Since companies are pouring money into 3D digital environments that can be explored with an avatar, the metaverse is a new opportunity to “Innovate for Impact“.
With the Metaverse estimated to be a $8 – $13 trillion market by 2030 having an expected 5 billion people living, working, and playing in it – is why organizations and communities are building metaverses and participating in the ecosystem. And why being good at business innovation is needed to create new value, expand opportunities as well as to increase relevance and revenue.
In the way of background, the term metaverse was coined by American writer Neal Stephenson in his 1993 sci-fi hit Snow Crash. But what was fiction 30 years ago is now nearing reality. An example of this is Facebook’s recent earnings call where the CEO announced their vision to unify communities, creators, and commerce through virtual reality – “ Our overarching goal across all of these initiatives is to help bring the metaverse to life ”.
So what actually is the metaverse ? It’s best explained as a collection of 3D worlds you explore as an avatar. Stephenson’s original vision depicted a digital 3D realm in which users interacted in a shared online environment. Set in the wake of a catastrophic global economic crash, the metaverse in Snow Crash emerged as the successor to the internet. Subcultures sprung up alongside new social hierarchies, with users expressing their status through the appearance of their digital avatars.
Today virtual worlds along these lines are formed, populated, and already generating serious money. Household names like Roblox and Fortnite are the most established with more emerging such as Decentraland, Upland, Sandbox, and the soon to launch Victoria VR. Interestingly, these metaverses are emerging when reality feels dystopian, there is polarization on issues, the effects of a global pandemic, the growing disruptions from climate change, economic uncertainty, and other changes in our daily lives. Between numerous people struggling with these concerns many escape into these online worlds where human interests and creativity can flourish amid crisis.
In fact, we are currently experiencing an explosion of platforms parallel to the dotcom boom. While many of these digital worlds will come and go, the metaverse brings a new dimension to the internet with brands needing to consider their current and future role within it. Some organizations are already increasing their presence by establishing a new genre of marketing – Direct to Avatar (D2A). Some examples are – A. Gucci sold a virtual bag for more than the real thing in Roblox; B. Nike put virtual Jordans in Fortnite C. Coca-Cola launchedavatarwearablesin Decentraland D. Sotheby’s has an art gallery that your avatar can wander .
D2A is being supercharged by blockchain technology and the advent of digital ownership via NFTs (Non-Fungible Tokens). NFTs are already impacting art and gaming with + $191 million transacted on the “ play to earn ” blockchain game Axie Infinity in its first 30 days ! This kind of growth makes NFTs hard for brands to ignore. In the process, blockchain and crypto are starting to feel less like “ outsider tech ”. While there are still barriers to be overcome with crypto – the poor UX and the devastating environmental impact of “ mining “ to create coins, history has proven we will find a way to move forward – by resolving the issues with technology and innovation.
FROM SCROLLING TO STROLLING
Recognizing there are detractors of the metaverse, the bigger picture is the behavior change that is occurring among Gen Alpha. When you watch how they play, it becomes clear that the metaverse is more than a buzzword. Why ? Because for them and many others, gaming is social life. While millennials relentlessly scroll feeds, Alphas and Zoomers increasingly stroll virtual spaces with their friends. Why spend the evening staring at Instagram when you can wander around a virtual Harajuku with others ? If this is difficult to understand, ask any 13-year-old what they think !
Because of the potential and newness, forward oriented enterprises are engaging to be future ready – A. Sony investing $200 million in Epic Games, the developer of Fortnite (in the company’s recent $1 billion funding round) B. Decentralized crypto platform Boson Protocol paid $700,000 for a plot of virtual real estate in Decentraland to build a shopping mall. C. Facebook creating a new workplace VR tool and proto-metaverse, Horizon.
These companies are investing heavily because they see the younger generations doing the same – 87% of Generation Z and 83% of millennials are playing video games and engaging with digital spaces on smartphones, gaming consoles, and computers at least weekly if not daily. Further, more than 65% of Gen Zers have spent money on in-game items. In schools, chat about V-Bucks and Robux is very common.
MARKETING IN THE METAVERSE
Where people go, business will follow. But whether in the metaverse, on a crowded street, or in a commercial break – the importance for brands standing out is the same. For this to occur, “ Innovating for Impact “ is a huge competitive advantage. And in the metaverse the possibilities for innovation are vast because marketing expectations have yet to be set and the laws of physics don’t apply.
With the first wave of innovation in the metaverse following one consistent approach – the importation of real-world products into virtual spaces – brands need to start thinking more creatively about “ virtual first ” products and services. For example, a brand making energy drinks in the real world could manifest as a supplier of rocket packs in the metaverse. Or, an automaker providing teleportals in the virtual world. Recognizing this is different than historically how brand building occurs, consider that people could discover your brand in virtual space first. Because of this, how do you want to be perceived and what positive values can be transferred to the real world ?
By thinking “ virtual first ” you can see how these environments can be experimental, creative, and valuable. The products that can be designed aren’t limited by physics or marketing convention – they can be anything, and are now directly “ ownable ” through blockchain. Importantly, for brands who see a paradigm shift in the making or who are struggling to increase relevance and revenue, the metaverse is a huge opportunity to reinvent themselves – like the crypto casino that Atari has built in Decentraland.
NEW THINKING NEEDED TO BENEFIT IN THE METAVERSE
With the potential of the metaverse to be a significant opportunity, this means brands and marketers now have the ability to create products that exist in multiple realities. The winners will understand that the metaverse is not a copy of the world as we know it – where we simply paste our products, experiences, and brands into it. But rather, the metaverse requires a new mindset and new thinking to meaningfully create new value. Much like in Snow Crash, we find ourselves emerging from economic uncertainty, witnessing the dawn of a new digital frontier – but instead of dystopia, the metaverse is a place where curiosity and innovation can flourish like never before.