If you build the metaverse, will consumers come?

Forbes recently put out a thought-provoking article which questioned whether a consumer need for the metaverse indeed exists.

Yes, we see the tens of billions of dollars being poured into the metaverse. We see the potential value-creation events. Within web3 and metaverse-related echo chambers, we hear voices that promise the metaverse will be the next big thing – that it will be significant.

“The big players are not only prepared to deploy, they’re already 10, 11 figures in.”

Chris Dixon

In the periphery, we can see things like Shanghai’s $1.5 billion metaverse development fund, Facebook’s name change to Meta and the $10 billion per annum they’re prepared to deploy into the metaverse, and we see Dubai’s metaverse strategy which intends to add upwards of $4 billion into their economy over the next five years. The big players are not only prepared to deploy, they’re already 10, 11 figures in.

Forbes’ counter-narrative was both insightful and interesting. Does the new metaverse-enabling technology only compete with pre-existing means of entertainment, education, and other digital experiences?

But what about simulated training, alternate realities, and educational opportunities that the metaverse will present? What about increasingly complex digital identities, digital assets, and digital experiences?

“Both the metaverse and metatech are coming of age at a time when consumers and governments alike are aware of the dangers of such platforms and how consumer data can be misused and leaked.”

Ben Voyer

“Entertainment is a core human need, and every generation, every century, sees new forms of entertainment. These new forms of entertainment just end up replacing older ones and creating a more fragmented entertainment market,” Prof. Ben Voyer writes in the article. “Beyond entertainment, the metaverse may address needs such as education (e.g. offering learning environments closer to real-life campuses, where serendipitous interactions are key) and prototyping real world projects (e.g. building digital twins of cities and studying behaviours).”

Voyer continues by addressing other potential challenges: “Beyond identifying the right consumer needs, a bigger and more pressing challenge for aspiring metaverse and metatech companies may simply be data privacy regulations,” he states. “Both the metaverse and metatech are coming of age at a time when consumers and governments alike are aware of the dangers of such platforms and how consumer data can be misused and leaked. The metaverse is thus unlikely to benefit from an initial euphoric period of consumers sharing everything and anything personal in their new virtual world – something Facebook and other early social media platforms enjoyed.”

What are the thoughts of consumers and business leaders alike? Do they see metaverse-related activities creating a significant impact in the world, or is it creating a solution to a problem that doesn’t exist?

The future of commerce?

Some say that with the proliferation of relevant devices, with relevant applications it will enable a whole new engagement channel… possibly the future of commerce!

Very forward thinking. Should we be looking at it via a problem lens or is it a whole new opportunity statement? I guess it depends. My personal answer would be a healthy bit of both. In my opinion, the opportunity potential is primed, but there is need for critique and need for growing pains to be addressed.

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This article is based on a LinkedIn post by Chris Dixon, and subsequent replies to it.

It gives the views of its author, not the position of ESCP Business School.