the metaverse has become one of the biggest buzzwords in blockchain and crypto, as it promises to deliver a more immersive, interactive, and collaborative experience than the internet has achieved to date.
This promise of a new world has big companies like Meta (formally known as Facebook) investing heavily in the fledgling space. When most hear the name Metaverse, their mind wanders to a few things: an avenue for global conglomerates to show off their tech bent, an esoteric product for a select few to show off non-fungible tokens (NFTs), or a new front in the game development. However, a deep dive into the Metaverse reveals a whole new world, a world filled with new opportunities and risks for both consumers and businesses.
Although the current Metaverse ecosystem might be populated by giant corporations, eventually, for wider adoption, small businesses will have to make a transition. Looking at historical patterns in the adoption of new technologies like the internet, mobile payments, and more, it is clear that small businesses play a monumental role in onboarding the masses.
One of the critical takeaways from Facebook’s Connect 2021 was that the advent of the Metaverse is imminent, but the timeline for widespread adoption stretches out at least a decade. A study by Pew Research found than about 54% of the top technology innovators, developers, and companies. Meanwhile, political leaders believe that by 2040, the Metaverse will be a functional aspect of daily life for half a billion or more people around the world.
The urgency of the transition to the Metaverse may not be immediate, but companies should consider the technology at least on the fringes. By strategically using resources now, a company will be able to improve the customer experience of tomorrow.
To understand what opportunities and risks Metaverse brings to a business, it is imperative to understand the Metaverse infrastructure. Jon Radoff, CEO of 3D gaming company Beamable, classified it into seven layers:
- Infrastructure: This layer is the semiconductors, materials science, cloud computing, and telecommunications networks that allow the layers to be built on top of it.
- Human interface: The human interface layer refers to the hardware that will be used to access the metaverse. This includes everything from mobile devices to VR headsets.
- Decentralization: Build everything on a permissionless, distributed, and democratized structure.
- Spatial Computing: This layer refers to the software that brings objects into 3D and allows the hardware interface to interact with them.
- Creator Economy: Make it easy for creators to make Metaverse projects and monetize them.
- Discovery: Ways to discover the experience.
- Experience: Users can participate in games, social experiences, live music, etc.
In all likelihood, most small businesses will be involved in bringing Metaverse experiences to their customers. Speaking to Cointelegraph about the disruptive potential of the Metaverse, Naveen Singh, co-founder and CEO of decentralized data management network Inery, said:
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“It is no longer a question that the Metaverse would be a major disruption to the digital economy. The real focus now is what industries the Metaverse would be most important for. As a gateway to a new digital economy, the Metaverse opens up new possibilities for various domains.”
“The industries that are most likely to undergo transformation and feel the immediate impact of the Metaverse are gaming, fashion, entertainment, media and retail. At the same time, for the Metaverse to unlock its full potential, one of the most defining properties would be interoperability across its entire fabric,” he said.
The metaverse is reshaping industries
The gaming industry has traditionally been a pioneer in adopting cutting-edge technologies, and the same is the case for the Metaverse. The Metaverse is already considered by many gamers to be the next frontier in gaming. The developers say that today’s games can often feel lonely. Although multiplayer games solve the problem of isolation to some extent, Metaverse takes immersion and community to a whole new level. The communities created by Metaverse projects like Decentraland, Axie Infinity, and Sandbox provide benefits not only social but also monetary.
However, the current Metaverse gaming space is dominated by large companies. Research and development on a Metaverse game is generally out of the budget for small businesses. Nikita Sachdev, founder and CEO of Luna PR, believes that along with gaming, real estate is another sector that could be an early adopter of the Metaverse. Sachdev told Cointelegraph:
“In real estate, companies and agencies are always looking to develop ways to tour and view properties for previous sales and foreign investors. Imagine if you can tour an entire complex before it’s even developed. Investing in real world properties will be much more immersive and ‘open houses’ will no longer be necessary”.
The global real estate market is estimated to be valued at more than $3 trillion, and any possible dent in this space can have huge economic and sociological implications.
Fashion is another sector that could be affected by the Metaverse. In fact, there has already been a success metaverse fashion week which included fashion shows, after-parties, immersive experiences, shopping, panel talks and more.
Wahid Chammas, the co-founder of Faith Tribe, an open source design platform, believes that since the Metaverse and fashion are ultimately about identity, they are bound to complement each other. Speaking to Cointelegraph, he said:
“People venture into the Metaverse and do all kinds of things to live and portray an identity that they may not live in the physical realm. Wearables are undoubtedly the most conducive to showing your personality and identity. Having this link between the physical and the digital accentuates their perceived identity, we believe there will be further disruption to both the physical world and the Metaverse of fashion for brands that take digital fashion seriously.”
Risks associated with the Metaverse
Exposure to the Metaverse may be more risky for small businesses. The ecosystem is still taking shape and the uncertain and nascent nature of the Metaverse could throw off the roadmap of some companies. Expounding on this point, Jake Fraser, head of business development at Mogul Productions, told Cointelegraph:
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“Technical expertise and knowing how to structure user environments virtually is a fluid space and requires people to be in the know to run the best user experience. There also needs to be user value and something unique that they can’t get from your brand elsewhere. If there is no clear ‘hook’, it can be difficult to drive adoption by businesses”.
However, it is clear that venturing into the Metaverse for relevant companies not only helps companies to be prepared for the future, but also makes their current offerings more lucrative. The benefits far outweigh the risks. George Narita, CEO of Aurora42, told Cointelegraph:
“The biggest risk is not entering the world of the metaverse. I see a lot of opportunities, especially for early adopters, in the same way that it was at the beginning of the dotcom era; many did not understand how to communicate. Just being in the Metaverse isn’t enough. Those who have a disruptive vision and contribute experiences and emotional connections by co-creating with their followers will be ahead. Today people do not want to be passive but to be part of the construction of this universe”.