The Metaverse: Tech Hype or Future Reality?
The Metaverse is “the next big thing” according to techno-evangelists. Meta (formerly known as Facebook) has revealed significant R&D budgets. Big money is being spent by heavy hitters in tech – some of it will stick soon(ish).
What do we mean by The Metaverse? The Economist says it is: “an interoperable network of 3D virtual worlds that can be accessed simultaneously by millions of users who can exert property rights over virtual items.” Gamers already understand what it is, especially if they are on a platform like Roblox or Fortnite – the most fully realised virtual worlds. In The Metaverse (an excellent book for non-techies), Mathew Ball explains its revolutionary potential. It is proof of the old adage that “we expect too much change in a year and too little change in a decade.” For marketers, it means it may be smart to start experimenting and learning soon. The book is very good on three topics:
1. Technical reasons why the Metaverse will not happen soon. Briefly, the technical limitations of both the internet and devices make convincing live experiences at scale difficult. They require much more bandwidth and dramatically more powerful devices. Game developers, in fact, build virtual worlds around the limitations of the internet with as little live experience as possible – games are downloaded, and activities that seem live (such as brandishing a lightsaber) are in fact drawn from a menu of predesigned options. Their technical expertise makes the game developers early movers in the Metaverse.
2. Why ownership structure and regulation will be critical. The internet is open and operates by common standards. Information can be easily shared. Code is (mostly) open source, meaning that individual innovations could benefit the whole system. This was not inevitable and we largely take it for granted. For example, we talk about the ‘internet’ and not the ‘Amazon internet’ or the “Facebook internet’. The early days of the internet were dominated by academics and government bodies who defended a common standard for the common good. This time round it’s different. Global corporations seek proprietary standards as a source of profit. The clue is in the word “interoperable” (in the above definition). If you buy something (say an item of clothing or a shopfront) in one virtual world, you want to be able to take it to another rather than have to buy it all over again. With the arrival of the mobile internet, we saw a decline in interoperability. The music bought on my Apple smartphone cannot be easily moved to a non-Apple device. So, I feel locked into an expensive service. When people feel ripped off, it normally produces an innovation that delivers much better value and interoperability. Nowadays, I get my music from Spotify – its app can be accessed from any device. Ball makes the point that the big companies may want to own their own metaverses, but it is likely to suppress growth if it represents a bad deal for the end user. But he is not sure, which brings me to his third big point.
3. The Internet as a surprise generating machine. The Metaverse will be very different in 10 years: we can’t imagine it now. Game-changing innovations and technologies are bound to come. Consider the early days of the dial-up internet. It was mainly about sharing text. We could not imagine the likes of YouTube or streaming services like Netflix. Little did we know that broadband would enable images and video at scale. When the mobile internet arrived (enabled by 4G, geolocation and smartphones), a whole new class of innovation arrived – apps that unleashed new ideas, like hailing a cab to where you are. The internet today is designed to send packets of data (Netflix is not a live experience but a pre-treated compressed packet of data). But technical innovation will make true, live experiences possible. Keep an eye out for the equivalent of broadband and the smartphone, which will open up possibilities. The Metaverse is confidently predicted as a “Future Reality”. But we may not even call it the Metaverse. We no longer talk about “The Information Super Highway” even though the predictions made under this rubric 25 years ago have broadly turned out to be true.
What should you do in the Metaverse? Way back, I used to run seminars for brand owners called “What does Facebook mean for your brand?” Largely a waste of time. So, instead, I got attendees to sign up for Facebook, build a profile and use the service. Then we later talked about their experiences and ideas. A similar approach is needed for the Metaverse: dip a toe or three in the water, try stuff out and learn.
What is the Opportunity? Broadly, the Metaverse provides a platform (or platforms) where you can develop exciting and/or exclusive experiences and/or product innovation for your customers. You can also signal to others (staff, trade customers, etc.) that you are an innovative forward-looking company. Here are my planning tips for brand owners.
a) Form a small team with a budget to experiment that includes keen gamers and owners of VR headsets, because the big gaming platforms represent the state of the art in immersive 3D world design and commercial tie-ups.
b) Analyse the best work in gaming. Check out some of the first movers and especially luxury brands. Louis Vuitton has partnered with the online video game League of Legends for “a capsule collection”. Musicians are also worth following: Ariana Grande has performed a concert in Fortnite. In 2019, Nike launched virtual stores for a limited line of shoes – the Air Max 720. For retailers, building a virtual shopfront is a natural next step. It is like laying claim to the best property on a virtual high street.
c) Can you create and sell unique goods? (Sold as Non-Fungible Tokens – digital data that records who owns a virtual collectable or piece of digital artwork.) In 2021, Gucci partnered with the Roblox gaming platform to offer “The Collector’s Room”, which featured collectable limited-edition Gucci items for sale.
d) Have a meeting in the Metaverse. You didn’t take long to get used to Zoom. Why not create your own avatar (avatars are also an emerging area of brand innovation), escape into a 3D environment with your avatar and socialise? (See Umair Kazi’s tips on how to do this in Meta-Whatever-Se: Fad, Fiction, or the Future? in Aurora’s July-August edition) The Metaverse will be all about community and different ways of interacting. Conferences will run in 3D environments in the not too distant future. It will be another place where you can meet and deliver service to your customers. All new environments have their social codes and only immersion helps you learn them.
e) Watch for those enabling innovations that unleash innovation and opportunity (like the arrival of broadband and smartphones with 4G). If you are already a player in the Metaverse, you are much more likely to spot them. When he returned to Apple in 1998, Steve Jobs described his strategy as “I am going to wait for the next big thing.” I think he would have been ‘super-excited’ about the Metaverse, but would not have launched Apple’s big new idea just yet.
Julian Saunders was CEO, Red Cell advertising (a WPP company). He was also Planning Director at Ogilvy, Executive Planning Director, McCann-Erickson and in The Zoo at Google. email@example.com
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