How to solve a problem like the Metaverse

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Understanding the Metaverse

I may be wrong here, but the 'Metaverse' seems like a term that needs no introduction in 2022.

However, I think it is an area that still needs a lot of clarity.

Yesterday I shared a deep dive on the metaverse published by Deloitte China. Whilst reports like this are interesting they are also rather dense, and honestly don't contain much tangible or actionable insight.

As always with this newsletter, I want to help you cut through the BS and simplify whats really happening here and what you need to pay attention to.

Even though the final forms of this are conceptual and many years away at best, sports right-holders and athletes should be thinking about what sports fans of the future are looking for.

In this Issue of the newsletter, I'll be covering 3 actionable tips to help you understand your place in the Metaverse.

Housekeeping: What do we actually mean by Metaverse?

Triggered by Mark Zuckerberg rebranding his whole business from Facebook to Meta, the term Metaverse has become a shiny new way to package up a whole host of Web 3.0 marketing activity.

The concept itself isn't new, I'm sure everyone is familiar with some existing virtual worlds within gaming that are now being referred to as 'Metaverses' as well as the more dystopian concept of a full Virtual Reality.

But as ever, brands are scrambling for industry headlines and firsts because it drives interest.

Whilst this is fine, I think many of these can be distractions and gimmicks.

Definitions

It's easy to be bamboozled with definitions of the Metaverse.

The 'true Metaverse' is a fully immersive decentralised open virtual world, where access is permissionless, social structures are completely free and everything is owned by the community.

Current 'Metaverses' such as Roblox, Minecraft & Fortnite would not be considered as such because they are centralised, have corporate ownership structures and can limit access or shut down at a whim.

However these worlds are immersive, entertaining and have individual economies, and are already hugely popular with communities set up within them so it's easy to see why the term Metaverse has become easily used with these spaces.

Whilst we could end up with a true Metaverse in 50 years time, I think the most realistic scenario is that we actually need to prepare for something in the middle.

For example multiple worlds rather than one, where certain benefits of centralised structures are in place but governance can be influenced by a community of fans. Where assets can be owned (backed by NFT tech) vs 'borrowed' as per current virtual worlds.

Access points to Metaverses will increasingly lean towards use of hardware, i.e headsets, however I think everyone will become comfortable with access via normal controllers and mobile for quite some time.

When will the Metaverse be here?

"The Metaverse — the virtual dimension the tech world sees as the next big thing — won't have one big grand opening. Instead, it's coming to life in pieces all around us." - Axios

If you're looking for something more concrete, Deloitte China expect it to really get going from 2031 onwards.

3 actionable tips to help you find your place in the Metaverse

1) Understand the facts behind the trend

The 'Metaverse' may have been neatly packaged up as a marketing term, but the concept isn't new and there are very real trends and innovations behind the hype which are slightly less talked about.

You need to understand these before exploring the Metaverse further.

Technology is evolving rapidly.

The AR/VR headset market grew by 92.1% year-over-year in 2021 compared to 2020.

Sales are forecast to increase by 46% in 2022 and surpass 50 million units by 2026.

So whilst the headset tech is still cumbersome, increased adoption will happen quicker than you think.

Use case and behaviour around headwear will be the things that take time.

We have a generation familiar with early Metaverse behaviours.

This is because we have huge swathes of younger demographics already investing significant amounts of attention in spaces like Roblox, Minecraft and Fortnite.

Roblox is probably the most popular virtual world which most closely resembles a Metaverse at the moment.

This is based on its expansive environment, UGC centric feel and in game currency & economy.

Some fun facts:

• Roblox daily active users spend an average of 2.6 hours per day on the platform.

• They already use a virtual currently. The average Roblox user purchases $15.41 in Robux per quarter.

• In the first 6 months of 2021, $1.31 billion worth of Robux was purchased on Roblox

• It's a UGC & creator centric environment, with over 40 million games

• 67% of Roblox users are under the age of 16

Overall, this type of Metaverse environment will only become more second nature for future generations.

For the sports industry, understanding virtual worlds should clearly play an important role.

2) Understand what purpose you are providing for fans

I am very wary of the current trend in sports of "X Team is launching into the Metaverse by recreating their stadium".

Why? It's boring, not targeted and I'm not totally sure it's what fans are asking for.

That as an example isn't solving any problems or offering a purpose.

Ask yourself....

If fans are able to watch a game or match in these environments does it enhance the experience compared to what they could do already?

Experiences like Fortnite and Travis Scott worked so well because it a gig like never seen before. It wasn't possible to replicate in reality which made it super entertaining.

If you're bringing fans together, is it actually harder work for them to engage in a community setting that it would be via Whatsapp or Telegram? If so rethink your experience.

Is it just dull? Anything boring just won't be sticky.

Maybe think about which fans you are trying to provide purpose and entertainment towards?

Perhaps you can use Metaverse style opportunities to target specific subsections of fans.

For example I think sports teams and athletes can use Metaverse environments to lean closer into gaming culture & fashion, as these are native within those spaces.

In the same way that PSG has cemented itself in the fashion world, I think there are big opportunities for teams cement themselves in casual gaming and digital fasion via Metaverse worlds.

3) Collaborate

Creating an owned virtual world is probably not required for most rights-holders.

Again, don't rush to creating your own virtual stadium in the 'Metaverse'.

Without careful consideration and gamification you will simply suffer from a 'Cold Start Problem', basically you won't gather the necessary network effects to gain mass adoption usage of your virtual stadium.

Instead, focus on virtual world/Metaverse partnerships where there is existing attention.

Again some nice examples of this already exist within sports and Roblox, with examples from McLaren and Nascar integrating themselves into one of the most popular games.

Rights-holders could also do this in a fashion sense.

We saw Neymar jump into Fortnite last year with bespoke skins for the game. Although I'd love to see if Fortnite could push the boundaries of a player activation or watch-along for a huge game in the same way they totally changed how a concert could look.

So, what you can be doing at the moment?

Similar to my summary in last weeks newsletter around Web 3 strategy, based on the trajectory of this space, you need to have a strategy. Even if it is to not participate yet.

It's inevitable that over time existing partners and new commercial opportunties will present themselves which should require you to pass them through your Web 3 and Metaverse filters.

Spend time looking at how the virtual environments can enhance fan experiences and create new entertaining touch points!

🚀 Level Up

Hungry for more? Here are a few further things I've hand curated this week that I think you may be interested in:

📖 Read... I referenced it earlier but The Cold Start Problem by Andrew Chen is in my view a must read for anyone looking to create great digital products in the sports space.

That's all for this week!

If you enjoyed this insight please feel free to share with like minded friends and colleagues.

Thanks & see you next week, Richard Johnson

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