Cool down. The Metaverse is not here. Yet.
Carlo Pignataro
Author of "Sell with Style” and “Serve with Style" | Host of Lux and Friends | Luxury Industry | Research | Training | Consulting.
Over the past six months, the luxury industry has unapologetically, unconditionally and unquestionably embraced the metaverse.
Except, the metaverse is not here yet.
I am writing this article for two reasons:
WHAT IS METAVERSE?
To this day, there is no one definition everyone agrees on, because there is no one metaverse yet.
The term, which is made of the Greek word Meta (beyond) and the English word Universe, was first mentioned by author Neal Stephenson in his novel Snow Crash, published in 1992, one year after the Internet became publicly available.
In the novel, the main character goes in and out of a virtual 3D world to escape a dystopian reality.
Although in principles the metaverse is an immersive virtual experience, every player in the field (ranging from the world’s largest tech companies, to countless start-ups) is working on their own version, or interpretation if you will, of this digital realm.
Some, as we’ll see later, are being more vocal about it, others are (alarmingly, for the state of adoption) being silent.
METAVERSE IS NOT WEB 3
Lately, I’ve seen many people confusing metaverse with Web3, which is an evolution of the internet, based on the blockchain technology.
As opposed to Web2, dominated by tech giants like Google, Facebook, Amazon, Apple and only a few more, Web3 should offer its users a more decentralised experience, and grant them a higher level of ownership of their data.
At present, the major development of Web3 is represented by:
In all fairness, except for the bitcoin blockchain, which is totally decentralised, all other blockchains have, in a way or another, a (low) level of centralisation.
Nothing, if compared to Web2, where everything internet users do is tracked and basically belongs to the companies that facilitate the experience.
Enough for someone like Twitter’s former CEO Jack Dorsey to wanting to launch Web5. Web5 is a further evolution of the internet, entirely based on the bitcoin blockchain (not the asset) to ensure its users sole ownership of their data. Something very interesting, at first sight. I am committed to researching more as it grows.
The metaverse, by all means, is not limited to web 3.
In fact, one of the largest companies of Web2 (guess who?) has changed its name to Meta. The company is addressing most of its investment on the metaverse, of which the hardware Oculus is the main output.
HOW CLOSE? HOW FAR?
Although the Luxury Industry seems obsessed with the metaverse, the people creating it are very clear about one thing: the metaverse is not yet here.
In May this year, Mark Zuckerberg has informed investors that not only Meta will invest and lose billions of dollars over the next few years, but that some of the (most immersive) products will be available in 12 to 15 years.
The Financial Times, in an article dated June 9th covering the latest developer conferences of Apple, Google and Microsoft, highlighted the fact that none of them mentioned the metaverse.
Whatever plans those companies have related to this technology, they are not promoting.
Google had its glasses released almost a decade ago, and Microsoft is launching Mash, the virtual version of Teams, populated by avatars.
Mass adoption seems still far away…
THE FIRST GATEWAY
If one industry will lead the metaverse, that is, inevitably, the gaming industry.
If you’ve ever played Fortnite (or any other blockbuster video game) you know how immersive they are. Imagine what will happen when players will have all their senses immersed in the gaming experience.
As a father of two young kids, I fear that day. As a businessperson and investor, I await it in trepidation.
领英推荐
Although the technology is still “raw”, I’ve recently visited the Virtual Reality Park in Dubai (at the Dubai Mall) and the experience was quite revealing.
The metaverse is not here yet, but it’s coming. And there will be no way back.
The other reason gaming will lead the metaverse, lies within existing financial data. As of 2021, the market for in-game items (the virtual weapons and accessories players buy or earn playing) was worth 82 billion US$. The more immersive the experience, the more players will join, and the more items will buy. And the margins, for the companies “producing”them, are close to 100%.
NFTs and METAVERSE
The two are often mentioned in the same conversations. Although independent from each other, they are a perfect match.
If the metaverse is a virtual space in 3D, then the NFT is the digital possession you carry with you in this parallel world.
Do you wear Gucci in real life? You’ll want your avatar to wear it too.
Do you display unique artworks in your physical office? You’ll certainly want your virtual one to be as exclusive.
NFT, which stands for Non Fungible Token, is a smart contract that provides buyers with (often) additional features for the digital items they buy. It is also an uncorruptible proof of ownership.
This means the Rolls Royce many people fake on Instagram, cannot be faked in the metaverse
WHY DOES IT MATTER FOR THE LUXURY INDUSTRY?
I believe the luxury industry will benefit immensely from the metaverse.
First, the e-commerce experience will get to a whole new level. As user friendly as the e-shops of the best brands are today, they are flat and mono-dimensional. As more senses will be progressively involved, more people will shop online.
Second, the profit margins coming from the sale of digital items are stellar.
Third, the most active brands can create endless opportunities for interaction with their fan and customer base. From catwalks to product launches, from workshops to cultural events, the sky (and creativity of the people involved) is the limit.
Fourth. If luxury is pleasure and fun, then gaming is its next destination. The merge between fashion and gaming is already taking place. I think other segments of the luxury industry will soon follow.
Fifth. Is the sale of digital items in the metaverse (and not only) is as smart contracts (NFTs) brands can profit from the resell of the item for all its lifecycles.
WHO’S DOING WHAT?
There is a lot of talking and some activity in the luxury industry. Most of them suffer from the early and perhaps deceptive phase of the phenomenon.
Based on my observation, Gucci is the brand moving the boldest, and perhaps smartest, steps.
They have a virtual garden in Roblox, in which a digital bag is sold for over 4.000$, and they have launched, in partnership with the London based sports platform FACEIT, the Gucci Gaming Academy.
Here is a brief description of the Academy, as found in the FACEIT website:
“Created by Gucci & FACEIT, the Gucci Gaming Academy, is a program designed to support the development of up-and-coming gaming talent and help accelerate their path to pro. Players will receive full-time mentorship from coaches, mental health support, world-class hardware and access to many other programmes which help enhance in-game performance and well-being. The Gucci Gaming Academy programme will strive toward supporting aspiring talent and empowering them to be signed to a professional team.”
Balenciaga is selling their collections on Fortnite and several brands, from Dolce & Gabbana to Burberry, are experimenting (and already selling) NFT collections.
Analysts at Morgan Stanley say the market for virtual luxury goods could be as large as $50 billion by 2030.
CONCLUSIONS
We may be far from mass adoption, but the metaverse clearly represents an opportunity for the luxury industry and not only.
In this growth phase, we’ll see who’s in for the quick money, and who’s interested in building a future where the physical and virtual experiences will merge. Hopefully to elevate the life of humans.
Carlo Pignataro
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2 年Many fascinating predictions of where we're headed, Carlo Pignataro. Thanks for sharing your research.