Metaverse is the new buzzword in the world of tech — with recent estimates suggesting it could be an $800 billion market by 2024. And the race is now well and truly on among brands to create immersive 3D virtual experiences.
From virtual fashion houses like Gucci Garden on gaming platform Roblox to this year’s virtual fashion week; Nike’s NFTs (Non fungible tokens) which have made a whopping $185 million in revenue; the rise of “metaversities,” Meta partnerships with universities that open up virtual campuses and even TV show and movie NFTs (more on which later), the M-word is fast becoming one of the most important aspects of our future.
But let’s start with the basics - what actually is it?
What is the metaverse?
The metaverse right now is a vision. A vision of an immersive digital and real world, connected together, online, offline and across multiple platforms. Some industry folk are resurrecting the noughties word ‘phygital’ that was used to describe physical and digital retail spaces, or ‘multichannel’ if you’re from the advertising industry.
The difference with the metaverse vision is that mixed reality comes together, where everything you create or own can be used and has a globally recognised financial value anywhere you go online and offline. You can create, buy and sell anywhere, seamlessly and without technological or geographical borders. This is called ‘interoperability.’ For example, you create an avatar of yourself (your digital twin you have on a social media channel) which can be used in a game, and the purchases you make in a game for your avatar can also be used in the social media channel, and any financial gains or brand reward points you make in a virtual world can be used to buy real-world goods anywhere in the world. Still with us?
Metaverse and digital ownership
There are two technological factors that make up this vision. First, metaverse: an online 3D world connected to your real world through mixed reality technology (XR) and devices that enable access to this mixed reality. Yes, 3D worlds already exist — gaming platforms are the perfect example - but they don’t all work together. We call them Mesaverses — 3D worlds that are not connected.
Next, digital ownership, where there are assets of value in two possible ways:
a) Value in Web3 (aka blockchains and cryptocurrencies): Blockchains are decentralised, unregulated global platforms that can track absolutely every transaction made and are unrestricted by governments. Cryptocurrencies are digital currencies with a globally-recognised financial value, which are also unregulated and decentralised. For example, in the gaming space you have “play-to-earn games”. The more you play, the more cryptocurrency tokens you earn, which will always be yours and should you decide to sell, you could potentially profit from. This is value in Web3. While this is another article in itself, Web3 still has much uncertainty to resolve and consumers to win over before it’s fully utilised.
b) Value without Web3: value in the 3D world and brands the asset is associated with. The value of the asset exists in the environments and brands it’s connected to and can be used or sold within it. The same play-to-earn gaming example would still apply, the only difference is the more you play, the more tokens or points you earn that can be used to purchase products or experiences in real life with a specific brand. And once you purchase, you will always have a share in the value of the product or experience even if it is resold either in the game or in real life. Brands can do this to supercharge their loyalty programmes and offer more value to customers. Even a furniture company could design and sell furniture for houses in virtual 3D worlds, and build in an ownership model that if the virtual furniture is resold, the original buyer and all subsequent buyers will always own a part of the original piece and earn points with every re-sale. Both the purchase of the furniture in the virtual world and subsequent re-sale can be redeemed as points towards buying the real goods offline. This is value without Web3.
The full metaverse vision integrates metaverse and digital ownership value, with and without Web3, together. However, the metaverse and digital ownership can live without Web3, and for corporations that make up our consumer worlds now, this is good news because it means they can expand their presence to grow their customer base and increase customer retention through digital ownership.
The reality is, the metaverse hasn’t been fully created yet. For this to happen, we need partnerships among big tech, little tech, businesses, gaming platforms, and, essentially, for every key corporate player that makes up our consumer reality to find a way to work together. But early steps are being taken right now, and the future vision of the metaverse is being created with every single experience launched.
For example, Nikeland, a gaming and shopping experience, with assets of value both offline and online. Starbucks Odyssey, a transformed customer rewards system with both Starbucks real-life and NFT Web3 value, powered by platform Polygon. Interoperability is starting to become a reality with Paypal now accepting bitcoin and other cryptocurrencies, and more interoperability deals being made behind the scenes.
What the metaverse future could look like
The biggest barrier to entry right now is setting up a crypto wallet - pretty soon, that will be as easy as Apple Pay, and this world will quickly become democratised and open to all to play in.
What could the future metaverse look like? Imagine the movie and fan experience totally transformed - you can buy a movie NFT before it’s made to become movie investors. Each NFT has a different level of value that gives access to real-life perks and interaction with the actors. This could range from a premiere ticket to a metaverse event before and after the premiere. You put your VR glasses on and go into a private world that you designed. The clothes you wear to the event are virtual versions of what you bought to wear in real life, because that becomes our new normal. The version of you in the metaverse is your digital twin and you have friends from all over the world showing up to sit right next to you. The snacks you buy there are freebies from the reward points you collected in real life, or if you buy them there in the metaverse, you get more points to use in real life. The sponsors or ads you watch pay you crypto tokens or points to buy more metaverse swag to watch the full ads. Everything you do is connected and has a greater mutual value than it does now.
Watch out and be strategic
Whether we believe in the full vision or not, the metaverse is being created. Only time will tell what it will eventually look like, however, it will be immersive and we’ll have more ownership. We’ll see an incremental shift over the next year to 10 years, at which point the hot topic will be tech and human-emotional integration. Metaverse is fast becoming synonymous with Web3 (blockchain and crypto) — for now, remember, it can live with or without it — and there are “metaverse” standards being created to make the full interoperability vision a reality.
My advice to you for now is to have fun in the early metaverses (plural) and enjoy the experiences and communities that are being created now. Go to the shows, get more value from your purchases with NFTs and a Starbucks Pumpkin Spice Latte. If you’re new to investing in NFTs or cryptocurrencies, play it safe as you learn more and never invest more than you’re comfortable losing.
