Metaverse is one of the most exciting emerging trends that promises to change the way real world interacts with virtual world. However, despite all the excitement, and the fact that the term “Metaverse” has been around for some time now, it still lacks any authoritative definition to describe it. The metaverse seems to be whatever people’s imagination dream it to be, though simply put it is essentially a seamless convergence of our real and virtual lives. It can be imagined as next iteration of internet where we are immersed in rather than just viewing it. Metaverse does not represent any single technology but combines several technologies like AR/VR, Web 3.0, IOT, 5G, Artificial intelligence and spatial computing. Early adaptors are joining the bandwagon to learn how to operate in the emerging virtual world and some of them are beginning to reap real life benefits.
What is driving investment in Metaverse
As Metaverse evolves its potential to unleash the next wave of digital disruption seems increasingly clear. The impact varies by industry, but it has implications for all given its potential to enable new business models, products and services and act as an engagement channel for both B2B and B2C.
According to McKinsey research the value from enterprise and consumer use cases may reach up to $5 trillion by 2030. Research firm Gartner estimates that by 2026, 25% of people will spend at least one hour on metaverse every day. By 2021 the estimated funding by VCs and private equity had already reached $13Billion. Recently JP Morgan became the first bank to open a lounge in Decentraland – one of the most popular blockchain based world. Roblox had 55 million active daily users in Feb 2022. Meta has committed more than $10 billion into its Reality Labs division. The e-commerce, gaming, virtual collaboration, e-learning, shared experiences and tokenized assets are expected to provide the biggest opportunities.
So, what is driving all the investment? The recent technical advancements like 5G, edge computing, web 3.0, AI/VR are certainly helping realize the promise. The pandemic further accelerated shift towards doing activities virtually. A survey by McKinsey showed more than 60% respondents are excited to transition daily activities to the metaverse.
Over 80 percent appreciate shared virtual experiences with friends and family, 63 percent prefer virtual work meetings, and 59 percent enjoy virtual education sessions more than in-person ones.
Top use cases & industries
Many industries are already investing and experimenting with use cases on marketing, learning, commerce, customer service etc. Let’s look at some of the top uses that are emerging
- Learning & education: Pandemic forced many of the institutions towards digital e-learning platforms. With its ability to stream real-time data and improve interactions metaverse could improve how educators deliver their lessons. The University of California at San Diego’s Rady School of Management uses a virtual campus for real-time lectures, breakout spaces, and outdoor areas. With its capability to simulate real life scenarios even enterprises can leverage metaverse to train their workers as they compete for talent on global scale.
- Gaming and immersive entertainment: This is probably the largest use case on Metaverse as of today. Gaming has evolved into a multi-layered experience that encompasses viewing, playing, and socializing. Roblox is one of the most popular games on the planet today with over 53.1 million DAUs on average in 2021. With physical events almost coming to an halt in Covid-19 pandemic many artist explored alternate ways to perform and connect with fans. Ariana Grande in 2021 did a concert with the Fortnite gaming universe. Many similar entertainment events leverage the immersive experience of the metaverse.
- Advertising, branding and next gen commence: A number of brands are developing online presence on the metaverse. Hyundai Motor Company launched Hyundai Mobility Adventure on gaming platform Roblox.Coca-Cola launched digital assets to support several marketing campaigns. Disney's "theme park metaverse" initiative allows guests with immersive experience with wearables, smartphones and digital access points.
- Digital twin:Digital twin is a virtual representation of real world object in digital world. However what is interesting is that it is equipped with sensors for real time data feed and processing. The digital twin when integrated with metaverse has applications across several industries be it manufacturing , automotive , healthcare , smart cities and IOT. BMW is experimenting with creating digital twins of entire factories. In the U.K. nation highways have plans to implement digital twins of the U.K.’s road networks by 2050.
- Virtual tourism and real estate: Digital real estate is likely to play an important role in the future of the metaverse. They are essentially real estates in virtual world that may be used hold meetings , virtual concerts , play games , socialize , virtual tourism and all the other activities. The Sandbox and Decentraland are the most attractive metaverse venues for brands. HSBC bought land in Decentraland and plan to offer educational course on it. Boston Protocol built a virtual shopping centre for immersive shopping experience. Recently brands like Samsung, Adidas, and Gucci have also jumped on the bandwagon of digital-land NFTs.
The use cases for metaverse are huge and ever increasing with potential to impact most industries. Some of the top industries that are seeing the value include – Financial services , Retail , Apparel & luxury , healthcare and manufacturing. While all use cases may not ultimately grow and provide the value they promise the future is bright given the sheer range of possibilities.
Business Strategy to Generate value from Metaverse
As Metaverse opens up new services and business models its appeal and impact is hard to ignore. So the important question for all organizations is how do they prepare for this. Not everything in metaverse is relevant for all but it is important to have a clear business strategy to derive value from metaverse. Some of the steps involved could be
- Define Your metaverse goals: Define your goals clearly – both long term and short term. It could be catering demands across existing segments or it could be opening up new revenue stream. Do you have competitors that already have presence on metaverse.? Identify the opportunities by evaluating current high value use cases. Define metrics to measure success.
- Learn, adapt and evolve: Launch pilots and monitor the results. Refine the approach and evolve. Learn more about users, examining behaviour on different platforms and undertaking primary research. Evaluate in-house skills and train as needed. Start small and move fast.
- Scale: The final step is scale. Once you have identified the potential use cases that provide best value , plan to scale. Embed the metaverse in your business strategy and operating model, while clearly identifying who will drive the initiative in your organization. Source the required talent and establish the necessary infrastructure needed.
Conclusion
The Metaverse continues to evolve, and opportunities are fast emerging. It has potential to change everything the way internet did couple of decades back. It is important to note that despite all the buzz around Metaverse there are challenges that need to be addressed for it to realize its full potential. Technology needs to be improved along with standardization of digital assets, interoperability and data analytics. User identification and privacy safeguards will be crucial for both interacting and transacting in the metaverse. Workforce will need to be reskilled along with regulatory framework to govern it. It is off course difficult to have a firm strategy in such a dynamic space. However, the risk of being left behind justifies the investment needed to get started and explore this virtual world.
