In part 1 of our decoding the metaverse series we looked at what the metaverse actually is. We examined the core characteristics of a metaverse experience. We also looked at why the metaverse is the “next big thing”.
But part of the reason why the metaverse is the next big thing is its implications for consumer behavior. In part 2 we will examine metaverse sentiment. Put simply, whether people are excited by the metaverse and what it could offer. We will look at different demographics and attempt to unpack what this means for businesses. We also look at sentiment among business leaders. What are the priorities that they identify when it comes to delivering a metaverse strategy.
Let’s dive back into the metaverse to try and understand what consumers and businesses think of it.
Metaverse Sentiment Among Consumers
Before we look at what the metaverse could mean for consumer behavior, we should look at what consumers think of the metaverse right now.
Ipsos has conducted some research around consumer metaverse sentiment. Some of the findings are rather interesting.
Ipsos Digital shows that 38% of Americans state they are very, or somewhat, familiar with the metaverse. But there are slight variances in awareness among different age groups and the presence of children in the household.
Americans with children in their household become more aware of the metaverse. With 53% stating they are familiar with it. 53% of Americans from 18 to 34 are familiar with the metaverse. In the 35 to 54 demographic awareness dips but only to 45%. Among American consumers aged 55 and older 20% are familiar with the term metaverse.
The Ipsos survey does throw up some interesting side facts that illustrate a bit of confusion though. Awareness of the metaverse is lower than familiarity with “virtual reality”. With 69% of Americans stating familiarity with VR. It is also lower than “cryptocurrency” at 56% and “augmented reality” at 40%. The metaverse has similar awareness levels among Americans as things like “NFTs” (37%) or “the internet of things” (35%).
But things become a bit less clear when you ask people to define what the metaverse actually means.
Metaverse Sentiment – Consumers Are Confused…
Among those who are familiar with the metaverse, many consumers are unable to define it. Only 42% of those familiar with the term, and 16% overall, correctly define the metaverse as “a computer-generated world where people can socialize, work and play”.
10% of Americans surveyed think the metaverse is “a new social networking platform”. 9% select a response that says the metaverse is “a huge tech company that has developed consumer services in lots of different areas”. Which could be due to Facebook’s rebranding to Meta. A further 9% responded that the metaverse is “new internet experience which links together multiple sites and platforms”.
This suggests that consumers will need some education about the possibilities of the metaverse. Which could happen as the technology evolves and hits mainstream adoption.
There seems to be excitement among consumers, coupled with confusion. But what do business leaders think?
Metaverse Sentiment Among Business Leaders
There is excitement among executives about the possibilities of the metaverse. Even while it is evolving. But executive priorities are, obviously, very different.
Though there is a strong belief in the potential of the metaverse.
McKinsey research showed that 95% of senior executives expect the metaverse to have a positive impact in the next five to ten years. 61% expect it to “moderately change the way their industry operates”, with only 7% expecting no change at all.
But 65% of senior executives expect metaverse technology to drive more than 5% of their total revenue in five years. With 24% of executives expecting it to drive more than 15% of revenue in the same time frame.
McKinsey found that confidence in the metaverse varied by industry. But the opportunity seems to be clear for most business leaders. In fact, early adopters are already blazing a trail. 89% of early metaverse adopters reported positive operating margins of more than 5%.
So the excitement is real in the business community. But what capabilities do businesses think they need to deliver in the metaverse? Some of the responses in this area are a bit surprising.
Capabilities Business Leaders Think They Need To Deliver A Metaverse Strategy
According to McKinsey’s research, the top 5 capabilities needed to deliver a metaverse strategy are:
- Business model building (53% of business leaders put business model generation in first place)
- Product development/coding (42% of business leaders put product development in second place)
- Infrastructure/back-end engineering (38% of business leaders put back-end engineering in third place)
- Commerce/payments/blockchain (37% of business leaders put commerce and payments in fourth place)
- Product Design (35% of business leaders put product design in fifth place)
The surprises come further down the list. “Graphic design (eg, 3-D art, games)” is fourth from bottom in the list with 19% of seniors listing it as a need. “CRM/Community management” is right at the bottom of the list with only 10% of leaders selecting it as a capability they need.
“Content creation” at least is further up the list, with 29% of senior’s thinking that it is a capability that they need for their metaverse strategy.
The capabilities outside the top 5 that most business leaders pick include “Legal, risk, and compliance” with 35%. Putting it level with product design. “Cybersecurity” is at 33% while “Analytics” is at 32%. “Marketing/go to market” and “Brand/corporate strategy” sit mid-table among business leaders. With 29% and 28% respectively.
Confused Business Priorities?
While the top 5 capabilities seem pretty logical, the priorities after that seem a little confused. A 3D metaverse experience will need a huge amount of visual assets to create. While this bottleneck can be overcome with new tools like Unreal 4.0 or even AI asset generation, it should be a higher priority.
As the metaverse is all about community, it is even more of a surprise to see community management so low on the list. As the metaverse evolves, we may see this move up the list of capabilities that leaders think they need. Managing social media for huge brands is a massive job. Doing it in the metaverse is likely to be even harder.
On the positive side it is great to see business leaders value content creation. Consumers in the metaverse will need a constant conveyor belt of new experiences. These will have to be designed and scripted. While AI may shorten this process (eventually) it will still be a core capability businesses need in the metaverse.
Business Leaders Are Not Concerned About The Tech…It’s Revenue
What is clear from McKinsey’s research is that business leaders care less about the technical implications of the metaverse than you may think. The big concern is revenue uncertainty. This is why business model generation is the top concern among senior executives. 31% of leaders are uncertain about metaverse ROI. With 29% having no business model in place for metaverse technology. A further 10% believe that they “lack managerial capability to embed metaverse technology” into their business.
These concerns are valid. But it is possible that senior leaders do not yet understand that the most important aspect of the metaverse is the experience it offers. If that experience is amazing, ROI will follow. If it is subpar, the inverse is true.
The metaverse excites both consumers and businesses. But, while sentiment in both demographics is positive, there is still a lot of work to do.
Come back soon for part 3 where we will look at how businesses can get started. What can they do today to start preparing for the next evolution of the digital experience?
Talk to MAQE
Do you want to start preparing for the metaverse? Do you need back-end engineering help? Product design help? Or even advice on creating content and scripting experiences? Talk to MAQE, you can get in touch via [email protected].