Companies are still wondering what the metaverse actually is and whether they need to do anything about it. Given that everyone is still talking about the metaverse, are you ready to enter and participate in this virtual world? Or will you wait and see what your competitors are doing first?
When it comes to describing the metaverse and the approach that companies are taking, Rob Mayhew, the comedian and TikTok creator sums it up perfectly in one of his satirical sketches of life in a public relations agency. How do PR firms pitch the metaverse to their clients? “It’s like The Matrix meets Bicester Village,” Mayhew jokes. And this description of a sci-fi action movie mixed with a designer outlet shopping centre may be the most accurate that many corporates have come across so far.
Mayhew also sums up the uncertainty about what it is and what to do about it: “It’s like one world, we’re just not sure where that world is yet. I think you need a headset. It’ll be disruptive and brave though. Let’s just wait and see what some of the beauty brands do and then we can… sort of… copy them…”
As for the virtual reality (VR) headset, the technology isn’t there yet for it to go mainstream. Philip Rosedale, the founder of Linden Lab – which hosts the virtual world Second Life – and also co-founder of VR technology company High Fidelity, said the general population isn’t ready for VR headsets. In an interview, he likened the experience to walking into a room full of strangers with a blindfold on. So, for now, that kind of virtual world is a niche endeavour.
But there are opportunities for companies as they figure out what the metaverse is. One way to think about it is as the next generation of the internet. In the first phase, web pages were static. It was one-way; someone published text and you could read it. Then came Web 2.0 where the flow of information went both ways – think commenting on blog posts, or users generating their own content with platforms like YouTube.
And now we’re in the era of Web 3.0, which has been described as the foundation of the metaverse. This era is all about decentralised finance – where individuals don’t need to rely on big institutions to mediate their transactions – as well as digital assets and tokens. Web 3.0, EY notes, represents a shift from Web 2.0’s “read and write” to Web 3.0’s “read, write, own and participate”.
And Maximilian Schmidt, Manager Digital Strategy & Emerging Technologies, Switzerland for EY, defines the metaverse this way: “The metaverse combines cutting-edge technology and interaction models between private and commercial participants, which in turn enables a fully functioning economy within a virtual space.”
This creates opportunities for the metaverse economy, and the ‘metanomics’ of this new world holds potential because users – through their avatars – can buy and own property in this virtual world.
The size of the opportunity is huge. J.P. Morgan notes that US$54bn is already spent on virtual goods every year, and currently, non-fungible tokens (NFTs) have a market capitalisation of US$41bn.
For companies wondering what to do about it, J.P. Morgan pushes businesses to ask themselves some key questions. First, how would your business be impacted if more time was spent transacting and socialising in virtual worlds? What value could your business create in the metaverse? Is there an opportunity to create new experiences? What value can you gain by being a first mover? How important is it for you to target a younger audience? And what are your competitors doing?
So now you need to decide whether to embrace this one world of The Matrix-meets-Bicester Village, or wait and see what other brands are doing first.