The world’s major corporations are locked in a scramble for the metaverse.
Brands like Nike (NKE), Heineken (HEIA.AS) and Disney (DIS) are eyeing the increasing number of people flocking into virtual worlds that have proliferated around the concept of web3, and the billions of dollars of commerce that flow through them.
Corporations are channelling their creative sweat in an effort to be the first to develop successful marketing strategies for the metaverse, lest they lose a seat at the virtual table.
Recent data from Statista revealed the global metaverse market was worth $38.85bn (£29.54bn) in 2021.
By the end of 2022, this is forecast to increase to $47.48bn, before surging to a staggering $678.8bn by 2030.
To become “present” in the metaverse, one must create a virtual avatar, which is a digital body that is inhabited when navigating this brave new world.
Creating a 3D virtual avatar that you can personalise and use to interact with others in an online environment is nothing new, the concept has been around for decades.
A Korean metaverse, called Cyworld, was launched as early as 1999 and became an instant hit within the nation.
Cyworld was one of the first online iterations of a virtual world that allowed users to have a digitised version of themselves, and even facilitated Korean companies to profit from the sale of virtual goods.
Interactive online environments are also a mainstay of the gaming industry, called MMORPs, or massively multiplayer online role-playing games.
Now, with the advent of next-generation graphics cards and 5G networks, these games have become highly sophisticated replications of reality.
So, what was once the pursuit of pallid gamers, who were regularly chastised for spending too much time in murky bedrooms, has gone mainstream.
The metaverse takes the virtual world concept developed by the gaming industry and combines it with the interconnectedness and instant stream of information provided by the internet.
A new 3D experience is becoming a new version of the web — where users are virtually transported to find themselves inside the internet, rather than looking at it on a 2D screen.
The metaverse is not one all-encompassing virtual world, yet. There are still multiple incarnations that have no connection to each other, such as Cryptovoxels, Decentraland, Sandbox and Facebook’s (FB) metaverse.
Like different planes of existence, each virtual dimension is developing its own particularities and distinctive culture.
Eventually, each person could have access to a virtual bubble most suited to their inclinations, a strange future where one person’s heaven will be another person’s hell.
This multiple world dynamic is welcomed by those who believe in a free and open metaverse and oppose the concentration of power into the hands of a single techno-authority.
Justin Sun, head of Tron, told Yahoo Finance UK that “each metaverse is very different in terms of functionality, visual aesthetics and audience”.
His organisation has built the TRON complex on east coast of Miami as it appears in the Cryptovoxels metaverse.
He added that many big companies are eager to gain a presence in the metaverse, especially fashion brands like Gucci (KER.PA) and Balenciaga.
He said fashion houses are “attempting to hold fashion shows and design games in the metaverse to interact with their clients as there are so many possibilities in the metaverse for all kinds of brands”.
He believes that every brand needs a metaverse strategy that “will only become more and more important and those who are jumping into the metaverse now certainly have a competitive advantage over others”.
Digital asset management service Gnosis Safe said: “Many brands are experimenting with web3 now and we think it’ll be a norm in the future, where every major brand would have a consumer segment paying for products in crypto or interacting with NFTs [non-fungible tokens]”.
The company is fast becoming a major custodial service for brands wanting to store their iconic digital assets, and described the metaverse and NFT developments as both a “huge opportunity and challenge for brands”.
Now, the world’s major corporations have ambitions to carve up this virtual “Wild West” with digital land agents, such as MetaEstate, helping brands buy and build virtual property.
For instance, the Decentraland metaverse is divided into 90,000 units of land, with some of the most prized pieces of virtual real estate selling for millions of dollars.
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Recently, on the OpenSea NFT auction house, a section of virtual real estate in Decentraland was selling for $10m. The seller labelled it “the cheapest land in the Fashion Street area”.
A parcel of land called “Fashion Street Estate” sold for 618,000 MANA four months ago, approximately $1.5m. MANA is the ethereum (ETH-USD) based digital currency indigenous to Decentraland.
Global brands are buying into the craze, opening up outlets where people can enjoy a digital ice-cold beer, for example.
The Dutch drinks giant is pursuing a promotional campaign within the Decentraland metaverse.
On Thursday, Heineken released a “virtual beer” that you cannot drink and invited journalists to its metaverse brewery for the launch.
Those that attended were greeted by the company’s global master brewer, Willem van Waesberghe, who speculated on “how a virtual Heineken might taste”.
The expert brewer added, “I’ve never tasted anything like our new virtual beer, which is called Heineken Silver”.
The assembled digital bodies, all invited VIP guests, bobbed about awkwardly in the virtual space owned by Heineken in the Decentraland metaverse.
Some avatars stood frozen looking in the wrong direction of the speaker who was addressing the assembled avatars about “the world’s first virtual beer”. One avatar was just a head and shoulders sunk into the floor of the virtual brewery, frozen there as though the programme running the event had crashed.
The master brewer said: “I can see you all holding glasses, it doesn’t get more innovative than brewing a beer in the metaverse, and this beer is brewed with millions of pixels.”
A surreal experience was had by all. Ten minutes into the event I was asked by one avatar: “How do we leave?”
I left by turning off my computer and going to the nearest pub, for a real-life pint of the famous Dutch beer. So, in a way the whole promotional event may have achieved its ultimate aim.
Coca-Cola (KO) has teamed with Tafi, a US company that creates digital avatars and other virtual content.
Those interested in cloaking their avatar in a virtual Coca-Cola themed Bubble jacket and “sharing” the fizz sound of a bottle of coke being opened as they wander around the metaverse can purchase the NFT of the Coca-Cola Bubble Jacket from the Opensea NFT auction house.
Although it has a floor price of 500 eth, or $1.2m.
With Nike’s acquisition of RTFKT Studios, the apparel giant has stated its intention to become a major presence in the metaverse.
RTFKT is a tech start-up, backed by silicon valley VC firm, A16Z.
RTFKT, now part of the Nike family, has stated that it “uses the latest in game engines, NFT, blockchain authentication and augmented reality, combined with manufacturing expertise to create one of a kind sneakers and digital artefacts”.
In the future, Nike will be able to distribute virtual samples of its trainers in the metaverse before committing to manufacturing the physical equivalents —a web3 market sentiment testing strategy that could benefit the company’s bottom line.
The company has also created Nikeland, an immersive 3D experience within the Roblox metaverse.
In Nikeland, visitors can fit their avatar with Nike clothing and footwear. Visitors are encouraged to move in a virtual space where “games such as tag, the floor is lava, and dodgeball can be played with their friends”.
Disney aims to take the lead in the metaverse with chief executive Bob Chapek issuing a memo in mid-February claiming the virtual world is “the next great storytelling frontier”.
Chapek has appointed teams across the world’s largest entertainment company to explore the creative possibilities of this new virtual canvas and said he was “blown away by what I’ve seen”.
The most recent move follows on from Disney’s “virtual world simulator” patent approval from late last year. In December 2021 the United States Patent Office, approved the patent, signalling the company has a long-term strategy for the metaverse.
Gucci has become involved in the metaverse by selling rare luxury items within the Roblox virtual world and opening up an event space.
In May 2021, the Italian fashion house set up the virtual Gucci Garden space, calling the metaverse event “a one-of-a-kind, interactive virtual exhibit”.
The company created a digital version of its Dionysus Bag with Bee design.
It sold within the Roblox marketplace for over $4,000, exceeding the price tag of the physical version of the accessory.
Many of the institutional constructs of everyday life are beginning to migrate into this new digital frontier.
With metaverse property selling for millions of dollars worth of ethereum, rules on strict ownership of property are enforced, with NFT smart contracts replacing the physical deeds of the real world.
Also, the avatars that people use to navigate the digital frontier are gaining the legal personas associated with real life.
With the speedy development of full-body haptic suits that let you feel the metaverse, there is the possibility of future scenarios where virtual courts litigate alleged incidents of “virtual gross bodily harm”.
Many of the pioneers of this world fear we are building a new world that is still not free of the restrictions that society has imposed on the individual. Advocates for internet freedom are concerned that the metaverse will not just mirror these societal checks and balances, but also amplify them.
If corporations get control early on, then the metaverse could become saturated with advertising and promotional gimmickry.
At this year’s North American Bitcoin Conference, co-founder of Real Items Mark Patterson cautioned that the metaverse could “turn dystopian with all these brands coming in wanting more control”.
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If the metaverse becomes used as much as we now use mobile phones and other portals to the internet, then the most important events in a person’s life may happen within this digital dimension, such as falling in love.
But, this life event will be fully owned by those who provide the medium in which the user had the experience, such as Mark Zuckerberg’s Meta. The Meta company could have the “memory” of this experience stored, and users could find themselves paying premium prices for a full replay .
The omniscient power of those who control the data associated with metaverse experiences is a growing concern.
However, in virtual realities such as Decentraland, that exists on the decentralised ethereum blockchain, ownership is spread across thousands of validator nodes.