The metaverse has turned from sci-fi concept into reality with consumer awareness soaring, and, even though few people can explain what it is, major brands including HSBC, Amex, Nike, Coke, and McDonald’s are already grabbing a slice of what Goldman Sachs predicts will be an $8 trillion (£6.5tn) market.
So says a new Wunderman Thompson Intelligence report, “New Realities: Into the Metaverse and Beyond”, which expands upon its previous “Into the Metaverse” study and quizzed over 3,000 people aged 16 to 65 in the UK, US and China.
The new research reveals that awareness of the metaverse has more than doubled in just eight months. While less than a third (32%) had heard of the term in July 2021, by March 2022 this had risen to almost three quarters (74%).
Although awareness has increased, understanding remains low. The research finds that there is a lack of clarity around what the term means, with only 15% stating that they know what it is and can explain it to someone else.
However, those consumers in the know believe it promises to impact our lives across the board, from entertainment (90%), advertising (89%) and retail (86%) to work (85%), fashion (85%) and finance (82%).
Even so, consumers express major concerns around children’s privacy (72%), their own privacy (69%), data protection (69%), children’s safety (66%) and bullying (57%).
But the report insists the metaverse is shaping up as a powerful financial force, drawing funding, brand investment and shoppers’ spending. For instance, Epic Games secured an additional $2bn in funding from Sony and Lego parent company Kirkbi in April 2022 to advance its metaverse vision.
Meanwhile Facebook parent Meta invested $10bn in 2021, and the company says it plans to increase its investments “for the next several years.” Roblox reported $1.9 billion in revenue in 2021,representing 108% year on year growth.
Leading financial institutions also predict that this economic power is only going to grow. JPMorgan refers to the metaverse as a $1 trillion yearly market opportunity and forecasts that in-game ad spending will reach over $18bn by 2027.
Goldman Sachs sees the metaverse as an $8tn opportunity, and Morgan Stanley says the metaverse has the potential to generate $8.3tn total consumer expenditure in the US alone, identifying it as a $50bn revenue opportunity for luxury brands.
Wunderman Thompson Intelligence global director Emma Chiu, who is author of the report, commented: “As ever-greater portions of our lives move into the virtual realm, it’s becoming increasingly clear that the metaverse will be instrumental in our collective future, with our follow-up survey uncovering widespread expectation that the metaverse heralds enormous changes to almost all industries.”
Among the brands cited in the report are Nike, whose launch of Nikeland in online game platform Roblox and its Roblox in-store experience blend virtual and physical consumer engagement strategies for an immersive Nike experience on all fronts.
Consumers can shop and interact with Nike-branded augmented reality (AR) games and features in Nike’s NYC flagship store for a liminal shopping experience. Virtually, customers can connect, create and compete in Nikeland, a bespoke world housed in Roblox.
Using a Nikeland toolkit, players can create and design their own mini games in the digital realm using interactive sports materials.
The report states: “By overlapping the virtual and physical worlds, Nike is engaging consumers from multiple points of contact, encouraging play, competition and creativity while also selling and promoting physical and virtual gear from branded platforms.
“By eliminating access as a barrier to playing and connecting, Nike is meeting customers wherever they are, innovating both the physical and virtual worlds for future sports experiences.”
Meanwhile, in March, HSBC announced that it will enter the metaverse in partnership with mobile gaming platform The Sandbox. The bank plans to buy a piece of land in The Sandbox, which will be developed to engage and connect with sports, esports and gaming enthusiasts.
HSBC’s chief marketing officer for Asia-Pacific Suresh Balaji said: “The metaverse is how people will experience Web3, the next generation of the Internet—using immersive technologies like augmented reality, virtual reality and extended reality. We see great potential to create new experiences through emerging platforms.”
American Express is also exploring the metaverse by bringing its payments and financial services into the virtual world. The company is considering providing card payments, ATM services, banking services and fraud detection to customers in the metaverse, a March 2022 trademark filing suggests. Matt Sueoka, the new global head of Amex ventures, told Fortune that he sees Web3 as a “once-in-a-generation opportunity for a potential resetting of infrastructure.”
Wunderman Thompson global chief marketing and growth officer Naomi Troni concluded: “It’s critical that brands establish a roadmap for entry into the metaverse. However, there are concerns too around privacy, security, and safety. So while our latest findings indicate almost limitless opportunities for brands – enabling them to reimagine what their products, services and consumer engagement could and should look like – we must also enter this new world with care.”
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