Nikeland: Nike Metaverse on Roblox

With a $1 trillion revenue opportunity in less than a decade, companies must start preparing for a future dominated by the metaverse.

Following Facebook’s rebranding as Meta and several companies’ serious intentions for the metaverse, Morgan Stanley announced in a note that it would be the “next big investment theme.”

Fifteen years ago, software as a service and the cloud had caused a similar tectonic shift, causing the value of some companies to skyrocket and opening up a new economy for a group of players.

For several companies that were in the right place at the right time, their growth trajectory was changed forever.

Now, as we close out the year 2021, what are the potential business impacts we could expect in the coming years, as metaverse technologies are gradually developed and deployed?

To explore this, we first need to understand why the metaverse is such a revolutionary market force in the first place.

The metaverse is defined as a 3D virtual space that mimics the physics of our real world, but introduces the advantages of AR and VR technology to drive rich interactive experiences between multiple users, as well as between a user and their virtual environment.

Think of The Matrix, where Neo could walk through a virtual cityscape but also defy the laws of gravity if necessary.

The metaverse, as envisioned by companies like Microsoft, Decentraland, Epic Games, and now Facebook, brings similar capabilities to users of the technology.

The business implications of the metaverse are immense. It would enable high-level interactions for remote users, employees, and customers. Employees can hold face-to-face meetings without having to be in person.

Customers can explore places, try new products and even personalize them without having to travel to a store.

Furthermore, there are new business opportunities that can be explored when the laws of physical reality are challenged. For example, data presentations don’t have to be limited to a 2D slideshow: you can model data in 3D and interact with your hands.

Similarly, patrons visiting a virtual reality theme park in the metaverse can ride rides without traditional security limitations.

A new country without trade barriers

It has been claimed that the metaverse will come to be treated as an entirely new territory of its own. It will allow companies from different physical locations to participate in a single market economy, without trade barriers.

The impact of real-world borders, treaties, and sanctions on the metaverse remains to be seen, but deep down, companies will be able to trade freely without geographic limitations.

Over time, one could imagine trading markets and entire stock exchanges being built in the metaverse, open to a much larger set of investors than is possible in the real world.

Understand the role of NFTs, cryptocurrencies and the blockchain

Blockchain is one of the foundational technologies that will power the metaverse.

The metaverse is decentralized in nature, meaning that no single entity will build, own, or support it.

This requires an underlying blockchain-based architecture, which is already the case with metaverse platforms like Decentraland and Sandbox. On these platforms, real estate is considered tradable assets based on the blockchain.

Users can trade the assets via cryptocurrency and real estate sold as NFTs ensures that the assets are non-tradeable and retain their value.

In other words, the economy in the metaverse will be wholly dependent on the blockchain and related asset classes such as cryptocurrencies and NFTs. In the future, we may have a unified metaverse that converges the multiple platforms that are being built.

Businesses can expect to buy properties like NFTs to set up their RV stores, and offer customers catalogs of crypto-priced products.

The metaverse enables three main use cases for business operations:

The metaverse will have its own product and service requirements that may be fulfilled by companies in the metaverse. For example, users might want to purchase VR accessories to customize and “dress up” their 3D avatars. Games could have artifact hunters to help players complete objectives and earn money.

Tour guides at VR venues like theme parks or museums are another arena where companies can operate.

Companies can also engage in the trading of virtual assets in the metaverse, in the form of NFTs.

Non-Fungible Tokens or NFTs are an increasingly popular digital asset class that confers on the purchaser a license form of ownership of a virtual product. In the recent past, tweets, memes, GIFs, and digital artwork have been sold as NFTs.

Companies could find investment opportunities in the metaverse, thanks to the demand for high-value NFTs.

Advertise real-world products in VR

The metaverse could also fuel real-world business growth through VR ads and marketing. Advertising in the metaverse could range from digital billboards outside virtual collaboration spaces to product placement in VR games.

You could have end-to-end brand storytelling experiences, like Nikeland, with downloadable brand offerings that reinforce product recall in physical stores.

Business and commerce in the metaverse will have multiple dimensions, making it a difficult task for regulators.

On the one hand, it is known that the value of cryptocurrencies fluctuates a lot on a daily basis, which requires special measures for the protection of investors.

In addition, the intrinsic value of NFTs is the subject of debate, since the property license is not the same as that of traditional goods and services.

Finally, there is a risk that the big brands and market leaders will jump ahead and monopolize advertising messages in the metaverse.

For example, Gucci, Nike, Louis Vuitton and Coca-Cola have been early movers in this space, which could make it harder for smaller, emerging brands to gain a foothold.

In short, the metaverse is called to be the next iteration of the free market, only this time in virtual reality. You will have all the associated risks and opportunities, with regulatory intervention absolutely essential to ensure business practices.