The metaverse channel: the medium is the market
What is driving 2022 interest in the Metaverse? It’s not like the metaverse is a new concept – virtual worlds have been around for over 30 years and yet they are still far from mainstream adoption. There’s no new revolutionary technology that enables us to magically leap across the chasm making the metaverse more accessible — or broadly adopted. There’s still no hockey stick of hardware adoption, whether for wearable glasses, contact lenses, or a cheap or expensive headset. While there are plenty of competitive gaming and enriching virtual experiences, there are still significant arguments about whether we are hearing more of the same hype that we’ve heard the past 20-plus years.
Digital identity verification and biometrics providers are now joining the hype (more on that below).
Has the time come? If you’ve been in tech for a couple decades, you know how difficult it is to get timing right. Signals have shown opportunity for “a metaverse market” for decades and yet, it hasn’t taken off.
Add the latest Gartner prediction, that by 2026 at least 25 percent of people will spend at least an hour in the metaverse to the pile. But I want to know: What’s really driving this prediction? Because it doesn’t look like hardware adoption or youth culture or demographics or tech innovation.
“Enterprises will have the ability to expand and enhance their business models in unprecedented ways by moving from a digital business to a metaverse business,” said Marty Resnick, VP of Research at Gartner. “By 2026, 30 percent of the organizations in the world will have products and services ready for metaverse.”
“Our north star is can we get a billion people into the metaverse doing hundreds of dollars a piece in digital commerce by the end of the decade?” Meta CEO Mark Zuckerberg said in a recent company meeting, as reported by The Verge. “If we do that, we’ll build a business that is as big as our current ad business within this decade.”
According to the 2021 edition of the Digital Banking Report, 34 percent of the surveyed bankers believed that about a fifth of their customers will use VR/AR as an alternative channel for daily transactions by 2030.
The answer to what is driving metaverse obsession? Growth and revenue. Is the current obsession driven by a land grab? Is the metaverse another marketing and sales channel? No different from an app on the app store or website commerce in the early days. More advertising. More commerce. More sales. More profit. More growth. Oh, the banality of it! Especially in this 2022 climate.
In my January article on the metaverse I questioned whether the metaverse will have the same problems we’ve had here on the web. Problems with digital identity, trust, and verification – all things that have led to an explosive growth in online crime and the cybersecurity market.
There’s been a lot of recent announcements of companies expanding their digital identity and banking products into the metaverse. Ken Moore, Chief Innovation Manager at Mastercard, penned an opinion piece sharing some signals that the metaverse is imminent. But if I’m honest, the use cases have been around for at least a couple decades and while we have newer tech, there hasn’t been a breakthrough innovation. Is Mastercard going to recalibrate their network to transact NFTs?
Onfido talks about the need for digital identity fundamentals to make the metaverse safe from nefarious digital twins. The use cases are similar to the ones we’re dealing with today. And Matt Peake, Global Director of Public Policy at Onfido acknowledges this. This is good news for the companies solving today’s problems of verified digital identity outside the metaverse. Which is why we’re starting to see digital identity companies apply their solutions for a metaverse market. It makes good sense to solve for today’s use cases and plan for a future market, as Yoti’s John Abbot argues in an editorial for Business Leader.
But seeing the metaverse as an extension of existing markets misses something. Something that Zuckerberg fears.
“This is a competition of philosophies and ideas, where they [Apple] believe that by doing everything themselves and tightly integrating that they build a better consumer experience,” Zuckerberg said of the brooding rivalry. “And we believe that there is a lot to be done in specialization across different companies, and [that] will allow a much larger ecosystem to exist.”
Apple is known to watch a market, enter it when it suits them and revolutionize the experience. Apple’s financial motivation is about selling hardware with excellent user experiences. Apple’s customers are customers, not the product. You can complain about Apple’s walled tech stack, but it’s one of the most secure hardware platforms available for exactly that reason.
And then there is the youth culture of today. Web3 has a lot of energy and excitement around NFTs, especially as a way to reinvent the creator economy. They’re the wildcard. You’d better believe that something no company could conceive of will come of their products. I look to the emergence of MPESA in the mobile phone market as an example of wildcard.
So, what is driving Metaverse 2022? Growth. Money. Capitalism. Right now, it looks a lot like a dream of a fresh new market in which to sell digital items. But it could be something more.
About the author
Heather Vescent is a digital identity industry thought leader and futurist with more than a decade of experience delivering strategic intelligence consulting to governments, corporations and entrepreneurs. Vescent’s research has been covered in the New York Times, CNN, American Banker, CNBC, Fox and the Atlantic. She is co-author of the The Secrets of Spies, The Cyber Attack Survival Manual and The Comprehensive Guide to Self Sovereign Identity.