radial_angle specifies the outer limit of the calibration + validity in degrees of angle eccentric from the optical axis. + +3.9.Lens calibration frame adjustment +To properly render camera-captured frames, sensor-produced images may require a +post calibration mapping, or adjustment, to make the generated mesh compatible with +the final video dimensions. +Toward this end, the optional CameraSystemLensFrameAdjustmentBox allows the +specification of remapping polynomial parameters to describe the adjustment. + +3.9.1. Definition +Box Type: ‘lfad’ +Container: Camera-system lens box (‘lens’) +Mandatory: No +Quantity: One + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 35 + June 9, 2025 1.9.8 (Beta) + + +3.9.2. Syntax +aligned(8) class CameraSystemLensFrameAdjustmentBox extends FullBox(‘lfad’, +version = 0, 0) { + BEFloat32 polynomialParametersX[3]; // parameters for X axis + BEFloat32 polynomialParametersY[3]; // parameters for Y axis +}; + +3.9.3. Semantics +CameraSystemLensFrameAdjustmentBox has two fields currently: + polynomialParametersX and polynomialParametersY each specify an + array of exactly three BEFloat32 values which together satisfy these equations: + x' = ax + bx*x + cx*x3 + y' = ay + by*y + cy*y3 + where: + x is the x-axis source texture coordinate + y is the y-axis source texture coordinate + ax is polynomialParametersX[0] + bx is polynomialParametersX[1] + cx is polynomialParametersX[2] + ay is polynomialParametersY[0] + by is polynomialParametersY[1] + cy is polynomialParametersY[2] + Also, define: + referenceDimensions: The raw sensor image size, or the final exported + video size. This is the basis of source images used for the calibration + process. + cropDimensions: If calibrated from the sensor images, this is the center + crop size from the sensor image. + videoDimensions: The final exported video size. + + + + + The polynomial transform origin is at the center of the frame. {x,y} are the source + texture UV coordinates in the range [-0.5, 0.5]. {0.0,0.0} is the origin. + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 36 + June 9, 2025 1.9.8 (Beta) + + + The default values of elements of polynomialParametersX[] and + polynomialParametersY[] are each [0.0, 1.0, 0.0]. Some use cases for + setting parameters may be helpful to consider: + - If there is no cropping and no downsampling, or if it is calibrated from the + exported frame size, the parameters should be set to [0.0, 1.0, 0.0]. + - If there is a custom UV transform, please fit your transform to the specified + polynomial here. + - For calibration from the sensor image with ISP applied, a regular UV transform + with centered cropping followed by downsampling: + + Define: + - videoAspectRatio = video.width / video.height + referenceDimensionsAspectRatio = referenceDimensions.width + / referenceDimensions.height + aspectRatioScale = videoAspectRatio / + referenceDimensionsAspectRatio + - If in landscape mode, or in portrait mode with a 90-degree rotation track matrix + (i.e., video.width >= video.height): + - cropScale = referenceDimension.width / + cropDimension.width + - polynomialParametersX = [0, cropScale, 0] + polynomialParametersY = [0, aspectRatioScale * + cropScale, 0] + - If in portrait mode without track matrix (i.e., video.width < video.height): + - cropScale = referenceDimension.width / + cropDimension.height + - polynomialParametersX = [0, cropScale / + aspectRatioScale, 0] + polynomialParametersY = [0, cropScale, 0] + Also, note that if more array elements than three are introduced in the future or new + fields are required, a future version of this specification will increase the version field + of CameraSystemLensFrameAdjustmentBox and introduce new fields. The + polynomialParametersX and polynomialParametersY fields should not be + treated as dynamic arrays with more or fewer than three elements. + + +2.Camera-System Extrinsics +A camera system—whether a single-lens camera, a stereoscopic system with two, or a +theoretical system with more lenses—has a relationship from its lens(es) to the world coordinate + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 37 + June 9, 2025 1.9.8 (Beta) + + +system. This relationship establishes camera location in the world and is embodied in the +camera extrinsics. Just as there is an intrinsic matrix for a lens, typically an extrinsic matrix +establishes the orientation and position of the entire camera. Other models might use an +extrinsic matrix establishing the lens' position and orientation. The extrinsic matrix embodies a +rotation and translation. The rotation might be represented by a matrix of alternatively by a +quaternion. +Instead of a single extrinsic matrix for the camera system, this specification takes the approach +of describing a lens (or camera-system element) relative to the overall camera system. An +outcome of this is that the signaling for a multi lens system is that each lens may duplicate the +camera-system transform while identifying its relationship to a single point around which the +transform is applied. +As a matrix, the extrinsic matrix might look like: + + r1,1 r1,2 r1,3 t1 + r2,1 r2,2 r2,3 t2 + r3,1 r3,2 r3,3 t3 + +where ri,k cells embody rotation and the t vector positions the world origin in camera +coordinates. +An alternative formulation to a 4x3 matrix is to signal the extrinsics with a quaternion for the +rotation transform and some other indication of the camera's origin. +As mentioned in the introduction, coordinate systems user here are right-handed. + + +2.1.1.1.1.Definition +Box Type: ‘lnex’ +Container: Camera-system lens box (‘lens’) +Mandatory: No +Quantity: Zero or one +The camera system may need to signal extrinsics. For a single-lens system, it is unambiguous +(i.e., one cameras system has one lens has one extrinsic transform). For a multi lens system, +each lens exists in relation to other lenses in the overall camera system and can signal per lens +extrinsics using a CameraSystemLensExtrinsicsBox. There is still an overall notion of +camera extrinsics and this is done by carrying a single +CameraSystemLensExtrinsicsBox within the overall +CameraSystemLensCollectionBox that describes the camera system. Initially, the +approach is restricted in what is signaled but may be extended in future versions of this +specification even to the point of describing each lens' contribution by referencing +lenses by their lens identifier. + + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 38 + June 9, 2025 1.9.8 (Beta) + + +2.1.1.1.2.Syntax +aligned(8) class CameraSystemLensExtrinsicsBox extends Box(‘lnex’) { + RequiredBoxTypesBox(); // as needed + CameraSystemOriginSourceBox(); // optional + CameraSystemTransformBox(); // optional + Box[]; +}; + +2.1.1.1.3.Semantics +CameraSystemOriginSourceBox: a box indicating how the origin for the applied +transform is applied with respect to this lens. +CameraSystemTransformBox: a box indicating the transform to apply to the origin +of the camera system. + +2.1.1.2.Camera-system origin source + +2.1.1.2.1.Definition +Box Type: ‘corg’ +Container: Camera-system lens extrinsics box (‘lnex’) +Mandatory: Yes +Quantity: One +The camera-system extrinsics indicate an origin for the camera system that will be coupled with +a further transform. The origin may be derived from values instead of directly specified in the +extrinsics containing box. The CameraSystemOriginSourceBox indicates how it is +determined. Initially, the approach is restricted to a stereoscopic (binocular) system +where translations are inferred along the baseline distance. This approach may be +extended in future versions of this specification. + +2.1.1.2.2.Syntax +aligned(8) class CameraSystemOriginSourceBox extends FullBox(‘corg’, 0,0) { + unsigned int(32) source_of_origin; // e.g., 'blin' +}; + +2.1.1.2.3.Semantics +source_of_origin: Identifies how the origin of the camera system's extrinsics are +determined. + +This can hold these values: + 'blin': Indicating the center of transform is determined by the point mid way along + the dimensions indicated by the StereoCameraSystemBaselineBox held in + the StereoCameraSystemBox. The lens_role in + CameraSystemLensHeaderBox affects the interpretation in that the left lens + distance to the origin is 1/2 the distance indicated in + StereoCameraSystemBaselineBox and the right lens distance to the origin + is the reverse of that direction but with the same magnitude of 1/2 the distance + indicated in StereoCameraSystemBaselineBox. + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 39 + June 9, 2025 1.9.8 (Beta) + + + In the future, other values may be introduced to indicate other sources of direction + and magnitude to the origin for the transform. + Other values for origins may be introduced with new boxes or extensions to existing + boxes. + + +2.1.1.3.Camera system transform +The rotation or other transform to orient the camera system in world coordinates may take +various forms depending upon the kind of projection used. New formulations may be introduced +in future versions of this specification. + + + +2.1.1.3.1.Definition +Box Type: ‘cxfm’ +Container: Camera-system lens extrinsics box (‘lnex’) +Mandatory: Yes +Quantity: One +Whereas CameraSystemOriginSourceBox indicates the origin of the extrinsic transform, +the CameraSystemTransformBox indicates the transform around that origin. Currently, a +quaternion is used. In the future, a matrix or other representation may be introduced. + +2.1.1.3.2.Syntax +aligned(8) class CameraSystemTransformBox extends Box(‘cxfm’) { + RequiredBoxTypesBox(); // as needed + CameraSystemUnitQuaternionTransformBox(); // optional + Box[]; +}; + +2.1.1.3.3.Semantics +CameraSystemUnitQuaternionTransformBox: A box holding a unit quaternion +describing the rotation. +RequiredBoxTypesBox: In future versions of the specification, new mandatory boxes +may be introduced that are required to be understood. At that time, the new box types +can be signaled in a RequiredBoxTypesBox contained within the enclosing +CameraSystemTransformBox. + +2.1.1.4.Camera-system unit quaternion transform +The rotation or other transform may be modeled as a quaternion. The +CameraSystemUnitQuaternionTransformBox holds the three fields of a unit quaternion. + +2.1.1.4.1.Definition +Box Type: ‘uqua’ +Container: Camera-system transform box (‘cxfm’) +Mandatory: No +Quantity: Zero or one + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 40 + June 9, 2025 1.9.8 (Beta) + + +CameraSystemUnitQuaternionTransformBox describes a single unit quaternion. It +exists to be mappable to a runtime representation of a unit quaternion, such as the first three +elements of the vector of a simd_quatf data type. + +2.1.1.4.2.Syntax +aligned(8) class CameraSystemUnitQuaternionTransformBox extends +FullBox(‘uqua’, 0, 0) { + BEFloat32 xyz[3]; +}; + +2.1.1.4.3.Semantics +xyz: A vector of three big-endian Float32 elements corresponding to the elements of a +unit quaternion (i.e., a quaternion with a length of 1). + + + + +Use of other signaling extensions +Horizontal field-of-view box +The VisualSampleEntry defined an extension box to signal the horizontal field of view. + +3. Definition +Box Type: ‘hfov’ +Container: Visual sample entry +Mandatory: No +Quantity: Zero or one +The horizontal field of view of the decoded video frame image may be important to know. This +can be signaled with the optional HorizontalFieldOfViewBox extension to +VisualSampleEntry. The horizontal field of view is an unsigned integer in 1000ths of a +degree (e.g., 123.456 is represented as 123456). +The HorizontalFieldOfViewBox is optional, but if present, there can be at most one +HorizontalFieldOfViewBox in a VisualSampleEntry. + Note: Although HorizontalFieldOfViewBox is not mandatory in the + overall VisualSampleEntry structure parallel to + VideoExtendedUsageBox, its presence is required for the containing + movie file to be considered "spatial media" by visionOS 2. It may be + present for other use cases beyond stereo video. + + + +3.1.1.1.1.Syntax +aligned(8) class HorizontalFieldOfViewBox extends Box(‘hfov’) { + unsigned int(32) field_of_view; +}; + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 41 + June 9, 2025 1.9.8 (Beta) + + +3.1.1.1.2.Semantics +field_of_view: An unsigned 32-bit integer indicating the degrees, in 1000ths of a +degree. A 104º field of view would be recorded as 104000. + +Auxiliary Video Track Handler Type +To date, video tracks have used the handler type ‘vide’. Other track types such as audio and +metadata use their own handler types (i.e., ’soun’ and ‘meta’, respectively). This has never been +a problem because the decoded video can be presented as is, though perhaps with scaling or +cropping. With stereo video tracks, the decoded video may require additional processing such +as view extraction before being presented to the user. +Movies or fragmented movie files for HTTP Live Streaming may now use the auxiliary video, or +‘auxv’, handler type to “hide” the video track from naive reader decode and presentation. For +example, this can be useful for a video track with an alternative layout of images, signaled using +a video extended usage atom. +If the decoded video, however, displays in a backwards-compatible way when delivered—such +as MV-HEVC showing just a default view from the stereo pair—there is no need to use the ‘auxv’ +handler type. Use ‘vide’ in this case. Also, HTTP Live Streaming mediates the media shown so +that the multivariant playlist can serve to filter display of particular video streams. +In a production workflow, where users expect to see and confirm the decoded video even if +further processing might be expected when delivered to an end user, it is okay to use ‘vide’ so +tools that already present or process video tracks can find the track. + +Spatial Audio +The experience is enhanced if audio can represent the spatial acoustic environment. Just as +listening to stereo audio is richer than listening to mono audio, even richer audio representations +are possible with appropriate audio coding. A number of advanced audio technologies exist, and +they may be used in isolation or in combination. +QTFF/ISOBMFF audio tracks use audio codecs to encode and carry audio—uncompressed and +compressed—and the codecs can use different audio technologies. Some technologies are +applicable to Spatial Audio, and when used in that way, the audio might be termed Spatial Audio. +ISOBMFF can carry a wide range of uncompressed and compressed formats, some supporting +spatial playback. By introducing new audio codecs in audio tracks, the movie can carry Spatial +Audio. +ISOBMFF movies may contain any supported audio format. As additional formats are supported, +those may prove useful for delivering more richer experiences. + + +Spatial Audio Technologies +By way of a quick summary, there are three audio technologies typically used in the Spatial +Audio realm. +Channel-based audio can include more than one audio channel, each of which is mapped onto +the speaker layout. This is called multichannel audio, and is typically used with 5.1 and 7.1 audio. +The number and placement of these channels in the soundscape can be more varied, and the + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 42 + June 9, 2025 1.9.8 (Beta) + + +channel count can be more or less than the six of 5.1 or the eight of 7.1. Indeed, stereo has two +channels, so is in fact multichannel, but that term is almost never applied to stereo. +Another technology, termed ambisonics, is a modeling of three-dimensional audio in a 360- +degree space. It allows for the recording, mixing, and playing back of such audio. Just as +multichannel audio can vary in channel count, ambisonic audio can vary in order, allowing more +refined audio with higher-degreed ambisonics. Audio is fixed in location but surrounds the user. +A third technology, object-based audio, models each sound source as an object, with +associated metadata describing three-dimensional placement and other relevant +characteristics. Individual objects might be fixed in 3D or might move in 3D over time. +This specification does not prescribe which audio encoding formats, or which technologies +within those formats, are used to realize a richer experience. + + + +Timed Metadata and Spatial Media +Spatial media tracks such as video may benefit from having associated timed metadata. +Although this might be injected in AVC or HEVC SEI signaling, an alternative is to use a parallel +metadata track. This timed metadata track can use the ISOBMFF ‘mebx’ format’s ability to carry +a number of metadata items for a time range. Metadata item keys need not be related to other +item keys, allowing a flexible way to signal a variety of structural or descriptive information. +We consider one kind of timed metadata payload related to describing the parallax of decoded +stereoscopic video frames. + + +New data types +Some new data types are introduced as composite payloads to support timed metadata +introduced here. Although it would be possible to introduce keys for elements of these +composite structures, it is deemed more efficient to treat each payload as a self-contained +value. + + +BEFloatVector3 +aligned(8) class BEFloatVector3 { + BEFloat32 vector_elements[3]; // three elements that are each a +BEFloat32 +} +Semantics: + vector_elements[3]: An array of three big-endian IEEE 754 single floating-point values + indexed from 0 to 2 for three elements. Each element is typed as a BEFloat32. The + interpretation of each element is not prescribed, but a typical mapping might be x, y and z + coordinates. + + +BEFloatQuaternion +aligned (8) class BEFloatQuaternion { + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 43 + June 9, 2025 1.9.8 (Beta) + + + BEFloat32 quaternion_elements[4]; // four elements making up quaternion +} + +aligned (8) class BEFloatUnitQuaternion { + BEFloat32 unit_quaternion_elements[3]; // three elements making up a unit +quaternion having length 1.0 +} + + +Semantics: + quaternion_elements[4]: An array of four big-endian IEEE 754 single floating-point + values, indexed from 0 to 3, for four elements that map onto the four elements of a + mathematical quaternion. Each element is typed as a BEFloat32. This vector of four elements + should be mappable to a runtime's mathematical representation for a quaternion. + Quaternions are defined by a scalar (real) part and three imaginary parts, collectively called + the vector part. The order of elements in quaternion_elements corresponds to the real part + (labeled r), then the three imaginary parts (labeled ix, iy and iz). + unit_quaternion_elements[3]: An array of three big-endian IEEE 754 single floating- + point values, indexed from 0 to 2, for three elements that map onto the three elements of a + unit mathematical quaternion. Each element is typed as a BEFloat32. This vector of three + elements should be mappable to a runtime's mathematical representation for a unit + quaternion. Unit quaternions have a length of 1.0. + + +Caption-parallax timed metadata items +Traditionally, captions are placed in the horizontal and vertical axes over video. With the +introduction of stereoscopic video, however, there is a risk of depth collision if captions are +placed in Z, so they might intersect with stereoscopic elements that have a parallax (i.e., +horizontal disparity) that is less than the screen plane. This “depth conflict” can produce viewer +discomfort. To account for this, captions can have their parallax adjusted to have a more +negative parallax than the video elements so there is no collision. +The document “Video Contour Map Payload Metadata within the QuickTime Movie File Format— +Format Additions” [METADATA] specifies the structure of a metadata payload structure that can +serve to describe parallax values associated with 2D areas of a stereoscopic video frame. This +metadata is specific to the time-aligned video frame. +This payload is carried as metadata items within samples, within QuickTime File Format [QTFF] +timed metadata or ISOBMFF [ISOBMFF] multiplexed metadata. Note: Both of these use the +'mebx' format type of the 'meta' track handler type. The payloads can also occur in fragmented +movie files in both ISOBMFF and QTFF. + + +Motion timed metadata items +Much of this document describes the local projections needed to deliver a stereoscopic +experience at a point in time, corresponding to a single video frame in an overall timeline. When +played as video, a spatial experience is produced that is dynamic as time progresses. If dynamic +metadata were captured in parallel with the video that also characterized the motion of the +capturing device and user, that may prove useful in ways that are unanticipated or anticipated. +That motion might help in understanding how to deliver better user comfort, or where user + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 44 + June 9, 2025 1.9.8 (Beta) + + +comfort might be compromised. Aside from its role in user comfort, this motion might prove +useful for purposes that may only become available long after capture or initial delivery. That +might take the form of new algorithms requiring novel metadata. +To that end, this section enumerates potential timed metadata items that seem general and are +agnostic to how they are used. Novel services and algorithms can be built upon the presence of +some or all of these motion-related metadata items. + +Accelerator, gyroscope and magnetometer +When carried in ‘mebx’ timed metadata [QTFF, ISOBMFF], there are three metadata items, each +for a particular kind of motion data. Each key indicates the source of the value, and items in +samples represent discrete readings from that sensor. The timescale of the timed metadata +track can differ from that of the corresponding video, allowing for more frequent or less frequent +sensor reading than the frequency of produced video frames. + +Each value is a vector, with subfields for elements needed in the interpretation of the value, +rather than separate metadata items for each field or element. These data-type payloads are +documented in this specification. These use the following keys and value definitions: +Keyspace Key Data type1 Well-known + data type2 +mdta com.apple.quicktime.motion.accelerometer BEFloatVector3 TBD + +mdta com.apple.quicktime.motion.gyroscope BEFloatVector3 TBD + +mdta com.apple.quicktime.motion.magnetometer BEFloatVector3 TBD + +Note1: BE refers to “big-endian.” +Note2: ISOBMFF does not currently support signaling data types as QTFF does. + +Semantics +The com.apple.quicktime.motion.accelerometer value is a +BEFloatVector3, encoding G’s m/s2 relative to earth’s gravity (9.81 m/s2). + +The com.apple.quicktime.motion.gyroscope value is a BEFloatVector3, +encoding angular velocity in radians per second (rad/s). + +The com.apple.quicktime.motion.magnetometer value is a +BEFloatVector3, encoding magnetic field in microtesla (µT). + +Pose orientation and orientation heading +These metadata items may be interesting. +Keyspace Key Data type1 Well-known + data type2 +mdta com.apple.quicktime.motion.pose-orientation BEFloatQuaternion TBD + +mdta com.apple.quicktime.motion.orientation- BEFloat32 23 + heading + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 45 + June 9, 2025 1.9.8 (Beta) + + + + +Semantics +The com.apple.quicktime.motion.pose-orientation value is a +BEFloatQuaternion, encoding datum in quaternions. + +The com.apple.quicktime.motion.gyroscope value is a BEFloat32, +encoding Euler angles (degrees). + + +Motion Events +The camera may experience unanticipated motion that may be useful to accommodate +processing for comfort or other purposes. To capture these motion events, a metadata item is +introduced to signal the event(s) from a collection of known event identifiers. +Keyspace Key Data Type1 Well-Known + Data Type2 +mdta com.apple.quicktime.motion.eventID BEUInt8 75 + + + + +Semantics +The com.apple.quicktime.motion.eventID key is associated with a payload +value that is a big-endian unsigned 8-bit integer holding one of the values from the +following table. New events may be introduced in the future. Any unrecognized event +IDs should be ignored, as opposed to producing a failure. + +Motion Event Name Motion Description + Event ID +Motion Nominal 0 No motion event currently detected. + +Level Departure 1 The camera is no longer in its nominal “horizon-level" state, as + calibrated by the user. +Tumble 2 The camera orientation changes from a steady state to a high + rotation rate on at least two axes. +Drop 3 The camera experiences rapid vertical acceleration from a steady + state. +Shock 4 The camera is physically hit by an object at high speed, from any + direction. +Roll 5 The camera experiences rapid roll moment from a steady state. + +Pan 6 The camera experiences rapid pan moment from a steady state. + +Tilt 7 The camera experiences rapid tilting moment from a steady state. + +Heave 8 The camera detects a period of cyclical up-and-down motion after a + steady state period. + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 46 + June 9, 2025 1.9.8 (Beta) + + +Motion Event Name Motion Description + Event ID +Sway 9 The camera detects a period of cyclical lateral and/or longitudinal + motion after a steady state period. +Vibration 10 The camera detects high- or low-amplitude vibration in any + direction at a frequency. + + +There is no obligation for cameras to write motion-event metadata, but if they do so, the above +metadata item "mdta/com.apple.quicktime.motion.eventID" and event ID payloads +should be used. + +The absence of motion events may be written in two ways: + 1. Write the Motion Nominal (0) event ID. + 2. Write no motion-metadata item to the metadata track for that time period. + (Recommended) + + + +Comfort-related motion-analysis timed-metadata items +Motion-analysis timed metadata is composed of: + - Rotational motion indicator + - Perpendicular motion indicator + - Horizontal-panning motion indicator + - Vertical-panning motion indicator + - Motion score—mean from pixel differences + - Motion score—standard deviation from pixel differences + - Mean optical-flow magnitude + - Mean optical-flow magnitude in the horizontal direction + - Mean optical-flow magnitude in the vertical direction + + +Keyspace Key Data Type1 Well-Known + Data Type2 +mdta com.apple.quicktime.motion.metric.rotational BEFloat32 23 + +mdta com.apple.quicktime.motion.metric.perpendicular BEFloat32 23 + +mdta com.apple.quicktime.motion.metric.pan- BEFloat32 23 + horizontal +mdta com.apple.quicktime.motion.metric.pan-vertical BEFloat32 23 + +mdta com.apple.quicktime.motion.metric.pixel- BEFloat32 23 + difference-mean + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 47 + June 9, 2025 1.9.8 (Beta) + + +Keyspace Key Data Type1 Well-Known + Data Type2 +mdta com.apple.quicktime.motion.metric.pixel- BEFloat32 23 + difference-standard-deviation +mdta com.apple.quicktime.motion.metric.flow.mean- BEFloat32 23 + magnitude +mdta com.apple.quicktime.motion.metric.flow.mean- BEFloat32 23 + horizontal-magnitude +mdta com.apple.quicktime.motion.metric.flow.mean- BEFloat32 23 + vertical-magnitude + + + +Semantics +All of the above metrics are per frame and of type BEFloat32. The first four metrics are +indicators for different kinds of camera motion and are generated from optical-flow analysis. +They quantify rotational motion, perpendicular motion, horizontal pan, and vertical pan, +respectively. Pixel difference is an overall motion score generated from analyzing pixel +differences based on their mean and standard deviation. The last three metrics measure the +overall optical-flow magnitude between consecutive frames. + + + + +Conclusion +This document describes extensions to the QuickTime (.mov) and ISOBMFF movie formats. +These extensions are introduced by Apple to allow for the delivery of stereoscopic video, spatial +audio, and timed metadata signaling, to influence parallax of any subtitles associated with the +video. This is applicable to both standalone movie and fragmented movie files. It attempts to +build on existing structures where that was deemed appropriate, and introduces new constructs +where there was a perceived deficit or a benefit in introducing a new construct. The evolution of +the QTFF/ISOBMFF extensions described here may be taken through standards processes in +time. This document also introduces the notion of movie profiles, which are described +separately. + + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 48 + June 9, 2025 1.9.8 (Beta) + + + +Document Revision History + Date Revision Notes + 2025-06-09 1.9.8 Beta version toward version 2.0 + 2023-06-21 0.9 First version + + + + + Copyright © 2023-2025 Apple Inc. All rights reserved. Apple, the Apple logo and QuickTime are trademarks of + Apple Inc., registered in the U.S. and other countries. 49 + \ No newline at end of file diff --git a/2d_to_3d_verified_product_technical_reports/pdf_text/continental_post_ces_2023_3d_display_technology_one_pagers.txt b/2d_to_3d_verified_product_technical_reports/pdf_text/continental_post_ces_2023_3d_display_technology_one_pagers.txt new file mode 100644 index 0000000000000000000000000000000000000000..fb782924a8ded893a9e79e9667279ff489da9153 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/pdf_text/continental_post_ces_2023_3d_display_technology_one_pagers.txt @@ -0,0 +1,754 @@ +Post CES 2023 +Technology One Pagers + Curved Ultrawide Display SOP: 2025 + + Benefits & Features Functions Picture + › Demo Use Cases + › OEM / Customer Benefit ▪ Seamless visual experience for driver + ▪ World’s first curved pillar-to-pillar and passenger (1 display instead of 3) + display with shy control surface + ▪ Control concept for curved P2P display + ▪ 129 cm display area providing infinite with remote control screen + space for a seamless user experience + ▪ Innovative interaction concept with shy ▪ Touch Control for Driver and Co-Driver + control surface + ▪ Premium design creating a living + room on wheels Technical Information + › Technical Solution ▪ Curved ultrawide 8K TFT Display with Infinite space for new + ▪ 47.5’ single panel TFT display local dimming (>3000 LEDs) experiences. + ▪ Shy control display with active haptic ▪ Shy Control Panel + feedback + 12.3” TFT Display (1920*720 ) + ▪ Local dimming for highest image quality with local dimming (>300 LEDs) + and energy efficiency + incl. capacitive multi-touch and active Business Area + haptic feedback + User Experience + + + + + Post CES 2023 © Continental AG + + Confidential + Driver Identification Display SOP: 2025 + + Benefits & Features Functions Picture + › OEM / Customer Benefit › Demo Use Cases + ▪ World’s first display with secure ▪ Secure face authentication of driver incl. + authentication spoofing detection + ▪ Convenient, touchless solution for driver ▪ Driver monitoring features (drowsiness & + identification and mobile payment distraction detection) + ▪ Secure & fast biometric face ▪ Object detection + identification + ▪ Seamless invisible display integration Technical Information + of camera increases user acceptance + ▪ 1MP NIR-camera (1280 x 800) + NIR Securing it's you. + › Technical Solution flash + ▪ Spoofing detection by liveness check ▪ Beam profile analysis based on NIR + with beam profile analysis VCSEL + ▪ No additional sensor (e.g. fingerprint) ▪ Performs from darkness to bright + needed sunlight + Business Area + ▪ Fulfills requirements for iBeta Level 2 + certification User Experience + + + + + Post CES 2023 © Continental AG + + Confidential + High Resolution 3D Display SOP: 2025 + + Benefits & Features Functions Picture + › Demo Use Cases + › OEM / Customer Benefit ▪ Welcome scenario, 2 themes + ▪ 5K high resolution 3D display ▪ Driver information + ▪ Natural 3D effect for all passengers ▪ Adaptive navigation view + ▪ Variable 3D depth adjustment + ▪ Adding depth to the digital world + + › Technical Solution + Technical Information + ▪ 3D Lightfield display developed in Enabling the metaverse + cooperation with Leia Inc. ▪ 12.3” display, 5k native resolution + ▪ Ultra large eye-box ▪ Lightfield backlight w/ 13 views in your car. + (horizontal) w/o headtracking + ▪ 3D brightness 1000 cd/m² + Business Area + User Experience + + + + + Post CES 2023 © Continental AG + + Confidential + V2X Collective Perception SOP: 2024/2025 + + Benefits & Features Functions +› Most effective technology to save non-line-of-sight + › “Seeing through the eyes of others” + (NLOS) Vulnerable Road Users (VRUs) + › V2X with CPM addresses 3X more vehicle- › Enables efficient, low-data-rate sensor data sharing vehicle-to- + versus-VRU crashes compared to Basic V2X vehicle (V2V) and infrastructure-to-vehicle (I2V) + › When used with ADAS and Basic V2X, CPM can › Greatly improves environmental awareness by allowing a + address up to 90% of all vehicle vs. VRU vehicle to see more than only with its own ADAS line-of-sight + crashes (which are more than 600,000 fatalities (LOS) sensors + per year globally) +› Additionally protects crashes with non-connected › Extends ADAS safety use cases by adding NLOS sensor capability + (non-V2X) vehicles, which will remain the majority of + vehicles on the roads for 10+ years + › Therefore, CPM provides much earlier life-saving + benefits than only Basic V2X Technical Information +› Works with 2 vehicles, or 1 vehicle plus + › Global Standards-based (ETSI, SAE, China), but with differentiation by Saving Lives with V2X CPM + infrastructure (does not require 2 vehicles to provide + Continental-owned IP for processing of the V2X CPM data + benefits) +› Effective on both open roads and at intersections › China standard exists; ETSI/SAE in approval stages now +› Much lower data cost than raw sensor sharing › Software Solution running on Continental Telematics HW (TCU or Business Area +› Enables USP benefits for multiple Continental IAM), Continental HPC, and/or Continental Infrastructure + products (Telematics, Intelligent Infrastructure, Architecture and Networking, + ADAS, and backend systems) › Adds to existing Conti V2X SW + Product Line 2 Telematics + › SW can also be marketed separately + + + Post CES 2023 © Continental AG + + Confidential + Continental Advanced Antenna SOP: In Production + + Benefits & Features Functions Pictures + +Cost attractive customized solutions Exterior & Interior Antennas + › Continental Advanced Antenna technologies › Meeting esthetic & environmental requirements and + offers flexible high customized solutions for providing high technical performances + all customer’s antenna needs. + Hidden Antennas in functional parts (e.g. side mirrors) +Valuable Partnership › Ensuring high performances and no disturbances with the + › With its many years of expertise, the part core functionality + Continental Advanced Antenna design team + can integrate an antenna everywhere in the Car body integrated Antennas (e.g. bumpers) + car minimizing the tedious compromise › Ensuring high performances without affecting car body + between esthetic needs and technical + integrity + performances + Technical Information +Decades of proven expertise + › Continental with the acquisition of Kathrein Scalable & highly integrated solutions for: + brought home almost a century of history in › MIMO 5G + antenna design › HP GNSS + › V2X + › WiFi/BT Business Area + › Cameras + Architecture and Networking + › SDARS + › RKE + + + User Experience Post CES 2023 © Continental AG Confidential + + Confidential + Autonomous conductive charging device (ACD) + SOP: 2025 + Benefits & Features Functions Picture + › By enabling automatic, high v oltage battery charging f or electric and hy brid v ehicles, the conductiv e charging + robot ensures a more conv enient, highly reliable and ef f icient solution f or both public or priv ate use. + +› Hybrid and Electric Vehicles › The plug & play charging sy stem comprises two components; + +› Passenger cars and light commerical vehicles › the v ehicle unit (located on the underbody of the v ehicle) + +› Use in public and private areas › the ground unit (located on f loor at the intended charging location i.e. garage or public parking space + etc.). + +› Connection and Charging are carried out › Both units are protected f rom dirt and water to automotiv e standards, ensuring saf e and reliable operation at + automatically all times. + + +› Precise parking not necessary › As the v ehicle approaches the ground unit, a display inside the v ehicle ensures that the v ehicle is positioned + within a 15cm radius of the ground unit. + +› 360° Self-centering conductive connector › Once parked, the 2 systems automatically connect, and charging is commenced with no user action + required. +› Ground unit is a plug & play installation +› Vehicle and Ground Unit are dirt, water Technical Information + and touch protected until contact › Vehicle Unit Dimensions – 226....375 x 203 x 39 mm + established + › Vehicle Unit Mass - ~2kg + + › Ground Unit Dimensions – 795 x 440x 68 ...77mm + + › Working Area – 300mm Diameter Business Area + › Charging Pow er – 22kW AC, DC Preparation Safety and Motion, + › Vehicle Unit Interface – HV pow erline, 12V power supply, CAN to the vehicle, Bluetooth and Continental Engineering Services + Ultra Wide Band to the Ground Unit + + › Ground Unit – Connection to w allbox via country specific connector (power and + communication) according to IEC standard or fixed installation + + + Post CES 2023 © Continental AG + + Confidential + Child Presence Detection using Ultra-Wideband + SOP: 2025 + Benefits & Features Functions Picture + + +› EU NCAP and US regulation activities are + driving for new child safety requirements in › Classification based on respiration rate and micro + the vehicle by 2025 motion detection + +› Continental is the worldwide pioneer bringing + ultra-wideband digital car access CoSmA into + the automotive world + +› Extending the ultra-wideband technology with + sensing features enables child presence + detection Technical Information + +› Integrated in the OEM car architecture the + system allows a precise detection of an + occupant e.g., child in the cabin. › Detection and classifier algorithm + Business Area +› Scalable solution enables significant cost + savings on OEM side by avoiding additional Architecture and Networking, + Radar hardware components specifically Product Line Access Solutions + dedicated for CPD + + + + Post CES 2023 © Continental AG + + Confidential + HRL131 High Performance LiDAR SOP: 2025 +Enabling L2+ to L5 Autonomous Vehicles + Benefits & Features Functions Picture +› Single box, dual receiver, high- › Highway / Cruising chauffeur, dense urban environments + performance long- & mid-range › Flexible mounting locations: Grille or Roof B-Sample + LiDAR for L2+ – L5 autonomous › Mechanical + driving and active safety features + › LiDOME with integrated heater +› Use Case configurable scan › IP6K9K packaging of sensor + patterns; possible on-the-fly + › Solid performance under adverse weather and road conditions (direct sun, +› Small, Patented MEMS (Partnered night, rain, fog, snow, dust, smoke) Concept + with ) mirror design providing › B-samples (compact design) available today + solid-state robustness and reliability + using AEye IP +› Performance adjustable frame-to- Technical Information + › Range: > 500m (330m @ 10% reflectivity ) + frame FoV › SW Configurable Fields of View (H x V) with dual receivers: +› Output: Point Cloud & Intensity data › Wide Peripheral: 125° x 25° + and Object List › Ultra-long-range ROI*: 25°x8° + › Resolution: +› 1550nm fiber laser with pixel level › ROI*: 0.05° x 0.075° with Max Resolution + Business Area + control › Peripheral: 0.4° x 0.4° Autonomous Mobility, +› LiDOME cover with built-in heaters › Frame rate: 10 ~ 20Hz (typical) + & blockage detection › Integrated IMU Product Line LiDAR + › Class 1 eye-safe sensor IEC 60825 (Ed. 3) +› Gigabit Ethernet (IEEE 802.3) › Operating temp: -40 °C to +85°C + + + Post CES 2023 © Continental AG + + Confidential + Companion Premium Full Automated Driving Stack + + Benefits & Features Functions Exhibit + Demo Vehicle +› Continental with 20+ years full-stack supplier › Companion Performance & Premium SAE L2 systems with + of driving systems including software and hands-off functionality up to 130km/h + sensor products +› Ambarella with 18+ years of power efficient › Chauffeur SAE L3 systems up to 130km/h including + redundant fallback path + vision processing & 25+ years of Autonomous + Driving (AD) algorithms › Pilot SAE L4 Fallback systems up to 130km/h +› Joining forces to provide full-stack solution + scalable from low-end to premium ADAS and + AD applications for passenger cars and for + trucks + + + + Technical information + › Scalability: Ambarella with most scalable SoC platform vs. + competition +› Robust Autonomous Driving experience from › High performance and power efficiency compared to SoC + CV3-AD’s higher performance competitors in the AD market Business Area +› Battery, weight, & packaging savings for EV › Full Continental AD scalable system availability based on Autonomous Mobility + due to simplified cooling methods and smaller any combination of Continental sensor hardware & + ECU or HPC footprint + processing, perception, and driving functions + + + Post CES 2023 © Continental AG + + Confidential + Zonal Architecture SOP: 2023 +x-Domain Zone Control Units (ZCU) + Benefits & Features Functions Picture + + +› Zonal architectures consolidate vehicle › The zonal architectures enable a domain independent + functions in physical zones allowing an overall zonal management of vehicle functions for new server -based + reduction of the vehicle’s architecture/network vehicle architectures + complexity and costs + › The ZCU is located in the physical location of the vehicle +› The ZCU supports the separation of HW and to consolidate inputs/outputs from the various sensors and + SW and optimizes the E/E architecture + actuators and other ECUs + complexity and costs (for example the length of + the cable harness is reduced) and minimizes › The ZCU is also the host for real-time critical functions + CO2 emissions in a server-zone architecture +› Scalable Smart Power Distribution › Power management can be integrated into the ZCU +› Communication gateway (Ethernet, CAN/FD, + LIN, ...) + Technical Information +› Full support of security & safety measures + (ASIL) + › Backbone including scalable µC strategy, power supply and +› Supply of infrastructure functions (power/health communication interfaces + management, time synchronous networking, + etc.) › Ethernet interface (PHY, Switch) to server/s + (High Performance Computer/s) CAN (FD)/LIN for zonal +› Modular and scalable platform concept to meet network Business Area + the wide range of specific customer requirements + and address various vehicle variants › ZCU support TSN, UDS master (in the zone) + Architecture and Networking +› Together with the High-Performance Computers › Standardized E/E and software modules + our ZCUs build the required Hardware + fundament for the software-defined vehicle + › Smart fusing / switching up to 40A + + + + Post CES 2023 © Continental AG + + Confidential + Function as a Product (FaaP) SOP: 2024 + + Benefits & Features Functions Picture +› Continental offers functions full stack – from high-level › With Continental’s “Function as a Product” portfolio we offer a full range + applications down to real-time and safety critical of body & actuator functions as fast and cost-efficient off shelf solutions, + software which are ready to be integrated in x-Domain products. +› OEM can choose from a full range of solutions in our › Based on our long history of supplying body electronics, + functions catalog our new hardware decoupled function applications bring the software +› Shorter time to market with reusable assets allowing defined vehicles to live. + the OEM to focus on differentiating features › All Services can be offered as Full-Service-Package +› Independent sourcing of hardware and software incl. Software, Hardware and Cloud + supplier possible (system / hardware design consulting + service available) +› OTA upgrade and update possibility after SOP +› Cloud functions enable the use of new technologies / + functions not limited by the hardware in the vehicle Technical Information +› Full cyber security and FSM (Functional Safety + › Sensor and Actuator x-Domain turnkey solutions + Management) automotive compliant solutions + › Full Scale Function Library available +› Easily configured and managed across vehicle lines + › Modular and scalable solutions +› Continental provides integration, collaboration and + consulting services enabling long term support and › Integration Service (horizontal and vertical) + maintenance Business Area + › Calibration Service + + With our Function as a Product solutions, › Homologation Service Architecture and Networking + Continental enables OEMs to develop solutions + faster to the market and be more cost-efficient. + + + + + Post CES 2023 © Continental AG + + Confidential + Holistic Motion Control System SOP: 2024+ + + Functions Picture + Benefits & Features + Continental offers full system solutions and individual + There‘s an ongoing transformation towards: HW & SW components as “One Stop Shop!” + + › Skateboard chassis › Holistic Motion Control Software + › SW-defined Vehicle + › High-performance Computer + › Server-based architectures + › Centralized orchestration of vehicle motion + › True Brake-by-Wire capabilities + + › Increasing levels of Automated Driving › True Brake-by-Wire capabilities + + › Suspension solutions + Our Roadmap enables the OEM‘s to realize those + benefits & features with... + › Holistic Motion Software as a unified Technical Information + interface, actuator agnostic and decoupling the + driving function from the specific actuator and vehicle › Scalable host independent Application Holistic Motion Control SW Shaping Driving Emotions + setup › Orchestrating all vehicle motion actuators enabling their redundancy + › Powerful Master Controller and cross- domain High- › Various High-Performance Computer hosts for Motion Control, + depending on computing power and E/E architecture. + Performance Computer solutions as function host for + various E/E architectures › Smart Brake w/ Electronic Brake Pedal & Fluid less & Support green + brake calipers Business Area + › By-wire technology for more design freedom in › Steering control with enhanced Driver and Machine interface & + new chassis architectures leveraging infinitely Variable Steer Ratio to improve vehicle dynamic + functions Safety and Motion + › Adaptive Suspension to increase vehicle dynamics + › Smart Air Suspension system w/ Scalable Chassis Actuator Drive + and comfort and reduction of fuel/energy + consumption and CO2 emissions + + + + Post CES 2023 © Continental AG + + Confidential + Electric Corner Module SOP: 2028+ + + Benefits & Features Functions Picture +› Plug & play module for reduced vehicle assembly › Integrated control functions for highly efficient propulsion + and service effort, e.g. no fill & bleed process and chassis control +› Reduced R&D investments for manufacturers of › Silent single wheel torque control + purpose-built vehicles thanks to ready-to-use + approach › Slip control including blending +› A compact and highly integrated chassis and › Active leveling for load compensation and easy access + propulsion system › Vehicle mass calculation based on air spring pressure +› Scalable and modular construction kit for all › Tire pressure monitoring + wheel components: propulsion, dry brake system, + suspension, electric steering, rim and tire +› Highly efficient propulsion without transmission +› Requires less electronic control units and wiring Technical Information +› Enabling Tomorrow’s Solutions + Increased vehicle uptime › Power electronic integrated together with control electronic: inverter +› Supports automated driving architectures for electric drive and power electronic for actuators integrated and + commonly cooled +› Offers possibility of ground level access for + delivery vehicles › In-wheel electric motor +› Allows maximizing usable volume for given › Dry electro-mechanical by-wire brake system Business Area + vehicle footprint › Active suspension + Safety and Motion, +› Vehicle weight monitoring + Strategy & Future Solutions + + + + + Post CES 2023 © Continental AG + + Confidential + SOP CSM 2022 +Sensors for EV SOP eRPS 2025 + SOP BID 2025 + Benefits & Features Functions Picture + › Current Sensor Module (CSM) +› Current Sensor Module (CSM) Used in electric or hybrid vehicles, measures current and temperature and + delivers them to the battery management system to ensure the longevity of + › Two physical independent measurement the battery + methods (shunt and hall sensor-based) in one + housing › Battery Impact Detection (BID) + › Combines signal availability, robustness and Detects impacts on the lower part of the battery / vehicle and can sense + accuracy exact location and strength of the impact + › Supports ASIL D on system level + › e-Motor Rotor Position Sensor (eRPS) + Measures the angular position of the rotor shaft in synchronous electric + motors for an efficient torque control + +› Battery Impact Detection (BID) + › Driver can be warned, or service can be + informed Technical Information + › Passive battery protection can be reduced › Current Sensor Module (CSM) + significantly by active underbody protection + We make your EV sound and safe + › System can react on heavy impacts › Analog and digital output (CAN) + › ± 2.000 A / shunt-channel 1% accuracy, hall-channel 3% accuracy + › Battery Impact Detection (BID) +› e-Motor Rotor Position Sensor (eRPS) › Widely used and fully qualified components, PSI5 Interface Business Area + › Reduced weight and size › e-Motor Rotor Position Sensor (eRPS) + Safety and Motion + › Low power consumption › Up to 30.000 RPM + › Easy and cost-efficient assembly due to + included sealing › IP6K9K (proof against dust and powerful hot water jets) + + + + Post CES 2023 © Continental AG + + Confidential + CAEdge: Continental Automotive Edge Framework +with Elektrobit Software - Create. Develop. Explore. + SOP: 2022 + Benefits & Features Functions Picture + OEM / Customer Benefit: + › The software-defined-vehicle: Scalable + › CAEdge enables faster development of and deployment of Deployment of function from marketplace and Compute + distributed functions for Scalable Vehicle Computing + Platforms across the IoT mobility ecosystem (Vehicle/HPC, selecting user specific configuration for the vehicle Platform + Cloud, Mobile...) (HPC 2.0, HDK) + › CAEdge provides interchangeable building blocks with (OTA Update to HPC) + pre-defined, easy-to-adapt interfaces across the stack + covering hardware, software, tooling and the cloud. › Involvement of the Developer Workbench - Function + › OEMs can offer better customer experience by flexibly Deployment + updating software through OTA updates, bringing new + features to drivers over the complete lifecycle of the vehicle › Highlighting Modular and scalable compute platform + › Customers can start immediately using the cloud, HPC + Development Kit without production hardware. All you need › Virtual Development (CI/CD) CAEdge + is an account. + Demonstrator +Technical Solutions Technical Information + + + › Modular and scalable compute platform providing a stable + › New Version of HPC with x-domain SoM + environment for all domain HPC software development › Workbench for efficient function development and + › Automotive grade designed building blocks + and system capabilities providing a clear path to production deployment Business Area + › Cohesive, integrated tool framework for + user friendly and fast SW development and operations › Ecosystem of cloud & HPC – with EB corbos + › Non-differentiating automotive-grade Operating System Automotive Software and Central Technologies, + and middleware from Elektrobit, enabling easy function + Adaptive Autosar, Linux & Hypervisor, EB tresos Architecture & Software, E/E Architecture; + development AutoCore & Safety OS and EB cadian OTA Elektrobit + › Cloud as scalable extension of embedded and on-prem + resources providing unlimited potentials for services and + functions + › Monitoring of SOM/SOC performance + + Post CES 2023 © Continental AG + + Confidential + Elektrobit: EB zoneo. Master in-vehicle network challenges. + SOP: 2023 + Benefits & Features Functions Picture + + › Six use cases: +› Automotive in-vehicle communication demo + will showcase network features from the EB › IP routing in a switch, Health check, IDPS, IP routing in + zoneo product line to improve overall hardware, Protocol tunneling, VM arbitration. These network + network performance. features show the direct impact on the CPU load, with +› Car makers and Tier 1 suppliers can achieve improvements in processing time and network startup. + new functionalities without extra resource + consumption on the microcontrollers or SoCs + while simultaneously reducing integration + efforts and time to market. +› Intelligent off-the-shelf products and pre- + integrated cybersecurity options such as the Technical Information + intrusion detection prevention system (IDPS + with Argus Cyber Security) make it possible. › Demo shows benefits of usage: + › EB zoneo SwitchCore and SwitchCore Shield (highly + optimized firmware for switches) + › EB zoneo VSwitch (virtual switch for MCU with extra Business Area + virtualization and QoS features) Automotive Software and Central Technologies, + › Various extensions to the COM Stack of the Classic ASR Architecture & Software, Elektrobit + to include HW accelerators for performance + improvements + + + Post CES 2023 © Continental AG + + Confidential + Future Brake System +Evolution towards “New Brake System Architecture” + Benefits & Features Functions Picture +› Enables Brake-by-wire functionality for large › Brake-by-wire for large electric vehicle MK C2 + FA + E-Pedal + + BEV + › Use standard size one-box Front Axle +› Zero Drag → increases range & lowers hyd hyd EMB EMB + + emissions › Combine with eDB independent service brake and redundant electric Central ECU + parking brake (gear lock removal) +› Park Brake Redundancy included EMB EMB EMB EMB + +› Automated Driving SAE Level ≥3 possible › Safe introduction of dry-brake technology +› Manufacturing & packaging advantage › Zero drag – increased air gap +› Only electrical connectors, no more hoses › Weight reduction + MK C2 + Front + Axle + Technical Information + EMB + Drum + › FBS 2.0: Electro-Mechanical brakes on Rear Axle, hydraulic EMB + Caliper + brake system for Front Axle + + › FBS 3.0: Full dry brake system – E-Pedal + 4x Electro- + mechanical brakes + Business Area + Safety and Motion + + + + + Post CES 2023 © Continental AG + + Confidential + Connected Vehicle Safety Driving Simulator SOP: 2023 + + Benefits & Features Functions Picture +› Get behind the wheel and experience 4 driving + › Using the sensors and perception algorithms on both + scenarios that produce some of the most + catastrophic and frequent accidents, injuries and + infrastructure and vehicles paired with connected vehicle + fatalities to drivers, passengers and vulnerable road technology we‘re able to demonstrate how different types of + users, but safely in a driving simulator! connectivity, sensing and intelligence can warn drivers of safety + › The Wrong Way Driver Detection System uses + risks just-in-time to avoid catastrophy. + automotive radar sensors, novel detection + algorithms and cloud communications to detect + and warn nearby drivers of a wrong way driver in + their path. + › The Intelligent Intersection uses radar and + cameras, fused into a perception model of the + intersection to broadcast V2X messages about + every traffic participant it sees to receiving Technical Information Experience dangerous driving + vehicles to prevent accidents. + situations where connected + › Connected vehicle technology V2X / C-V2X, Cellular data and cloud infrastructure and vehicle technology + › When the sensing of a vehicle can be shared can work in harmony to save lives + with other vehicles over V2X networks, drivers › Infrastructure sensing and perception with radar and camera fusion + can virtually see around corners and through + other vehicles to improve driving safety and › On vehicle sensing and perception + efficiency. Vehicles can also react directly on the + sensing of other vehicles and automatically › V2X standards such as SDSM (Sensor Data Sharing Message), Business Area + initiate safety manuevers and braking to improve CPM (Collective Perception Message), BSM (Basic Safety Message) + safety. Safety and Motion, Passive Safety & + Sensorics, Electronic Chassis & Components + + + + Post CES 2023 © Continental AG + + Confidential + SW Products for HPC System Architectures + + Benefits & Features Functions Demo Vehicle +› Low Speed Maneuvering, Safety, Cruising, › SurroundView + and Visualization functions offered as a + bundle or individually › Use case specific views +› HW-agnostic system or software solution › Automated View Change +› Scalable and modular concept for driver + assistance systems in compact, mid-sized and › Adaptive 3D Bowl + premium vehicles › Advanced Park Distance Warning +› Overall architecture complexity + › Transparent Vehicle + reduction and space savings +› Configurable and upgradable to new + customer functionality with OTA +› Flexible and scalable concept for + highly integrated cross-domain HPC Technical Information + solutions +› Available SW Products: › Mid sized SUV, VW Touareg + › GPU performance: 50 GFLOPS min + › 4x satellite cameras 2.5 Mpix, 195° HFoV + › 12x ultrasonic sensors Business Area + Autonomous Mobility + + + + + Post CES 2023 © Continental AG + + Confidential + Digital Access Solution CoSmA SOP: 2021 +Smart Device based vehicle access using Ultra-Wideband + Benefits & Features Functions Picture +Convenient car access, meeting user’s › Realtime precise positioning calculation (inside / outside +digital lifestyles + vehicle fulfilling Thatcham) +› Digital User Experience with same + convenience as the classical car key › Full system solution expertise including CCC compliance +› Multiple smart devices (e.g., smartphone, + watch) +› Hands-free access › Continental KeyCore2 Virtual key management backend +› Remote Keyless Entry (RKE) offers fully secured integrated end to end key solution +› Enhanced anti-theft protection +› Tailgate "auto-drop" intention detection + + Technical Information +End to End Digital Key Management +› Digital Key storage and management via › UWB/Bluetooth® Low Energy Combo transceivers inside + apple wallet + and outside of the vehicle +› Key sharing & revocation + › Advanced detection algorithm Business Area +A proven partner › Zone & localization output via graphical user interface Architecture and Networking, +› Continental is one of the first to introduce an (GUI) shown via tablet Product Line Access Solutions + UWB based Hands-free access system in the + market in 2021 + + + + Post CES 2023 © Continental AG + + Confidential + Companion Premium Full Automated Driving Stack + + Benefits & Features Functions Exhibit + Demo Vehicle +› Continental with 20+ years full-stack supplier › Companion Performance & Premium SAE L2 systems with + of driving systems including software and hands-off functionality up to 130km/h + sensor products +› Ambarella with 18+ years of power efficient › Chauffeur SAE L3 systems up to 130km/h including + redundant fallback path + vision processing & 25+ years of Autonomous + Driving (AD) algorithms › Pilot SAE L4 Fallback systems up to 130km/h +› Joining forces to provide full-stack solution + scalable from low-end to premium ADAS and + AD applications for passenger cars and for + trucks + + + + Technical information + › Scalability: Ambarella with most scalable SoC platform vs. + competition +› Robust Autonomous Driving experience from › High performance and power efficiency compared to SoC Business Area + CV3-AD’s higher performance competitors in the AD market +› Battery, weight, & packaging savings for EV › Full Continental AD scalable system availability based on + due to simplified cooling methods and smaller any combination of Continental sensor hardware & Autonomous Mobility + ECU or HPC footprint + processing, perception, and driving functions + + + Post CES 2023 © Continental AG + + Confidential + Autonomous Technology Truck + + Benefits & Features Functions Picture + +› Continental’s Class 8 Development Truck › Realtime camera and LiDAR visualizations from CoSAr + is where cross domain concepts are bar + tested in the real-world › Smartphone-based key enables driver proximity +› Continental Sensor Array (CoSAr), with its monitoring and automated access management + integrated and pre-calibrated camera, + radar, and LiDAR sensors, makes it easy + to add sensors for automated driving, + scalable up to L4 +› Continental Smartphone Access for + Commercial Vehicles (CoSmA) can + automatically and securely authorize any + driver to unlock doors and drive, while + Technical Information + also providing vehicle advance wakeup + functions upon approach › HRL131 – High resolution, ultra-long range MEMS-based + scanning LiDAR + Business Area + › 2x FSC231 – Forward facing satellite camera + › Ultra-wideband digital key for fleets provides an extremely Smart Mobility & Autonomous Mobility + simple access solution, using only the minimum number of + tranceivers + + + Post CES 2023 © Continental AG + + Confidential + \ No newline at end of file diff --git a/2d_to_3d_verified_product_technical_reports/pdf_text/immersity_ai_technical_backgrounder_2024.txt b/2d_to_3d_verified_product_technical_reports/pdf_text/immersity_ai_technical_backgrounder_2024.txt new file mode 100644 index 0000000000000000000000000000000000000000..a3494cb9c516a4a642e69c1deb373d3c4dc2238c --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/pdf_text/immersity_ai_technical_backgrounder_2024.txt @@ -0,0 +1,134 @@ + Immersity AI Technical Backgrounder + +Immersity AI is a technology platform powered by Neural Depth technology, an innovative suite of AI tools +designed to transform ordinary pictures and videos into captivating immersive content. Within seconds, +anyone can take a flat image and create a dynamic environment where they can freely navigate through +the scene. This technology not only enables the movement of the camera within the scene but also +provides straightforward yet powerful tools for editing lighting, colors, and composition based on the depth +information of the scene. Through this cutting-edge approach, Immersity AI promises to make complex 3D +transformations accessible and intuitive for all users. + +Neural Depth technology comprises four key components, each contributing uniquely to transforming +ordinary images into immersive experiences: + + ● Neural Depth Engine: This advanced neural network functions as the core of our technology. It + intelligently estimates the depth structure within an image, producing "depth maps" that serve as the + foundational layer for further enhancements. + + ● Neural Depth Navigator: Leveraging the depth maps created by the Neural Depth Engine, this + sophisticated algorithm generates new viewpoints within an image, effectively simulating the + experience of moving a camera through the image’s 3D space. This allows viewers to explore scenes + from angles they've never seen before. + + ● Neural Depth Enhancer: A suite of depth-guided image processing tools that utilize depth maps to + enhance visual content. These tools can adjust lighting, change colors, or apply focus effects to scenes, + enhancing the overall visual impact and realism. + + ● Neural Depth Composer: This set of tools enables the introduction of 3D elements such as text that + interacts naturally with the scene, like being partially hidden behind objects, just as they would in real + life. It also allows for precise selection and merging of elements based on their depth, facilitating + complex compositions that blend multiple images seamlessly. + + + + + Depth Navigator Depth Enhancer Depth Composer + + + + + 1 + What makes the Neural Depth Engine so special? + +At the core of Neural Depth technology is our Neural Depth Engine, an advanced neural network designed to +generate depth maps with exceptional speed and accuracy. This next-generation neural network has been +rigorously trained on a proprietary dataset composed of millions of 3D images. It continues to evolve, +constantly being fine-tuned with fresh data derived from real-world 3D captures. This extensive and +ongoing training allows the Neural Depth Engine to produce depth maps of remarkable detail and precision, +which serve as the foundation to create content with a truly realistic immersive feel. + + + + + Original Image Depth Map Dec 2023 Depth Map May 2024 + LeiaPix Immersity AI + + +What Makes Depth Maps a Key to Lifelike 3D Visuals? + +Depth maps are crucial for unlocking the third dimension in digital imaging, providing essential information +about the spatial relationships within a scene. This depth information enables a myriad of transformative +applications: + + ● In-Picture 3D Motion: By understanding the depth of each element in a scene, our Neural Depth Views + can simulate realistic camera movements within the image, creating the illusion of exploring the scene + in three dimensions. This capability allows users to generate dynamic viewpoints, enhancing the + interactive experience of digital content. + + ● 2D-to-3D Conversion: With accurate depth maps, content that was originally in 2D can be converted + into 3D. This transformation is not just about adding depth; it's about redefining the visual experience to + match human stereoscopic vision, making images and videos pop out as if they were originally + captured in 3D. + + ● Photorealistic Enhancements: Depth maps enable our Neural Depth Image tools to perform + sophisticated image enhancements based on the spatial context of the scene. Whether it’s relighting a + photo to change the mood, applying depth-based color effects, or creating realistic bokeh, the + enhancements rely on the precision of the depth map to maintain the authenticity of the scene. + +Humans perceive depth through the slight differences between what each eye sees, and even minor +discrepancies can disrupt the 3D illusion, making the scene feel unnatural. Thus, the accuracy of a depth + + + + 2 + map is paramount—it ensures that the 3D rendering not only looks good but also feels right to the viewer. +Applications such as viewing stereo images on advanced devices like the Apple Vision Pro demand high +fidelity to ensure that depth cues are rendered perfectly, enhancing the overall immersive experience. + +By providing detailed and precise depth maps, the Neural Depth Engine ensures that all enhancements and +transformations maintain a high level of realism and immersion, crucial for both casual viewing and +professional applications. + + + + +How Does the Neural Depth Engine Set New Standards in Depth Mapping? + +When it comes to generating depth maps, the Neural Depth Engine stands out from the competition with its +unmatched combination of speed and accuracy. This superior performance is crucial for creators who +demand professional quality and the ability to make real-time edits and previews. Here’s how the Neural +Depth Engine excels: + + ● Rapid Processing: Neural Depth Engine processes images swiftly, significantly reducing the wait time + typically required for depth map adjustments. This speed is essential for professionals who need to + iterate quickly without sacrificing quality. + + ● High-Resolution Depth Maps: Our engine not only captures high resolution in width and height but also + excels in detailing depth. This allows for nuanced and precise visualizations critical for high-quality + content creation. + + ● Exceptional Accuracy: Neural Depth Engine features advanced object and feature detection + capabilities. It accurately identifies and positions complex elements within the scene, such as facial + features (noses, ears, hair), enhancing the realism and fidelity of the final output. + + ● Noise Reduction: Our technology effectively eliminates noise, ensuring that the depth maps are not only + accurate but also clean and usable without extensive post-processing. + + + + + 3 + Unmatched Training Data + +Unlike many competitors that rely on synthetic datasets or 3D data of limited variety, our Neural Depth +Engine has been trained and continually refined on a proprietary dataset of real-world 3D images. This +extensive and diverse training set is key to the Neural Depth Engine's ability to understand and reconstruct +complex scenes with unparalleled accuracy and detail. + +For visual comparisons, please see: https://www.immersity.ai/technology/neural-depth-engine + + + + + 4 + \ No newline at end of file diff --git a/2d_to_3d_verified_product_technical_reports/pdf_text/lenovo_thinkvision_27_3d_product_datasheet_2025.txt b/2d_to_3d_verified_product_technical_reports/pdf_text/lenovo_thinkvision_27_3d_product_datasheet_2025.txt new file mode 100644 index 0000000000000000000000000000000000000000..a7a2ccd68b06f33452930eede6be7a2385a794ba --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/pdf_text/lenovo_thinkvision_27_3d_product_datasheet_2025.txt @@ -0,0 +1,166 @@ +Lenovo ThinkVision 27 3D Monitor + + + + +Immersive experiences in 3D +now becomes glasses-free! + + + + +Immersion becomes Hybrid 2D/3D for Integrated 3D ecosystem +glasses-free hyper creativity + • Always stay at the cutting edge +• Relying on glasses for 3D • Seamlessly switch between of 3D workflows with Lenovo’s + content is a thing of the past 2D and 3D content with suite of continuously developed + with switchable lenticular lens. the monitor’s 2D and 3D and upgraded apps. + compatibility. +• Experience seamless 3D • Enjoy a rich and smooth user + even when moving your • Relish sharp and color accurate experience while using our host + head around with real-time content with 4K resolution and of 3D tools and softwares, all + eye-tracking. 99% DCI-P3 and Adobe RGB designed to provide great 3D + color space coverage. viewing pleasure. +• View your favorite 3D content + in unparalleled clarity without • Connect with convenience • Offload 3D processing to the + any dips in refresh rate! using single cable USB-C monitor with the built-in 3D + docking and stack* support. engine to get peak performance + from your computer. + + + + +* Utilize our stack support to easily add Lenovo’s Webcam and Soundbar. Sold separately. + Lenovo ThinkVision 27 3D Monitor + +Display Eye Tracking Power Consumption Switch-off Mode Size Unpacked w/o Stand + Yes < 0.3W (Head Only) +Panel Size (D x H x W, mm / inch) +27-inch Environmental Conditions Power Supply + 72.3 x 390.0 x 614.8 mm + 0 lx - 1000 lx Internal +Screen Dimensions 2.85 x 15.35 x 24.20 inches +608.8 mm x 355.3 mm Minimal PC Requirements¹ USB Power Delivery9 + Weight Packed (kg / lb) + GPU : NVIDIA® GeForce® GTX 1050 Up to 100W +Panel Type 12.4 kg / 27.3 lbs + (or AMD, Intel® graphics card +In-Plane Switching USB Type-C (Downstream) + with equivalent performance) Weight Unpacked (kg / lb) + Power Delivery +Active Area System : Windows 10 64-bit 8.9 kg / 19.6 lbs + Up to 15W +596.7 mm x 335.7 mm Memory : DDR5, 8GB + Weight (Monitor Head Only) + Hard Disk : Available Space 50GB Smart Power +Backlight (kg / lb) + CPU : i5 7400/3.00GHz Yes +WLED 6.6 kg / 14.6 lbs + Voltage Required +Aspect Ratio +16:9 + Connectivity AC 100 to 240 V (50-60Hz) + What’s in the Box + Video Signal +Resolution Monitor with Stand + USB Type-C2 (DP 1.4 Alt Mode, up to 100W) +3840 x 2160 2 x HDMI 2.13 + Mechanical Yes + +Pixel Pitch 1 x DP 1.4 Tilt Angle (Front / Back) Power Cable (Cable Length) +0.155 mm x 0.155 mm -5° / 23.5° 1 x Power Cable (1.8 m) + Audio Signal +Dot/Pixel Per Inch (DPI/PPI) 1 x Audio Out (3.5 mm) Swivel Angle (Left / Right) DP Cable (Cable Length) +163 -45° / 45° 1 x DP Cable (1.8 m) + USB Hub +Viewing Angle (H x V @ CR 10:1) Yes Lift (Max. Range) HDMI Cable (Cable Length) +178° / 178° 155 mm 1 x HDMI Cable (1.8 m) + Ethernet +Response Time Yes (10M/100M/1000M) Pivot USB Cable (Cable Length) +4ms (Extreme Mode), -90° / 90° 1 x USB Type-C to Type-A Cable + USB Upstream +6ms (Normal Mode) VESA Mount Capability (1.8 m) + 1 x USB 3.2 Gen 14 Type-C + Yes (100 x 100 mm) 1 x USB Type-C to Type-C Gen 2 +Refresh Rate USB Downstream Cable (1.5 m) +60Hz 4 x USB 3.2 Gen 1 Type-A ThinkCentre M Series Tiny Support + Yes Factory Calibration Report +Brightness (Typical) 1 x USB 3.2 Gen 1 Type-C (15W) + Yes +310 cd/m2 ThinkCentre M Series Nano Support + Quick Setup Guide +Contrast Ratio (Typical) Multimedia Yes + Yes +1200:1 Integrated Speakers Kensington Lock Slot + Yes (2.5 mm x 6 mm and 3 mm x 7 mm) Cleaning Cloth +Dynamic Contrast Ratio (Typical) Yes (2 x 5W) + Yes +3M:1 Modular Camera/Speaker Support Headphone Hook +Color Gamut (Coverage Ratio) Yes (ThinkVision MC60)5 Yes +99% DCI-P3; 99% Adobe RGB; Cable Management Certification +100% sRGB; 100% BT.709; +83% BT.2020 (CIE 1931) Special Features Yes CCC + Yes + Factory Calibration Bezel Color +Color Support (Typical) Raven Black Volatile Organic Compound + Yes (Avg. Delta E<1 for DCI-P3, +16.7 Million Certification + Adobe RGB, and sRGB) Bezel Width (Side) +Color Depth Yes + Software 8.0 mm +8-bit RoHS (2011/65/EU) + 3D Explorer6 (available from Lenovo Bezel Width (Top / Bottom) +HDR Compliance Accessories and Display Manager⁷ - Yes + 8.0 mm / 44.3 mm +Yes (HDR10 Decoding) ThinkColour) Windows Certification + 3D Master (3D viewing App), Windows 10, Windows 11 + Design Engine, 2D-to-3D Converter, Dimension +3D Features Plugins, SDK + Size Packed + EU Energy Level Certification + Exempt (Level: G) +2D/3D Switchable Third-party Software Support8 (D x H x W, mm / inch) +Yes Microsoft 365, PTC Creo, 165.0 x 520.0 x 720.0 mm China Energy Efficiency Standard + Autodesk 3ds Max, Autodesk VRED, 6.50 x 20.47 x 28.35 inches Tier 1 +3D Resolution +1920 x 2160 Autodesk Maya, Trimble SketchUp Pro, + Size Unpacked w/ Stand TÜV Rheinland Eye Comfort + Blender, Lumiscaphe Patchwork 3D, +Optimal Viewing Distance (Highest Position) Yes + Dassault Systems Deltagen, Rihno, +60 cm - 100 cm (D x H x W, mm / inch) + SolidWorks, Catia, AutoCAD, Vectorworks, + 222.7 x 568.0 x 614.8 mm + DAZStudio, Houdini, Inventor, Revit, UGNX, +Recommended 3D Viewing 8.77 x 22.36 x 24.20 inches + SolidEdge, Cinema 4D, Fusion 360, +Distance +70 cm ~ 90 cm Unity, C++ & Unreal (via SDK) Size Unpacked w/ Stand + (Lowest Position) +Optimal Viewing Angle (D x H x W, mm / inch) +Horizontal : ± 20° Power 222.7 x 413.0 x 614.8 mm +Vertical : ± 20° 8.77 x 16.26 x 24.20 inches + Power Consumption (Typ. / Max.) +Number of Viewers 43.8W / 246.0W +1 + Power Consumption Sleep/Off Mode + < 0.5W + +¹ RTX2080 and above; Graphic card driver newer than version 527.41; O/S: Windows 10, version 1803 (10.0.17134.0) and above. | 2 USB Type-C® and USB-C® are registered trademarks of +USB Implementers Forum. | 3 Supports 4K @ 60Hz as specified in HDMI 2.1. | 4 Depending on many factors such as the processing capability of peripheral devices, file attributes, and other +factors related to system configuration and operating environments, the actual transfer rate using the various USB connectors on this device will vary and is typically slower than the data +rates as defined by the respective USB specifications: 5 Gbit/s for USB 3.2 Gen 1; 10 Gbit/s for USB 3.2 Gen 2 & 20 Gbit/s for USB 3.2 Gen 2x2. | 5 Sold separately. | 6 Must be installed on the PC +connected to the monitor. This software can only be used with Windows 10 and Windows 11. | 7 Supports Windows 10 & 11, Mac OS, Windows On Arm (functions vary across systems). | 8 Selected +third-party products are listed. Compatibility is tested on limited versions/models only. Compatible product list is subject to change without notice. 3D monitor is developed to be compatible +with and should be used with fully licensed specific versions of third-party software only. Lenovo makes no representation or warranty, and assumes no responsibility with regard to, the +selection, performance, or use of third-party products or services that are licensed/provided by third parties under their own terms and conditions and may be subject to license fees +and/or other costs. | 9 Listed as maximum capacity of power delivery. Actual capacity of power delivery may vary depending upon devices connected or monitor configuration, and may decline +with downstream USB ports connected or higher brightness setting. +© 2025 Lenovo. All rights reserved. These products are available while supplies last. Prices shown are subject to change without notice. For any questions concerning price, please contact +your Lenovo Account Executive. Lenovo is not responsible for photographic or typographic errors. Warranty: For a copy of applicable warranties, write to: Warranty Information, 500 Park +Offices Drive, RTP, NC 27709, U.S.A, Attn: Dept. ZPYA/B600. Lenovo makes no representation or warranty regarding third-party products or services. Trademarks: Lenovo, the Lenovo logo, +Rescue and Recovery, ThinkPad, ThinkCentre, ThinkStation, ThinkVantage, ThinkVision, and ThinkColour are trademarks or registered trademarks of Lenovo. Microsoft, Windows, and Vista +are registered trademarks of Microsoft Corporation. Intel, the Intel logo, Intel Inside, Intel Core, and Core Inside are trademarks of Intel Corporation in the U.S. and/or other countries. Other +company, product, and service names may be trademarks or service marks of others. +Specifications may vary depending upon region. + \ No newline at end of file diff --git a/2d_to_3d_verified_product_technical_reports/pdf_text/samsung_display_solutions_spatial_signage_catalog_2026.txt b/2d_to_3d_verified_product_technical_reports/pdf_text/samsung_display_solutions_spatial_signage_catalog_2026.txt new file mode 100644 index 0000000000000000000000000000000000000000..e7c7871b723fb576adc1851550e5fc7da0cc3049 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/pdf_text/samsung_display_solutions_spatial_signage_catalog_2026.txt @@ -0,0 +1,2088 @@ + SAMSUNG + + + + + 2026 Samsung + Display Solutions + Innovating Displays Beyond Boundaries + + + +About Samsung Electronics Co., Ltd. +Samsung Electronics Co., Ltd. inspires the world and shapes the future with transformative ideas and technologies. The company is redefining the worlds of TVs, smartphones, wearable devices, tablets, +digital appliances, medical equipment, network systems, and semiconductor and LED solutions. For the latest news, please visit the Samsung Newsroom at news.samsung.com. + + + +Display Solutions +For more information about Samsung Display Solutions, visit www.samsung.com/business + + +Copyright © 2026 Samsung Electronics Co., Ltd. All rights reserved. Samsung is a registered trademark of Samsung Electronics Co., Ltd. Specifications and designs are subject to change without notice. Non-metric +weights and measurements are approximate. All data were deemed correct at time of creation. Samsung is not liable for errors or omissions. All brand, product, service names and logos are trademarks and/or registered +trademarks of their respective owners and are hereby recognized and acknowledged. + +Samsung Electronics Co., Ltd. +129, Samsung-ro, Yeongtong-gu, Suwon-si, Gyeonggi-do, 16677 Republic of Korea + +2026-02 + Samsung, Continuing No. 1 market leadership +a global brand in display solutions for 17 years + +Since its establishment in 1969, Samsung Electronics has grown into a global Given its excellence in broad manufacturing expertise and premium picture quality technology, it is no wonder that Samsung has been ranked the No. 1 in the display + Regional Offices Employees +technology leader, driving innovation and creating new possibilities for people market for 17 consecutive years. +and businesses worldwide. + 15 267K+ Samsung has consistently provided enterprises with display technologies that drive business growth and operational efficiency. Through continuous innovation, +With a presence spanning the globe, Samsung invests heavily in R&D to pioneer including The Wall, the world's first modular display based on micro LED technology, Samsung has successfully delivered differentiated signage products tailored to +breakthrough technologies. Our commitment to relentless innovation drives our unique business needs. From diverse product portfolios to software solutions for management, our end-to-end approach enables customers to maximize performance +mission to create a better world for all. and focus on what matters most. + + For the past 17 years, Samsung has pushed the boundaries of display technology innovation. We are committed to maintaining our category leadership by continuously + Total Revenue Countries bringing the most innovative display solutions to market. + + + 1. Apple 332.8 74 + * Based on FY 2025 consolidated + statement (KRW trillion) + 2. Microsoft ** Q4 2025 results are preliminary + + Smart Signage M/S (unit) + 3. Amazon + + 4. Google 45 + + Sales Offices Production Sites 40 + + + 5. Samsung + 109 33 ~ 35 + + + lJifiilLI 30 + + 25 + + 6. Toyota 20 + 15 + 7. Mercedes-Benz 10 + 5 12.6% 10.2% 12.0% 18.3% 25.3% 26.9% 28.1% 28.0% 27.4% 25.7% 27.3% 32.0% 31.0% 31.1% 33.0% 34.6% 36.2% + 8. Coca-Cola + R&D Centers Design Centers 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 + 9. Nike + + 10. BMW 40 7 Source : + * 09-12 : Display Industry research company “Display Search”. + * 13-25 : Market research company “Omdia”. + Note : + * Consumer TVs and Hospitality TVs used for signage are excluded. + * The 2025 data excludes Q4 market share. + + + + +02 03 + Table of Contents + + + + 01 02 03 04 + Innovating Displays Smart Signage LED Signage Hospitality TV Solution + + Beyound Boundaries Next-Gen Displays + 08 Spatial Signage + 36 The Wall + 40 Onyx + 50 The Frame + 52 Crystal UHD + 58 Samsung VXT + 60 LYNK Cloud + 10 Color E-Paper 42 Indoor LED 54 Full HD + 44 High Brightness LED + Impact 46 All-in-One LED + 12 Supersized Signage + 14 UHD Signage + 16 Video Wall + + + Interactive & Engagement + 18 Interactive Display + 20 Samsung Flip + 22 Touch Signage + + Environment-specific + 24 Outdoor Signage + 26 Window Signage + + Specialty + 28 Stretched Signage + 30 Small Signage + + TV-based + 32 Business TV + + +04 05 + Smart Signage +Samsung Smart Signage delivers a comprehensive portfolio for today’s Next-Gen Displays + +business environments. From next-generation displays that introduce new 08 Spatial Signage + 10 Color E-Paper +visual possibilities—such as immersive 3D experiences and paper-like +digital signage—to high-impact installations for large spaces, interactive Impact +collaboration displays, and specialized models built for demanding 12 Supersized Signage + +conditions, Samsung provides the right solution for every use case. 14 UHD Signage + 16 Video Wall + + + Interactive & Engagement + 18 Interactive Display + 20 Samsung Flip + 22 Touch Signage + + Environment-specific + 24 Outdoor Signage + 26 Window Signage + + Specialty + 28 Stretched Signage + 30 Small Signage + + TV-based + 32 Business TV + + +06 07 + Smart Signage LED Signage Hospitality TV Solution + + + + Virtual 3D Display + Spatial Signage + - + Powered by Samsung’s patented 3D plate + technology, Spatial Signage brings 2D content + SMHX + to life. Vivid details feel almost within reach, + making every moment unforgettable. + + Samsung's Spatial Signage delivers immersive realism through + innovative display technology, transforming ordinary content into striking + ~ + 3D visuals that capture attention. Powered by Samsung's patented 3D + plate technology, it adds depth and dimension to any scene without + requiring special glasses or separately created 3D content. The result is a + vivid, engaging visual experience that feels closer to reality. + + Beyond its visual performance, Spatial Signage is designed for ease and + flexibility. Its slim 52mm profile enables clean, space-saving installation + across various environment. Samsung VXT with AI Studio empowers UltraThin Design + businesses to easily manage content, adjust 3D effects and monitor Built on an ultra-slim 52mm profile, Spatial + devices remotely. Slim Depth Signage redefines how 3D displays integrate + 52 mm into commercial spaces. Its refined form + reduces visual bulk while maintaining the + familiar proportions of standard signage, + enabling seamless integration of 3D visuals + across a wide range of environments. + + + + + AI Studio + Samsung VXT’s AI Studio app makes 3D video + creation simple—just upload images and write + a prompt to generate video content. + + + • + Highlights Prompt + + "A female model walks Generate AI Video Embedded within Samsung VXT, this AI- + forward while holding + + Virtual 3D Display a bag, then turns to a + side angle." + I + powered tool converts images into dynamic, + UltraThin Design 3D-style visuals designed for Spatial Signage, + If helping businesses create engaging content + Lite Installation + AI Studio + Quantum Processor + •U _ _j quickly while reducing production complexity. + + + Anti-glare + Samsung VXT + + +08 09 + Smart Signage LED Signage Hospitality TV Solution + + + + Paper-thin Design + Color E-Paper + --EMDX-A EMDX + + + + Samsung Color E-Paper is a paper-thin, lightweight display engineered + for ultra-low power consumption, Equipped with a built-in battery and + Edge + 8.6mm + + + + + Total + At just 17.9mm, Samsung Color E-Paper + seamlessly enhances diverse business + environments with unmatched elegance and + aesthetically-pleasing design. + + + + + supported by a mobile app, it delivers paper-like picture quality without + 17.9mm + requiring dedicated infrastructure - offering a practical way to support the + digital transition of traditional paper-based communication. Supporting up + r * Both 13i-inch and 32-inch Samsung Color E-Paper models include two + rear holders and two hanging brackets. The 13-inch model also includes + two simple stands. Other accessories are not included and must be + purchased separately. + to 77K colors, the display enables more detailed, natural color expression + while maintaining the visual simplicity of printed + materials. + + Samsung Color E-Paper incorporates recycled materials throughout Energy Efficient Usage + its construction. The 32-inch model features housing made with 55% Experience ultra-low power performance with + recycled plastics, while the 13-inch model uses 45% recycled plastics and Samsung Color E-Paper. Static images can be + Zero displayed with zero watts* of power + incorporates 10% bio resin derived from plankton oil. The 13-inch model is watts + consumption, significantly reducing energy + the world's first product to adopt this innovative bio-based plastic, verified + use without compromising reliability. This + by UL*. Additionally, packaging for both models—including the box, makes it an ideal choice for power-conscious + MEGA cushion, handle and accessory box—is made entirely from paper. + * UL verified that Samsung 13-inch Color E-Paper's housing materials use bio-based plastic, 10% of which is composed + facilities. + + SALE of phytoplankton bio resin derived from plankton oil. * Activities related to content refresh, content changes, or device + monitoring and control will require additional power. + * Content refresh is essential and automatically performed when the + power cable or battery is connected. + * Screen flickering during the refresh or image change is normal due to the + characteristics of EPD technology. + * Images simulated for illustrative purposes only. + + + + + Samsung E-Paper App + Available on Android and iOS mobile devices, + the dedicated Samsung E-Paper App allows + users to easily control the Samsung Color + Highlights + E-Paper series locally. + Paper-thin Design + Versatile Placement with Embedded Battery + Energy Efficient Usage + Made with Recycled Materials + Wi-Fi + Color Imaging Algorithm + Samsung E-Paper App + * Samsung E-Paper App requires mobile device running Android™ 10 or + Samsung VXT later or iOS 15 or later. + + + +10 11 + Smart Signage LED Signage Hospitality TV Solution + + + + Supersized Screen + Supersized Signage + -- + The expansive 115-inch screen creates immersive + visual experiences and enhances communication + 115” QHFX 105” QPDX-5K 98” QHC 98” QMC + across commercial and business environments. + With just a single display, the QHFX delivers the + large-scale impact typically achieved with + Samsung’s Supersized Signage redefines large-format display multiple screens—offering a simpler, more + experiences for premium commercial environments. The 115-inch seamless solution for bold visual expression. + + QHFX delivers commanding visual impact with an ultra-large screen + that supports both landscape and portrait installation, enabling + flexible use across diverse spaces. With its super-slim 34.1mm profile + and anti-glare panel, it maintains a refined, modern presence while + ensuring clear visibility even in bright lighting. + + The 105-inch QPDX-5K complements the lineup with a 21:9 aspect ratio + optimized for immersive video conferencing and corporate collaboration. Portrait Installation + Together, these displays elevate presence, clarity and communication Samsung’s supersized signage models offer + across executive, lobby and meeting spaces. both landscape and portrait installation, + enabling flexible deployment across a wide + range of environments. Vertical orientation + unlocks full-length visual possibilities—from + Highlights life-sized product displays and fashion imagery + to tall-format brand videos—creating impactful + ♦ Supersized Screen SMARTVIEW+ large-scale experiences that expand creative + Portrait Installation Samsung Knox Security possibilities. + Anti-glare Samsung VXT + 24/7 Operation 21:9 Ultra Wide Screen * + Super Slim Design + + + + + QPDX-5K 105-inch Super Slim Design + Samsung’s QPDX-5K features a 21:9 Despite its ultra-large 115-inch screen, the + aspect ratio optimized for video QHFX features an impressively slim profile at + conferencing. Whether attendees are + just 34.1mm*. This refined depth enhances + onsite or remote, the display ensures + equal engagement, providing a truly installation flexibility and elevates the overall + immersive and collaborative meeting aesthetic, making it perfect for modern + environment. 34.1 mm environments where design and performance + Slim Depth + are equally important. + + + + + * 21:9 Ultra Wide Screen * The 105-inch QPDX-5K, 98-inch QHC and 98-inch QMC models have + (available on 105-inch QPDX-5K) a depth of 48.1mm + + + +12 13 + Smart Signage LED Signage Hospitality TV Solution + + + + Ultra Slim Depth + UHD Signage + --- + At just 28.5mm*, QHC / QMC / QBC series + delivers Samsung’s slimmest UHD signage + QHC QMC QBC + display. It is compatible with a Slim Fit Wall + Mount**, which allows you to install it neatly + and easily in any environment. + Samsung's UHD QHC, QMC, and QBC series feature the slimmest + 28.5 mm + designs in the standalone lineup, adding sophistication to any business Slim Depth + + environment while optimizing space utilization. These products captivate + audiences with breathtaking realism and vibrant color reproduction. + + + +l + * The 98-inch QHC and 98-inch QMC models have a depth of 48.1mm. + ** Slim Fit Wall Mount must be purchased separately and is not supported + on the 98-inch QHC and 98-inch QMC models. + Powered by Tizen OS, they offer exceptional performance and an + unparalleled user experience, ensuring stable operations and enhanced + security tailored to meet any business requirement. The intuitive Home + Screen interface streamlines navigation, enabling seamless control + across functions. Quantum Processor 4K + Conventional QHC / QMC / QBC Series + Samsung’s industry-leading video processing + technology enhances every piece of content for + clarity and consistency. Intelligent UHD upscaling + technology, powered by Samsung's 4K Processor, + elevates lower-resolution video to UHD, providing + professional picture quality. + + + + + * When compared to Samsung’s FHD model. + * Viewing experience may vary according to types of content and format. + + + + + Highlights + Ultra Slim Design (28.5mm)* Smart Calibration + + □ rEl + Even Bezel + Professional Video pattern PC software + Dynamic Crystal Color Color meter generator solution + PC Guarantee complete brand consistency across + every display in every location. Using the + Anti-glare** + Samsung mobile app, Smart Calibration + 24/7 Operation + ensures all displays are calibrated correctly, + Portrait Installation + showcasing brand logos and other collateral in + SMARTVIEW+** + Smart Calibration + ... the exact colors required. + + Home UI + Samsung VXT*** + + * The 98-inch QHC and 98-inch QMC models have a depth of 48.1mm Smart + Calibration + ** Anti-glare and SMARTVIEW+ are not supported on QBC series and 32-inch QMC model. + *** Samsung VXT must be purchased separately. + + + + 14 15 + Smart Signage LED Signage Hospitality TV Solution + + + + Uninterrupted Visual E xperience + Video Wall + ----- + A narrow bezel options—0.88 mm to 3.5 mm + bezel-to-bezel— minimize the visual distractions + VHC-R VMC-R VHC-E VMC-E VMB-U + across multiple screens. The display’s non-glare + panels provide better visibility regardless of + ambient light, 24/7. + Samsung’s Video Wall delivers a refined, seamless viewing experience + through an exceptionally narrow bezel design. Bright, anti-glare panels + help maintain clear visibility across various viewing positions and lighting + environments, while advanced factory calibration ensures consistent + brightness and color uniformity. Intuitive PC and mobile calibration tools + make fine-tuning the Video Wall simple and efficient. + + + + + Precise and Convenient Calibration + \\lf//#I + Samsung’s multi-step factory calibration + Before After ensures brightness and color uniformity across + Calibration Calibration + all displays in the Video Wall. Users can also + easily maintain display consistency through + Samsung’s intuitive PC and mobile calibration + tools. + + + + + Highlights + Various Bezel Width Options + Wide Viewing Angle + Efficient and Reliable Operation + Non-glare Panel Using daisy chain with DP1.2 and HDMI + 24/7 Operation + 4K ports, Samsung’s Video Wall can project UHD + Multi-step Factory Calibration UP TO 5X5 content across multiple screens in up to a + Convenient Mobile Calibration 5x5 configuration. ISTA-certified packaging is + HDMI DP designed to minimize possible damage during + 4K UHD Resolution by Daisy Chain + Easy Installation* shipment. + IP5x Rating + EMC Class B** + UHD All-in-one Samsung UHD + ISTA-certified Packaging Signage Player Box + Video Wall Signage Player Box + * Samsung’s special wall mount accessories must be purchased separately. + ** EMC class B certification varies by video wall model. + + + +16 17 + I J -- I / Smart Signage LED Signage Hospitality TV Solution + + \ / + l I I / Interactive Display Android™ OS & Octa-core CPU + + + + + --- + Experience intuitive, fast, and fluid performance + powered by Android™ OS and an Octa-core CPU. + WAFX-P WAF WEFX* + Whether you’re in the classroom or the meeting + room, enjoy seamless access to educational + tools, apps, and multitasking features. + Samsung Interactive Display is designed for dynamic learning + environments where interaction matters. Powered by Android™ OS, + it delivers an intuitive interface, a smooth writing experience, and + responsive multi-touch collaboration. As an EDLA-certified display, it + provides official access to Google apps and services, ensuring + security and reliability. Built-in AI-powered features further support + + --- + -- - - + :- + :- + -- + smarter lessons, streamlined workflows, and engaging classroom + experiences. + =;. =-- - + ~ + EDLA Certification + As a Google EDLA-certified interactive display, + Highlights the WAFX-P comes with Google apps and + services. It supports Google Play and delivers + Powered by Android™ OS 3-in-1 USB-C port / HDMI Out / OPS + a streamlined experience designed to enhance + (Open Pluggable Specification) + Octa-core CPU + EDLA Certification + + • Annotation On + AI Write & Search + All-in-One Video Call System* + G education and collaboration. + + + + Dual Pen + + * The All-in-One Video Call System, including the built-in camera, microphone, and + high-perfor mance speakers, is available on the WAFX-P series only. + M Fl + + + WEFX (Non-OS)* AI Write & Search + Stripped of unnecessary complexity, Seamlessly transition your handwritten notes into + packed with just what you need. the digital world. With WAFX-P's embedded AI and + Samsung’s OS-Free interactive Display + digital ink recognition, simply circle handwritten + provides a simple, seamless way to + present, write, and collaborate in any notes on the screen and tap the search icon to + space. Just connect your device and work access web results, images, and more - all without + in the environment you already know—no typing. + software installation, no setup, no training + required. It’s the effortless way to begin + every meeting, lesson, or project, so you + can focus on ideas, not instructions. + + * WEFX is a non-OS model and may not support the + highlighted features listed above. + + + +18 19 + Smart Signage LED Signage Hospitality TV Solution + + + + Natural & Precise Writing + Samsung Flip + + - + Experience smooth, accurate pen performance + with 26ms response time and 2,048 pressure + WMFX + levels. Every pen stroke feels natural, while + flexible erasing keeps your creative flow + uninterrupted. + Samsung Flip creates a meeting environment where ideas flow as soon + as inspiration strikes. With instant writing on power-up, it works like a + true whiteboard, keeping discussions smooth and uninterrupted. Its P\ + Latency + 26ms + Pressure levels + 2,048 + intuitive home screen provides quick access to frequently used apps and + tools, adapting naturally to any meeting style. Enhanced clarity and fluid + interaction make it easier to express and share ideas with confidence. + + + + + Enhanced Whiteboard + Instant Access Start writing instantly. Flip’s enhanced whiteboard + lets you edit, move, and resize notes freely — + transforming handwriting and shapes into clean, + Clear & Accurate + professional visuals. + + ~~ ~~ + Communication + + + + + Conventional WMFX + + + + + AI Writing Tool + + + + + l9JlQJ- □O + + + + Highlights Samsung Knox Security + Natural & Precise Writing + Powered by Samsung Knox, Flip safeguards every + Enhanced Whiteboard idea with multi-layered protection from boot-up to + Easy Multitasking shutdown, ensuring worry-free collaboration. + Annotation On + Flip Home + Rotatable Design*(55”, 65”) / Slim Design*(75”, 85”) + Workspace + Samsung Knox Security + SMARTVIEW+ + Samsung VXT + USB-C Hub / HDMI Out / OPS (Open Pluggable Specification) + + +20 21 + Smart Signage LED Signage Hospitality TV Solution + + + + All-in-One Touch Solution + Touch Signage + --- + Touch interaction is enabled without the need for + additional external devices. Interactive content + QMB-T QMC-T QBC-T + can be deployed and operated through a single + display, simplifying setup and streamlining + operations across various business environments. + Samsung Touch Signage is designed to enable intuitive, touch-based + interaction for effective communication across a wide range of business + environments. Available in a lineup ranging from compact 13-inch models + up to 55-inch displays, it allows users to navigate content and information + directly on the screen—supporting diverse business applications. + + + + + Center IR + With center IR, each display receives IR signals + directly to the panel, allowing easy and + convenient remote control. When mounted, + the display doesn't require an IR receiver + cable extension. Built-in Wi-Fi allows wireless + remote management for both content and + display. + + + + + Anti-glare + Designed with an anti-glare panel and optimized + haze level, the Samsung Touch Signage helps + reduce reflections from indoor lighting and + Highlights + daylight. In bright retail spaces or open offices, + All-in-One Touch Solution your content stays clear and easy to read. + 4K UHD * + Anti-glare + IP5X rating + Center IR + 24/7 * + + * 4K UHD resolution and 24/7 operation apply only to the QMB-T model. + + + +22 23 + Smart Signage LED Signage Hospitality TV Solution + + + + Verified by UL Solutions for + Outdoor Signage + --- + Outdoor Visibility + With a brightness level of 3,500nits (peak + OHA OHDX OHB + 4000nits) Samsung Outdoor Signage series + delivers 24/7 performance, providing clear and + vivid content in outdoor environments. OHDX + Samsung Outdoor Signage models are built for harsh environments, is verified by UL Solutions for outdoor visibility + allowing you to effectively deliver your business message beyond the brightness, ensuring your message is effectively + storefront. Even in varying weather, the OHDX ensures your brand communicated even in direct sunlight. + + presence stays powerful and memorable to captivate your audience + year-round. + + + + + Heat Dissipation Structure* + Featuring an advanced heat dissipation system + for efficient air circulation, OHDX’s design + prevents heat damage that is commonly + found in high-brightness outdoor displays. + The display's effective cooling measures help + ensure stable and reliable performance in harsh + environments. + + + + + * Availability of this feature may vary by model. + + + + + IP56 + With certified IP56-rated protection, Samsung + Outdoor Signage series delivers a dustproof + and waterproof design that withstands physical + Highlights + impacts. This ensures dependable operation + Verified by UL Solutions for Outdoor Visibility across a variety of outdoor conditions for + Heat Dissipation Structure consistent performance. + IP56 + Auto Brightness Sensor + Additional Glass Installable Structure + Samsung VXT + IK10 + + +24 25 + Smart Signage LED Signage Hospitality TV Solution + + + + Brilliant Presentation for All + Window Signage + - OMA OMN, OMN-D + + -- OMB OMDX + + + + Samsung Window Signage enhances your storefront to attract customers. + Featuring high brightness and clarity, even in direct sunlight, the display + FHD UHD + UHD + + + + 4000 + nit + + + High + Brightness + Samsung's Window Signage is optimized for + storefront promotions, delivering brilliant picture + quality that brings all content to life. High + brightness combined with polarized sunglass + support ensures optimal visibility, delivering an + uncompromised customer viewing experience. + + ~•CJlllLIIti + ensures your messages stand out. The slim design enables maximum + LUXURY space utilization while creating captivating and engaging customer + experiences. + Polarized + Sunglass Support + + HOUSE * Resolution and high-brightness specification may vary by model. + + + ·=-~= + Durable Performance + With IP5X-validated dust protection and + :~: + -If em-bedded proprietary functionality that + mitigates overheating, Samsung’s Window + Overheating + Mitigation + Signage con-tinuously provides robust + durability. This ensures optimized operation in + a variety of outdoor conditions for consistent + performance. + + IP5X + Dust resistant + + + + + Highlights + 4K UHD Resolution* + High Brightness** Slim Depth* + Auto Brightness Control + Polarized Sunglass Support The slim design allows Window Signage to + blend naturally into storefront environments, + 24/7 Operation + minimizing visual clutter and preserving valuable + ♦ Slim Design + space. In particular, the 32-inch model features a + IP5X Rating + compact depth of 45.6mm, enabling a clean and + Overheating Mitigation + unobtrusive window-facing installation. + Clean Cable Management + 45.6 mm + Slim Depth + + + Built-in Wi-Fi + Dual-sided Screen*** + + * Resolution and High-brightness specification may vary by model. + ** OMN-D model is 3,000 / 1,000 nit (Dual-sided). + *** Dual-sided screen is only available on OMN-D series. * The thickness may vary by size. + + + +26 27 + Smart Signage LED Signage Hospitality TV Solution + + + + Maximize Space and Optimize + Stretched Signage + - + Content + Versatility and cost effectiveness are necessities + SHC + in digital signage. Samsung’s SHC series, + featuring a 16:4.5 wide screen stretched display + format, offers the ability to effectively + Samsung's Stretched Signage offers a versatile signage solution to communicate information in small, narrow + meet any need, delivering impactful content while maximizing space spaces. + efficiency. + + + + + Make Messages Easier to See + with 700-nit Brightness + With brightness levels up to 700 nits, these + displays maintain clear, vibrant content + visibility in high-ambient-light environments. + Customers can easily read messages and see + product details from any angle. + + + + + Communicate Even in Vertical + Format + Vertical displays capture customer attention and + fit naturally into narrow spaces where traditional + horizontal signage won't work. This flexibility + Highlights + allows you to deliver your message in more + 16:4.5 Stretched Ratio locations and environments. + 700 nits Brightness + Anti-glare + 24/7 Operation + Embedded Media Player + Vertical Installation + + +28 29 + Smart Signage LED Signage Hospitality TV Solution + + + + Compact 13-inch Size & + Small Signage Slim Design + 19.9 mm The 13-inch Small Signage features a slim + 13”, 24” QBC + + I + Slim Design + 19.9mm profile, fitting easily into tight spaces + where larger displays are impractical. Its + compact design simplifies installation and + Samsung Small Signage enables clear and focused communication in content management, making it ideal for + space-constrained environments through its compact and versatile design. 13" customer-facing areas where information + Optimized for close-range viewing, it delivers information effectively where needs to be delivered up close. + + larger displays are impractical, offering a flexible solution for a wide range + of business needs. + + + + + Hold Sizable Opportunities in + Small Spaces + Small Signage is designed for efficient use in + space-constrained environments. A sleek rear + design makes the display optimal for wall + mounting while the connectivity, content play + and device controls are easy to operate. + + + + + Dual Wi-Fi (2.4GHz + 5GHz) + Samsung’s QBC series now supports dual-band + Wi-Fi with both 2.4GHz and 5GHz frequencies, + enabling faster network connections and + higher data transmission speeds—especially in + high-traffic areas. + + Highlights + Compact Size (13-inch, 24-inch) + Home UI + Dual Wi-Fi (2.4GHz + 5GHz) + Samsung VXT + + +30 31 + Smart Signage LED Signage Hospitality TV Solution + + + + Do More with Your TV + Business TV + --- + Communicate with your customers without the + need for physical paper materials. The simple, + BEFX-H BEFX-M BEFX-B + ready-to-use Business TV app allows you to + showcase advertising content alongside TV + programming. + Samsung’s Business TV is the ideal display solution for small businesses, + replacing outdated physical paper signs and posters. Whether used for + C~Ftl51tQ9 + SU.SON.\l. menu boards or advertisements, Business TV provides flexible + ~P{C•,q + HINU functionality suited to a wide range of retail stores and businesses + ESPRESSO looking to do more with their TV. + BERRY + &CREAM + LEMONADE + + \1 I , Samsung Business TV App + ~ + + CClrll'MI ~ + ... __ --- + .... + + uo + 6.00 7-.88 + Available on Android or iOS mobile devices, + the Samsung Business TV app allows users to + remotely manage, schedule and display + • .OQ + ' °" customized content effortlessly. Additionally, + + + + - + users can easily create eye-catching content + using a variety of ready-to-use content + w + templates. + + + + + * Images simulated for illustrative purposes. Actual UI may differ and is + subject to change without notice. + + + + + PlayLock + Lock your TV with a pin-code system*, + preventing unauthorized access and + tampering with the screen. This minimizes the + risk of accidental misuse, while ensuring that + only the content you have selected is played. + Highlights + Samsung Business TV App + Samsung VXT + PlayLock * + Tizen Zero Config* + + * The feature's availability may vary by region. * The feature's availability may vary by region. + + + +32 33 + LED Signage +Expand your business vision without limits. Samsung LED Signage 36 The Wall + 40 Onyx +effectively captures customer attention with brilliant visuals, even 42 Indoor LED +on large-scale displays. Available in a variety of sizes and shapes, 44 High Brightness LED + 46 All-in-One LED +these displays allow for unlimited creative possibilities. + + + + + 35 + Smart Signage LED Signage Hospitality TV Solution + + + + The Essence of Black + The Wall + + -- + Black Seal Technology creates a uniform, + seamless canvas for deeper black levels and + MPF MMF + enhanced depth. This delivers unparalleled + Black Seal Coating contrast and superior detail for purer image + reproduction. + Samsung The Wall is an industry-leading display solution delivering + never-before-seen visual experiences. Backed by decades of Samsung’s + rich R&D heritage and LED technology expertise, The Wall delivers the + deepest blacks and pristine colors. + LED Anti-Reflection Film + + * Black Seal Technology vary by models. + + + + + Superior Color Purity + Viewers can experience fully authentic, + accurate color validated by PANTONE. As a + trusted symbol of color fidelity by industry + experts, PANTONE Validated confirms the + accurate reproduction of 2,140 PANTONE + colors and 110 newly added skin tone shades + for superior color accuracy. + + + + + * PANTONE certified based on HDR screen. + * PANTONE Validated feature may vary by models. + + + + + Highlights + Black Seal Technology + + LEMIRAGE PANTONE Validated + 20bit Processing + Instant AI Optimization + Every second of content is instantly analyzed + Timeless Design. Effortless Grace Linear Grayscale and optimized for enhanced picture quality. The + MICRO HDR NQM AI Gen2 processor delivers vivid visuals at + NQM AI Gen2 Processor any size up to 8K resolution, enhancing contrast + One-Body Design and removing noise. + Simple Structure + TUV Eye Comfort + EMC Class B + Multi View + 8K S-BOX + Stand-by-Mode * AI Processor may vary by models. + + + +36 37 + Smart Signage LED Signage Hospitality TV Solution + + + + Minimize flickers and artefacts + The Wall for Virtual Production Conventional LED The Wall for Virtual Production + + + + + - IVC + + + + Samsung The Wall for Virtual Production transforms the entire workflow + of virtual production, supporting an industry top level 12,288 Hz refresh + Black Seal Coating + By supporting an industry top level 12,288 Hz + refresh rate, The Wall for Virtual Production + minimizes flicker lines and artefacts when + shooting the image on display through a + camera. + + + + rate as well as genlock and phase offset. + + + + + Perfect frame synchronization + The Wall for Virtual Production allows to + genlock all the signals of the entire system, + ensuring a perfect synchronization. It also + Gen Lock offers a phase offset function for further frame + corrections. + + + + Phase Offset + + + + + Flawless curved installation + The Wall for Virtual Production improved its + Highlights cabinet structure to be half-width in 4:9 ratio, + Black Seal technology allowing better curved installation with perfectly + Ultra Chroma technology smooth angle. + 20bit processing + Linear grayscale + 12,288 Hz high refresh rate + Genlock & Phase offset + 6000 R + Virtual Production Manager Smooth Angle + + Advanced installation + - Max 5800R concave support, Hanging / Stacking + + +38 39 + Smart Signage LED Signage Hospitality TV Solution + + + + True Black Levels + Onyx Cinema LED With self-emitting LED technology, Onyx + delivers true black levels that enhance contrast + ICD (5m / 10m / 14m) + and depth perception. This creates a more + immersive viewing experience, particularly in + darker scenes where precise black reproduction + Samsung Onyx is the world's first cinema LED display, delivering is critical. + exceptional image quality with true black levels and vivid color + accuracy. Designed for professional cinema, Onyx sets a new standard + for cinema displays with superior contrast and color fidelity. + + + + + Rich Color Accuracy + With a wide color gamut and enhanced + saturation, Onyx delivers rich, vibrant colors + across all content types. This ensures + consistent, accurate color representation— + particularly important for animated content + and films with complex color palettes. + + + + + HDR Technology + Highlights + Powered by Samsung’s HDR technology, Onyx + True Black Presentation + reaches peak brightness levels of 300 nits, + Vivid Color Expression + balancing bright and dark elements precisely to + HDR Support + deliver clear detail across the full tonal range. + Flawless images Highlights remain vivid without blooming, + Flexible Media Server Options and shadow details stay visible without losing + Expanding sweet spot contrast—ensuring accurate HDR content + True power of 3D reproduction. + Alternative Content Play + Scalable Size: P1.2 (5~9m) / P2.5 (10~14m) / P3.3 (14~20m) + + * HDR supported by using DCI-HDR compatible IMBs. + + + +40 41 + Smart Signage LED Signage Hospitality TV Solution + + + + Best-in-Class LED Picture Quality + Indoor LED + --- IFR IEA IEF + + + + Samsung’s Indoor LED signage delivers exceptional picture quality and + customizable configurations to fit specific space requirements, creating + Samsung's Indoor LED signage uses LED HDR + technology to optimize brightness and contrast + while preventing glare. This ensures accurate + color presentation and sharp detail across all + content types, without requiring additional + metadata. + + + engaging visual experiences for customers. + + + + + Reliable Protection, Lasting Clarity + GoB (Glue on Board) technology adds a + protective layer to the LED surface, helping + Physical Impact guard against water droplets, electrical shock, + or physical impact. The reinforced surface + improves handling during installation and sup- + Electrical Shock + ports long-term performance. + + Water Droplets + + + + + Highlights + Flexible Installation for Various + • Brilliant Visuals Locations + HDR10/10+ Support + Advanced design provides flexibility for any + 4K AI Upscaling + indoor retail or business environment. Supporting + NQM AI Processor + portrait and landscape orientations—and even + GoB Technology + curved, L-shaped and ceiling installations— + Thin & Light Design + businesses have added control to create the + Flexible Installation ideal display for their space. + LED Signage Manager 2 + Signage Setup Assistant + Samsung VXT + + * Some features may vary by models. + + + +42 43 + Smart Signage LED Signage Hospitality TV Solution + + + + Crystal-clear Visuals, Even in + High Brightness LED + --- + Direct Sunlight + Capture attention with vivid visuals that remain + ISC IHC IBF + clear in bright conditions. High-brightness + technology delivers consistent content visibility, + even in direct sunlight, maximizing customer + Samsung’s ISC, IHC, IBF series high brightness LED displays create a engagement. + brilliant centerpiece in various environments. Featuring 2,000-4,000nit + brightness and 3,840Hz refresh rate, these displays captivate spectators + with immersive visuals on bright large-scale installations. + + + + + Clean Aesthetics for Modern + Spaces + The simplified rear panel reduces visual clutter, + helping the signage integrate seamlessly into + modern interiors. The result is a display that + looks refined from front to back, even in open + or window-facing spaces. + + + + + Highlights + High Brightness Seamless LED Signage Operations + Brilliant Visuals + LED Signage Manager 2 (LSM2) streamlines + Thin & Light Design + installation and operation by configuring + Clean-Back Design + cabinet layouts, adjusting color settings and + GoB Technology + fine-tuning display parameters. With built-in + Flexible Installation monitoring and firmware management, it + Full Front & Rear Service ensures stable and consistent signage + FlexFit Module performance. + Improved Energy Efficiency + LED Signage Manager 2 + Samsung VXT * LSM2 is supported on Tizen 8.0 and above on S-BOX/All-in-On. + Earlier Tizen versions support LSM + * Some features may vary by models. * Availability may vary by LSM or LSM2. + + + +44 45 + Smart Signage LED Signage Hospitality TV Solution + + + + Quick Install. Big Impact. + All-in-One LED Dock the two background plates and hang just + four preset modules for a complete installation. + 110”, 146” IAB 130” IAC 108”, 136” MMF-A + With Samsung’s Quick Build structure, large- + scale displays can be fully installed in just a few + hours, reducing setup time and labor costs. + Samsung’s All-in-One LED display enables a significantly simplified + installation. With Samsung's exclusive Quick Build technology, it only + takes a few hours to install a large-scale display. + + + + + Auto Configuration Setup + Samsung’s All-in-One LED display integrates + the control box into the display itself, + eliminating a cumbersome configuration + + - process and enabling faster deployment. + + + + + Conventional LED The Wall M All-in-One + External Control Box Built-in Control Box + + + + + Highlights + No Extra Peripherals Needed + True Black Presentation + All components needed for operation are + MICRO HDR + included in one package—control box, wall + NQM AI Processor + brackets, speakers, and decorative bezels— + 20bit Processing + Wall Bracket eliminating the need for additional purchases. + Linear Grayscale + Quick Build Built -in + Control Box + Built-in Control Box + All-inclusive Components Décor Bezel + Built -in Speakers + Multi-Screen Connection + TUV Eye Comfort + + * Some features may vary by models. + + + +46 47 + + f + Hospitality TV +Enhance the guest experience with Samsung Hospitality TVs. 50 The Frame + 52 Crystal UHD +Leveraging our expertise in TV technology, these hospitality 54 Full HD +displays are optimized for hotel environments, offering guests a +comfortable and familiar viewing experience while providing hotel +managers with efficient control and management. + + + + +48 07 + Smart Signage LED Signage Hospitality TV Solution + + + + Modern Frame Design + The Frame + - + Designed with a slim picture frame aesthetic, + The Frame features an elegantly minimal and + HL03H + modern design that blends beautifully into + guest room décor. + + The Frame for hotel is a hospitality display that brings stunning 4K + QLED picture quality with vivid colors, deep contrasts and lifelike + visuals to guest rooms. Its sleek and sophisticated design transforms + interiors while maintaining a refined aesthetic. The Frame allows hotel + managers to customize rooms by displaying a curated selection of + modern or classic artwork. + * The Frame for Hotel is planned to be launched in Q3 2026. + + + + + Built-in One Connect Box + With flexibility and a compact design, enjoy + a cleaner setup to elevate your space. The + built-in One Connect Box simplifies installation + and creates a clutter-free setup to elevate the + room aesthetics. + + + + + * TV requires a separate power cable connection. + + + + + Highlights + Artful Picture Quality with QLED + Modern Frame Design + Stunning visuals for art and entertainment + Generative Wallpaper + alike. Using Samsung's sophisticated display + Artful Picture Quality with QLED + technology, The Frame produces a vibrant + Glare Free + TV Art image with a wide range of colors and high + LYNK Cloud brightness levels, so viewers can watch TV + Google Cast with exceptional QLED picture quality. + Apple AirPlay + Samsung Knox Security + NQ4 AI Gen2 Processor + Live Translate + + * Feature of HL03H is planned for a future update. + + + +50 51 + Smart Signage LED Signage Hospitality TV Solution + + + + LYNK Cloud: An Integrated Cloud + Crystal UHD + ---- + Platform + Empower managers with a powerful set of + HU8000F HU7010F HU7000F HU6000F + tools to enhance the guest experience. LYNK + Cloud provides remote display management + and can even analyze guests' content use to + Samsung Crystal UHD hospitality displays gives your guests the feeling uncover marketing insights, helping managers + of home, offering clear visuals and convenient access to their favorite deliver optimized promotions. + content for instant comfort. + * HU7010F series is launched in North America and India region only. + + * Samsung LYNK Cloud solution must be purchased separately. + * UI may vary by models or hotel's current platforms. + + + + + Google Cast™: Instant In-room + Entertainment + With Google Cast™, guests can easily cast their + favorite content directly from their Android™ + and iOS devices to the TV without the need for + additional dongles or login requirements. The + connection process is quick and straightforward, + utilizing QR codes for instant pairing. + + * The features are available through Samsung solution. + (LYNK Cloud, Tizen Enterprise Platform) + * Android™ and Google Cast™ are trademarks of Google LLC. + * Google Cast™ supports Android™ 6 and above, and iOS 14 and + above. Availability may vary by device, software version and region. + + + + + Highlights + LYNK Cloud + Google Cast™ Apple AirPlay: Simple and Secure + • Apple AirPlay Streaming + Tizen Enterprise Platform + Guests can enjoy movies, shows, photos and + Samsung TV Plus + more on the TV in their room with AirPlay or + Samsung Knox Security Smart View. Devices are securely paired to the + • AirSlim Design TV, ensuring peace of mind that everything + ♦ Swivel Stand stays personal and private. + Crystal Processor 4K + * When using Tizen Enterprise Platform, In order to enable AirPlay, all + 4K Upscaling related parties including hotel property and system integrator must + be certified by Apple separately. + * Some features may vary by models. * AirPlay in hotels requires iPhone Xs or later running iOS 17.3 or + * Samsung TV Plus certain region only. later; or iPad (6th generation or later), iPad mini (5th generation + * Samsung Knox Security applies to Samsung TVs powered by Tizen, launched since or later), iPad Air (3rd generation or later), 12.9-inch iPad Pro (2nd + 2015.Latest software update is required. generation or later), 10.5-inch iPad Pro, or 11-inch iPad Pro + (1st generation or later) running iPadOS 17.3 or later. + * This function may not be supported depending on the model, + apps, or geographical area. +52 53 + Smart Signage LED Signage Hospitality TV Solution + + + + Tizen Enterprise Platform + Full HD for small spaces + - + Samsung's Tizen Enterprise Platform (TEP) + provides an integrated service infrastructure + HF8000F + and a flexible application development + environment. Within Tizen OS, applications + can be easily customized to meet specific + Samsung’s HF8000F series is a compact display that fits flawlessly in business needs, while the system ensures + tight spaces while maintaining the same reliable performance hospitality enhanced software management for + operation. + businesses demand, making it a smart choice for any space. It features + Tizen OS and LYNK Cloud for seamless management while also + providing effortless casting options with Google Cast™ and Apple + AirPlay to create a unique experience for each guest. + + + + + Compact Design, Greater + Flexibility + The compact display fits seamlessly in tight + spaces, allowing hotel managers to optimize + room layouts without hindering performance. + Its compact design packs the same reliable + performance hospitality demand, making it a + smart choice for small space. + + + + + Highlights + Compact Design Your Privacy. Secured. + LYNK Cloud + Samsung Knox Security secures TVs by block- + Google Cast™ + ing unauthorized, malicious apps or access to + Apple AirPlay + phishing sites while securing connected IoT + Tizen Enterprise Platform + devices. It protects guests’ sensitive data like + Samsung Knox Security + PINs and passwords through multiple layers of + Multi-Code Remote software and hardware. + Samsung TV Plus + Smart Hub + SmartThings Pro + * Content services and recommendation may vary by regions & models. + * Agreement of the Smart Hub Terms and Conditions and Privacy Policy is required Secured by Knox * Samsung Knox Security applies to Samsung TVs powered by + before use. Tizen, launched since 2015. Latest software update is required. + + + +54 55 + Solution +Optimize your business operations with Samsung’s comprehensive 58 Samsung VXT + 60 LYNK Cloud +display solutions. Seamlessly integrate and control multiple devices +and systems to enhance operational efficiency and overall +performance across various business environments. + + + + + 57 + Smart Signage LED Signage Hospitality TV Solution + + + + AI-Powered Features (AI Studio) + Samsung VXT AI Studio makes video creation simple—just + _..,'-!' upload images and write a prompt to generate + ~----.--................. video content. Embedded within Samsung + VXT, this AI-powered tool converts images into + dynamic, helping businesses create engaging + Samsung VXT* is a cloud-based solution for digital signage, bringing content quickly while reducing production + intuitive content management and remote display management together complexity. + + in one secure platform. + + + + + Remote Control in Real Time, + Every Time + Samsung VXT features intuitive remote + monitoring, strong security controls, and + issue detection for stable content playback. + Alerts are sent via email and mobile app push + notifications. It also supports tag-based screen + and content access permissions for efficient + management. + + !!::.=::::::::z:l _______________________ l' A + Early Warning + + + + + Highlights + Free Templates for Various Verticals + Vertical-Specific Custom Options + Sync Play & Screen Wall + Live Touch VXT Apps enables users to easily discover, in- + Security Management stall, and utilize extra solutions tailored to their + Advanced Tag Management specific needs. Explore the diverse features of + VXT CMS alongside Apps optimized for your + Early Warning & Energy Management + specific business scenarios. + VXT Assistant (Chatbot) & Live chat + Dynamic Content based on events + Tag-Bound Role + VXT Apps + - VXT Art, AI Studio, Data Sync, Custom Integration, etc. + + * Each feature's availability may vary by Samsung VXT's subscription plan. For more + information about Samsung VXT, please visit vxt.samsung.com + + + +58 59 + Smart Signage LED Signage Hospitality TV Solution + + + + Streamlined Property + LYNK Cloud Management + With online access that supports multiple + users, Samsung LYNK Cloud is ideal for + global hospitality operations with centralized + man-agement, giving operators control of their + Samsung LYNK Cloud* is a comprehensive hospitality cloud solution. hotel displays worldwide. + More than a powerful content and device management system, LYNK + Cloud can analyze guests’ content use to uncover marketing insights. + * LYNK Cloud License must be purchased separately. + + + * LYNK Cloud is not available in China. + + + + + e =. a- . ... + - + - + ~ tvo + Content Creation and Custom + Interactions + Curate your hotel’s in-room experience with + LYNK Cloud. Create and remotely deploy web- + based content to each in-room TV tailored to + your property’s brand. With interactive request + support, you can provide the easiest way for + guests to make room service orders and book + spa appointments directly from their TV. + HIGHER HEIGHTS + HIGHEST STANDRDS + + + + + * Some features may not be compatible with hotel’s current platforms. + + + + + Highlights Integrated Device Management + Device Status Monitoring + Quickly update in-room TVs from a centralized + Multi-site Monitoring Source Change Volume Control Power On/Off source with Samsung LYNK Cloud. Managers + Remote Firmware Updates can modify channel maps and program guides + Remote Device Setting Change and control basic functions, making it easier + Automatic Credential Removal than ever to provide support and maintenance. + Real-time Message Sending + Web-standard Content Creation + Custom Preview Support + Room 01 Room 02 Room 03 + Interactive Service Support + TV and Service Usage Analysis + User Flow Analysis + + +60 61 + Specifications + + Smart Signage Smart Signage + + + +Spatial Signage UHD Signage + Model Screen Size Resolution Brightness Contrast Ratio Operation Hour Conncectivity Platform Model Screen Size Resolution Brightness Contrast Ratio Operation Hour Connectivity Platform + + - In: HDMI 2.0 (3), DP 1.2 (1), USB 2.0 (2) + - In: DP 1.2 (1), HDMI 2.0 (3), USB 2.0 x 2 + QHC 43", 50", 55", 65", 75" 3,840 x 2,160 700 nit 4,000:1 24/7 - Out: Stereo Mini Jack Tizen 7.0 + SMHX 85” 2,160 x 3,840 (9:16) 500 nit 4,000:1 24/7 - Out: Stereo Mini Jack Tizen 7.0 - Ext: RS232C (In/Out), RJ45 + - Ext: RS232C (In/Out), RJ45 + + - In: HDMI 2.0 (3), DP 1.2 (1), USB 2.0 (2) + 43", 50", 55", 65", + QMC 75", 85" + 3,840 x 2,160 500 nit 4,000:1 24/7 - Out: Stereo Mini Jack Tizen 7.0 + - Ext: RS232C (In/Out), RJ45 + +Color E-Paper 43", 50", 55", 65", + - In: HDMI 2.0 (3), USB 2.0 (2) + QBC 75", 85" + 3,840 x 2,160 350 nit 4,000:1 16/7 - Out: Stereo Mini Jack Tizen 7.0 + - Ext: RS232C (In/Out), RJ45 + Model Screen Size Resolution Battery Display Colors Operation Hour Conncectivity Platform IP rating + + 77K* + * Based on internal + 4,600mAh Li-ion testing. Results may - In: USB-C 2.0 (Data), USB-C (Power) + EMDX-A 32" 2,560 x 1,440 (16:9) 24/7 Tizen 8.0 IP5X + (Pre-installed) vary depending on test + environments and/or + * RJ45 to USB-C PoE+ Dongle Compatible (Not included in the sales package) Video Wall + standards. + + 77K* Model Screen Size Resolution Brightness Contrast Ratio Operation Hour Connectivity B-to-B Bezel Width + * Based on internal + 4,600mAh Li-ion testing. Results may - In: USB-C 2.0 (Data), USB-C (Power) + EMDX 13" 1,600 x 1,200 (4:3) + (Pre-installed) vary depending on test + 24/7 + * RJ45 to USB-C PoE+ Dongle Compatible (Not included in the sales package) + Tizen 8.0 IP5X - In: DVI (1), DP 1.2 (1), HDMI 2.0 (2), Stereo Mini Jack, USB 2.0 (F/W Upgrade) + 700 nit (VHC-R) + environments and/or + standards. + VHC-R/VMC-R 55" 1,920 x 1,080 + 500 nit (VMC-R) + 1,100:1 24/7 - Out: DP 1.2 (Loop-out), Stereo Mini Jack 0.88mm 0.44mm (Even) + - Ext: RS232C (In/Out), IR (In/Out), RJ45 (In) + + - In: DVI (1), DP 1.2 (1), HDMI 2.0 (2), Stereo Mini Jack, USB 2.0 (F/W Upgrade) + 700 nit (VHC-E) 1.3mm (U/L) + VHC-E/VMC-E 55" 1,920 x 1,080 + 500 nit (VMC-E) + 1,000:1 24/7 - Out: DP 1.2 (Loop-out), Stereo Mini Jack 1.74mm + 0.44mm (R/B) +Supersized Signage - Ext: RS232C (In/Out), IR (In/Out), RJ45 (In) + + - In: DVI (1), DP 1.2 (1), HDMI 2.0 (2), Stereo Mini Jack, USB 2.0 (F/W Upgrade) + 2.25mm (U/L) + Model Screen Size Resolution Brightness Contrast Ratio Operation Hour Conncectivity Platform VMB-U 46", 55" 1,920 x 1,080 500 nit 1,200:1 24/7 - Out: DP 1.2 (Loop-out), Stereo Mini Jack 3.5mm + 1.25mm (R/B) + - Ext: RS232C (In/Out), IR (In/Out), RJ45 (In) + + - In: HDMI 2.1 (3), DP 1.4 (1), USB 2.0 (2) + QHFX 115" 3,840 x 2,160 1,000 nit 5,500:1 24/7 - Out: Stereo Mini Jack Tizen 8.0 + - Ext: RS232C (In/Out), RJ45 + Interactive Display + - In: HDMI 2.1 (3), DP 1.4 (1), USB-C, OPS*, Type-A (2), Type-C (1) + QPDX-5K 105" 5,120 x 2,160 500 nit 4,000:1 24/7 - Out: Stereo Mini Jack Tizen 8.0 Model Screen Size Resolution Brightness Contrast Ratio Operation Hour Connectivity OS Touch Type + - Ext: RS232C (In/Out), RJ45 + - In: HDMI 3 (Rear 2, Front 1) USB C (Front), OPS, DP, 1 (Stereo Mini Jack), 5 (2.0 x 3, 3.0 x 2 ) + WAFX-P 65", 75", 86" 3,840 x 2,160 450 nit 1,200:1 12/7 - Out: HDMI Out (Rear), 1 (Stereo Mini Jack), Touch Out 2 (Front 1, Rear 1) Android 15 IR + - Ext: Touch Input, RS232C In, RJ45 In/Out + - In: HDMI 2.0 (3), DP 1.2 (1), USB 2.0 (2) + QHC 98" 3,840 x 2,160 700 nit 5,500:1 24/7 - Out: Stereo Mini Jack Tizen 7.0 + - Ext: RS232C (In/Out), RJ45 - In: HDMI 2 (Rear 1, Front 1), USB C (Front), OPS, 1 (Stereo Mini Jack), 4 (2.0 x 2, 3.0 x 2 ) + WAF 65", 75", 86" 3,840 x 2,160 400 nit 1,200:1 12/7 - Out: HDMI Out (Rear), 1 (Stereo Mini Jack), Touch Out 2 (Front 1, Rear 1) Android 14 IR + - Ext: Touch Input RS232C In, RJ45 In + + - In: HDMI 2.0 (3), DP 1.2 (1), USB 2.0 (2) - In: HDMI 3 (Rear 2, Front 1), USB-C 2 (Front1, Rear1), + QMC 98" 3,840 x 2,160 500 nit 5,500:1 24/7 - Out: Stereo Mini Jack Tizen 7.0 OPS, 1 (Stereo Mini Jack), 7 (3.0 x 4, 2.0 x 1, USB-C x 2) + - Ext: RS232C (In/Out), RJ45 WEFX 65", 75", 86" 3,840 x 2,160 350 nit 1,200:1 12/7 + - Out: 1 (Stereo Mini Jack), Touch Out 2 (Front 1, Rear 1) + OS-Free IR + - Ext: Touch Input, RS232C In + + + +62 63 + Specifications + + Smart Signage Smart Signage + + + +Samsung Flip Window Signage + Model Screen Size Resolution Brightness Contrast Ratio Operation Hour Connectivity Platform Touch Type Model Screen Size Resolution Brightness Contrast Ratio Operation Hour Connectivity Platform IP Rating + + + - In: HDMI 1, (With Tray) HDMI 1, USB-C, USB 1 (With Tray) USB 1, USB External (In/Out pair) 1 - In: DP 1.2 (1), HDMI 2.0 (2), USB 2.0 (1) + WMFX 65", 75", 86" 3,840 x 2,160 450 nit 4,000:1 12/7 - Out: HDMI 1, 1 (Stereo Mini Jack),Touch Out 1 (USB Upstream Type), (With Tray) Touch Out 1 Tizen 9.0 IR OMA 75" 3,840 x 2,160 4,000:1 (w/o glass) 1,200:1 24/7 - Out: HDMI 2.0, Stereo Mini Jack Tizen 5.0 IP5X + - Ext: Touch Input, RS232C thru stereo jack, RJ45 (For MDC) - Ext: RS232C (In/Out), RJ45 (In) + + + + - In: HDMI 2.0 (2), USB 2.0 (1) + 1,920 x 1,080 (46") 4,000 nit (46") 6,000:1 (46") + OMB 46", 55" 24/7 - Out: HDMI 2.0 (1), Stereo Mini Jack Tizen 5.0 IP5X +Touch Signage 3,840 x 2,160 (55") 3,000 nit (55") 1,200:1 (55") + - Ext: RS232C (In/Out), RJ45 (In/Out) + + + Model Screen Size Resolution Brightness Contrast Ratio Operation Hour Connectivity Platform Touch type + - In: DP 1.2 (1), HDMI 2.0 (2), USB2.0 (1) / (-D) HDMI 2.0 (2), USB 2.0 (2) + 4,000 nit + OMN, OMN-D 55" 1,920 x 1,080 + 3,000/1,000 nit (-D) + 6,000:1 24/7 - Out: HDMI 2.0 (1), Stereo Mini Jack / (-D) N/A Tizen 5.0 IP5X + - In: DP1.2 (1), HDMI2.0 (3), USB (2) - Ext: RS232C (In/Out), RJ45 (In/Out) / (-D) RS232C (In), RJ45 (In) + QMB-T 43", 55" 3,840 x 2,160 500 nit (w/o glass) 4,000:1 (w/o glass) 24/7 - Out: Stereo Mini Jack, Touch Out Tizen 6.5 Capacitive + - Ext: RS232C (In/Out), RJ45 + + - In: HDMI 2.0 (2), HDCP 2.2, USB 2.0 x 1 + 300 nit OMDX 32" 1,920 x 1,080 2,000 nit 4,000:1 24/7 - Out: Stereo Mini Jack Tizen 8.0 IP5X + - In: HDMI 2.0 (3), USB 2.0 x 2 - Ext: RS232C (In/Out), RJ45 (In/Out) + (with Touch glass), + QMC-T 32" 1,920 x 1,080 + 400 nit + 4,000:1 (w/o glass) 16/7 - Out: Stereo Mini Jack, Touch Out Tizen 7.0 Capacitive + - Ext: RS232C (In/Out), RJ45 + (without Touch Glass) + + - In: HDMI 1.4 (1), USB 2.0 (1, Type-C) for Data transfer dedicated + 13" 1,920 x 1,080 500 nit (w/o glass) 800:1 (w/o glass) 16/7 - Out: Stereo Mini Jack, Touch Out Tizen 7.0 Capacitive + - Ext: RS232C (In), RJ45 Stretched Signage + QBC-T + - In: HDMI 1.4 (1), USB 2.0(1) + 24" 1,920 x 1,080 250 nit (w/o glass) 1,000:1 (w/o glass) 16/7 - Out: Stereo Mini Jack, Touch Out(Type-B) Tizen 7.0 Capacitive Model Screen Size Resolution Brightness Contrast Ratio Operation Hour Connectivity Platform + - Ext: RS232C(In), RJ45(In), IR(In) + + - In: HDMI2.0 (3), USB (2) + SHC 37" 1,920 x 540 700 nit 4,000:1 24/7 - Out: Stereo Mini Jack Tizen 7.0 +Outdoor Signage - Ext: RS232C (In/Out), RJ45, IR (In) + + + Model Screen Size Resolution Brightness Contrast Ratio Operation Hour Connectivity Platform IP Rating + + + 3,500 nit + - In: DP 1.2 (1), HDMI 2.0 (2), USB 2.0 (1) Small Signage + OHA 75" 3,840 x 2,160 + (peak 4,000 nit) + 1,200:1 24/7 - Out: Stereo Mini Jack Tizen 5.0 IP56 + - Ext: RS232C (In), RJ45 (In) + Model Screen Size Resolution Brightness Contrast Ratio Operation Hour Connectivity Platform + + + - In: HDMI 2.0 (2), HDBaseT (LAN Common), HDCP 2.2 HDCP 2.2, USB (2) - In: HDMI 1.4 (1), Type C (USB 2.0)(1) + 3,500 nit + OHDX 46", 55" 1,920 x 1,080 + (peak 4,000 nit) + 6,000:1 24/7 - Out: Stereo Mini Jack Tizen 8.0 IP56 QB13C 13" 1,920 x 1,080 500 nit 800:1 16/7 - Out: Stereo Mini Jack Tizen 7.0 + - Ext: RS232C (In/Out), RJ45 (In/Out), HDBaseT - Ext: RS232C (In), RJ45 (In) + + + + - In: HDMI 2.0 (1), USB 2.0 (2) - In: HDMI 1.4 (1), USB 2.0 (1) + OHB 24" 1,920 x 1,080 1,500 nit 1,000:1 24/7 - Out: Stereo Mini Jack Tizen 6.5 IP66 QB24C 24" 1,920 x 1,080 250 nit 1,000:1 16/7 - Out: Stereo Mini Jack Tizen 7.0 + - Ext: RS232C (In), RJ45 (In) - Ext: RS232C (In), RJ45 (In) + + + + +64 65 + Specifications + + Smart Signage LED Signage + + + +Business TV Indoor LED + Model Screen Size Resolution Brightness Contrast Ratio Operation Hour Connectivity Platform Model Pixel pitch Diode Type Brightness (peak)* Contrast Ratio Certification Cabinet size (L x H x D, per cabinet) Weight (per cabinet) Service** IP Rating + + - In: HDMI x 3, USB x 1 + - RF : 1 Terrestrial / 1 Cable / 0 Satellite 12,000:1 (P1.5) + 43", 50", 55", 65", 1,600 nit (P1.5, P2.0) 11.8 kg (IFR P1.5) + Surface Mount 7,200:1 (P2.0) EMC Class A 960 x 540 x 79.5 mm (IFR) + BEFX-H 75", 85" + 3,840 x 2,160 300 nit N/A 16/7 (EN/XU/CI) 1 Terrestrial, 1 Cable, 1 Satellite / (NZ) 1 Terrestrial, 1 Satellite Tizen 9.0 IFR/IFR-F P1.5, P2.0, P2.5, P4.0 2,000 nit (P2.5) 12.4 kg (IFR P2.0/P2.5/P4.0) Front IP20 + 85"(EN/XU) 1 Terrestrial, 1 Cable, 1 Satellite / (NZ) 1 Terrestrial, 1 Satellite Device (SMD) 8,000:1 (P2.5) Safety 62368-1, 60950-1 240 x 540 x 81 mm (IFR-F) + 1,500 nit (P4.0) 3.2 kg (IFR-F) + - Ext: RJ45 8,300:1 (P4.0) + + + - In: HDMI x 3, USB x 2 + 12,000:1 (P1.5) + - RF : 1 Terrestrial / 1 Cable / 0 Satellite 1,600 nit (P1.5, P2.0) 11.8 kg (IFR P1.5) + BED-H 98" 3,840 x 2,160 400 nit N/A 16/7 + (EN/XU) 1 Terrestrial, 1 Cable, 1 Satellite / (NZ) 1 Terrestrial, 1 Satellite + Tizen8.0 Surface Mount 7,200:1 (P2.0) EMC Class A 960 x 540 x 79.5 mm (IFR-V) Front + IFR-V/IFR-VF P1.5, P2.0, P2.5, P4.0 + Device (SMD) + 2,000 nit (P2.5) + 8,000:1 (P2.5) Safety 62368-1, 60950-1 240 x 540 x 81 mm (IFR-VF) + 12.4 kg (IFR P2.0/2.5/4.0) IP20 + - Ext: RJ45 1,500 nit (P4.0) 3.2 kg (IFR-F) + 8,300:1 (P4.0 + + + 11.8 kg (IEA P1.5) + 6,000:1 (P1.5) + Surface Mount 1,000 nit (P1.5, P2.0, P2.5) EMC Class A 960 x 540 x 79.5 mm (IEA) 12.4 kg (IEA P2.0) + LED Signage IEA/IEA-F P1.5, P2.0, P2.5, P4.0 7,500:1 (P2.0) Front IP20 + Device (SMD) 800 nit (P4.0) Safety 62368-1, 60950-1 240 x 540 x 81 mm (IEA-F) 10.8 kg (IEA P2.5, P4.0) + 5,000:1 (P2.5, P4.0) + 3.2 kg (IEA-F) + + +The Wall + Surface Mount EMC Class A + IEF P1.2 + Device (SMD) + 600 nit 4,000:1 + Safety 62368-1, 60950-1 + 600.1 x 337.5 x 50.2 mm 5.4 kg Front IP40/20 (Front/Rear) + Model Pixel Pitch Diode Type Brightness (peak)* Contrast Ratio Certification Cabinet size (L x H x D, per cabinet) Weight (per cabinet) Service** IP Rating + + + 29,000:1 (P0.8) EMC Class B * Peak value according to IDMS (Information Display Measurement Standard) + 1,800 nit (P0.8, P1.2) + MPF P0.8, P1.2, P1.6 Flip-chip RGB LED + 1,600 nit (P1.6) + 41,000:1 (P1.2) TUV Eye Comfort 806.4 x 453.6 x 49.4 mm 9.2 kg Front IP40/20 (Front/Rear) ** Front service: Front service to power supply and main board on a cabinet level. + 43,000:1 (P1.6) Safety 62368-1, 60950-1 + + + + EMC Class A + 8,000:1 (P0.9, P1.2) + MMF P0.9, P1.2, P1.5 Flip-chip RGB LED 600 nit + 10,000:1 (P1.5) + TUV Eye Comfort 600 x 337.5 x 49.8 mm 5.1 kg Front IP40/20 (Front/Rear) + Safety 62368-1, 60950-1 + High Brightness LED + + 31,000:1 (P1.2) EMC Class A Front (Module/Tcon) Model Pixel pitch Diode Type Brightness (peak)* Contrast Ratio Certification Cabinet size (L x H x D, per cabinet) Weight (per cabinet) Service** IP Rating + IVC P1.6, P2.1 Flip-chip RGB LED 1,500 nit + 35,000:1 (P1.6) Safety 62368-1, 60950-1 + 403.1 x 907.0 x 83 mm 13.3 kg + Rear (Tcon/SMPS) + IP20 + + 500 x 500 x 64 mm (ISC-X) 7.9 kg (ISC-X) + Surface Mount Front (Module/Tcon) + ISC-X/ISC-Y/ISC-L P3.9, P5.9 + Device (SMD) + 2,000 nit 6,000:1 EMC Class A 500 x 1,000 x 64 mm (ISC-Y) 12.2 kg (ISC-Y) + Rear (Tcon/SMPS) + IP50 +* Peak value according to IDMS (Information Display Measurement Standard) 500 x 500 x 64 mm (ISC-L) 6.8 kg (ISC-L) +** Front service: Front service to power supply and main board on a cabinet level. + + + + +Onyx Cinema LED IHC-X/IHC-Y/IHC-L P3.9, P5.9 + Surface Mount + 4,000 nit 8,000:1 EMC Class A + 500 x 500 x 64 mm (IHC-X) + 500 x 1,000 x 64 mm (IHC-Y) + 7.9 kg (IHC-X) + 12.2 kg (IHC-Y) + Front (Module/Tcon) + IP50 + Device (SMD) Rear (Tcon/SMPS) + 500 x 500 x 64 mm (IHC-L) 6.8 kg (IHC-L) + Model Pixel pitch Diode Type Brightness (peak)* Contrast Ratio Certification Cabinet size (L x H x D, per cabinet) Weight (per cabinet) Service** IP Rating + + DCI 1,000 x 500 x 42 mm (IBF) 13 kg (IBF) + P1.2 (5m) Surface Mount + Surface Mount (Digital Cinema Initiatives) + ICD 5m P2.5 (10m) 300 nit ∞:1in Dark room 640 x 900 x 125 mm 14.1 kg Rear IP20 IBF/IBF-T/IBF-Q P2.5 + Device (SMD) + 3,500 nit 10,000:1 EMC Class A 750 x 500 x 42 mm (IIBF-T) 10 kg (IBF-T) Front IP30 + Device (SMD) EMC Class A 250 x 500 x 42 mm (IBF-Q) 3.7 kg (IBF-Q) + P3.3 (14m) + Safety 60950-1 + + + + +66 67 + Specifications + + LED Signage Hospitality TV + + + +All-in-One LED Crystal UHD + Model Pixel pitch Diode Type Brightness (peak)* Contrast Ratio Certification Cabinet size (L x H x D, per cabinet) Weight (per cabinet) Service** IP Rating Model Screen Size Resolution Features Connectivity + + + + LYNK Cloud, Tizen Enterprise Platform, Google Cast, Apple AirPlay, Smart Hub, Samsung TV Plus, Multi-Code Remote, SmartThings Pro, + IAB 146" 4K P0.8 1,600 nit 24,000:1 HU8000F 43", 50", 55", 65", 75“, 85” 3,840 x 2,160 + Samsung Knox Security, AirSlim Design, Crystal Processor 4K, Dynamic Crystal Color, 4K Upscaling, Motion Xcelerator, HDR, Contrast Enhancer + Wi-Fi 5, Bluetooth 5.2, 3 x HDMI, 2 x USB-A + + + 3,229.5 x 1,818.0 x 49.1 mm 160 kg + EMC Class A + TUV Eye Comfort IP20 LYNK Cloud, Tizen Enterprise Platform, Google Cast, Apple AirPlay, Smart Hub, Samsung TV Plus, Multi-Code Remote, SmartThings Pro, + IAB 146" 2K P1.6 Flip-chip RGB LED 1,400 nit 22,000:1 + Safety 62368-1, 60950-1 + Front HU7010F 43", 50", 55", 65", 75” 3,840 x 2,160 + Samsung Knox Security, Swivel Stand*, Crystal Processor 4K, Dynamic Crystal Color, 4K Upscaling, Motion Xcelerator, HDR, Contrast Enhancer + Wi-Fi 5, Bluetooth 5.2, 2 x HDMI, 2 x USB-A + + + + + LYNK Cloud, Tizen Enterprise Platform, Google Cast, Apple AirPlay, Smart Hub, Samsung TV Plus, Multi-Code Remote, SmartThings Pro, + IAB 110" 2K P1.2 1,600 nit 24,000:1 2,423.1 x 1364.4 x 49.1 mm 99 kg HU7000F 43", 50", 55", 65", 75” 3,840 x 2,160 + Samsung Knox Security Metal Stream Design, ,Crystal Processor 4K, 4K Upscaling, Motion Xcelerator, HDR + Wi-Fi 5, Bluetooth 5.2, 1 x HDMI, 1 x USB-A + + + + + EMC Class A + Surface Mount + IAC P1.5 + Device (SMD) + 1,000 nit 6,000:1 TUV Eye Comfort 2,888.5 x 1,628.5 x 56.2 mm 125 kg Front IP20 HU6000F 43", 50", 55", 65", 75” 3,840 x 2,160 Crystal Processor 4K, 4K Upscaling, HDR, Motion Xcelerator, Multi-Code Remote, Q-Symphony, OTS Lite, Adaptive Sound, MetalStream Design Wi-Fi 5, Bluetooth 5.2, 1 x HDMI, 1 x USB-A + Safety 62368-1, 60950-1 + + + * Swivel Stand: US Only - HU7010F : 43”, 50”, 55“ + + MMF-A 108” 2K P1.2 500 nit 8,000:1 2,408.2 x 1,365.2 x 62.8 mm 80.5 kg + + EMC Class A + Front + Flip-chip RGB LED TUV Eye Comfort + Safety 62368-1, 60950-1 + IP40/20 (Front/Rear) + Full HD for small spaces + MMF-A 136” 2K P1.5 500 nit 10,000:1 2,408.2 x 1,365.2 x 62.8 mm 130 kg + Model Screen Size Resolution Features Connectivity + + + + Compact Design, LYNK Cloud, Tizen Enterprise Platform, Google Cast, Apple AirPlay, Smart Hub, + HF8000F 24”, 32”* 1,920 x 1,080 + Samsung TV Plus, Multi-Code Remote, SmartThings Pro, Samsung Knox Security + Wi-Fi 5, Bluetooth 5.2, 2 x HDMI, 1 x USB-A + + + + Hospitality TV * A 32” model is planned for a future update. + + + + +The Frame + Model Screen Size Resolution Feature Connectivity + + Modern Frame Design, Generative Wall Paper, + Artful Picture Quality with QLED, Glare Free, LYNK Cloud, + HL03H 43”*/55”/65”/75“ 3,840 x 2,160 + Google Cast, Apple AirPlay, Samsung Knox Security, + Wi-Fi 5, Bluetooth 5.2, 2 x HDMI, 1 x USB-A + NQ4 AI Gen2 Processor, Live Translate + + +* Except North America. + +68 69 + \ No newline at end of file diff --git a/2d_to_3d_verified_product_technical_reports/pdf_text/samsung_odyssey_3d_g90xf_product_datasheet_2025.txt b/2d_to_3d_verified_product_technical_reports/pdf_text/samsung_odyssey_3d_g90xf_product_datasheet_2025.txt new file mode 100644 index 0000000000000000000000000000000000000000..dea4d27c5c674b3b7d61fe45077163997fa09384 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/pdf_text/samsung_odyssey_3d_g90xf_product_datasheet_2025.txt @@ -0,0 +1,185 @@ +Odyssey 3D +Gaming Monitor +G90XF + +27 Zoll (68.0 cm) Bildschirmdiagonale +EAN 8806097022510 + + +Artikelinformation + +Artikelname S27FG904XU +Artikelnummer LS27FG904XUXEN +Serie Odyssey 3D G90XF +EAN 8806097022510 +Produktgruppe Monitor + + +Panel + +Au ösung (Pixel) 3840 x 2160 + fl +Panel-Technologie IPS +Helligkeitswert (typ., cd/m²) 350 + + +Design/Anschlüsse + +Farbe Silber +Anschlüsse 1x DP, 2x HDMI, 2x USB (3.1) + + +Besondere Eigenschaften + +Reaktionszeit 1 ms (G/G) +Bildwiederholungsrate 165 Hz (max.) +Glasses‑free 3D Technologie +AI gestützte 3D Video Umwandlung +Odyssey 3D Hub +HDR10+ Gaming +FreeSync Premium +Auto Source Switch+ + + + + +Samsung Electronics GmbH · Frankfurter Straße 2 · 65760 Eschborn · Hotline 06196 77 555 77 (Kosten laut Konditionen des Vertragspartners für 1/3 +Festnetzanschlüsse oder Mobilfunkanschlüsse) · Stand 16. Juni 2025 · Irrtümer und Änderungen vorbehalten + Technische Daten +S27FG904XU + +Artikelinformationen Energiemerkmale ¹ + +Artikelname S27FG904XU Netzteil Extern +Artikelnummer LS27FG904XUXEN Lieferant Samsung +EAN 8806097022510 Artikelname S27FG904XU + Energieef zienzklasse ² F + + + + + fi +Display Bildschirmdiagonale (cm) 68 +Panel-Technologie IPS Energieverbrauch pro 1000h (kWh) 26 +Curved Panel Nein Energieverbrauch im Ein-Zustand 26 + (typ.) (W) +Bildschirmgröße 68 cm (27 Zoll) + Energieverbrauch im Standby- 0.5 +Au ösung (Pixel, nativ) 3840 x 2160 + Zustand (W) + fl +Bildformat 16 9 + Energieverbrauch im Aus-Zustand 0.3 + : +Helligkeitswert (typ., cd/m²) 350 (W) +Bildwiederholungsrate (max. Hz) 165 Bildschirmau ösung (Pixel) 3840 x 2160 + fl +Kontrast (stat.) (x : 1) 1000 Maximales Leuchtverhältnis (%) 65 +Reaktionszeit (ms) (G/G) 1 Quecksilber (mg) 0.0 +Betrachtungswinkel (H/V) 178°/178° Blei Ja + + +Audio Einstellungen + +Speaker Ja Digital Vielfältige + Einstellungsmöglichkeiten über + OSD +Farben + +Anzahl der Farben 1 Mrd. Besondere Eigenschaften + + Eye Saver Mode Ja +Signal + Flicker Free Ja +Signaleingang Digital + Picture-In-Picture Ja + Image Size Ja +Konnektivität + Lautsprecher Ja (5 W x 2CH) +Display Port 1 + Off Timer Plus Ja +HDMI 2 + HDR HDR10+ Gaming +Kopfhörer Nein + Auto Source Switch+ Ja +USB Ports 2 +USB Hub Version 3.1 Gaming Features + + FreeSync FreeSync Premium + G-Sync Option G‑Sync kompatibel + Black Equalizer Ja + Virtual Aim Point Ja + Ultrawide Game View Ja + LED Beleuchtung Ja + + + + +Samsung Electronics GmbH · Frankfurter Straße 2 · 65760 Eschborn · Hotline 06196 77 555 77 (Kosten laut Konditionen des Vertragspartners für 2/3 +Festnetzanschlüsse oder Mobilfunkanschlüsse) · Stand 16. Juni 2025 · Irrtümer und Änderungen vorbehalten + Technische Daten +S27FG904XU + +Design + +Gehäusefarbe Silber +Fuß Tiltfunktion Ja +Fuß Tiltfunktion Wert (mm) ‑3.0° (±3.0°) ~ +15.0° (±3.0) +Fuß Höhenverstellung Ja +Fuß Höhenverstellung Wert (mm) 120.0 ± 5.0 +Fuß Swivelfunktion Nein +Pivot Ja +VESA Wandmontage (mm) 100x100 + + +Maße und Gewicht + +Maße mit Standfuß (B x H x T, mm) 614.1 x 541.5 x 203.3 +Maße ohne Standfuß (B x H x T, 614.1 x 372.2 x 46.0 +mm) +Maße mit Verpackung (B x H x T, 834 x 434 x 133 +mm) +Gewicht mit Standfuß (kg) 7.5 +Gewicht ohne Standfuß (kg) 4.7 +Gewicht mit Verpackung (kg) 9.6 + + +Normen + +Pixelfehlerklasse ³ Klasse 2 nach ISO 9241‑307 +EMC ³ CE + + +Lieferumfang + +Enthalten Stromkabel (1,5m), HDMI‑Kabel, + DP‑Kabel, USB Type A zu B + Upstream Kabel + + +Service & Garantie ⁴ + +Service innerhalb der Garantiezeit Bei einem Defekt steht dir unser + Send‑In Service zur Verfügung. +Service außerhalb der Garantiezeit Bei einem Defekt wende dich bitte + an unsere Service‑Hotline für + weiterführende Informationen. +Garantiezeit 2 Jahre + + + + +1 Das elektronische Energielabel und -Produktdatenblatt für das betreffende Model ist erhältlich unter https://www.samsung.com/global/ecodesign_energy +2 Energieef zienzklasse auf der Skala von A (höchste Ef zienz) bis G (niedrigste Ef zienz). + fi + fi + fi +3 Nähere Informationen zu den Zerti katen sind erhältlich unter https://samsung.com/de/ + fi +4 Die Garantiebedingungen können unter folgendem Link eingesehen werden: https://www.samsung.com/de/support/warranty/. + + + +Samsung Electronics GmbH · Frankfurter Straße 2 · 65760 Eschborn · Hotline 06196 77 555 77 (Kosten laut Konditionen des Vertragspartners für 3/3 +Festnetzanschlüsse oder Mobilfunkanschlüsse) · Stand 16. Juni 2025 · Irrtümer und Änderungen vorbehalten + \ No newline at end of file diff --git a/2d_to_3d_verified_product_technical_reports/qualification_matrix.md b/2d_to_3d_verified_product_technical_reports/qualification_matrix.md new file mode 100644 index 0000000000000000000000000000000000000000..7bec2b4c5dd0f57d7d50ab4fd6672bbe10c5c47b --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/qualification_matrix.md @@ -0,0 +1,27 @@ +# 产品技术资料资格矩阵 + +判定标准:A 为直接竞品产品技术资料;B 为产品系统或交付架构,可用于补全项目报告;C 为产品/服务案例,但技术披露有限。 + +| 级别 | 厂商与产品 | 资料性质 | 对已发布产品的关联 | 技术实现或架构图 | 对应项目模块 | 判定 | +|---|---|---|---|---|---|---| +| A | Immersity AI / Neural Depth Engine | 官方 Technical Backgrounder PDF,2024 | 直接对应 Immersity 2D-to-3D Image/Video 平台 | 四个产品技术组件、深度图实例、训练与处理说明;无完整流程图 | 深度估计、视点生成、实时预览、2D 转 3D | 核心必读 | +| A | Immersity AI 4.0 | 官方产品版本技术说明,2025 | 直接对应 4.0 已发布功能 | 前景/背景分层、逐层渲染、隐藏内容 inpainting、前后对比图 | 遮挡修补、新视角、伪影降低 | 核心必读 | +| A | XREAL REAL 3D / XREAL One | 官方产品工程报告,2026 | 直接对应 REAL 3D 1.0 | X1 芯片 NPU、端侧深度估计、实时转换、重构渲染管线、校准;无正式框图 | 实时深度、部署、渲染、校准 | 核心必读 | +| A | Acer SpatialLabs Go/Player | 官方产品技术页及本地打印版,当前页归档于 2026 | 对应 SpatialLabs 产品套件 | 眼动、立体显示、实时渲染、AI 深度映射、OpenXR/Unity/Unreal 生态;有产品流程图片 | 深度估计、实时转换、参数控制、显示 | 高度相关 | +| A | Samsung Odyssey 3D G90XF | 官方工程访谈 + 产品数据表,2025 | 对应已上市显示器与 Odyssey 3D Hub | 双目相机眼动、view mapping、柱状透镜、深度学习眼动算法;有组件图片 | 视图映射、2D 视频转换、终端显示 | 高度相关 | +| A | Lenovo ThinkVision 27 3D | 官方产品数据表,2025 | 对应已上市显示器和 3D Explorer | Design Engine、2D-to-3D Converter、插件、SDK、内置 3D 引擎、眼动 | 产品功能、转换入口、工具生态 | 相关但技术深度较浅 | +| B | Sony Spatial Reality Display | 官方产品白皮书,2025,2026 更新 | 对应 ELF-SR 系列产品 | PC/Runtime/Unity 或 Unreal/左右眼图像/显示器系统总图,另有光学与眼动图 | 系统架构图、双目原理、显示端 | 图示参考价值很高 | +| B | ASUS Spatial Vision | 官方产品技术说明,2023 | 对应已上市裸眼 3D 笔记本 | 六层光学结构爆炸图;双摄眼动、实时渲染和 image weaving 图 | 显示结构、感知渲染流程 | 图示参考价值很高 | +| B | Apple Stereo Video | 官方技术规范 PDF,2023/2025 | 对应 Apple 空间视频生态 | 左右眼 view ID、MV-HEVC、解码配置和 ISOBMFF 结构图 | 双目编码、封装、交付 | 输出模块必读 | +| B | Samsung Spatial Signage | 官方产品技术页 + 2026 产品目录 PDF | 对应 SM85HX-P Spatial Signage | 3D plate、显示端图像形成、端到端处理说明;有产品结构图 | 裸眼显示、商业应用 | 邻近产品参考 | +| B | Continental High Resolution 3D Display | 官方 CES 产品技术 one-pager,2023 | 对应计划量产的车载 3D 显示 | 13-view light-field backlight、5K、可调深度 | 多视图显示、车载场景 | 邻近产品参考 | +| B | Looking Glass Software Stack | 官方产品软件栈说明 | 对应 Looking Glass 显示器与 SDK | RGB-D、quilt、video、Unity、Bridge SDK 和实时全息渲染 | 多视图输入、软件栈、显示交付 | 邻近产品参考 | +| C | Foundry Ocula for Nuke | 官方产品页 | 对应商业软件 Ocula | disparity、alignment、color/focus matching、GPU/CPU 工具集;无单目转换架构 | 立体后期、质量修复、专业工作流 | 工作流参考 | +| C | DNEG Stereo / Godzilla x Kong | 官方项目案例,2024 | 对应实际电影立体转换服务 | 有项目与制作说明,但核心技术在视频中且公开文字很少 | 电影级转换场景 | 只作案例,不当技术报告 | + +## 未纳入 + +- Disney Research、Google、Meta 等团队的 CVPR/SIGGRAPH/arXiv 论文:属于研究论文,不是产品技术报告。 +- Acer、Sony 等产品用户手册:属于操作说明,不符合本次目标。 +- Prime Focus View-D:能确认商业服务和专有技术,但当前官方产品技术页已失效,且未找到近年公开架构报告。 + diff --git a/2d_to_3d_verified_product_technical_reports/sources.csv b/2d_to_3d_verified_product_technical_reports/sources.csv new file mode 100644 index 0000000000000000000000000000000000000000..8b6f9dc4b7feb6d90911e5d03ff1f88f97a2f524 --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/sources.csv @@ -0,0 +1,20 @@ +tier,vendor,product,material_date,material_type,local_path,official_source,notes +A,Immersity AI,Neural Depth Engine / Immersity AI,2024,official technical backgrounder PDF,01_direct_conversion_products/immersity_ai_technical_backgrounder_2024.pdf,https://drive.google.com/file/d/1GFpZRlpNsFDL_8ELH2Zcd0lB17mQqSBt/view?usp=drive_link,Direct 2D-to-3D image/video product technology +A,Immersity AI,Immersity AI product launch,2024-05-22,official product technical launch page,official_web_archives/immersity_product_launch_technical_overview_2024/,https://immersity.ai/news-articles/introducing-immersity-ai,Links the released product to the Technical Backgrounder +A,Immersity AI,Immersity AI 4.0,2025-03-26,official product release technical page,official_web_archives/immersity_4_product_release_2025/,https://immersity.ai/news-articles/immersity-4-0,Layer separation and inpainting of obscured content +A,XREAL,REAL 3D / XREAL One,2026-02-02,official product engineering report,official_web_archives/xreal_real_3d_engineering_report_2026/,https://www.xreal.com/kr/blog/how-we-built-real-3d-en,On-device NPU depth estimation and rendering pipeline +A,Acer,SpatialLabs / SpatialLabs Go,2026 archive,official product technology page print,01_direct_conversion_products/acer_spatiallabs_official_web_report_print_2026.pdf,https://www.acer.com/in-en/spatiallabs/index.html,Locally printed PDF from official page; not vendor-native PDF +A,Samsung,Odyssey 3D G90XF / Odyssey 3D Hub,2025,official engineering interview,official_web_archives/samsung_odyssey_3d_engineering_interview_2025/,https://news.samsung.com/global/interview-transforming-the-monitor-experience-expanding-the-boundaries-with-odyssey-3d,Eye tracking view mapping lenticular lens and deep learning +A,Samsung,Odyssey 3D G90XF,2025,official product datasheet PDF,01_direct_conversion_products/samsung_odyssey_3d_g90xf_product_datasheet_2025.pdf,https://images.samsung.com/is/content/samsung/assets/de/display/pdf/Datenblatt_Gaming_Monitor_LS27FG904XUXEN.pdf,German datasheet; states AI-assisted 3D video conversion +A,Lenovo,ThinkVision 27 3D,2025,official product datasheet PDF,01_direct_conversion_products/lenovo_thinkvision_27_3d_product_datasheet_2025.pdf,https://techtoday.lenovo.com/sites/default/files/2025-08/thinkvision27-3d-monitor-datasheet-ww-en.pdf,2D-to-3D Converter Design Engine SDK and eye tracking +B,Sony,Spatial Reality Display,2025-12-12 updated 2026-01-28,official product white paper,official_web_archives/sony_spatial_reality_display_whitepaper_2025/,https://xyn.sony.net/en/developer/technical/spatial-reality-display/whitepaper,System overview optical lens eye sensing and stereo principles +B,ASUS,Spatial Vision,2023,official product technology report page,official_web_archives/asus_spatial_vision_technology_2023/,https://www.asus.com/content/asus-spatial-vision-technology/,Optical stack and eye-tracking rendering diagrams +B,Apple,HEVC Stereo Video Interoperability Profile,2023-06-21,official technical specification PDF,02_display_and_delivery_products/apple_hevc_stereo_video_interoperability_profile_2023.pdf,https://developer.apple.com/av-foundation/HEVC-Stereo-Video-Profile.pdf,Left and right views MV-HEVC and decoder configuration +B,Apple,Stereo Video ISOBMFF Extensions,2025-06-09 revision,official technical specification PDF,02_display_and_delivery_products/apple_stereo_video_isobmff_extensions_2025.pdf,https://developer.apple.com/av-foundation/Stereo-Video-ISOBMFF-Extensions.pdf,Stereo video tracks packing metadata and spatial media +B,Samsung,Spatial Signage,2026,official product catalog PDF,02_display_and_delivery_products/samsung_display_solutions_spatial_signage_catalog_2026.pdf,https://images.samsung.com/is/content/samsung/assets/ch_fr/business/display-solutions/Samsung_Display_Solutions_Catalog_003.pdf,3D plate and commercial spatial display product +B,Samsung,Spatial Signage,2026-03-05,official product technology article,official_web_archives/samsung_spatial_signage_technology_2026/,https://insights.samsung.com/2026/03/05/how-samsung-spatial-signage-works-inside-the-technology-behind-glasses-free-3d/,Panel architecture and end-to-end image formation +B,Continental,High Resolution 3D Display,2023,official product technology one-pager PDF,02_display_and_delivery_products/continental_post_ces_2023_3d_display_technology_one_pagers.pdf,https://cdn.continental.com/fileadmin/__imported/sites/corporate/usa/english/hubpages/10_20press/40_20events/ces_2023/post_ces_2023_continental_technology_one_pagers_final_media.pdf,13-view 5K automotive light-field display +B,Looking Glass Factory,Looking Glass Software Stack,current,official product software stack page,official_web_archives/looking_glass_product_software_stack/,https://lookingglassfactory.com/software,RGB-D quilt video Unity and Bridge SDK +C,Foundry,Ocula for Nuke,current,official product technical overview,official_web_archives/foundry_ocula_product_technology/,https://www.foundry.com/products/ocula,Stereo disparity alignment and correction workflow +C,DNEG,DNEG Stereo conversion service,2024-06-12,official production case,official_web_archives/dneg_godzilla_x_kong_stereo_conversion_case_2024/,https://www.dneg.com/news/from-2d-to-3d-behind-the-stereo-conversion-of-godzilla-x-kong-the-new-empire,Actual film conversion case but limited public technical disclosure + diff --git a/2d_to_3d_verified_product_technical_reports/web_archive_manifest.csv b/2d_to_3d_verified_product_technical_reports/web_archive_manifest.csv new file mode 100644 index 0000000000000000000000000000000000000000..17a29412962cec0de02b17c8d86ea4926341728a --- /dev/null +++ b/2d_to_3d_verified_product_technical_reports/web_archive_manifest.csv @@ -0,0 +1,14 @@ +category,vendor,product,date,url,http_status,final_url,title,images_recorded,archive_dir,error +direct_conversion,XREAL,REAL 3D / XREAL One,2026-02-02,https://www.xreal.com/kr/blog/how-we-built-real-3d-en,200,https://www.xreal.com/kr/blog/how-we-built-real-3d-en,Inside REAL 3D: How XREAL Built It and How the X1 Chip Paves the Way,9,official_web_archives/xreal_real_3d_engineering_report_2026, +direct_conversion,Samsung,Odyssey 3D G90XF / Odyssey 3D Hub,2025,https://news.samsung.com/global/interview-transforming-the-monitor-experience-expanding-the-boundaries-with-odyssey-3d,200,https://news.samsung.com/global/interview-transforming-the-monitor-experience-expanding-the-boundaries-with-odyssey-3d,[Interview] Transforming the Monitor Experience: Expanding the Boundaries With Odyssey 3D – Samsung Global Newsroom,26,official_web_archives/samsung_odyssey_3d_engineering_interview_2025, +direct_conversion,Immersity AI,Immersity AI 4.0,2025-03-26,https://immersity.ai/news-articles/immersity-4-0,200,https://immersity.ai/news-articles/immersity-4-0,Immersity Now Reveals Hidden Details | Newsroom,8,official_web_archives/immersity_4_product_release_2025, +direct_conversion,Lenovo,ThinkVision 27 3D / 3D Explorer,current,https://www.lenovo.com/pk/en/monitors/thinkvision-27-3d/,200,https://www.lenovo.com/pk/en/monitors/thinkvision-27-3d/,"ThinkVision 27 3D - Glasses-free, 2D/3D Compatible Display | Lenovo Pakistan",14,official_web_archives/lenovo_thinkvision_27_3d_product_technology, +display_delivery,Sony,Spatial Reality Display,2025-12-12 (updated 2026-01-28),https://xyn.sony.net/en/developer/technical/spatial-reality-display/whitepaper,200,https://xyn.sony.net/en/developer/technical/spatial-reality-display/whitepaper,White Paper(ELF-SR1 only)|Technical Specifications|XYN Web Portal Site,30,official_web_archives/sony_spatial_reality_display_whitepaper_2025, +display_delivery,ASUS,Spatial Vision,2023,https://www.asus.com/content/asus-spatial-vision-technology/,200,https://www.asus.com/content/asus-spatial-vision-technology/,ASUS Spatial Vision – Let your creativity shine in 3D | ASUS Global,17,official_web_archives/asus_spatial_vision_technology_2023, +display_delivery,Samsung,Spatial Signage,2026-03-05,https://insights.samsung.com/2026/03/05/how-samsung-spatial-signage-works-inside-the-technology-behind-glasses-free-3d/,200,https://insights.samsung.com/2026/03/05/how-samsung-spatial-signage-works-inside-the-technology-behind-glasses-free-3d/,How Samsung Spatial Signage works: Inside the technology behind glasses-free 3D - Samsung Business Insights,23,official_web_archives/samsung_spatial_signage_technology_2026, +display_delivery,Looking Glass Factory,Looking Glass Software Stack,current,https://lookingglassfactory.com/software,200,https://lookingglassfactory.com/software,A Robust Software Stack for Building Holograms,30,official_web_archives/looking_glass_product_software_stack, +hollywood_postproduction,Foundry,Ocula for Nuke,current,https://www.foundry.com/products/ocula,200,https://www.foundry.com/products/ocula,Ocula® | Stereoscopic Images and Effects,13,official_web_archives/foundry_ocula_product_technology, +hollywood_postproduction,DNEG,DNEG Stereo conversion service,2024,https://www.dneg.com/news/from-2d-to-3d-behind-the-stereo-conversion-of-godzilla-x-kong-the-new-empire,200,https://www.dneg.com/news/from-2d-to-3d-behind-the-stereo-conversion-of-godzilla-x-kong-the-new-empire,From 2D to 3D: Behind The Stereo Conversion of 'Godzilla x Kong: The New Empire'!,2,official_web_archives/dneg_godzilla_x_kong_stereo_conversion_case_2024, +hollywood_postproduction,Prime Focus,View-D / Stereo conversion service,current,https://www.primefocus.com/what-we-do/creative-services,FAILED,,,0,,404 Client Error: Not Found for url: https://www.primefocus.com/what-we-do/creative-services +direct_conversion,Acer,SpatialLabs / SpatialLabs Go,current,https://www.acer.com/in-en/spatiallabs/index.html,200,https://www.acer.com/in-en/spatiallabs/index.html,Acer SpatialLabs Stereoscopic 3D Solutions,2,official_web_archives/acer_spatiallabs_product_technology, +direct_conversion,Immersity AI,Neural Depth Engine / 2D-to-3D Video,2024-05-22,https://immersity.ai/news-articles/introducing-immersity-ai,200,https://immersity.ai/news-articles/introducing-immersity-ai,Introducing Immersity AI! | Newsroom,8,official_web_archives/immersity_product_launch_technical_overview_2024,