Nike, Axa, Balenciaga, Forever21 or even Carrefour, there are so many brands that are investing in virtual universes, and not a day goes by without the impact of a new announcement. So much so that some forecasters are already envisioning a total market for metaverses at around $700 billion in 2030!
It’s hard to believe the greater number, because these metaverses are still in an embryonic stage – it is clear at the moment the weak penetration of this universe with the general public. Added to this are the weak signals emanating from the market in recent months: cryptocurrency price correction, waning enthusiasm around NFT, etc.
So, should you invest in the metaverse when you’re a brand? Is it really affordable for all brands? What should we gain from venturing out there today? How to avoid losses in the short and long term? And above all, what place will you take in the brand experience tomorrow?
We often talk about accelerating the pace of change. What’s new about Web3 is that it’s maturing at breakneck speed, integrating brands right from the start. Because these virtual worlds today need brands to gain credibility, as much as some brands do, for reasons of image and experience. Fifteen years ago, debates raged over Facebook’s profitability, and the place brands might occupy in it. It took at least 6 or 7 years for the popular Web 2.0 platform to give birth to a profitable model.
In contrast, Web3 immediately offers a completely different model, which makes it an essential playground for brands, for at least three main reasons.
First of all, Web3 is based on the so-called “decentralized” philosophy and model. In the face of the hegemony of GAFAM, it presents a democratic and open model, in which all actors are welcomed. Sebastien Borget, co-founder of Sandbox (one of the reference platforms, with social and gaming vocation, among the metaverses under construction), explains that in the long run, “only 10% of the platform’s content will be produced by The Sandbox” – the rest in the hands of “creators” .
At the forefront of these creators: brands. Today there is a certain kind of equality between platforms and brands, which now have the card to play through experience and deliver experience in their own image, which resonates with their DNA, identity and values. The true cultural attractions of IRL, they have the fame, intangible assets, and financial means to deliver original, tailored experiences that cater to new Web3 explorers. The fashion and luxury industry is at the fore in this field, as Louis Vuitton has been able to do with League of Legends, but many other sectors are gradually following suit.
Then in relation to these new explorers of Web3 specifically, they are younger, more connected and looking for shared experiences and moments. Therefore, there is a primary playing field and invasion of brands, which have to be present where consumers are, to seduce the Z and Alpha generations. It is then a matter of taking a step forward, by creating a link with the consumers of tomorrow – even the day after tomorrow.
Finally, Web3 operates on a more mature business model than its previous iterations. The issue of value creation and sharing among stakeholders is central to this model. Creating communities (famous DAOs) using their own tokens and cryptocurrencies, “play to win” logic, or even rewarding internet users’ attention (see sample Brave web browser and its own currency, BAT) are all examples of this financial benefit. Of course, this does not mean that all Web3 business models are destined for success! As with any entrepreneurial adventure, only time will tell which models you will keep over time…
So, of course, venturing into the meanders of the Metaverse and its ecosystem presents its share of risks. Brands themselves should be asking the right questions: Are my brand assets dropable in Web3? How can I deliver a consistent experience across all the channels and touch points already activated by my brand? Or, is it possible for one to show oneself responsibly in this universe, so as not to betray the brand commitments already made elsewhere in terms of CSR?
However, it seems that it will soon be a risk for the brand to move away from Web3 rather than invest in this space – in a thoughtful and responsible way, and with good support of course! It is still allowed to experiment and explore, and the possibilities are numerous, with the goal of not just investing in a platform, but to deliver authentic experiences and content in line with the brand’s strategy.
(Published forums are the responsibility of their authors and CB News is not involved).