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We are on the brink of a revolution similar to the way businesses and brands experienced the World Wide Web in the mid-1990s.
If you’re a fan of science fiction, you might have read Neal Stephenson’s novel “Snow Crash” (“The Virtual Samurai”) or watched the movie “Ready Player One.” If not, you must have heard of the “Matrix” trilogy. You might have thought that spending most of your online time in a virtual universe would be scary. As reality continues to meet fiction, a whole new economy, very real, will emerge.
Is that equivalent to a web revolution?
This is not new: for example, it is possible to apply filters, sometimes for a fee, to optimize its appearance during a video conference. This is the case with Zoom, in particular, with the “Touch Up My Appearance” option, which, among other things, has the effect of smoothing the skin. Also, cosmetic brands are starting to offer their virtual beauty products. At the end of April 2020, L’Oréal thus enabled Snapchat users to virtually try products from several of their brands such as Garnier and Lancôme. And teenagers are spending money (sometimes a lot) to outfit their Fortnite avatars with fashionable “skins.”
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Is all this an epiphenomenon? Or, conversely, weak signals becoming a real trend? There is plenty of evidence to suggest that we are on the brink of a revolution similar to the way businesses and brands experienced it in the mid-1990s with the World Wide Web.
I define “metaverse” (a portmanteau of “meta” and “universe”, i.e. meta-universe, a concept first described by Neal Stephenson in the editor’s note in “The Virtual Samurai”) as the future version. The Web, where immersive 3D virtual universes derived from video games, meet social networks, collaborative spaces, marketplaces, and e-commerce.
The uses for visualization are endless, both personal (for example, a movie with friends at home) and professional (for example, a remote work meeting as if we were there).
Even if the beginning of the metaverse is not new and we have been promised this revolution for years (even decades), this time may be right, because three essential elements have come together for the first time.
Hardware: Everything is possible
Creating such a virtual universe and finding friends or professional relationships there has become physically possible in a believable way.
On the one hand, the computing power of computers and very high-speed Internet access make it possible to create realistic virtual universes and create one’s avatar there with perfectly acceptable latency.
>> Creating immersive 3D spaces, new generation events, 3D commerce, selling virtual products or works of art, augmented reality, avatarization… What are the opportunities and limits for brands?
On the other hand, the progress of human-machine interface is immeasurable and extremely fast. Anyone who has tested virtual reality glasses such as those marketed by Oculus, a Facebook subsidiary, can imagine their full potential. Especially since it seems that Apple, after filing numerous patents, is about to launch its own glasses – remember what happened when Apple entered the music market! Glasses are also only the beginning, as advances in brain-machine interfaces are advancing at breakneck speed
Software: A supporting infrastructure
Your kids may have told you about the Roblox video game. In reality, Roblox is not a video game, but an infrastructure platform (what some call a metaplatform). Roblox, by making its development environment and data available, allows anyone to develop accessible games in Roblox’s virtual universe on the one hand, and players to purchase virtual assets on the other. (eg Apple’s App Store which allows developers to create apps and users to buy them). Roblox is like the YouTube of video games, bringing together creators and consumers.
Epic Games, the publisher of Fortnite, announced in April 2021 that it had raised a billion dollars that will allow the company to support its future growth and long-term vision for Metaverse.
Last example, Facebook founder Mark Zuckerberg has been saying for several months that the future of social networks is in the metaverse. And Facebook’s latest announcements confirm this view: on August 19, 2021, its subsidiary Oculus VR is launching Horizon Workrooms in beta, a virtual reality space that allows company teams to communicate virtually in the same room.
Imagine, tomorrow, meeting your friends for a virtual dinner. It’s (almost) not science fiction anymore.
Users: Towards mass adoption
Technically (hardware and software), everything is there. What about users? Here again, the pace of progress is dazzling. Health crises and repeated incarcerations have been a great catalyst. Companies have looked for solutions to allow their employees to keep in touch, teenagers for solutions to keep seeing their friends.
The crisis accelerated trends that were already at work, but also created new uses that would last. The number of users who find themselves in a universe of metaverse is constantly increasing every day. For example, Travis Scott’s 2020 concert attracted 12 million listeners across the metaverse (in-game Fortnite – but should we still be talking about gaming?) At the same time, more than 40 million users log into Roblox daily (more than double from two years ago ).
Virtual assets for a real economy
Where it becomes particularly interesting is when we observe the evolution of the turnover generated. For example, Roblox generated more than 450 million euros in revenue in the second quarter of 2021. A drop of water in the video game industry, which weighs 300 billion dollars a year, but a drop of water that is growing very fast: it has more than doubled in a year. How is this revenue generated? By selling virtual assets. When I was in college, I saved up my pocket money for months so I could buy the latest Nike Air Base. Today’s teenagers buy virtual “skins” to make their avatars look better. And, tomorrow, they’ll buy virtual Gucci bags.
Brands, including luxury brands, are already competing for virtual assets. For example, a virtual space called “Gucci Garden” was available on Roblox for two weeks in late May 2021. Gucci also released a limited edition virtual in-game bag, which retailed for over $4,000.
New economy, new challenges
A new and very real economy is therefore emerging. With this, new challenges for companies and brands:
– Counter Digital Native Virtual Brand (DNVB). For companies and historical brands, it will be a question of being able to cope with the arrival of new brands known as DNVB, which will appear in the virtual with an extension in the real world and which will have the potential to generate billions. Turnover after only a few years of existence.
– Combine physical and virtual assets. This new economy will not be 100% in the virtual world. Often, success comes from the ability to exploit the continuum between the virtual and the real, and the ability to sell virtual assets to sell physical assets (and vice versa).
– Control and leverage talent on demand. The hybridization and continuity between the virtual and the real will accelerate the emergence of all kinds of talent in the community. An independent designer, for example, could design a Nike basketball in the virtual world, making it a success, which could be real. Metaverse will be the YouTube of design and creation.
– Avoid duplication for Blockchain and NFT (“Non-fungible token”, a form of unique digital asset that cannot be duplicated, altered or deleted and which is recorded in an immutable and permanent way on a blockchain).
– Enable interoperability Confirmation that a virtual asset has been purchased, for example, can also be used in Second Life on Roblox or Fortnite. While this may not be in the interest of the platforms, it will be in the interest of the brands
In the question “Is a real economy possible in a virtual world?” », it seems the answer will soon be “Yes! ” The opportunities are immense, the challenges are also many.
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