“the metaverse is generally regarded as a network of 3-D virtual worlds where people can interact, do business, and forge social connections through their virtual “avatars.” Think about it as a virtual reality version of today’s internet.” – Mark Purdy, How the Metaverse could change work. With revenue opportunities projected to reach over $1 trillion, it’s no wonder brands like Google has started investing in the Metaverse with a $39.5 million contribution to a private equity fund for all Metaverse projects.
Using insights from our data partner GWI, we explore the trends in the Metaverse and show what opportunities there are for brands keen to enter the Metaverse.
#1 Welcome to the virtual world – heavy utilisation of digital platforms
As well as augmenting existing business models, the Metaverse will provide entirely new markets. Companies will be anticipating an expansion in the provision of virtual services via a customer’s online presence (such as online meetings, medical appointments, concerts and exercise classes) as well as exploring the provision of virtual goods to the avatars themselves. We expect to see an increase in companies partnering with digital platforms to sell digital assets ranging from designer clothes to virtual real estate.
While we have seen the fashion industry mark its entry, the beauty one might make a splash later, hopefully, with products for the more realistic avatars. Apart from them, big names such as Disney and Intel are expected to make announcements of their Metaverse worlds as the year progresses.
With aspects of the building of the Metaverse being based on new technology (including the application of AI), the question of potential patent protection and freedom to operate will also be important to consider.
#2 Gaming – leading industry, boosted by merging entertainment and social networking experience
The global Metaverse revenue could approach $800 billion in 2024. The primary market for online game makers and gaming hardware may exceed $400 billion in 2024 while live entertainment and social media make up the remainder. Roblox, Microsoft’s Minecraft and Epic Games’ Fortnite appear to be early leaders in the race.
As video game makers continue to elevate existing titles into 3D online worlds that better resemble social networks, their market opportunity can expand to encapsulate live entertainment such as concerts and sports events as well as fighting for a share of social-media advertising revenue.
Game makers could seek to add additional social features and make user-generated content become a larger part of their experiences to capture Metaverse demand.
The ability to bring live events such as concerts, film showings and sports into 3D virtual worlds represents additional opportunities for game makers. Game makers including Epic Games and Roblox have hosted concerts inside of their games already, while Unity is investing in opportunities to bring live sports content and tools into its 3D development kit.
#3 Making Connections – technology drives immersive interaction
Technology such as 3-D scanning sensors, augmented reality glasses and audio equipment will proliferate, allowing for ever more immersive interaction. Improvements in the Internet of Things (IoT) and 5G technology will speed up data transfer, expanding possibilities for the use of virtual and augmented reality at scale.
Metaverse companies may be eyeing sales of their AR/VR hardware as a sizeable source of revenues at the beginning of their Metaverse journey. However, if the Metaverse has to grow to a large scale, the entry-level requirements need to drop. As with developing technology, hardware upgrades are bound to come in but will also require the headsets to shed their clunky forms and become easy-to-use wearables.
Companies will also begin to explore how to take robotics to the next level through the Metaverse – for example, immersive environments could enable the performance of maintenance on off-shore wind farms or the carrying out of high-precision surgery through robot avatars, regardless of the real-world location of human expertise.
#4 The “direct-to-avatar” Economy – more realistic avatars
Something that needs immediate attention in the near future is that avatars in the Metaverse move away from their emoji-like appearances to more realistic ones. Avatar customisations might be a million dollar market, but going ahead, Metaverse users would like their avatars to resonate with their actual identities.
Companies like Burberry have created virtual version of stores, and fashion houses sold NFT clothing items people could apply to their avatars in a virtual environment. The more realistic these avatars become, the more immersive our communication sessions will become, and the more powerful online events and digital experiences will feel.
If Meta and Microsoft really look at the Metaverse where people will come to work and interact with others, then the avatars need to look more like real people doing real things. Legless avatars might work in a game but if you are expecting a CEO to give a talk about the company’s new offerings, they can’t be floating on the stage.
#5 Fintech meets the Metaverse – fintech and NFTs accelerate the path to the Metaverse
Distributed ledger technology (DLT), which has underpinned a booming crypto-asset industry, may provide the building blocks for a decentralised Web 3.0 and decentralised autonomous organisations (DAOs), which will shape ownership, control and commerce. Non-fungible tokens (NFTs), currently prominent in the arts and entertainment industries, could go on to facilitate trade and investment in virtual goods, alongside cryptocurrencies that are becoming ever more mainstream.
Platform creators are keen to introduce their own digital currencies to be used in these worlds but given that users may want to hop in and hop out of these Metaverses, a more uniform means of exchange will also be required to be available. With NFTs becoming a standard feature in discussions about the Metaverse, popular coins like Bitcoin and Ethereum will also look to follow into the Metaverse.
#6 Create Your Own Metaverse – Coexistence of Code and No-Code Platforms
Meta may have already spent billions of dollars building up the first iterations of its Metaverse but if the Metaverse is truly to grow as a decentralised entity, users need to be given the freedom to build up their visions of this world. This would mean developing platforms that allow users to let their creativity run wild without having to bother with the intricacies of coding.
As with the current iteration of the world wide web, no-code platforms along with the engineers of the tech industry will shape up the Metaverse. The race in the coming year will be to develop these no-code platforms and reach out to potential users.
#7 Data Security & Privacy – increasing consideration of data security and privacy
From employee monitoring to consumer analytics, the Metaverse and Metaverse-like microcosms represent potentially vast sources of data, some types of which will not have been meaningfully collected before. Data security, privacy, employment and consumer protection law considerations will be high on the list of considerations for companies wishing to tap into user data, be they consumers or workers, particularly as data protection enjoys increasing regulatory attention globally.
Businesses will need to keep everything from antitrust laws, to payments regulations to tax implications in mind when expanding into the Metaverse and interacting with the increasing number of firms seeking to collaborate in, and capitalise on, the development of virtual and augmented realities.
Related content: Future Spotting: 6 Ways To Level Up Brand Experiences Through Gaming
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