WEF & Accenture: Demystifying The Consumer Metaverse
Defining & Building The Metaverse
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Key Findings & Analysis
The World Economic Forum launched an initiative in May 2022 to define and build the metaverse, a new age of internet.
It involves two tracks: governance and economic & social value creation, which public & private sectors must work together on for responsible activation of the metaverse.
Governance track focuses on frameworks that prevent potential harms while ensuring equity, privacy, security & safety.
Value creation track looks at opportunities in consumer, industrial & enterprise metaverses with considerations for access, inclusion, sustainability and well-being.
The metaverse is expected to have a wide-ranging impact on consumer attitudes and behaviours.
Organizations need to redefine their brand image, shift relationship models with consumers and change how they monetize products/services in order to create true value.
This report aims to give a holistic introduction of the consumer metaverse & its economic opportunities.
Key components include social interaction, identity, multilateral value exchange & distribution and some degree of immersion.
Individuals can take multiple roles from participants to creators or providers; technologies such as AI & blockchain will amplify individual creator role.
Consumer metaverse is a value creation track exploring economic challenges and opportunities.
Eight economic models identified to drive value in the metaverse, including digital products and assets, access and influence, immersive commerce, payments and currency etc.
Six drivers of metaverse growth identified such as networks, avatars, infrastructure etc.
Exploration of key components for technical interoperability across usage & jurisdictional levels.
Explore social opportunities related to diversity & inclusion; privacy & security; identity with physical/emotional/mental well being considerations; future potentials of consumer/industrial/enterprise metaverses through activating economic flywheel mechanism.
The 1990s internet of data made vast amounts of info available and connected people to each other.
The 2000s Internet of People brought virtual social life to the forefront.
The 2010s Internet of Things connected phones, devices and machines together.
Web 3.0 brings a shift to 3D as a method for navigation, social interaction, engagement and insights with digital wallets tokens data virtual representation & digital identity playing an important role in it's evolution towards more intuitive interactions with technology.
Predictions suggest that metaverse will be worth $6-$13 trillion by 2030 & generate global revenues up to $800 billion by 2024 driven largely through advances in hardware software & processing power allowing high levels density population & interaction in virtual worlds.
Metaverse is composed mainly from components such as social interaction, identity multilateral value exchange/distribution + foundational technologies immersive content/experiences disrupting value chains businesses & entire industries
Web 3.0 describes the third stage of the internet, focused on distributing systems to create a secure and open experience with no intermediaries.
The metaverse is a massively scaled and interoperable network of real-time rendered 3D virtual worlds experienced synchronously with an individual sense of presence.
The “metaverse stack” consists of layers that are enabled by an interplay of technologies, capabilities and human behaviour; these layers allow end-users to consume, exchange, transact and create content.
Policy, security and governance should ensure equitable realization for all components in the metaverse stack.
Experience Economy Digital identity Software and platforms Infrastructure and network are the foundational technologies and capabilities driving metaverse expansion.
Society, Participants, Creators, Providers - these roles bring metaverse stack to life exchanging value.
Gaming industry is leading in virtualized world building with Epic Games & Roblox pioneering ideas of what a metaverse could be with engaging content & attracting audiences.
Gaming shapes our understanding of the metaverse, while the metaverse also affects gaming industry.
Collaboration is essential to progress driven by XR and web3 technologies such as blockchain that are transforming traditional business models.
User generated content provides virtual environments with personality and scale; creators should be empowered to monetize their IP in perpetuity.
Gamified experiences require privacy & security considerations and asset management for microtransactions & gambling disorders.
VR gaming will grow at a CAGR of 32.7% 2021–2027; users expect frictionless, nonintrusive social experiences.
Platforms like Second Life have paid creators $80 million in 2021 while reporting 64.7M active users on their platform in same year
Social pays: Engagement is higher for metaverse players who play to socialize (over two extra hours played/month), and those who socialize spend more (4-5% every six months).
Value creation in the consumer metaverse: Humans don't follow linear paths to purchase, predictable patterns of behaviour, or set attitudes; brands will find new ways to authentically engage consumers.
Gen Z & the Metaverse report: Solidarity searchers value convenience; citizens enjoy socialization & entertainment.
2022 Metaverse Fashion Trends Report: Most Gen Z want to embrace digital identities and like brands that support identity creation.
Mass market potential of VR/AR devices opens up millions of consumers & developers with price points & feature sets meeting expectations.
Network effects: Big tech brands and creators create new experiences, products and services that are more compelling, unique and convenient.
Technological progress: Game engines, XR processors and optics become easier to use, more capable & easier to build on; digital wallets/tokens evolve; edge computing improves.
Consumer metaverse: MES industry provides content/distribution engine for virtual worlds engaging users in new ways; personalized 3D experiences across distribution based on user identities.
Metaverse economy: Creators economy vital part of overall metaverse economy with the potential to address flaws of Web 2.0 system by reinventing value creation & sharing among diverse set of entities.
Value-led economic mindset encourages sustainable, fair climate for creators.
Blockchain applications allow monetization of talent independently from hosting platforms.
AI likely to play significant role in creation of metaverse; design tools put into hands of consumers and turn participants into creators.
Symbiotic value exchange opens up new possibilities for equitable digital economies.
Brands & platform providers benefit from enabling/amplifying creators at pulse of consumer sentiment.
Mechanisms needed to ensure equitable treatment & reasonable transaction fees for creator economy in metaverse economy.
Roblox scaling towards fully user generated with 90% avatar items currently community based; introducing new mechanisms to build businesses including control over scarcity & ability to resell/trade items
Platforms or systems must be designed to allow users to easily find and re-use existing creations, while crediting the initial creator.
There needs to be transparency on how existing ideas are used, as well as a fair value distribution across the entire value chain.
AI decision making should be transparent and automated with sufficient control mechanisms including an appeal process.
Intermediaries such as legal professionals, marketers and influencers also need to receive credit for their added value in rights promotion and distribution.
The culture of ownership needs addressing in relation IP rights management & treatment.
Systems must measure “added value” accurately & flow microcredits efficiently & fairly for growth that benefits majority of creators sustainably.
Metaverse economic models form an interdependent ecosystem driven by compelling experiences, seamless commerce options & fabric underpinning both roles: consumer wants/needs understood by data human centric design; strategy aligned with industry specific metaverse adoption/maturity plus technological/regulatory landscape; new plays based on successful delivery of these elements + tools enabling circular economies/experiences aware fast evolving nature space = 9 potential captured values explored through market research from Web2 business models
Digital products and assets: New product opportunities range from virtual goods such as NFTs, skins, accessories to tokens enabling fractional ownership.
Access and influence: Pay-for access options enable a path to monetization for exclusive offerings like items, tiers, tools or entire worlds.
Future value horizons in the metaverse: Mass scale will depend on delivering engaging experiences backed by mature technologies & policy enablers. Experiments today act as foundational learnings for stakeholders to position themselves & evolve into longer-term sustainable opportunities.
New infrastructure topology, network edge computing, cloud rendering stack and advancement of 5G Metaverse-ready networks are needed for interoperability and scalable experiences.
Realistic avatars, hardware, infrastructure and computing power as well as governance standards and regulation need to be developed.
AI is essential for metaverse mass adoption, along with ownership models based on content distribution.
6G wireless technology will be a key enabler in the future of virtual worlds.
AR trends such as new milestones in immersive tech will shape 2023.
Brands launching new VR, AR and MR devices.
AI used for full body tracking without full body sensors.
Location-based awareness with standards and experiences using device and geo-location capabilities.
Decentralized physical asset tokenization, low code/no code development tools, decentralized identity solutions, advancements in 2D mobile & desktop experiences.
Premium experiences allowing users to access products & services by paying a fee; governance & voting rights granted by utility tokens or virtual assets.
Tokenized gated marketplace for immersive shopping; digital wallets included in financial services sector; CBDCs & stablecoins improving cross border payments.
Net new sources of revenue generation from leasing items like virtual spaces or renting digital products/spaces; programmatic advertising at scale with hyper personalized brand experiences integrated across omni channels built on trusted identity foundation where users control their data
Creator economy: A new digital sector, driven by immersive technologies and experiences, where content is co-created between creators and consumers.
Product co-creation: Content created through a collaboration of creators and consumers in the creator economy.
Potential future scenario (by 2030): Blurring of lines between creator/consumer as metaverse matures; proliferation of net-new virtual services such as access to network & computing power; early adoption & traction with paths to economic value & growth in metaverse; ecosystem maturity leading to mass adoption.
Metaverse native services: Specialized services, simulations or entire world builds offered within the metaverse environment.
Smart contracts: Digital agreements used for secure transactions without third parties on blockchain technology.
Premium connectivity : High speed Internet connection allowing faster data transfer rates than regular connections due to use of advanced technological systems such as fiber optics cables or satellite links.
Conclusion: Organizations should continue to amplify creators in order enrich an equitable digital economy while individuals must find their role within this emerging space and create a strategy accordingly
Digital products and assets unlock new revenue streams driven by entirely virtual goods, NFTs, avatar skins, accessories and features.
Phygital products provide utility within and across virtual experiences that extend to the physical simultaneously.
Economic mechanisms such as product sales and royalties enable direct end-user sales with potential for perpetual royalties to creators/platforms.
Equity/entitlement sales allow fund/refine product development through digital representation of a product or fractional ownership of more expensive assets.
Community exclusivity develops products specifically for target communities as reward for their engagement.
Physical assets can be tokenized as NFTs and exchanged, traded, transferred or held.
Digital and physical experiences will need to transition seamlessly.
Community-led approaches will support product development, funding and more.
Interoperability of assets is important for value creation.
Virtual to physical commerce models have not yet been scaled.
TIME has partnered with artists to create NFTs generating over $10M in profit & $600K for charities so far.
End users pay access fees to gain exclusive content, premium tiers or usage based tolls/single instance fee accesses etc.
Ownership based access includes granting governance & voting rights by purchasing utility tokens/virtual assets from brands
Mindset shifts: Trend towards non-paywalled but tiered/premium models based on exclusivity & engagement. Virtual network effects key to scaling.
Additional considerations: Higher customer acquisition costs, mechanisms shouldn't be a barrier to adoption, tech needs evolution for large crowds.
Immersive commerce: Metaverse powers next evolution of commerce with experiential shopping along multiple layers of immersion.
Economic mechanisms: Marketplace curation & personalization; interactive contextual PoS w/ click referral process; social shopping/commerce benefits from virtual communities for brand interaction and sales.
Brands can use AR and VR to allow end-users to virtually try on or visualize products before purchase, increasing confidence in digital/virtual purchases.
Digital products will be offered in the environment/experiences they are most useful in, such as NFT profile pictures while setting up avatars.
Virtual interactions may trigger IRL behaviours with digital wallets providing a seamless transition for end-users.
In game commerce is possible where goods may be placed in the context of an experience and bought both digitally or physically.
Products and transactions will be tokenized using blockchain technology & smart contracts eliminating high fees across marketplaces.
Interplay of payment means and currencies establishes need for currency conversion, wallets to store digital assets and custody services.
End-users can buy, earn and exchange tokens that can be used for products/rewards or cashed out.
Digital wallet payments generate fees from brands when buying products/services etc.
Currency exchange generates B2B fees when using crypto-to fiat offramp or executing token exchanges.
Custody services also charge fees to end users or generate B2B interest depending on the solution used.
Cross border payments may result in a competitive landscape offering faster & cheaper payments with potential fee application.
Fractional lending provides opportunity to take out loan on asset with an applied interest return by dividing ownership into fractions between owner & lender.
Mastercard Crypto SourceTM offers banks & fintech companies technology support enabling buying, holding, selling selected crypto assets as well as security management, spending & cashout capabilities etc
Virtual assets offer new opportunities to link with physical assets and extend enterprise assets into the virtual realm.
Blockchain-based contracts help build trust and provide authenticity.
Staking is currently the most trusted form of asset monetization, but comes with its own risks.
Renting/leasing would only be successful when there is enough demand for virtual land and spaces.
DeFi is not user friendly and lacks regulation for protecting end users against fraud or cyber risk.
Brands like Pepsi and Formula One have leased virtual spaces from Admix, pulling profits upwards of 70%.
Consumers’ virtual lives will shift into the metaverse, creating new digital channels for marketing.
Traditional marketing and advertising models will be transformed by immersion, storytelling and user expression through content and experiences.
Brands can extend users’ identities while providing authentic value to gain higher margins on key ad products.
Metaverse offers new types of consumer data with unprecedented depth; transparent responsible practices are needed to ensure trust.
Ads could appear as banners/billboards during gameplay or sponsored venues; retail media placements in marketplaces also available.
XR ads bridge physical & virtual worlds, driving foot traffic in both realms.
Affiliates advertise brand/product sales directly from avatars/spaces; brands create games & events for deeper connection & product sales; loyalty programmes tokenize brand loyalty rewards for customers
– Ad spend growth will be coupled with metaverse user growth rates.
– Data privacy needs to be a priority in metaverse marketing and advertisement.
– 41% of respondents are often annoyed by online advertising, while 35% don't mind if they get content in return.
– Roblox plans to introduce immersive ads on its platform in 2023 for revenue streams and new opportunities for advertisers.
– Creator economy represents a paradigm shift where individuals have autonomy over how, when and where they monetize their content (e.g., through royalties).
– Brands can provide creators with tools/features or collaborate directly with them to generate end-user assets & new content from platform fees/royalties.
Brands co-create products with creators to drive awareness and revenue.
GameFi offers users a model to earn royalties from creating digital in-game assets.
Brands can license their IP for creation of branded worlds, digital products, etc.
Platforms charge fees for asset creation/maintenance & when creator sells good to end user.
End users pay usage fees based on asset usage; royalties paid back to original creator.
Mindset shifts: User roles become creators; current IP approaches may lead to loss of content & IP generation for brands; lack of margin incentives for creators leads them tracking own impact/value delivered by negotiation w/brands re: engagement KPIs and ROI's.
Rook example: Selling 30 NFTs as invites into exclusive DAO offering learning sessions, interactive games, metaverse trips & working with perfumer Crowe to create 'Scent of the Metaverse'.
User co-creation and license brand IP: NFT holders receive bottle of perfume with collaboratively designed NFT label, earning royalties on fragrance sales.
Metaverse native services: Smart contracts enable stake & transfer ownership; network/ computing power can be rented; premium connectivity improves end user experience; digital twin & rendering as a service outsource tasks to focus on key capabilities.
Mindset shifts in metaverse require new service offerings, sufficient infrastructure for interactions between individuals, reliance on metaverse native providers to outsource work not in core capability.
COVID highlighted need for face-to-face interaction - MATSUKO platform combines physical & virtual world through mobile connection creating 2D video rendered into 3D holograms streamed by viewers in AR/VR/MR environment.
The metaverse will allow organizations to capture increasingly large amounts of personal data.
New data analytics will be possible, including insights into consumers’ emotions, cognitive load or attention span.
Enhanced privacy, security and safety protections are critical for robust adoption of the metaverse offerings.
Companies have an opportunity to support consumers in their data ownership journey by incorporating decentralized identity protocols and data portability into their business models.
Users may outsource their data stewardship, e.g., through external privacy services providers such as the Solid project.
Interoperability: Ability to interact, exchange and use data across systems, platforms and technologies.
Phygital: Blending physical/digital experiences with real goods/services becoming interoperable.
XR: Umbrella term for immersive tech like AR, VR & MR.
DeFi: Financial ecosystem built on blockchain where users exchange assets without intermediaries.
Digital token: Unit used to represent value such as asset, commodities or stock in a digital ledger.
NFTs: Solution enabling representation of objects with unique qualities within a blockchain.
Tokenization: Digitizing an asset into a blockchain including all its information to facilitate transactions/transfers of title .
Digital wallet (crypto): Software or hardware used for digital asset operations through the network .
Digital identity : Collection of attributes associated with an individual stored & authenticated digitally .
Decentralized identity : Self owned verifiable credentials allowing trusted data exchange .
DAO : Autonomous organization managed by smart contracts providing transparency , immutability & security .
Permissionless / Centralized / Decentralized networks : Respectively no restrictions , control from small group & governance from whole community over participants' rights .
3D worlds : Immersive sensory environments displayed on flat screens occupying 3D spaces
Market analysis from Bloomberg Intelligence predicts the metaverse market to be worth $800
Metaverse is a collection of virtual worlds built on the decentralized web.
Orange, Deutsche Telekom, Orange, Telefónica and Vodafone together with MATSUKO are implementing a proof of concept for holographic presence as part of simple phone calls.
Miller et al. studied how user tracking data can be used to identify individuals when viewing 360-degree VR video in 2020.
Solid Project is an open source platform that enables users to store and share their personal data across multiple applications without compromising privacy or control over your information
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