There’s a lot of skepticism right now from those who think the metaverse is just a flash in the pan. That’s also what some people thought of the Internet in the 1990s. But then, as now, one thing became clear: although we don’t know which company will shape this new technological development, but consumers are flocking to it. Increasing consumer acceptance has prompted fundamental change.
Similarly, consumer attraction to the metaverse today represents a major shift in the way people use technology. If the metaverse is yet another evolution of the Internet – the one we are now, not the one we see from afar – then it’s clear that marketers shouldn’t miss out.
This is why we think the metaverse has staying power.
- Technological advancements are taking place. Technical challenges still have to be overcome for the metaverse experience to become fully mainstream — for example, due to technical limitations, both Meta Horizon Worlds and The Sandbox limit the number of participants per session. . But continuous improvements in computing power allow larger virtual worlds to exist. Cloud and edge computing allow intensive big data processes, such as rendering, to move away from local devices. The rapid adoption of 5G is allowing mobile devices to access these vast worlds more easily and with lower latency. And manufacturing costs for augmented and virtual reality hardware are falling.
- Massive investment in metaverse infrastructure. In 2021, Meta invested $10 billion in the metaverse. Other tech companies have also committed resources to building it — such as the recent launch of the NVIDIA Omniverse design and simulation platform and the recent metaverse-friendly updates from the Unity Engine, a platform for game developers. For good reason, the metaverse dominated this year’s Consumer Electronics Show. More and more companies large and small want to join.
- A broader set of use cases. Gaming in the metaverse has gained mainstream traction. Consumer use cases are now expanding into new retail, entertainment, sports, and education experiences. Then there are the sizable — but little-known — metaverse applications and opportunities, including virtual worker training and team collaboration with avatars, virtual prototyping in production and construction, and showrooms. Virtual display for products like cars. Even government organizations are experimenting with the metaverse. In South Korea, the city of Seoul announced the 5-year Metaverse Seoul Basic Plan that will begin with the creation of the Virtual Mayor’s Office and the Seoul Campus.
- Online commerce is mainstream. Now, omnichannel commerce is second nature to most super-diverse consumers — payment credentials are often embedded into the devices and software they use. The virtual goods economy accounts for more than 40% of global gaming revenue generated by billions of game players around the world. In the future, the long-term rise of cryptocurrencies will make any requirement to set up a crypto wallet account on metaverse platforms no longer a barrier. We’ve seen innovation in both physical-to-virtual and virtual-to-physical transactions, such as ordering Domino’s pizza in Decentraland for actual real-world pizza delivery.
- Appropriate demographics. The oldest Gen Z consumers are in their 20s. Increasingly, they are becoming an income force to be reckoned with. These consumers are more familiar with the virtual world, transactions, and commodities than previous generations. The game is leading the way: 67% of Roblox’s 50 million daily users are under the age of 16, which could signal the arrival of a whole new generation of super naughty natives.
- Brand marketing and more consumer interaction. The shift towards individual content creators is evident in the over 50% increase in influencer marketing over the past 5 years on platforms like WeChat and Pinduoduo in China as well as YouTube and Instagram in the Western world. This change bodes well for the evolution of the metaverse: a significant portion of the creative and engaging experiences will likely come from these creators-users.
Reference source: McKinsey