Metaverse
A metaverse is a virtual reality world where users can interact, game, and experience things as they would in the real world. Modern iterations heavily rely on virtual reality (VR) and augmented reality (AR) technologies.
“The Metaverse” is most commonly referred to as the upcoming VR social commerce platform of the same name, developed by Meta – formerly Facebook. It gained widespread public attention following its announcement in 2021, and it’s expected to launch sometime in the 2020s, with no exact date given.
Exact definition of metaverse
The term metaverse has been around in science fiction, and web development long before Mark Zuckerberg coined it as the lead project of his newly rebranded company – Meta. The term has been used to describe digital spaces that offer a deeper level of personal involvement and customization, social interactivity, and immersion into the medium than traditional social networks. Most of these spaces are constructed from the ground up as their own virtual worlds in which users blend into the environment in the form of avatars. These core principles have been most effectively realized in video games, specifically massively multiplayer online games, which is why the concept of the metaverse is heavily intertwined with the history of gaming.
Meta’s foray into the virtual reality space brought widespread attention to the concept and cemented “the metaverse” as the next big social platform for Meta. Because we live in a competitive world, a single, unified metaverse that all users and all businesses use will probably remain mere fiction – as depicted in the popular movie Ready Player One. Microsoft is already working on its own metaverse platform, so are Nvidia and Unity. Soon, there will be several metaverses to choose from – just like there are so many social commerce platforms to choose from today.
At its core, “metaverse” refers to any virtual space that attempts to mimic the real world in some way through VR systems and AR technologies. They will be constructed as social platforms from the start.
What is the history of metaverses?
Metaverses have been in use for quite some time now. The first big metaverses were arguably established in the early 2000s when large scale multiplayer online games became popular - the most popular being World of Warcraft, in which players could communicate, go on adventures together, trade digital items, create social groups, and so on. The game’s orcs, humans, goblins, and elves were digital representations of very real people behind computer screens, and they roamed in a world that arguably mimicked our own with its cities, shops, social structures, and human communication. Players already used software such as TeamSpeak and Ventrilo to use their real voices to communicate, blurring the lines between the real and the virtual world.
Even more interestingly, this virtual world had its own business opportunities, often not necessarily intended by the developers: Players could purchase services in the virtual world using money in real life (picture receiving in-game currency; or having a strong player slay a dragon for you). In this sense, World of Warcraft was not only one of the first popular metaverses, but it was also an early metaverse commerce opportunity for businesses. Big tech discovered that there was a market for digital assets and an audience willing to pay for them.
In the mid-2010s augmented reality games became immensely popular, especially Pokémon Go. In this game, players would venture into the real world and catch Pokémon and battle other players at famous real-world sights and other significant locations. The Pokémon blended into the real-world environment. Players could locate fish-like Pokémon near rivers and lakes, while bug-types would generally be found in grassy and forest areas. The game augmented our reality in a smart and approachable way, and people loved it. The Pokémon Go metaverse was visible to everyone as you could see groups of people hanging out in parks, going on hikes, and even on boats glued to their smartphones in the search for elusive characters.
How metaverses entered the public mindset
One of the major contributing factors to the rise of metaverses was the 2020 pandemic which increased demand for highly interactive social platforms offering more than the existing social networks. Because people had to stay home and avoid unnecessary human contact, there was suddenly a real need for digital spaces that mimic real-world social experiences. One such metaverse platform is Bigscreen, which lets users watch movies and TV series together in a shared space, trying to replicate the social experience of a movie night or trip to the cinema. Another example is Party.Space that creates a metaverse to host social events like company parties, complete with tables, seats, interactive games, presentations, and the ability for its users to roam around the area and meet others freely.
Recent years saw video games such as Roblox and Fortnite embrace their own metaverses as marketing channels. In Fortnite, for example, players could experience a trailer for the new Star Wars movie in-game and only when the player was using one of their avatars. There have even been virtual concerts in Fortnite, complete with tickets, merchandise, and a live-stream live music. Roblox enables players to essentially create their own sub-metaverses other players can traverse with their in-game avatars. They are all interconnected within the Roblox main metaverse, and, most importantly, they can be monetized by brands and retailers. These games tapped into the metaverse’s social commerce potential long before Mark Zuckerberg presented his vision.
Metaverses and vitual reality
For many, the future of metaverses lies in virtual reality. The catch with VR is that it needs specialized technology, specifically a VR headset. The high cost of these gadgets and the skepticism and health concerns around them have prevented many people from experiencing it. There have been popular VR platforms such as VRChat and Meta’s Horizon Worlds, but so far, their user bases still mainly consist of tech-savvy people who can afford the main gadget. VR has not yet reached the general public and, arguably, the biggest challenge for Zuckerberg will be to make the technology more affordable.
Many believe the upcoming widespread use of metaverses will usher in a new era of the Internet. Metaverse technologies are heavily intertwined with Web3 developments, and one of the idealistic visions of Web3 is to create a singular, decentralized Internet that is accessible like its own meta-universe (=metaverse) of content. This development can already be traced across all digital spaces. Missing until 2021, of course, was a de-facto flagship metaverse project.
Mark Zuckerberg’s Metaverse announcement was so significant that he “hijacked” the term for his company. For the majority of the public today, “metaverse” simply refers to the next big thing Zuckerberg is doing.
What are some modern examples for metaverses?
Today, there are several notable metaverse projects aside from Meta’s platform:
- Decentraland is essentially a digital society centered around cryptocurrency, digital real estate, and decentralized governance
- Nvidia’s Omniverse targets professionals in the 3D design industry, enabling them to collaborate on projects in a shared metaverse, Pixar studios is involved.
- Otherside, a project spearheaded by Yuga Labs, famous for their NFT series “Bored Ape Yacht Club”, will make heavy use of NFT technologies but will apparently appear as a role-playing game
What implications does the metaverse have for commerce?
Now that metaverses are more commonly known and heavily linked to virtual and augmented realities, more and more projects are delving into the concept’s commerce opportunities. Businesses will therefore have to adapt to a new social commerce landscape in which metaverses bridge the gap between digital and physical products.
For example, buying new sneakers in real life may come with a code that unlocks the same sneakers as a virtual item in a metaverse; or those sneakers are only available digitally for an avatar to wear, and the buyer is ok with owning the product in digital form only. The ownership of this digital item might be verified by using a so-called non-fungible token (NFT) that confirms the ownership of the item in an encrypted blockchain, along with the purchase history.
Metaverse, NFTs, blockchain, cryptocurrencies – all of these concepts are slowly coming together to realize a new landscape of commerce. It is hard to predict how fast businesses will have to amend their social commerce strategies to seize on these new opportunities.
How will businesses use the metaverse as a commerce platform?
Let’s consider metaverses as a subset of social commerce. Businesses will have to utilize them as sales channels much in the same way as they use current social commerce platforms such as Facebook, Instagram, or TikTok. However, the upcoming large-scale metaverse platforms will radically change the way potential buyers will interact with products:
- The three-dimensional level of interactivity with the product will demand a 3D representation of the product. In other words, sellers will have to be able to provide 3D models instead of mere static images if they want to capitalize on the technology.
- The possible use of non-fungible tokens (NFTs) and their interactions with physical and digital products - as well as the layer of ownership - will pose an entirely new level of requirements for product information management. A Product-to-Consumer (P2C) solution that includes NFT technology in product information value chains (PIVCs) will be key to streamlining already very resource-intensive processes.
- The entire concept of digital ownership will elevate digital products to the next level. Businesses will have to consider offering digital-only products once more people are willing to spend real money on metaverse-exclusive items.
- Digital shops and storefronts are already a thing in today’s social commerce. Still, in a metaverse setting, they will go 3D and create entirely new levels of interactivity with products and brands. Brick-and-mortar and online spaces will get much closer, for better or worse.
P2C solutions will be vital to making metaverses commercially viable
It is hard to predict how many major metaverses will exist and if they will be lucrative for businesses as commerce platforms. If platform owners cannot find universal standards for product information, the demands for smart product feed management and product content syndication solutions will skyrocket. Imagine making a digital product along with product information in a 3D format and then extending that to hundreds, thousands, or even millions. Think about all the variants and the various platforms and channels with alternating data requirements where these products will be seen. What is already a difficult task today, will become infinitely more complex once these metaverses are launched.
Product-to-Consumer (P2C) platforms can adapt to these new meta-landscapes quickly. Businesses will quickly recognize that only high-level P2C tech will enable them to expand into the metaverse markets and succeed. Otherwise, retailers and brands selling on metaverses without P2C support risk a significant backlash from consumers if products appear with inaccurate data. Because the experience is much more immersive, inaccurate product data could turn away potential customers more quickly than today.
This complexity – now known as commerce anarchy – will be very tangible once metaverses move into social commerce on a large scale. Once millions of consumers put on VR headsets and dive into these digital spaces, commerce anarchy will play out in front of their own eyes. Businesses will have to ensure to rise above the mess that will probably be endemic in the early days. They can achieve this by breaking through the complexity using smart P2C solutions.
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