Metaverse: The Future Of The Internet And E-Commerce?

By James Robert- Jan 19, 2023 34

From a word confined to the vocabulary of sports fans and cryptocurrency investors to a sticker stamped on the NRF, the media, and even bar table conversation. Since Mark Zuckerberg announced that his company's name would change from Facebook to Meta, there has been a real global uproar over the term Metaverse.

 

The definition, which still seems abstract to many, refers to a virtual world that replicates reality through technology. Immersive, surrealistic, decentralized, collective, and open. It will be the evolution of the Internet as we access it today. Kickoff for Web 3.0. The metaverse is the future. But will it?

 

Metaverse is a continuation of this half-baked experience of video calling that we are used to today, for example. Five years from now, we'll be projecting our faces into the metaverse. The experience will be fully immersive, blending real and digital. It sounds crazy, but this will be the interface of our digital world, which will stop being 2D and become 3D.

 

This process is more advanced, especially in the world of games. Also, several virtual universes are already being created. And even in some successes, such as Decentreland (MANA) and Sandbox (SAND), companies began investing in technology as a branding strategy.

 

Also, Facebook, Epic Games, Roblox, Nvidia, Microsoft, and Snap are some of the companies that are already betting on the concept.

 

But, it would be naive to think that the news coming out of these new virtual platforms will be limited to entertainment. Experts believe that an entire economy needs to be created, where transactions can be made - be it land, real estate, services, artwork or any other object - and that's where retail comes in.

 

To carry out these transactions, a means of payment is required. Here NFTs (a type of blockchain-based token used to prove ownership of digital items) are the most suitable option.

 

Retail in the Race to the Metaverse

Taking advantage of the publicity, the global giants announced their investment in the new platform. Join forces in the fashion sector. Gucci already caused a stir in the middle of last year when it sold a bag on Roblox for around $20,000. The piece was virtual and could only be used within the platform - it wasn't an NFT, for example. What's more, the price was even bigger than the original piece.

 

In late 2021, Nike announced the purchase of RTFKT, a company that calls itself "Born in the Metaverse". It was created at the start of the Covid-19 pandemic to create sneakers and unique digital artifacts. RTFKT says it works with game engines, NFTs, Blockchain, and Augmented Reality and the products are sold in Ethereum.

 

Adidas was another that, at the same time, released a video pointing to a partnership with Yuga Labs. The company responsible for collecting NFTs is Bored Ape Yacht Club, with money from crypto asset investors. At the time, the company commented that "Metaverse is one of the most exciting developments in digital right now, making it an attractive platform for Adidas", and said that more news would be announced, "in due course".

 

In addition, Zara, Ralph Lauren, Vans, and Balenciaga have expressed interest and left their names in the existing virtual world. In this case, regardless of the company's performance in terms of public engagement, only the brand associated with the theme becomes an opportunity to reach the target audience, position itself as an innovator, and, of course, increase revenue.

 

Trillion revenue

Last November, a study noted that the metaverse could represent an annual revenue opportunity of US$1 trillion.

 

The study also showed that the amount generated from games in the virtual world could reach US$ 400 billion in 2025 - and this value was US$ 180 billion in 2020. Most revenue should come from public spending within the game

 

The numbers caught the attention of financial markets and some skeptics went so far as to suggest that the forecast could be used to their own advantage, as it was an investor.

But in the last week of January 2022, just before this edition ended, investment bank Goldman Sachs not only defended Metaverse but picked up the ball and put the new technology on hold. According to analyst Eric Sheridan, the metaverse is an $8 trillion opportunity.

 

The opportunity seems tempting and the potential for endless profit. "We are starting a path that we don't know yet that has a learning curve, not only for us as technology developers, to have an imaginative way of thinking about how the metaverse can be used, but other uses for the user himself", Binho prophesied Dias, product director at Blitzer, a platform for interactive digital events.

 

Metaverse is the new retail channel and could be an important arm of e-commerce. Across the counter, consumers will be able to purchase products from their favorite brands in the real world and receive NFTs to use on products purchased in the Metaverse. It is this functionality that will drive sales and encourage a focus on feature building in Metaverse.

 

How long until the idea becomes reality (digital)

Despite encouraging expectations, predictions about the metaverse are still in the dark. The way Zuckerberg described the news when he announced the company's name change doesn't exist for now. What is known is still based on experiments and isolated actions.

 

Experts say this universe is at least five years away from becoming popular. Mainly because, today, the idealization of the Metaverse is conditional on having access to certain tools or technologies, such as Virtual Reality (VR), Augmented Reality (AR), NFT, Blockchain and Cryptocurrency.

 

“Currently, access is limited to a limited universe of games and tools that allow access to VR and AR and require some type of device. It's not popular, and we don't know how many people will follow it massively. That's why it's still a nebulous scenario”, assessed researcher and faculty Professor Tera of Com+ USP.

 

Cautious, he still sees the metaverse as too much buzz and thinks there is more pressure for companies to conform to this universe in some parts of Silicon Valley than in society. Mainly, taking into account the UK, a country with many problems of access to technology and social inequality.

 

"The digital universe allows for countless possibilities of transactions through NFTs or cryptocurrencies. But our entire financial strategy is closely related to credit cards, images, which are the means of payment we usually use", Terra mentioned as an argument that it is still a high social class. A limited concept.

 

Another thing to consider is related to the law, which is not yet precisely defined in any part of the world, which will create thousands of legal and ethical dilemmas regarding platform limits. Tax, copyright, and cybercrime issues are some of the potential problems along the way.

 

So, it's still risky that the Metaverse is the future. The more thoughtful reader will exercise caution before venturing into the world of 3D. It promises so much but has so far delivered so little. On the other hand, following a bold approach, it could be the new and biggest source of retail revenue in a few years. And it would be a mistake to ignore the opportunity to invest in eye candy at the start-up stage. Whoever is right, one thing is certain: even if it seems far from our (and any other) reality, the metaverse already exists - at least for those who can pay for it.