Why the ‘metaverse’ will prove to be more than a buzzword

Companies are pouring money into 3D digital environments that can be explored via avatar. Here’s why they’re here to stay.

Article by FastCompany.com

BY NICK PRINGLE5 MINUTE READ

The term metaverse was coined by American writer Neal Stephenson in his 1993 sci-fi hit Snow Crash. But what was far-flung fiction 30 years ago is now nearing reality. At Facebook’s most recent earnings call, CEO Mark Zuckerberg announced the company’s vision to unify communities, creators, and commerce through virtual reality: “Our overarching goal across all of these initiatives is to help bring the metaverse to life.”

So what actually is the metaverse? It’s best explained as a collection of 3D worlds you explore as an avatar. Stephenson’s original vision depicted a digital 3D realm in which users interacted in a shared online environment. Set in the wake of a catastrophic global economic crash, the metaverse in Snow Crash emerged as the successor to the internet. Subcultures sprung up alongside new social hierarchies, with users expressing their status through the appearance of their digital avatars.

Today virtual worlds along these lines are formed, populated, and already generating serious money. Household names like Roblox and Fortnite are the most established spaces; however, there are many more emerging, such as DecentralandUplandSandbox, and the soon to launch Victoria VR.

These metaverses are peaking at a time when reality itself feels dystopian, with a global pandemic, climate change, and economic uncertainty hanging over our daily lives. The pandemic in particular saw many of us escape reality into online worlds like Roblox and Fortnite. But these spaces have proven to be a place where human creativity can flourish amid crisis.

In fact, we are currently experiencing an explosion of platforms parallel to the dotcom boom. While many of these fledgling digital worlds will become what Ask Jeeves was to Google, I predict that a few will match the scale and reach of the tech giant—or even exceed it.

Because the metaverse brings a new dimension to the internet, brands and businesses will need to consider their current and future role within it. Some brands are already forging the way and establishing a new genre of marketing in the process: direct to avatar (D2A). Gucci sold a virtual bag for more than the real thing in Roblox; Nike dropped virtual Jordans in Fortnite; Coca-Cola launched avatar wearables in Decentraland, and Sotheby’s has an art gallery that your avatar can wander in your spare time.

D2A is being supercharged by blockchain technology and the advent of digital ownership via NFTs, or nonfungible tokens. NFTs are already making waves in art and gaming. More than $191 million was transacted on the “play to earn” blockchain game Axie Infinity in its first 30 days this year. This kind of growth makes NFTs hard for brands to ignore. In the process, blockchain and crypto are starting to feel less and less like “outsider tech.” There are still big barriers to be overcome—the UX of crypto being one, and the eye-watering environmental impact of mining being the other. I believe technology will find a way. History tends to agree.

FROM SCROLLING TO STROLLING

Detractors see the metaverse as a pandemic fad, wrapping it up with the current NFT bubble or reducing it to Zuck’s dystopian corporate landscape. This misses the bigger behavior change that is happening among Gen Alpha. When you watch how they play, it becomes clear that the metaverse is more than a buzzword.

For Gen Alpha, gaming is social life. While millennials relentlessly scroll feeds, Alphas and Zoomers increasingly stroll virtual spaces with their friends. Why spend the evening staring at Instagram when you can wander around a virtual Harajuku with your mates? If this seems ridiculous to you, ask any 13-year-old what they think.

Big corporations and tech companies are beginning to bet on this future. Sony invested $200 million in Epic Games, the developer of Fortnite, in the company’s recent $1 billion funding round. Decentralized crypto platform Boson Protocol paid $700,000 for a plot of virtual real estate in Decentraland to build a shopping mall. Facebook is pouring its piggybank into a new workplace VR tool and proto-metaverse, Horizon.

These companies are investing huge sums because they see the younger generations doing the same: 87% of Generation Z and 83% of millennials are playing video games and engaging with digital spaces on smartphones, gaming consoles, and computers at least weekly if not daily. More than this, more than 65% of Gen Zers have spent money on in-game items. In schools, chat about V-Bucks and Robux fill the corridors from first bell to last.

MARKETING IN THE METAVERSE

Where people go, brands will follow. But whether in the metaverse, on a crowded high street, or in a commercial break, the rules for businesses seeking to stand out remain the same.

Creativity is the defining competitive advantage. And in the metaverse, the possibilities for creativity are vast. Why? Because marketing expectations have yet to be set and the laws of physics don’t apply. In short, anything is possible.

So while the first wave of creativity in the metaverse has followed one consistent approach—the importation of real-world products into virtual spaces—brands should start thinking more creatively about “virtual first” products and services.

For example, a brand making energy drinks in the real world could manifest as a supplier of rocket packs in the metaverse. Or an IRL automaker could provide teleportals in the virtual world. This may seem fanciful, but consider that the next generation could well discover your brand in virtual space first—so how do you want to be perceived and what positive values can be transferred to the real world?

By thinking “virtual first,” you can see how these spaces become highly experimental, creative, and valuable. The products you can design aren’t bound by physics or marketing convention—they can be anything, and are now directly “ownable” through blockchain. Interestingly, this presents an opportunity for ailing brands to reinvent themselves in the metaverse; just look at the crypto casino that Atari has built in Decentraland.

I believe that the metaverse is here to stay. That means brands and marketers now have the exciting opportunity to create products that exist in multiple realities. The winners will understand that the metaverse is not a copy of our world, and so we should not simply paste our products, experiences, and brands into it.

Much like in Snow Crash, we find ourselves emerging from economic uncertainty, witnessing the dawn of a new digital frontier. But instead of dystopia, I believe the metaverse is a place where creativity and curiosity can flourish like never before.


Nick Pringle is SVP executive creative director at R/GA London.

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