Despite Metaverse’s Slow Start, Brands are Still Investing in Hopes of Mainstream Adoption
Questions and concerns are being brought forward about the value of metaverse worlds where usership remains low but yet marketers don’t want to be left behind. The digital experiences being described collectively as “the Metaverse” has gained a great deal of traction and attention in the last two years, but why is the progress so slow? Let’s dive in and take a deeper look into this digital phenomenon.
Exploring Metaverse and it’s Potential
The term “Metaverse” does not refer to any one specific type of technology, but rather a broad shift in how we interact with technology. Essentially, it can be described as “cyberspace” with the most common practices taking place in virtual reality. It is characterized by virtual worlds that continue to exist even when you're not playing—as well as augmented reality that combines aspects of the digital and physical worlds. However, it doesn't require that those spaces be exclusively accessed via VR or AR. Many companies that have hopped on board the metaverse bandwagon also envision some sort of new digital economy, where users can create, buy, trade, and sell goods. In the more idealistic visions of the metaverse, it's interoperable, allowing you to take virtual items like clothes or cars from one platform to another. However, there are limitations that may be impossible to overcome. When tech companies like Microsoft or Meta show fictionalized videos of their visions of the future, they frequently tend to gloss over just how people will interact with the metaverse. VR headsets are still very clunky, and most people experience motion sickness or physical pain if they wear them for too long. However, every year there are improvements and progress made towards expanding this technology.
Who is Investing and Why?
Meta’s virtual world Horizons is a major bet for the company. So much so, the company took on a new name, Meta, and rebranded last year. The move was speculative and forward-thinking as The Strategic Market Research has valued the global market value at $47.48 billion. That value is expected to surpass $678.80 billion by 2030. Meta and Microsoft are not the only ones building and working on tech related projects regarding the metaverse. Many other large companies, including Nvidia, Unity, Roblox, and even Snap—as well as a variety of smaller companies and startups—are building the infrastructure to create better virtual worlds that more closely mimic our physical life. Ideas for the metaverse vary and it is yet to be determined where this technology can go. Meta thinks it will include fake houses you can invite all your friends to hang out in. Microsoft seems to think it could involve virtual meeting rooms to train new hires or chat with your remote coworkers. Some of the ideas you hear sound great and some sound like fan fiction. And it seems consumers are not buying into this advancement. It’s no secret that compared to Roblox, Web3-based metaverse platforms are struggling to attract visitors, with Decentraland and Sandbox reporting 8,000 and 39,000 daily active users, respectively. However, the slow growth and adoption has not stopped giant brands from flocking over and taking advantage of early integrations.
Major brands including Walmart, Nike, Disney, Levazza, Argos and Mini have flocked to develop their own experiences across platforms such as Meta’s Horizons, Decentraland, Sandbox and games such as Fortnite, Roblox and Star Atlas. Even Second Life, which was born in early 2000s during Web 1.0, is getting a second life in Web3. Another of the major platforms working in this space, Decentraland, hosts brand experiences for Heineken, Samsung, Nike, Cola-Cola, Starbucks, Domino’s and Adidas. But are audiences buying in? Not so much, at least not yet.
The Challenges Facing the Metaverse and it’s Future
To simply put it, there aren’t very many things to do yet in the metaverse. Newer platforms don’t have the experiences built up inside of them yet to make them particularly interesting. Microsoft, Meta, and every other company that shows wild demos are trying to give an artistic impression of what the future could be, not necessarily accounting for every technical question. The concept of “the metaverse” has served as a powerful vehicle for repackaging old tech, overselling the benefits of new tech, and capturing the imagination of speculative investors. But money pouring into a space doesn't necessarily mean a massive paradigm shift is right around the corner.
Nonetheless, many people had doubts about previous innovations and technology, which happened to take over the industries and change our day to day lives. By being early, brands involved in the metaverse have the opportunity to capture an audience that late adopters won’t have. Are you on the metaverse train or are you getting off at the nearest stop?