The rise of the metaverse has been compared to the rise of the dot.com, billed as the next Internet by some analysts, dismissed as unsubstantiated hype by others. However, recent developments in technology, retail, productivity, entertainment/gaming, and education are signaling rapid and dramatic changes that will transform the way we work, learn, shop, play, and interact with each other.
In business, the metaverse is aggressively emerging as a trend that leaders across industries must address to protect company growth opportunities and competitive strategies. Although metaverses have been around for decades (the term originated with Neal Stephenson’s 1992 science fiction novel snow accident), companies are now starting to place big bets on them, expecting enhanced virtual immersive experiences to be unprecedented disruptors in the global market. But, when it comes to embracing the Metaverse:
- Recognize Opportunity. How can your company and your industry take advantage of the elements of the metaverse to gain a competitive advantage?
- Analyze the Landscape. If you’re not already there, have you sponsored a team to continually look for current opportunities and plan for potential uses?
- Evaluation and Planning. When and how will you start experimenting with aligning functional needs with metaverse environments?
Answers to these types of questions will facilitate predictive planning and prevent risk-averse operating cultures.
Where we are now: early adopters and innovators
In late 2021, Facebook decided to change its name to Meta (a move some dismissed as an effort to deflect from its not-insignificant PR crisis). CEO Mark Zuckerberg called the metaverse the “holy grail of online social experiences”, stating that the company hopes to “help the metaverse reach a billion people and hundreds of billions of dollars in digital commerce in this decade.”
Zuckerberg’s vision of breakthrough sales in the virtual world is already a reality in the gaming industry, where competitors spend real-world money on virtual items (think clothing, weapons, decorations) that they can use in games like world of warcraft, FortniteY animal crossing. In addition to generating significant profits (more than $9 billion annually fortnite epic Games, for example), gaming platforms are now competing with virtual and real-world destinations by hosting meetups, concerts, movie screenings, and parties. More than half of American children and adolescents under the age of 16 are already there. Gartner, a management consultancy, hopes that by 2026, adults will have joined them— predicting that 25% of people will be immersed in the metaverse, at least one hour a day, working, shopping, learning, socializing and/or entertaining.
Early adopters are leveraging these existing metaverse communities and the technologies they are based on to improve business results, educate, reach more potential customers, increase brand loyalty and engagement, and drive real-world sales. . Last year, animal crossing players could order virtual snacks from Deliveroo food delivery service, which included promo codes for ordering food in the real world. Designer Gucci has launched virtual clothing and products in Robloxtest marketing products for gaming communities long before real-world production begins.
Fast food chain, Wendy’s, promoted the use of fresh beef by send an avatar to Fortnite to destroy the freezers of a virtual hamburger restaurant. The stunt was seen, live, more than a quarter of a million times on Twitch, increased brand mentions on social media by 119% and won eight Cannes Lions (prize awarded at the event formerly known as the International Advertising Festival).
HUB commercial insurance broker, which launched in 2019, is using Meta’s virtual reality collaboration platform horizon Workrooms, internally and externally, to host board meetings, engage clients, onboard talent, and deliver an enhanced hybrid work experience. The platform has a lot of competition: Roblox, Participate XR, Microsoft mesh (which the company calls a “gateway to the metaverse”), GatherY Space, among others, are using virtual reality to improve online collaboration and other work experiences. Some of these platforms require the use of a virtual reality headset, creating another source of revenue for companies like Meta and Accenture (which acquired the XR from Microsoft—extended reality— division to develop its Floor N and compete in the space) that are developing their own compatible hardware.
The existing metaverse can also be used as a training environment. Medical schools are taking advantage of virtual reality to teach future doctors before working with real-world patients, and doctors use it to plan complex procedures, including the recent operation to separate conjoined twins. Richard Ward, McKinsey senior manager in the enterprise virtual reality practice, says the metaverse can be used to groom workers in many industries: “Why not practice in the metaverse first, where it’s cheap, you can do things in infinite ways, and you can make the impossible happen? Those kinds of things really offer people more efficiency and productivity…. [metaverse] it has very wide uses across the board that you can literally do now.”
where we are headed
The price of groundbreaking innovation can be astronomically high, making the decision to strike first or wait to be the last to move challenging. Think of the toy manufacturer, Lego®, that just received a $2 billion investment to create a family metaverse on the Epic Games platform. CEO Niels Christiansen said: “Children enjoy playing in digital and physical worlds and move seamlessly between the two. We believe there is great potential for them to develop lifelong skills such as creativity, collaboration and communication through digital experiences.” Lego® is betting that its virtual experience will create its own revenue stream and improve sales of its real-world product.
For organizations that want to enter the market and don’t have the deep pockets to become first movers, there’s a lot of good news. The tech industry, in particular, is littered with examples of subsequent winners, including Google, Apple, and PayPal. If your business prevents you from using an existing platform, waiting at this early stage of the game may be a smart choice. Late movers receive advantages that include learning from early mover mistakes, spending less on research and development and market education, refining early innovations to create a superior offering, reducing product acceptance risk, and spending less on marketing. customer acquisition.
Even with deep pockets, choosing to give up pioneer status can make sense. At the beginning of this year, Disney CEO Bob Chapek said the company’s ambition to “connect the physical and digital worlds” it would be overseen by a newly hired vice president. Mike White is currently establishing a task force and developing models on how to harness emerging technology to take Disney characters and storytelling to the next level.
Success with the “last-mover” approach requires companies, like Disney, to be transparent and intentional. Is your business ready to pivot and adapt to the metaverse of trends and the inevitable impact on cross-industry markets? What is your plan?
You may need to take your time to determine the best way to bring your product or service to the virtual world. Or, you have a plan but need to wait for new technologies to support your move. Or, you know that a competitor has made a formidable investment that makes it unreasonable for you to compete against him at this time. Or you’re working to build an ecosystem of partnerships (including vendors, talent, distributors, locations, and/or customers) that will support your future forays into the metaverse. Whatever the reason for your wait, have a team to monitor your industry and your competitors, allowing you to continually update your strategy and communicate your current status to stakeholders.
Whether you choose to jump in now as an early adopter of an existing platform, invest in disruptive technologies and applications, start experimenting on a small scale, or take a wait-and-see approach, the opportunities are there for businesses to expand to the world. virtual. unlimited. The only barrier? A failure to appreciate the potential for strategic innovation and business model adaptation for metaverse integration.