From VR and in-game experiences to digital goods and tokens, brands should carefully weigh the pros and cons of each emerging option
hanks to Facebook’s recent rebranding as Meta, the metaverse has become a buzzy topic in the media and marketing world lately. Much of the discussion so far has been understandably focused on the key players and consumer-facing platforms that are driving its development, such as Facebook’s investment in Oculus and Fortnite’s live events, but the metaverse is an all-encompassing concept that goes much further than that.
As a leading contender for the next iteration of the internet, the metaverse promises to create a persistent, shared, and creator-driven digital world. While this vision may take years, if not a decade, to come to fruition, we’re already starting to see bits and pieces of it being integrated into digital products we’re using today, no VR headsets or crypto wallets required.
Here are some of the viable entry points into the metaverse today that all brands should take into consideration before jumping to VR experiences and buying virtual real estate.
MMO Games & Virtual Experiences
For innovation-minded marketers, it is common knowledge by now that popular massively multiplayer online games (aka MMO games), such as Fortnite, Roblox, and Minecraft, are evolving beyond video games and becoming establishing shared virtual worlds for players to socialize with each other, explore, and, in some cases, participate in the world-building process. They are immensely popular among younger consumers; for example, as of 2021, Fortnite had over 350 million registered players, with 62.7% of them in the 18 to 24 age group, while Roblox counted 47.3 million daily active users as of Q3 2021, with a similarly young-skewing demographic.
These MMO games now provide virtual venues where millions of players go to enjoy shared experiences, such as Fortnite with its Party Royale island where shared experiences take priority over gameplay, and Roblox with its Party Place, a private venue for virtual birthday parties and other meetups. For future-forward brands, these venues provide an interesting channel to experiment with metaverse-lite activations where embodied presence adds a new dimension to the interactive experience. The Gucci Garden exhibition in Roblox, for example, allowed players to wander through a lush and surreal landscape while their avatars automatically changed based on the order in which they visit the different rooms. It was visited by one million players within its first week.
Granted, not every brand would have the resources to pull off a customized in-game experience like that today. Brand activations in these virtual venues are still in early stages of development and a few years away from having turn-key solutions. Some platform owners may be more inclined to allow brands in as co-creators than others, who would prefer to exert more control over who gets in. For most brands today, organic presence in MMO games may take some effort to establish.
Before making the investment to build a presence in the MMO games, however, it should be a prerequisite for brands to have a fully-realized gaming strategy. After all, these MMOs are forming the prototypical foundation of the metaverse, and the gaming audiences are already on board with the cultural and behavioral shifts that the metaverse is set to propagate and accelerate.
In other words, your metaverse audience of tomorrow is already on these MMO games, as well as the other common touchpoints in the gaming ecosystems such as esports events, game-streaming sites like Twitch, and gaming-related Discord channels (more on this later). Therefore, every consumer-facing brand will need to address the growing reach of gaming as a media channel, now with a cultural impact that extends far beyond its own category, or risk losing out on a rapidly growing audience that is becoming more diverse in demographics each year.
Connected Communities & Embodied Presence
The necessity of tapping into the gaming community via various touch points extends beyond this particular audience segment and applies to all types of connected communities that will one day inhabit their own corners of the metaverse. While the gaming community may be the undisputed early adopters, communities organized around other common or niche interests will likely migrate from the channels they operate on today to the metaverse for a richer experience.
The metaverse aims to bring people together, but consumers are already enjoying shared online experiences, live or time-shifted, outside the platforms with metaverse ambitions. For online communities, Discord and Reddit are two popular channels for live and time-shifted interactions, but other types of shared experiences may also bring communities together, or even create new communities. The viral phenomenon of Wordle serves as another recent example of how connected communities can spring up around unlikely topics.
One of the key characteristics of the metaverse is the sense of presence. Despite the myriad ways to be social online, the experience of being online today still tends to be a mostly solitary one. You can doom-scroll through your social feeds for hours without leaving a trace of social interactions. In the metaverse, however, lurking wouldn’t be the default mode, as your avatar embodies your presence and announces it to others. And it is logical to assume that this increased awareness of presence will facilitate the sense of community for the metaverse users.
For brands, this means that earning the trust of connected communities will be a cornerstone of future success in the metaverse. In order to do so, brands should extend products and offers to enrich their shared experiences. Today’s algorithmic culture means that people sharing similar interests can easily find each other online and spread their experiences. How well a brand can manage to tap into these connected communities and create shared experiences will be crucial skill sets to learn in preparation for the metaverse.
Digital Goods, NFTs, & Digital Self-Expression
As more and more consumers start to populate the metaverse-lite platforms, the number of digital items they own and trade will naturally increase as well. Just as our physical processions are often seen as an important indicator of our identities, digital goods are on track to become a crucial part of our self-expression in the metaverse. Many tend to spend more than is necessary for fashionable clothes and home decor; similarly we do and will spend more for good skins in Fortnite and bragging rights to being at a streamed event.
Last year, Epic revealed it made $50 million from selling one set of NFL-themed Fortnite skins, with its sets of Marvel and Star Wars-themed skins each generating an even higher, undisclosed amount. That is partly why a digital-only Gucci bag from the brand’s aforementioned Roblox exhibition was re-sold for over $4,000 on the aftermarket, far surpassing the bag’s value in the real world.
A central driver behind the growth of digital goods is the increasing popularity of NFTs, which generate digital scarcity and prove digital ownership without a central authority. For future metaverse inhabitants, NFTs make digital goods unique and tradable, doubling as both means of digital self-expression and investment where wear and tear won’t depreciate their resale value. From NBA-licensed basketball trading cards to limited-edition NFT sneakers, many brands are already rushing in to create their own digital collectibles.
There is a natural path for branded NFTs to become part of the metaverse. After all, the most beloved brands are often valued as social signifiers within different communities (Nike for sneakerheads, A24 for indie cinephiles, etc.), and NFTs are already being leveraged to create digital signifiers fit for the metaverse. Twitter’s recent decision to launch NFT profile pictures (and the resulting backlash) is a good example of NFTs’ potential as a tool of self-expression and social signifier in the metaverse. In the future, NFTs may enable digital goods to become portable across different platforms, as the blockchain powering them can operate independently off the platforms, but so far that hasn’t been made a possibility.
In addition, the emerging combo of NFTs and video games is a transformative match, opening new doors for brands to rethink their holistic strategy around gaming, NFTs, and digital assets. Last summer, Axie Infinity became the first NFT-based game to hit $1 billion in all-time trading volume. While there have been some well-reasoned critiques of this type of play-to-earn games and what they mean for the future of work, in addition to backlash from the gaming communities towards proposed NFT integrations, they nevertheless offer a glimpse into a possible future where NFTs and other decentralized financial tools may serve as the economic infrastructure of the metaverse.
Some brands are starting to explore this intriguing intersection as well. To commemorate its 200th anniversary, Louis Vuitton developed a mobile game, Louis: The Game, in which players can collect 30 free NFTs, along with 200 candles, as they follow the brand’s mascot Vivienne on a virtual journey to Paris. Plus, ten NFTs created by Beeple are embedded into the game to further boost its appeal, although players won’t be able to claim them.
Despite these intriguing promises that NFTs and digital goods hold for the metaverse, we’d advise a healthy dose of caution for brands thinking of tapping into this entry point in 2022. The initial frenzy of branded NFTs has died down, so the press value of being an innovative first-mover is now gone. Overall, NFTs and by extension, other web3 technologies, have roughly peaked in their inflated expectations and the resulting backlash is gathering momentum. The aforementioned backlash towards Twitter’s NFT profile pictures is one such example.
Considering the sustainability issues surrounding crypto mining, plus a high amount of frauds and scams in the NFT space, many consumers have grown quite wary of NFTs, and it will serve brands well to consider digital goods beyond NFTs. Bragging rights alone won’t be enough to sustain their values — not many brands have a dedicated cult following to justify that approach. Therefore, the key element of creating branded NFTs should be the type of membership and access they confer.
Tokenized Access & Ownership
Today, access is managed via ticketing; in the metaverse, NFTs can be used to tokenize access to exclusive events and experiences. By attaching each ticket to an NFT, event organizers and service providers can tap into the resale market and make a cut every time the ticket changes hands.
Early experiments with tokenized access mostly come from the music industry, as rock band Kings of Leon issued front-row tickets for their upcoming concerts as NFTs, and Post Malone auctioned off a chance to play Beer Pong with him via NFTs. AEG, the company behind the Coachella music festival, recently announced it will auction off 10 lifetime passes as part of a larger move into NFTs. Some of the Coachella NFTs can be redeemed for physical items like posters and photo books; the digital goods come with analog swags.
Beyond the music industry, Resy co-founder Gary Vaynerchuk is set to open a members-only fine-dining restaurant next year whose membership is granted and verified via crypto tokens made available for public trading. In this sense, NFTs can turn the abstract concept of access into a tangible collectible, elongating its resale cycle even after the events are concluded.
This is where the development of the metaverse collides with the booming creator economy. Much like today’s internet, the majority of the content in the metaverse will be user-generated, and brands will have a chance to collaborate with content creators to reach their audiences. What may be different from today, however, is that tokenized ownership of digital creations, enabled by the same blockchain technologies that power NFTs, may grant the digital creators more agency in how they choose to monetize their creations in the metaverse. But that also opens the door for unauthorized usage and frauds; for instance, Hit Piece, a music NFT platform currently in beta, is currently minting NFTs off songs on Spotify without artists permission.
Today, most content creators depend on platforms for monetization, be it ad-supported ones like Instagram or podcasts, or subscription-based ones like Substack or Patreon. These platforms act as the middleman between content creators and consumers and make a cut by virtue of being the distributor. In the metaverse, blockchain-backed tokens may replace these middlemen and unlock new monetization models for creators and, by extension, brands looking to work with them.
Once again, the growing cultural backlash against crypto and web3 technologies mean that brands need to exercise an abundant amount of caution when exploring this new model for the creator economy. At the moment, it is difficult to discern which platforms will be willing to embrace this new model to build their metaverse at the expense of their potential profits. But even without the utilization of crypto tokens, it would be smart for brands to strategize around the value of access and membership that they may provide their most loyal customers with in both digital and physical realms to foster lifecycle loyalty.
VR’s Potential as a Primary Entry Point
Of course, we’d be remiss if we didn’t mention VR and AR experiences as a main entry point for brands to enter the metaverse. Thanks to Mark Zuckerberg, VR is now widely accepted as the primary interface for the metaverse of tomorrow, as many envision it as a 3D immersive version of the internet, for this is how Meta has been demonstrating its metaverse. Horizon Worlds, which the company recently opened up to all 18+ users in US and Canada, is a prime example of how Meta envisions itself as a VR-driven metaverse platform.
Brands have been exploring VR as a potential media channel long before the concept of metaverse blew up. Burberry’s recent collaboration with ELLE Digital Japan to create an interactive virtual replica of its flagship Ginza store is a good example of how today’s VR experiences may successfully transfer into a metaverse environment one day soon.
Yet, the meager adoption rate of VR headsets today inspires little confidence that it will serve as the primary interface for the next iteration of the internet, and Meta faces many competitors in the race towards metaverse. The competitive landscape will look quite different by 2024, with Apple’s upcoming AR wearables, as well as mixed reality devices from Google, Snap, and Niantic, all competing with Meta’s headsets for market share. (Notably, Microsoft has reportedly canceled plans to build HoloLens 3, instead partnering with Samsung to build a new mixed-reality device.)
It is estimated that by 2026, global consumers will collectively use 70 million virtual reality headsets worldwide, up from 26 million in 2021. While 70 million is a sizable user base, it still pales in comparison to the over 6 billion smartphones in use today, indicating the need for brands to consider other more accessible metaverse entry points alongside VR as well.
Interestingly, even Facebook recognizes the long ramp-up that VR headsets need to become a primary metaverse interface and has announced it will bring Horizon Worlds to mobile later this year, thus acknowledging the necessity of exploring other metaverse entry points while VR and VR tech continue to evolve and mature.
As our head of strategy Adam Simon laid out in his piece on what it will take for the metaverse to be fully realized, it is important to have an accessible interface that allows for varying degrees of engagement and attention from users. Yes, one can choose to strap on a VR headset and get lost in Horizon Worlds, but it will be equally important for both the audience scale and use cases of the metaverse to allow people to access it via smartphones, wearables, and other connected devices in a less demanding manner.
The same principle holds true for brands looking to find an audience in the metaverse. While it is important to start tinkering with immersive technologies and figuring out what AR/VR content could add to your brand’s metaverse footprint, it is just as crucial to formulate a metaverse strategy that allows for more accessible interactions via gaming, connected communities, digital goods, and tokenized access.
Photo by: julien Tromeur on Unsplash