A concept coined by sci-fi writer Neal Stephenson in his book Snow Crash in 1992, the metaverse is regarded as the ‘future of the internet’; an immersive and digital virtual world that exists parallel to the real world. The metaverse is understood as being ‘an integrated network of 3D virtual worlds’, one that is accessed through virtual reality (VR), augmented reality (AR), and extended reality (XR) – though Stephenson himself now suggests that it can work equally well with 2D displays. The metaverse is a place that allows its users to create a digital life through avatars, where people can interact with one another as they would IRL (In Real Life) – but why is it going to become an essential concept for businesses of all sizes?
How it Works
When Facebook’s parent company rebranded as Meta, it became clear that the concept of the metaverse had moved beyond being a game gimmick, and into the realms of big business. But how would it work?
Essentially the metaverse is an immersive experience, enveloping users through their audio-visual headset, enabling individuals to navigate through the virtual world with their eyes, voice commands, and feedback controllers. These features create the physical sensation that the user is actually within the metaverse. This is why the metaverse is perceived as a ‘3D version of the internet’.
The proliferation of multi-player real-time online video games was an indication of the way in which the metaverse could develop, though they only touch on its possibilities. Its closest iteration is perhaps a video game titled ‘Second Life’, a platform that allows users to create a second life through a simulation, in which they control digital avatars that can make friends, and, essentially for the business future of the metaverse, spend money. Fortnite and Roblox are other examples of video games that demonstrate what a metaverse future may be like.
The possibilities of an immersive and interactive metaverse have rapidly become obvious to retail operations affected by the decrease in footfall in bricks-and-mortar outlets. First moving to the combination of ‘bricks and clicks’, they are now starting to think along the lines of recreating the entire shopping experience in the metaverse, where user experience (or ‘UX’) becomes the key to the retail transaction.
To secure this retail metaverse, Blockchain technology can be used to encrypt transaction data. In fact, blockchain can even represent digital assets with NFTs which can be utilised within the virtual world – for example, ‘skins’, or new visual representations, for avatar skins. Some companies are already making money by selling digital ‘fashion’ product to clothe avatars.
Alongside this, cryptocurrencies can be employed to build and power the metaverse economy, giving users the ability to purchase real-world products and services.
Despite widespread discussion of the metaverse, it is far from being a fully functioning reality. Even Facebook asserts that it will be another 10-15 years before they have the technologies required to power the metaverse.
However, you’d be ill-advised to disregard the economic powers of the metaverse, as it’s likely to pave the way for commercial opportunities we have not yet imagined – as did the Internet. Venture capitalist Mathew Ball stated that the metaverse will likely grow the digital economy, ‘which is the primary growth driver of the world economy’.
Besides tech giants such as Facebook and Microsoft employing the metaverse, other big companies have interacted with the virtual world. For example, Selfridges and Pokémon built a virtual city titled ‘Electric/City’, where people could purchase physical and virtual Pokémon merch. The program allowed visitors to create and dress avatars while using an AR body-tracking Snapchat Lens to view this. Users were then able to share their avatars via social media and other virtual platforms.
One common way users will be able to make money within the metaverse will be through advertising, directly connecting individuals with companies and marketers. The platform won’t simply be a place where people can spend their time, but also one where you can make money through advertising and socialising.
Luckily, you won’t have to be a million-dollar company to advertise within the metaverse, there will be a myriad of options available to utilise its advertising potentials. For example, 3D billboard ads, like the ones in real-life Tokyo, will be used to increase awareness for campaigns and businesses. Unlike real-world billboard ads, these ads will be more affordable.
In addition, there are massive e-Commerce possibilities. Although selling products is still a new concept within the metaverse, businesses will have many opportunities to sell products for real-world use. Think online shopping but having the ability to visit actual stores through your avatar and try on clothes and shoes, and then order these items to be delivered straight to your door (possibly by a robot…!)
It’s already been demonstrated by virtual events like Jean Michel Jarre’s The Opening, held in a virtual version of Notre Dame, that one possibility of the metaverse is to create virtual ‘real estate’ at a fraction of the cost of mounting a real-world event.
We’ll likely see events such as webinars and business meetings operating through the metaverse, as the pandemic gave every incentive to push ahead with the burgeoning technology of remote conferencing. Recently Bill Gates predicted that within the next three years we’ll see remote meetings be held within the metaverse, with 3D avatars being used.