Q4 2021: rise of the metaverse

While there are many interpretations of what the metaverse is, will be or could be, most agree it is made up of the immersive virtual and augmented worlds in which one can already do  things such as shop, socialise and work. To explore these worlds there is often the option of doing so as a digital version of one’s self. 

We’re already seeing the transformation of sectors such as gaming and fashion, with many proponents arguing that, eventually, every industry will be involved. While there is a long way to go before even a fraction of the metaverse’s potential is reached, many experts say now is the time to take notice. 

The recent rebranding of Facebook to Meta was a turning point in the mainstreaming of the metaverse. Given its vast reach, Meta is likely to play a significant role in what the actual metaverse eventually comes to mean. According to a former VP at MGA Entertainment Inc, Meta is the platform to watch. “They have the deepest pockets. Everyone is on their platform already, so the potential for their adoption and pivot point is massive.”

Other platforms in the recent limelight include video game publishers Epic Games and Roblox. The former’s Fortnite game has evolved into an online space where people socialise and virtual concerts have been held. “They also have deep pockets and are still a privatised company, so I can only imagine how big they’re going to get with more seeding and more funding rounds,” our expert said. Meanwhile, Roblox no longer positions itself as a pure-play gaming platform, instead positioning itself as a global platform through which people can gather to “imagine, create, and share experiences”. 

Fashion has also been one of the first industries to jump on the metaverse bandwagon, with many high-profile brands entering the world of virtual events, particularly in light of the COVID-19 pandemic. “I think key brands are really getting into it and adopting the fact that you can have New York Fashion Week on Roblox and in real life. That’s never happened before. In many cases… the virtual Gucci bags on Roblox are outselling the IRL Gucci bags,” the former MGA Entertainment VP said.

And it’s not just about linking back to products that are available in the physical world; many brands are digitising their assets or rolling out virtual ones. In December, Ralph Lauren launched a digital fashion line via “Winter Escape”, where players can enjoy the “ultimate holiday experience” involving activities such as ice skating and, of course, shopping for sportswear.¹ https://www.roblox.com/games/7608438089/The-Winter-Escape Nike also recently filed trademark applications, with CNBC saying the space is a priority for the brand and that more virtual rollouts are expected soon.²https://www.cnbc.com/2021/11/02/nike-is-quietly-preparing-for-the-metaverse-.html The idea of a digital wardrobe for avatars might sound far-fetched today, but if the metaverse takes off in the way its backers believe it will, dressing for work or socialising in that world might not seem so extreme. Indeed, Microsoft will start rolling out Mesh for Microsoft Teams this year, combining the mixed-reality capabilities of Microsoft Mesh with the productivity tools of Teams.³https://news.microsoft.com/innovation-stories/mesh-for-microsoft-teams/

At the moment, consumer goods are the low-hanging fruit in the metaverse; indeed, we heard that CPGs are “always going to be at the forefront”. However, the activities we’ve seen so far look like just the beginning. “Thus far, it’s been a collectable pop culture thing to get involved with. It’s been hot. They’ve not embraced it for what it’s actually going to do, which is… revolutionise an entire industry.” Our experts say eventually there will be tokens and loyalty programmes specific to individual businesses. “There’s going to be a McDonald’s token, there’s going to be a Wendy’s token, and that’s the economy they’re going to control.” As the metaverse continues to expand, we can also expect a radically more diverse mix of participants, spanning restaurants, department stores and even real estate. 

The way to think about it right now, we’re told, is like the “Wild Wild West”. With numerous existing platforms operating independently, the specialist said it will be a few years before “the flood gates open”, adding that the biggest gap today is understanding the infrastructure and resources required, combined with smart contract knowledge. As a former director at HTC Corp noted, a critical prerequisite for the metaverse is collaboration to achieve “common prosperity and coexistence”. As another expert said, “it’s going to be an amalgamation of several virtual worlds that you can hop in and out of seamlessly”.

There’s also a fundamental question about how we will enter the metaverse via our physical devices. According to the former HTC director, mixed reality (MR) glasses will be key, as will virtual reality (VR) hardware — but this will not be enough to encourage wider participation and “without enough individual users, there’s no point in building a metaverse”. 

How the metaverse develops is currently hard to predict as the real world goes through a “test-and-learn” period. But soon it seems the metaverse will blossom and regulatory implications will come into focus, along with safety and privacy considerations. As we heard: “Everyone is going to want to have their own platform and, therefore, control their own data and engagement with the customer.” In the event of mass adoption, questions are sure to be raised regarding how much data and content is “too much”, notwithstanding the thorny issue of consent.

Ultimately, the metaverse has the potential to usher in a new era for how brands engage with and advertise to consumers, as well as in how content is created and consumed. How quickly this happens is an open question but we were told “it’s actually going to be faster than a decade”. Expect to hear a lot more about the rise of the metaverse in 2022.