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A few years ago, the metaverse was only a fancy buzzword used to describe dystopian virtual worlds like the OASIS in the ‘Ready Player One’ movieor the digital realm Neal Stephenson envisioned in his 1992 science fiction novel ‘Snow Crash.’
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However, while decentralized projects continue their rise in popularity, and tech giants like Meta, Microsoft and Google are building virtual worlds of their own, the concept is evolving into what could potentially become the greatest tech trend of this decade.
So, why do global brands choose to embrace the metaverse, and how do the residents of the virtual worlds benefit from this? To answer this question, let’s look deeper into what’s been happening in the digital space in the last two years.
The rise of the digital space
Since early 2020, government lockdowns and social distancing have played an integral role in our everyday lives, leaving us hungry for quality interactions. Unable to go outside to see their relatives, meet up with their coworkers, go to a concert, or hang out with their friends in real space, people eventually turned to technology. And what’s a better way to connect in this scenario than to engage in a digital realm that mirrors the real worldand even aims to offer a larger-than-life experience?
If we put it this way, it becomes clear why Goldman Sachs predicts the metaverse to become an $8 trillion opportunity. As services and entertainment are increasingly moved online, it gives a powerful use case for the metaverse, which serves as the ultimate 3D platform to host all these experiences. A working infrastructure is rapidly developing around the virtual worlds, and the demand for high-quality digital content, goods and other solutions is rising.
Avatars are inhabiting the metaverse, and they want this experience to be immersive. From plazas and fashion stores to banking and financial services, consumers now want digital clothes, accessories and products that would let them express their real-world personality or create a new one. This way, consumer demand is forming the supply within the metaverse.
Meeting consumer demand in the ‘new normal’
After witnessing the success of branded NFT collections and digital eventsuch as the virtual world-based concerts of Ariana Grande and Travis Scott gathering 78 million and 12.3 million viewers, respectively global brands recognized it as the perfect opportunity to capitalize on, creating more visibility and reach.
With sufficient resources to innovate and experiment, they are jumping in to fill the new niche. It’s now officialDisney, Hyundai, Warner Bros., Gucci, Louis Vuitton and many others are joining the metaverse. Some go further than others.
For one, in addition to launching NFT collections, Nike and Adidas have designed their own branded digital worlds. The prior built Nikeland on Roblox and acquired the virtual sneaker creator RTFKT, while the latter purchased digital land in The Sandbox’s decentralized universe to launch AdiVerse.
JP Morgan, the largest bank in the world by market cap, jumped on the bandwagon to become the first financial institution in the digital realm by opening a lounge in Decentraland. Microsoft is leveraging its developed cloud infrastructure to build Mesh, a 3D virtual platform serving a B2B audience in which businesses and their employees can collaborate, communicate and brainstorm on new ideas together.
In the entertainment industry, huge players like Disney can seamlessly onboard their millions of existing users to the metaverse. While they don’t have to work as hard as a startup to attract users to their 3D platforms, they can more effectively meet their audience’s needs via a virtual world.
Why does metaverse need brands?
As we see from above, investing in the metaverse can create a highly lucrative opportunity for brands. But does the space itself benefit from their arrival? The short answer is yesas the active involvement of brands in a relatively new industry can supercharge the adoption of the technology and applications, as well as main projects within that space.
NFTs provide a great example here. Despite their history dating back to 2014, non-fungible tokens only started gaining traction last year, when numerous global brands, celebrities and well-known artists launched their digital collectibles. When that happened, the market started to explode, with NFT sales on Ethereum skyrocketing from January 2020’s monthly $80,000 to $115 million a day by January 2, 2022.
Brands we know and love will have the same effect on the metaverse, playing a critical role in mass adoption. As they provide a quality supply, it creates new demand that will power metaverse adoption. The reason behind this phenomenon is simple.
As familiar brands join the metaverse, it will create an island of recognition and familiarity in an otherwise strange new world. However, as the big names are present, it will attract the mass user by showcasing that this virtual world is safe, tested and familiarand it’s a place where the consumer belongs.
The same goes for investmentsthe involvement of trusted names and established players helps attract more funding for the development of the new technologies. Like it once happened with internet companies, conservative Wall Street investors will eventually embrace the trend and invest in the metaverse it would be too big of an opportunity to miss out on.
Ilman Shazhaev is the founder and CEO of the Farcana metaverse. Ilman is a techpreneur with extensive experience in launching IT and deep tech engineering projects. He has a strong background in IT management, data science and AI.
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Featured Image: Shutterstock/solarseven/Dario Lo Presti/Andy Chipus
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