Published September 18-October 11, 2021
Metaverse is a word I had first come across nearly 30 years ago in the book “Snow Crash” by Neal Stephenson. It is once again in the news with the CEOs of Microsoft and Facebook talking about it. In this series, I will review the current thinking on the metaverse, and then imagine how the metaverse idea could be used by businesses to create interesting experiences for their customers.
Wikipedia writes about the origins of the metaverse concept:
The Metaverse is a collective virtual shared space, created by the convergence of virtually enhanced physical reality and physically persistent virtual space, including the sum of all virtual worlds, augmented reality, and the Internet. The word “metaverse” is made up of the prefix “meta” (meaning beyond) and the stem “verse” (a backformation from “universe”); the term is typically used to describe the concept of a future iteration of the internet, made up of persistent, shared, 3D virtual spaces linked into a perceived virtual universe.
The term was coined in Neal Stephenson’s 1992 science fiction novel Snow Crash, where humans, as avatars, interact with each other and software agents, in a three-dimensional space that uses the metaphor of the real world. Stephenson used the term to describe a virtual reality-based successor to the Internet.
Another book, William Gibson’s, “Neuromancer”, published in 1984, had given us a new term: cyberspace. He described it thus: “A consensual hallucination experienced daily by billions of legitimate operators, in every nation, by children being taught mathematical concepts… A graphic representation of data abstracted from the banks of every computer in the human system. Unthinkable complexity. Lines of light ranged in the nonspace of the mind, clusters and constellations of data. Like city lights, receding.”
Remember that both these books were published in the pre-Internet era. I remember reading them and being fascinated by the futuristic vision that was presented. When I started IndiaWorld in early 1995, I would imagine it at times as a new world where people anywhere could interact with each other – a sort-of 3D storefront for businesses and consumers to engage. Of course, the technologies were still too primitive to make any of that happen.
Since then, the metaverse as an idea has inspired many books, TV shows and movies, as catalogued by Jon Radoff. There have also been some efforts like Second Life. There was a book, “Ready Player One”, which was later made into a movie by Steven Spielberg, that visualised the metaverse. Marvel’s comics and movies give us early glimpses of what is possible in such a world. Minecraft and Roblox are present bets on the metaverse future.
From a South China Morning Post article: “Generally, the metaverse is a place that you can go to find the games, music, films and programmes that you like, all brought together in a single immersive experience… The defining quality of the metaverse is persistence. When a participant leaves the metaverse, it continues to develop – it has an independent existence which you can’t turn off or pause…The holy grail of the metaverse is a player’s avatar that is also persistent, which means that s/he can use the same avatar in every game or experience. A player’s avatar is, in a sense, a single representation of an individual that can go anywhere in the metaverse, and evolves because of its experiences there… such convergence is starting to become a reality…[with] the success and popularity of gaming platforms Roblox and Minecraft. Roblox is a gaming platform that allows users to program their own games using the company’s game creation software. Roblox is already a kind of multiverse, with around 160 million monthly users and its own communities and currency. The online version of Minecraft, in which users explore and create a blocky terrain, has 125 million monthly users.”
So far, the metaverse has largely remained a distant dream. Now, with augmented reality (AR) and virtual reality (VR) technologies accelerating, it is edging towards “reality”.
Facebook and Microsoft Visions
It was the recent comments made by the CEOs of Facebook and Microsoft that shone the spotlight on the metaverse in a big way.
Mark Zuckerberg outlined an expansive vision in an interview to The Verge in July 2021:
The metaverse is a vision that spans many companies — the whole industry. You can think about it as the successor to the mobile internet. And it’s certainly not something that any one company is going to build, but I think a big part of our next chapter is going to hopefully be contributing to building that, in partnership with a lot of other companies and creators and developers. But you can think about the metaverse as an embodied internet, where instead of just viewing content — you are in it. And you feel present with other people as if you were in other places, having different experiences that you couldn’t necessarily do on a 2D app or webpage, like dancing, for example, or different types of fitness.
I think a lot of people, when they think about the metaverse, they think about just virtual reality — which I think is going to be an important part of that. And that’s clearly a part that we’re very invested in, because it’s the technology that delivers the clearest form of presence. But the metaverse isn’t just virtual reality. It’s going to be accessible across all of our different computing platforms; VR and AR, but also PC, and also mobile devices and game consoles. Speaking of which, a lot of people also think about the metaverse as primarily something that’s about gaming. And I think entertainment is clearly going to be a big part of it, but I don’t think that this is just gaming. I think that this is a persistent, synchronous environment where we can be together, which I think is probably going to resemble some kind of a hybrid between the social platforms that we see today, but an environment where you’re embodied in it.
In the same interview, Zuckerberg talks about some fascinating possibilities:
So, one is you will be able to, with basically a snap of your fingers, pull up your perfect workstation. So anywhere you go, you can walk into a Starbucks, you can sit down, you can be drinking your coffee and kind of wave your hands and you can have basically as many monitors as you want, all set up, whatever size you want them to be, all preconfigured to the way you had it when you were at your home before. And you can just bring that with you wherever you want.
If you want to talk to someone, you’re working through a problem, instead of just calling them on the phone, they can teleport in, and then they can see all the context that you have. They can see your five monitors, or whatever it is, and the documents or all the windows of code that you have, or a 3D model that you’re working on. And they can stand next to you and interact, and then in a blink they can teleport back to where they were and kind of be in a separate place.
So I think for focus time and individual productivity, I think being able to have your ideal setup, we call this “infinite office.”
Facebook recently announced Horizon Workrooms, a virtual reality app to reimagine office workspaces. Watch this CBS video. And here is another interesting video. A quote from Zuckerberg in the CBS story: “So I think of the metaverse as the next generation of the internet. So you can kind of think about it as, instead of being an internet that we look at, right, on our mobile phones or our computer screens, it’s an internet that we are a part of, or that we can be inside of.” It also introduced smart glasses, in association with Ray-ban.
Satya Nadella had this to say in May 2021: “Finally, as the virtual and physical worlds converge the metaverse made up of digital twins, simulated environments, and mixed reality, is emerging as a first-class platform. With the metaverse the entire world becomes your app canvas. With Azure Digital Twins you can model any asset or place with Azure IoT and keep the digital twin live and up-to-date. Synapse tracks the history of digital twins and finds insights to predict future states, and with Azure you can build autonomous systems that continually learn and improve. Power Platform enables domain experts to expand on and interact with digital twin data using low-code/no-code solutions. And Mesh and Hololens brings real-time collaboration.”
So, can the metaverse be the next big idea? If so, how would it impact marketing and the brand-customer relationship? Let’s begin by understanding what the metaverse really is.
What It Is – 1
An explainer from CNN: “The metaverse was originally conceived as the setting for dystopian science fiction novels, where virtual universes provide an escape from crumbling societies. Now, the idea has transformed into a moonshot goal for Silicon Valley, and become a favorite talking point among startups, venture capitalists and tech giants. The idea is to create a space similar to the internet, but one that users (via digital avatars) can walk around inside of and where they can interact with one another in real time. In theory, you could, for example, sit around a virtual meeting table with colleagues from around the world — instead of staring at their 2D faces on Zoom — and then walk over to a virtual Starbucks to meet up with your mom, who lives across the country… Much like the internet today, the metaverse won’t be a single technology that gets switched on at once, but rather an ecosystem built over time by many different companies using a variety of technologies … Improvements in mobile device processors, gaming systems, internet infrastructure, virtual reality headsets and cryptocurrency are all crucial building blocks for creating the metaverse and ensuring consumer adoption. What’s more, after the pandemic forced much of the world to work, learn and socialize from home, many people may feel more comfortable interacting virtually than they did two years ago, something tech companies may be trying to capitalize on.”
Forbes: “Imagine walking down the street. Suddenly, you think of a product you need. Immediately next to you, a vending machine appears, filled with the product and variations you were thinking of. You stop, pick an item from the vending machine, it’s shipped to your house, and then continue on your way. Next, imagine a husband and wife. The husband offers to go to the store but the wife can’t remember the name and type of product she needs. Her brain-computer interface device recognizes it for her and transmits a link to her husband’s device, along with what stores and aisles it’s located in. Welcome to the metaverse, alternate digital realities where people work, play, and socialize. You can call it the metaverse, the mirror world, the AR Cloud, the Magicverse, the Spatial internet, or Live Maps, but one thing is for certain, it’s coming and it’s a big deal.”
Eric Elliott: “The metaverse, in a nutshell, is the digital world, where anything we can imagine can exist. Eventually, we’ll be connected to the metaverse all the time, extending our senses of sight, sound, and touch, blending digital items into the physical world, or popping into fully immersive 3D environments whenever we want. That family of technologies is known collectively as eXtended Reality (XR).”
Citibank adds: “Non-Fungible Tokens-based markets for physical real estate, digital art, and Fortnite skins might seem only slightly interconnected, but they are all part of a larger opportunity: the Metaverse. As conceptualized in books and movies beginning in the 1990s, the Metaverse is the virtual alternative to our physical universe and may be the next version of the internet. To envision the potential scale of NFT assets in the Metaverse, imagine a virtual world where every conceivable asset can be bought, sold or traded.”
What It Is – 2
Matthew Ball provides a definition of the metaverse:
Be persistent – which is to say, it never “resets” or “pauses” or “ends”, it just continues indefinitely
Be synchronous and live – even though pre-scheduled and self-contained events will happen, just as they do in “real life”, the Metaverse will be a living experience that exists consistently for everyone and in real-time
Be without any cap to concurrent users, while also providing each user with an individual sense of “presence” – everyone can be a part of the Metaverse and participate in a specific event/place/activity together, at the same time and with individual agency
Be a fully functioning economy – individuals and businesses will be able to create, own, invest, sell, and be rewarded for an incredibly wide range of “work” that produces “value” that is recognized by others
Be an experience that spans both the digital and physical worlds, private and public networks/experiences, and open and closed platforms
Offer unprecedented interoperability of data, digital items/assets, content, and so on across each of these experiences – your “Counter-Strike” gun skin, for example, could also be used to decorate a gun in Fortnite, or be gifted to a friend on/through Facebook. Similarly, a car designed for Rocket League (or even for Porsche’s website) could be brought over to work in Roblox. Today, the digital world basically acts as though it were a mall where every store used its own currency, required proprietary ID cards, had proprietary units of measurement for things like shoes or calories, and different dress codes, etc.
Be populated by “content” and “experiences” created and operated by an incredibly wide range of contributors, some of whom are independent individuals, while others might be informally organized groups or commercially-focused enterprises
He also explains what a metaverse is not “… a virtual world, a virtual space, virtual reality, a digital and virtual economy, a game, a virtual theme park or Disneyland, a new app store, or a new UGC platform.”
Jon Radoff offers this definition: “The metaverse is the internet evolving into a creative space for anyone who wants to craft experiences.” He describes the attributes of the metaverse:
An emphasis on activities
…in increasingly immersive places in which the self is present
…crafted by an exponential rise in creators
…supported by the connective tissue to link and embed immersive, emergent content
He adds: “The metaverse is about a multiverse of metaverses that will exist. It is Roblox and games built in Unity; Fortnite and Rec Room; Clubhouse and WebXR. It is about open ecosystems as well as the walled-gardens. Most of all: it’s about an exponential rise in human expression. The metaverse will be co-created by all of us.”
Matthew Ball’s Metaverse Primer on the future: “We can guess that the Metaverse will revolutionize nearly every industry and function. From healthcare to payments, consumer products, entertainment, hourly labor, and even sex work. In addition, altogether new industries, marketplaces and resources will be created to enable this future, as will novel types of skills, professions, and certifications. The collective value of these changes will be in the trillions.”
What It Is – 3
Think of the metaverse as a cross between the web, gaming, mixed reality (VR/AR), with a touch of crypto. These ideas have so far existed and evolved independently. The metaverse is what happens when they all come together.
Gene Park in Washington Post: “The most widely agreed core attributes of a Metaverse include always being live and persistent — with both planned and spontaneous events always occurring — while at the same time providing an experience that spans and operates across platforms and the real world. A Metaverse must also have no real cap on audience, and have its own fully functioning economy.”
The Conversation explains the distinctive features of the metaverse:
There are three key aspects of the metaverse: presence, interoperability and standardization.
Presence is the feeling of actually being in a virtual space, with virtual others. Decades of research has shown that this sense of embodiment improves the quality of online interactions. This sense of presence is achieved through virtual reality technologies such as head-mounted displays.
Interoperability means being able to seamlessly travel between virtual spaces with the same virtual assets, such as avatars and digital items. ReadyPlayerMe allows people to create an avatar that they can use in hundreds of different virtual worlds, including in Zoom meetings through apps like Animaze. Meanwhile, blockchain technologies such as cryptocurrencies and nonfungible tokens facilitate the transfer of digital goods across virtual borders.
Standardization is what enables interoperability of platforms and services across the metaverse. As with all mass-media technologies – from the printing press to texting – common technological standards are essential for widespread adoption.
Swathi Moorthy wrote in MoneyControl: “[It] could be that you could be watching a movie with your friends in a virtual theatre, transacting using cryptocurrency, or doing an interview in your digital avatar, sitting across the interviewers, in a space that resembles an office with lifts, cafeteria and workers milling about. It might be a totally different world… [The] metaverse, where you will be interacting in real time in the digital universe as you do in real life, requires technology that works in real time and at scale that can handle not just a hundred or a thousand but millions of people. This translates to massive computing infrastructure, which is a challenge that companies need to solve.”
Richard Waters wrote in the Financial Times: “Rather than plunging users straight into a full VR world, the metaverse could well take shape more gradually. Using augmented reality to project aspects of the metaverse on to the physical world, for instance, would see it take shape first as a partial digital overlay. The final product could be an ultimate “walled garden”, a place where a single company benefits from the total immersion of users. If Facebook and other big internet companies build their own — and particularly if they each sell their own proprietary hardware to access these zones — then the result could be a collection of isolated worlds, forcing digital citizens to pick where they spend the bulk of their time. On the other hand, the metaverse could comprise a set of more closely interconnected worlds, some of them controlled entirely by their users. This would be a place where people could take their personal data, digital goods and favourite services with them as they move from place to place.”
What It Is – 4
Andrew Chen: “When you think of a metaverse you think of the idea that there’s other people. Intrinsically, it’s a social product. There are other people you’re interacting with, as opposed to the next triple-A first-person narrative-driven thing… The other part of the metaverse that’s compelling is that you would be willing, maybe, to put in a lot of different types of content there. You might imagine part of the metaverse would have very science-fiction stuff, or very fantasy-oriented stuff. We like the idea of user-generated content or moddable platforms as part of our investment thesis, because it lets users participate in creating their own worlds… Another big part of it is just the concept of a persistent identity you care about. Part of the metaverse idea is that you might spend as much time there as in real life. That’s an interesting thing. People are already gaming, obviously, for many hours a week. That’s almost already available. That’s shared… I’m more excited about the idea that instead of having “the” metaverse, we all move further and further toward a world where there’s a set of standards and we view that–there’s going to be identity and avatars and a payment processing layer.”
@punk6529: “the metaverse is a superset of virtual realities, augmented realities and the internet. NFT Twitter & Discord is a form of proto-metaverse, with its avatars, shared communities and shared 2D/3D spaces (@opensea, @oncyber, @decentraland), hanging off it. And this is, of course, a continuation of decades of internet communities from bulletin boards to AOL to modern social networks So what is different now? Why does this feel different? So what is different now? Well, global internet scale for one, but more importantly: Crypto/NFTs and UX. Crypto, and in particular NFTs, have converted our online communities for the very first time into an ownership society. Your avatar, your digital art, your in-game items, your gallery template are all NFTs and they are genuinely owned by you…The scale and breadth of what this can unleash is astounding as you get huge decentralized global communities coordinated with economic incentives…What about UX? This is what drives the jokes right now. 3D worlds are still clunky. Interesting, but not ready for consumer prime-time YET…The UX issue is going to be solved in the 2020s. You can expect photorealistic mixed reality (augmented reality, virtual reality and real reality) with minimal lag in non-ridiculous devices this decade. Mixed realty (the Metaverse) will be just your regular life.”
As the world searches for the next big thing after 25+ years of the Internet, the metaverse could just be that. Smartphones and Zoom have made screens central to our personal and work lives. Now imagine them to be immersive and persistent, and we can start imagining what the metaverse would look like.
Epic Games Vision
One CEO who has been at the forefront of the metaverse conversation has been Tim Sweeney of Epic Games, the creators of Fortnite. Here are some excerpts from his interview with Joseph Kim in July 2020:
The Metaverse is going to be some sort of real time 3D social medium where instead of sending messages and pictures to each other asynchronously, you’re together with them and in a virtual world and interacting and having fun experiences which might span anything from purely games to purely social experiences.
The other critical element of the Metaverse is it’s not just built by one mega corporation, right? It’s gonna be the work, the creative work of millions of people who can each add their own elements to it through content creation and programing and design. And the other way of adding value.
So it will be a massively participatory medium of a type that we really haven’t seen yet. And even though you have Fortnite and Minecraft and Roblox each manifest some aspects of it, I think we’re still pretty far from having the thing. But yet the talk about this thing is it’s not just the work of one company. It’s not just one company’s product or revenue stream. Right. We’re talking about a mass participatory media, which needs to be an economy if there’s not an economy underlying this thing.
And so the critical thing with this effort is to build out not just a 3D platform and to have technical standards, but also a fair economy in which all creators can participate, make money and be rewarded in an economy with both the principles ensuring that customers are treated fairly, that there is not, you know, massive fraud or scheming or scams. But also one in which companies have the freedom to release their own content and to profit from it.
GamesBeat has more, in an interview of Tim Sweeney by Dean Takahashi in April 2021:
Sweeney said he started thinking about the metaverse more seriously in 2017, after Fortnite succeeded. He said it became apparent that all of the science fiction writers were talking about the same thing, even though it had some crazy ideas attached to it.
“We realized that you don’t need this crazy technology to do this,” he said. “We have everything we need right now. And the limiting factor on becoming reality is not much more than that. Developers learning what elements really make for awesome online social experiences, continuity of experience, and science fiction.”
… I asked Sweeney what the killer attraction of the metaverse would be. He said the killer feature is simply getting together with your friends to have great social experiences, like going outdoors for a walk. That’s more fun than just sitting on a couch and talking.
“In a game environment, you can constantly go back and forth between the real world stuff and what’s happening in-game and it’s constantly engaging and constantly messing up the conversation,” he said. “I think that’s a key ingredient. And I think this mechanic is essential. It’s been mechanically proven out in dozens of different genres of games. Every genre that we know is going to be represented.”
I noted that Fortnite has added concerts and brands, and so I wonder if Fortnite will evolve into its own metaverse.
Sweeney said, “I think I think there will be a linear evolution. It’s not going to be a massive sudden disruption. It’s going to be a meeting place for individuals and creators of all sizes, including brands. Every company will be there at some point. If you are a car manufacturer, your brand presence in the metaverse isn’t going to be a bunch of advertising for your cars. It’s going to be a place where you can actually drive the cars around and feel the experience of it. You can use a Corvette in the game. We have an opportunity for much, much more interesting interactions.”
… “The pandemic severed a lot of real world physical contact that people had,” Sweeney said. “Everyone quickly migrated to replacing that with virtual connections, with social network usage, Fortnite, Minecraft, Roblox, and Zoom.”
GamesIndustry.biz quotes Rami Ismail: “The idea of creating an alternative world in which everyone has to use your currency, play by your rules and everyone wants to promote their brands is really appealing to rich people. I mean, I guess we are talking about Fortnite after all.”
Another company that has been at the frontlines of the metaverse future is Niantic. Pokémon Go was one of the first games that embedded AR.
Niantic’s founder and CEO John Hanke wrote recently:
A lot of people these days seem very interested in bringing this near-future vision of a virtual world to life, including some of the biggest names in technology and gaming. But in fact these novels served as warnings about a dystopian future of technology gone wrong.
… As a society, we can hope that the world doesn’t devolve into the kind of place that drives sci-fi heroes to escape into a virtual one — or we can work to make sure that doesn’t happen…We believe we can use technology to lean into the ‘reality’ of augmented reality — encouraging everyone, ourselves included, to stand up, walk outside, and connect with people and the world around us. This is what we humans are born to do, the result of two million years of human evolution, and as a result those are the things that make us the happiest. Technology should be used to make these core human experiences better — not to replace them.
… Building the real world metaverse lies at the intersection of two major technical undertakings: synchronizing the state of hundreds of millions of users around the world (along with the virtual objects they interact with), and tying those users and objects precisely to the physical world.
… Although we expect games and entertainment to be key drivers for this new platform, reality channels are a way of seeing the world that will power more activities that entertain, educate, guide, explain, and assist us, from assembly lines and construction sites to the most complex knowledge work, all without taking us away from the thing we do best: reality
… The shift to the real-world metaverse represents a sea change in computing that’s as significant as earlier developments like personal computing, the internet, and mobile.
More from Hanke in an interview in Fast Company: “Our thesis as a company is that gaming will be one of the frontier technologies. [We] have this concept of reality channels—this idea of games that transform the world around you in an almost passive way that just enhances it and makes it more interesting, makes it more fun and [puts] some adventure and excitement into it. It’s almost like an Instagram filter that’s always on, basically with Pokémon Go-like embedded gameplay. That’s our vision of one of the transitionary applications as we go towards this idea of a real-world metaverse… The notion that you can just slap on a headset and shoot some photons into your eyes and somehow that takes the place of that whole-body experience that you have in the world—it’s false… Real social [is] designed to connect people who are far away—grandmas with their grandkids. We need that. That’s a wonderful thing that the internet can do for us. It’s a shame that that world has to now get confused with getting viral misinformation and weird political stuff. We don’t want to become that, and it probably doesn’t even make sense in AR, that media driver. We’re about talking to other people and making plans together.”
Diverse Opinions – 1
There are words of caution and suggestions about the metaverse from others.
The Economist: “If history is a guide, computing platforms and internet connectivity will become faster and more widespread, latency will go down, input and output devices will improve and game engines (and their successors) will be able to create customised virtual worlds on the fly. At some point in the future, anyone who wants to may be able to switch in and out of fully immersive virtual worlds, flitting in and out of whatever the real version of Neal Stephenson’s Metaverse turns out to look like. What seems certain is that sophisticated 3D digital worlds will appear on ever more of the screens of successive generations of devices that people already use every day. As activities, particularly interactions between people, in virtual realities can generate practical and aesthetic outcomes that have moral consequences and personal meanings, the idea that the “real” world is limited to that which is physically present nearby will seem increasingly bizarre.”
New York Times: “In fiction, a utopian metaverse may be portrayed as a new frontier where social norms and value systems can be written anew, freed from cultural and economic sclerosis. But more often metaverses are a bit dystopian — virtual refuges from a fallen world. As a buzzword, the metaverse refers to a variety of virtual experiences, environments and assets that gained momentum during the online-everything shift of the pandemic. Together, these new technologies hint at what the internet will become next. Video games like Roblox and Fortnite and Animal Crossing: New Horizons, in which players can build their own worlds, have metaverse tendencies, as does most social media. If you own a non-fungible token or even just some crypto, you’re part of the metaversal experience. Virtual and augmented reality are, at a minimum, metaverse adjacent. If you’ve attended a work meeting or a party using a digital avatar, you’re treading into the neighborhood of metaversality. Founders, investors, futurists and executives have all tried to stake their claim in the metaverse, expounding on its potential for social connection, experimentation, entertainment and, crucially, profit.”
Peter Rubin in Wired: “[Ernest Cline’s Ready Player One] OASIS works because it feels like it has no owners, no urgent needs. It’s a utility, a toolkit available for artisans and corporations alike. If we want to realize this potential ourselves—universal freedom and possibility—let’s start thinking about VR the way Cline does: not as a first-to-market commodity, but as an internet all its own.”
Kyle Chayka in New Yorker: “The metaverse represents a techno-optimist vision for a future in which culture can exist in all forms at once. Intellectual property—a phrase increasingly applied to creative output of any kind—can move seamlessly among movies, video games, and virtual-reality environments… The more immersive it is, the more inescapable it becomes, like an all-encompassing social-media feed, with all the problems thereof.”
Diverse Opinions – 2
Nvidia CEO Jensen Huang in a VentureBeat interview:
The metaverse, as you know, for all of you who are learning about it and hearing about it, it’s a virtual world that connects to the world that we live in. It’s a virtual world that is shared by a lot of people. It has real design. It has a real economy. You have a real avatar. That avatar belongs to you and is you. It could be a photoreal avatar of you, or a character.
In these metaverses, you’ll spend time with your friends. You’ll communicate, for example. We could be, in the future, in a metaverse right now. It will be a communications metaverse. It won’t be flat. It’ll be 3D. We’ll be able to almost feel like we’re there with each other. It’s how we do time travel. It’s how we travel to far places at the speed of light. It could simulate the future. There will be many types of metaverses, and video games are one of them, for example. Fortnite will eventually evolve into a form of metaverse, or some derivative of it. World of Warcraft, you can imagine, will someday evolve into a form of metaverse. There will be video game versions.
…In the world of industry, [the] building exists fully in virtual reality…We designed it completely digitally. We’re going to build it out so that there will be a digital twin of this very physical building in VR. We’ll be able to simulate everything, train our robots in it. We can simulate how best to distribute the air conditioning to reduce the energy consumption. Design certain shapeshifting mechanisms that block sunlight while letting in as much light as possible. We can simulate all of that in our digital twin, our building metaverse, before we deploy anything here in the physical world. We’ll be able to go in and out of it using VR and AR.
Jason Moore wrote this in the early days of the pandemic: “The basic concept of a metaverse has not changed much since the 1990s. Imagine a 3D world that you would enter through your web browser. You would be able to socialize, shop, and work from your desk or couch over the internet. A key feature of the metaverse is that it’s persistent. When you are logged out, the virtual world continues without you just as the real world does. The goal is for the user interface to the metaverse to be intuitive and easy so you could spend many hours a day immersed in stimulating activities. For some, the metaverse could occupy most of their waking hours with the real world sometimes being more of a distraction. Could a modern metaverse replace some of the interpersonal interactions we are craving? The key is to create a virtual world that stimulates many of the same senses we experience out in the real world. For example, touch and smell are just as important as the auditory and visual cues we get when talking face-to-face. It’s the combination of all these senses that create feelings and memories. Can we experience that using a computer or mobile device?”
Mark Sullivan wrote in Fast Company in the context of Facebook’s metaverse plans: “In a metaverse, lots of AR experiences would share a common reality, and users could navigate between them…You might social network in one place, then move to some other digital place for gaming, then move somewhere else for concerts or movies. One of the toughest problems…is mapping a common 3D graphical world to the real world so that users can see the same digital content when they’re in the same real-world places. Google relies on this kind of mapping when it places augmented reality wayfinder graphics to provide walking directions for users within its Maps app (the graphics are viewable on a smartphone, but may be seen through glasses in the future). Niantic built a map under its 2016 Pokémon Go AR game to let all the players see the same Pokémon in the same physical places. The quality of mixed-reality content, and how well it’s integrated around and within the real world in front of our eyes, may determine whether people eventually adopt it.”
Diverse Opinions – 3
Herman Narula in GamesIndustry.biz: “It is my belief that we underplay how invested people are in the life of the mind. In one sense, we are already living in mental virtual worlds. Gaming has been quietly fulfilling humanity’s needs for decades in this mental life. Far from being ‘just’ entertainment, gaming structures, play and goal-oriented models all help deliver the essentials for psychological health and well-being of an individual. In gaming, people are actively growing, striving to overcome challenges and creating new experiences which ultimately fulfills as a whole. The needs being fulfilled are universal and innate and include the need for competence, autonomy and relatedness. And that is the promise of the metaverse, that these human needs will find greater fulfillment.”
New York Times (in an article about Horizon Workrooms): “In Mr. Zuckerberg’s telling, the metaverse is a world in which people can communicate via VR or video calling, smartphone or tablet, or through other devices like smart glasses or gadgets that haven’t been invented yet. There, people will maintain some sense of continuity between all the different digital worlds they inhabit. Someone might buy a digital avatar of a shirt in a virtual reality store, for instance, and then log off but continue wearing that shirt to a Zoom meeting. For now, that vision remains distant.”
Nick Fajt of Rec Room quoted in The Information: “Since Xerox PARC in the 1970s, all software has lived in a tile. As you start seeing these use cases migrate into a 3D world, software will look a lot less like a tile. It’s going to look like a room, an object or a person. I think what we’re trending toward is a Wikipedia-esque world, where rooms and objects and people can all be authored by different authors from all around the world.”
Wall Street Journal on Roblox: “Roblox CEO Dave Baszucki said…that the company sees its 15-year-old platform as a hub for virtual and immersive experiences where thousands of people can simultaneously attend concerts, school or staff meetings. He said the company has been investing heavily in technology and growing its workforce to support these experiences, but also in areas such as content moderation. Roblox’s business model is largely centered on users’ purchases of virtual currency that allows them to acquire in-game perks or items for their avatars. In May, the company hosted an immersive experience to celebrate the designer brand Gucci’s 100th anniversary and users could buy limited-edition items for their avatars. Roblox finance chief Michael Guthrie said the types of content on the company’s platform have broadened over time and, in some cases, developers are still figuring out how to generate revenue from their content.”
Jared Ficklin in VentureBeat: “The metaverse won’t be realized in a closed-garden VR space. Instead it will emerge as our digital lifestyles begin to join us in the physical world…The popular metaverse thinking often portrays a common interface, assuming we will all enter as Player One ready to play the same game by the same rules. But what we will see is a myriad of different business models, content types, and classes of experiences. Individuals will orchestrate the interfaces for these into workflows that bring productivity, entertainment, or socialization in the manner they want. The common thread is that all of these applications will amplify the capabilities of the individual users. If you were to watch the data flow in the modern internet, you would see some of it flowing into a pool like Facebook. But you would see far more flowing in many different directions, creating unique patterns of activity that begin to approximate us as individuals. This kind of hyper-personalization is extending into all parts of our digital lifestyles. The tools are becoming us. In the data is a meta me that is becoming every bit as real as us.”
Diverse Opinions – 4
Brian Merchant in Vice: “In the world of Snow Crash, the metaverse is not viewed as particularly cool—it is necessary, because the real world has become so unbearable. Ditto in the most famous book to update the metaverse’s architecture for our modern, pop culture-saturated era: Ready Player One. Its Oasis is basically the Metaverse if it were written by a neural net trained on 80s movies and 00s video games… Both books’ metaverses get at a common truism: there is something inherently dystopian in a future where humans abandon the real world in favor of an escapist and consumerist-oriented fully immersive digital one. To want to spend any serious amount of time in a metaverse, it must be made more appealing than reality, a feat which can be accomplished in one of two ways—either the world outside is already shitty enough to drive you into a glitch-prone, murder-filled alternative, or the fantasy of becoming someone else is compelling enough to consume you totally… None of these luminaries, from Zuck to Nadella to Boz, seem capable of painting a coherent vision for what their particular metaverse will look or feel like, beyond gesturing at “presence” and a collection of apps, keywords, and old science fiction tropes. It is an odd vision built from a compendium of juvenile fantasies, perceived market opportunities, and overt dystopias.”
Paul Tassi in Forbes: “The main problem with Zuckerberg’s Metaverse concept is how heavily he’s leaning into the necessity of VR/AR here. The reality is that Zuckerberg is skipping several steps along the way, ignoring the fact that despite years on the market, VR has yet to approach anything like widespread mainstream adoption…Mark Zuckerberg is trying to build the Metaverse with tech in exactly the vein of those sci-fi books, ignoring the reality of the market and seemingly, many challenges VR still endures for mass adoption after all this time…But other companies seem to get it, and nearly all are in the gaming sector… The most easily identifiable purveyor of the proto-Metaverse is Fortnite, which yes, at its core, is a combat-focused video game. And yet the last few years, it has spent time building itself out into a social space, with one-time-only can’t miss events like virtual rocket launches or giant monster fights on the map.. And other games, even without large collections of IP, are crafting similar worlds players live and exist in, from Roblox to Minecraft to GTA Online…I do not want to sit on my friend’s couch as a hologram. I want to attend a virtual Ariana Grande concert as Batman.”
Ben Thompson: “What I am skeptical of is the idea of there being one Metaverse to rule them all; we already have that, and in this case the future is, in William Gibson’s turn of phrase, here — it’s just not very evenly distributed. I speak from personal experience: for two decades I have lived and worked primarily on the Internet; it’s where I experience friendship and community and make my living. Over the last year-and-a-half hundreds of millions of people have joined me, as the default location for the work has switched from the office to online (that “online” is primarily experienced at home does not mean that home is intrinsic to the work — “work from home” is a misnomer). This too is an inverse of Snow Crash, where most jobs are in the real world, and recreation in the Metaverse; the future of work is online, and the life one wants to live in the reality of one’s choosing.”
Washington Post: “Think of it as an embodied Internet that you’re inside of rather than looking at. This digital realm wouldn’t be limited to devices: Avatars could walk around in cyberspace similar to how people maneuver the physical world, allowing users to interact with people on the other side of the planet as if they’re in the same room…In theory, you’d log on to the metaverse similarly to logging on to the Internet. Only you’d use a head-mounted display, not a screen, to view content and a form of motion tracking, like Facebook’s wristband, to grab objects…“It’s the little kid in all of us that wants to live in a sci-fi novel. We want life to be fun like a game,” said Jon Morris, a founder of Nowhere, a virtual events platform. “And there aren’t the tools to do it well on the Internet yet.””
Diverse Opinions – 5
FT: “We should be careful which metaverse we choose to live in…A fully-realised parallel online world will take decades to appear but the possibilities are infinite.” More from FT: “It is not clear how real world laws will interact with virtual worlds, how intellectual property and brands are protected, and who will police against theft and fraud. Bad actors are already pumping and dumping the price of NFTs. How long will it be before regulators wish to intervene? A second obstacle is capitalism itself. The worlds that make up the metaverse have little financial incentive to create a utopia of shared goods, rather than promoting their own offerings. Why should a platform that has secured an exclusive virtual performance from one pop star allow people on other platforms to see it? Technology may enable an open metaverse, but the attraction of building mini empires will be hard to resist.”
Mike O’Sullivan: “It’s growth will highlight a number of new trends and sources of friction between the real and virtual worlds. This is often the case when new eco-systems grow, let alone new universes or ‘shared-worlds’. One area of contention is identity. In the real world our identities are largely set by factors like birth, geography, culture and education, and are largely known to the extent that they are captured by passports and id systems and by our interactions with other humans. In the MetaVerse, one can construct a new identity, which is free of geography and social ties (theoretically a more egalitarian setting), and potentially very different to the user’s real-world identity.”
Rahul Matthan wrote about the opportunity for India: “One of the key features of the metaverse will be its ability to replicate the physical world within its virtual environment. The creation of these mirror-worlds will call for mega-scans of our physical surroundings—enormous centimetre-resolution images of the physical world that we can render within the metaverse to faithfully recreate our physical environs in a virtual space. As part of India’s map reforms last year, domestic companies were given the exclusive right to map terrain at resolutions lower than one metre, giving them a significant advantage in creating mega-scans of the Indian landmass. As companies look to acquire megascan databases so that they can create mirror-worlds, this regulation will likely offer Indian companies a significant strategic advantage. Another element of the metaverse that is still being worked out is its payment rails. While cryptocurrencies are widely touted as the ideal payment system of the metaverse, it is unlikely that they will be able to operate at the velocity at which transactions are likely to occur in these virtual environments. India’s digital payments platforms, on the other hand, have demonstrated that they can operate at population scale—processing 10 billion transactions a month without breaking a sweat. Why should this not be our payments framework of the metaverse?”
Our final word comes from Neal Stephenson who coined the term “metaverse”. He spoke to Vanity Fair in 2017 about the metaverse, VR and AR: “I’m tempted to say that if it really existed, it would be less vulnerable to some social-bubble formation than what we have now where anybody can create their own Web site or social-media feed. The thing that’s not intuitive that makes social-media bubbles so deceptive is that you don’t see what you’re not seeing. So, it just invisibly, behind the scenes, filters out all the stuff that you’d rather not see, and you’re not aware that filtering is taking place. That’s the thing that causes bubbles. It’s not the filtering, it’s the fact that the filtering happens invisibly… The purpose of VR is to take you to a completely made-up place, and the purpose of AR is to change your experience of the place that you’re in. That pervades everything in terms of how you think about content, how you tell stories, what it is that you can actually do with these devices.”
Marketing and Metaverse
An MMA and Culture Group report on the metaverse showcases the emerging marketing ecosystem:
It also outlines 4 roles for brands:
- Brand as Enabler: As the Metaverse takes shape, brands that enable access to unique experiences will earn a meaningful place with the consumer as a functional enabler.
- Brand as Authenticator: Brands seeking to communicate their own value through new forms of engagement and interaction, and commerce must provide highly relevant brand experiences to authenticate consumer lifestyles and passions.
- Brand as Participant: Brands will no longer be passive users of the form or medium of media in which they operate, but active co-creators in the customer experience.
- Brand as Celebrant: There is a great opportunity for brands to celebrate the adoption of new forms of interaction and creation through gamified rewards, digital goods, virtual celebrations, and more.
Built In: “Whenever people venture someplace new, advertisers trail closely behind. Highways are built, then billboards spring up. The internet is developed, then banner ads materialize. This principle holds true with the latest hyped-up destination — the metaverse… As with any shiny new digital marketing channel…marketers are approaching the metaverse from a posture of experimentation. They’re looking to connect with citizens of the metaverse in ways that add value, not intrusions… “It’s a really exciting time to be a marketer in this space,” AB InBev’s McInerney said. “I believe the shift we’re seeing to Web3, metaverse, is going to be one of the largest shifts we’ve seen in a long time. … We are where we were in social media 17, 18 years ago.”
Search Engine Journal: “Brands such as Gucci, Nike, Disney, Snap, and Facebook are in the midst of creating virtual communities, content, assets, fashion, art, experiences, and worlds. Matt McGowan, Snap Director and General Manager Canada, says: “For brands and marketers, it’s important to remember the value of Gen Z and millennials – or the Snapchat Generation, as we like to call them.””
And the young are going to grow up with and in the metaverse.
As we have seen, the metaverse is the next step in the evolution of our computing and communications infrastructure which started with the personal computer, followed by the internet, mobile internet and the smartphone. Games have followed their own parallel track, and even though consoles are still popular, the smartphone is subsuming gaming. Our work lives which were very much in-person went online because of the pandemic, and are getting enriched with virtual backgrounds and immersive views.
Shopping too is getting transformed with richer real-time interactions, enhanced with augmented reality. Mint wrote about the use of augmented reality recently: “Brands like Lenskart and CaratLane allowed customers to try on their products virtually. Dhamodaran Subramanian, general manager, Takeleap, a technology media company with offices in Chennai, Delhi and Dubai, estimates that AR-driven conversion could now be anywhere between 20-30%. Several international and Indian brands are launching or expanding their AR technology and use. In July 2020, for instance, Gucci partnered with Snapchat, using its AR try-on lens for sneakers. And in May this year, Walmart announced it was acquiring Israeli startup Zeekit, which had developed a dynamic virtual fitting room.”
Tim Sweeney, CEO of Epic Games, had this to say in an interview with LA Times in May 2020: “Just as every company a few decades ago created a webpage, and then at some point every company created a Facebook page, I think we’re approaching the point where every company will have a real-time live 3D presence.”
Grant Paterson of Wunderman Thompson says: “[The metaverse] is the future of the internet, a vision in which we will shift seamlessly between virtual and physical experiences, economies, environments and ecosystems… The rapid growth and diversification of these virtual environments will force the marketing industry to fundamentally reconceptualize how brands communicate with consumers.”
Even as there is an entertainment and social focus for the metaverse, business-to-consumer commerce will also be transformed. Like any new technology, evolution will happen through innovations in many different directions; there is no single dominant vision of the consumer of the future and the metaverse.
In this context, it is our imagination which can help envision and create tomorrow’s B2C metaverse. We can think of today’s 2D websites and apps as the rudimentary forerunners. In the past quarter century, they have taken us to places and shown us products we otherwise would never have experienced or seen. The natural next step will be to create parallel worlds where our digital twins (embodied by software agents) roam looking for the next things to buy, and even negotiating on our behalf to get deals. These agents will be persistent – unlike today, where the relationship ends once we exit the website or shut the app. These AI embodiments will have a life of their own, epitomising our always-on world, learning from our actions, and anticipating our next needs.
For B2C businesses, the physical world has been about availability: mental availability (branding) and physical availability (distribution). They did not know each of us; we were just an aggregate whole. They piggybacked on mass media to create awareness and surface our latent needs. And then they had to ensure the product was available easily at a store near us.
Starting in 1995, the Internet has transformed the world. In recent times, consumer attention has become even more fragmented with mass media consumption giving way to many newer platforms – from YouTube to Facebook, from Instagram to Tiktok, from marketplaces like Amazon to streaming services like Netflix, and even gaming platforms. The pandemic has accelerated trends by many years. Each of us has adopted more digital tools and technologies to change how we work, shop and entertain ourselves; it almost feels like we are an avatar in a new world. The “Me” we each knew in March 2020 is so very different from present day Me – even time is a blur with each day a copy-paste of the previous, the small daily changes in behaviour have created a new persona for each of us who spends time and money differently.
In this new world, the scarce resource is our attention. We have so many more options to direct our attention now – play a game, buy a stock, order an ice-cream, watch a video, check the social stream, scan the news feed, send a message, take in a movie. In our past, we would have to take time and effort to do each of these activities. Now, we could be doing these activities all at the same time – right from the comfort of our chair, sofa or bed! (And for some of us, it could be happening even as we are in a work Zoom meeting.) Our “attention recession” is the single biggest challenge brands have to face in the digital world.
The second business challenge is the dilemma between growth and profits. While risk capital has been available for many centuries, the availability was limited to a few businesses. As such, most businesses had to make profits if they had to invest in growth. What has changed in recent times is the easy availability of capital – it is almost as if it is getting created out of thin air first by governments, then in the stock markets, and finally by the exponentially increasing valuations of companies. The digital acceleration has created a land grab moment – the focus is not on profits from existing customers but acquisition of new customers at all costs. Growth trumps profits as if there is no tomorrow. In such a world, companies which focus on profits today to reinvest for tomorrow’s growth are disadvantaged as plentiful and cheap capital is flowing to startups who are rewarded for today’s growth. For such adventurous enterprises, faster growth attracts even more capital from eager investors and pushes profits out even more in the future.
It is against this backdrop of attention recession and the growth-vs-profits conundrum that B2C brands need to start thinking about the customer of the future and the metaverse.
Beyond the Sale
At some future point of time, the pendulum will shift from growth-at-all-costs to profits. It is profits that create the free cash that translates into valuation (or market cap). Capital will turn scarce and every company will need to shift focus to monetising their existing customer base. It is then that attention will become front and centre; without attention, there is no engagement and transaction, and without a sale, there is no revenue and profit.
We are not there yet, and probably not even close. Case in point: Zomato’s sales and valuation. As Vivek Kaul explained after Zomato’s listing and first results as a public company: “The revenue from operations of the company for the period April to June 2021 amounted to Rs 844 crore. The total expenditure was at Rs 1260 crore. To put it in another way, for every Rs 100 that Zomato earned, it spent Rs 149. If we look at the same metric for the period January to March 2021, the company had spent Rs 128 for every Rs 100 that it earned. For the period April 2020 to March 2021, the company had spent Rs 131 for every Rs 100 that it earned. Clearly, the expenditure that the company has incurred for every rupee that it earned during April to June 2021, was higher than it was in the past.” For now, discounts are the transaction drivers. But it will not always be so.
When the shift happens, the digital customer’s attention will matter. Attention is upstream of everything: engagement, monetisation, cross-sell and retention. It is attention, more than loyalty programs, which can unlock profits. And it is attention which holds the key to the B2C metaverse. It is the space beyond where brands can create amazing and memorable experiences. Two businesses can be selling the same product at the same price (or with the same discount) but can offer very different metaverse experiences. This is what will drive attention and eventually the sale and persistent relationship. There will be little to distinguish the brands in the physical world, but a lot that can differentiate their relationship with customers in the metaverse. As such, the metaverse will emerge as the new frontier for B2C innovation and building lasting customer relationships.
We have seen a glimpse of it on the websites and apps of businesses via personalised recommendations. But there is little else which differentiates a first-time user’s experience as compared to a loyal customer’s. This is where brands need to start thinking differently. In an acquisition-only growth-focused world, only the first transaction matters. In a retention-centric profits-focused world, repeat transactions matter more because they are the only way to create lasting surplus cashflows.
Every business needs to think digital. For B2C businesses, experience differentiation is critical – not just better than competition, but also for their Best Customers as compared to the Rest. The metaverse can be the enabler of digital experiences, the link between attention and a profits flywheel. Welcome to the µniverse (pronounced ‘mu-niverse’).
Charles Kettering said, “Our imagination is the only limit to what we can hope to have in the future.” It is in that vein that I will imagine how the metaverse could help redefine the relationship between businesses and their customers. What follows is my vision and is thus also constrained by my limited understanding. Hopefully, this will spark ideas in readers and move us further along to constructing the metaverse. It also builds on many of my previous writings about marketing. As an entrepreneur, one has to envision the future first, and then go and build it. Even if that construct is flawed and fails, it helps move the world forward. Eventually, only a handful of ideas succeed but the innovations – including the ones that do not succeed in the market – help make the world a better place.
The pre-digital world of goods and services did not lend itself easily to 1:1 relationships between brands and customers. The digital revolution starting with the Internet and spurred along by the smartphone has given every customer a digital identity (either a mobile number or an email address or both). Being able to uniquely and consistently identify each person is the starting point for constructing a 1:1 relationship. The website login or the app download enabled businesses to identify each customer and thus begin offering distinctive views of their offerings to customers. This is the world we inhabit right now. We see some personalisation based on both our individual interactions with the business augmented by that of others (collaborative recommendations). This is also a step forward from showing the same thing to everyone – as is evidenced by our feeling of delight when Amazon and Netflix recommend just the right product or movie to watch. The current interfaces are still largely 2D and haven’t changed much in the past 25 years even as the size of the screen we engage in has become smaller for most of us, shifting from the desktop to the mobile.
Meanwhile, the richness of gaming interfaces has been growing by leaps and bounds. As an intern in the mid-1980s, I remember getting fascinated by “Digger”. Compare that to the richly crafted and deeply immersive worlds that we now see in games – not just on consoles hooked up to large TVs but also on smartphone screens.
Imagine now if the gaming engines could be used to construct business and commerce websites and apps. I can, in my mind’s eye, construct the experience of walking down infinite aisles of books on Amazon – much like I do at New York’s Strand Book Shop, stopping every so often, pickup up a book, and looking inside. Next imagine if, like in the AR games, I could see avatars of others. Maybe I will meet a friend and we could chat about the books we are reading. Or, I could just pick a book and go sit on a virtual sofa – like I actually do in Kitab Khana. Sitting in my room in Mumbai, I could attend an author’s book reading session anywhere in the world, and even perhaps ask some questions and join the discussion. I could also find others who bought the same book recently and chat with them. Would a ‘book metaverse’ not be fascinating? The discrete technologies are all there – they need to be put together.
Amazon knows who is buying books and what they are reading on the Kindle, but it does not know our social network – which is locked up today on Facebook or our phone contacts. WhatsApp can decipher who we engage with more than others – so it knows who we are close to. These connections are what the metaverse can enable, along with creating nice spaces for us to interact without leaving our home. The book buying and reading experience becomes a shared experience that can enhance our learning and friendships.
These are still very simplistic starting points, but they help paint a picture of what is possible. The pandemic has made us all more digital in everything from conversation to commerce. The metaverse is simply the next upgrade to our digital existence.
Engagement to Experience
Websites and apps track our every action. Can they use this knowledge to make us better? I am writing this on Microsoft Word on a desktop. The app has seen me write tens of thousands of words, and other than some spelling and grammar suggestions, little has changed in the basic writing process. What would a metaverse-enabled Word look like? For one, it could create a digital twin for me based on all the writing I have done, and find me articles and references that keep me updated on topics I have written about. It could organise all my docs in a 3D cabinet, showing me connections between topics and docs. It could show me what I was thinking a year ago! It could encourage me to join a writing community. Or in this case, offer to connect me to others thinking about the metaverse. Each of this can perhaps be done today, with some friction, by separate apps or utilities. The point is: how can a more seamless experience be constructed with the data that our computers and mobiles already have on us?
Imagine time travel – but in the past. I would love to sit through a video of James Buchanan teaching public choice or Hayek talking about liberty – along with others who are learners like me. A few of us could get together virtually and create a small working group to explore some themes further. And as we are engaged, imagine running into today’s experts who could enlighten us – exactly what would happen at a conference we would have physically attended. Imagine next leaving a software agent in the metaverse that would alert us for interesting new ideas and conversations. As I said earlier, independent tools do make all this possible but there are a number of hurdles and therefore we don’t do it.
The uniting theme across these futuristic scenarios is “experience.” Customer engagement is all about customer experience. And yet most businesses have done little – other than faster delivery, lower prices and better recos. Improvements in logistics and AI will make these improvements par for the course for most brands. What’s beyond that? This is the opportunity that the metaverse brings: a way to differentiate based on experience. A few rupees difference in the product may not make us switch, but a truly unique experience could, especially for the brand’s most valuable customers.
Let’s take the example of news media; worldwide, it is facing survival challenges because of the onslaught from various alternatives. Consider Mint or Business Standard. They have excellent reporting and commentary. The print edition doesn’t tell them what I am reading and ignoring; but their digital properties gives them a deep insight into my interests – they can in fact create a replica of me and create a “Daily Me” personalised version. What else can they do for a core audience to generate additional revenues by giving unique experiences? Imagine creating a space where readers can interact with editors in exclusive events, a 3D view of news letting me see connections and context better, and coordinating interactions with others like me who can bring their expertise on specific topics. The metaverse can also offer news organisations the ability to curate 1:1 engagements between business leaders to explore new opportunities. News may have become commoditised, but experiences will never be. What business leaders need is imagination and a willingness for experimentation.
Attention is the key currency in today’s world. The world of digital lets brands literally track every eyeball movement for a person who is using the website or the app. And yet, no business measures and incentivises attention. While many offer rewards for transactions, the triad of attention-action-engagement that precedes a transaction is largely ignored. As such, all that brands are left with is looking at spends and running loyalty programs to offer points. Imagine if attention could be rewarded – with the prize being an entry into the metaverse for unique, differentiated experiences. I call the attention currency as Mu (µ), and the metaverse, appropriately enough, as the µniverse. Let’s play out this vision.
In the pre-digital world, transactions were the only element of the consumer lifecycle that could be tracked. That’s how loyalty programs emerged – to collect data at an individual level and thus get better insights into customer behaviour. In the digital world, this has continued. But when interaction is via a keyboard, mouse, or touch, it now becomes possible to track everything upstream of the transaction: attention, action and engagement. The more time someone spends on Site/App A means that the time is not being spent on Site/App B – attention is a zero-sum game. Since attention can now be tracked right from opens and clicks on emails to actions taken on SMSes and push notifications, it now becomes possible to create a rewards program for attention. This is the idea behind Mu. [See: Imagining Mus: An Attention-Action Currency.] Mu is the first building block for the µniverse.
Push messages are today sent to inboxes that end customers have: Gmail, SMS, or increasingly, WhatsApp. In the Gmail inbox, Google’s algorithms decide which folder the emails land in. Incoming marketing emails also have to compete with various personal emails. Just like P2P messaging has largely moved from the SMS inbox to WhatsApp, there is a need for a new inbox – the micronbox – dedicated for marketing emails. [See: Micronbox: A New Inbox.] The micronbox, our second building block, is a repository of microns – brand push messages with reward (Mu). Since all messages in this are only based on customer opt-in, this is a spam-free repository. At the most basic level, it can do for emails what Microsoft’s SMS Organizer does for SMSes. Over time, the micronbox can evolve from an inbox into an app, a portal to the µniverse.
The µniverse is the third and most ambitious building block for the metaverse. It is where brands and customers can have intimate experiences, where customers can participate in communities, where communities can drive co-creation with brand managers. The µniverse is an exclusive space – reserved for a brand’s Best Customers, accessed via attention as measured by Mu or based on customer lifetime value as determined by the brand. It is thus the ultimate Velvet Rope Marketing prize. [See: Best Customers and Velvet Rope Marketing.]
A New World
The µniverse may sound like science fiction today, but it is waiting to be constructed. It is inhabited by our digital twin – much like we have personas in the games we play. There is one big difference; when we exit the game, the persona also exits. Instead imagine persistence, where the digital twin – constantly learning from our actions engaging with brands – stays on in the metaverse. The digital twin is constructed from our digital pheromones and AI-ML engines. The twin, undeterred by attention recession, can chat with brand bots, consume an infinite supply of marketing messages, and identify which of these merit our indulgence. Which book to buy next, which news story to read next, which movie to watch next – the digital twin helps us choose from the vast cornucopia of offerings. It can also spawn offspring in the form of software agents which can ferret out nuggets beyond what may be obvious to us.
The µniverse is the habitat of the digital twin. There can be a single twin created by each of us. What is perhaps more likely in the near-term is that there will be a digital twin created by every brand which lets them predict what we will do next. It is like playing Chess – a human can perhaps play a few other humans simultaneously but only a computer can play millions of humans at the same time. In the same vein, marketing managers can determine next actions for a limited number of cohorts of customers, but only in the µniverse can the next best actions of millions of customers be individually predicted and consequent actions be taken to nudge them along those journeys.
Constructing the µniverse will require new tools – just like making the first-generation of HTML websites needed site builders. These tools are likely to come from the world of gaming. For most customers of a brand, the regular website or the app is good enough – these are the 80% Rest Customers who account for 40% of revenue. But the 20% Best Customers who account for 60% revenue and perhaps more than 100% of profits need what they have not got so far – an exclusive experience that nudges them towards maximising their spend with the brand. This is where the ideas of the metaverse can come into play – with access restricted by either attention (Mu earned) or lifetime value. The experience of the µniverse becomes the next axis of differentiation – after price and convenience have been equalised.
The µniverse is the new world that beckons brands to a future where attention and profits matter more than new customer acquisition to show lossy growth. Just as human attention is finite, so is investor appetite for spending (aka paying Google and Facebook). The tide will turn, and profits once again will be in vogue. Just product, price and delivery equalisation will not be enough; marketers will need to bring in experience into the mix – especially for their most profitable customers. The time to take the steps to birthing the µniverse is now!
The metaverse – or the µniverse as I term the B2C metaverse – will get built over the years to come. Meanwhile, CEOs and their marketing teams can take many actions to begin the journey to the new world.
First, collect customer data across all touchpoints. Machines and not humans in marketing departments are going to process this, so there is no need to economise! Every datapoint is a piece that goes on to create a single, unified, composite view of the customer, so no data is irrelevant. Computing and storage are cheap enough to make this almost a given. And yet few companies do this well. So, start by creating a “Chief Data Officer” (distinct from Chief Digital Officer). In the right hands and with the right software, data can tell amazing stories.
Second, invest in a full-stack communications and martech solution. The “full-stack” bit is important. The mistake marketers make is to get the next shiny point solution and then face a big challenge with silo-ed data and integration hurdles; they lose sight of the forest for the trees. For the magic of AI-ML to work, a single omnichannel stack is the way to go.
Third, lay the foundation for Velvet Rope Marketing – by analysing the customer data to calculate customer lifetime value (CLV) and decode the Best Customer Genome (BCG). CLV will help identify the Best Customers, and BCG will offer clues on the ideal customer profile and journey.
Fourth, construct digital twins for the Best Customers. AI-ML software can do this. With this, it will also become possible to predict the next best action that needs to be proposed for the customer. This is an iterative process – with every new customer input in the form of an action (or inaction) creating a new output in the form of personalised recommendations.
Fifth, consider atomic rewards as the answer to information overload and attention recession. This is where Mu, the attention currency, comes into play. Selected customers can be rewarded for their attention (push messages to begin with). Atomic rewards help nudge the customer along the journey and also bring in an element of gamification.
Sixth, imagine new, rich experiences for Best Customers. What is it that will surprise and delight them? How can the combination of content, context and community create lasting memories and the urge to share and refer others like them?
Seventh, use gaming engines to give life to these experiences in a private µniverse. Even as the larger metaverse takes shape, it is possible to create gateways to new worlds with today’s technologies to strengthen relationships with the Best Customers – the first step to creating a profipoly (profits monopoly).
Each one of these seven actions can be begun today – readying the business for tomorrow’s world. The basics of business success have always remained the same: get the category’s best customers, keep them forever, and persuade them to refer their friends and family. The metaverse is the next evolution in doing the basics even better. The digital journey that began with the Internet is ready for its next – and most exciting – big leap. It is our combined imagination that will birth the new µniverse future.
This has been a long journey into a future that is coming. As with the internet, no one is exactly sure how it will evolve. The innovations creep up on us with the early adopters starting to use them. Today’s users of Fortnite, Roblox and Minecraft will be tomorrow’s customers and will therefore expect richer engagement experiences with brands. They will drive the cutting edge and the construction of the metaverse future.
While the metaverse will be led by our desire to share experiences in the form of space and time with others, the µniverse will be driven by the need for a brand to offer differentiated and rich experiences for its most valuable and profitable customers – that little extra that wins them over for life. Just as it was very difficult to imagine all the possibilities of the Internet in the mid-1990s, it is our 2D and small screen imagination that limits our exploration today of the possibilities of the metaverse future. But that future is coming. Technology has a relentless forward march and early failures are but small blips in the path of progress.
In this series, I have, in a limited way, explored some ideas. Atomic rewards to counter attention recession, a micro-currency Mu to provide access to the new world, gamification and 3D interfaces to combine with avatars, digital twins and software agents to provide a persistent presence in this parallel universe. All of these are individually there; what entrepreneurs need to do is to start putting them together.
One of my first projects when I started working at NYNEX in 1989 was to explore an Intel technology called Digital Video Interactive (DVI). I would imagine replicas of places which one could explore via the desktop. Later, in the early days of IndiaWorld in the late-1990s, I would imagine a 3D mall as a manifestation of the global marketplace that I wanted to create. And then came SimCity, which enabled the development of buildings, offices, factories and their interplay. Video games and movies fed our fascination for alternate worlds. The big difference now is that the technologies are finally ready to place us in these new worlds. Instead of static, detached, game-like interfaces, we are getting to a future where reality gets extended into a “mirror world.”
The metaverse is a once-in-a-generation opportunity to completely reimagine and construct something very new and different. My lens in this series has been the brand-customer relationship. The physical and anonymous past of that relationship has now become digital and data-driven. The µniverse will transform it further. As Alan Kay said: “The best way to predict the future is to invent it.” The best way to imagine the metaverse future is to build it!
Since I wrote the series, there has been a lot more discussion about the metaverse.
For one, Facebook’s Andrew Bosworth and Nick Clegg defined the metaverse as “a set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you. You’ll be able to hang out with friends, work, play, learn, shop, create and more. It’s not necessarily about spending more time online — it’s about making the time you do spend online more meaningful.” They added: “The metaverse isn’t a single product one company can build alone. Just like the internet, the metaverse exists whether Facebook is there or not. And it won’t be built overnight. Many of these products will only be fully realized in the next 10-15 years.”
Wunderman Thompson published a report on the metaverse. From the foreword: “The virtual domain has become an all-encompassing space where commerce, education, entertainment, community-building, wellness, work and more can be accessed. As more people spend time online, digital third spaces are becoming the new hangouts, making this a thriving environment for brands and influencers. But the potential of the metaverse goes beyond the digital domain, allowing for interactions that blur the boundaries of physical and digital.” Their view is captured below:
The report covers an array of themes: MetaLives, MetaSpaces, MetaBusiness, and MetaSocieties. A few interesting ideas described:
- Virtual possessions: Consumers are replicating their physical daily habits in the virtual realm—assigning a growing value to digital assets and giving rise to new direct-to-avatar (D2A) business models.
- Liminal spaces: Blended virtual and physical experiences—are already revolutionizing the culture and art scenes. In future, expect to see similar blurred reality activations in retail spaces, brand hubs and business centers.
- Gamevertising: Bigger than the movie and music industries combined, gaming has become a playground for brands and marketers to connect with an engaged audience.
- New retail frontiers: Digital-twin stores and augmented shopping experiences are paving the way for the next retail frontier—one that is intuitive, immersive and engaging.
Alexander Fernandez wrote about the four key drivers behind the metaverse:
- The retirement of baby boomers and the rise of the digital-first Gen-X, Millennials, Xenial and Gen-Zers who grew up playing video games, surfing the web and traveling the world.
- The digitization of financial assets integrating across all aspects of life (for example, blockchain, smart contracts, cryptocurrencies and NFTs).
- The future of work as the pandemic revealed that most knowledge businesses could function remotely as long as they had transparent cultures, processes and technologies to support them
- The rise of the next two billion people as emerging markets in Latin America, Southeast Asia and Africa have become sources of raw talent eager to participate in the global economy.
He added: “Whether you’re looking at new ways to maintain brand loyalty, engage new customers or streamline your workflow, video game technology and methodology can be the key to unlocking them. It’s not only creative industries that benefit but also traditional industries like healthcare, transportation and education. Remember when gamification was a big deal? That was just the beginning. The third epoch of gaming has arrived, and it’s bringing the Metaverse with it. “
A column on Nasdaq.com: “The evolution of this metaverse, the merging of physical and virtual realities into something completely new, will usher in an enormously digitized economy. Digital currencies will utterly dominate, and political borders will become increasingly difficult to enforce in a virtual world. Current tax codes and regulations aren’t prepared to handle a virtual designer selling virtual clothes to avatars that can then resell them to others in this metaverse – wear and tear will be a bit lighter than on the streets of San Francisco. What about the virtual architect that designs a virtual home that can then be moved to anywhere in the metaverse … while the world today is struggling with enormous levels of debt, challenging demographics, social strife, and a pandemic, a whole new world is evolving. Within it, the human potential to solve problems, collaborate, create, and meaningfully connect in ways that defy geography and social biases will ultimately result in medical advances beyond what we can imagine today, wealth generation that will overpower today’s global financial challenges, and greater compassion for one another.”
A column from Brookings: “The seminal asset, and thus the seminal issue, in the digital era is access to—and control of—personal information. In the current online world, the digital companies have siphoned personal information and then stored, manipulated, and repackaged that data in order to sell access to targeted users. If the metaverse is moving to a persistent pseudo-world, then the amount of data collected will be immense, as will the opportunity to monetize that data.”
The metaverse action is just beginning and opening a new world of opportunities for brands to engage with their customers. Together with the blockchain, cryptocurrencies, NFT, DAO (decentralised autonomous organisation), Web3 beckons!