Introduction to the Metaverse

We’ve all heard about the latest buzz word ‘Metaverse’ and the hype around it is growing steadily but what is it really? Influencer Marketing Hub loosely defines it as “a virtual universe where users have access to digital avatars that let them “live” in a “digital world”.

While the Metaverse is still being defined, both literally and figuratively, you may have already been exposed to a few of its use cases such as connecting with friends and exchanging digital assets. If you’ve paid for your kids to upgrade their gear in Fortnite, or overheard them rave about the Travis Scott or Marshmello concert they attended, you’re seeing the early adoption of this virtual universe.

Even though this may be unchartered territories for many companies in South Africa, the Metaverse has the potential to unleash real-life benefits and is worth exploring to better understand the commercial value it could have for “future-fit” businesses of all sizes.

Background to the Metaverse

In its earliest form, the internet was the physical connection of wires and governing protocols that allowed users to communicate on a single network. Web 1.0 brought the internet to the masses, allowing people to consume static, read-only content. Web 2.0 ushered in a new era of dynamic, interactive pages, enabling communication between users.

Web 3.0 is currently developing around us, connecting users, content, and programs directly to each other, bypassing intermediary applications. It is this Web 3.0 framework that could create massive “multi-user, economically strong applications” which is where the Metaverse fits in.

The Metaverse was introduced as a fictional concept by Neal Stephenson in his 1992 novel Snow Crash. It referred to a permanent virtual world, a successor to the internet, where people spent large parts of their lives in digital environments to escape from their realities. He imagined this digital world would be accessed via special devices which would allow the digital avatars of these users to meet, interact, play games, buy and sell things, and more.

The Metaverse has the potential to impact everything from employee engagement to customer experience, omni-channel sales and marketing, product innovation, and community building.

What is the Metaverse?

According to Matthew Ball the Metaverse is a massively scaled and interoperable or connected network of real-time rendered 3D virtual worlds that can be experienced synchronously and persistently by an unlimited number of users with an individual sense of presence, and with continuity of data such as identity, history, entitlements, objects, communications, and payments.”

Mark Zuckerberg said a lot of people think the metaverse is about a place, however, it could be better defined as the point in time “immersive digital worlds become the primary way that we live our lives and spend our time.”

Additional definitions:

• A 3D extension of the internet today with a much larger economy than that of the real world - Jensen Huang

• An expansive communal, and virtual world where people can interact with brands, intellectual properties, and each other with experiences spanning across all categories - Tim Sweeney

• We have Instagram. We have email. We have messaging. And then there are our real-life friends; the real-life activity that we’re participating in. Sometimes there’s an intersection between those two. But when I think about a real-world vision of the metaverse, it’s really a union of those where they become much more deeply fused; where there’s a digital extension to everything that’s real.’ -John Hanke

Is the opportunity real?

In 2021, venture capital and private-equity funding into the Metaverse reached $13 billion. In 2022 the investment into the Metaverse space is already more than double what it was in 2021. McKinsey & Company estimates a market impact of between $2 - $2.6 trillion on e-commerce by 2030, an impact of $180 - $270 billion on the academic virtual learning market, a $144 - $206 billion impact on the advertising market, and a $108 - $125 billion impact on the gaming market.

The industries most likely to be impacted by the Metaverse include consumer and retail, media and telecommunications, and healthcare, which could be the catalyst for their early adoption.

Will customers and businesses adopt the Metaverse?

Consumers and brands are already engaging with the Metaverse. According to a report from McKinsey, nearly 60% of consumers are excited about transitioning their everyday activities to the Metaverse, with 57% of Metaverse-aware companies saying they are adopters. 66% of the consumers indicated they would attend Metaverse live events, e.g., concerts, sports, movies, and festivals. 66% would engage in gaming, with 64% shopping and 62% also interested in “travel”.

Of the two-thirds that have already experienced the Metaverse, 80% appreciate the shared virtual experiences, 63% prefer virtual work meetings and 59% enjoy virtual education. 62% of those using the Metaverse had engaged with one or more branded virtual experiences.

Here are a few use cases businesses are implementing:

• Marketing campaigns or initiatives

• Learning and development for employees

• Meetings in the Metaverse

• Events and conferences

• Product design or digital twinning

Are you thinking about your Metaverse strategy?

Much like everything in business, defining your ambition is the just first step toward developing a strategic stance. The Metaverse is likely to influence many aspects of business including how customers expect to interact with your business, your competitive landscape and your business operations in general:

• Human resources will have new ways to undertake learning and development and recruiting

• Future growth plans will need to examine new revenue streams and business models

• Marketing strategies will evolve

• Sales teams will be able to host and attend events at a significantly lower cost

• Customer support may use the Metaverse for service calls or to directly demonstrate actions.

• Research and development could be accelerated through the use of “digital twins” and new design tools.

While early adopters have largely been corporates, it is never too early to get your business Metaverse ready. Experimenting with these new technologies won’t cost you an arm and a leg either. By hosting internal meetings or virtual socials in the Metaverse, or sharing personal experiences of the Metaverse during team huddles to create more awareness, employees will become more familiar (and confident) as the ecosystem continues to evolve.

Watch this video to learn more from Meta [1hr; 17mins], and read further on how your Small business can adapt to the Metaverse

Sources:

Trends Bulletin Edition Three , 2022 Vodacom Strategy and Research and Value Creation in the Metaverse, McKinsey & Company, June 2022.