What is the Metaverse and How Should Businesses Respond?
Why the Metaverse Matters
Mark Zuckerberg made the biggest announcement in Facebook’s history recently. The launch of a new company brand known as Meta probably did more to draw attention to the metaverse than any other announcement from a major brand. But for many people, the announcement created confusion. To wit, what exactly is the metaverse? It’s a fair question. In fact, a number of businesses and people are embracing forms of the metaverse already.
What is the Metaverse?
The name metaverse comes from Neal Stephenson's 1992 science fiction novel Snow Crash. His book envisioned a virtual world in which people would use avatars to interact with each other. Stephen Spielberg’s 2018 movie Ready Player One, based on a 2011 science fiction novel Ernest Cline, dramatized the metaverse vividly for a mass audience. Outside the world of entertainment, the company Second Life launched an early version of the metaverse in 2003, but Second Life was probably ahead of its time.
Today there are variations in how people define the metaverse. But a popular definition is this: an all-encompassing virtual world where people live and play using avatars and virtual goods. In fact, the definition today is pretty much how Neal Stephenson defined the metaverse.
Is the Metaverse the same as virtual reality?
A metaverse environment can use virtual reality (VR), but it doesn’t have to. The key to the metaverse is people using digital versions of themselves to interact with each other. But VR certainly makes the metaverse a lot more immersive.
Why is the Metaverse so popular now?
The explosive growth of cryptocurrencies such as Bitcoin and nonfungible tokens (NFTs) in 2020 created a spike in general interest in the metaverse. The notion that people could pay each other in virtual currencies – and create digital representations of objects through NFTs – made the concept of a completely virtual world seem more real. When artists began selling their work for millions of dollars through NFTs – meaning completely digital art that no one could duplicate – the metaverse gained a newfound sense of urgency. Big money talks!
When is the Metaverse going to actually take hold?
The metaverse is already taking shape now. A really good example is the growing popularity of gaming platform Fortnite. On Fortnite, millions of people play games and purchase virtual goods such as special skins for their gaming avatars using virtual money. To be clear, Fortnite members are using real money to buy virtual goods. But to do that, they convert their money into a Fortnite currency known a V-Buck.
The metaverse is much bigger than Fortnite, as this influential essay from venture capitalist Matthew Ball explains. The metaverse, when it really takes shape, will consist of interconnected virtual environments where anyone can comfortably exist through their digital twin. Facebook wants to help build that interconnected world.
Why does the Metaverse matter to businesses?
The metaverse creates an entirely new income stream for brands. In fact, it’s probably more accurate to say an entirely new income world. For instance, hip-hop star Travis Scott earned millions of dollars when his avatar appeared on Fortnite in 2020 to perform a concert. He gained the money from the sale of virtual goods such as special Travis Scott gaming skins. But he’s not the only brand. For example, MLB offers NFTs of famous ballparks. Each NFT includes original artwork that can sell for thousands of dollars. In 2021, Gucci and gaming platform Roblox created a virtual Gucci Garden. There, Gucci sold virtual goods via Roblox currency (Robux). And gaming platform Minecraft has worked with businesses such as Disney to offer virtual content. Industry analyst Jeremiah Owyang recent published a blog post that discusses many more examples of businesses using metaverse building block NFTs to generate revenue and engage with people.
Why Is Facebook so interested in the Metaverse?
The metaverse can create tremendous economic value for businesses that get involved in building it. For example, Facebook’s parent Meta could gain revenue by selling technologies that make avatar living more fun and immersive. Although immersive technologies such as VR and augmented reality are not a requirement for embracing the metaverse, Meta is betting that people and companies will want to use them. And Meta already owns a chunk of technology through its purchase of Oculus VR equipment.
What should my business do about the Metaverse?
Consider first of all whether it makes sense to start engaging with people on digital platforms such as Fortnite, Minecraft, or Roblox. Or consider also how your brand might want to connect with people through metaverse elements such as NFTs. Consider the examples that Jeremiah Owyang cites in his post. Can you see your brand building trust and loyalty through an NFT as Taco Bell is doing? If so, now is a good time to experiment.
The metaverse may also create some fascinating ways brands and people connect with each other through content, such as:
- Virtual events conducted through digital twins.
- Creating playful content that people unlock through NFTs.
- Sharing thought leadership such as a discussion of the future of virtual reality or augmented reality through your own avatars on a platform hosted by another company.
One thing not to do: ignore the metaverse. It’s important to know what it is and assess your interest.
Contact Investis Digital
To create great content that builds trust with your audience, contact Investis Digital.