The Business of the Metaverse

Jason Alan Snyder, Global Chief Technology Officer of Momentum Worldwide.

Jason is an inventor, technologist, and futurist. As Global Chief Technology Officer of Momentum Worldwide, he brings over 25 years of experience leading technology, innovation, and transformation in advertising and marketing. In his role, he oversees enterprise, development, and client service technologies.

Sixteen years ago, Jason produced a film, “Ideal World – A Virtual Life Documentary,” about Second Life, the metaverse platform launched in 2003. It follows a well-known content creator who was the founder of Second Life’s most popular fashion line. The film explores the idea that a person could, through their life in the Metaverse, create their ideal life in the physical world. Throughout the film, experts discuss how virtual worlds will reshape human society.

 

Today in Minecraft, Roblox, and Fortnite users can play, socialize, or gather for events. Just as in Second Life, these activities are not new or novel.  But these newer, popular platforms limit interoperability: you can build nearly anything in Minecraft, but you can’t transfer your creations to Fortnite or Roblox.

The Metaverse promises to allow for the generation and distribution of content freely throughout any digital world. These platforms offer huge opportunities for technological and commercial between people, brands, and services. For this year’s SuperBowl, Momentum Worldwide built a virtual stadium, which had 40 million visitors at a time where people couldn’t attend physically.  

Is the Metaverse just Second Life with better processing? Or yet another attempt to make a business case for VR/AR?

“To be clear regarding all my responses, metaverse (with the little “m”) in my terms means to reference all new and existing virtual spaces already thriving with millions of users in spaces like Fortnite, Roblox, Sims, Minecraft and more. The new Facebook effort to add to this space (the big “M”) is an unknown entity as a business platform at scale, but I imagine we will also be adding to this discussion in short order.

“But to answer your question about the general metaverse, technology has matured quite a bit in the nearly two decades since Second Life launched. And now we can make deeper, more meaningful connections between the physical and the virtual worlds, including extending our ownership of goods, services and experiences, thanks to the blockchain. But more than that, we can also separate the physical from the virtual in more profound ways, and the advances in technology help anchor us in the virtual spaces.

“I was an early resident of Second Life (SL). I owned real estate for several years before eventually taking my island offline in 2009. I remain an avid supporter of Linden Lab and an SL community member, so much so that I produced a documentary film in 2006 about Second Life that followed several residents, including Nephilaine Protagonist, who started a line of virtual goods designing fashion for avatars.

“Her brand, Pixel Dolls, became so successful in Second Life that she was able to quit her job in the physical world, allowing her to focus on designing and selling her virtual goods. Nephilaine’s success speaks to the vibrant commerce and social sphere that existed 20 years ago that Facebook/Meta will be looking to replicate in some ways and take further in others. Today’s metaverse is much more than just a souped-up version of Second Life.”

How can businesses leverage what the Metaverse seems to offer?

“The metaverse (with the little “m”) has quite a bit to offer businesses:

• Virtual showrooms and retail settings.
• Product and sales training.
• Configurators and customizers for products.
• Testing new designs and colour options.
• Gamified commerce.
• Immersive, experiential data that can be fed real-time into business intelligence platforms.
• A creator economy that will continue to grow with the advent of new and evolved tools that will help anyone develop, modify and contribute new content to the metaverse.
• The continued growth of the virtual economy—selling virtual goods for real money.
• Virtual photography. Much of the catalogue photography produced today is CGI accomplished in virtual environments.
• Increased sustainability efforts. Fewer returns, less travel, fewer physical prototypes and fewer samples mean less impact on the environment.
• Brands can enter the conversation in new ways and unexpected places. Video games have demonstrated the power and opportunity that virtual environments can provide brands; this type of opportunity will only continue to grow.

What are the key challenges to businesses that want to integrate these kinds of immersive environments into their enterprises?

“One of the challenges businesses will increasingly face in the metaverse will be negotiating their role within a new medium, though this challenge is not new in general. Immersive, virtual worlds do not provide an exact corollary for marketing and advertising efforts in the physical world. They might not be a fit for traditional advertising at all.

“Today, flight, teleportation, shapeshifting, and living in outer space or under the sea are habitual behaviours for citizens of the metaverse. So, like any messaging with the intent to persuade, the context for advertising and brand communication with citizens is critical in the metaverse. And what these new immersive experiences offer includes new channels to stimulate and accelerate new approaches to engaging consumers and constituents. At Momentum Worldwide, we have invested in technology and teams to help brands manage the transition, sustain engagement and increase brand growth in the metaverse.”

As businesses re-draw their digital transformation roadmaps in the wake of COVID-19, are technologies like the Metaverse in their plans?

“COVID-19 was certainly a catalyst for increased engagement in virtual environments, as evidenced by educational, religious, governmental, news, business and leisure activities occurring in collaborative, video chat platforms. Additionally, the adoption of immersive community environments like Roblox, Fortnite and others increased dramatically during this same period.

“Naturally, business activities began to expand into all these environments as new vectors of opportunity began to avail themselves as people found themselves spending more of their time engaging with these platforms. As we are seeing with new hybrid-work situations remaining in place as many businesses return to the office, these platforms are here to stay. And these technologies need to become a symbiotic part of the business culture and integral to the operational technology stack.”

What are the risks businesses face who want to embrace what the Metaverse can offer them?

“As we have seen with social media, unsavoury responses including outrage or debasement amplify, as they tend to get better engagement or responses in terms of “likes” and “shares.” The algorithms that enable the platforms tend towards encouraging and rewarding negativity or discord in general. Social media has changed the tone of our conversations, fundamentally eliminating viral exposure of moderate viewpoints.

‘This same risk exists for businesses as they launch and maintain a presence in the metaverse. Negotiating to moderate the inhabitants of their metaverse spaces and determining what behaviours and speech to tolerate and best reflect brand ethos will become critical to the success of this new channel. The rules of engagement must also be negotiated between brands and consumers, as these channels must naturally allow consumers to become part of the brand story. The way consumers own and represent brands here will be critical to audience acceptance at scale.”

How do you see the business case for the Metaverse evolving over the next few years?

According to a Douglas Mental Health University Institute study, before turning 21, the average American has spent upwards of 10,000 hours playing video games. Given that enormous time investment, the experience in these in-game worlds is valuable. Adroit Market Research estimates that the value of the virtual goods marketplace will be almost $200 billion by 2025.

“The metaverse isn’t just games, but games provide a great reference for helping businesses determine the value of co-creation environments that unlock the creative potential of customers. The metaverse provides an opportunity for businesses to create new opportunities for revenue, increase sales, build capacity and even create employment opportunities through content development and paid engagement with their business.”

Will we see Digital Twins being connected, viewed and used within a business’s metaverse?

Yes. Digital Twins, or simulacrum, has been and will continue to be, critical to the strategies Momentum Worldwide is providing clients as a metaverse solution. For many of the events and sponsorships we are producing and managing at physical venues, we are simultaneously building out parallel experiences in the metaverse. So, attending a concert, sporting event or retail experience can take place at either the physical venue or in the metaverse.

“In this context, the way simulacrum manifests itself is very powerful for brand marketers. One might imagine, for example, attending a baseball game:

• One of the sections in the stadium is visible only to those watching the broadcast. That section includes participants from the metaverse who appear virtually on camera. Those metaverse fans would have registered, created an avatar and “travelled” to the stadium in the metaverse to view the game taking place in the physical world.
• During the game, let’s say a ball gets hit—a ninth-inning, game-winning home run. And some lucky fan sitting in the physical stadium’s outfield bleachers catches that ball.
• At that instant, the ball becomes the property of the lucky fan who caught it. And, at that very moment, the stadium, the league, the club, or a sponsor could issue an NFT for that ball. That NFT would include the provenance of who hit it, when, where and even associate the video clip of the lucky fan catching it. And, if that fan desired, from right there in their seat in the physical stadium, they could transfer or sell that NFT to another lucky fan attending the same game in the metaverse.

“In this way, I view the metaverse as the next wave of the experience economy. And it is not difficult to imagine how this very powerful business opportunity could easily extend across categories, venues and experience types.”

Is the Metaverse the Internet 5.0?

“If interactions are personalized to create experiences that excite users, Web 5.0 will undoubtedly be more friendly than its predecessors. Although the metaverse is not Web 5.0, it can certainly fit within these criteria.

“I like to think about it like this:

• Web 1.0 was the basic Internet Web.
  It was limited to publishing information, developing marketing and sales plans, and transactions with customers. This first iteration of the Web ushered in the original online strategies for businesses.
• Web 2.0 was the social Web.
  It enabled platforms for collaboration and offered content management features. This brought about many changes for software developers and end-users, including applications for information sharing, interoperability, user-centred design and collaboration. Web 2.0 saw the advent of YouTube, Facebook, LinkedIn, deli.cio.us, Wikipedia, etc.
• Web 3.0 combined biological and artificial intelligence to provide more context and better access to information.
  Web 3.0 amplified language capabilities derived from neuronal networks and genetic algorithms, emphasizing analysis, processing capacity and the generation of new content from user-generated information. Web 3.0 ushered in the era of the Web as a database, a way of making content more accessible through multiple non-browser applications, artificial intelligence technologies, the semantic Web and the geospatial Web, giving way to the nascent 3DWeb and, ultimately, the metaverse.
• Web 4.0 is wireless communication.
• Mobile devices connect people and objects whenever and wherever in the physical or virtual world in real-time.
• Web 5.0 will be the sensory and emotive Web.
• Enabling computers to interact with human beings emotionally.

“This relationship will become habitual for many people. Right now, the Web is “emotionally” neutral; it does not perceive what users feel. However, although emotions are still difficult to map, there are already technologies starting to measure their effects and intent.

“Businesses use technology as a force multiplier and an amplifier of ideas and sentiment. Unfortunately, today, social algorithms are constructed for behaviour modification and persuasion as an echo chamber, resonating with fear and other dark ideas. Every new technology provides us with an opportunity to change this narrative.

“We are working on pivoting to positivity, creativity, and value creation beyond manipulative persuasion. I hope that businesses take this opportunity with the metaverse to clean the grime we have accumulated in recent years from the mirror humanity has been using to hold up to itself.

“At Momentum Worldwide, we take the ethics of technology very seriously. We are investing in people and technology to help businesses navigate their relationships with consumers in the new metaverse space. We embrace the metaverse as a catalyst for businesses to create new revenue opportunities and build new forms of creativity and positivity into their culture.”