The Metaverse is collapsing the physical and virtual worlds to create a paradigm shift in interactions between customers, suppliers, partners, employers and employees. It is changing existing business models to buy, sell, spend, learn, collaborate and create. Some brands, like Nike, Starbucks and P&G, already have a presence in the Metaverse with campuses, fan zones and collaboration. And while early adoption is primarily in media, entertainment, gaming, retail, consumer and industrial manufacturing sectors, over time, it will be a disruptive force in every industry and every business.
Business Implications of the Metaverse Revolution
One of the most pronounced business implications of the Metaverse is customer engagement. The Metaverse will transform experiences with an immersive, persistent, 3D environment that enables experience-driven use cases that cut across many business areas. Companies can reimagine engagement in many business functions to provide more meaningful experiences. Where can the Metaverse improve business? How about everything from event hosting, immersive learning and development, e-sporting, gamification, meta mall, remote field service, marketing, recruitment, onboarding, fashion, and home improvement solutions, to digital arts, museums and metaverse real estate.
The multi-dimensional aspect of the Metaverse will create new-age algorithm-driven personalization platforms built on user interests and social graphs. This hyper-personalization for users will trigger new subscription-based models and digital marketplaces yet to be imagined.
Social media will transform to open collaboration platforms. Harvesting more collaboration data will allow brands to use finely tuned and pertinent information for improved customer targeting and personalization. And data from this new immersive environment can feed seamlessly into product and service development and brand positioning.
Dynamic customer service channels will help identify developing revenue streams and markets. Evolving trends include digital identities and innovative commerce models like cryptocurrencies and tokenization. These new models will increase brand adoption, create more opportunities and become mainstream in the new creator economy.
The Emergence of New Monetization Models
Perhaps one of the most significant developments from the Metaverse will be emerging monetization opportunities. Companies that are involved with the Metaverse from the start will be able to leverage these new models early and establish market share.
One new area for metaverse monetization is through platform-based services. Enterprises that bundle core platform capability with new services that span cognitive content moderation, connectivity services, AI, and edge computing, can create a One Stop Metaverse Shop.
The Metaverse, coupled with Web3.0, will lead to a boundaryless creator economy. Just like the Internet drove new business models, metaverse users will see and capitalize on opportunities to create content. But this time, user communities will have control over and flexibility to manage their content and pricing, promoting a more equitable society. Content creators will have different channels for customer acquisition, and entrepreneurial opportunities and direct relationships between creators and followers will drive growth.
Business models will proliferate across creators, developers, players, marketers and metaverse education to provide new revenue models. Budding examples of new revenue models include non-fungible token (NFT) minting, selling (examples include collectible digital art, tickets to shows, custom 3D models, etc.), and commissions from the resell of NFTs – direct to the developer and direct to creator monetization.
Metaverse Adoption Challenges
The Metaverse will enable appreciable business outcomes. But doing business in the Metaverse is not without its challenges. Enterprises should have a well-defined strategy to address issues that impact data privacy and consent, culture, technology and organizational readiness.
Defining Cyber Trust
Establishing trust as the foundation of the Metaverse is critical. There are multiple dimensions of cyber-trust – setting user expectations, safety, user experience, controlling participation and ability to manage existence. The essential attributes of identity include verified versus unverified and known versus unknown. Creating people and brand identity with the role of future identity providers in the Metaverse will profoundly impact identity-related concerns.
While there may not be any current laws or regulations that apply to the Metaverse, existing internet and copyright laws will apply. Policing the Metaverse will be another dimension to ensure that platforms comply with user-defined access needs. Enterprises should have a defined cyber security strategy that encompasses the following:
- Reputation and Identity
Establishing a process to validate that the entity-user interaction is trustworthy and legitimate is essential. The process will require new verification methods like decentralized identity management with control given to the user community to manage digital assets.
- Personal Data, Security and Consent
Centralized data management, currently controlled by big industry giants, will need to be decentralized. Companies should develop a strategy to protect personal data and assets that require a new security paradigm.
- Law and Jurisdiction
The current regulatory standards are General Data Protection Regulation (GDPR). In open identity management, an approach is needed for the user community to ensure these groups are not violating the privacy rules while interacting in the Metaverse.
- Approach to Asset Ownership
In a creator economy, a user can participate as a “value exchanger” or a “value creator.” A validated approach should include verifying that assets created and brought into the Metaverse are from a trusted user and creator of the digital assets. Ownership will be with the users. A unified system or view of user communities will be challenging to address.
The Metaverse will Transform Experiences, Business Models and Channels
The Metaverse will open new channels from brand marketing and positioning to product development and new ways to host sales events. There will be new business models for creators, developers, and players that will enable the monetization of digital collectibles and content.
Enabling 3D worlds, location and context-aware interactions and transactions at a global scale will require computing, storage and network capabilities that are an order of magnitude greater than what is in use today. Businesses should adopt an interdisciplinary approach to maximize and scale up for metaverse opportunities. Start by developing a strategy to assess the platform for viability, desirability, and feasibility of all addressable possibilities. To fully capitalize on this platform, companies should apply design thinking that can capture people’s imaginations in unique and compelling ways to deliver meaningful and distinctive experiences.