The transformation of gaming into a dominant social media platform has led to the rise of the metaverse. Games like Roblox and Fortnite allow users to easily program games and build virtual worlds that enable shared experiences such as concerts and even graduation ceremonies in the digital universe. This virtual experience has led to the metaverse – an immersive 3D virtual world where one can have a variety of experiences in a 3D virtual environment that can be similar to the real world or could be a newly defined world. In the metaverse, one can connect with a defined space through their digital avatar (a close replica of a real human being) by wearing an immersive AR/VR device, all while enjoying the comfort of their couch.
The metaverse became a trending tech topic in October 2021 as Facebook Inc, changed its name to “Meta” and announced a $10 billion investment in metaverse technology over the next five years. The technology has already started to gain its share of acceptance and according to Bloomberg Intelligence, by 2024 global metaverse revenue could approach $800 billion. The metaverse is not a fad. For organizations to stay relevant, they should begin taking the first steps toward meeting the needs of the next generation.
Early Adopters of the Metaverse
The appeal for virtual worlds is promising for many industries. The metaverse will make many new virtual experiences possible from weddings to yoga classes. While the development of this technology is still at a nascent stage, many companies have taken a giant leap into the metaverse to connect with the next generation. Companies like PepsiCo have partnered with start-ups like Metaverse to get started building a bridge to this new technology.
Retail in the Metaverse
The metaverse promises various possibilities like virtual stores, malls, branding opportunities and more. The technology helps continue the in-store experience and digital elements. For example, a user can enter a virtual cosmetics storefront in the metaverse with their virtual avatar, walk around, interact with beauty advisors, experience virtual try-ons, find out more about the product and then make a real purchase. According to Shopify, interactions with products featuring 3D/AR content have a 94% higher conversion rate than those without it. And some retailers have already begun to build out their virtual channels. Nike is collaborating with Roblox to build its virtual world named “Nikeland” where players can try new sports shoes. The virtual channel will extend to experiences like virtual marathons.
Another emerging business model is the direct-to-avatar (D2A) business, where accessories and apparel are sold for the avatars. Some retailers, like Ralph Lauren, American Eagle, Gucci and North Face have already released their digital avatar fashion collections. Even luxury auto brands like Maserati and Tesla are releasing virtual versions of their vehicles for avatars.
Metaverse Offers Enterprise Solutions
The metaverse has big potential beyond accessorizing avatars. Forward-thinking organizations can benefit from enhanced team collaboration and virtual modeling. Nvidia has created the “Nvidia Omniverse” to combine different virtual worlds and integrate them by creating virtual twins of factories and buildings. They are also working with BMW to redesign 31 factories around the world. Engineers in different countries will be able to collaborate in real-time on the factory’s redesign using digital humans to simulate how activities and tools on the production line could be operationalized.
Microsoft is implementing metaverse technology to prepare for a 3D virtual world through its “Enterprise Metaverse”. The launch of Mesh for Teams will allow employees in different locations to collaborate and share halo-graphic experiences using their avatars. As the world moves to more virtual work environments, the metaverse will be a key technology driving better collaboration and fostering creativity which were the biggest drivers for in-person meetings. This will improve remote team collaboration during product and packaging design, JAD sessions, and company/program/project status meetings. The scenarios are endless.
New Markets and Products Emerging in the Metaverse
CNBC recently reported that according to MetaMetrics Solutions, real estate sales in the metaverse were over $500 million in 2021 and could reach $1 billion in 2022. Despite being intangible real estate, its value is skyrocketing. Decentraland, an Ethereum based virtual reality blockchain platform, is a 3D world where participants can enter a property virtually through avatars, engage with the real estate agent, explore the property and then use tokens to purchase land, goods, and services. With the explosion of virtual real estate, tech giants like Meta and Microsoft are well equipped to become digital real estate companies.
But virtual experiences may provide some of the best opportunities. Walt Disney is creating a virtual theme park with the help of AI, robotics and other tech advancements. Park-goers will purchase tickets to experience the theme park in the metaverse in-lieu of the travel and expense associated with these real-world experiences. Music concerts will be hosted on the metaverse to enable people across the globe to attend a concert hosted from a remote location. Justin Bieber has already hosted a concert on the metaverse and thousands of his fans were able to join the concert through their avatars.
Other virtual experiences could include watching a football match together with friends from the best stadium seats; traveling to exclusive places across the globe; destination fitness experiences; virtual education opportunities and even virtual socializing. Tinder is building its metaverse platform with new concepts like space dating and metaverse dating.
While online gaming has driven the reimagination of 3D virtual experiences, even the gaming industry can help companies realize new revenue streams. For example, Burberry recently collaborated with the video game “Honor of Kings” to bring Burberry costumes to the game. Gaming offers unique opportunities for brands to assert their brand identity in another dimension.
Even sustainability can be promoted in the metaverse. Procter & Gamble’s Herbal Essences partnered with the Royal Botanic Gardens, Kew, to allow consumers to visit a virtual garden and authenticate natural, plant-derived ingredients in the product line. For each authentication, a tree is planted, reinforcing P&G’s commitment to sustainability.
To understand the full potential of emergent Metaverse platform - its applications, challenges, risks, and opportunities - Wipro surveyed 550 business and technology executives across the US, UK, and Germany. Read the newly launched full report here: The Industrial Metaverse: A Revolutionary Game Changer for Business.
Current Challenges in the Metaverse
The technology is still in its early stage and is rapidly evolving. Like every other new phenomenon, it has its challenges.
The metaverse is the next big step in tech. It is no longer science fiction or confined to the pages of a novel. There are many emerging uses for how the metaverse can touch every industry. For now, the technology is at a very nascent stage and mass adoption of the metaverse will take time. But at some point, having a virtual avatar will be as common as having a social media account today. And these avatars will redefine the digital experience of users.
Senior Consulting Partner, Wipro, Ltd.
Vinay is a Consulting Partner with Wipro and works with a portfolio of retail and consumer product clients in B2B and B2C eCommerce, Omni-channel, Industry 4.0 and supply chain.
Principal Consultant, Consumer D&C, Wipro, Ltd.
Naveen is a Principal Consultant with the Consumer D&C. He has over 10 years of experience managing several clients in the consumer and retail space. His interests include emerging technologies and enterprise supply chain management services.