In 2021, the lexicographers, editorial staff and marketing team at Collins DictionaryOpens a new window selected NFT as the word of the year. If I had been making the selection, runner-up “Metaverse†would have taken the top spot because it is this concept of immersive virtual worlds that will give things like NFTs actual value. Without it, NFTs could be a passing trend with a lifespan that rivals Tamagotchi.Â
While the concept of the metaverse is a head-scratcher to some and an existential threat to others, it’s not really new. We just have better technology to fuel more immersive experiences. Still, whether this is yet another buzzy trend or a real paradigm shift will depend on how these immersive experiences bring value both to the general public as users and to brands and businesses whose dollars will be critical to growth.
See More: 5 Key Ways the Metaverse Is Disrupting the Consumer Experience
We’ve Been Here Before
To illustrate this point, let’s transport back to the mid-1990s, back when you were lucky to have a 28.8kb modem and before many people reading this article were born. Even in those Web <1.0 days, there was a platform called “Active Worlds.†Inspired by the bookOpens a new window from which the term metaverse was first coined, it gave users the opportunity to explore 3D environments built by others or even create and “own†custom universes. It was a great idea, but like so many in those early years, the technology just wasn’t there to support it.Â
Fast forward to 2003. Technology has evolved considerably. Over half the U.S. population now has the internet and one-thirdOpens a new window even has high-speed at home, according to Pew Research Center. Linden Lab launched Second Life, a platform where “residents†could create avatars and interact with places, objects and other avatars in an alternative reality. There were early hints at social networking via group activities and opportunities to socialize. There was even virtual currency that could be used to buy and sell goods and services within its worlds.Â
The platform was relatively niche until business media caught up with it. All of a sudden, everybody and every business wanted or felt they needed to be on Second Life. User numbers exploded, but after a while, the buzz waned, and many users simply stopped coming back. The platform still exists, retaining a relatively small and loyal following. It even had a bit of growth during the pandemic, but it’s not the world-changer some believed it to be.Â
These are just two examples of metaverses that have come and are largely gone. There are probably a handful more with similar stories. But why does any of this matter?
It matters because we’ve been here before. As we move forward with the next-generation metaverse, we can avoid the pitfalls that prevented these previous attempts from, for the most part, succeeding.Â
Based on these previous examples, we can see there are a few elements that are fundamental to the long-term viability of a metaverse platform:Â
1. The technology has to support the experience
Active Worlds didn’t fail because it was a bad idea. It failed because the experience was more like pushing around pixels than being immersed in a new world. Today, we have exponentially better technology. Still, there’s an issue, and that’s hardware dependency. Or, more specifically, being tethered to headsets.Â
They’re expensive; they’re cumbersome, and while they ultimately help the experience to be immersive, they prevent it from being seamlessly integrated into our digital lives. To be adopted in mass and long term, the metaverse needs to be accessible without additional gadgetry.Â
2. The experience has to be sticky
Second Life is a perfect example of a platform with phenomenal user acquisition. Where it fell short was retention. The novelty of 3D worlds combined with the early media buzz was enough that people wanted to see firsthand what the hubbub was all about. They created their avatars and checked them out, but they found they didn’t have much to do. So they stopped coming back.Â
The issue here was that Second Life was like a massively multiplayer online role-playing game (MMORPG), just without the game part. And it’s the game part, or more accurately, the game mechanics, that makes an experience sticky.Â
A successful metaverse should incorporate the elements of gaming that have made it a multi-billion dollar industry. It’s not by mere luck or coincidence that games can amass an audience who will spend hours and even days inside their environment. There are people — very talented people — whose job it is to design them that way. The same type of talent and expertise will be required to keep different audiences with different motivations coming back to the metaverse.Â
3. There needs to be a real business model
One of the characteristics that have been essential to the mass adoption and popularity of the internet can also be viewed as its original sin. That is that it trained us, the users, to expect everything for free. As we can see now from the sheer number of failed businesses and shuttered media outlets, free is not sustainable.Â
Now, we know that there are basically three ways to support digital experiences: subscriptions, advertising, and in-app purchases. It’s hard to imagine a subscription or commerce-based metaverse reaching critical mass, so its longevity will be contingent on brands’ financial support. Second Life had some success establishing itself as a marketing platform. It just wasn’t able to continue delivering enough value to keep those brands spending.Â
This ability to drive value doesn’t have to be in the traditional sense of dollars for eyeballs or even dollars for clicks. As I see it, the metaverse will put in brand hands the fastest, easiest and most effective market research tool ever. This would bring immense value to brands, and therefore brands would be eager to invest the capital required for significant growth.
I actually experimented a bit with this idea over 15 years ago when I created an interactive game-like experience for a fashion brand that wanted to expose its fans to new designs before they went into production. We made 3D versions of the designs and invited the brand’s core target of teens and tweens to play with the styles and colorways. The brand was able to see what potential buyers really wanted, and that’s what they produced. When the items hit the stores, there was a 100% match between popularity in the virtual experience and in-store. The value of that type of predictive intelligence is immeasurable.
See More: How the Metaverse Is Changing the Dynamics of Influencer Marketing
We are certainly seeing a number of brands and other businesses experimenting in the metaverse as it currently stands. It remains to be seen whether this involvement grows enough to hasten a revolution or, as with Second Life, it fades away due to a lack of tangible ROI. At this point, nobody knows. What we can be sure of is that the conversation around the metaverse will continue its acceleration throughout the year. Some voices will be pro, and some will be anti. Some will doubt its feasibility, while some, like me, will tell you it already exists. For us in the latter group, the biggest question is whether we’ll have a singular united platform, a bit like the internet itself, or if we’ll have yet another series of great ideas that never really reach their potential.
What do you think is the future of the metaverse? Let us know on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window .