The metaverse is now live thanks to a convergency of technology, ease of access and customer demand. The metaverse has moved from what was originally a gaming experience to other sectors due to lower costs including VR headsets, superior game engines and 5G.
While the metaverse is still in its infancy, it offers massive potential for businesses, and this will continue to grow rapidly. Just as with the iPhone’s arrival in 2007, applications will grow as the end user experience grows. The key to the metaverse is its cultural change element incorporating multi-user, social event elements, coupled with the ability to transact physical and digital commerce.
BearingPoint have been exploring the metaverse extensively with our clients for several years. While we continue to take a pragmatic view, we aim to help companies identify which parts of their activities and brands will benefit from rolling out real-time immersive social experiences. This piece will take a look at what’s really happening today, and where the real value for businesses lies. We believe that once decision-makers recognise that the expansion of the ecosystem is inevitable, they will begin to embrace its full potential. Now is the moment to begin preparing for that expansion by learning and experimenting in an agile way.
The predominant application for the metaverse was gaming which has generated billions in revenues for its creators. But the picture is changing. The metaverse is expanding due to a combination of the supporting technology and cost of involvement. The growth in 5G cellular networks, grid computing, AI, blockchain, NFTs, state-of-the-art game engines and peripherals such as VR goggles have all ensured that access and involvement have become far more affordable, driving steadily increasing adoption.
Along with the technology, a metaverse creator/develop economy is now thriving. Independent creators, developers and artists are turning their attention to building massive volumes of new content accessible in the metaverse. And content, of course, is what will continue to attract new users.
For all these advancements, a huge amount remains unclear about how the metaverse will develop in the next decade. In a sense, the world is in a very similar position to where we were back in 2007 when the iPhone was launched – not knowing how central it would become in our lives, and struggling to keep up with ubiquity of usage that emerged after it was launched.
Many businesses are more ready for this brave new world than you might think. Some already approach product development in a digital-first way, by building and testing ‘digital twin’ products in virtual environments long before work begins on creating the real thing. The metaverse, as a socialised, immersive, interactive experience, will enable business to transform both their internal activity and their customer relationships.
The interactivity and immersive experience that the metaverse provides has prompted a swathe of consumer businesses to consider how and when to deliver brand experiences to potential customers in this new medium.
But for these businesses, the metaverse does more than simply enrich the purchasing experience. In Web 2.0, the current iteration of the internet, brands have historically struggled to realise the longed-for potential of direct reach – being able to access and interact with customers directly, rather than through an intermediating platform. It’s the hope of many – users, creators and brands alike, that the metaverse will materialise into an environment that is far more open, and less dominated by these big tech players. The result, so the theory goes, will be a virtual world where consumers can engage with their favourite brands in a far more direct way, without having to be subject to the constraints that these large platforms place around the experience.
Early business adopters in the metaverse have predominantly been luxury goods brands. In part, this has been a function of the cost of 3D peripherals, which until recently have restricted use to a relatively small market. For these iconic names, metaverse presence means more than simply a new point of sale. It’s a glamorous and attention-grabbing way to showcase their portfolios. Burberry, Gucci, Balenciaga and Louis Vuitton are just a handful of the top-tier brands that have now established metaverse experiences.
When will the metaverse truly begin to take off as a consumer platform, and become a regular go-to experience for millions if not billions of consumers? As mentioned, the falling cost of peripherals provides part of the answer. But it’s also beneficial to look at a few sectors where virtual worlds have strong potential to change the game:
There are very significant hurdles still to be jumped before it becomes a truly mass-market experience for consumers and businesses alike.
The first of these is the problem of competing agendas. The larger digital platforms, of which Meta is the most obvious, have ambitions to replicate the model of Web 2.0, in which the online space is essentially dominated by vast walled gardens of content. It’s easier for big players to track and monetise usage in this way, but has a tendency, as we see with the internet and social media today, of meaning that only a small number of platforms are delivering and facilitating the vast bulk of content. But there’s a broad and growing movement within the Web 3.0 community that believes we should be aiming for something very different for the metaverse: a far more open environment with lower barriers to entry in which a more diverse and varied array of content providers are able to establish presences without the need for intermediation by big platforms. With a better share of value for creators and developers as well.
The second major hurdle to the development of the metaverse is standards. Currently, the metaverse is populated by ‘islands’ of content, that operate using different technology standards. For the metaverse to become a single, seamless, unified experience, much more will have to be done to create common standards around performance, accessibility, configuration, interoperability, and privacy, to name just a few areas.
Immersive social interaction via 3D is driving real enthusiasm and interest. Headsets and other emerging immersive peripherals (including haptic gloves) are designed to ultimately render the metaverse as a true VR/AR/XR experience. But peripherals are still a barrier to participation for the mass market, despite falling costs.
It’s critical to understand that in the short to medium term, this full 3D experience may not be the only way that the metaverse can take off. Instead, we expect that the metaverse will be delivered for some time over ‘3D through 2D’, that is to say, using desktop computers, laptops, tablets and smartphones. Content providers will design experiences accessible via all of these methods to accelerate take-up.
The metaverse will bring extraordinary new opportunities for businesses. But as we’ve outlined, it won’t arrive overnight. There’s a huge amount of work to be done before it becomes a seamless and singular experience for users.
The critical question for businesses to answer is when to invest significantly in what will unquestionably become a central part of both our personal and professional lives. Move too early, before standards have been properly established, and a metaverse experience may prove to be an expensive novelty. Move too late, and competitive advantage may be lost in the race to provide enthralling and immersive customer experiences.
We believe that the use cases for B2B in the metaverse are already proven and available. Business should explore which of their current internal business activities work well in these new environments and gain valuable expertise at the same time. B2C experiences may be slower to reach scale for businesses that are not already involved in gaming or the direct-to-consumer ecosystem. But while it will be a few years yet before they enter widespread, mainstream use, it’s essential that businesses monitor developments and begin laying the groundwork for live consumer presences.