What is Metaverse?
Ever since Metaverse caught public attention, there have been many attempts to define it. However, most of the definitions have been from the consumer perspective. But what does this virtual world means for businesses? Here’s how the Co-founder of Queppelin, Mr. Prafulla Mathur, defines a Metaverse for businesses.
“Metaverse for businesses is an interactive virtual space that facilitates business expansion. It’s the latest iteration of the internet where you create, engage, monetize and own the content. Combining advanced technologies like Augmented Reality (AR), Virtual Reality (VR), Blockchain, Artificial Intelligence (AI), NFTs, and others.
Businesses can operate in this 3D digital virtual world parallel to the real world and contribute to the five critical components for a business – Value Creation, Marketing, Sales, Value Delivery, and Finance”.
Enterprise Metaverse: Real Opportunities from Virtual World
Based on the above definition, we can infer that an Enterprise Metaverse is an immersive virtual space where businesses can seek growth opportunities with novel methods of customer engagement.
They can use enabling technologies to achieve their objectives.
- Reach out to new customers,
- Create innovative products and services
- Promote and market through engaging methods,
- Reduce the cost of production and operation
- Improve organizational efficiency
In order to completely grasp the possibilities in the Metaverse, we have to get clarity on what an Enterprise Metaverse is made of and where the opportunities lie.
As per a report published in June 2022 by Mckinsey & Company, there are four components of Metaverse –
- Infrastructure & Hardware
- Platforms, and
- Content & Experiences
Enablers are those platforms that lay the foundation for the complex Metaverse structure. They take care of crucial aspects like governance, security, and privacy and lay the foundation for the Metaverse economy.
The second component is Infrastructure. This component consists of the hardware and software required for the Metaverse development such as Operating Systems, Cloud, Semiconductors networks, Devices, Accessories, etc.
Third, the Platforms and tools that facilitate the creation and distribution of the experiences. This includes Web browsers, Applications, App stores, Game engines, AI services, etc.
Lastly, the Experience and the Content available on the Metaverse platforms. It can be created by developers, creators, or most importantly, the user themselves. After all, it was the user-generated content that boomed Web 2.0, though the difference here is the user owns the content in web 3.0, not platforms.
These four components can be further broken down into ten layers. Investment is flowing in the Metaverse through these ten channels. (See the figure below)
Enablers component consists of 3 layers:
- Payment & Monetization – This facilitates the functioning of the Metaverse economy. The digital assets are stored and traded with the help of these platforms. Here, exploring this layer for investment means opening ways for digital transactions.
- Identity – It takes care of the digital identities and the aspects related to them. Investments, here, are to find ways for identity management, avatar creation, signature authentication, etc.
- Security, Privacy, and Governance – This is a crucial layer. Many of the discussions have been around it. The Metaverse of the public imagination is robust, secure, and, most importantly, respects the user’s privacy. Investments are being made in this layer to seek solutions to the privacy and security dichotomy.
The Infrastructure and Hardware component consists of two layers:
- Infrastructure & Hardware- Here, the investments are trying to solve issues related to computing and networking infrastructure such as low bandwidth, high latency, low-quality rendering, and others.
- Devices, OS, & Accessories – It is the combination of hardware and software that people will use to interact with the virtual world. Progress in this area will determine how people interact with the Metaverse.
Further, the Platforms component consists of two layers:
- Access & Discovery: This layer will facilitate the distribution of the Metaverse content. This includes the web browsers, app store, etc.
- Creators Platform: This layer will comprise platforms that will facilitate content creation. They will provide the tools to build the virtual environment in a Metaverse.
Lastly, the Content & Experience will consist of three layers:
- Content: Investment in this area will lead to more content getting created from different categories of creators like developers, creators, and users.
- Application: This layer will focus on how Metaverse can help in specific endeavors such as events, education, and other industry-specific applications.
- Virtual Worlds: Investors can also focus on creating virtual worlds wherein a number of users can join, interact with each other, indulge in activities, and generate their own content.
Thus, these are the segments of the Metaverse that investors are finding suitable for their investment.
In the next section, we will discuss who are those investors? What kind of businesses are finding expansion avenues in the Metaverse?
How can Enterprise Metaverse contribute to Business Value Creation?
Ever since Facebook renamed itself, Meta, in late 2021, the popularity and interest in the Metaverse increased exponentially. More than $120 billion has been invested in the Metaverse in 2022 till now, more than double that invested in the whole of 2021 i.e. $57 billion. (See Graph below).
Out of this $120 billion total investment, $90-100 billion came from Merger & Acquisition, $15-20 billion from internal corporate investments, and around $6-8 billion from Venture Capital & Private Equity.
These high numbers in the investments are the reflection of investors’ confidence in the potential of Metaverse.
Who all are investing in the Metaverse?
There are three categories of investors entering the Metaverse:
This includes some major names like Meta (formerly Facebook), Alphabet, Microsoft, Nvidia, and others. Facebook conveyed its intent clearly of becoming a Metaverse Company by renaming itself, Meta. It committed $10 billion to its Reality Labs to develop hardware related to the Metaverse. Similarly, Microsoft is planning a $69 billion acquisition of Activision Blizzard, a gaming company.
There have been some major investments from this category of investors. For example, SoftBank invested $93 million in The Sandbox, and Niantic received $300 million from Coatue. Improbable raised $150 million, led by Andreessen Horowitz and SoftBank. Bored Ape Yacht Club creators Yuga Labs raised $450 million.
Non-Tech Corporations & Brands
These players do not want to be left behind. Hence, some big brands collaborate with renowned tech players to make their way into the virtual world.
For example, Balenciaga collaborating with Epic Games is one such example, or Tanishq teaming up with Queppelin. The reason is that the latest trends like social media, e-commerce, etc have started to become obsolete. Now is the time to explore new methods to engage customers. What can be better than the Metaverse when it comes to engaging experiences.
Why are they investing in the Metaverse?
Now, talking about the reasons. Their confidence in the virtual world is not based on thin air. The emergence of Web3 and the related enabling technologies form a strong basis. This includes Blockchain, Smart Contracts, and Digital Assets. Plus, there are other factors as well that we will discuss here in this section.
The takeaway is that we are undergoing a paradigm shift in technology and every business would like to take the first-mover advantage.
Although there is still a lot to be achieved in the technological aspect, the impetus we got through some promising technologies is encouraging. Blockchain is one of the biggest factors along with the 5G telecommunication standard, Edge computing, AR/VR, advancements in related hardware, etc.
To elaborate, blockchain creates an ecosystem for the creation, ownership, and monetization of decentralized digital assets such as NFTs and Cryptocurrencies. This underpins the development of the Metaverse economy. After all, there is no Metaverse without economy.
Similarly, the roll of out 5G will contribute to edge computing by connecting more devices to process data. Hence, it will take care of the low latency issues and enable faster and high-quality rendering.
Edge computing is a computing paradigm that captures, stores, and processes data locally rather than in the cloud.
Next, the developments in the field of Augmented Reality and Virtual Reality are maturing fast. While Oculus has already started making gloves and body suits with haptic feedback, others like Microsoft, Qualcomm, and Sony are also entering this sector.
On the same line, top software companies are engaged in shaping the application layer (discussed above) of the Metaverse. Examples include Azure Digital Twins and Microsoft Mesh.
Metaverse has been finding stakeholders across different domains. While brands are using it to expand their consumer reach, consumers are using it to add value to their life, and organizations serving businesses are ready with Metaverse Enterprise Solutions. They all have their own utility of the virtual world.
Brands are reaching customers with innovative ideas
We have already discussed this aspect in the above section. Various brands are making their presence in the Metaverse like Nike’s Nikeland and Gucci’s Gucci Town in Roblox. These brands have already charted their way forward into the Metaverse.
As Metaverse is following the boom of user-generated content. Here, too, the user will contribute a big deal. Brands have seen how creator economy platforms can work miracles. The prominent examples are Youtube, Facebook, Tiktok, and others.
In the case of Metaverse, the efforts were made right from the start to facilitate user creativity and help them create as much content as they can.
More noticeably, the use cases will not be limited to gaming as we are seeing today. This is expanding to learning and education, medical care, fitness, and other untouched areas.
Enterprise Metaverse Solutions
Metaverse will offer enterprises highly innovative solutions to facilitate smooth and fast business processes. Some of the emerging use cases in this area include:
The immersive 3D experience wherein business partners can meet and discuss the future course of action will save a lot of resources. No longer there will be a need to travel or locate to distant areas.
Digital Twin is an innovative way to increase functionality, efficiency, and spot lacunae in the industrial or manufacturing plant. Organizations can create a digital replication of their manufacturing plant to simulate it in real-life as well as imaginary situations. This helps in identifying the shortcomings in the plant design and weeding them out.
Learning & Development
3D simulations of complex concepts and machinery will help employees deeply understand the topic. Thereby, improving the outcome to a great extent. Not only this, but it will also help in other processes related to human resource management such as onboarding, documentation, orientation, etc.
This will give an edge to the organization over its competitor. They can attract talents from across the globe and work together in the same Metaverse environment.
The demography of video-game users is expanding both in terms of Gender & Age.
Gaming is a major opportunity in the Metaverse, and the demographic shift in this area will easily reflect in the demography of the Metaverse.
Another noteworthy trend is the shift towards independent developers and content creators, as we saw in the past five years. This will bring a variety of content containing in great quantity and quality.
Users are discontent with the current scheme of things
On one hand, consumers are not happy with the spread of misinformation and data privacy concerns, on the other, creators are dissatisfied with the centralization, monetization, and distribution of income. This discontent is drifting them toward a decentralized and secure system where they are in command.
Brands also want to engage directly with consumers without any thirds party involvement. How things will turn out remains to be seen in the coming times.
Trillions of opportunities in Metaverse
As per the Mckinsey report, the Metaverse is projected to be a $5 trillion opportunity by 2030. The prominent reasons for it are:
- Big project announcements by corporate giants like Meta, and Microsoft. They are making sure the world knows about the Metaverse.
- High user awareness about the Metaverse.
- Advancement in enabling technologies like AI, Blockchain, etc.
Talking in terms of supply, the users are already familiar with the current Metaverse offering and are even excited about the future. The tremendous spike in the prices of digital assets is proof of it.
On the supply side, foundational technology already exists, and investments from all sources are pouring into it, leading to further rapid-paced advancement.
Moreover, the best part is that the experiments by brands involving Metaverse resulted in high returns. For example, the concert of Travis Scott in Fortnite was attended by over 27 million players.
Till now, most of the Metaverse activities are centered around five areas:
- Marketing & promotions,
- Learning & Development for employees;
- Virtual Meetings,
- Events & Conferences;
- Product design or Digital Twinning.
The following graphs show the number of projects in these areas across industries:
However, in the future, the area of activity is about to expand with technological innovation. We can understand it with the example of different industries and how they are set to use Metaverse.
Metaverse for Fashion & Jewelry Industry
The fashion industry finds Metaverse useful in multiple ways such as
- Negligible production cost
- No supply chain issues
- Higher personalization
- Deeper engagement
- Higher profit margin
- Better reach
Brands are offering specialized digital wearables that users can flaunt through their avatars. Then, they are also tying their real-world collection to their digital tokens. Lastly, they are looking for immersive user engagement through the virtual world.
For example, While Adidas Originals released their first NFT collection titled “Into the Metaverse”, Gucci sold the digital version of its Dionysus bag on Roblox. The bag fetched a price of around $4,115, 20% higher than its real-life counterpart. This offered a way higher profit margin as the cost of production was negligible while the selling price was higher.
Metaverse for Financial Services
Metaverse will create a lot of room for financial service providers. They can explore new avenues in terms of trusted digital services such as payments, digital IDs and signatures, etc.
It will open room for lending backed by digital collateral. Lastly, it will also let them offer innovative products and services like NFT financing.
The Metaverse has further digitized the payment system. This will bring added efficiency to the management and tracking of funds. Plus, the financial institutions will be able to offer highly personalized financial services through high-quality Metaverse data.
Lastly, the advent of Decentralized Finance or Defi will lead to the decentralization of resources and leveling of the playing field. Blockchain technology will ensure that all the players have equal access to the resources without any undue advantages. Secondly, the distributed ledger system will also ensure the protection of data to generate trust in the user.
All these factors combined will lead to a great user experience and, thereby, next-level digital customer acquisition by the financial institution.
Metaverse for Business Operations
Whether it is a billion-dollar corporation like Intel, McDonald’s, and Nike or budding Startups like Gravity Sketch, InWorld AI, and Upland, the importance of virtual business infrastructure is well-known across the business spectrum. That is why these endeavors are building offices in the virtual world for daily operations as well as opening new avenues of resources.
Metaverse in making day-to-day business operations easier, faster, and more efficient. It will offer a better remote working environment and facilitate higher productivity. Employees could better collaborate virtually with other employees and will better perform with the ubiquitous data and guidance available even for the most complex of technologies.
Moreover, it will be much more convenient and cost-saving for businesses than maintaining real-world infrastructure.
Metaverse for Branding & Marketing
Metaverse offers a great platform for marketing and branding initiatives of businesses.
Some of the popular names are Hyundai, Tata, Walt Disney, and Warner Bros.
Hyundai inaugurated its Hyundai Mobility Adventure on Roblox where participants can explore the company’s future projects as well as current products.
Similarly, Tanishq, a Tata product, collaborated with Queppelin to launch its latest jewelry collection Rivaah in the Rivaahverse in a head-turning Metaverse event.
Warner Bros. Pictures promoted its movie “In the Heights” through a Metaverse party. Last but not the least, The Walt Disney Company. It will utilize a range of Metaverse technologies like Natural Language Processing, AI, AR, IoT, and computer vision to build a theme park in Metaverse to charm the visitors.
Web3 & Metaverse: Where do they fit each other?
Many of us might be confused about how Metaverse and Web 3.0 are related. The answer to this is simple.
Metaverse is a platform where content is created and consumed. Anyone can create content for anyone. On the other hand, Web3 is an iteration or version of the web that will infuse decentralization into the Metaverse. Hence, when creators create content in the Metaverse, they can monetize it at their convenience.
Further, Web 3 allows users of the Metaverse to own their data and have full control over its utilization.
There are three major components of Web 3 (the next version of web) –
It is a distributed ledger system that offers immutable protection to the data stored in it. It is highly reliable, robust, and near-impossible to tamper with. With blockchain, users can store their data with complete protection.
These assets are issued on a blockchain. They are used to represent value, portability, ownership, and permanence. This facilitates the exchange of value between Metaverse dwellers without intermediation.
They are self-executing protocols that contain conditional programming code. Once the pre-defined conditions are met, they get executed automatically. This introduces automation to all the processes across the board.
To know more about Web3, check out our podcast “Understanding the possibilities in Web 3.0, NFTs and Metaverse with Sam Kamani” which discussed this topic in greater detail.
How can you prepare your business for the Metaverse?
Now that we have discussed the great benefits of entering into the Metaverse. The next question is how you can be well-prepared for this opportunity?
With our practical experience, we have charted out a three-step plan.
Specify your objective
- Set your goals as to what you want to achieve in the Metaverse. It can be to generate demand, build a network, or open new revenue streams.
- Demarcate your role whether to build experiences, facilitate interactions or develop infrastructure.
Explore objectives, track results, and get feedback
- Launch pilot projects to explore opportunities in different areas.
- Track results to fine-tune the long-term objective. This will also help in identifying the right metrics for analysis.
- Get users’ feedback and monitor their behavior.
Scale your business
- Once the priorities are set, hire or source the required talent and the tools.
- Integrate Metaverse in your business model and clearly define the responsibilities of the involved people.
Case Studies: Queppelin Developed Projects in Metaverse
Rivaah Jewelry Collection for Tanishq in Metaverse
Queppelin offered its Metaverse technology expertise to Tanishq, a Tata Company, for their product launch in the Metaverse. It was to launch their latest jewelry collection titled Rivaah into the Metaverse
Tanishq conducted a press conference that witnessed visitors from across the globe. The attendees can explore the detailed 3D model of the collection and try it through AR filters.
This brought a lot of user engagement and media attention. Hence successfully achieving the promotional purpose.
Pulse Advertising Global Office moved to The Sandbox Metaverse
As visible in the video, we built a three-storied building denoting the three offices of Pulse advertising in three different countries. The interior was designed to replicate their offices.
The space was developed for the client to have a presence in the Metaverse and achieve their business goals. They could hold meetings, events, and other gatherings as well as attract visitors.
The Metaverse fit right into their marketing strategies and contributed to enlarging their audience base and building community. This transpired in skyrocketing sales and improved the turnover manifold.
Experience & Expertise in Metaverse endeavors
For the past 12 years, Queppelin has been working on technologies that underpin Metaverse. The years of experience and a strong team of 250+ experts offer the best of Metaverse services needed for a grand entry into the Metaverse.
For any queries or doubts, feel free to contact us.