Hailed as the internet's future, the Metaverse is set to revolutionize how consumers interact and engage online. Whilst still in its infancy, the metaverse is becoming big business as technology titans and gaming giants such as Meta (previously Facebook), Microsoft, Epic Games, Roblox, all rush to shape the next era of the web. But just what is the metaverse and is it all fluff and hype? In this article we take a look at what the metaverse is, how it is growing and the brands that are already beginning to experiment in order to get ahead of the curve.
What is the metaverse?
As the metaverse is still being built it is difficult to define exactly what it is and is not. According to Cathy Hackl, a futurist and metaverse expert “there is really no agreed-upon definition right now.” However, if she had to define it, she explains it as follows:
“I believe it’s a convergence of our physical and digital lives. It is enabled by many different technologies, like AR and VR, which are the ones that most people tend to think about. But they’re not the only entry points. There’s also blockchain, which is a big component, there’s 5G, there’s edge computing, and many, many other technologies.”
The metaverse is thought to be the next big evolution of the internet. In part, it will provide a network of 3D virtual worlds which will take many forms, including gaming, online communities and business meetings where people collaborate via a digital facsimile or avatar of themselves.
In the metaverse users traverse a virtual world that mimics the physical world using such technologies such as virtual reality (VR), augmented reality (AR), AI, social media and digital currency.
Is the metaverse and web 3.0 the same?
Often the metaverse and web 3.0 are terms that are used interchangeably and it is easy to see why as they intersect and overlap. However, web 3.0 and the metaverse are different. At its core, web 3.0 is the next generation of the internet as we know it. Today much of our web experience is characterised by gatekeepers – major search engines and social media sites. Web 3.0 promises a decentralized version of the internet and a more open web, one which is not controlled by a small number of central authorities (Facebook, Google and otherwise).
Like the metaverse it is not well defined rather it is an umbrella term which refers to a series of technologies (blockchain, NFTs, AI and others) that are reshaping the internet as we know it and will provide people with greater control over their own data and enable greater exchange between people amongst other things.
What is the size of the metaverse audience and what are participants doing in the metaverse?
It is estimated that by 2026, 25% of people will spend an hour in the metaverse and 30% of companies will offer services and products for the metaverse. By 2030, it is anticipated that up to 5BN people will be users of the metaverse. But what exactly are users today doing within the metaverse? From the ability to attend virtual concerts and game, through to the opportunity to learn online, buy virtual and physical retail goods and more, the metaverse is anticipated to re-shape several industries and change the way consumers interact and engage online.
What are some of the most significant metaverse worlds?
Roblox is one of the most well-known in the metaverse, enabling online gaming and game development. Roblox now boasts more than 54.1 million daily active users globally. Roblox reports that an estimated 20 million games have been made within its metaverse. But it is not the only world of significance.
In October 2021, Facebook rebranded as Meta. When announcing the rebrand Zuckerberg spoke about how “In this future, you will be able to teleport instantly as a hologram to be at the office without a commute, at a concert with friends, or in your parents’ living room to catch up”. The name was chosen to echo the key product that owner Mark Zuckerberg hopes Meta will be represented by the metaverse. Off the back of its re-brand, Facebook launched Horizon Worlds, its metaverse and has been progressively expanding territories over the past 12 months. In Horizon World, consumers can game, build fitness and gain access to virtual experiences across music, sporting events, film and more. Given it has only been more recently established it is said to have 300,000 monthly active users as of February 2022.
Decentraland is another which is described as a virtual destination for digital assets. In Decentraland users can buy and sell digital real estate as well as explore, interact and play games within this virtual world. It utilises Mana as a cryptocurrency to enable the purchase of land as well as virtual goods and services.
Sandbox is another significant player in the metaverse. Built on Ethereum block-chain, the Sandbox is a lot like the user-generated content worlds of Roblox and Minecraft. Part virtual real estate, part amusement park, the Sandbox is already seeing a flurry of brands establishing their presence within Sandbox including Warner Music Group, Gucci and others. New games are being onboarded every week and over 19,000 users own land in the Sandbox including Snoop Dogg. It is said to have now reached 2M users.
Decentraland, Sandbox and others have their own marketplaces which allow players and participants to monetise their assets created or owned by those in the metaverse.
What is the value of the metaverse?
With differing definitions of the metaverse – so too are there differing estimates on the value of the metaverse market today. Bloomberg estimated that the metaverse was worth $478.7bn in 2020 and the metaverse market is estimated to be somewhere between $8T and $30T by 2030. JP Morgan estimates that today $54bn is spent on virtual goods in the metaverse and $501m was spent on metaverse real-estate.
What is the profile of a metaverse user
When it comes to those gaming in the metaverse, users are 59% male and 38% are aged 10-20. According to a survey of 5,521 metaverse users, the largest group of users of the top 3 games; Minecraft, Fortnite, and Roblox are under the age of 20. But the metaverse is not just for the young or the gamer. According to Statista, almost three quarters of the US population are now considering joining the metaverse – the top reasons they are considering joining is to gain access to new experiences that are not available in the physical world (41%), and to communicate and engage with others in the metaverse (40%) – reasons that can appeal to those of any age.
How are brands leveraging the metaverse to connect with audiences
Several brands have already begun experimenting within the metaverse experiencing varying levels of success.
Luxury brands are making major plays into the space – with Gucci one of the stand outs. Gucci developed a Gucci Garden digital space where users can buy a limited edition of the Gucci virtual bag for $4,115 or 350k Robux. Based on its success, Gucci has created a more permanent address in Roblox launching Gucci Town in June 2022 enabling consumers to express their individuality with Gucci virtual products and connect with likeminded individuals. Louis Vuitton and Burberry are also experimenting with virtual items.
Sotheby’s, the nearly 300-year-old auction house, virtually built their auction house named Decentraland where an avatar can walk around and view what is being auctioned. Occupying a prime location in Decentraland’s Voltaire Art District, the building is a replica of their iconic New Bond Street Galleries in London. Michael Bouhanna, Head of Sales at Sotherby’s said “We see spaces like Decentraland as the next frontier for digital art where artists, collectors and viewers alike can engage with one another from anywhere in the world and showcase art that is fundamentally scarce and unique, but accessible to anyone for viewing,” Its virtual auction house has since enabled them to host several exhibitions of both digital art and several physical works of art too.
If you are uncertain about where to play and how to win in the digital space – chat to us. We are helping an array of brands make sense of the landscape and to build clarity in a changing digital world. Find out more about our digital strategy & transformation advisory services here.