It’s that season again, when we all try to figure out what the biggest trends of the next year will be, so we can look back and say “I told you so” to everyone we know. Here at the intersection of retail and tech, that means predictions about Web3 and virtual worlds.
So, is 2023 the year one platform rises above the rest as the best “metaverse?” Is it the year Apple finally releases its much anticipated AR/VR headset? Is it the year Retail Brew readers surprise us with their EOY thoughts on Web3? (Yes, I’m looking at the 49.9% of you who said you thought it was overhyped in 2022. Here’s me hoping you join my dad in reading my stories anyway…)
We’ll have to wait another 12 months for the next reader poll, but in the meantime, we asked a range of experts to take a look into their crystal balls and tell us which way the digital winds will blow in 2023.
Metaverse maneuvering
There’s an important distinction between Web3 and the metaverse: Some virtual worlds are built on the blockchain and are considered Web3 metaverses, but not all virtual worlds are built with Web3 technology. And Web2 gaming platforms like Roblox, which isn’t built on the blockchain, are likely to hang onto their popularity with brands in 2023, said Conor McNamara, marketing manager at metaverse-focused SaaS company GEEIQ.
“It’s those traditional gaming environments that are really where brands are investing time and money into at the moment,” McNamara explained. “And that’s obviously because [there is] a huge audience in those spaces already.”
- Web2 gaming platform Roblox, for example, had nearly 60 million daily users as of Q3 2022. By comparison, Web3 worlds like Decentraland and the Sandbox reportedly have under 1,000 daily users.
- Despite the low traffic, McNamara expects to eventually see a rise in the blockchain-based environments, because brands can mint NFT collections within them, and collect better data about those who engage with them.
- But today, brands that are activating in open metaverses are sacrificing user experience, said Nitin Kumar, CEO of software company ZBlocks. “The Web3 metaverses have work to do,” Kumar told Retail Brew. That’s why, he said, so many brands are opting for Web2 virtual worlds: “They just don’t want to associate their brand with a suboptimal experience at this point.”
Doubling down on decentralization
An important thing for brands to understand is that Web3 is both a set of technologies, and a mindset, said Timmu Tõke, founder of Ready Player Me, which creates animated avatars that can be used across virtual worlds.
“There’s a whole new generation of developers that say: We are Web3-minded, we want to have the open metaverse…We don’t want to live in one big world that one company built,” Tõke explained. “That’s the mindset that really pushes us towards a more open and connected and decentralized metaverse.”
- And the current *ahem*...downturn in the crypto market, isn’t necessarily a bad thing for metaverse innovations, Tõke added. In fact, it might mean a wealth of exciting projects in 2023.
- “When the market is down…they’re focused on creating interesting user experiences. They’re focused on creating real retention,” he said.
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Don’t write off NFTs
Jamie Burke, founder and CEO of Web3 VC firm Outlier Ventures, said NFTs are top of mind for him moving into 2023.
“I think one of the big [trends] is moving away from one-off drops with NFTs into subscription-type models, where you are subscribing to digital brands,” Burke told Retail Brew. That shift is forcing brands to think about managing the life cycle of their digital goods, and about managing relationships with token holders, he added.
- GEEIQ’s CEO Charles Hambro refers to NFTs as “the new CRM,” McNnamara said, because of the engagement rates within their audience compared to emails.
- That high value is fueling a trend McNamara said GEEIQ is already seeing this year, and expects to take off in 2023: the emergence of Web3 and metaverse-focused hiring.
- “Where traditionally this would have been a marketing exercise, there are now specialists coming in…and I think we’re going to see more and more of that,” he said.
All eyes will be on community engagement
Loyalty programs will be one of the top use cases for NFTs in 2023, said Kumar, pointing to projects like Starbucks’ Odyssey and Nike’s .Swoosh. “By definition, a loyalty point is a token of your loyalty and your reward,” he explained. That, he added, makes NFT-powered rewards “pretty intuitive.”
- “What Starbucks and Nike are doing is they’re taking the audience and converting it to the community,” Kumar said. “If you’re sitting on social media, you have all these people in the audience but they’re not a community, they aren’t connected with each other.”—MA