Metaverse is predicted to become a new future of the Internet. According to a report by McKinsey, the value of Metaverse will reach 5 trillion USD by 2030. So what areas can apply Metaverse and what businesses need to do to take advantage of opportunities in the Metaverse? This will be the topic of today’s article. Let’s begin!
Metaverse is a term with a broad meaning. It usually refers to the virtual world environment that people can access via the internet. Simply put, Metaverse is a new vision where humans and bots can be interacted with to play games, do business, socialize or shop.
In fact, the term of Metaverse was started from science fiction with the fiction novel ‘Snow Crash’, written by Neal Stephenson in 1992. Accordingly, Metaverse refers to an imported digital environment role, where people interact as avatars.
There are a few definitions for Metaverse. According to Matthew Ball – a venture capitalist, author of the book Metaverse Primer: “Metaverse is a large network of 3D images built in real time. Along with that, it is the reimagining of the identities of people, objects, history, payments, and social order. This space can be experienced by an unlimited number of users, each one has their own sense of existence“.
But according to Facebook, you can see the Metaverse as an embodiment of the Internet, where you can not only view the content, but also exist within it. Metaverse is not only virtual reality, but it is also accessible on all different computer platforms, VR, AR as well as PC, both mobile devices and game consoles.
In general, the definition of Metaverse is still inconsistent because at the moment Metaverse does not have any real products or services. However, we think that with different development and construction directions, there will be more new definition for Metaverse.
II. The huge potential of Metaverse
In 2021, the number of Google searches for the word “Metaverse” skyrocketed 7,200%, and the Metaverse online gaming platform Robloxreached over 55 million daily active users by February 2022.
The world’s tech giants are also investing heavily in the Metaverse market. Meta has committed to invest more than 10 billion USD in Reality Labs division, along with 20 specialized manufacturing hardware related to Metaverse (virtual reality glasses – VR). Microsoft plans to buy game company Activision Blizzard for $69 billion and will provide “building blocks” for Metaverse.
The results of a McKinsey survey of more than 3,400 consumers and executives also show interest in Metaverse:
Nearly 60% of consumers using the first version of Metaverse are excited about converting their daily activities to Metaverse.
About 95% of business leaders expect Metaverse to have a positive impact on their industry within the next 5-10 years.
Despite the recent hype of the Metaverse games such as Sandbox and Decentraland, the Web3 Metaverse market cap is still extremely small compared to traditional Web 2.0 video games companies.
Therefore, as decentralized metaverses disrupt the gaming industry thanks to the advantages of blockchain technology and NFT, their market cap will rise dramatically and we can see that the potential is enormous.
Recently, the sale of metaverse land is also gaining traction among both retailers and institutional investors alike.
A total of $106 million was spent on virtual property, with purchases of digital land, luxury yachts, and other assets, according to data from DappRadar. Sandbox alone accounted for $86.56 million in unique non-fungible token land sales.
Nevertheless, if you compare this to the total value of the real estate market which is about $326.5 trillion in 2020, the upside is enormous.
IV. Businesses’ opportunities in the Metaverse
With the potential to create a huge value of up to 5 trillion USD by 2030, businesses have many opportunities in the Metaverse. It not only helps provide unique experiences for customers but also and enhance business operational efficiency.
Metaverse gives learners a more authentic experience. The Rady School of Management of the University of California at San Diego (USA) uses a virtual campus that allows students to participate in online lectures, meet and exchange in a creative open space. Or the virtual classroom space developed by Akaverse also helps students learn and interact with each other.
Metaverse helps businesses launch many novel shopping experiences to attract customers, promote brands and set up “virtual” stores to reach global customers. Furniture retailers such as Crate & Barrel, Walmart, West Elm and Wayfair have partnered with Pinterest to use augmented reality (AR) technology. This help consumers experience first-hand the layout of furniture in their own home before deciding to buy.
Metaverse brings together various online social networks, games, cryptocurrencies and digital assets. Korea’s KB Kookmin bank creates virtual “financial towns”, telecommunications hubs and virtual interactive spaces.
The fashion industry’s early experiments with the virtual world were largely the launch of virtual clothing. Gucci sold a virtual version of the Dionysus bag for the equivalent of $6 on Roblox, each of which has since been bid up to over $4,000 when resold on the second-hand market, higher the price of a real bag.
Gaming was the first entertainment sector to enter the Metaverse with popular games like Roblox and Fortnite. Besides, some famous musicians also plan to hold performances on various platforms in the Metaverse. Marshmello, Travis Scott, Ariana Grande… are among the many artists who have made their mark in the virtual world.
V. Big players enter the market
The metaverse hype begins with Facebook officially entering the market and boldly rebranding to Meta. However, this is just the beginning of a wave of institutions’ involvement in this new trend. As FOMO (fear of missing out) happens to retailers and traders on a regular basis, the same will occur to big players as they do not want to lose to their competitors and will gradually dip their toe into this highly potential market.
Sandbox has secured $93 million in a Series B fundraising round led by Softbank Vision 2 Fund, marking the fund’s first investment in crypto assets.
Sports clubs are diving in too. English soccer club Manchester City has teamed up with Sony to build its own virtual world.
Adidas announced the partnership with Coinbase after stating that they would expand its activities in the Metaverse.
World-famous auction house Sotheby’s has recreated its London New Bond Street galleries in the virtual world of Decentraland. After getting involved in NFT auctions, the renowned auction house now becomes part of the metaverse with its own virtual location.
VI. 7 steps to take advantage of opportunities in the Metaverse
According to McKinsey’s opinion, companies must consider how Metaverse can positively and negatively impact their business. Therefore, they will have a strong foundation to come up with an appropriate strategy.
Here are 7 steps to take advantage of opportunities in the Metaverse that businesses can refer to:
Step 1: Enterprises need to define clear goals when entering the Metaverse market. Whether your business want to create new demand, build community or create new revenue streams. These goals play an extremely important role, as a guideline for the development of products and services on Metaverse.
Step 2. Define your business’ role in the Metaverse ecosystem. Enterprises can choose to build new experiences for users in many different fields, facilitate interaction or develop infrastructure for Metaverse such as building hardware components, Blockchain technology, AI. , Big Data, Internet of Things (IOT), …
Step 3. Launch the first projects and use cases of Metaverse. Businesses can experiment with new opportunities such as:
Immersive experiences with technologies such as virtual reality (VR), augmented reality (AR), mixed reality (MR), …
For example, a typical use case in the field of Healthcare are two popular tools during the pandemic: Telemedicine & Telehealth. It allows patients and doctors interact in virtual 3D clinics. This helps increase efficiency of medical examination and treatment results while limiting contact and reducing the risk of disease transmission.
Step 4. Monitor appropriate indicators to measure initial effectiveness in the short term, and then planning to test long-term options in the future. The indicators analysis helps businesses make timely assessments, as a basis for decisions on future development strategies.
Step 5. Analyze more about users, learn their behavior on different platforms and provide detailed research to optimize the product in a way that suits the needs of customers.
Step 6. Start the plan to scale up the development through finding talent, establishing the technology infrastructure as well as the necessary tools to speed up the product and service development process.
Step 7. Include Metaverse in your business strategy and operating model, and clearly define who will be responsible for project management.
VII. Final thought
With the recent statistics and development, we believe that Metaverse will not be a passing trend but will truly change the technological landscape. It not only bring more and more opportunities in the Metaverse for businesses but also open up the door for mainstream adoption of cryptocurrency and NFT.
However, Gartner experts also believe that the application of Metaverse technology is still nascent and fragmented. It’s still too early to determine which investments will be viable in the long term. Therefore, businesses should limit their investment in some specific Metaverse areas. Moreover, it’s very important for businesses to prioritize learning, exploring, and preparing for Metaverse before deploying.