So You Want To Enter the Metaverse? Start Here! (Part 1)
Every good platform or game needs a handbook. The Technology team at Allison+Partners is here to help: We’ll quickly demystify the metaverse, giving your brand the information necessary to either jump into “the next big thing” in tech, or hold off until the digital dust has settled.
What Do People Do in the Metaverse?
First, while there are multiple visions for how the metaverse will play out, the core idea is to create an always-on digital space tying the real and digital worlds together. In the early 1990s, Snow Crash depicted users wearing virtual reality (VR) goggles to access “The Street,” a digital planet filled with virtual people and real estate. Twenty years later, Ernest Cline's Ready Player One expanded this vision with "the Oasis," an endless shared lobby connecting VR users to a digital universe of games, entertainment and social experiences.
In each case, the "metaverse" creates a single virtual space – imagine it as a digital city or a grand lobby. Wearing a VR headset or AR glasses, you’ll be able to switch from working at your virtual office to playing at an arcade after hours, go shopping at a virtual mall, or watch a movie in a shared virtual theater with your physically scattered friends or family, all from the comfort of home. It’ll be as easy as changing the TV’s channel and opening a new webpage or app. Just as video games let players race cars and go on adventures, the metaverse is expected to grow into a virtual playground where users can make their dreams come true – digitally and beyond.
Some companies, including Meta, expect the metaverse's grand connecting lobby to be virtual. Others hope to anchor the digital world to the real world, an augmented reality (AR) vision advanced by Pokémon GO creator Niantic, Snapchat developer Snap and enterprise developer Magic Leap. Each company has developed smartphone or wearable technologies that let users see digital characters and objects composited into real spaces. Niantic has referred to placing persistent, shared digital content within real spaces as creating a "real-world metaverse," and Snap has pursued similar goals with its Landmarkers.
A Reality Check on the Metaverse
Wall Street started chasing metaverse money well before Facebook changed its name to Meta, imagining a future where billions of people will use real dollars to purchase, resell and consume fully digital objects. Based in part on rising virtual real estate prices in Decentraland, an early metaverse platform, JPMorgan recently declared the metaverse a $1 trillion annual opportunity and opened the first virtual bank location there. Marquee brands, including Nike (Nikeland), now create destinations in the popular multiplayer building game Roblox to attract young customers. So, is everyone else already missing out on the next big thing?
Without shattering bankers' dreams, it's worth noting classic economics won't necessarily apply in the metaverse. Just as games don't start players without basic clothes and tools, the metaverse will enable wish fulfillment, rather than forcing people to struggle through virtual life. In other words, you won’t actually need $100 to buy a virtual pair of Air Jordans.
Let’s get real: Today's metaverse gold-rush mentality is fueled more by a post-dot com fear of missing out and losing marketing attention than by any likelihood of near-term profits from metaverse users. Although VR and AR devices are key to accessing the metaverse, Statista estimated VR hardware's 2021 global install base at only 16.4 million, with AR glasses collectively at or under 1 million users. That’s small potatoes given that six whole years have passed since the first consumer VR headsets went on sale.
Moreover, no VR or AR hardware maker has released a true metaverse software platform. Meta’s likely metaverse springboard, the social VR app Horizon, has only attracted 300,000 total users – not all of whom are regular users. Decentraland similarly claims 300,000 monthly users, but notes only 18,000 are active on any given day.
Most of the online traffic that will ultimately fill the metaverse is currently found in popular multiplayer video games. Roblox has approximately 47 million daily users, and Epic Games’ Fortnite has upwards of 22 million, having peaked at more than 78 million in 2018. While these games don’t connect to other titles to enable true metaverse experiences, each has hosted concerts that draw millions of attendees – 36 million for Lil Nas X in Roblox and 27.7 million for Travis Scott in Fortnite, 12.3 million of them concurrently. There’s certainly an audience for metaverse content, but they’re not actually in the metaverse yet.
Wait or Jump In? Current Metaverse Business Opportunities
Should you wait until the metaverse is fully built-out to get involved? Certainly not! Much like some companies jumped online early in the 1990s, there was (and remains) a first-mover advantage. Now is the time to consider whether the metaverse will require your business to:
- Become more digital and less physical, with virtual transactions and locations replacing in-person sales and brick-and-mortar stores.
- Connect with customers regardless of physical location or distance, going beyond a basic 2D online store to offer more 3D content – including real or virtual 3D customer service.
- Advertise in ways literally guaranteed to capture eyeballs, given that VR and AR will use eye-tracking technologies to note what's being seen, and for how long.
- Connect rapidly with your early adopter customers. If your customer base is known for being first to try things like this, getting there and supporting their interest sooner rather than later would be to your advantage.
So take a beat to understand where your brand might make sense now within the metaverse, and where it will likely work within the metaverse as it evolves. Then decide if you’re going to dip a toe into the water, dangle your feet or cannonball into the deep end.
Ready to be inspired? In Part 2 of this guide, we discuss a wide variety of current and upcoming metaverse business opportunities, as well as next steps to capitalize on them. See you there!
Jeremy Horwitz is Allison+Partners' head of content for the Technology group, drawing upon three decades of prior experience as a journalist and entrepreneur to provide brand positioning, media relations, and content development counsel. Specializing in communications for the consumer electronics, semiconductor, gaming, and B2B sectors, he also has a deep background in diverse areas ranging from intellectual property law to popular entertainment, international dining, and luxury hospitality.Category: Technology