The future of the metaverse hinges on generating authentic brand value

The metaverse has quickly joined the ranks of over-hyped, misunderstood, and poorly defined technology trends. Even in recent weeks, metaverse noise has been drowned out by generative AI, and economic uncertainty has further muddied the waters of the future of this nebulous movement. It’s time for marketing and experience leaders to stop gawking at the latest shiny toy, roll up their sleeves, and think about bringing together emerging technologies to create immersive virtual experiences with real impact. HFS, with support from RRD, brought together 17 enterprise leaders and Web3 experts in a roundtable discussion to debate where the metaverse is headed and how to create value amid all the hype.

The metaverse opportunity—how big is it?

Sources such as the Accenture Business Trends Survey have asserted that a $1 trillion opportunity looms ahead in as little as three years, but only $2.45 billion is attributable to the top 18 services providers profiled in our inaugural metaverse services providers Horizons report. Our delegates agreed that the size of the commercial opportunity could vary wildly depending on the definition of the metaverse. For example, we had an unresolved debate about whether decentralization, augmented reality, and virtual reality (AR/VR) are prerequisites for metaverse inclusion criteria. HFS data shows that metaverse investments top the emerging technology investments for the coming year (see Exhibit 1), indicating an aggressive push—though from a small base. For these growth promises to reach fruition, 2023 is the year the metaverse must prove its value.

Exhibit 1: Metaverse will see the most growth in enterprise investment

Sample: HFS Pulse H1 2023; n=592 Global 2000 leaders
Source: HFS Research, 2023

Shift the conversation to a combination of technology

Regardless of its definition, delegates agreed that the metaverse is not one singular technology; it’s an experience manifested by pulling together various technologies. Investment in metaverse enablers is enormous. In combination, executives prioritize the metaverse enablers in the top three more than any other technology (see Exhibit 2).

Exhibit 2: Enterprise appetite for metaverse is huge—but it lacks strategic direction

Sample: HFS Pulse 2022; n=602 Global 2000 executives
Source: HFS Research, 2023

Our roundtable was a timely discussion, as multiple alarming headlines have emerged in the last few weeks detailing shrinking metaverse investments, including Walt Disney Co. shutting down its metaverse strategy division and Meta (Facebook) head Mark Zuckerberg announcing a shift in strategy away from its metaverse platform. Delegates have had varied feedback from their executive leadership, with the consensus being that enterprises are still keen to experiment and invest—if the use cases present themselves.

Metaverse outcomes must be about experience; traditional metrics don’t work

Perhaps more important than the technology combination discussion is the design of metaverse initiatives to focus on experiences that benefit company stakeholders. This strategy has often been lacking in failed metaverse experiments, which usually focused on testing technology rather than designing brand experiences. Delegates experienced in metaverse experimentation heed the advice to not focus on traditional ROI metrics; instead, they think of this as an avenue of customer or employee engagement that enhances brand perception.

The Bottom Line: For the metaverse to prove its value and live up to expectations, metaverse strategies must deliver authentic human connections in a digital format.

Our roundtable’s existential question about where the metaverse is headed proved that there is a bright future if we don’t look at the metaverse in a silo. It is fundamentally another way to generate meaningful human connections, albeit in a virtual format. It is just one piece of the technology investment discussion, a part of the broader omnichannel experience, customers’ and employees’ avenue for engagement, and an opportunity to improve your brand perception.

If you’re just playing around with metaverse without thinking about brand, value, and the right outcomes, your initiative will crash and burn. You must also think through very complex ethics issues around equity and inclusion and regulatory concerns. Creating authentic connections that provide real value must be the guiding light for the future of the metaverse.