The Metaverse represents a whole new world, brimming with opportunities and risks for both consumers and businesses. While the current Metaverse ecosystem is dominated by large corporations, small companies will play a monumental role in mass adoption as the technology transitions into the mainstream. To understand the adoption of new technologies like the internet and mobile payments, we can observe historical patterns. The Metaverse has captured the imagination of major players like Meta, leading some to view it as a platform for multinational corporations to showcase their technological prowess or as a new frontier in gaming development.
According to Facebook's Connect 2021, the Metaverse is on the horizon, but it will take at least a decade for it to achieve widespread adoption. Pew Research reports that more than half of leading technology innovators, developers, and businesses believe that by 2040, the Metaverse will become an intrinsic part of daily life for half a billion or more people worldwide.
Preparing for the Metaverse
Although the Metaverse is not an immediate concern, businesses must keep it on their radar. By allocating resources now, organisations can enhance customer experiences in the future. To fully grasp the opportunities and risks the Metaverse presents, businesses must understand its infrastructure. Jon Radoff, CEO of the 3D gaming company Beamable, categorises the Metaverse into seven layers:
- Infrastructure: This layer comprises semiconductors, material science, cloud computing, and telecommunications networks— the foundation that enables other layers to function.
- Human Interface: Includes devices like mobile phones and VR headsets that provide access to the Metaverse.
- Decentralisation: Everything must be built on a permissionless, distributed, and democratised structure.
- Spatial Computing: Software that allows hardware to interact with 3D objects, enabling creators to build and monetise Metaverse projects.
- Creator Economy: Encompasses the software that allows users to discover experiences in the Metaverse.
- Discovery: The various methods through which users can find and explore Metaverse experiences.
- Experience: The activities that users can engage in, such as games, social interactions, and live events.
The Role of Small Businesses in the Metaverse
Many small businesses will likely be involved in delivering Metaverse experiences to consumers. According to Cointelegraph, the Metaverse has the potential to disrupt multiple markets. Naveen Singh, co-founder and CEO of the decentralised data management network Inery, noted:
"It is no longer a question that the Metaverse will be a major disruption for the digital economy. The real focus now is on which industries the Metaverse will most significantly impact. As a gateway to a new digital economy, the Metaverse opens up new possibilities for several domains."
The industries most likely to undergo transformation due to the Metaverse include gaming, fashion, entertainment, media, and retail. To fully unleash its potential, interoperability across the Metaverse will be crucial.
Gaming and Beyond
The gaming industry often pioneers the adoption of cutting-edge technologies, and the Metaverse is no exception. Many gamers view the Metaverse as the next frontier in gaming, offering a new level of immersion and community that current games lack. Projects like Decentraland, Axie Infinity, and Sandbox provide both social and financial benefits, although small businesses may find it challenging to develop Metaverse games due to budget constraints.
Nikita Sachdev, founder and CEO of Luna PR, suggested that real estate is another industry poised to adopt the Metaverse:
"For real estate, companies and agencies are always looking to develop ways of touring and visualising properties for pre-plan sales and foreign investors. Imagine if you could tour an entire compound before it is even developed. Investing in real-world property will become much more immersive, and 'open houses' will no longer be necessary."
The Metaverse has the potential to impact the $3 trillion global real estate market in various ways, whether positively or negatively. It could also have significant economic and societal implications for the fashion industry.
Metaverse Fashion and its Economic Impact
Metaverse Fashion Week is an example of how the Metaverse is already influencing the fashion industry. The event featured runway shows, after-parties, immersive experiences, shopping, panel discussions, and more. Wahid Chammas, co-founder of Faith Tribe, a free-to-use design platform, explained:
"The Metaverse and fashion are both about identity, and they will likely complement each other. People venture into the Metaverse to live and portray an identity they may not experience in the physical world. Wearables are a natural extension of showcasing personality and identity. The link between physical and digital worlds accentuates your perceived identity, and we believe there will be further disruption in both the physical and Metaverse worlds of fashion for brands that take digital fashion seriously."
Risks for SMEs in the Metaverse
Exposure to the Metaverse poses higher risks for small and medium-sized enterprises (SMEs). The ecosystem is still evolving, and the uncertain nature of the Metaverse could mislead some companies' roadmaps. Jake Fraser, Director of Business Development at Mogul Productions, commented:
"Technical expertise and knowing how to structure environments for users in the Metaverse is a fluid space and requires people to be in tune with the latest developments to execute the best user experience. There also needs to be value for the user—something unique that they can’t get from your brand elsewhere. Without a clear 'hook,' driving adoption from businesses will be challenging."
However, entering the Metaverse can help companies prepare for the future and make their current products more profitable. The benefits far outweigh the risks. George Narita, CEO of Aurora42, remarked:
"The most significant risk is not getting into the Metaverse. I see a lot of opportunities, especially for early adopters, similar to the beginning of the dotcom era. Many didn’t understand how to communicate effectively. Just being in the Metaverse is not enough. Those who have a disruptive vision and provide experiences and emotional connections by co-creating with their followers will be ahead. Today, people do not want to be passive; they want to be part of building this universe."
