Billion-dollar companies are taking the Metaverse by storm as consumers have shown heightened interest in virtual, interactive, three-dimensional experiences that take place online.
While the “Metaverse” is still a new concept, research firm Strategy Analytics found that the global Metaverse market is forecasted to hit nearly $42 billion by 2026. This very well may be the case, as a handful of businesses including Nike and Walmart have begun exploring consumer experiences in metaverse environments.
NFT utility for brands launching in the Metaverse
To understand how and why brands are leveraging the Metaverse, it’s key to point out the role that NFTs, or nonfungible tokens, play within these ecosystems. While the year 2021 saw an influx of NFTs, the rise of the Metaverse is predicted to highlight the importance of utility behind NFTs.
Adrian Baschuk, founding partner at Ethernity Chain — an authenticated and licensed NFT platform — told Cointelegraph that every brand, company and notable figure will eventually have a metaverse and NFT integration:
“This is the "Myspace days" of the NFT-metaverse interactivity layer. Just as every company and individual has adopted some form of social media, this will also be the case for NFTs and the Metaverse.”
Given this, Baschuk shared that Ethernity recently brought its IP to The Sandbox, a blockchain-based metaverse ecosystem. Specifically speaking, Ethernity has acquired a desirable plot of land in The Sandbox to host a gallery and fully licensed NFT store. Baschuk explained that this will allow The Sandbox users to purchase Ethernity NFT wearables and collectibles.
According to Baschuk, these wearable NFTs include athlete jerseys, which will be used to dress and provide special powers to The Sandbox avatars. “Dallas Cowboys’ Zeke and Dak will kick this off, as the players’ wearable jerseys and shoulder pads will boost a user's avatars’ skills and powers,” he said.
While this specific example may appeal to The Sandbox gaming community, the concept behind it is universal for brands entering the Metaverse. For instance, Baschuk explained that NFTs within virtual ecosystems allow for companies to monetize assets across a blockchain network, enhancing interactivity for consumers and fans.
To put this in perspective, consumer electronics giant Samsung recently announced that it will have a virtual replica of its New York physical store located within Decentraland, another leading metaverse ecosystem. The store, known as the “Samsung 837X shop,” will be accessible in Decentraland for a limited time.
A Samsung spokesperson told Cointelegraph that establishing Samsung 837X as a metaverse brand will provide limitless possibility for consumers to connect with Samsung and its products in an immersive way:
“In our metaverse, the brand pillars of sustainability, customization and connectivity will come to life in experiences that showcase the cutting-edge technology embedded in the Samsung family of products. This virtual hub will become a place for our community to celebrate the convergence of technology, art, culture, fashion and music.”
Samsung’s spokesperson further mentioned that Decentraland specifically gave the company a platform to enable a true Web3 metaverse experience. They noted that the Samsung community wanted a metaverse store to feature interactive quests that would allow participants to earn wearables like NFT badges or opportunities to win exclusive Samsung branded clothing for avatars.
Overall, Samsung explained that its 837X store will serve as a foundation for the future, which will offer significant utility to its visitors. In turn, the company is looking at ways in which badges earned at 837X will offer access and utility for future events and experiences in its virtual space. “In the future, it’s our hope that everyone who visits our world will be able to enhance their online experience in the metaverse and their real-world experience with Samsung products,” commented Samsung’s spokesperson.
While Samsung was one of the first major brands to launch a virtual store in Decentraland this year, other organizations are following suit. Most recently Tennis Australia, the organizer of the Australian Open (AO), partnered with Decentraland to host the AO in the metaverse. This virtual environment contains key areas in Melbourne Park, including the Rod Laver Arena and Grand Slam Park. AO Decentraland 2022 will take place Jan. 17–30, mirroring the in-real-life tournament schedule.
Ridley Plummer, Tennis Australia NFT and metaverse project lead, told Cointelegraph that it was a natural progression for the event to expand into the metaverse. Plummer shared that this was also the case due to border closures brought about by the COVID-19 pandemic, which has made it more difficult for fans to attend the event in person:
“We can only have a certain number of people in the area and the arenas, so we are bringing the AO to the world by allowing fans to partake in a virtual, interactive experience on Decentraland. This will enhance our fans’ viewing experience at home from their television by providing users with a more voyeuristic look at what’s happening at Melbourne Park.”
Plummer elaborated that AO’s metaverse environment features entertainment hubs where fans can watch replays of tennis matches, along with historical footage of past tournaments. He noted that during the final weekend of the event, fans will have access to behind-the-scenes footage that will show players during practice sessions and more.
Plummer added that users on Decentraland can walk around Melbourne Park with their avatars to collect wearables and play virtual games to earn NFTs. “There are items and branding we can add within Decentraland that enhance experiences for our partners as well from a play-to-earn perspective. We have a series of gamification within Decentraland.”
Blockchain-based metaverse offers more, but will the mainstream catch on?
Given the unique experiences NFTs can bring to consumers and fans, it’s equally important to highlight the benefits offered by a blockchain-based metaverse ecosystem. For instance, while many brands have started to engage users through connected environments, blockchain networks enable digital asset ownership while demonstrating the true power of Web3.
Elaborating on this, Adam De Cata, head of partnerships at Decentraland, told Cointelegraph that the difference between a blockchain-based metaverse and a non-blockchain metaverse is interoperability:
“When it comes to interoperability and what this means to users in blockchain, it can provide countless utilities and benefits. You can buy your digital garments, trade and sell them and receive these funds via crypto (that can be transferred into fiat if need be). As a creator, you can receive a trailing commission on wearable sales too.”
De Cata added that open source platforms like Decentraland further allow users to connect their digital wallets to the platform to access particular builds and scenes that might be exclusive to a particular NFT they already hold: “We are still in the infancy of exploration, and it’s exciting to think of the possibilities moving forward with Web3.”
In regards to interoperability, Sebastien Borget, co-founder of The Sandbox, told Cointelegraph that the Metaverse enables a digital economy, noting that a true virtual ecosystem should allow for an avatar to be used across a variety of platforms: “The Metaverse means that your avatar can function across a myriad of virtual worlds, with the same identity. This is only possible through blockchain technology, which puts the users in control of their identity, data and currency.”
Borget further remarked that virtual worlds have existed for over 20 years, adding that many current metaverses are just centralized platforms:
“The value centralized platforms bring by creating or being present is locked into the platform, and even worse, captured mostly by the platform rather than going back to the users. For me, the Metaverse’ true potential can only happen if there is a technology that supports this digital economy and users' sovereignty.”
Yet while blockchain-based metaverse environments are capable of offering more to both companies and their users, the question as to whether this concept will catch on with the mainstream remains. De Cata remarked that he is optimistic about mainstream adoption, noting that Decentraland has seen an almost equal number of guest wallets and users with existing digital wallets utilize the platform. He shared that he is looking forward to the feedback from the AO event. “I’m keen to see what happens during the course of the AO on Decentraland. There is just enough market research to find out the retention rate and user experience for events like the AO, and if these users are crypto native or not.”
It’s also notable to point out that Samsung shared that the company has had an overwhelmingly positive response from visitors coming to Samsung 837X. “Based on the response we’ve received, we’ve seen attendance to Samsung 837X from both experienced users and new explorers alike. For us, that’s very exciting.”
Will metaverse experiences replace real life?
Metaverse experiences may be the next big innovation for brands and users, but some may be wondering if virtual environments will replace real-life experiences entirely. After all, this could very well be the case due to the advanced capabilities provided within blockchain-based metaverse environments.
For instance, while NFT utility has been brought to life through the Metaverse, the trillion-dollar e-commerce sector is being disrupted overall. To understand the scope of this, Justin Banon, co-founder of Boson Protocol — a decentralized commerce protocol — told Cointelegraph that brands are ultimately seeking commerce opportunities. “The whole point of the Metaverse is that it's programmable and gameable, therefore offering full capabilities for a new wave of commerce.”
In turn, Banon explained that Boson Protocol has purchased one of the largest plots of land in Decentraland to host virtual shops that allow for NFT wearables to be purchased and then redeemed for physical items either online or at store locations. For example, Boson Protocol recently launched a virtual store with DressX, a retailer for digital fashion clothing, allowing the company to sell items to users in the metaverse that can be redeemed for physical versions. “We are getting more demand for Web3 features, like "digiphysical" offerings. There is no longer the demand for vanilla e-commerce,” he remarked.
While this may be, De Cata commented that time spent in the Metaverse depends on individual users:
“Metaverse events will be complementary to real-life events and experiences. We are already seeing a blended mix of both. Social content is key in the digital age we live in. I draw from the tech adoptions curves — the early adopters may spend increasingly more time in the Metaverse whereas the late majority less time.”
Although it’s hard to predict the future traction of the Metaverse, industry experts remain confident that all brands will eventually adopt a metaverse model. Borget commented that he expects this trend to accelerate because brands are looking for new ways to engage with users digitally. “It makes sense for brands to give more value back to the users directly, rather than spending on advertising,” he remarked. And De Cata added that although “the Metaverse” is trending as a topic, he believes that these virtual worlds are just an extension of social media platforms:
“The Metaverse allows us to connect with like minded individuals in a way that we don’t currently get from swiping up and down in a mobile app. For the crypto community, interoperability is key. For non-crypto users entering these environments, it’s clear that they are enjoying them now more than YouTube.”