Week 50 - The Metaverse is coming - but when and for whom? Tags Blogroll About OSK

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Dear readers,

If you dream of leaving the real world behind and leading a second life in the digital world - and enjoying virtual cars, sneakers and art far away from physical restrictions, the "Metaverse" could be of great interest to you! In the current OSK Weekly, we explain which fundamental ideas the hyped concept encompasses, which opportunities and challenges the ambitious vision holds in store and how companies can use the parallel universe for themselves.

Have fun reading!

First dystopia, then utopia - the moving short story of the Metaverse

At the moment, practically not a day goes by without new records from the so-called Metaverse. "Over $100 million worth of virtual properties have been sold in the Metaverse in the past week alone," writes t3n. The Art Newspaper announces the most expensive artwork ever sold by a living artist - but it's not a tangible painting for a classic collector's art room, but a Non-Fungible Token (NFT) - a unique digital asset closely related to the Metaverse term is linked. On Meedia, Dr. Teo Pham, expert for digital business models, social media and e-commerce, summarizes the NFT principle: “The customer purchases individual items registered in the blockchain. He can put them on his avatars, brag about them to friends, sell them on for a profit or he just likes to collect them. The motives for buying NFT are diverse.”

But back to the actual metaverse: Historically speaking, Neal Stephenson coined the term more than 30 years ago: In his 1992 sci-fi novel "Snow Crash", the American author describes the metaverse as a kind of virtual reality for pursued escapists . The concept became world-famous in 1999 with the classic film "The Matrix", in which machines imprison the consciousness of mankind in a digital image of the real world. The game "Second Life" brought the principle to the PC as a kind of online life simulation as early as 2003 and, according to the company, still has many millions of users today.

In the summer of 2021, Mark Zuckerberg finally announced his new interpretation of the Metaverse, even made it the focus project of his entire company - and consequently renamed "Facebook" to "meta". His goal is to create nothing less than the successor to the internet we know: "We'll be able to feel present like we're right there with people no matter how far apart we actually are. We'll be able to express ourselves in new, joyful, completely immersive ways and that's to unlock a lot of amazing new experiences," he explains in his keynote.

Upload Magazine's Jan Tißler sums up Zuckerberg's basic idea in a more factual manner: "The Metaverse is a place where we do a lot of things that we do on the Internet today - but in a virtual, three-dimensional environment. There are also new activities and services that do not exist in this form today.” This in turn is reminiscent of the approach of the Spielberg film “Ready Player One” from 2018. Just like the fact that Zuckerberg also had access to of its digital, as three-dimensional reality as possible via the virtual reality glasses of the Quest product portfolio belonging to the meta group, as futurezone reports.

However, the complex history of the term also shows that what exactly the metaverse is is entirely in the eye of the beholder. heise online also sees it that way, but notes that the basic principles of the various metaverse interpretations are still relatively stringent. The portal paraphrases investor Matthew Bell, who wrote one of the most relevant editorials on the Metaverse back in 2020: "[...] its own economy, a constant presence, synchronous rather than asynchronous and full of diverse experiences created by 'an incredibly wide range of contributors' – some as individuals, others as groups or even companies.”

According to Web 3.0 and NFT expert Dr. Teo Pham, many of us have long been in the Metaverse, as he explains on YouTube (link to his channel and his other profiles here). Because it is less about a specific digital place and much more about our virtual presence. To put it simply: an Instagram channel, for example, is already a form of digital avatar that we use to position ourselves in a certain way on the internet. He also explains that NFT dissolves the boundaries between the virtual and real worlds. The reason: Owning an NFT increasingly entitles buyers to purchase real, exclusive products. Only those who have the NFT of a specific brand in their Bitcoin wallet can access the virtual store in the first place.

Anything is possible, for everyone - opportunities and advantages of the Metaverse

Let your imagination run wild, the Metaverse theoretically offers almost limitless options, situations and experiences that can be realized in the real world would never be conceivable. Playing a round of virtual table tennis with your business partner? The metaverse helps. Enough of the social isolation in the home office? Then go to the virtual Metaverse office with your own avatar. The digital alter ego needs a new pair of sneakers? No problem, because the next data-based shoe store is not just around the corner, but just a click away. The exciting thing about it: All of this is already possible in practice today - provided you have the right equipment and human helpers.

The Bayerischer Rundfunk describes these advantages in a somewhat more abstract way. In the metaverse, "[d]igital information [...] could be transferred smoothly between all conceivable applications - just as naturally as we copy text from one email to another today." through a future metaverse shared by a variety of companies to ensure the needed "seamless experience and interoperability". In the same context, the editorial team sees advantages in the merging of the physical and virtual worlds: "For example, one could - provided the right hardware - bring someone AR visually into a face-to-face meeting, as well as the other members as avatars in a VR environment . Also, buying clothes in the physical world and getting a skin for the Metaverse avatar at the same time would be a cool thing.”

Last but not least, the exciting new Metaverse, brimming with business visions, is already an Eldorado for investors. In an interview with CNBC, well-known investor Cathie Wood predicted that the market was worth billions and that the Metaverse was such a successful idea that it would change every industry in the world.

VR glasses for billions? These hurdles still stand in the way of the Metaverse

But as great as the potential of the Metaverse is - so far it has only consisted of individual, promising, but often mutually incompatible island projects. Before the vision of an all-encompassing, virtually accessible internet becomes reality, the digital pioneers have to overcome numerous other challenges that are technically, economically and socially justified.

Bayerischer Rundfunk notes in particular concerns about the technical implementation and the danger of monopolies. A Zuckerberg-style metaverse would require "gigantic amounts of computing power, very high-speed internet everywhere, and advances in digital animation and artificial intelligence," and should by no means be "a centrally organized space" in which a single company controls the metaverse - and thus the Take control of a virtual space that encompasses the entire earth and all digital transactions taking place there.”

In addition, Basecamp mentions that most potential users are currently only minimally equipped with "handy and light VR glasses" - and also raises the question of whether they would be willing "at some point to enter virtual 3D worlds [to] dive”, with the blog noting that Facebook, or meta, as a driver, has far more resources than Second Life, for example, to help their focus project achieve a breakthrough.

Netzpiloten Magazin finally has concerns about a lack of anonymity and new addictive behavior due to the increase in social pressure that already prevails in the current social web: "Fear of missing out, followers as a measure of one's own relevance, using social media to pretend a sugarcoated reality. The Metaverse could reinforce such side effects again. It is not without reason that metaverse-like concepts in science fiction tend to be part of a technological dystopia.”

Keyword technological dystopia: Ironically, Matrix main actor Keanu Reeves recently criticized the hype surrounding NFT, which is an elementary building block of the Metaverse principle - according to t3n, the actor sees this as "an artificial shortage" that " goes against the ethos of the internet.”

In addition, companies should also consider the immense energy costs for NFT and Co, especially from a CSR perspective, as t3n reports in relation to calculations by the cryptoart.wtf website: "Depending on the number of bids and their withdrawal, there is definitely a footprint of well over 100 kilograms of CO2 for an NFT drop.”

With customers at the virtual concert

Apart from the hurdles mentioned, however, there are also potential new communication channels for companies to customers in the metaverse. Allfacebook writes that users are already willing to spend real money on virtual things, such as clothing or equipment in video games. Exorbitant sums are sometimes paid for virtual art as well.

In the virtual world that the Metaverse offers users, there is - just like in reality - an economy, currency and different behaviors. New technologies such as virtual reality, augmented reality and artificial intelligence must therefore become part of digital marketing strategies in order to adapt to these circumstances. Just as communicators had to adapt to the technical development towards the Internet, it is now necessary for them to adapt to the development towards the new virtual world. The Metaverse is the evolution from a 2D feed to a 3D social media community.

This opens up new possibilities for communication: In the digital world, influencer campaigns could, for example, be planned as an interaction between the user and the digital avatar of the influencer. For example, it is conceivable that food influencers would cook together with their community.

If social digital spaces are no longer limited to apps, web addresses and interfaces such as smartphones and laptops, there will be room for new communication strategies, according to the hosting provider Ionos. Virtual events, such as concerts, offer a lot of creative space for this. Digital equivalents of real locations and products, including, for example, online tours or virtual fittings, are also suitable for communicating with the target group in previously unknown ways.

The fashion brand Balenciaga, for example, sees a lot of potential in the Metaverse, which is why the company has now founded its own business unit for this area. Virtual fashion continues to be a focus for the brand, which previously released the Fall 2021 collection via a video game and with which the hugely popular online game Fortnite has collaborated on a collection of digital skins for gamers.

Nike and Adidas buy virtual land

Sporting goods manufacturer Nike bought the NFT fashion producer RTFKT on Monday of this week and is thus taking another step towards the Metaverse, writes BTC-ECHO. The brand wants to "provide the next generation of collectibles that combine culture and gaming," the company explains in a press release. RTFKT aims to unite the NFT and gaming world with unique sneakers and digital artifacts. Nike had previously announced that the company was launching its own section called "Nikeland" within the popular gaming platform Roblox. In Nikeland, users can participate in sporting events with virtual avatars and outfit their characters with Nike fashion.

Competitor Adidas has a different approach: The company dares to jump into the metaverse with the help of currently popular NFT project partners, as the industry portal Cointelegraph reports. One of these partners is the "Bored Ape Yacht Club" - one of the currently most successful NFT projects. Adidas has also announced that it will acquire virtual land in the blockchain-based world "The Sandbox". There, the brand could then sell virtual goods such as shoes and clothing and even replicate a flagship store or even the Adidas HQ.

For Oliver Nermerich, Head of Digital Communications at OSK, the metaverse strategies of both companies differ significantly: "Nike goes 'all in' and buys RTFKT Studios, the most important player in the rapidly growing NFT and digital fashion market . RTFKT was only founded in 2019, today the brand is already considered the supreme of the Metaverse. According to industry insiders, Nike is said to have paid between two and three billion euros for the company. This underscores the sporting goods manufacturer's intention to become a major player in the NFT market and in the Metaverse.

Adidas' path isn't quite as bold and native. Adidas relies more on cooperation than on acquisitions. The partnership with BAYC will have generated enormous attention in the NFT target group, but Nike has achieved significantly more opportunities and freedom for its customers by acquiring RTFKT. For example, Nike could now give all RTFKT-NFT owners a special access right to purchase certain genuine Nike sneakers. Conversely, Nike can offer all customers a digital counterpart to their physical purchase in the future, with which the owner can appear in the digital space.

I'm sure that with the purchase of the digital fashion producer, Nike will become one of the most important players in the metaverse."

Meta-Federation or Meta-Monopoly?

So how does the Metaverse start? Where and when does it start? Unfortunately, the question is just as difficult to answer as the question about the limit of the universe. The ONE Metaverse will probably not exist. Because if the metaverse is to be a diverse ecosystem, a living virtual world, companies like Microsoft and meta could be part of it, but never the metaverse itself, explains Bayerischer Rundfunk. Just like Facebook is not synonymous with "the Internet". It is more conceivable that different providers would develop their own solutions, which would ideally be compatible with one another.

Nevertheless, it is quite possible that a Metaverse version will prevail whose provider becomes a monopolist. In our opinion, however, this scenario is less likely. After all, there has never been a monopoly on access to the Internet. And Facebook's initial autocracy in the social media universe has also been ended by new networks and apps.

A third variant: The hype surrounding the metaverse turns out to be short-lived and the topic falls out of focus. But we don't expect that to happen either, at least not in the near future. The idea sounds too promising, too many first steps in this direction have already been taken.

How exactly the metaverse will develop in (virtual) reality, whether we will all soon be leading a second, digital life or whether it is "just" a social network in 3D cannot be predicted at the moment.