May 31, 2022
If you haven’t been living under a rock, you probably have seen Facebook’s announcement that, from now on, the company’s name will be Meta. With that, Mr. Zuckerberg also introduced the metaverse, a witty marriage of meta and universe.
The metaverse is a virtual reality experience in which anything is possible; according to the Facebook CEO, it is: “the successor to mobile internet”. That’s quite an announcement and as it turns out, he’s probably right: the future of virtual reality (and much more) is in the metaverse.
We are getting deep into the unknown valley and as always, we are going to review it like an old western movie: the good, the bad, and the ugly.
In our recent article, we reviewed the new trend and technology of NFTs. Alongside the announcement of the metaverse, Nike, backed by NFT technology, trademarked virtual sneakers in the metaverse
Essentially, the metaverse is a virtual reality experience, a digital world in which people come and connect, work, play, or go to school. In other words, it is virtual reality-based internet. A three-dimensional world in which digital creators and brands sell houses, clothes, sneakers and just about anything we sell in the real world. With VR headsets getting more affordable, and with the addition of LiDAR 3D scanners on phones, this trend is likely to gain further traction. Also, 5G technology enables devices to access insane download speeds enabling brands to create unique 3D experiences on the go.
But the metaverse is not a new idea; the term has been coined by science fiction author Neal Stephenson in the 1990s. In fact, VR headsets have been around for a while and online worlds too. Since 2014, the online platform “VRChat” has been offering an online world where people come together and chat.
The online game Roblox has been providing a similar platform in which users can come together and create games. In 2020, digital gaming goods were already a $18 billion dollar market, with games like Fortnite cashing in more than a billion dollars in sales. Hence, we know that the technology works, but the more important question is how the metaverse looks in 10 years.
Luckily, Mr. Zuckerberg has provided us with an answer. In his vision, there are all kinds of silly looking characters that you can inherit and explore the metaverse in or have business meetings with. Existing platforms look quite goofy but as technology develops further, it is likely that future iterations of the metaverse will be much more photorealistic and with that comes massive potential for brands to explore a new market. In the future, there will be all kinds of companies claiming pieces of the metaverse, maybe there will be multiple metaverses.
One of those companies could be Nvidia. The company is the leading producer of graphical processing units; a crucial ingredient in any metaverse, because displaying an entire new universe that doesn’t look like Super Mario requires some hefty processing. Nvidia has introduced the Omniverse: a platform using the latest ray-tracing technology to perform collaborative design and work tasks using VR or Augmented reality. This gives way for globally dispersed teams to come together in a shared workspace and work on all kinds of problems ranging from engineering to design.
However, Meta has the most ambitious plans and is willing to invest massive resources into developing a large part of the metaverse. In the next five years, meta plans to hire 10.000 people just in Europe to work on the metaverse. According to Meta, investments in the metaverse will “reduce its profits by $10 billion this year”. Furthermore, Meta is investing $50 million into global research.
With the metaverse being built in the next 10-15 years, “Virtualization” is the keyword for brands. Practically anything can be virtualized: houses, cars, jewellery. With the latest hype around NFTs, it is not difficult to imagine digital creators selling digital houses in the metaverse for a small fortune or more. In fact, the digital real estate fund, Republic Realm, bought digital land on Decentraland for over $900.000. With that come new possibilities for brands to enter the virtual economies like the online marketplace Decentraland.
As of now, the metaverse is still in its infancy and comes with lessons to learn for marketeers. First, brands need to embrace their own digital transformation and realize what potential lies in 3D worlds. That means making 2D assets and 3D assets. A good start for companies is experimenting with NFT technology as they become more understood and embraced.
Another issue facing marketeers is the murky return-on-investment. Building or investing in 3D worlds can be quite costly and there is no guarantee that these investments will play out in the future. But social media faced quite similar issues when it first started, however, early adopters of a social media strategy were successful.
One example is the company MetaVRse, which creates interactive digital showrooms for customers to experience a totally new and unique way to see and engage with the product.The metaverse will not be built by one company and it won’t happen overnight. A slow buildup of parts will likely occur, however, the rebranding of Facebook to Meta comes at a time when former employees become whistleblowers and public officials are trying to dismantle the digital monopoly of Facebook.
The word “metaverse” was coined by the science-fiction writer Neal Stephenson, and it was intended as a warning. An evil monopolist created the metaverse and this led to widespread segregation and discrimination. Mr. Zuckerberg might not be evil, however, after the leaking of the “Facebook papers”, Meta must deal with heavy accusations by the former employee turned whistleblower Frances Haugen. According to the documents provided by Haugen, Facebook (now Meta) is aware of the massive negative effects it has on the mental health of teenage boys and girls. Besides, thousands of documents are demonstrating Facebook’s struggle dealing with hate speech and misinformation. In 2020, the Vietnamese communist government has threatened to shutdown Facebook if it doesn’t censor certain political content on its page. Facebook complied, approved personally by Mr. Zuckerberg. Moreover, according to Haugen, the algorithms that drive the content that you see when you scroll through Facebook, are selectively providing content that is the most engaging. Internal research shows that the most engaging content is hateful content that inspires rage.
All the above mentioned does not lead to trusting Meta in handling difficult ethical issues. This isn’t likely to get easier for Meta once they achieve their desired goal and build out the metaverse.
A new iteration of the internet is being built, heck, a new version of reality itself is being crafted. This is a huge opportunity for brands and has massive implications for society. We must be careful about who curates that space in what way. The metaverse is coming, whether it’s Facebook or somebody else, or even all together. The only question is: How are you entering the metaverse?
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