Gaming Trends in the Metaverse: What They Mean for Your Business
How game developers are leading the charge into the metaverse (and why brands should pay attention)
By Melania Lonchyna, Managing Director and Partner, and Giorgo Paizanis, Growth Director, BCG Digital Ventures
Many tech CEOs talk about the metaverse as the next evolution of the internet. It’s why we’re seeing more and more companies — from major tech players to top consumer brands — getting involved in the metaverse. Over the last year, Disney has patented technology for a metaverse theme park, Nike has started selling virtual sneakers, and Coca-Cola auctioned its first NFT (non-fungible token) for a staggering $575,000.
Gartner predicts that by 2026, 25 percent of people will spend at least one hour daily in the metaverse. When you consider Sony’s $1 billion investment in Epic Games and Microsoft’s pending acquisition of Activision Blizzard for a record-breaking $69 billion, it’s clear the metaverse is only getting pushed further into the digital mainstream.
Brands in all industries are experimenting with the metaverse as they look to new opportunities for growth and innovation. Why? Well, with more people spending time on these platforms, brands are “following the customer” to meet them where they are. There are also a host of direct commerce opportunities for brands to sell experiences and NFTs — opportunities particularly relevant for fashion and luxury brands.
But here’s the thing — the metaverse is a moving target. The metaverse is in its early innings, and while there is a lot of action happening in the space — the metaverse is still vague and largely ill-defined. Understandably, CEOs want to tread carefully, preferring to dip a toe into the unknown waters before diving in — a strategy that’s hard to argue with.
While the metaverse is still in its relative infancy, the gaming industry has been creating immersive digital worlds for decades. Popular games like Roblox, Fortnite, and Minecraft have tens of millions of active players daily. Nearly 40 percent of gamers between the ages of 10 and 20 played proto-metaverse games — games with metaverse-like elements — in 2021.
So, what can brands learn from the gaming industry as they consider low-risk ways to start experimenting with the metaverse?
In this blog post, we’ll explore a few important strategies that can be learned from gaming as you consider how your own company can tap into the potential of the metaverse — without having to go all in from the start.
Why Gaming is the Gateway to the Metaverse for Brands
Anyone old enough to remember first-generation video games like Pong and Pac-Man can appreciate how far gaming has come over the last 50 years. And while those games may seem archaic now, they were nothing short of revolutionary when they appeared.
The gaming industry has always been on the leading edge of digital transformation and innovation. Game developers have pioneered a host of disruptive new technologies — online payments, multi-sided platforms, digital goods, SaaS, and social networking — with the metaverse being the most recent addition to that long list of breakthrough innovations.
By studying these early innovators in the video game industry, brands can glean unique insights that will allow them to accelerate innovation further and capitalize on the emerging metaverse economy.
3 Lessons Learned from Gaming in the Metaverse
It’s no surprise that 97 percent of gaming executives believe their industry is the center of the metaverse today — and all of them expect companies across industries to establish a metaverse presence in the near future.
Here are three things the gaming industry does exceptionally well that any organization can learn from them as they shape their own approach to the metaverse:
- Delivering personalized, adaptive experiences
Games invoke numerous methods to engage users and optimize for time spent in different situations. For example, a game will enable short bursts of game play throughout the day that can easily be accomplished while on public transport or during a lunch break.
The metaverse also offers brands the opportunity to deliver a hyper-personalized experience, free of the physical world’s limitations. From emotive avatars to custom shopping features, the metaverse offers brands limitless ways to personalize customers’ experiences. Zoom, for example, is one brand dipping its proverbial toe into the metaverse with the recent launch of its avatars feature.
2. Unlocking hidden complexity
Have you ever glanced into the cockpit when boarding your flight for a trip, only to be met by a dizzying array of switches and buttons? While an aircraft control panel seems overwhelming to the non-pilots among us, pilots know what every single switch and button does. But they certainly didn’t know on their first day of flight school.
Rather than throwing all the bells and whistles at users as soon as they join a game in the metaverse, gaming companies ease them into it, little by little. Given how feature-rich and complex games tend to be, gaming companies usually start users with a limited set of features. Users can then “unlock” more of the experience as they progress along the learning curve.
When crafting your brand’s metaverse experience, consider “dripping” features and functionality to your audience over time. Prioritize the most important things they need to know in the moment. And this lesson doesn’t just apply in the metaverse. For example, Apple does this brilliantly in its marketing with advertisements promoting just a single feature — like the camera or FaceTime — instead of all its capabilities.
Gaming companies have also cracked the code for getting non-gamers to adopt their platforms: hosting immersive, virtual concerts that appeal to gamers and non-gamers alike. Top acts like Ariana Grande, Charlie XCX, Lil Nas X, Travis Scott are just a few artists whose avatars have performed in the metaverse. In 2020, Travis Scott’s Astronomical tour in Fortnite drew in more than 45 million viewers.
To drive metaverse engagement and adoption — just like Roblox and Fortnite have done with virtual concerts — you first need to ensure your audience is comfortable with the idea of using avatars and virtual spaces. Remember, it’s new to many of us. It may seem counterintuitive, but it’s sometimes necessary to slow down to speed up.
3. Leveraging network effects
Game developers have pioneered many social mechanics that are now commonplace in a variety of app genres. These can be as simple as a friending mechanic — or much more integrated, with real-time chat and “player vs. player” competition. Metaverse game developers have learned that by integrating social elements, players create their own content, creating a virtuous cycle.
This cycle, however, can also turn on itself if a community becomes “toxic.” This happens when players make the experience worse for others who join. Significant investments go into maintaining a healthy community through community engagement, moderation, or ambassador programs when this occurs.
Consider whether you can build network effects by enabling your customers to interact in ways that positively affect the experience of others or that encourage others to join. Conversely, stay laser-focused on the health of your community to ensure that existing customers (or churned customers) are not detracting from the experience and turning new joiners away.
Taking Your Brand’s First Steps Toward the Metaverse
So, you’re ready to start experimenting in this exciting new virtual world, but, like many organizations, maybe you’re not sure where to start.
Before you determine your metaverse approach, you need to identify how important it is for you to test — and at what investment level. If your company is in the financial and technical position to build a metaverse, then you may consider making a bold investment in the team and infrastructure to make it happen — like Facebook, Google, Unity, Epic, or Sony have done. If your company is in the entertainment space or owns significant intellectual property (IP), you may also want to invest in a larger and more sustained experiment and form strategic partnerships — like Disney or Lego have done. Since the metaverse is a natural extension of gaming and entertainment, it offers fans a way to explore the worlds they create with more immersion than ever before.
The vast majority of companies, however, are not in a position to build the foundation of the metaverse or create virtual worlds around their intellectual property. Brands in this position will most likely interact in the metaverse economy created by other platforms, which are still relatively niche and developing in a fragmented way. The world’s most popular blockchain game, Alien Worlds, has nearly 1 million monthly active users, for example. When you consider there are five billion internet users worldwide — more than 60 percent of the global population — it’s clear the metaverse still has plenty of room to grow and unlike the internet, it’s not only just one place, it’s many properties/many metaverses that may, but more likely, will not converge, so you’re not just betting on metaverse as a concept, you’re also needing to make a bet on a singular or portfolio of platform(s).
Some industries and product categories also simply make more sense in the metaverse than others. Luxury fashion is a natural fit, for example, since avatars are a major feature in metaverse platforms and are wildly popular among players and lucrative for developers.
Dipping a Toe Into the (Virtual) Waters
The metaverse lies at the intersection of three converging technologies: Metaverse worlds (m-worlds); augmented, virtual, and mixed-reality (AR, VR, and MR); and virtual assets powered by the Web3 technology stack. For many brands, a more agile approach to entering the metaverse — and experimenting with the technologies that comprise it — is often the best choice. Whether you are looking to start exploring cryptocurrencies or technologies like VR and AR, taking a test-and-learn approach is vital to innovation in the metaverse.
For brands ready to dip a toe in the virtual waters, here are a eight low-risk, tactical ways to start experimenting with the metaverse:
- Release an NFT collection or virtual goods line
- Launch a tokengated store on Shopify
- Offer AR experiences like virtual try-ons
- Sponsor a virtual concert or event
- Host a virtual meetup on an existing platform
- Create an immersive VR experience
- Establish relationships with creators and influencers
- Monitor what your customers are doing in these platforms
Brands should also do their homework to select the right platform with which to experiment. Platforms like Sandbox and Decentraland are still emerging, for example, while massively multiplayer games like Fortnite, Roblox, and Minecraft already boast hundreds of millions of users. User demographics can also vary significantly across platforms. Roblox, for example, is dominated by young players — only 14% of Roblox users are above the age of 25.
It’s also worth noting that the more layers of new technology you build into your metaverse pilot programs, the more niche they will become. For example, if you mix NFTs and VR and virtual worlds into a single test, you’ll naturally end up with a smaller audience than if you test with just one of these technologies.
Most importantly, remember that there are no hard-and-fast rules to operating in the metaverse. Be ready to iterate, improve, and evolve your metaverse experience strategy over time.