2022 was supposed to be the year of the Metaverse. Something went wrong?
We translated an interesting material about the Metaverse from decrypt.co.
Billy Huang runs a metaverse advertising agency. Okay, to be precise, he runs an advertising agency. It recently partnered with established brands that were looking to capitalize on the potential of the new immersive internet.
But given the events that had taken place this year, Huang wondered if he should abandon the word “m”.
“Maybe we really need a little rebranding right now,” he says.
Huang’s firm, Insomnia Labs, ran experimental campaigns in 2022 with Under Armor and L’Oreal. They have been linked to Web3, ranging from NFT-based advertising campaigns to DAO subsidiaries. There was some result. But he is still very far from the existence of brands in the futuristic digital reality that, as claimed, was about to become our present.
What went wrong?
Last October, Facebook refocused all of its resources on dominating virtual worlds and even changed its name to Meta. Over the next few months, metaverse startups received a lot of venture capital. A huge stream of traffic poured onto the Metaverse platforms. In the spring and summer everyone was talking about the metaverse, it graced the covers of magazines; in autumn, “metaverse” was shortlisted as a Word of the Year finalist for the Oxford English Dictionary.
However, after a few months, the hype waned, as did the population of the metaverse. The crazy fall of cryptocurrencies drew attention to itself. And the “Word of the Year” was the concept of “goblin mode”, denoting greedy and unkempt behavior.
Experts argue that the main problem is related to the number of users. The purpose of the universe promised to attract millions to a new vision of the Internet. But even those who came at the beginning did not stay.
“Basically this year we have not recommended any campaigns in the metaverse. This is because there are few users there,” says Huang.
Why didn’t they show up? Brycent, renowned Web3 game creator and opinion leader, believes that too many metaverse platforms and investors are confusing the novelty of virtual social spaces (such as digital parks and offices) with the real innovative uses of metaverse technology.
“If there’s a place called the metaverse where we sit and do nothing but chat, that’s no better than sitting on Discord,” he says.
At the beginning of this year, users raced to check out what the metaverse platforms like The Sandbox and Decentraland are. They shelled out hundreds of millions of real dollars for virtual plots of land in these worlds. In February and March, Decentraland had an average of 50,000 daily visitors, according to the company. But soon this figure dropped by more than 80%.
“It doesn’t really matter how many users you can get to the landing page,” Huang explains. “They won’t stay if they don’t see the value.”
However, this does not mean that online spaces cannot build new value. Moreover, some have already done so.
Josh Rush, co-founder and CEO of Surreal, a virtual event platform, has had great success using immersive digital advertising. This year, Surreal launched a meta-worldwide campaign for Flipkart, the Indian e-commerce giant.
The event was a resounding success. Half of the users spent an hour in the space, which was an unheard-of amount of content for advertisers; The event purchase conversion rate was 400% higher than standard ad campaigns.
But Rush himself does not say that this event happened in the metaverse. It took place in the “microworld”, a site created specifically by Surreal for a particular client.
Microworlds like Surreal offer their vision of the future of virtual spaces. It contrasts sharply with platforms like The Sandbox, which see the metaverse as a constellation of many different metaworld platforms interconnected.
Tiny metaverses, such as those being built for big brands in Surreal, are not compatible with this vision. They do not connect to other platforms or sites. These are not so much virtual quarters as virtual castles floating in the air.
Despite this, Sebastien Borger, COO and co-founder of The Sandbox, considers such small virtual platforms a useful addition, and not competitors to the universal metaverse.
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But Surreal is not interested in developing a single digital platform called the Metaverse. Its director sees the future of space as a constellation of many separate micro-worlds, each with its own purpose and benefit.
“We’ve seen millions of dollars of investment that used to go to platforms like Sandbox, where people don’t really waste time and have little to offer, are starting to move into microworlds, where companies create really fun 3D programs that can work as part of promotions,” says Rush.
Trends in the newborn gaming world of the metaverse seem to point the same way.
Last year, Web3 games such as Axie Infinity gained popularity through a “play to earn” model that offered users financial rewards by playing online. Axie has made billions of dollars in 2021. But the platform’s tokens soon crashed, questioning the entire “play to earn” model.
Brycent still believes that games and Web3 are very promising combinations. But he believes previous attempts at Web3 games failed because they were being used as a vehicle to promote some kind of universal metaverse concept rather than using Web3 tools to promote individual video games.
“You can’t just come in and offer tokens and floor prices. You have to tell stories, create incredible experiences,” he says. “Because if you don’t, the player will have no reason to play.”
Brycent sees the future of the metaverse not as a single utopian shared virtual space, but as a constellation of projects, including video games, enhanced by the integration of NFTs and other blockchain-based applications.
“The Metaverse is the next generation of video games,” he says. “Games and ecosystems with own IP address: I think we will see that such things will flourish.”
This situation with the metaverse can be beneficial for market leaders. If it is a means rather than an end, if commerce in the metaverse is all about branding and games are all about storytelling, what prevents the corporations that have mastered these forms from also mastering the virtual realm?
“Web2 companies have a big advantage,” admits Brycent. “You will see Disney, Nintendo, all these big gaming companies come in and say, ‘OK, we’ll just add blockchain technology to the server, our gamers won’t feel the difference, and we’ll give them an incredible experience.’
This would be very upsetting for fans of another version of the metaverse, such as Decentraland creative director Sam Hamilton.
Hamilton says that because of the metaverse hype, his platform got noticed too early. “Honestly, we probably would like to have a couple more years to improve the products before we start to work so actively, but it is what it is,” he adds.
Hamilton believes that these are only temporary setbacks. He is unshakable in his belief that after a certain period of time humanity will exist virtually in the metaverse. And he is doing everything he can to ensure that when that day comes, Decentraland will prevent this digital world from falling into the hands of hyper-centralized corporations.
He acknowledges that Decentraland’s core of about 10,000 people is an ideologically motivated group that holds more to the theoretical promises of the metaverse than to the tangible benefits that average Internet users can attract.
“The remaining people are united by philosophy. They want the internet to go in a different direction,” says Hamilton. “Most people don’t really care about decentralization.”
He really expects the masses to change their priorities after all.
Isolated, company-dominated microworlds may well be the near future for Web3 commerce and gaming, but Hamilton says he’s playing for the long haul.
“If you designed the metaverse for movies, we are still living in the days of silent movies,” he says. “We have so many decades of innovation and invention ahead of us until we get to blockbusters like Star Wars.
Well, we’ll see.