The Metaverse: The Next Frontier for Business and Commerce
The metaverse is turning the business world on its head, flipping the script in every way. In the past, conventional business strategy models and shiny new technologies may have captured our collective minds, yet in the future, the seminal advancement of the metaverse will unleash our collective minds. This audacious revolution will require a completely different way of thinking, one in which businesses must boldly leap into the next horizon of their growth.
As Citigroup Investment Bank stated in 2022, the total addressable market (TAM) for the metaverse economy is between $8 trillion and $13 trillion. Goldman Sachs puts the TAM at $12.5 trillion, assuming one-third of the digital economy shifts into virtual worlds and then expands by 25%. To put this in context, the total global gross domestic product (GDP) in 2021 was $96.2 trillion. These vast prospects are a rallying cry for businesses, entrepreneurs, creatives and others to enter the metaverse to enable socioeconomic and cultural dynamism.
According to geopolitical analyst Peter Zeihan, the world is experiencing unpredicted change. Supply chains are breaking down, demographics are collapsing, the climate emergency and fears of inflation and economic troubles are rising. He sums it up, stating, “Just as geopolitics tells us that the free trade era is closing, demography tells us that the era of consumption-driven growth that has been the economic norm for seventy years is coming to an unceremonious end”. These challenges cause forward-looking visibility to be incredibly challenging, which makes it difficult, if not impossible, to produce workable solutions using the current economic tools. The world needs an entirely new way of approaching the problem.
Jamie Damion, the Chairman of the Board and Chief Executive Officer of JPMorgan Chase & Company, reinforced the challenges present in the world: geopolitical tension, high inflation, waning consumer confidence, the uncertainty about how high rates have to go and the never-before-seen quantitative tightening and their effects on global liquidity are very likely to have negative consequences on the global economy sometime down the road. Yet, in numerous ways, this is a tale of two words. According to Scott Galloway, from a macro standpoint, the world is much wealthier, has more freedoms and is better educated than ever:
- In 1980, 40% of the people in the world lived in extreme poverty; in 2022, that number was less than 20%
- In 1980, 44% of people didn’t have democratic rights; in 2022, that number dropped to 25%
- Children born in 1980 could expect to live 63 years, and now that number has increased by a decade.
- In 1980, 30% of people over 15 years old were not formally educated; today, that number is down by 50%
Yet, the one undeniable aspect of the world is that it’s increasingly dynamic. Herein lies the opportunity for businesses to invest in the metaverse, by applying Persistent Utility, a strategic methodology and mindset for providing an ongoing service loop across three audiences:
- Those who build the metaverse
- Consumers who benefit from the metaverse
- Businesses that are expanding
Gaming provides a glimpse into the business growth opportunities in the metaverse, and the influence of gaming on the metaverse is already changing enterprises and businesses, enabling greater collaboration and innovation. Let’s briefly examine a few of these changes here.
- Sales and marketing. The immersive experiences the metaverse offers will allow customers to see and feel products, creating a more lifelike communication without needing to be physically present.
- Advertising. Product placement within movies and other media has been and is a popular method to generate revenue from entertainment. The metaverse will give advertisers opportunities to advertise within digital worlds by placing products with users or players (in the
- case of games).
- Events. Everything from comedy acts to major sporting events will see the size of their potential audience expand because people will be able to attend without a physical presence. These immersive experiences will look and feel natural without travelling to a crowded venue.
- Engineering. Businesses will be able to create immersive simulations of their products. An engineer could create a simulation of a bridge and test it under various conditions to determine its strengths and weaknesses long before the bridge is actually built.
- Workforce training. Businesses will be able to create immersive environments to allow employees to be trained. For example, a power company could set up an immersive simulation of a nuclear power plant to walk employees through various failure modes without any danger to help them learn what to do in those instances.
Today’s games allow for immersive storytelling in which players are enveloped by the game and become part of the story. They are no longer just idle viewers—they can see, hear and even touch their environments, interact with other players and create new forms of engagement and business in a virtual game world. The result blurs the lines between gaming and other forms of entertainment (i.e., music, film and media)—and even with real life. Games are becoming seemingly near real and, in many ways, the virtual world can expand reality into new realms that, in the past, humans could only dream of.
As these gaming concepts and technologies are carried over to other forms of entertainment in the metaverse, there are virtually no limits on the artistic creativity available to humans. The metaverse is upending traditional relationship building for businesses, products, brands and consumers, redefining creative excellence to create new ways to deliver both consumer and business value and effectively empowering humankind to unleash their creative abilities and free their imaginations. Ultimately, the opportunities that this expanded technology brings create a byproduct of successful immersive experiences that evoke emotion and empathy at scale.
See you in the metaverse!