Nearly 350 million registered users have contributed to the success of Fortnite — one of the world's most popular video games. The success of the video game lies in moving away from its roots as a video game and becoming a social space where people can interact with each other.
Fortnite was the first to release the trailer of Christopher Nolan’s film Tenet in May 2020. Subsequently, three Nolan films were shown in the game's ‘Party Royale mode.’ In future, movies may get released directly in social spaces. Since people now spend a considerable amount of time online, lines between “online life” and “real life” are blurring. Metaverses will gradually come to life as more social spaces become a reality.
A good illustration of the limitlessness in social spaces is rapper Travis Scott's nine-minute performance as a virtual avatar of himself in front of 12 million people in a Fortnite game earning $20 million. The recent tragedy at Scott’s Astroworld music concert is enough to prove that this is impossible to organise in real life.
The birth of metaverse
Mark Zuckerberg envisaged the future of Facebook during one of the earning calls that happened in July 2021. He said: “In the coming years, I expect people will transition from seeing us primarily as a social media company to seeing us as a metaverse company. In many ways, the metaverse is the ultimate expression of social technology.”
In the same earnings call, he went on to define metaverse as “a virtual environment where you can be present with people in digital spaces.” He said, it’s “an embodied internet that you’re inside of rather than just looking at. We believe that this is going to be the successor to the mobile internet.” Until then, metaverse was a mere buzzword doing rounds among the Silicon Valley enthusiasts. But with Facebook’s launch of the first-ever metaverse product — Workrooms app — it has captured everyone’s attention.
Workroom is a virtual meeting place where colleagues of an organisation can work together from anywhere. When one joins the meeting in virtual reality avatar, like every other member of the team, and get together in the virtual room. The huge whiteboard helps the team to work together on their ideas. Facebook is not stopping here. It says it will develop the metaverse in a more responsible way with the $50 million funds.
Further, Facebook de-emphasised its name and rebranded itself as Meta, a clear step toward an overhaul. Among the changes were the introduction of a new logo, which resembles an infinity sign that is slightly misaligned. Facebook, Instagram, and WhatsApp will remain, but under the Meta brand.
According to Matthew Ball, a venture capitalist and former director of Amazon, metaverse is the next level of the internet. It is a combination of digital and physical reality and an amalgamation of the augmented reality, virtual reality, and the internet. Metaverse is continually online and active, offering an economy of its own, jobs, media, and shopping malls. It is, like Zuckerberg described, “the total interactive reality that connects humanity.”
Business in the metaverse
It’s necessary to know about NFTs, cryptocurrency, and blockchain to understand how business is happening in the metaverse. Blockchain is a database that is shared across a network of computers. Once a record is created on the blockchain, changing it is next to impossible.
Non-fungible tokens (NFTs) are intangible digital assets that can be in the form of images, videos, or virtual items in the digital space. The ownership of such NFTs is registered on the blockchain.
In simple terms, cryptocurrency is a digital currency from which goods and services can be purchased. Using strong cryptography, cryptocurrency transactions are secure because they are recorded online using blockchain technology.
Many brands have already entered the metaverse and there are numerous marketing opportunities. Luxury brand Gucci sells its digital bags on the gaming site Roblox, each of which has a certified owner for the NFTs. One would be surprised to note that the price of a digital bag is $3,400, which is more than the price of real bag.
Recently, CNN launched Vaults by CNN through which CNN sells digital collectables named Moments as NFTs. Football star Lionel Messi launched an NFT collection named 'Messiverse,' available on the ethernet-chain platform.
Another unique business is digital real estate. Decentraland is a platform where users can buy and sell lands, and put up art galleries. It has received several registrations from companies looking to trade digital assets as NFTs. In Decentraland, one can participate in programmes in group settings, invite friends, and explore cities built by others. Fashion shows take place in cyberspace as well, and some collections fetch over $1,30,000. At Decentraland, Sotheby's and Christie's, both giant international auction houses, have inaugurated their digital headquarters. Coca-Cola launched exclusive collectable items on Decentraland and an NFT auction took place within the framework of an online event where items like a friendship card or a sound player that simulates opening of a Coca-Cola can could be obtained.
RTFKT pronounced as artifact, creates digital assets, and secures ownership of such assets through NFTs. In February 2021, RTFKT raked $3.1 million in seven minutes by selling 600 digital shoes. A buyer of a digital shoe can add the shoe to their existing Instagram photos.
Marketing in the metaverse
Metaverse is the next frontier for online interaction that will revolutionise the online marketing landscape just as social media did. The metaverse will have a significant impact on society. There is a great deal of opportunity as well as challenges for marketers, communications professionals, and brand managers. In the metaverse, brands can create experiences that are more engaging and exciting than traditional advertising.
In a first, the global automaker Hyundai was the first to experiment on Roblox with Hyundai's Mobility Adventure. The virtual space was launched in October, featuring five theme parks highlighting several of the company's future products such as the Nexo hydrogen fuel cell crossover vehicle and Ioniq 5 electric SUV. Hyundai hopes to establish long-lasting relationships with its young customers by introducing them to these offerings.
A collaboration between Vans and Roblox community developers, The Gang Stockholm, created 'Vans World,' which applies new in-game physics technologies to recreate a more satisfying skateboarding experience. ‘Vans Off The Wall Skatepark’ in California and ‘House of Vans’ are examples of real-world locations modelled in the virtual park. This is the brand's first foray into the metaverse.
In Nintendo’s Animal crossing game, Gucci has its own island which showcases the brand's distinctive aesthetic, including scenes from its campaign video and its fragrance scent.
Considering the experiential nature of the metaverse, some brands are creating brand installations and pop-up events — items that users are expected to interact with — instead of just running banner advertisements. When visitors are provided with persistent, interactive spaces to enjoy the content, they invest emotionally in the brand. Rather than passive engagement opportunities that you might find on social media platforms, these spaces offer immersive engagement opportunities for a brand.
With the in-game furniture craze sweeping the world, Ikea Taiwan leveraged the trend by creating an Ikea-themed island in a game and linking it to its company platform and store. One step further, KFC in the Philippines offered real rewards to customers for spotting 'The Colonel,' a costumed employee dressed up as the brand's mascot, in a virtual game. This seamless integration of the physical and digital world is the essence of the metaverse which Ikea Taiwan and KFC Philippines leveraged creatively.
Embracing the digital world is the best way for brands to move forward. To stay competitive in the new digital world, companies can apply use what they learned about the internet and social media, as metaverse is only a logical extension in the digital transformation process. It will be those with a deep understanding of online culture, digital art, and gaming experiences that succeed in the metaverse.
(The writer is Chairperson, Marketing Area and AIM-Parasuraman Center for Service Excellence, Jagdish Sheth School of Management.)