The Metaverse Evolution and Learning from the Games Industry

Next Gen Insights | Thomas Bedenk |
30 March 2022

Ever since Meta (former Facebook) announced their name change end of last year, “Metaverse” has become the new go-to buzzword – one that has various meanings depending on who you ask and what’s on their agenda. The metaverse could be a virtual world in which we live, work and entertain ourselves 10 years from now, or it is everything that is happening in digitalisation right now, or it is simply a decentralised web 3.0. It’s not even clear if we are talking about the metaverse or multiple metaverses…

So clearly, the term is hyped and ambiguous, but I think there is a lot of truth to some of the ingredients. Rather than defining something undefinable, let me shine some light on misconceptions, underlying trends and the value promises connected to it. If nothing else, the metaverse discussion is about how we all shape a future digital economy. The question at hand is what role do you want to play in that? And also: why might the hype be relevant for you?

THE METAVERSE (R)EVOLUTION

I would consider the move towards the metaverse an evolution rather than a revolution. Virtual 3D online worlds, like Meridian 59, EverQuest and World of Warcraft, have been around for decades. Even VR weddings date as far back as 1994. One aspect that changed – accelerated by the pandemic – is the overwhelming acceptance of real-time and remote online collaboration, commerce and social interaction. Something the early virtual platform Second Life couldn’t build upon.

Another aspect that will fundamentally change the way we interact with content is spatial computing in the form of true virtual reality (VR) and augmented reality (AR). Even though these technologies were created over half a century ago, only now are we approaching consumer readiness through advances in optics, machine learning and the cloud, amongst others. So, the current metaverse trend gives new context to continuously changing media consumption. It is important to understand the evolution of media to be able to adapt your products and tools accordingly.

LEARN FROM THE PIONEERS: GAMES

The shift towards games as a platform for social interaction is undeniable. Internet users aged 16-24 years spend about 8 hours a day online and about 90% of them play games. Games are consistently the top category in any app store across downloads and consumer spend. VR had its best holiday season ever, approaching a sustainable market size. While it is still far from a mass medium, new target groups are brought in with VR fitness and puzzle games like Puzzling Places. Even the world championship final of Catan, one of the most famous board games of all times, was now hosted in the virtual version Catan Universe we created. Also, with platforms like Minecraft, Fortnite and Roblox, games increasingly become the content creators of the future.

In short, 3D worlds are becoming an essential space for human co-experience. More and more brands are identifying this. For example, we helped stream the first ever fully interactive 3D and cloud-streamed virtual motor show for Volkswagen. Also, game engines like Epic’s Unreal Engine and Unity3D are increasingly supporting business applications in all domains and use cases.

So why should you and your business care about the metaverse?

WHERE METAVERSE MEETS BUSINESS

Virtual economy

We are fast approaching 3 billion gamers around the world, and the sector has long overtaken other entertainment industries in volume and cultural impact. Our current and future employees are gamers, and so are our customers. This impacts the definition of a good user experience. But it also changes the perspective on value and property.

Virtual goods are real goods; they have value even though they don’t have a physical representation. Fortnite makes about 14 million dollars a day, and a huge part of that is virtual fashion – or ‘skins’ – sold in the game. Currently, playing the Crypto / NFT game is more a question of positioning and tapping into a pool of available funding rather than technological utility. There is a lot of money in the system, but also opposition on the part of game communities and developers. It’s a topic so complex and controversial that it warrants its own article.

So, while there is disagreement over whether this future economy should be driven by artificial scarcity created through NFTs and decentralised blockchains or an economy of abundance, you should think about how your own business plays a role in the overall trend of virtual economies and the value of data and eventually align your goals with the right technologies. Will the next generation of kids still play on playgrounds? Yes – but maybe they will be wearing virtual skins while chasing each other around.

Attention

The real currency of our time is attention, and nothing captures our attention like a well-designed game. Game designers are masters of motivation and masters of walled garden economies. In fact, the games industry is often ahead of everyone else. Monetisation models like in-app purchases, defining what user experience means before the term UX existed and perfecting agile and iterative development are all examples of how games lead innovation.

The metaverse will create virtual spaces but also a virtual layer on top of reality. There will be AR ad blockers to remove real posters from your environment or replace them with virtual content. Try to explore these scenarios and learn how and when it will impact your own business. Owning the data, having direct knowledge about your customers, getting ready for real-time 3D and positioning your products in the gate-keeping platforms will be key.

Real-time interaction

What captures our attention in virtual worlds is a real-time interaction and immersion not unlike that in the real world – a second-to-second reaction and feedback loop. Mental processes and visceral actions and reactions happen in a much tighter sequence in real-time interactions compared to, say, navigating a hierarchy of information on a website. Being able to continuously track what users do in this space, we know much more about our users’ interests and intentions. It also means we have much more power to influence their thinking and actions. And this will apply to a virtual shopping experience just as much as virtual trainings or other use cases.

We are helping clients create platforms that can capture a whole new quality of analytics and through that drive relevance and meaning for the user. Which means we need to be much more careful with understanding context and intention, but also data privacy and trust. Only if we find a way to embrace privacy with a new approach to our digital identities, can we benefit from this massive potential.

Context and spatial computing

Virtual objects and data will also become more and more embedded in the real world through augmented reality. Understanding user context will be key in driving ubiquitous and spatial computing forward and a requirement to create meaningful user experiences. This is a great example of how we need to integrate various technologies to create true value. Spatial computing and interfaces like AR and VR will be just as crucial as machine learning, edge computing and the cloud. Only if all these technologies flawlessly work hand in hand, can we fulfil the promise of utility and true value.

And I think this is the key to understanding the metaverse. It is not the controversial agendas and ideologies we should focus on but how these cultural and technological developments will reshape our own business models and how we engage with each other in the future.

HOW TO APPROACH THIS

Where will these developments increase our efficiency, sustainability and interaction with products? How can we build a trusted and secure environment to have these aspirations come true? How can we utilise technologies like VR, AR, real-time 3D, AI, Cloud and the decentralised internet? Only by not looking at them in isolation but as a technological architecture that creates a new medium which connects the virtual with the real and the real with the virtual in a tightly knit metaverse – or whatever you want to call it.

And just like developing a good game, you must face this challenge in an iterative and agile approach. You need to formulate a strategy, but it is impossible to solve the whole puzzle at once. It is impossible to know everything ahead of time. Start by identifying some patterns in your puzzle that stand out and connect the pieces. Keep track of your learnings and improvements and, most importantly, approach the process head-on.

Rather than reading more articles about the metaverse, try it out! Try Ikea Place on your phone. Get a Meta Quest 2, try out AltspaceVR, Puzzling Places or Tilt Brush and have a work meeting in VR. Explore games like Roblox with your kids – don’t just watch them play. Really try to understand what makes the difference with this medium. And of course, come talk to us!

Thomas Bedenk

VP Extended Reality

Thomas has over 25 years of experience in digital productions, focusing on Strategy, XR, and UX to support digital acceleration across various industries. Past XR projects he led span from product design and training to marketing applications for internationally known brands. Thomas is a frequent speaker at international conferences, an advisor for start-ups, and a fixture at industry associations and events. His love for digital creation started when he was playing Pac-Man against his twin brother on the Atari 800XL, leading Thomas to develop his first own video game in 1996.

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hi! I’m Thomas Bedenk