08/08/2022 5 min read
You must have come across the term “metaverse” and wondered what it meant. Metaverse is a virtual, augmented, and 3D universe providing an immersive experience, where users can enter in the form of their avatar and experience a digitized version of real life. The concept stems from a need for a virtual space where people can not only shop but also “live” to some extent. If you have watched Ready Player One, you get the idea. Consumers can live the virtual experience and go on an “adventure” from the comfort of their homes. Metaverse strives to someday be a platform where people can live, work, play, and shop as they wish without having to move an inch from their couches, literally bringing the world to their fingertips.
Owing to COVID-19, the massive shift to metaverse started in 2020. As people were forced to stay at home, they sought out ways to virtually not only shop but also play. The gaming sector during this time period saw a surge. As the demand for AR/VR started to grow and most of the population from India, South Korea, China, and Japan focused on digitization, the metaverse market is growing at a rapid speed. In 2021, North America was the leading country when it came to the metaverse. The metaverse market reaches a new high as individuals as well as corporate companies prefer digital solutions and the introduction of new technologies for the same, like AR. AR sector is gaining more popularity as it is used for educational and training purposes now retail, healthcare, gaming, media, and entertainment. The shift to metaverse remains to evolve as more and more celebrities and content creators engage their fans in buying Non-fungible Tokens (NFTS) to provide VIP services and special collectibles that come with usage rights. Music artists and bands BTS, Imagine Dragons, Muse, and Travis Scott is dispensing various metaverse implementations in the media and entertainment industry. Many celebrities are offering virtual spaces for their fans to play and shop at.
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With the introduction of Metaverse comes the huge repository of terms that requires you to have an idea before you can get into business! The first term that resonates with metaverse is “cryptocurrency” and consequently, “metaverse crypto” and how they work. Cryptocurrency refers to digital assets that can be exchanged for real money, which can be used virtually or digitally using cryptography for secure transactions. Metaverse crypto refers to the currency used in the metaverse to buy and sell assets. One such cryptocurrency is NFTs with which art or property can be sold and bought. These tokens can be used for play to earn models and can be exchanged for virtual collectibles and properties. Mark Zuckerberg’s announcement of Facebook to Meta caused a surge in the value of these NFTs. Some of the top metaverse cryptos would include Sandbox (SAND), Decentraland (MANA), Star Atlas (ATLAS), Axie Infinity (AXS), and Flow Blockchain (FLOW).
The prominent players in the metaverse market are Meta (Facebook), Roblox Corporation, ByteDance, Microsoft, Tencent Holdings, Lilith Games, miHoYo, ZQGame, Nvidi, NetEase, Unity, Epic Games, and others. On 28th October 2021, Mark Zuckerberg announced Facebook shifted to “Meta Platforms” in order to focus more on the metaverse and reposition the tech company. Consequently, 10,000 employees were announced to be recruited from European Union to evolve the metaverse. Meta next collaborated with a European NPO, Colourintech to focus on the meta tech and stay on top of the competition. It was followed by Nike Inc. collaborating with Roblox Corporation to launch “NIKELAND” where avatars are given the free choice to try on Nike outfits and roam freely in the game. Special mention should be made of Decentraland, a virtual social world, where players socialize with other players and play games. It provides ownership of the assets to the users and it almost always collaborating with top brands of fashion, cosmetics, and other industries to expand their exposure in the metaverse world.
Following these top businesses, in January 2022, Sandbox collaborated with Warner Music group to launch the first music-themed metaverse on Sandbox. A virtual connection company called Emerge launched a system of tactile encounters in the metaverse called Emerge Home system. It was followed by TechMahindra launching TechMVerse in February 2022 for metaverse practice where customers can transact while having an immersive experience. In February 2022, Electronic Arts Company launched a multiplayer gaming platform called GRID Legends where users can race, enter live events in real-time, and create private lobbies for parties.
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Metaverse started as a sensation and ever since it was adopted by the main media, all sectors of the economy have started to build their early foothold in the metaverse through different strategies.
The FMCG is rapidly embracing the metaverse and contributing to the hype.
- The first massive invasion of the metaverse in the FMCG industry started when Fornite launched an event called “Food Fight” in 2018. Wendy’s decided to pitch in for the event for advertisement and the entertainment of the consumers. It soon used the “fresh, never frozen beef” tagline to make its way into the game where the motive was to destroy freezers, drawing attention to fresh food instead of refrigerated one. This led to a 119% increase in the mention of the brand name across all social media and the winner of several awards.
- Another massive walk into the mystery of the metaverse was in July 2021, when Coca-Cola raised over USD 5 million in an online auction of NFTs in 72 hours by launching NFTs. On international Friendship Day, Coca-Cola relaunched this idea by auctioning friendship-inspired NFTs where the winner not only had the rights to the four NFTs being offered but also had a fridge full of Coca-Cola bottles and other surprises delivered to him physically.
- Mondelez's Cadbury had created an immersive 360-degree virtual world for couples to walk around Moon and have a dinner date on Valentine's Day in February 2022.
- Tata Consumer Products launched their tea brand Tata Tea Premium in their metaverse world during the Holi party in February 2022.
- E.l.f. Cosmetics launched their CryptoCosmetics NFT collection showcasing the artwork of the cosmetic products in June 2021.
- On Estee Lauder's ‘ANRcade’, a metaverse microsite, users could play minigames and learn about the brand's new product: Advanced Night Repair serum in August 2021.
- L'Oreal-owned YSL Beaute partnered with streamer Talia Mar to promote Black Opium fragrance by Twitch in October 2021.
- Charlotte Tilbury collaborated with Obsess, an e-commerce platform to launch their ‘Pillow Talk Party Virtual Wonderland’ in April 2022, where the customers can explore, shop, and learn about the brand’s products. There are masterclasses by beauty professionals and interviews with beauty influencers available as free content for all users.
- Clinique has launched a “Metaverse Like Us” NFT project in 2022 where 5,904 NFT make-ups are to be sent to a random selection of Non-Fungible People (NFP). NFP is a collection of 8,888 avatars consisting of 60% people of color and 20% people with disability avatars with their ownerships stored in the Ethereum blockchain. It aims to bring diversity and awarenesses to the virtual space. The three drops are set for July, August, and September 2022.
- In August 2021, Gucci collaborated with Roblox to offer a virtual Garden exhibit for Gucci’s 100th birthday. It offered a two-week freely accessible exhibit for all Roblox players with an immersive experience in music, art, travel, and pop culture. Roblox players could buy digital clothing from Gucci and the digital Gucci bag was sold at a virtual price which was USD 3,400 more than the retail price of the physical bag.
- Louis Vuitton celebrated the 200th birthday of the founder in August 2021 by introducing the “Louis Game” where a virtual character of Louis Vuitton was introduced and users could explore fashion, collect “candles” and access higher levels. During this, cutting-edge blockchain technology was used to sell 30 NFTs. Out of the 30, one of the 10 pieces made by the artist “Beeple” was sold at USD 69.3 million, holding the highest record of any digital artwork.
- In June 2022, Burberry collaborated with Mythical Games to create the NFT collection, which includes a limited-edition Burberry Blanko NFT. In “The Oasis”, a new virtual community by Burberry, players can connect with other players and enjoy “digitized beaches and branded sailboats”.
- Gucci launched ‘Gucci Town’ in Roblox in May 2022, followed by the launch of a new metaverse space called ‘Vault Art Space’. The first exhibition was in June titled “The Next 100 Years of Gucci” paying homage to the brand’s heritage where 29 digital artists interpreted the brand in their own unique styles in collaboration with NFT marketplace ‘SuperRare’.
The video calling industry rose to a new height during the pandemic. Today, works are being collaborated to form virtual conference rooms, and offices, which are anticipated to upgrade from a 2D to a 3D model in the upcoming years. With Zoom application already allowing users to create virtual spaces to replicate physical ones, the shift to metaverse is not far behind. The real-time engagement (RTE) platform is gearing up for the shift to such virtual conferences and businesses.
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While it is true that metaverse and VR are taking the world by storm, the relevancy of physical goods will never decrease. Consumers will simultaneously opt for virtual and physical goods as the metaverse gradually start to take over the market. Currently, the market size value of the metaverse is USD 47.48 billion. However, in 2021, Meta’s Reality Labs saw a loss of $10.19 billion on $2.27 billion in revenue. The loss is expected to increase in 2022.
In a survey, SkyQuest observed that 6% of the 2000 people surveyed, were familiar with metaverse. More than 52% of the respondents said they were not looking for careers or to “live” in the metaverse world. Only a little over 30% of the respondents were looking forward to playing games in the metaverse world. The respondents selected Meta as the least trusted of all the metaverse technological advancements, followed by Apple, Amazon, Microsoft, and Google. With the pandemic reducing its impact, people are gradually starting to go back to the office, decreasing the requirement for the virtual world to meet and hold businesses and conferences. Along with the multiple layoffs, consumers are looking to spend mostly on essential goods and virtual items of the metaverse are not the need of the hour for most. 53% of respondents in another survey expect a change in the metaverse market, where the need for virtual reality will lessen. Besides, COVID-19’s impact is also seen as there is a decrease in the size of the metaverse market from 1.0 to 1.5% in 2020-2021 as compared to the year prior. However, there are many many startups that are beginning to climb up the metaverse competitive market currently.
RPG Enterprises has developed 3 new metaverse projects. Although they are in their early stages, the focus is on building new platforms in medtech, agritech, blockchain, and artificial intelligence. The first project is focused on building a virtual campus to bring B-schools together to work on things like live projects. The second project is the KEC City, under KEC International, which is the flagship firm for the leading engineering, procurement, and construction (EPC) company. The third and final project is the CEAT shopping, catering to the tire manufacturer’s metaverse foray. Some of the Indian startups successfully working with the metaverse worth mentioning are IKonz, Invact, LOKA, Wall App, Kudo Money, AcknoLedger, Atirath Gaming Technology, and so on.
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With the metaverse expected to be worth USD 800 billion by 2024, having a CAGR value of 43.3%, it is time to create an early foothold in the virtual world. It is expected that the global AR, VR, and MR market will reach USD 300 billion by the end of 2024. It is also expected that by 2024, there will be roughly 1.7 billion AR users worldwide. Gamers are willing to spend more on skins, outfits, and virtual events their avatars can attend. This has caused an increase of 161% in Roblox’s currency purchases which rose to USD 652 million in 2021.
With North America holding the largest metaverse market, opportunities in the country are expected to grow even more. It is expected that if Metaverse grows at 13.1% each year, the annual value by 2030 will skyrocket to a whopping USD 1.6 trillion! Metaverse is a vast market and many opportunities await in digital commerce, digital twins, blockchain, extended reality, artificial intelligence, and much more. The entertainment and gaming industry is seeing the fastest growth with a rise in the demand for VR, AR, and MR technologies which are accompanied by the rise in demand for technological products like VR headsets, MR headsets, smart glasses and helmets, head-mounted displays (HMD) and Head-up displays (HUD).
Businesses looking for investing in the metaverse will benefit by following a B2A model: business-to-avatar instead of a business-to-consumer (B2C). Creating NFTs and selling them is seen as the base to establish your market in the metaverse. This will help in selling physical as well as digital products of your business. It is paramount now to have an understanding of the metaverse world to prepare for retail in the future.
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