Raphael Thys
Currently everybody is doing their 2023 predictions. As somebody in the strategy field I love reading (and writing) these, but after a while they become repetitive. Especially within the Metaverse field you see the same six predictions all the time (which honestly aren’t really predictions around the Metaverse, but marketing around NFT and crypto — you know which six I mean).
So here is my attempt at predictions around the Metaverse in 2023 that you haven’t read somewhere else yet.
Disclaimer: This is not about claiming to know the future or trying to sell a specific version of it, but to train my personal muscle of Strategic Foresight. I will provide assumptions for the predictions as well as drivers and a lot of links to dive deeper. This is going to be some reading. Grab a coffee or tea and enjoy!
The Metaverse is not distributed equally. In 2023, the Industrial Metaverse will scale, the Enterprise Metaverse will emerge, while the Consumer Metaverse is still forming
Base assumptions & definitions: When making any kind of predictions around the Metaverse, it is important to understand that it is a contested future vision, claimed by different perspectives and motivations. I don’t like to gatekeep specific visions of the Metaverse and try to be as inclusive as possible:
Visions of the Metaverse usually describe persistent, digital dimensions connected to many aspects of the physical world, including people, places, and things. The Metaverse then enables shared immersive experiences across both the physical and digital worlds, connecting users to others around them, either through augmented physical things or through purely digital experiences.
This includes components from several technology fields, for example Digital Twins, Machine Learning and Graphs, as well as technologies along the reality-virtuality spectrum. All those technological families are at distinct stages of technical and social maturity and availability.
Assumption: While the Metaverse as a concept might eventually bring together some or all those technologies into one commoditized bundle, it does not make sense to look at the technologies and aspects as unified trend yet.
Assessing adoption rates & scale of any technology depends on the size and intent of the market segment:
- For industrial use, scale adoption might mean usage in specific steps in the production or service chain of an industry — The total market represents only thousands to tens of thousands of organizations.
- For enterprise use, scale adoption might be specific departments in organizations adopting it — The total market is hundreds of thousand organizations.
- Consumer solutions require broad adoption on society-level to be seen as scale — This means tens and hundreds of millions of users.
Observations in industry: We are already seeing scale adoption of Metaverse technologies in some industries, as they provide tangible returns in planning and operations. This is now accelerated by rising prices for resources like natural gas as well as a looming global recession, forcing industries to be more efficient with all resources.
Manufacturing and supply chain companies are using connected assets and digital twins to monitor, analyze and optimize their processes, making them more efficient and sustainable, improving quality, reducing waste, and optimizing energy expenditure. Manufacturing, energy, mobility, and logistics use machine learning to get from reactive to predictive maintenance, managing assets more efficiently, reducing downtime and prolonging their lifespan, thus reducing capital expenditure. Mixed Reality is used for planning, training, work ergonomics, remote assistance, and safety.
When looking through the case studies, they don’t read like typical Metaverse cases, as they sometimes get rolled into “Industry 4.0” / Digital Transformation initiatives. Example: “Mercedes Benz introducing the MO360 Data Platform to make vehicle production more efficient, resilient and sustainable.” That said, they use Metaverse components and experiences, thus driving Metaverse adoption.
Prediction: This trend will accelerate in 2023 as more end-to-end industry solutions will become available at lower price points, driving availability into small & medium corporations within manufacturing, allowing organizations to better operate (and survive!) in tough market conditions.
Observations in enterprise: In 2020 many organizations went remote due to the COVID pandemic. Personal meetings and interactions were replaced by remote meetings and digital collaboration tools at scale, with organizations testing the limitations of remote work.
While remote work is now a viable option in many organizations, there is a desire to increase presence in remote teams to foster personal relationships and understanding. Enterprise collaboration tools are already adding Metaverse capabilities like avatars, spatial meeting rooms and 3D asset management to their solutions as a result. As many organizations already use these tools, they will get access to the new Metaverse functionalities as well.
As a result, enterprises will start to utilize Metaverse technologies to, for example, better equip their remote and on-site teams, connecting them to experts as needed within shared experiences. They will also be able to explore training and education — this will not only be true for adult / on-the-job education, but also for the education sector itself like schools and universities, as spatial understanding is key for some fields, for example in medicine, engineering, or chemistry. As more solutions will be available, we will see isolated scale adoption in specific verticals, proving enterprise viability.
Prediction: As collaboration tools implement Metaverse functionalities, enterprise organizations will start to utilize them in 2023, entering scale somewhere in 2024.
Observation in consumer space: Augmented Reality hardware is still too expensive and nowhere near ready for consumer use. Virtual Reality headsets are getting there but lack a compelling use case for large scale consumer adoption. Internet of Things solutions like smart home devices exist, but also have not shown enough benefits or maturity for scale adoption. The same is true for Cognitive Services solutions like voice assistants. While isolated products exist that show promise, they do not yet lead to a seamless Metaverse experience.
Scale solutions exist but are confined to gaming and entertainment experiences, for example massive multiplayer games and virtual concerts / experiences.
Prediction: There won’t be scale Metaverse solutions for the consumer segment in 2023 that provide shared immersive experiences across both the physical and digital worlds. Progress in solving challenges around technology, cost and availability continues, but slowly.
Summary: The Metaverse is already here, but not distributed evenly across sectors. In the next 12 months, scale adoption in industry is driven by external market forces, emerging adoption in enterprise by improved experiences, while there are too many challenges to bring it to consumer scale.
In 2023, consumer brands will continue to use the Metaverse as marketing narrative, driving the illusion of consumer-scale relevance
Base assumptions & definitions: While there won’t be large scale business use cases in the consumer space, we already see consumer brands adopting the Metaverse narrative for marketing. These are not meant as actuation, to improve the fundamental business of the brand, but as inspiration, influencing their perception in the market.
This will continue to be a dynamic field, with brands exploiting various metaverse narratives for reach.
Example: The acquisition of virtual property in speculative game platforms like Decentraland or The Sandbox were highly successful earned media campaigns for brands in 2021. This was explicitly not about using virtual property to open new revenue streams, but to get free articles in technology and industry media.
As media interest in virtual property declined, brands switched to branded NFT drops. These were initially simple, static NFTs, similar to community pins, and have recently transformed into more elaborate “brand marketing experiences”.
Observation: This current hype cycle for NFTs as an enabler for the Metaverse is driven by crypto maxis as an attempt to get new money into the crypto ecosystem. This creates a symbiotic relationship between the crypto maxis and brands, with brands publishing PR and marketing campaigns and maxis providing the hype and multiplication. While the Web3 narrative is also driven by crypto-maxis, it does not offer enough marketing pull for brands as the claimed use cases are a) not practical and b) not experience-based. Brands will thus go for a Metaverse-play.
Prediction: Throughout 2023 brands will continue isolated marketing campaigns around hype Metaverse topics, without connection to the larger marketing toolchain (CRM, global loyalty programs, customer support), nor connected to the core business.
As some late mover brands will finish their NFT projects, first mover brands like Nike, adidas and others will maintain and expand their campaigns while looking for the next crypto-driven Metaverse topic(s) as consumers will continue to lose interest in NFTs.
Predicting what this might be is hard. Creating branded virtual worlds offers the potential for great experiences and customer retention. However, they are expensive to develop and even harder to maintain / operate safely. Partnerships or branded one-time events on popular existing virtual worlds and platforms like Fortnite, Minecraft or Roblox is more likely as they offer an existing community as well as mature and brand-safe environments. This might be in-game events, collectibles, advertising, real-world collaboration.
If I’d have to guess, I could see brands exploring Flash Communities, inspired by flash mobs, but extending the collaborative experience for a longer time. The result might be similar to branded Alternate Reality Games, potentially backed by Augmented Reality mobile experiences. What we now know from games like Pokémon Go or I Love Bees will be used in a new branded experience — building on these game mechanics but providing a new feel of entertainment or value. This will also provide a path from the current NFT-based campaigns to community-based ones, utilizing them as early adopter tickets into these programs.
In 2023, we will see the first brands extend into shared immersive branded experiences across both the physical and digital worlds, connecting fans of the brand to others around them.
Summary: Metaverse marketing campaigns will thrive in 2023, but detached from core business value or the main marketing toolchain (effectively siloed). Campaigns around NFTs will decline, being replaced by more engaging digitally enabled experiences in the real world, beyond scarcity and collecting.
In 2023, a society-wide discussion around the boundaries of identity & representation in virtuality will emerge
Base assumptions & definitions: Identity in virtuality is complicated. Based on research, we know that virtuality is used for identity experimentation and exploration. Dr. Richard Bartle is an early proponent of this, having studied the motivations of players in virtual worlds since the early 1990s, stating: “The celebration of identity is the fundamental, critical, absolute core point of virtual worlds.”
In virtual worlds, digital avatars are very descriptive, expressive, and deliberate digital representations of self in a (seemingly) safe & separated environment. People can thus explore gender, sex, race, culture, body types, even human nature itself. We see this in male players choosing female avatars. Or different skin colors and cultures. They essentially “walk a mile in virtual shoes”, making them a little bit uncomfortable, but also inspiring them to be more. And this is used to push the boundaries of a user’s core personality, exploring what they could be, having real effects on them as they use and explore these representations and the behaviors associated with them.
With digital avatars every external attribute is changeable and merely temporary. They are all completely fluid. And this is challenging a lot of current assumptions, most of all that human nature is a fixed point. Is choosing a female character as a male player weird? What about in a work setting? Is choosing a dark skin tone as a white player digital blackfacing? If my avatar is stylized as Asian, is it cultural appropriation? Can I make Asian jokes and imitate an Asian accent? How about choosing races that don’t exist in reality? Can I even appropriate Gallente culture in EVE? Or Lalafell culture in Final Fantasy IX?
Observation: These questions will surface broadly in 2023 as avatars and virtual identities are charging into the mainstream, for example with avatar talent shows like “Alter Ego” and “Masked Singer” or portrait generators like Lensa.
A data point for this is CodeMiko. Miko is a virtual character, pupeteered by Youna Kang aka the Technician. Besides her Twitch steams and YouTube channel being quite entertaining, they push the boundaries of what is technically possible and what is currently socially accepted. Twitch chat being able to change the size of body parts or body functions is just the beginning. She has been banned from Twitch multiple times for breaking the conventions of what was considered acceptable.
As people explore their identities in virtual dimensions, it is impossible to disentangle reality. We will bring all biases, social norms, and conventions from reality into virtuality. The cultural subtext we bring from reality into these virtual worlds is important and must be respected.
Prediction: Starting in 2023, one generation will want to talk about “digital yellowfacing” in v-tubing and a younger generation won’t even understand the problem since avatar skin color is simply an RGB value you can change at any time.
This also aligns to a larger divide in (some) societies, as discussions around gender identity are highly controversial and emotionally charged. And as said, with digital avatars every external attribute is changeable and completely fluid as a core feature. This means that the discussions around the boundaries of identity and representation in virtuality will also be emotionally charged & political from the beginning and end up highly politicized.
Prediction: We will see identity exploration in virtuality condemned as “damaging to children and young adults” by the conservative right.
At the same time, virtual world designers and operators cannot avoid this conflict as they need to allow users the room for exploration to grow their identities. If Metaverse companies want to progress in this space, there is a need to participate and meaningfully contribute to these discussions in the social space. This then extends into topics like accessibility, equity, inclusion, safety, governance, and compliance.
Prediction: “Responsible Metaverse” capabilities, bridging the gap between technology, design, ethics, and politics, will become a differentiator and enabler for Metaverse companies, similar to “Responsible AI” capabilities in the AI field.
Discuss!
Congratulations — you made it through the predictions! I hope you found them entertaining and just a bit challenging. Granted, with predictions only 12 months out there is not much room for true surprises, but I find some details not that obvious — and thus interesting.
What do you think? Leave a comment or ping me with your thoughts. Take care!