Is It Time for Your Organization to Enter the Metaverse?

What is the metaverse and where is it going?

The metaverse is a network of immersive virtual worlds where users can work, shop, play, socialize, and live parallel lives in the form of digital avatars. With the advent of 5G technology, and improvements in devices like virtual reality (VR) and augmented reality (AR) headsets, an all-new social and commercial ecosystem is coming into being, and it’s creating possibilities we’re only beginning to discover.

Most of us associate the network in its current, fledgling form with tech giant Meta (formerly Facebook). It’s easy to see why. Meta sinks more than $10 billion each year into various metaverse initiatives in a bid to dominate what CEO Mark Zuckerberg has called the “next chapter of the Internet”. In addition, the company’s aggressive metaverse-focused rebranding efforts, culminating in a much-publicized name change last year, indicates how seriously it takes its assumed role as the network’s chief builder, popularizer, and custodian.

Meta is far from the only big tech player looking to secure a dominant position in the metaverse, however. Microsoft, Google, Amazon, and Apple are all preparing products, services, and entire business segments specifically for the network. This industry-wide push makes a good deal of sense when we consider growth projections in the space. According to one report, the metaverse market is expected to reach $730 billion by 2028¹. JPMorgan Chase is even more bullish, predicting the technology “will likely infiltrate every sector in some way in the coming years, with the market opportunity estimated at over $1 trillion in yearly revenues.”²

It’s worth pointing out that nobody really knows for the moment what long-term impact the metaverse will have on society, culture, or business. Time’s Matthew Ball recently wrote that executives can’t even agree on whether the network is “here now, might be soon, or is decades in the future.” But money talks, and Silicon Valley’s huge investment in metaverse-related activities implies that aiming to own a slice of the network is very much a bet worth taking.

Many opportunities, one big risk

It’s not hard to figure out why leading digital technology companies with immense resources at their disposal would want to get involved in the metaverse. But what about the rest of the business world?

A recent blog post from Meta gives us a few answers to this question. The company highlights several possible business use cases for the technology, including:

• New sales channels: The metaverse represents a genuine blue ocean for sales teams and e-commerce professionals. By combining immersive AR technology with a traditional digital marketplace’s ease of use, sellers can craft a powerful sales experience that offers customers the best of both worlds. The range of available goods and services is expanding all the time to boot, from access to in-universe events to (not quite) real estate.

• Greater flexibility: Bytes are, metaphorically speaking, easier to manipulate than bits. Business owners in the metaverse will be able to quickly renovate their shop fronts and headquarters, change strategic course, and continuously update their product lines at a fraction of the physical world cost.

• New promotional opportunities: The metaverse will provide users with rich, colorful, ultra-modern variations on their favorite real-world experiences, such as attending concerts and sporting events. Marketers can sponsor experiences like these, and even organize one themselves under their own brand, leveraging the pliable nature of cyberspace to create the emotional associations they want.

The metaverse presents businesses with a theoretically limitless range of revenue generation opportunities, but the space is also fraught with risk. Or rather, it is beset by a single, overbearing risk: we simply don’t know what level of consumer adoption it will enjoy in the long run.

It’s true that the metaverse has the potential to be a fully fledged digital-native economy powered by NFTs, crypto tokens, and other novel digital assets. But today’s consumers are not used to immersing themselves entirely in a virtual environment, and there’s plenty of evidence suggesting they don’t much want to. For example, the virtual world Decentraland is currently valued at $1 billion, yet new data suggests it boasts a grand total of 38 daily active users. In conditions of uncertainty, it can be hard to separate the tulip bulbs from the gold nuggets.

We encourage innovators to explore the metaverse with an open mind and a skeptical eye. However, we recommend focusing on technological developments rather than hype cycles and glossy marketing campaigns, and emphasizing user engagement metrics over all of the above. Like any emerging technology, the metaverse will be kind to those who understand its limitations as well as its many strengths.

Footnotes

• Facts and Factors, Statistical Report on Metaverse Market Size to Hit $730.5 Bn by 2028 ↩

• JPMorgan Chase, Opportunities in the Metaverse ↩