Inside The Metaverse Economy
April 7, 2021
publicis sapient
Are we in the matrix?
What’s the future of the 3D experience?
Will the enterprise play a role?
Look Beyond Gaming In The Metaverse Economy
Beyond virtual worlds, there’s more to this emerging market trend.
Metaverse Total Addressable Market
- 2022: $1,247,378,154
- 2023: $1,692,317,942
- 2024: $2,391,414,483
- 2025: $3,537,141,162
- 2026: $5,351,694,578
- 2027: $7,648,641,891
- 2028: $10,952,855,188
- 2029: $15,246,374,422
- 2030: $20,684,756,178
Growth rates by year:
- 2022: 31.20%
- 2023: 35.67%
- 2024: 41.31%
- 2025: 47.91%
- 2026: 51.30%
- 2027: 42.92%
- 2028: 43.20%
- 2029: 39.20%
- 2030: 35.67%
Inside the Metaverse Economy Ecosystem
- Interfaces: Brain-machine and human APIs
- Metaverses: Digital experiences and worlds
- DAOs: AI-driven dynamic governance models
- Blockchain/Crypto Tech: Trusted, private, and secure value exchange
- Web 3.0: Decentralized access and self-sovereignty
- Creator Economies: Multisided value creation platforms
- Data-Driven Digital Networks (DDDNs): Multisided consumption networks
Interfaces
Neuralink and other brain-machine interfaces are at the forefront, enabling new ways for humans to interact with digital environments.
Worlds Have Been Revived
Platforms like Second Life have seen renewed interest, demonstrating the longevity and adaptability of virtual worlds.
The Youth Are Ahead Again
Brands like Forever 21 are engaging younger audiences through platforms such as Roblox, showing how the next generation is already active in the metaverse.
Gaming Platforms Play a Key Role
Platforms like Unity are central to the development and expansion of metaverse experiences.
Digital Twins Create New Opportunities
Technologies like Matterport enable the creation of digital twins, opening up new possibilities for simulation and innovation.
Interoperability Platforms Are Much Needed
Companies like Nvidia are working on solutions to ensure different metaverse platforms can work together seamlessly.
Creator Economies Meet DDDNs
The intersection of creator economies and data-driven digital networks is fostering new forms of value creation and consumption.
DAOs Define Membership and Governance
Decentralized Autonomous Organizations (DAOs) are establishing new models for membership and governance, driven by AI and community participation.
Token Economics Drive Value Exchange
Token economics underpin the exchange of value within the metaverse, enabling new funding mechanisms that surpass traditional venture capital and private equity.
Blockchain-Crypto Tech Powers Value Exchange
The rise of digital assets, such as NFTs, is creating new opportunities, though the majority of these assets currently lack long-term value.
Web 3.0 Is the Backbone
The Web 3.0 ecosystem is advancing through decentralized infrastructure, maturing technology, research, open-source projects, and a wide array of participants including miners, developers, wallets, storage providers, exchanges, DAOs, and more.
Web 3.0 Has a Whole New Set of Tech
Key technologies include:
- CHAINLINK, FILECOIN, THETA NETWORK, HELIUM, THE GRAPH, BITTORRENT, ARWEAVE, LIVEPEER
- RENDER TOKEN, AUDIUS, ETHEREUM NAME SERVER, SIA SKYNET, STORJ, HIVE, OCEAN PROTOCOL, NUCYPHER
- ARAGON, GOLEM, XYO, FETCH AI, MASK NETWORK, BRAINTRUST, ORCHID PROTOCOL, NKN
- RADICLE, CIVIC, AKASH NETWORK, GITCOIN, BAND PROTOCOL, API3, HANDSHAKE, STREAMR XDATA
- DISTRICT0X, KIN, DIA, PARSIQ, FOAM
Web 2.0 to Web 3.0 Requires a Frameshift
Examples of Web 2.0 apps and their Web 3.0 counterparts:
- Browser: Chrome → Brave
- Storage: Dropbox, Google Drive → Storj, IPFS
- Video/Audio Calls: Skype → Experty
- Operating System: Android, iOS → Essentia.one, EOS
- Social Network: Facebook, Twitter → Steemit, Akasha
- Messaging: WeChat, WhatsApp → Status
- Remote Job: Upwork → Ethlance
Future of Work and Employee Experience
Collaboration and Meetings
- Move from 2D to 3D video conferencing
- See how colleagues want to be represented
- Use immersive presentation capabilities
Recruiting
- Meet as avatars or exact replicas
- Use real-life scenario rooms for candidate assessment
- Enable more interviewers and deploy bot recruiters
- Remove bias from interview processes
Onboarding
- Create shared experiences for diverse candidates
- Develop self-service kiosks for procurement and benefits
- Match new hires with buddies for immersive role experiences
Training
- Conduct live simulations
- Benchmark and develop new skills
- Create self-service classes
- Learn from participants and bots
Internal Communications
- Interactive town halls
- One-on-one meetings
- Crisis communication war rooms
Digital Twins
- Simulate operations
- Identify hazards and mitigate risks
- Apply new models to existing conditions
- Develop new offerings based on capabilities
Reimagine Collaboration: Humans + Machines
Expanding Human Reach: New realities with Metamobility (Source: Hyundai)
Apply Digital Twins (Source: Nvidia)
Digital Asset Settlement
Adopt, Expand, Unlock, Amplify (Source: Bitwave)
Seven Steps to the Metaverse Economy
- Consider overall brand strategy in context with the metaverse economy.
- Choose an enterprise use case.
- Determine the desired business outcomes.
- Design and build reusable digital assets.
- Identify an experience strategy and engagement modality.
- Apply analytics, automation, and AI for scale.
- Use insights to power a data-driven digital network.
The Retail Metaverse Opportunity
The Metaverse Evolution: Opportunities to sell digital & traditional products
2020 → 2030
- Gaming Worlds (e.g., Fortnite, Minecraft, World of Warcraft, Animal Crossing)
- Networks of Worlds (e.g., Roblox, Decentraland, Second Life)
- VR, Meta & Facebook (e.g., Facebook Horizons)
- AR, Fully Persistent Worlds (e.g., Microsoft Hololens)
Current Traffic (Monthly Active Users):
- Fortnite: 84m
- Minecraft: 173m
- Roblox: 54m
- Decentraland: 460k
Retail Monetization:
- Fortnite: $5.1B in 2021
- Minecraft: $415m in 2022
- Roblox: $1.9B
Gaming worlds have the highest MAUs but are less flexible and relatively lightly monetized compared to Networks of Worlds.
Monetization Pyramid
- Brand Activation & Partnerships (e.g., Burberry, Forever 21, Marvel, Gucci, LV, Wendy's, CocaCola)
- Digital Badges, Valuable Giveaways (e.g., NFTs, POAPs)
- Functional: Power-ups, world-enablers, digital twins
- Transactional & Marketplaces
Brands Are Getting Into the Action
Examples include CocaCola's Friendship Day campaigns and Forever 21's presence in digital worlds.
5 Reasons Retailers Should Be in the Metaverse
- Access to Generation Alpha and Gen Z
- Creation of new buying channels
- Collect new demand signals and enable product development
- Capture new revenue from NFTs
- Protect and position your brand assets
How to Get Started Now
- Enhance your commerce app to accept crypto payments
- Develop a strategy considering a range of business objectives, including digital products
- Appoint a clear Metaverse owner
- Build 3D models for use on your own commerce sites and in the metaverse
- Expand your loyalty program to include collaborative features
Bottom line: Treat web3 as an entirely new channel, with a new set of rules, users, and opportunities.
Unpacking the Metaverse: Technologies, Challenges & Opportunities
- Top Questions I Get Asked
- Applying the Metaverse to Brands
- Addressing the Risks
- Key Takeaways
What is “web3?”
Web3 represents the next iteration of the internet:
- Internet: Network (TCP/IP), Email, BBS
- The Web: Informative, early e-commerce, desktop browsers (Value: $1.1 trillion)
- Web2: Interactive, social networks, mobile, API-economy, cloud computing (Value: $5.9 trillion)
- Web3: Immersive, blockchain, NFTs, digital identity, intelligence, interoperability, security & transparency (Value: ~$30 trillion?)
Web3 is:
- OWNED by builders and users
- ORCHESTRATED with digital web3 currency
- OPERATED across AR/VR, websites, and physical worlds
- ORGANIZED through collective voting in open communities
Web3 promises a transformational future for the web:
- Blockchain & Crypto: ~$1.8T market cap, 18,000+ cryptocurrencies, $80B/day trading across 450+ exchanges
- Metaverse: ~$800B annual revenue by 2024 (Meta investing $10B/year)
- NFTs: $10B market cap, 20k sales/day ($36M/day)
- DID & DAO: $21B market cap (top 5 DAOs = $13B or 60% of total value)
- DeFi: ~$33B total value locked in DeFi loans across 130+ exchanges (top 4 = 90%+ of volume)
Web1, Web2, Web3 - Distributed
- Record: Transaction, deal, NFT…
- Block: A collection of records, added to the chain by miners
- Chain: A collection of blocks representing the entire history of transactions
What is the Metaverse?
It already exists in different forms—not just VR:
- iOS & aOS: ZEPETO (20MM MAU)
- Desktop: Decentraland (300K MAU)
- Mobile, Desktop, Console: FORTNITE (80MM MAU)
- Mobile & Glasses: Snapchat (500MM MAU)
- VR - Oculus: Horizon Worlds (300K MAU)
The Metaverse is mainstream and accessible in many traditional ways:
- iOS & aOS: FaceTime, ZEPETO
- Desktop: Teams, Webex by CISCO
- Mobile, Desktop, Console: FORTNITE
- Mobile: Instagram, Snapchat, TikTok
- VR: Horizon Worlds, Meta, Decentraland
Data Privacy
- Web1: Email login
- Web2: Single sign-on (Google, Apple, Meta, Microsoft, Amazon)
- Web3: "Choose what to share" (Connect wallet or get started)
Fungible Token: Interchangeable, divisible
Non-Fungible Token: Not interchangeable, non-divisible
Applying the Metaverse
The Metaverse: Social Interactions & Wearables
- FACEBOOK/META
- MICROSOFT MESH
- EPIC GAMES
- SANDBOX
Gaming is the Metaverse’s gateway to mass adoption and attention:
- AXIE INFINITY
- CRYPTO KITTIES
- SWORD AND MAGIC
- ENJIN MARKETPLACE
The Real World: Digital wearables & connecting experiences between digital & physical
THE IMPERIAL PHYGITAL (Esquire x Satoshi Studio)
- Phygital NFT includes handmade sneakers and a digital NFT on Lukso’s blockchain
- Each pair comes with a QR code for NFT access
- No returns or refunds due to bespoke production
Non-Fungible Property Tokens (NFPT)
- Each block of land is divided into 100 NFPTs, which can be combined into an NFT that entitles holders to the same rights as a physical land title
- Rights include building homes or apartments, leasing, or renting out
- Multiple blocks can be combined for larger land titles
There Is a Lot of Scrutiny, and Rightfully So
Risks, Concerns & What to Do About It
- Security Risk
- Volatility Risk
- Service Level Risk
- Environmental Risk
Key Takeaways
- Don’t mistake your target
- Utilities are an easier way to go
- Be authentic and specific
- Consider an evolving roadmap
Authentication, Coupons/Loyalty Program, Ticketing
Final Thought
- Expand & Protect
- Best-in-class retailers
- Develop retail stores in the metaverse
- Buy digital/physical
- Scale with future NFT glasses
- Examples: High-end retailers, Nike & Adidas
- Rebrand & Transform
- Retailers wanting to innovate or rebrand
- Develop off-brand metaverse experiences
- Buy digital only
- Scale with future NFT glasses
- Examples: Atari, Flamingo Casino
- Inspire & Disrupt
- Designers flipping the platform model
- Direct to consumers
- Rewards for ownership
- Example: Phillip Plein buys $1.2M high-end land in Decentraland
Thank you
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