European businesses, investors, and talent are all vying for a ticket on themetaversehype train.
Even political heavyweights are making moves or, at least, pronouncements.
French President EmmanuelMacron wants to builda European metaverse to challenge US and Chinese tech giants.
The EUs digital chief, Margrethe Vestager, meanwhile, is mulling new antitrust regulation.
But their ambitions are a long way from being realized.
Its being defined by US and Asian players.
Those are the two regions where this technology is going to develop.
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European startups lag behind their US and Asian counterparts.
Europe, by contrast, is largely limited to niche operators and startups.
He acknowledges, however, that they face significant challenges.
Historically, European startups havelagged behindtheir US and Asian counterparts when it comes to producing unicorns, he says.
Europe also trails behind the US in terms of venture capital raised.
Europes metaverse funding problem
Petri Rajahalme has his own plans to plug the funding gap.
In March, the duo announced a 25m fund for startups at the pre-seed or seed stage.
Were not lacking in talent, thats for sure, says Rajalhlme.
The big question is how do you keep that talent in Europe?
The talent pipeline flows towards the best financial incentives.
FOV Ventures prefers to keep talent inEuropeby providing early-stage funding and go-to-market expertise.
These experts can provide funding and advice on working with big platforms.
Rajahalme also wants Europes investors to work together to challenge US resources.
That doesnt mean the metaverse is now widely-understood.
Indeed, the nebulous nature of the concept poses both problems and opportunities.
Building the unknown
Members of both theEuropean CommissionandParliamenthave called for regulation of the metaverse.
There is one problem, however: they dont yet understand exactly what theyre regulating.
Definitions of the metaverse abound.
All these definitions have room for numerous use cases and charlatans.
Virtually real or just assorted buzzwords?
Ifyou trust Meta(and who wouldnt?
Some elements of this grand vision already exist.
This multitude of applications can play to the strengths of various European ecosystems.
Critics, however, argue many metaverse vendors are merely repackaging existing technologies under an all-embracing buzzword.
Their individual applications are also far from integrated.
Any attempts to impose interoperability across platforms will befraught with design challenges.
Illenberger, the VRdirect founder, has further doubts about the metaverse becoming decentralized.
He predicts that Chinese and US big tech firms will remain gatekeepers to the dominant platforms.
So what youre going to do is develop apps for Meta and Apple.
Setting rules
Some metaverse businesses, developers, and investors are concerned that EU regulation impedes innovation.
The EU representatives in attendance said their ambition was to become the best regulators of AI.
Its a nightmare to comply with European data privacy rules.
Illenberger, whose company provides customized VR experiences for businesses, has witnessed the downsides of heavy-handed regulation.
One problem arose from VR headsets using outward-facing cameras to identify surroundings.
They can therefore easily breach EU requirements for consent from anyone who could be accidentally filmed in a workplace.
Yet these facilities are inconvenient for some businesses and unaffordable for others.
Its a nightmare to even use metaverse technologies in compliance with European data privacy laws, he says.
You have to film your environment in order for the rig to work.
The speeds at which such rules are changed can hamper innovation and push trailblazers towards Asia or the US.
Instead of battling the incumbents, European firms may find more success by working with them.
Illenberger argues such interoperability provides opportunities in the fragmented market.
To some extent, this is a competitive advantage for us, he says.
But in terms of Europe as a region versus the US and Asia, its a big roadblock.
Story byThomas Macaulay
Thomas is the managing editor of TNW.
He leads our coverage of European tech and oversees our talented team of writers.
Away from work, he e(show all)Thomas is the managing editor of TNW.
He leads our coverage of European tech and oversees our talented team of writers.
Away from work, he enjoys playing chess (badly) and the guitar (even worse).
