Demystifying the metaverse
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Letter from the editor
The potential for the metaverse is immense. Think of it: billions of people visiting millions of always – on virtual environments to play, socialize, shop, work, learn.
The business opportunities are still coming into focus – but the scope is undeniable. More than 90% of business leaders expect the metaverse to significantly impact their industry by 2030. The economic activity has been projected to be in the trillions of dollars.
There remain many questions and challenges about the metaverse. Are the right data and privacy guardrails in place? Can existing telecommunications infrastructure manage the throughput? Will all people – not just the few – benefit from this new platform?
For any company to be successful, we need to deliver on our customers’ needs today, while also developing services for where they will be tomorrow. And we need to make sure new technologies are being driven in the right direction. That’s why so many of us are experimenting and innovating in the metaverse today – creating immersive experiences, sponsoring events, engaging communities and more. This work will inform customer-centric strategies and deepen our partnerships.
This new era of experience and engagement is more than just games. It’s a new frontier for so many. It’s an opportunity to shrink the digital divide. Small businesses and underserved communities can and must benefit equitably from this exciting shift. And all must have the confidence that their interests are at the core.
This transition won’t happen overnight, of course. As it unfolds in the coming years, we’re committed to make this future one that benefits people when they make the leap.
chief executive officer,
For any company to be successful, we need to deliver on our customers’ needs today, while also developing services for where they will be tomorrow
Plausible use cases
Signals to watch
Brands in the metaverse
Building the metaverse
Emerging technologies and consumer behaviors are converging to bring immersive experiences to life
From work to play to commerce to travel and beyond, the metaverse could recalibrate the limits of what's possible
Virtual environments could deliver new ways for brands to connect with consumers
The factors that will make the metaverse viable for value exchange — and the new business models that could emerge
What to look for as the metaverse develops and how we'll know when it's here to stay
Technological revolutions bring
wholesale changes. What can we
expect from the metaverse — and when?
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The metaverse, despite its singular name, will encompass millions of metaverses by 2030. Some will be stand-alone virtual destinations. Others will be open so visitors can move easily among them — leveraging their digital identities, assets and payment options across environments.
Even in its current fledgling form, the metaverse has the potential to significantly impact the ways in which we work, learn, shop, socialize and do business.
What is it?
Thirty years after the term “metaverse” was introduced in Neal Stephenson’s sci-fi novel "Snow Crash," a clear definition remains elusive. Here are a few of the ways it has
Mastercard looks to bring some of these solutions closer to Financial institutions. For instance, our recently announced partnership with Zeta, a banking tech unicorn and a Mastercard Startpath graduate. Zeta's cloud-native, fully API-enabled, pre-integrated Omni stack is designed to help players significantly reduce their time-to-market and build exceptional customer experiences.
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What’s driving the growth?
Yesterday the metaverse was science fiction, and today it’s the next big thing. What’s causing this transformation?
Technological advances are converging to make metaverses possible (although tech limitations still prevent a fully realized version). Meanwhile, millions of consumers are entering early-stage metaverses every day for gaming and entertainment, and brands are launching virtual reality experiences for their customers. Lastly, people are ready. Three in five are excited about transitioning everyday activities to the metaverse. And four out of five consumers active in the metaverse have made a purchase there.
In a centralized metaverse, such as the Fortnite or Roblox gaming platforms, a central authority controls the digital environment — including policies concerning data consent and how user data will be used, stored and managed.
Preconditions for a full-fledged metaverse
• The ability to verify digital identity and ownership of digital assets across platforms.
• The availability, stability and acceptance of a widening selection of payment choices — including cryptocurrencies, stablecoins, tokens and fiat money.
• Reliable cybersecurity and consumer trust in it.
• Coordination is needed across industries and technologies to address data ownership, cybersecurity, sustainability and inclusion.
A “cyber Big Bang” that’s producing a sprawling network of sites and digital spaces
A place to create, buy and sell digital assets
A launch pad for new ownership opportunities in the form of non-fungible tokens (NFTs), cryptocurrencies and other exchangeable digital assets
The source of countless transformative business models and economies
A potential multitrillion-dollar contributor to the global economy
A new way to experience the internet through immersive 3D experiences
Fully developed metaverse
At its most basic, the metaverse will have these features:
A fully developed metaverse, meanwhile, will also include:
A primer on virtual worlds
Specific digital destinations that use emerging technologies to create immersive, sensory experiences
consumers active in the metaverse have made a purchase there
McKinsey estimates the metaverse economy will grow to $5 trillion by 2030, with e-commerce representing about half that total. Citi pegs it at $8 trillion to $13 trillion. The potential is massive because the metaverse is global and likely to impact myriad business sectors.
The remainder of this issue explores the metaverse’s viability, enabling technologies, financial infrastructure and key considerations, including security, sustainability, inclusion and regulatory oversight. We hope you find it insightful.
On the other hand, a decentralized metaverse platform, such as Decentraland, is run by users. Such a platform often deploys blockchain technology to facilitate voting on operational questions and smart contracts to store and share rules.
• Interoperability across platforms and devices
• Concurrency as thousands of people interact simultaneously
• Use cases spanning human activity and industry segments
• A sense of immersion
• Real-time interactivity
• User agency
• Persistence. It’s always on
• More regulatory oversight will be needed to protect user privacy and govern the use of digital assets commonly exchanged in the metaverse.
• The metaverse may exacerbate mental, social and physical health conditions associated with spending significant time online.
An environment for new types of human interaction
in this section
6 ways of
looking at data
avatars today and tomorrow
was spent on metaverse tech and infrastructure
in the first five months of 2022
Tim Cook is a metaverse skeptic
Apple CEO Tim Cook questions whether people will want to — or should — spend extended time in virtual reality. On the other hand, he says augmented reality — which superimposes computer-generated images onto a person’s view of the real world — will have a profound impact.
He says the concept of the metaverse as a place where people spend extended periods of time in immersive, 3D virtual reality (VR) environments is problematic.“ VR is something you can really immerse yourself in,” Cook noted. “And that can be used in a good way. But I don’t think you want to live your whole life that way. VR is for set periods, but not a way to communicate well.”
NETWORK and COMPUTING INFRASTRUCTURE
A new tech stack
Click on each for more detail
(click for more)
AR refers to the use of information in the form of text, visuals, audio and other virtual upgrades that are combined with real-world items in real time. This "real world" component is what sets augmented reality apart from virtual reality. As opposed to a simulation, augmented reality (AR) integrates and enhances the user's engagement with the real environment.
Using AR and Internet of Things technology, we will be able to create a digital overlay on top of the physical world to provide rich and contextual digital experiences anchored to real physical spaces — such as walking to the subway and seeing the departure time for only your train.
VR/AR/MR headsets continue to evolve thanks to innovations in chip manufacturing that deliver more processing power more efficiently. VR headsets are already widely accessible, and their adoption has increased in recent years. For AR headsets, many engineering challenges must be overcome to achieve a truly portable device that can perform the spatial computing tasks needed to power an immersive, high-definition experience.
Extended reality (XR) is a newly coined umbrella term for all immersive technologies. Those available today include virtual reality (VR), augmented reality (AR) and mixed reality (MR). Immersive technologies either blend the virtual and real worlds or create a fully immersive simulation. XR is expected to become mainstream within the next five years.
Online accounts, downloaded games and cryptocurrencies that can be used for transactions online and in gaming platforms are all examples of digital assets. Non-fungible tokens (NFTs) are another. They are a blockchain record of ownership of a specific digital or physical asset.
Computer vision technology has come a long way thanks to sensors and AI-powered algorithms that today enable our devices to map and navigate our world. This technology will help us create immersive 3D applications capable of accurately projecting holograms that react to our environment in a natural way, tricking our senses to blend the digital with the physical.
The metaverse provides a wide range of possibilities, such as XR headsets, mounted displays and smart glasses will require new authentication technologies. For these devices, traditional passwords are troublesome, because typing in midair adds friction. On the other hand, iris-scanning technologies will enable seamless authentication when wearing a headset. Voice authentication is another option. And some companies are experimenting with EEG scanners to create a signature based on brain waves.
There is a wide range of possibilities provided by the metaverse, such as going to virtual concerts, taking virtual vacations, shopping, transacting, watching movies, trying on clothes and altering the way we work. This is where the primary link between the metaverse, blockchain and non-fungible tokens emerge, because they help us manage, secure and exchange digital assets in a decentralized way.
One of the main obstacles impeding the mass adoption of XR devices is the processing power and energy consumption required to render high-definition graphics and run spatial computing applications. It’s a challenge we will surely overcome as CPU and GPU chipsets continue to achieve higher performance and greater efficiency. Miniaturizing this technology will be needed to reach the full potential of the metaverse.
The metaverse will depend heavily on artificial intelligence (AI) to build impactful user experiences and, hence, significantly expand the market. As a fundamental building block of the metaverse, AI will help us navigate voice recognition and natural language processing, understand our surroundings using advanced computer vision, and more.
By leveraging the Internet of Things (IoT), we will be able to sync physical world events to the virtual metaverse overlay. Sensors and AR technology could help us accurately navigate cities and reach our destinations. At home, we could turn up a light fixture by pointing at it, with the gesture captured by our headset and translated for the device.
Fast-streaming technology and minimal latency will be required to create more complex, fully immersive metaverse experiences than exist today. 5G next-generation wireless networks will play a big role in allowing VR/AR wearables to stream high-quality 3D content on the fly, minimizing the need for strong processing in small wearable devices.
Holographic screens will manifest in many ways to bridge the physical and digital worlds. Headsets will allow us to superimpose digital content that we can see within any physical space. Holographic screens for multiple users are also being developed, which will allow anyone to see projected holograms in real space without the need for a specialized wearable device.
Haptic technology simulates the sense of touch. It will soon be included into hand controllers, headsets, wrist bands, bodysuits, omnidirectional treadmills and other accessories to improve metaverse navigation.
A broad spectrum of technologies — from haptics equipment to 3D mapping tools to payment systems and beyond — will come together to create the future.
VR offers a computer-generated 3D world (containing both computer graphics and 360-degree video) that surrounds a user and reacts to their actions naturally, typically through immersive head-mounted displays. Hand and body tracking are provided by gesture recognition technology and haptic (or touch-sensitive) feedback.
Internet of Things (IoT)
Internet of Things /
Spatial audio makes immersive experiences more natural by replicating the way sounds behave in real life — where they originate from specific locations in a 360-degree sphere. With spatial audio, users can differentiate each sound based on its distance, volume and direction. Turn your head and sounds shift just as they do in a real three-dimensional space.
What is the current state of technologies needed to build the metaverse? How do you see it evolving over the next few years?
What’s required to achieve rich, immersive and intelligent experiences? What are the biggest hurdles to overcome?
One of the main obstacles impeding the mass adoption of metaverse devices is the processing power and energy consumption required to render high-definition graphics and run spatial computing applications. It’s a challenge we will overcome as CPU and GPU chipsets continue to achieve higher performance and greater efficiency. Miniaturizing this technology will be needed to reach the full potential of the metaverse.
In addition, network and low-latency communication to the cloud and on the edge will also be vital to ensure a flawless and lossless experience. Next-generation wireless networks will play a big role in allowing VR/AR wearables to stream high- quality 3D content on the fly and for AI-driven experiences.
The metaverse also will depend heavily on AI to build impactful user experiences. As a fundamental building block of the metaverse, AI will help us navigate voice recognition and natural language processing, understand our surroundings using advanced computer vision models, and more.
What challenges do developers face as they enter this domain and begin building new iterations of the metaverse?
A significant amount of an engineer’s existing skillset will be transferrable when building for the metaverse, but they will need to learn some new technologies — which engineers love — and some architectural differences and work with additional partners.
From an architectural point of view, engineers will need to become familiar with new building blocks including the devices themselves, world-generating engines, customization engines that allow application developers to create new experiences, and asset creation tools to create virtual land, buildings, vehicles, apparel and avatars, among other things. There is also a need to become comfortable with cloud-oriented storage and blockchains, which will be used in many metaverse environments to support payments and decentralized finance capabilities and to enable NFTs to make virtual assets and objects transferable and tradable.
Also, we’ll need to engage partners to design compelling 3D objects to bring these worlds alive. This is an exciting journey for engineers and their product partners.
The tech stacks will vary, as will the architectural choices. Centralized metaverse platforms will use some open choices like Unreal Engine, as Fortnite does, while Oculus is supported by both Unreal and Unity, but others will make less transferable choices
Decentralized metaverses utilize blockchain and decentralized storage such as IPFS to decentralize as much of the environment as possible over many servers — this is the point when the metaverse movement intersects with the Web3 movement.
The terms metaverse and Web3 are often used interchangeably, but although they are related, they are different concepts. Metaverse can be thought of as the new experience layer of the internet while Web3 provides decentralized technology and protocols used to build the backend of the metaverse and enable new ecosystems, communities and economies to develop.
What’s the difference between a centralized and decentralized metaverse, from an engineering perspective?
executive vice president for Research and Development,
in conversation with
Is it plausible for remote engineering teams to one day collaborate successfully in the metaverse, using VR and other technologies?
Engineers collaborate successfully today fully through digital tools. As the original digital natives who built the digital world, they are already plugged in for hours on end while working with colleagues in a 100% digital environment. Despite the graphical UI revolution over the past few decades, engineers still primarily work with keyboard and text to create code and collaborate with each other through code, so it's likely they will continue creating virtual code for the foreseeable future. That holds true with metaverse development, with a few additions — such as 3D object design and some of the low-code application design engines.
But introducing an "active" way of developing could be a net positive by getting a lot of engineers out of our seats.
Today’s metaverse offerings, such as Sandbox, Horizon Worlds and Fortnite, primarily use a combination of existing technologies with some additions and variations. They are created with a combination of 3D environments — in some cases AR or VR technology, low-cost VR headsets, blockchain, NFTs and AI — using cloud computing and today’s always-on networks.
In the end-state vision of a metaverse, however, a lot more is envisaged that will require significant development to become mainstream. This will include desirable, cost-effective AR glasses — these will be a tipping point for adoption, in my opinion — as well as body suits, holo-screens, omnidirectional treadmills and other accessories to improve metaverse navigation. But now we’re starting to stray into a certain movie that paints a compelling picture of the metaverse future!
The varied functions of information in the metaverse
6 ways of looking at data
vice president for Digital Labs,
Data is the utility of our age, powering the digital ecosystem.
As we participate in that ecosystem, we generate a data item every 18 seconds — information reflecting what we tend to buy, what issues we care about, where we like to linger online and more. We’ll create magnitudes more data when the metaverse fully emerges and we inhabit it daily. Even when we’re not active, our avatars will engage in the metaverse’s persistent environments, spinning off data as they do.
As data proliferates in the metaverse, it will play vital roles. Here are six of them.
The emergent data ecosystem will require new expertise and capabilities everywhere.
There will be a need for lawyers who understand metaverse technology, privacy advocates who understand data interoperability, and ethics advisers who understand cultural differences. Metaverse world builders will need to manage relationships across ecosystems, and strategists will need to communicate opportunities in ways that persuade organizations to invest.
Businesses and consumers will use real-time data to create virtual representations of physical objects, devices and structures. Also known as virtual twins, these replicas will offer immersive ways of running scenarios, training workers and understanding complex systems.
In this way, data and the visualization tools it enables will change how we interact with real-world objects and phenomena, from urban grids to industrial facilities to climate systems — and how we solve problems.
At the same time, the data-driven generation of artificial images will be critical for training and strengthening AI and computer vision.
Data has been the prime monetizable asset of the internet — with tech companies, and not the people who produce the data, profiting the most in the exchange.
In the metaverse, the situation can be more equitable. In blockchain-based decentralized environments, people will tokenize their data to control how it’s monetized and which entities can access it.
Data exchanges and digital asset managers will help people buy and sell tokenized data and other data-based assets. AI-driven pricing models will offer guidance about what the market will bear in any exchange.
Communities will form in the metaverse just as they have online for decades. But metaverse communities can be more robust than today’s online communities because their members will, thanks to immersive tech, be present and “real” to each other in an unprecedented way.
These communities — potentially global networks of people with shared values and passions — could come to wield significant social, political and economic power. Data-based instruments will help them organize, govern themselves and generally stay cohesive.
There will come a time when everyone has an avatar — or multiple avatars if we want to employ different identities depending on context.
Brands will also deploy multiple avatars for different purposes. Digital shopping mall concierges, bank tellers and financial advisers will proliferate. Such avatars, brought to life by data-crunching AI applications and working alongside human colleagues, can help brands reach the next level in customer service.
As companies experiment and learn, new service models, from finance to e-commerce, will change how consumers interact with companies.
Effective identity verification will be necessary in a world of avatars. We’ll need to ensure that every interaction we undertake is with a validated party. Multiple digital versions of an individual must be traceable to a single real person or entity.
Tokenization of personally identifiable information (PII) will serve as the basis for a new form of identity verification and will provide users the confidence to navigate and take full advantage of the metaverse.
For this to work, the metaverse must be interoperable across platforms — with avatars, documentation and unique identifiers crossing digital borders without friction. As of now, there is no single data model for the metaverse — but one will be vital to enabling identity verification and value exchange regardless of device or point of interaction.
Humans in these critical roles and others will, in partnership with machines, design and grow a sustainable data-powered metaverse.
Data is the essential material of the metaverse — constituting it, facilitating how it works and generating value within it. As the metaverse deepens and expands, data will play many more roles than these six.
Data as a verification mechanism
Data as a liquid personal asset
Data as a tool for representation
Data as a community builder
Data as a problem solver
Data as a change agent in the world of work
manager for Experience Research, Mastercard Foundry
Building the Metaverse
Identity and Ownership
Financial infrastructure and economics
Considerations and implications
Forecasts that predict the metaverse will become a massive economic engine are based on an assumption: Within a few years, millions or even billions of people worldwide will visit the metaverse regularly for work, play, socializing, entertainment, commerce and more.
To create and capture this market, the first wave of companies operating in the metaverse today is testing ways to get people through their virtual doors and keep them coming back. They’ve built immersive environments to welcome the metaverse-curious, learn what works and improve the user experience as they go.
So how is it going? What do people think of the metaverse in its nascent stage?
To explore these questions, in September 2022 we asked 725 U.S.-based consumers who spent time in the metaverse in the past year about their experiences. Here’s what we found.
What did you most enjoy about the metaverse?
Was there anything you did not enjoy?
31% Technical issues (e.g., computer lagging.)
25% Unsure what to do.
19% Disorientated or couldn’t find what I was looking for.
19% Felt bored or aimless.
Takeaways: Companies should create spaces with exciting and novel elements, including music and other sensory experiences. They should engage users with games that give them a chance to acquire desirable digital collectibles and give them opportunities to connect and interact with each other. Testing the user journey to a company site is also a good idea. How hard is it to find the site? And what about the on-site experience? Are visitors engaged or wandering aimlessly?
Overall, people who have explored the nascent metaverse are upbeat about its potential, anxious for tech advances to improve the experience and expand choices, and open to involvement from traditional financial institutions and centralized authorities. There are many opportunities for businesses to create value by tapping the metaverse as a commercial channel, creating the enabling technologies and protecting the dignity of the digital customer.
Apple tends its premium garden
Apple is quietly building metaverse applications within its own iOS ecosystem and has stayed out of the Metaverse Open Standards Forum. Whether an approach that’s worked for hardware will be as effective in a metaverse environment in which interoperability is a key value remains to be seen. Apple is expected to release a premium mixed-reality headset early in 2023.
Playing games with other users
Meeting other people virtually
Shopping for my avatar
Technical issues (e.g., computer lagging)
Unsure what to do
Disorientated or couldn’t find what I was looking for
Felt bored or aimless
What did you most enjoy about the metaverse?
Technological limitations, security gaps and poor user interfaces hamper many immersive experiences.
Games and social interaction engage many metaverse visitors — but more than two-thirds complained about the virtual experience.
Companies should create spaces with exciting and novel elements, including music and other sensory experiences. They should engage users with games
It's often reported that virtual reality (VR) headsets are heavy, uncomfortable and cause headaches, eye strain, dizziness and nausea. However, more than 80% of survey respondents enjoy using them.
Respondents most often used a standard computer screen to access the metaverse, but half used a VR headset at least once. And they liked it.
Not very enjoyable or not at all enjoyable
How would you rate your experience using a VR headset?
Use of VR devices will increase in the metaverse over the next few years, and users will expect more immersive 3D experiences. Companies will need to attract and retain talent with the necessary technical skills. This talent drive will include 3D developers, artists, game designers and people with specific platform expertise.
Given the wild price swings in the NFT market, there is natural skepticism regarding the value of these assets. However, 57% of the metaverse users surveyed said they were confident or highly confident that items available in the metaverse are worth the cost.
Even though the market for digital assets has been speculative and volatile, survey respondents are confident the collectibles for sale in the metaverse today are worth at least their sales prices.
Visual appearance of the digital asset
Access to exclusive events/clubs
Linked to a physical item
Rarity of the digital asset
I don’t see metaverse items as valuable
Here are the factors that led users to attribute value to an item for sale in the metaverse:
Companies striving to grow their brands in the virtual world can create attractive avatar wearables and games where users can win those wearables and put them to use. Partnering with a game company to determine how these items work within a specific game environment can be effective.
There are two methods of storing digital assets — either in a Web3 wallet accessible across decentralized metaverses or within a centralized, self-contained platform such as Roblox or Fortnite.
Metaverse users who store their digital items in a Web3 wallet prefer a wallet that is available as a browser extension and a mobile app and integrates with traditional payment mechanisms such as credit cards.
What features do you value most in a wallet that you use to interact with the metaverse? (Ranked in order of importance)
Available as a browser extension
Available as a mobile app
Quick access to fiat currency
Ability to view NFT collection
Compatible with multiple blockchains
Ability to buy NFTs through the wallet
Accepted by a wide variety of digital asset marketplaces
(e.g., the ability to pay directly with a credit card through the wallet)
The need for a wallet that can store metaverse items is likely to grow, and many users are trying out multiple options. At least 15% of survey respondents used 10 different wallets, and the top three wallet choices had a significant market share — MetaMask (66%), Coinbase (43%) and Trust (37%).
What features do consumers want in their web wallets? Trust, security and the ability to actively manage assets.
Despite believing their digital assets are safe in a Web3 wallet, more than half of metaverse users would value the protection of a trusted entity such as a bank.
Protection of my assets/NFTs by a trusted entity such as a bank
Access to the wallet with biometrics (fingerprints, etc.)
The ability to see what an NFT/asset will look like in different environments
Fraud/scam detection when interacting with a metaverse space
The ability to recover a wallet without a seed phrase
The ability to organize my NFTs and avatar asset collections
In the future, which features would you most like to see in your web wallet?
There is an opportunity for banks and other trusted entities to act as custodians for digital assets.
We asked people who entered the metaverse about negative experiences they encountered during their time there.
One in four respondents said they experienced trolling and harassment in the metaverse.
The experience layer
Early metaverse users are positive, but see room for improvement
Was there anything you did not enjoy?
I haven’t experienced any of the issues listed
Disconnection from real life
Trolling/ harassment potential
Environmental/energy consumption issues
Theft (e.g., someone stealing one of my NFTs)
Here’s how they responded:
Companies operating in the metaverse need to consider security beyond the financial transaction and ensure they are protecting users’ dignity.
that give them a chance to acquire desirable digital collectibles and give them opportunities to connect and interact with one another. Testing the user journey to a company site is also a good idea. How hard is it to find the site? And what about the on-site experience? Are visitors engaged or wandering aimlessly?
VR worlds offer a number of tools to combat this, such as personal spaces and the ability to mute, block and report bad behavior. Educating new users and vulnerable groups, like children, on how to use these tools is essential.
Avatars today and tomorrow
Metaverse graphics are disappointing because computational power and connectivity remain insufficient
Why doesn’t your avatar look like you? And more generally, why do current metaverses feature primitive block-like graphics? Because that’s all today’s computers and connectivity technology can do.
Making the vision of the metaverse a reality will require 1,000 times more computing power and at least 10 times less latency. Until then, avatars will be ungainly and the metaverse will function at less than its full potential.
round-trip time latency for video calling/cloud gaming
latency for multi-player, complex games
latency required for truly immersive metaverse
Microsoft and Nvidia
An immersive future
media and entertainment
work and collaboration
Numerous use cases are being explored — here are 7 areas that could see traction
The metaverse, in its ultimate state, doesn’t exist yet. But proto-metaverses do: That’s what eGaming platforms essentially are. What can we learn from eGaming about how the metaverse will develop?
Here are four observations, each with a takeaway we can apply to the emergent metaverse.
eGaming is hugely popular: Perhaps to the surprise of people who don’t pay much attention to online culture, eGaming is the fastest-growing form of entertainment. The industry grew more in the last decade than it did in its first 40 years — it's valued at over $200B (as of Q1 22). eGaming is more popular than sports and movies.
The big corporate players are involved: Though the deal has run into regulatory roadblocks, Microsoft still plans to acquire video game company Activision Blizzard for $68.7 billion, the largest acquisition eGaming has ever seen. Nike, Adidas, JPMorgan and HSBC have shown interest in Decentraland and The Sandbox, platforms leading the way in what’s alternately called Web3 and NFT gaming — blockchain-powered gaming that lets users transfer and exchange digital assets across metaverse borders.
It’s everywhere, and it’s diverse: The three billion gamers around the globe are evenly distributed across age groups, genders and income levels. eGaming is increasing its presence on social media, especially Discord; live gameplay streaming on Twitch, YouTube and TikTok draws millions of unique monthly viewers. And more than 200 million monthly active users are building and living within their own virtual worlds on the Roblox and Minecraft platforms.
User preferences drive change: The gaming industry has always been responsive to what gamers want. Video game developers regularly modify games in response to player suggestions and criticism.
The metaverse will bring its share of surprises. As we try to discern how it will take shape, we should keep in mind the lessons that eGaming offers.
BACK TO ALL USE CASES
director of product management for
Product & Engineering, Mastercard
Lessons learned from a metaverse precursor
The metaverse is unlikely to fizzle out as another overhyped tech trend. More likely, eGaming proto-metaverses will continue deepening and expanding, adding features and use cases and assimilating new communities of users.
Powerful companies are betting on the proto-metaverse’s development into the fully fledged thing — and they’re planting their flags early. It's another indication that the metaverse will be a robust engagement channel.
eGaming retains a reputation as a subculture with a narrow demographic profile, but the reality is more complicated than that. This fact ought to change certain preconceptions about the metaverse, such as that it will lack diversity or be less than inclusive. If the metaverse is anything like the proto-metaverse, it could become a humanity-spanning phenomenon that embraces people of all identities.
Big tech companies dominate the metaverse discussion today. Those companies certainly have an important role to play. But if the metaverse turns out to be like eGaming, user preferences and tastes will significantly drive evolution.
of remote work
use case areas
Facing challenges in the physical world, shopping malls might have a brighter future online. Take Metajuku, a mall that Everyrealm, a metaverse investment fund and innovation firm, opened in Decentraland.
Inspired by Tokyo’s fashionable Harajuku district, Metajuku is a 16,000-square-foot property with an atrium lined with virtual storefronts. Austin-based architect Martin Guerra designed the property, working in concert with Everyrealm’s technical team.
The mall's current tenants are JPMorgan, Brazilian investment platform Genial Investimentos, Emirati holding company Majid Al Futtaim and the digital-only fashion brands DRESSX and Tribute Brand.
“Real-world shopping malls are sitting half empty as stores move more business online. Meanwhile, elaborate virtual malls are being built in the metaverse, a nascent industry called 'de-commerce'.”
A shopping district in Decentraland inspired by a hip Tokyo neighborhood suggests malls have a metaverse future
At its limit, the metaverse implies the possibility of fulfilling the human aspiration for effortless and instantaneous travel. In this vision, the VR headset serves as something like the teleportation portal we know from science fiction, beaming us across space and time to somewhere else in defiance of the laws of the physical world.
Fantastical scenarios aside, the travel and hospitality sectors will likely distinguish themselves as arenas for metaverse innovation.
Before their real-life trips, they’ll use the metaverse to “practice” potentially tricky transfers. That way, when they get to the airport in Beijing or the train station in Warsaw, they’ll know exactly where to go and what to do: how to buy tickets, how to store luggage, where to find bathrooms and food and the like.
They may even take vacations in historical or fantasy locations or real-world places inaccessible to most of us.
Travelers are already doing at least some of those things within the boundaries of today’s tech. Airlines, hotels, tour operators and others are offering VR experiences, heavily reliant on 360-degree video, that advertise what they have to offer. Emirates Airlines, in September 2021, launched a VR app that potential clients can use to explore the interiors of its aircraft. Perillo Tours, the American operator specializing in trips to Italy, is now associated with Travel World VR, which creates VR marketing materials for tour providers. And numerous hotels offer VR experiences.
In-flight entertainment is another arena for VR technology, and Lufthansa and Air France are among the carriers offering VR-based options. In addition, VR booking platforms are emerging, and AR solutions that overlay information on real-life locations for tourists’ edification are proliferating. London’s Gatwick Airport has long been a standout in this regard. Since 2017, it has been offering an AR wayfinding app that travelers can deploy through their phones. Google Maps’ Live View AR has been helping people bewildered by transit hubs since 2021.
Travel and hospitality, then, have given themselves a head start when transitioning into the metaverse. It should pay off: One estimate has the travel and tourism industry’s “metaverse market” growing by a 26.01% CAGR between 2022 and 2026.
Hospitality and travel
Arenas for metaverse innovation
A path to 3D search
The “3D internet” will require 3D search capacity, and graphics processing unit giant NVIDIA has taken a lead in providing it. DeepSearch, the company’s AI-powered contextual search engine for 3D data, saw a soft launch in August 2022, when NVIDIA announced that it was making it available to its clients. A public-facing version will come.
Travelers planning trips will “window shop” potential destinations, taking virtual spins through foreign cities and landscapes to determine whether it’s worth physically visiting them. They’ll explore the hotels’ and airlines’ amenities, deploying haptic gear to see if that first-class seat is as comfortable as its price tag suggests. They’ll attend conventions and family reunions in real-world hotels’ virtual analogs.
One estimate has the travel and tourism industry’s “metaverse market” growing by a 26.01% CAGR between 2022 and 2026
Several private companies plan to take tourists to space in the next decade. Virgin Galactic, for example, has more than 600 reservations for future space flights, and a company called Space Perspective says it will send tourists on six-hour journeys into low orbit by 2024.
Consumers may not need to wait for their tickets to space, however. They can taste zero gravity today by way of the metaverse. Technologies including VR and AR make possible a visceral, immersive experience that replicates flying in a space capsule to visit faraway planets.
How will it work? A VR camera attached to an outbound spacecraft or satellite could film the trip to space in 360 degrees, and the footage could be converted into a metaverse experience to be shared and commoditized.
How about a liftoff to the moon? NASA is preparing for the first trip there in 50 years, and a stream of the event called “Artemis Ascending” will be available in VR headsets. This new way of experiencing a rocket launch will undoubtedly spur more innovation in virtual space travel and event viewing in general.
NASA and certain startups are also harnessing the power of the metaverse for astronaut training. A company called Raytracer has created the Titan Lake space simulator. Users wearing VR helmets while immersed in a swimming pool are transported to different outer-space environments, allowing them to float in reduced-gravity settings, replicate a lunar or Martian orbit, or spacewalk at the International Space Station.
Metaverse technologies that span virtual and physical worlds can enhance space exploration and create shared experiences among consumers, space enthusiasts and astronauts. As the metaverse grows and matures, it has the potential to make outer- space adventures accessible and affordable for consumers in the comfort of their homes.
vice president, portfolio lead for Data & Services, Mastercard Foundry
Coming soon to a metaverse near you
Gaming would seem to be Sony’s obvious on-ramp into the metaverse. The company owns the PlayStation gaming platform, which in 2022 started to support video game Fortnite’s cross-platform wallet. But Sony’s ambitions seem bigger: In spring 2022, with investment group Kirkbi, owner of The Lego Group, it purchased a stake in Epic Games, the creator of Fortnite, among other influential games. The intention is to create metaverse content for kids. Sony’s library of film and other entertainment franchises should also prove rich soil for development.
Summer 2022 saw Lionsgate and indie film company Millennium Media team up with decentralized metaverse The Sandbox to create a dedicated “land” called Action City. The partners will use the new space to present content, and particularly horror and action content. The Rambo, Expendables and Hellboy franchises will reportedly be the first to see elaboration. Sandbox users will be encouraged to develop their own content based on Lionsgate/Millennium properties.
Disney appears less concerned with drawing its customer base into purely immersive experiences than with using XR tech to augment guest experiences at the real-world theme parks so important to its brand identity. It’s also reportedly exploring the use of metaverse tech to enrich the customer experience of Disney+, its subscription streaming service. Winter 2022 saw the company appoint an executive to coordinate the company’s metaverse efforts.
Hollywood giants stake a claim in the metaverse
Entertainment’s an obvious application for the metaverse. These big industry players have been taking immersive reality particularly seriously.
Healthcare is another field putting extended reality solutions to work in a way that suggests it will be well-situated to take advantage of the metaverse.
Virtual reality tools are already helping surgeons examine their patients’ physiologies before operations, such as at George Washington University Hospital, where Precision Virtual Reality technology offers 360-degree interior anatomical views. Patients can also use this VR exploration tool on the theory that familiarity with the images it provides is calming in the run-up to surgery.
VR is also finding applications in medical education. At UCLA’s David Geffen School of Medicine, a VR tool helped one cohort of students notch a 230% performance improvement over traditionally trained peers in an orthopedic surgery trial. The group that underwent VR training finished the exercise 20% faster than the control group and correctly performed 38% more of the exercise’s components.
In addition, VR is helping doctors and medical students better understand how patients experience maladies. By using solutions that simulate how it “feels” to suffer from vision loss or Alzheimer’s, current and future healthcare professionals can gain new technical expertise and that intangible quality so valuable in the healing professions: empathy.
Elsewhere in healthcare, VR is taking patients’ minds off pain, enhancing physical therapy (those recovering from injuries can rehearse tasks like tying their shoes), strengthening motor functions, improving cognitive functioning via mind-challenging gamification scenarios and more.
Mental healthcare is another area already befitting from “virtual” technology, whether that means actual VR tech or, more humbly, by-now-familiar solutions like videoconferencing platforms. Mental health professionals use the former to perform exposure therapy on traumatized patients, helping them overcome fears of certain real-life situations via simulation. They’re using the latter to perform talk therapy, and to great effect — in an era characterized by a shortage of psychiatrists, the sort of basic “virtualization” that videoconferencing entails is helping to spread the benefits of mental healthcare.
The point is this: When the metaverse does become a viable reality, a healthcare industry that has long been experimenting with virtualization won’t have to hurry up to enter it. It will merely need to half-step into a space in which it’s already preparing to excel.
The market would seem to share a rosy opinion of healthcare’s immersive future: One forecast has the metaverse healthcare market growing from $5 billion in 2022 to almost $72 billion in 2030.
'The doctor will see your avatar now'
While it’s difficult to say precisely where the metaverse begins and certain proto- or pre-metaverse technologies end, an argument could be made that the UK’s Latus Health is taking that half-step. In early 2022, the company, which already offered a remote care platform, announced plans to launch a completely virtual mental health clinic — an environment so immersive that it could qualify as a properly “metaverse” solution.
Healthcare’s horizons in the metaverse will indeed be expansive. We can imagine the diagnostic possibilities that will emerge as avatars become more sophisticated, even to the point of reflecting in a one-to-one fashion the physical peculiarities and liabilities of our flesh-and-blood selves. Just as industry now deploys “digital twins” of machines and systems to make them comprehensible, medicine could rely on digital twins of patients, testing drug compounds on them or inspecting their internal organs to avoid invasive surgery in the physical world. Then too, there are analytical frontiers that will open as new oceans’ worth of biometric and other data flow into ever more powerful AI solutions.
Doctors today are using the emerging technologies that underpin the metaverse — AI to improve patient outcomes, augmented reality to assist with complex surgeries and virtual reality in medical training.
source: Precedence Research
Work and collaboration
Bill Gates predicts that most virtual meetings will move to the metaverse within a couple of years.
In addition, metaverse-based 3D models can improve design collaboration, with far-flung architects and urban planners working together to develop next-gen buildings and communities. Mixed-reality environments will let engineers verify information with on-site colleagues in real time, while clients virtually tour work sites and production facilities.
As remote work becomes a mainstay in the metaverse, advocates say, the benefits of working from home will accelerate. Environmental gains will increase as commuting and business travel decline. Population pressure on urban centers will lessen because fewer people will need to live near an office. Professional opportunities will expand and recruiting challenges will subside as employers hire from anywhere and employees find themselves unencumbered by geography.
On the downside, skeptics raise concerns ranging from the trivial — what’s the dress code for office-work avatars? — to the chilling — in what ways might on-the-job surveillance grow more pervasive in the metaverse?
Other signs, however, point to hurdles that could delay the shift. For example, volunteers spent a week working in the metaverse for a recent research project — and reported increased anxiety and frustration, lower productivity, migraines and eye strain. The president of Virbela, a metaverse workspace design company, has said: “I don’t think there’s an amount of money you can pay me to be in a VR headset 40 hours a week.”
Still, companies ranging from startups to tech giants like Meta and Microsoft believe they can improve the technology and user experience and that their corporate customers will find genuine value in working in the metaverse.
Early adopters are already there. South Korean prop-tech startup Zigbang has 20 tenants in a 30-story metaverse office building it launched in May. Other examples include Atom, a Mumbai-based events firm, which is opening a virtual office in Decentraland; digital asset exchange KuCoin, which is setting up shop in the Bloktopia digital space; and the venture arm of Siam Commercial Bank, which is going to work in The Sandbox.
No one knows how this trend will ultimately play out, but it’s clear that more change is coming to the hybrid workplace.
Maximizing the hybrid environment
Working in the metaverse could solve the most persistent problems associated with remote employment. In immersive metaverse workplaces, colleagues scattered around the world will feel like they are in the same room together. They will appear as 3D avatars or photo-realistic holograms, interacting with one another just as their real-life analogs would.
The digital space these avatars share can be optimized for creative interaction, brainstorming and whiteboarding, and absorbing the organization’s culture. Co-workers will read and respond to expressions and body language, stop by one another’s desks to say hello, and serendipitously meet and share ideas in courtyards and corridors.
There’s a lot of discussion about people working in the metaverse. Does this seem viable at a large scale?
It will be viable at scale eventually, but it’s still a nascent technology that’s very different from anything we’ve seen before. Most people are aware of the concept of the metaverse, but they’re not intimately familiar with it. A recent article in VICE captured this stage accurately. It said, "Talking about the metaverse feels a lot like talking about the internet back in the ‘70s and ‘80s." We don’t know how it will evolve, but creating meaningful workplace applications will require an experimental, iterative process.
Success will occur over time as technology advances and adoption increases. As this happens, companies and employees will need time to integrate the metaverse into their everyday lives in ways that maximize its benefits. There will be a learning curve, just like there is with any new technology.
What benefits do you anticipate for employers and employees?
One crucial benefit is that the metaverse can provide a realistic sense of presence even when colleagues are not in the same physical space. Companies will be able to use the metaverse to facilitate conversations, meetings, presentations, training and events.
One feature that provides this sense of presence is spatial audio — where sound changes direction and volume based on where we are positioned in relation to someone else. Another is the ability to convey facial expressions and hand gestures. This is currently limited, but it shows us what will be possible in the future. Participants will feel like they’re meeting in person, working hands-on and sharing an experience — even when they are working from various locations around the globe.
What are the biggest challenges impeding virtual collaboration?
As with any new technology, individual and company privacy and security are a top concern. There’s also third-party risk management — essentially the ability of platform developers to ensure privacy and security standards are met when they leverage various tech products.
What type of on-the-job activity is likely to be a good fit for the metaverse?
Think of the times when you need or want to collaborate with people on a project, but you’re in different locations. Now you can meet in the metaverse — in some cases this is a nearly identical “digital twin” of your company’s office — and walk your avatar directly up to a co-worker. Ideally, this enables the spontaneity, culture and in-person feelings we are not able to achieve with our current digital collaboration tools. So collaborative office work, training and professional development, product design, and even the basic idea of a “coffee chat” are all possible in the metaverse — and will most likely create more engagement among employees.
What is the potential for direct customer interaction in the metaverse?
The pandemic rapidly normalized virtual connections, and now customers are demanding these types of experiences from the businesses they work with. There may be a point where businesses can leverage metaverse environments to solve customer pain points in new and groundbreaking ways, in real time. This will unlock greater customer service and new layers of customer intelligence.
I don’t think so. I believe that it will instead be a great addition to a physical office. Think of what we have right now. Sometimes we physically meet in a conference room; other times we need a video call if we are in different locations, or maybe a quick chat message or email will suffice. Different needs require different collaboration tools.
The metaverse is no different — it’s not a one-size-fits-all solution. However, it does have immense potential to provide us with a more seamless hybrid working environment that offers more of the benefits of in-person interactions than we currently have available via today’s digital collaboration tools.
Will the metaverse replace the physical office?
president of Operations & Technology,
The future of remote work
The metaverse can enrich work life — when the technology catches up with the vision
Brands in the metaverse
Virtual environments could deliver new ways for brands to connect with consumers
The metaverse lets marketers innovate and experiment with immersive, interactive customer experiences. How significant is this for brands? In what ways?
How would you advise brand managers to think about and begin to experiment with the metaverse? What objectives should they pursue there?
Marketers might be tempted to rush into the metaverse merely to be cool in the hot new space, and that's a mistake. You must stay focused on the objectives of your business. At Mastercard, for example, our strategy in marketing is to build the brand, fuel the business and create sustainable competitive advantage — and I can advance all of those in the metaverse in different ways that are brand-appropriate to us. But you have to test and learn your way in — the metaverse is in such a nascency that marketers need to experiment and try activations in different platforms to see what works for the brand. Inclusion is a central brand value for us, so we celebrated the LGBTQIA+ community during Pride Month with the Your True Self is Priceless campaign in Decentraland and a fully immersive experience in Meta's Horizon Worlds.
Which marketing-in-the-metaverse use cases are most exciting to you?
I see activations from brands that are changing business models. For example, the Budweiser Royalty NFT drop highlights emerging musical artists and lets people invest in them. The NFT gives you a stake in an artist's business and helps them make a living — completely changing the reliance on record labels or other business models. It's also a good engage-and-experience platform for Budweiser and a unique way to leverage blockchain technology.
Another interesting one is Closeup's City Hall of Love in Decentraland, where people can mint their own NFT marriage certificate — recognizing that many people worldwide are still denied the right to marry.
What are the implications for the future of customer engagement?
There's a new factor in that equation in the metaverse. Every activation in this space is more than delivering on consumer needs and the consumer journey. It's also about creators. We must consistently think about the value proposition for creators — how we bring them in and shine a light on inclusivity in the creator community and demonstrate their critical role.
What products, services or industry segments will likely benefit the most from metaverse marketing and customer engagement?
I think everyone should be exploring the future potential here because it will be how consumers interact. There's an opportunity for nearly any category and every industry.
executive vice president for
Global Brand Strategy and Innovation,
Engaging customers in new ways
Companies can't ignore the advent of the metaverse because it means technology is finally catching up to consumer insights and needs. Why do I say that? Three-fourths of millennials and Gen Z worldwide believe that how they present themselves in the digital space is more important than in the real world. And most of them are more comfortable expressing their true selves in digital spaces than in real life. This is a major cultural shift. It will change the way we socialize, shop and provide education. And brands can use this technology to connect with consumers on their terms, where they will be, by creating engaging, immersive metaverse experiences — but they will need to do so in an authentic and meaningful way.
How to succeed in marketing in the metaverse? The answer could hinge on one word: community.
Here are three examples from the world of fashion footwear that indicate why.
Nike/Louis Vuitton: sneakers for those in the know
For its spring-summer 2022 collection, the French luxury fashion house Louis Vuitton collaborated with Nike to create a high-end sneaker based on the iconic Nike Air Force 1.
The resulting Nike/Vuitton Air Force 1 shoes, designed by Virgil Abloh, Vuitton’s late artistic director, are hand-produced from the best materials. But Nike/Vuitton’s promotional efforts were as remarkable as the shoes themselves. The partners gamified the process of viewing the collection, which was on exhibit at an undisclosed New York City location. Interested sneakerheads and fashion aficionados could download a unique Snapchat AR lens and use it to find the exhibition space.
The brands’ clever marketing paid off. Compelling their communities to seek out the sneakers made potential buyers feel they were in on a secret; displaying the sneakers as if they were precious artifacts raised their cachet. The first drop of the shoes sold out in minutes, despite — or perhaps because of — price tags of $2,750 and up. The volume of buyers crashed the Vuitton website.
more investments in Fintech Intermediaries in Asia Pacific in 2021 compared to 2020
Our stack (Tachyon credit) allows issuers to increase the lending book by composing contextual upsells using our extensive APIs and SDKs; reduce costs via pay-as-you-go SaaS billing, improve customer satisfaction by launching rich, self-serve experiences for cardholders; and launch and iterate faster using our infinitely scalable cloud-native deployment. In Mastercard, we have a partner that is commited to undertake this journey with us and truly believes in this mission.
Bhavin Turakhia, Co-founder & CEO of Zeta
vice president of innovation for
Labs as a Service, Mastercard
Nike, Louis Vuitton and RTFKT set the bar
the next normal
RTFKT: building anticipation, encouraging creation
In October 2020, RTFKT Studios, a new digital-native fashion startup, launched its first viral NFT, a virtual sneaker.
The company followed up by releasing the PS5, a physical version of the sneaker. Customers could use a Snapchat AR lens to “try it on” before purchasing.
Next came the company’s X Evolutions sneaker, the first sneaker created partly by AI. An AI-powered painting device decorated the shoe, speeding up its work in sync with how many people bid on the shoe’s NFT. The winning bidder received that NFT, a pair of sneakers and an avatar for use in the Sandbox metaverse.
That set the stage for CloneX, a complete online ecosystem launched in late 2021. Buyers of CloneX avatars receive the avatars’ 3D files and the full commercial rights to them. RTFKT’s goal is to encourage relationships between avatar owners and 3D creators who might create content for those avatars — which also means creating content for CloneX.
RTFKT/Nike: keeping the circle small
In December 2021, Nike acquired RTFKT to take advantage of new opportunities in digital culture.
The Nike/RTFKT tandem launched their first “physical plus digital” clothing item, the RTFKT x Nike AR Genesis hoodie, in summer 2022. The physical version of this unique garment comes with a built-in near-field communications chip that enables connection to a device. Wearers can overlay digital images on the hoodie — angel wings, for example — via an augmented reality app. Wearers’ avatars get the digital version of the hoodie. The tech lets avatars track their real-life analogs’ physical movements in the garment.
The community imperative
How best to sell products in the metaverse is an open question, but it’s a good bet that it will involve cultivating, engaging and empowering core communities. The companies in the examples above have done that, making customers feel they’re members of select groups, getting them involved in creative initiatives, flattering their tech prowess and more.
The numbers testify to their success. Nike’s NFT collections have brought in about $185.3 million, with CloneX products responsible for roughly half of that. Revenue numbers for the Nike/Vuitton sneakers haven’t been released yet, but pairs have been fetching six-figure prices on the secondary market and at auction.
RTFKT x Nike Dunk Genesis CRYPTOKICKS
The hoodie is available only to owners of RTFKT x Nike Dunk Genesis CRYPTOKICKS, the virtual sneakers that the companies launched earlier in 2022.
In addition, the hoodie requires some degree of tech familiarity. Unlike the Nike/Vuitton sneakers, which anyone can wear, the hoodie needs to be linked into the metaverse if the wearer is to appreciate its features to the fullest. The makers deliberately limit the audience, narrowing it to a circle of initiates. They might lose reach by doing this, but they solidify their core clientele.
RTFKT was savvy in how it sequenced its launches, with each initiative building on the last. First came an NFT, then a physical product, then a physical product with an ingenious AI twist and, finally, a proprietary ecosystem. This strategy built anticipation in RTFKT’s community, keeping people wondering what the brand would give them next time. RTFKT also devised an effective way to get its community invested in building out CloneX.
The metaverse represents exciting terrain for marketers. Here are some tools and tactics they should embrace for maximal results and engagement.
Sponsorships and events
One essential point of the metaverse — that it exposes us to experiences that in real life would be inaccessible — makes it an excellent environment for imaginative sponsorships and event presentations.
An automobile manufacturer could sponsor a virtual rally in which contestants, each behind the wheel of the manufacturer’s latest-model SUV, barrel at thrilling speeds across a desert landscape. A cruise line could sponsor a concert by a top recording artist, with the event unfolding on the deck, under the stars, as the ship rides the swells of a warm sea.
As for events, a brand could invite an unlimited number of attendees to a new product launch, during which they’d immerse themselves in a thrilling 360-degree multi-sensory brand expression. Besides getting a high-impact experience, attendees would interact with the product in its virtual form, meet new friends and walk away with goodies, such as NFTs that grant a discount on the physical product when it hits the stores.
What’s the best place for a company to launch a product or offer entertainment, education and other experiences? Its own space on a metaverse platform such as Decentraland, Roblox or Wild World.
Such a space will function as a digital home base or clubhouse, giving customers a destination to seek out in the metaverse.
The use of game-play elements, such as competition and point-scoring, in marketing activations has long been a way for brands to differentiate themselves and boost engagement. It makes particular sense in the metaverse, so much of which is dedicated to gaming.
In a platform like Decentraland, a brand might set up a scavenger hunt in which the user’s avatar traverses virtual environments, searching out clues to solve a series of riddles. At the end of the hunt, the user might win access to an event in an exclusive branded location or other prizes.
A virtual billboard in the metaverse can be an effective move. It will be seen by a tech-savvy young audience who can be hard to reach through other channels. And it has an obvious advantage over a real-life billboard: People all over the world could see it.
Creator and influencer collaborations
Brands sometimes need guidance in appealing to online communities that have their own tastes, affinities and jargon. There is a risk of being perceived as inauthentic, which is no less true in the metaverse. Brands might overcome this challenge by collaborating with leading creators and influencers in metaverse communities. Such partners can report back about what the community wants and thinks and help devise products and messages that appeal to it.
“Live operations” marketing
Marketing activations in the metaverse can't follow a “set it and forget it” model. For one thing, users expect constant engagement via text, chat or other channels. For another, metaverse capabilities are constantly evolving. By the time you’ve “set it,” something significant has changed.
Instead, brands must practice “live operations marketing," prioritizing persistent interaction with customers. Brands need to be constantly on, saturating the space with activations that are quick to deploy and adapt.
The metaverse is developing into a powerful marketing platform. Brands that embrace these methods will have a head start in making it work.
manager of digital and social marketing for Integrated Marketing and Communications, Mastercard
How marketers are leveraging virtual activations
Retail players that have set up shop in the metaverse are shifting their focus. Now that they’ve established virtual presences, they are connecting physical and virtual experiences in ways that expand the omnichannel consumer experience. Here are a few early adopters that have evolved their activation strategies to bridge the digital-physical divide.
Less than a year after Nike launched Nikeland in Roblox in November 2021, 7 million visitors have spent time with the brand there. Visitors can play games and buy exclusive digital assets to decorate their avatars across Roblox environments — essentially becoming digital brand ambassadors. Nike brought basketball star LeBron James into Nikeland to engage with fans in the metaverse and encourage the competition for virtual releases. In the spring of 2022, Nike launched its LeBron 19 "The Chosen One” design in the Nikeland showroom before it hit the company’s SNKR app for purchase.
Coca-Cola took a big step on its metaverse journey when it launched an NFT collection — the Friendship Loot Box — tied to International Friendship Day. The winning bidder spent over $575,000 for the collection of NFTs, which included the minting of Coca-Cola's 1948 trading card artwork, a custom-designed virtual bubble jacket for the winner’s avatar and a sound visualizer that plays signature sounds from the brand, including the fizz accompanying every product promotion. A real-life Coca-Cola refrigerator stocked with the company’s products was also part of the deal, tying the activation back to the physical world.
Finally, Samsung recently collaborated with K-pop group BTS to promote the company’s new Galaxy Z Fold phone. They launched a music video in Decentraland before broadcasting it on physical billboards globally across major shopping districts, including New York’s Times Square, London’s Piccadilly Circus, Berlin's Kudamm and Seoul's Coex mall.
There’s no denying the metaverse’s relevance as a retail channel, especially for younger consumers. With 60% of Gen Z eager to see brands sell their products in the metaverse, there's enormous potential for omnichannel retail to assume a whole new dimension.
director of product development Mastercard Foundry
Adding a dimension to retail experience
A metaverse skeptic at Amazon
At a summer 2022 event, Amazon head of devices David Limp expressed a desire to “work on technologies that bring people’s heads up, get them to enjoy the real world about them, make the family a more communal experience” — as opposed to tech that “completely embeds everybody and distracts them from the here and now.”
In another example of connecting a metaverse experience with real-world activities, Coca-Cola released a limited-edition “metaverse” drink, Coca-Cola Zero Sugar Byte, in several Latin American markets. The flavor profile of this variant is intended to depict Coca-Cola's interpretation of the metaverse and the experiences it has to offer. With this launch, the company established a gateway between the physical world and virtual reality by providing twin packs of 12.5-ounce cans that consumers can buy in the physical world. Consumers would then gain access to an augmented reality space within Fortnite and participate in a spiral jump game to get their monikers on the board.
Gucci was one of the first luxury brands to enter the metaverse. Its focus was engaging with a younger market segment already accustomed to spending time in gaming metaverses. The company used its Metastore in Roblox to unveil digital replicas of its signature accessories, including the iconic Dionysus bag. The virtual Dionysus sold for $4,115, more than its real-world twin.
Much has been written about the big tech players in the metaverse. But the new online world also offers intriguing possibilities for small and medium-sized enterprises (SMEs).
It’s an opportunity SMEs should explore, because a portion of the digital economy will inevitably shift to the metaverse — creating the potential for an $8 trillion market over the next two decades, according to Goldman Sachs.
Here are six ways SMEs can prosper in the virtual world:
director of product development for
Product and Engineering, Mastercard
The metaverse offers small and medium-sized players ways to compete
The industrial metaverse
In one vision of the metaverse, it’s a consumer-oriented environment designed for shopping and gaming. In another, it’s an industrial application — and this vision has been quietly taking off. Microsoft, NVIDIA and Dassault Systèmes are among the leaders of those companies producing virtual solutions for shop floors, logistics facilities, warehouses and more.
One advantage for SMEs will be facilitating virtual meetings more effectively than videoconferencing, reducing the need for an in-person presence. This connectivity will let SMEs operate across larger geographies. They’ll be able to reach national (or even international) markets that they previously could not.
Restaurateurs, hoteliers and others in the hospitality field will provide immersive experiences that showcase what their establishments offer. Potential customers will “test drive” exercise facilities and honeymoon suites and virtually stroll the terrace before deciding whether to dine outdoors or in.
Homeowners have long consulted YouTube for help with repairs and improvements. The metaverse will build on this phenomenon, enabling maintenance and other professionals to provide effective remote advisory services. An off-site technician might walk a homeowner through a furnace repair as they both consult a virtual twin of the malfunctioning apparatus.
Once they achieve a wider reach, small businesses could focus on cultivating specialization within their fields. An accountant could choose to go deeper rather than wider, for example, offering higher-value informed advice in a narrower tax area instead of providing general services. The economy of scale would make this work, with the bigger audience compensating for the smaller range of activity.
When building a plush real-life office, an SME might not rival a big company. But it can create a virtual office in the same league as those of enterprise-level companies. These environments will enhance how that SME is perceived — a boon in attracting clients and talent.
Not all SMEs want to build themselves into big enterprises. But even those content to remain small often compete against larger companies with scale and cost advantages. The metaverse will let SMEs collaborate across vast distances — potentially globally — sharing knowledge and banding together in mutually advantageous initiatives. They’ll get some of the advantages of size while retaining their SME identities.
The metaverse isn’t just for the tech titans now attracting so much attention. Small businesspeople will also harness its power and the opportunities it offers.
The share of in-person meetings will drop from 60% to 25% by 2024, Gartner says. This will make virtual sales calls the norm and open far-flung markets to SMEs.
of global enterprises have invested in VR and AR technologies to create virtual environments.
will be there
will be there
The metaverse will open new markets for SMEs.
It will let professionals position themselves as experts in distinct specialties.
It will create new remote SME business models.
It will help SMEs eliminate surprises and build trust.
It will create virtual office experiences as good as what big corporations offer.
It will connect SMEs across the world.
Virtual value exchange
Where do you store these digital assets? In your digital wallet. In the past three years, the number of people using blockchain-based wallets doubled to more than 80 million, according to Blockchain.com. In coming years, digital wallets are likely to become as ubiquitous as email addresses. They will allow us to store and exchange currencies and items like NFTs and access our digital identities. They’ll act as passports to everything in the metaverse.
Buying and selling in the metaverse, of course, requires payment rails. These can include credit and debit cards, prepaid cards, consumer reward points, payments from a bank account and cryptocurrencies. At Mastercard today, we are scaling and securing the crypto and blockchain ecosystem to make metaverse transactions accessible to billions of consumers. This includes ensuring people can use their cards to buy and exchange cryptocurrency and NFTs and providing cryptocurrency intelligence and identity verification.
The Roblox gaming platform is a self-contained metaverse with more than 50 million daily users and its own digital economy. It generates revenue through in-game micro-transactions. Players use a virtual currency called Robux to buy premium memberships, clothes and gear for their avatars, as well as special abilities that help them compete.
Now, expand that concept across millions of metaverses, including virtual shopping malls, art galleries, immersive games, theaters, arenas and other 3D environments. For people to easily move between and engage fully in these digital spaces — to buy, sell and trade — they’ll require the financial infrastructure under construction today. It’s likely to leverage cryptocurrencies, NFTs, digital wallets and new payment rails.
A few early metaverses use cryptocurrencies with value beyond their VR environments as investments in the “real world” crypto market. Decentraland’s MANA and The Sandbox’s SAND are two such cryptocurrencies. These novel forms of money are built upon blockchain technology that provides the interoperability required to transport digital assets, including avatars and NFTs, across decentralized platforms.
Blockchain enables NFTs to serve as verifiable, transparent records of ownership in the metaverse. Value derives from exclusivity, and an NFT indicates who owns a plot of digital land, a piece of digital art, a ticket to a virtual concert or an avatar’s Nike shoes and Gucci bag.
number of people using blockchain-based wallets
Buying, selling and trading assets
virtual value exchange
In December 2020, Jack Dorsey, who was then CEO of Twitter, created an NFT from his first-ever tweet. He turned a static image of the five-word post into a digital file stored on a blockchain and, voila, an NFT was born. A few months later, the image sold for a stunning $2.9 million — and showcased what a wild ride the NFT market has been.
NFTs are digital records of ownership stored on a public ledger called a blockchain. Every NFT is unique, unchangeable and auditable. As a new form of digital asset, NFTs have the potential to become a pillar of the metaverse economy — where they can authenticate ownership and identity, establish the value of digital assets and facilitate transactions and value exchange.
Here are a few NFT concepts and uses in these early days of the metaverse:
NFTs can represent ownership of almost anything, from digital art to physical property to a video game app. In 2014, digital artist Kevin McCoy minted the first NFT — Quantum, a digital image of a pixelated octagon that hypnotically changes colors and pulsates. This breakthrough ownership model ushered in a period of experimentation. Standards for how developers can create their own tokens were codified and NFT gaming rapidly accelerated. At the same time, metaverse galleries proliferated to display and sell NFT art. The underlying blockchain technology validates artists’, musicians’, game developers’ and other creatives’ ownership of their work and enables them to receive royalties every time it sells.
senior vice president for
ESG EEMEA and Mastercard Foundry
NFTs as a vehicle for ownership of virtual and physical assets
NFT sales plunge in 2022
Brands and other entities now create and distribute NFTs that provide holders with exclusive access to metaverse
Is the nosedive evidence NFTs
were overhyped or part of their market maturity cycle?
Fashion brands have been quick to capitalize on NFTs as digital collectibles become more lucrative. Nike, Dolce & Gabbana and Tiffany & Co. are among the companies bringing in the most revenue from NFTs. Nike, for example, entered the metaverse with its launch of Nikeland, a virtual world created in partnership with Roblox. After acquiring RTFKT, the company began pumping out its own NFTs — which have generated $1 billion in revenue on the secondary market, with the Swoosh taking in $93 million.
Provenance is a record of ownership history — of an artwork, antique or product in a supply chain, for example. It’s used to verify authenticity and quality. Within a blockchain, “provenance refers to the tracking mechanism where every single change made to the original data is tracked and versioned so the authorized viewers can be certain about its legitimacy. As a result, systems that follow provenance become the single source of truth.”
Imagine visiting a store to buy an expensive watch along with its digital twin. You pay with your Mastercard, which is connected to your digital ID and crypto wallet. An NFT representing ownership of the watch is recorded in the blockchain, where its provenance will be validated and updated for its lifetime. Another NFT representing the digital twin is stored in your wallet so your avatar can wear it in the metaverse.
Companies are increasingly using NFTs to unlock customer loyalty, with some disseminating tokens that grant access to branded metaverse games and loyalty benefits. Louis Vuitton, for example, celebrated its 200th anniversary with the launch of “Louis: The Game.” Players had the opportunity to earn one of 30 limited-edition NFTs. The goal of these NFT rewards and branded experiences in the metaverse typically is to drive long-term customer engagement and brand loyalty — in exchange for something exclusive, memorable and valuable.
1. Originstamp, 2022, How Does Blockchain Technology Enhance Provenance?
Customization is truly the key in gaming. Games such as “Call of Duty” enable players to customize their guns and armor, and Ubisoft has launched an NFT called Ubisoft Quartz that enables players to own their accessories.
NFTs and the metaverse are distinct digital developments, but they clearly are intertwined. Each will have a significant impact over the next few years on the evolution of commerce, immersive experiences, the future of money and the exchange of value. There is a great deal of work ahead, of course, as lawmakers and regulators establish NFT rules addressing royalties, taxation, cross-border transactions and more.
events and experiences, new products, communities, content and other assets. These “access NFTs” make it easy for creators to tap global markets and for token holders to transfer ownership of assets such as community memberships. For example, Bored Ape Yacht Club, a series of NFT artworks hosted on the Ethereum blockchain, gives owners access to exclusive membership benefits and perks.
Please tell us why digital wallets will be so important in the metaverse.
The metaverse will ideally be a collection of interoperable platforms. When you enter a certain platform, you’ll need to be able to bring items from other metaverse domains into it.
That’s where a digital wallet will come in: It will enable portability and interoperability. A wallet will house cryptocurrencies, assorted digital assets such as NFTs, blockchain wallet IDs and much more. When we log on to a metaverse platform, we can bring everything in our wallets with us. We’ll be able to spend the currencies and utilize, trade or sell the NFTs in the wallet, no matter where in the metaverse we are.
A digital wallet also lets us choose what information to share with a given platform, where I may want to share my currencies but not my NFTs.
What makes a digital wallet different from the log-on and authentication tools we have today?
Historically, if I went to a website that I’d never visited before and I wanted to buy goods, I’d have to create an account. I’d have to add my new payment card credentials and shipping information. That’s the opposite of interoperability and portability.
Now, a lot of platforms today employ the “check out with” concept. You can check out with PayPal; you can check out with Click to Pay. You can log in with Gmail or Facebook. That’s a similar concept: logging in with an existing account that already holds your credentials. But a digital wallet is different: Users, not platforms, own and control their information.
What’s the distinction between crypto wallets and the digital wallets we’re discussing here?
A crypto wallet holds the private keys that give people access to their digital currency. A digital wallet can include cryptocurrency keys but goes beyond them to hold NFTs, digital representations of your driver’s license or passport, medical or insurance information and so on. It could even hold hunting or fishing licenses. It’s a widely useful tool that comprehends the functions of a crypto wallet.
What challenges do we need to overcome to make universal digital wallet adoption a reality?
A lot of it comes down to education. If things aren’t safe, simple and smart for people to use, they’re not going to use them. At the moment, even buying an NFT isn’t the most straightforward process, even though NFTs have become relatively mainstream. Similarly, if I say to someone, ‘Hey, we’re going to sign you up for a digital wallet, here are the steps to take,’ it won’t be the easiest process. Signing up for a digital wallet and enabling its different functions needs to be more seamless. The average person needs to understand how wallets work and how to use them, in the same way they understand their bank cards.
In addition, people will need assurance that their data is stored securely and used appropriately. Again, that comes down to education.
What other hurdles might we have to overcome?
Stakeholders in the space have to agree on standards. If there’s no general framework that everyone is following, things become complicated. Think back to when Blu-rays were battling with HD DVDs: You had two different standards in competition with each other. I believe we are at a similar point right now where we don’t know what the final standard will be. It will take time to figure out which standards will define the digital wallet space and what wallets will look like in the long run, although there are currently some clear front-runners.
Do we know what stakeholders, such as the big tech companies, want from digital wallets?
First, the person will go to a merchant site they’ve never visited and frictionlessly use their wallet to buy something.
Later that morning, the person must take a flight to a convention in another country. At the airport, they pull out their digital wallet, which holds a digital copy of their passport, and breeze through passport control. They get through the door at the convention, center overseas by sharing the NFT that functions as the convention pass. At the convention, they receive another NFT that verifies that they attended the event: a digital stub, so to speak, for record-keeping and collection purposes.
Finally, let's imagine that night they accidentally stumble off a curb and twist an ankle. At an urgent care spot in the foreign country, the medical professionals will access the medical information they need through the patient's digital wallet with a quick scan. Insurance information is in there, too. The urgent care people ask the patient for an email address, but the patient would rather not receive follow-up materials from them digitally and declines to make it visible to them.
The digital wallet makes for a streamlined, frictionless, more secure day in the life of users.
vice president for product management for
Crypto and Digital Assets, Mastercard
The more important question is this: What do consumers want? Will consumers want to own their digital assets, carry them to different platforms and sell assets they win in a metaverse game after they’re done? The answer is yes: Consumers will want all of that. Consumers, rather than the big tech brands, will drive responses in the space.
Imagine that we’re in the future and everyone has a digital wallet. How might the typical person use one every day?
Recognizing the need for interoperability, the Metaverse Standards Forum was founded in 2022 to serve as a forum for organizations and companies to cooperate on an "open metaverse." Multiple industry leaders have stated that the potential of the metaverse will be best realized if built on a foundation of open standards. The organization provides a venue for cooperation to foster new standards for an inclusive metaverse and accelerate their development and deployment through practical, action-based projects. Members include Adobe, Autodesk, Meta and Qualcomm, among others.
Connecting owners to their assets across different platforms
hover to explore
Types of money
Expanding to include cryptocurrencies, tokens representing digital and physical assets, and more.
Non-fungible tokens will enable transfer of assets across metaverse platforms.
This technology, including biometrics solutions, will ensure security and speed transactions.
Companies are exploring how users can make payments with the wave of a hand, a finger tap or a pinching movement.
Existing payment mechanisms
These include credit cards, debit cards and prepaid cards.
Where cryptocurrencies and in-game tokens
will be stored.
Innovations are opening the door to new ways to move money
The independent creators in various mediums who use online platforms and marketplaces to make, disseminate and get paid for their output should flourish in a decentralized version of the metaverse, which needs to be built out and filled with content. Blockchain will secure creators’ ownership of their production, let them more easily monetize it and give them control over how it can be used, under what circumstances and by whom. A centralized metaverse will also generate opportunities for creators, just as today’s centralized internet platforms do. But in this case, those creators will have less control over and ownership of what they make.
the creator economy
3 economies that could flourish in the metaverse
The big platforms have defined the online data economy as we’ve known it. That could change in a decentralized metaverse as blockchain gives users a mechanism to control their data, even to the point of their being able to sell or exchange it on their own. Where might they sell it? Financial institutions, big and small, could form one market, and in the era of open banking, fintech startups and third parties could leverage permissioned consumer data to build innovative financial products.
the data economy
In a decentralized metaverse, we’ll use cryptocurrencies to transfer value across virtual and geographic borders. But even in a metaverse where big tech companies could dominate, digital currencies and NFTs will make financial transfers faster and easier — simplifying the cumbersome process of sending money from one platform to another, among other things. In either scenario, crypto could become a proper medium of exchange rather than just a vehicle for speculation.
the crypto economy
the creator economy
doors will open for creatives
the data economy
new frontiers in monetization
the crypto economy
toward frictionless value transfer
The metaverse will generate magnitudes more information than the internet as we currently know it. Twenty minutes’ worth of a single individual’s VR immersion could generate up to 2 million unique data items.
But it’s not just about quantity. It’s also about quality. Metaverse data will often be of a more sensitive nature than the browsing-and-buying information that internet users have reconciled to feeding into the online economy. Headsets, hand controls, haptic equipment and other apparatus could collect information we might prefer to keep to ourselves.
That means that the controversies about data we’re navigating now, which center around such questions as whether third-party cookies should be allowed, could soon seem paltry by comparison.
Is there a way out of the data dilemma that the metaverse could enable?
There may be. The way in question foresees metaverse users, as opposed to its big corporate players, controlling — “owning” — the data they produce online. Users would tokenize their data, consigning it for safekeeping to the blockchain. This tokenization would allow users to control by whom and how their data is accessed and potentially extract some value.
Can it work?
This vision of ubiquitous data ownership is most strongly associated with those who think of the metaverse as “Web3,” a new vision for the internet that shifts the locus of control from dominant platforms (in Web2) to the individual. Web3 will be a decentralized environment, built not on Big Tech servers but on that disintermediating technology we know as blockchain. It will be as void of the authority of dominant platforms as our current Web2 is permeated and defined by it.
But if the Web3 vision has an inherent utopianism, that doesn’t mean that the issue of individual data ownership is utopian. Personal data ownership could become a reality even in a centralized metaverse managed by the same household names who run and have largely built Web2.
Government regulation, encouraged by a political environment in which Big Tech’s prestige has taken some hits, could help coax a new data-ownership paradigm into reality. Still, its emergence would probably require the relevant tech giants to support — because they consider it in their interest — a different type of online economy than the one we’ve known. Their support may sound unlikely, but the metaverse is very young. Much remains possible.
Do we want to own our data?
Another question is this: How many people are eager or able to serve as custodians of their data?
The world of blockchain can be forbidding. Even the “accessible” and “popular” parts of it, like cryptocurrency exchanges and NFT marketplaces, can be complicated for non-techies to use. At some point, there could develop data-tokenization and exchange tools that are as user-friendly as, say, our banking portals. But that point could be a long way off. By the time we reach it, metaverse users could have accepted the same bargain that internet users have long accepted: that allowing access to your data is a small price to pay for the benefits of being online.
unique data items
of a single individual’s VR immersion could generate
It’s easy to imagine a thriving ecology of “data aggregating” or “data brokering” companies who would pool users’ data and sell it to interested parties, much in the way that mutual fund companies pool retail investors’ monies. (Call the business model “scale as a service.”) Even now there exist “data commons” organizations and “data unions” that perform something like this information-pooling role.
How control of our data could evolve
privacy in the metaverse
Virtual real estate
Potential, peril and paradox
Street View as proto-metaverse
An intriguing path into the metaverse emanates from Google’s Street View, a product that has been an experiment in parallel reality. Street View’s new “immersive” feature, which allows bird’s-eye and 3D vistas of world landmarks, suggests that Google’s company-defining quest to create a digital analogue of the real world is morphing into a metaverse project.
Digital real estate is what its paradoxical name suggests: property that exists online. At the moment, that most likely means in one of the “Big Four” platforms — Decentraland, Somnium, Voxels and The Sandbox. Another roughly half-dozen platforms with lower profiles are also players in the space.
To simplify, buying digital real estate works as follows: A user enters a platform, scans a map to identify appealing properties, then clicks on a parcel to zoom in and see price and other information. As in the real world, location is key: Being near enough to a road or in possession of an ocean view can boost prices. Buying is as easy as clicking once a digital wallet has been set up and the cryptocurrency appropriate to the platform has been acquired.
On each platform, land parcels are of a standard size — Decentraland’s parcels measure 16 by 16 meters within the spatial logic of the online environment. Ownership is registered on the blockchain via an NFT.
Speculation — and beyond
What’s the attraction of digital real estate?
So far, the attraction has primarily been its utility as a vehicle for speculation. Some investors cleared considerable profits in 2021 when digital land penetrated mainstream attention and values appreciated with a speed that made envious even those who benefited from the 2017 cryptocurrency gold rush. By November 2021, the biggest metaverse environments’ combined real estate market was worth $187 million, more than double what it had been a year previously. For 2021, the market added up to more than $500 million. A “virtual land rush” was on. Celebrities and big brands made high-profile metaverse real estate purchases. A land plot in the Sandbox sold for $4.3 million.
decline in some
in less than a year
Permanence, scarcity and the law
Unsurprisingly, given digital real estate’s novelty, it raises certain questions. These stem from the yet-to-be-determined legal status of what happens in the metaverse. Many metaverse platforms, “decentralized” and “user-owned” as they might be, are still operated by organizations that retain the real property rights to everything in their purview. Users access the properties to which their NFTs give them entrée only at the discretion of the platforms — as detailed in each platform’s terms and conditions.
So what if the platform that hosts your property goes offline, ceasing to exist? There remains a non-zero chance that any digital
investment a metaverse user makes could disappear. (Decentraland’s terms and conditions stipulate that the platform “may cease to operate ... in the future, at its exclusive discretion, with no liability whatsoever in connection thereto.”)
Size of metaverse real estate market in November 2021
(2x what it was
Then there’s the issue of scarcity, which gives physical real estate much of its value. Metaverse platforms have created scarcity artificially. Decentraland has capped at 90,000 its number of land parcels; Sandbox at 166,464; Somnium at 5,026. Still, there remains that non-zero chance that platform managers could somehow contrive to flood platforms with vast amounts of new territory.
Third, and related to the above questions, there’s the question of precisely what ownership means in these environments. Again, an NFT gives us access to our digital property. But it exists, and we have access to it, ultimately at the whim of the platform — which retains the rights to property it hosts.
As the digital real estate market continues to decline at the time of this writing, it’s difficult to say whether this asset class has a long-term future — or will serve as the subject of a chapter in an eventual textbook about internet-era investment bubbles, large and small.
That land rush seems to have faltered. By August 2022, the market had cooled. Decentraland saw prices fall by as much as 61% compared with the previous November. Whether digital real estate is a spent economic force or the crash represents a temporary downturn in the volatile life of a digital asset, time will tell.
In the meantime, there are ways to put digital real estate to use beyond speculation. Owners might rent out their buildings’ facades so that brands can put up virtual advertising posters. They can build event spaces on their property, then rent them out to recording artists who want to give concerts there. If their home is located in a great location, they could potentially rent it out to tourists, Airbnb-style.
For that matter, they could simply enjoy their property, sitting on their virtual porch, enjoying the virtual view, with no aspirations to monetize what they have.
What is the metaverse? By some accounts, it is a parallel, immersive and pervasive virtual life where you can exist among other avatars, purchase and trade virtual goods, and participate in digital concerts and cocktail hours. For others, the ultimate vision is that the metaverse isn’t one place but a multiverse of digital worlds offered by different platforms, some blending with the real world.
If the world’s collective experience with data (mis)use to date is instructive, we need to understand better the implications of our choices in these virtual worlds, especially given the complexity and emergence of many of the metaverse’s enabling technologies. If we don’t create clear data controls and guardrails, it could expose people using the metaverse to excessive data collection and abuse of their data and privacy.
chief privacy officer,
Privacy in the metaverse
When a pop singer is your data controller
SVP, assistant general counsel for
Privacy and Data Protection, Mastercard
And for good measure, Hollywood offers up some dystopian examples: “The Matrix,” with its ersatz version of reality that serves as a prison for humanity, and the massive, chaotic gaming and social platform in “Ready Player One.”
Whatever you think of it, metaverse-related ideas, technology and platforms are backed by billions of dollars in investments. The addressable market is expected to be in the trillions of dollars. It will be a fast-evolving and complex area with many potential use cases. From gaming to shopping, fitness to education, all of it could be enabled by the convergence of foundational and interlinked technologies — blockchain, 5G/6G, AI, spatial computing, cloud and edge computing.
Such an all-encompassing and powerful platform will create massive amounts of personal data — and raise significant ethical, privacy and security questions, both novel and familiar.
More data creation and collection — lots more
The technologies used in the metaverse will expand the current widespread collection and use of data. These platforms and devices could create a more intimate profile of individuals, including physiological information — such as the size of your hand, how your eyes move when you scroll a page, what your brain waves are doing in response — and behavioral data. Information collected from these systems could not only point toward preferences but could even, for example, make predictions, identifying the early onset of medical conditions. The metaverse will be data collection on steroids.
This expanded level of data collection also is expected to be “always on.” For example, prescription glasses with augmented reality functionality would not only provide real-time heads-up displays and overlays of information but also contain a selfie-type camera that tracks what your eye is looking at: Look toward an Italian restaurant,
Defining the data controller
Some privacy laws place much of the responsibility for compliance on the data controller — the person or entity who determines the purpose and means of collecting the data. A data controller needs to be distinguished from a data processor, who acts on the instructions of the data controller.
Identifying who is the data controller is important, as data controllers need to ensure transparency (such as providing privacy notices) and get users’ permission for collecting and using their data. These controllers must also allow individuals to access, correct and delete their data, and notify individuals in the event of a data breach.
Determining who is a data controller or processor in today’s Web 2.0 world is difficult enough. You will get as many disagreements on the
Navigating the metaverse with our eyes open
There will be other novel — and familiar — questions to deal with. For example, we have yet to fully appreciate the impact of extended reality devices on our perception of reality. How much will we take information at face value in a virtual reality world, and the plausibility of information being presented (that is, “responding as if it is real”)? Spotting scams and fraudulent emails in today’s world is difficult enough, so perhaps we should start preparing for how to deal with scammers using deep-fake avatars in a metaverse.
Security will continue to be only as strong as the weakest link. Basic phishing attacks will still be a blight, as seen in a recent phishing email campaign targeting NFT owners.
There are several approaches we can take to navigate potential pitfalls. These could include adopting a Privacy by Design and Security by Design approach, being guided by a strong sense of data responsibility and giving individuals transparency and granular controls over the use of their data. Manufacturers could also consider establishing common standards for extended reality devices to recognize no-filming zones.
Beyond that, and critically, the potential complexity of the metaverse means that addressing the ethical, privacy and security issues will require discussions that involve a diversity of views and disciplines — from law, security, technology, psychology, ethicists, economists, regulators and the wider community.
We sleepwalked into the internet age. Investing in the necessary discussions, analysis and governance will help to ensure that we do not sleepwalk into the metaverse, whatever version or versions we ultimately create.
and you'll be presented an offer for takeout from that business. On the other side of an augmented reality lens, people around the wearer will be concerned (as will regulators) about whether individuals are being recorded and subject to facial recognition without their knowledge. Some organizations — companies, hospitals, governments — may also want to bar such devices from sensitive areas to limit data leakage or confidentiality concerns.
Data will also continue to bleed between the virtual and physical worlds. Real-world information or preferences unintentionally disclosed or displayed by your avatar in the virtual world or by transactions reflected on a public blockchain can be used to identify you in the real world and vice versa. As with the digital exhaust you currently produce when surfing the web, you could end up sharing far more personal information than you intended when interacting in the metaverse.
roles and responsibilities of a data controller or processor as there are lawyers in the room. This complexity will only grow when dealing with a metaverse built on public blockchains, given the web of parties and interactions that could occur.
Let’s say that a famous pop singer has a virtual concert in The Sandbox (a metaverse that allows users to create, buy and sell land and digital assets using a public blockchain), and you purchase a ticket (in the form of an NFT) using your crypto wallet. Who is the data controller here, responsible for compliance with privacy laws? The Sandbox, the crypto wallet provider, the NFT marketplace or the singer himself?
The answer could be all of them. The wallet provider could be the data controller for the data used to create your account, conduct "know your customer" checks and manage your cryptocurrencies. The NFT marketplace could be the data controller for the data on its platform. The owner of the gaming metaverse could be the data controller for data collected from content creators, users and landowners. The brand owners in the metaverse — for example, the singer — could be the data controllers for data collected in relation to his events or experiences that take place in the metaverse, much in the same way that brands are data controllers for the personal data collected on their business page on, say, Facebook.
Given the significant responsibilities a data controller holds — including responding to individual requests for the deletion of personal data — more guidance from regulators will be needed.
executive vice president for
Cyber and Intelligence, Mastercard
The challenge of a new threat environment
The cybersecurity of multiple and varied metaverse environments needs to be verified and users advised appropriately, just as defenses, protocols and signposting serve to secure the internet. This security is essential for everything from child safety to digital commerce.
Cybersecurity and fraud
How can you trust the person behind the avatar (in the metaverse, nobody knows you’re not a dog) or the business behind the virtual shopfront? The fact that the metaverse may look strikingly real is a risk in itself — we tend to question what we see far less than what we read or hear. In response, expect environments that recognize trusted devices, and use biometric authentication, geographical elements and other data to create accurate risk profiles. Just as we do today.
Imagine if every website you visited required a different wallet, or your purchases disappeared once you left the shopping mall. That is the risk of walled gardens, or closed metaverses, where avatars, friends, digital assets, services and profiles are nontransferable. Switching environments should be as simple as clicking on a different website.
“On the Internet, nobody knows you’re a dog.” So says one hound to another, sitting before a computer screen, in a New Yorker cartoon from 1993. It embodied a moment in time when the nascent internet was a digital playground offering the promise of anonymity, the power of reinvention and freedom from the prejudices of the real world.
The same might be said today of the metaverse. Swap typeface for avatars, chatrooms for virtual universes, but the parallels remain — a place where you might escape the real world, adopt new personas and engage with different people. To understand how the metaverse might develop, it is helpful to examine how the internet has evolved over the past 30 years, from tiny digital playgrounds to vital global infrastructure. We have come to depend on the internet — for communication, education, commerce, healthcare, travel and more. As a result, cybersecurity has become our age's most significant issue; how do you trust someone or something you don't know and can't see?
Mastercard has been at the forefront of answering that question. We helped introduce secure payments to the internet, opening it to commerce, and we developed digital identity verification and authentication solutions that safeguard individuals’ data and privacy. By employing AI and intelligent reasoning to assess risk more effectively, we have hastened the demise of static passwords and PINs, enhancing the ease with which people can securely navigate multiple digital environments.
Securing the metaverse will be both similar and different. Similar because the metaverse is essentially the internet but in 3D. Different because the metaverse is a full immersion in the digital world. It is like comparing surfing with deep-sea diving.
We have learned a lot about cybersecurity over the past 30 years. Today, the internet is safer and more accessible than in 1993 because of the standards, protocols and protections mainly developed through collaboration and consensus. We owe it to future generations to achieve the same for the metaverse.
What will the metaverse mean for sustainability? Whether we think of sustainability in its strict environmentalist sense or in a broader one encompassing those practices and qualities that produce a healthy society capable of reproducing itself over the long run, this is an important question.
Is it sustainable?
The metaverse will bring headwinds and tailwinds in environmental impact
of global energy
consumption will grow by 2030
As for sustainability in the broader sense, the metaverse could work against it by encouraging people to retreat from society. It might promote passivity and escapism, intensifying some of our existing internet’s least positive qualities.
Preempting physical consumption
Yet there’s another side to the story.
Virtual consumption in the metaverse could replace physical consumption in the real world. In this view, purchasing digital sneakers for our avatars would satisfy our consumerist impulses to the point where we'd be less compelled to buy physical sneakers. That would promote sustainability.
The metaverse could also reduce certain types of travel. Office collaboration platforms are already doing this, as those who work from home know. But the tendency could go further, with virtual vacations replacing real-world trips to certain places. Why go to all the hassle and expense of flying to Disney World when you can strap headsets on your children and spirit them off to its metaverse version instead?
Perhaps most realistically, digital twin technology could give us new tools to find system efficiencies. Industrial apparatuses, supply networks and urban systems will give up their secrets more readily to experts who can comprehend them via virtual twinning in the metaverse. Recent research indicates that digital twin tech can help reduce a building’s emissions by 50%. Translate that to a societal scale, and the potential efficiencies are startling.
Yet another way the metaverse could boost sustainability is as an educational tool. Lecturing students about disappearing glaciers is one thing. Placing them in immersive environments to watch chunks of glaciers calve off is another thing, and possibly more effective.
Toward empathy and social engagement
As for sustainability in the broader sense, the metaverse could become a vehicle for escapism. But it could also promote the empathy that makes people want to change things for the better. In the metaverse, people can viscerally experience the world the way less privileged people do. "Moral training tool” is probably not the first phrase we associate with the metaverse, but that’s exactly what it could be.
The metaverse will be implicated in the sustainability issue one way or another. The question is whether it develops as a positive force here or not. If stakeholders make the right choices, it can, as the potential is already there.
On the one hand, the metaverse brings liabilities concerning sustainability. Consider the computing power required: about a thousand times what we have now. Despite computing’s increasing efficiency, that will need new data centers — and data centers are emissions-intensive. In 2015, when there were fewer of them than there are now, they were responsible for the same amount of emissions as the aviation industry.
Then too, the metaverse, in its decentralized version at least, will be powered by cryptocurrency, which requires a lot of energy. Bitcoin transactions burn up more energy in a year than Argentina and are responsible for about as many tons of emissions as Greece.
The metaverse could also result in more electronic waste since it relies not only on computers and computing power but also on hardware, from headsets to haptic gloves to handsets — all of them ultimately disposable.
The metaverse today is a 21st century version of the American Wild West — a digital frontier attracting newcomers, including people who lack traditional financial and social capital. Will they find opportunity and community or inequity and discrimination?
As an investment vehicle, this virtual world and its underlying blockchain and non-fungible token (NFT) technologies can open doors for historically under-represented entrants. For example, 23% of African Americans and 17% of Latinos own cryptocurrency, compared with 11% of white Americans, according to The Harris Poll. It can also offer opportunities to people locked out of traditional investment channels owing to a lack of credit and capital.
But the virtual world can also bring risks. We saw that recently with the precipitous drop in NFT stock prices. Black investors owned more cryptocurrency than their white counterparts, so they lost more in the spiral, according to a study from Ariel Investments. For BIPOC communities, which historically have had weaker financial safety nets, the impact of downturns like this can be devastating.
A safe, borderless world?
The metaverse is also a double-edged sword when it comes to diversity, equity and inclusion on the social front.
On the one hand, it can provide people with safe, borderless environments where they can be their true selves and connect with communities who share their values and interests. Take, for instance, a young gay man living where it is illegal to be LGBTQ+ or with family who do not know he is gay. He may be unable to gather with community members in the physical world safely, but he can do so in the metaverse.
On the other hand, places where people can be anonymous, like the metaverse, invite bullying and harassment. And given its roots in online gaming, where the user base skews white and male, the metaverse isn’t starting with a diverse playing field.
Transcending identity categories
Similarly, decentralized governance and less hierarchical operations, key features of the Web3 world, could promote cooperation and collaboration, making the metaverse a more equitable place than our established physical institutions. Users have the unique opportunity to transcend their identity categories and get to know one another in new and different ways without divisive labels.
Or decentralization could hide harassment and create challenges regarding accountability and oversight.
The virtual divide
Inclusion may be hampered because many people don’t have access to or feel comfortable with metaverse technology, so users tend to be young, digitally savvy and tech-connected. We don’t have to dig deep to identify who might be missing from that equation. Those socially and financially excluded in other facets of civic life are more likely to be excluded from the metaverse.
The future will tell whether we can close the equity gap in the metaverse and make it a safe, inclusive place where concerns related to privacy, safety and access are addressed.
The good news is that we have the power to make the metaverse what we want it to be.
vice president of social impact communications for
Integrated Marketing and Communications, Mastercard
Closing the equity gap
There are many legal issues to consider in the emerging online environment. Here are several.
As regards fractionalization, imagine if a collector tokenizes a Picasso painting into millions of units, each with its own small value, then uses those units to pay for things. What do the recipients of those tokens own? To put it another way, what could it mean to own several millionths of a painting? Do recipients get to use the artwork for a time proportional to their tokens' value? Are they entitled to their share of the work as a physical object — can they chip off a piece of it and carry it away? Which piece?
What does fractionalization imply?
Metaverse-related intellectual property cases are starting to crop up. Miramax sued Quentin Tarantino after he sold NFTs that deployed content from “Pulp Fiction” — content that Miramax claimed ownership over. The case, which was quietly settled, hinged on what rights and obligations an NFT implies. Relatedly, when you buy an NFT of an artist’s work, what are your rights, if any, as regards disseminating or profiting from the image? The answers to such questions will need to be nailed down.
Who owns the IP behind an NFT?
In a spring 2022 article, João Marinotti, an Indiana University law professor, argued that an NFT owner owns nothing much at all. He pointed out that buying an NFT on a platform like The Sandbox gets the buyer merely a blockchain address. The digital object to which that address (the NFT) points is located elsewhere, on the platform’s servers. The NFT holder may only be able to access it only at the platform’s discretion, subject to the platform’s terms and conditions. “[W]hat many companies are calling ‘ownership’ in the metaverse is not the same as ownership in the physical world, and consumers are at risk of being swindled,” he wrote.
Does an NFT confer ownership?
In a metaverse that spans the globe, it's a question as to which nation’s or other authority’s laws and regulations will apply. Imagine you own a virtual house in a virtual neighborhood on a metaverse platform. Your neighbors, the people who own the buildings around yours, are all residents of different countries around the globe. To which entity does each of you pay taxes when you all sell your properties? Do you pay taxes at all?
Whose jurisdiction is it?
The metaverse promises to change our conception of where we end and digital/virtual representations of ourselves begin. If an avatar comes to be considered a legal representative of a person, will one avatar’s assault on another be considered a “real” crime? If the victim is at the time of the attack wearing haptic equipment that transmits the physical sensation of the blows the avatar is receiving, will the law consider this a worse crime than if the victim were not?
What constitutes a crime?
Technological revolutions bring wholesale changes. What can we expect from the metaverse — and when?
Key markers to look for on the road to viability
One promise of the full-blown metaverse is that our experience of it will be frictionless. That should mean no grappling with cumbersome tech as we enter or leave it.
So far, the hardware necessary for the metaverse remains cumbersome. Meta’s Oculus Quest 2 headset weighs more than a pound — a noticeable weight. Haptic gloves bristle with wires and themselves can weigh about a pound each. Some haptic suits resemble body armor. Smart glasses still look like smart glasses rather than regular glasses that happen to integrate smart technology.
When the market furnishes hardware that’s as easy, or almost as easy, to put on as our regular clothing, we’ll have another sign that the metaverse is coming.
One indication that the metaverse is more than hype will be if use cases multiply.
Gaming will thrive in the metaverse: Gaming and gamified environments have led the way thus far. So has entertainment, and we can imagine a new generation of digital natives attending concerts and other events in VR. Commerce should also have a bright metaverse future. As for work, immersive meetings are the next step in a logical progression from the virtual meetings we’ve grown used to since the pandemic started.
But the metaverse will require more than just a few use cases. When political rallies, job training, medical services, schooling and a hundred other things happen consistently in the metaverse, we'll have more confidence that it will "stick."
Will metaverse stakeholders subordinate their short-term interests to make the project viable?
There are signs that they will. Summer 2022 saw the Khronos Group, a tech standards consortium, establish the Metaverse Standards Forum under its auspices. The Forum includes Meta, Microsoft, Nvidia and Adobe and will promote metaverse interoperability. These tech giants seem to be looking beyond the walled garden.
Yet if the metaverse is to reach its most fully realized version of itself, a comprehensive governance layer will have to develop. A new world with its own economy will require equivalents to the institutions that form, steer and regulate the “old” world and its “old” economy. In other words, we’ll need metaverse analogs to the World Trade Organization, the International Monetary Fund, GATT and other trusted institutions.
In a late 2021 interview, Intel executive Raja Koduri claimed that the metaverse would require a thousand times more computing power than is available now. Koduri also alluded to the connectivity challenges he encounters in the Bay Area. If Koduri has connectivity issues even today, before high-bandwidth VR and other applications come online and in a part of the world synonymous with tech, there's still a lot of work to do.
Regarding connectivity, Moussa Zaghdoud of Alcatel-Lucent Enterprise estimated that the metaverse will require broadband of more than one gigabyte, with a latency of 10 milliseconds or less. A gigabyte equals 8,000 megabits. For perspective: Streaming a video today requires 25 megabits of speed and happens with as much as 100 milliseconds of latency.
Koduri clarified that he expects to see appropriate computing and connectivity capabilities emerge. When they do, we can all have more confidence in the metaverse.
Sufficient computing power and
connectivity come online to create
credible immersive environments.
"Invisible” VR hardware becomes available — equipment we don’t even notice we’re using.
A governance structure emerges that supersedes tech-company fiefdoms/walled gardens.
The metaverse goes beyond the obvious use cases currently attracting the most attention.
the path ahead
Today, online gaming features all the essential elements of the metaverse — virtual reality, avatars, immersive experiences, in-platform economies, large numbers of simultaneous users, and activity that continues 24/7 — and millions worldwide visit gaming platforms every day. Half of Gen Z and Millennials say their virtual identity is an extension of their physical self and they believe online friendships can be as strong as those formed in the "real world." They are ready to explore whatever comes next in the metaverse because it already feels like home.
Mastercard is similarly exploring the metaverse as it unfolds — for the company, our customers and consumers. Our primary goal is to ensure commerce in virtual worlds is frictionless, secure and trusted.
In whatever way the metaverse evolves, Mastercard is committed to being at the forefront —exploring, learning, scouting opportunities, and ensuring our business customers and consumers can participate securely and seamlessly in this technological transformation.
Here are a few ways we're preparing for commerce in the metaverse:
In one project, Mastercard is collaborating with the Saudi Esports Federation (SEF) to promote the country's billion-dollar gaming industry — including metaverse and augmented reality activations, NFTs, consumer loyalty solutions, and a virtual Mastercard card for gaming environments. Gaming and e-sports in Saudi Arabia is expected to reach $6.8 billion by 2030, so this initiative is a milestone in metaverse market development.
Mastercard has filed for expanded trademark protection of its core trademarks in a number of important markets globally to cover NFT and metaverse-related activities.
Mastercard is working with NFT marketplaces, including Candy Digital, The Sandbox and Mintable, to enable NFT transactions.
Preparing for a future of virtual commerce
At the same time, Mastercard is assessing metaverse platforms’ potential to bolster communities and deliver unique virtual experiences. For Pride Month this year, we partnered with Decentraland and MetaPride Land to launch a digital space for the global LGBTQIA+ community. We also sponsored Grammy Week's first-ever metaverse experience on the Roblox gaming platform. Activations included artist avatar meet-and-greets, games, prizes and a performance by Camilo, who was nominated in the Best Latin Pop Album category.
We've partnered with Coinbase so people can use their Mastercard cards on its NFT marketplace, and we acquired CipherTrace, a leading cryptocurrency intelligence company, to provide advanced security and insights.
Mastercard Data & Services helps banks manage the adoption of digital currency and create cypto strategies and loyalty programs. Its solutions consulting team collaborates with customers on metaverse projects.
The metaverse in 2030 is what automated driving was during the 2010s: something influential voices kept predicting would soon capture the world but never did.
Hardware, software and connectivity limitations prevent the triumph of the metaverse, just as they derailed automated driving. Deficiencies in metaverse tech, such as cumbersome hardware, aren’t catastrophic like those in driving tech. But they keep people away.
always just around the corner
Multiple possibilities for the metaverse
a mainstream metaverse
What the new digital realm could develop into by 2030
The metaverse in 2030 remains permanently just around the corner and appeals, as it does now, primarily to gamers and other niche enthusiasts.
We don’t all step over a threshold into the new virtual world and pull the door shut behind us. Nor does the metaverse fizzle. Instead, metaverse research leads to innovations that seep into our lives so that by 2030 we’re using lots of "metaverse technology,” even if we don't think about it that way.
That technology might include next-gen smart glasses, which surgeons and architects will wear on the job a couple of hours a day; or digital twinning solutions for use in industry; or virtual health care solutions that let patients in remote areas “visit” doctors.
People will adopt “metaverse” tech on a piecemeal basis and for specific reasons. But we won’t all be living for significant amounts of time in a parallel world.
Sufficient computing power and connectivity swiftly come online and make the metaverse "happen” fast. Hardware makes huge strides, too.
Success feeds on itself, driving cycles of investment and innovation. New business models emerge, and millions of fully interoperable metaverses transform how we live, work, socialize, shop and run our economies. Most, if not all, of the pieces have fallen into place.
The metaverse, an unavoidable and ubiquitous force, penetrates our lives like the internet does today.
Consultancies have been busy defining and teasing out the implications of the metaverse. Here are highlights from their commentary.
Voices on the 'verse
What consultancies are saying about the metaverse
On when the metaverse will be viable:
“It will likely take at least 5-10 years for a fully immersive metaverse with widespread user adoption and an established economy to emerge, while an open, fully interconnected metaverse scenario … may be at least a decade away.”
On why the metaverse is attracting attention now:
The pandemic accustomed us to the “‘digitization’ of social and work interactions” and to endemic e-commerce.
On the metaverse as, like the iPhone, a convergence of familiar technologies:
“Recall the release in 2007 of the original iPhone — a single device that brought together a camera, computer, mobile phone and operating system. The technologies involved were not new; the revolution lay in their convergence and the resulting entrepreneurial stimulation of thousands (and, ultimately, millions) of app developers, who set about finding ways to put the magical new tool to use.”
Numbers that tell a growth story:
“Annually, $5 billion is spent on virtual goods (twice what is spent on streaming music).”
“The average price of a parcel of virtual land in four pioneer metaverse experiences doubled in 2021.”
On why the “Web3” concept might not be necessary:
“Even if the metaverse doesn’t become the decentralized crypto utopia that many technology visionaries propose, it will still reshape how we create, interact with and exchange content.”
On how the metaverse could improve society:
The metaverse’s “capabilities may help to overcome social and economic barriers to progress by toppling the gender gap, economic obstacles and other inequalities. The power and reach of the metaverse can potentially eliminate many of the constraints and biases of today’s reality.”
On how AR beats VR:
“Augmented reality (AR), in particular, supported by AI, is likely to be more transformative than virtual reality in the near term, given the ability to seamlessly layer AR on top of our daily life.”
On how metaverse hardware will catch up:
“Although nimble software and consumer-friendly form factors are still a barrier to widespread consumer adoption, particularly for VR, those issues won’t last forever. After all, Apple’s original personal digital assistant, Newton, was too clunky to capture the world’s attention. Then Apple invented the iPhone.”
On the metaverse’s cross-generational appeal:
“[M]illennials showed the greatest awareness of the metaverse, with two-thirds saying they had previously heard of it and half expressing excitement about it. Gen Z and Gen X trail closely behind, and, surprisingly, nearly half of baby boomers are aware of the metaverse.”
On consumer tendencies in the metaverse:
“Consumers, on average, spend $219 annually on digital assets, of which more than 30 percent is on metaverse-related assets, such as in-game purchases, virtual enhancements and real estate, and nonfungible tokens (NFTs).”
On corporate leaders’ expectations for the metaverse:
“Eighty-two percent of [the 1,000 U.S. executives PwC surveyed] expect metaverse plans to be part of their business activities within three years.”
Thirty-eight percent of PwC’s surveyed executives expect the metaverse to be “business as usual” within the next year.
On consumer ambivalence — tending toward optimism — about the metaverse:
“[C]onsumers worry about the metaverse’s societal implications (such as online hate, discrimination, sexual predators) and say that it’s just for younger people, but roughly half also say that it’s exciting and will accelerate the use of digital assets. ... This vision, of optimism mixed with fear, may reflect experience with the internet, which advanced quickly — but often at a cost.”
There clearly are great expectations for the metaverse, but to reach its full scale and potential will require years of sporadic steps forward as technologies mature, regulations develop, consumer behaviors evolve and companies and industry sectors experiment and innovate.
Early on, we're likely to see hybrid applications — digital elements integrated into physical environments — that bring immersive commerce to life across retail, entertainment and sports.
As emerging technologies advance, our physical worlds will be more instrumented and interconnected with digital experiences. We'll leverage AI, wearable technology, sensor-driven IoT, edge computing and augmented and mixed reality to create hyper-personalized intelligent experiences. We'll see not quite complete immersion, but rather a persistently available digital overlay on our day-to-day physical lives.
Further out, as its underpinnings evolve, the metaverse is likely to develop similarly to social networks. Companies will create immersive experiences and incentives to engage consumers. Then they'll foster communities that connect people based on interests and activities. More brands will participate as more people spend more time in these worlds. Advertising, fulfillment and commerce will follow.
We'll see success stories gradually emerge beyond the sectors where they're occurring today — gaming, e-sports, entertainment and fashion — transforming work, education, healthcare, hospitality and more.
No one knows exactly how big the metaverse will become, but analysts say it will be a multi-trillion dollar market by 2030, and tech companies are investing billions to be part of it. Early signals suggest people are open to and excited about the potential.
At Mastercard, we're exploring the nascent metaverse to ensure we create inclusive, trusted virtual ecosystems so people can participate securely and seamlessly in whatever opportunities it may offer in the future.
At Mastercard, we're exploring the nascent metaverse to ensure we create inclusive, trusted virtual ecosystems so people can participate securely and seamlessly
The path ahead
chief innovation officer
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