Following Facebook’s rebrand to Meta Platforms in October last year, sparking the global virtual space race, Morgan Stanley soon announced that trading in the Metaverse would be the “next big investment theme.”
15 years ago, software-as-a-service (SaaS) and the cloud triggered similar shifts in the market. This caused the value of many companies to skyrocket while rapidly increasing competition among verticals.
Currently, businesses are considering the meteoric rise of many new intelligent industries. Companies are also mulling whether the Metaverse is a viable, sustainable platform for commerce and economic growth.
With a forcasted $1 trillion revenue opportunity in less than a decade, businesses must start preparing for a metaverse-dominated future.
The Metaverse is defined as a platform, combining spatial computing and the Internet, that simulates physical worlds using immersive technologies. These experiences aim to drive rich, interactive experiences for users, both simultaneously and individually.
Numerous companies such as Meta Platforms, Microsoft, Decentraland, Epic Games, Unity, Pico Interactive, NVIDIA, and even Autodesk are developing platforms to facilitate the Metaverse.
Their new tools are set to offer enterprises an immense number of business use cases. Many firms have already turned to extended reality (XR) for training, upskilling, evaluating, collaborating, and showcasing their content on immersive platforms.
Massive firms such as NIKE, Mcdonald’s, Wendys, Adidas, Gucci, Acura, and many others have also entered the digital frontier to interface with colleagues and customers. Entertainment firms worldwide have also turned to immersive tech for amusement rides, concerts, and interactive gaming.
The blockchain is one of the foundational technologies powering the decentralised Metaverse, where no single entity will build it, own, or support it.
This requires an underlying architecture based on blockchain used on platforms like Decentraland, Insomnia Labs, and Sandbox. Real estate in these platforms are tradeable, blockchain-based assets.
Users can trade using cryptocurrency and property sold as NFTs, ensuring that assets remain non-interchangeable and retain their value, leading to three primary use cases for business operations:
Provide services: The Metaverse will have its own product and services for businesses, namely collaboration platforms. For example, users can purchase digital assets to personalise and dress their 3D avatars for VR platforms. Theme parks and museums can also leverage digital humans as tour guides.
Sell meta-assets as NFTs: NFTs allow buyers to buy and sell digital content linked to the blockchain. An increasingly popular digital asset class, people have sold them as tweets, memes, GIFs, and artwork.
Advertise Phygital Goods: VR ads and marketing can also drive business growth with solutions such as digital billboards in virtual collaboration spaces to product placements in VR games. Additionally, companies such as Nike have begun producing phygital products at its concept store in Seoul, South Korea, which converts trainers from digital NFTs to physical products and conversely.
Despite a promising future, metaverse business and trade will face significant challenges, making it a difficult task for regulatory bodies. Issues linked to erratic cryptocurrency values may call for special measures to protect investors currently and in the near future.
Risks to large brands and market leaders may also arise due to antitrust laws and unauthorised adverts in the Metaverse.
Some speculate that moves from large corporations could make it difficult for smaller and emerging brands to carve out room. Allegations over product licencing and technology disputes have already hit Meta Platforms and ByteDance in recent years.
Ultimately, the Metaverse is expected to become the next iteration of the free market. It will have similar risks and opportunities, leading to regulatory intervention to ensure sound trading practices.
Organisations that set standards for the industry, including the Metaverse Standards Forum, IEEE, XR Association, and Khronos Group, and O3DF, among others, continue to rally the global tech industry to build interoperability, security, safety, ethics, and privacy benchmarks for future users.