The metaverse is poised to become marketing’s next big thing. We’re already seeing tech companies creating solutions that are giving audiences a glimpse of what’s to come. Digital worlds are fast becoming a reality and not just the stuff of science fiction.
But what is the metaverse, and why is it making waves? How will it impact the entertainment industry and with it entertainment marketing? Let’s take an in-depth look at the metaverse and what it means for entertainment marketing in 2022 and beyond.
We’re at the cusp of a major digital shift as the metaverse or Web 3.0 is slowly emerging, bringing with it the end of Web 2.0.
What is the metaverse? While its exact definition can be difficult to pin down, it can basically be defined as a digital and immersive 3D environment where users, through avatars, can do practically anything and everything. In a marketing context, the metaverse presents an opportunity to target these users using brand-related content and various marketing strategies.
Already an emerging virtual space, it’s estimated that gaming, business communication, and advertising within this digital realm will grow to at least $82 billion by 2025.
What brought about the metaverse’s emergence? This can be attributed to three developing trends:
Cryptocurrencies have become immensely popular these past few years. With the surge in their popularity came breakthroughs that enable users to house their assets and ownership on the web.
The continued development of augmented and virtual reality has made changes in how users interact with technology and digital spaces.
Spurred by the COVID-19 pandemic, many people are moving their work, studies, and other activities online. We’re seeing more people starting to value the digital lives and communities they’ve created over this period as much as they value their real-world lives.
Gaming is a key player in the development of the metaverse. We’re already seeing glimpses of it in top metaverse games like Minecraft, Roblox, and Sandbox, where players are immersed in a digital environment that lets them create custom worlds.
Gaming is where we see most of the tech innovations that drive the development of metaverse-like experiences.
For example, the Roblox metaverse has seen tremendous growth during the pandemic. Its value has surpassed that of other well-known brands like Ferrari and FedEx. As of December 2021, the game is worth $68 billion—a major leap from its $42 billion valuation in March of the same year.
Aside from its valuation growth, its monthly active users jumped from more than 9 million in 2016 to 202 million in April 2021. In the second quarter of 2021, the game’s daily active users were at 43.2 million, compared to 2019’s 17.1 million.
Engagement hours on the platform also increased in 2021. The first two quarters of the year raked in a little over 9 billion engagement hours.
Moreover, the game has an expansive universe where players can take part in built-in games like Adopt Me!, Tower of Hell, and MeepCity, which are also the top three games in the Roblox metaverse.
Now, there are two types of metaverse platforms: centralized, where one entity oversees the entire platform, and decentralized, where a platform is open source and users have a lot of freedom to create and curate their experiences. The Roblox metaverse is an example of a centralized metaverse, as it features a space that’s controlled by one central entity. While users are free to create shared experiences by interacting with other players, they’re essentially limited by the game’s parameters.
However, this doesn’t take away from the game’s immersive atmosphere. It still manages to be engaging and immersive without the need for AR or VR gear.
We’re also seeing the emergence of new blockchain-based virtual worlds and games like Sandbox. In the Sandbox metaverse, users can acquire a plot of land, essentially allowing them to enjoy virtual land ownership. Within this virtual world, virtual landowners can build experiences through quests. The Sandbox metaverse also doubles as a virtual venue where concerts are held.
Essentially, the Sandbox metaverse lets users create, build, and trade digital assets by way of a digital game. It operates on the premise of decentralized autonomous organizations (DAO) and non-fungible tokens (NFTs), making it a decentralized platform.
Like Roblox, Sandbox has enjoyed immense growth. In 2021, it raised$93 million to expand its scale, operations, and user acquisition. Its developers are looking to expand the Sandbox metaverse by incorporating other elements like fashion, architecture, and virtual events like concerts and shows.
Moreover, the Sandbox coin (SAND) is also considered one of the top-performing cryptocurrencies in 2021, alongside Decentraland’s MANA. For example, if you invested $1,000 in the Sandbox coin on January 1, 2021, then you’d have close to $140,000 today.
Meanwhile, creators and artists looking to collaboratively create assets and virtual worlds can enjoy Nvidia’s Omniverse. Omniverse is a platform that enables collaboration and simulation for users in industries like robotics, architecture, and engineering. The Omniverse has several iterations, but its Omniverse Machinima, in particular, allows users to create their own storylines using existing game content. Users can alter game content from titles like MechWarrior 5 and Shadow Warrior 3 to create their own 3D movies.
As digital worlds continue to become a large part of our lives, we’re seeing the expansion of virtual gaming worlds. This particular industry is projected to grow to $400 billion by 2025, an immense growth compared to 2020’s $180 billion.
Given this expansion, the metaverse presents a huge market opportunity of $1 trillion.
Gaming, in particular, presents itself as a very viable avenue for marketers. The industry is well on its way to shifting to Web 3.0, and it already lends itself well to marketing, digital events, and social commerce, among other avenues. In fact, the gaming and eSports industry has a market cap of close to $2 trillion.
In gaming, marketers can test the waters, whether they’re trying out interactive ads or videos. This enables them to have more avenues and opportunities to communicate with the users, according to Anzu VP of marketing, Natalia Vasilyeva.
The metaverse is a space where brands can create a virtual presence and have the potential to exist permanently in these virtual worlds, according to Christian Perrins, head of strategy at Waste, a gaming specialist agency.
Even non-gaming brands are jumping on the metaverse bandwagon. Companies like Vans, Ralph Lauren, and Forever 21 are partnering with Roblox to build virtual experiences within the Roblox metaverse to drive engagement, traffic, and monetization.
In celebration of Gucci’s 100th anniversary, it has launched the Gucci Garden Archetypes. The Gucci Garden experience offers an immersive multimedia experience for users, transporting them to Florence, Italy.
Ikea Taiwan remade its 2021 furniture catalog via Animal Crossing. The refurbished catalog features Animal Crossing-themed characters and items.
On November 18, 2021, Nike launched NIKELAND, a virtual world inside Roblox that lets players and Nike fans connect with each other and create shared experiences.
There are many reasons why brands are leveraging marketing in the metaverse. One such reason is they’re targeting the Millennial and Gen X audience to keep them engaged and up-to-date with what they’re offering. Furthermore, metaverses are offering new opportunities for brands to market to this diverse audience. Based on the amount of engagement they’re getting, they’re able to drive brand awareness among their target audience. Vans’ partnership with Roblox, for example, has had 48 million visitors as of November 2021.
With the growing popularity of the metaverse and digital worlds, as well as innovations in artificial intelligence, influencers are making their way into these virtual spaces. Virtual influencers are essentially computer-generated characters that boast realistic characteristics and features, effectively emulating humans. They’re like avatars that their creators can customize using sponsored items from brand deals.
Industry analysts predict that Asia will become the hotbed of the virtual influencer industry. There’s new interest in virtual influencers as businesses seek to innovate in light of the effects of the pandemic. Similar to how human influencers function, virtual influencers can collaborate with brands and become brand ambassadors. This, in turn, enables brands to benefit from their relationships with these virtual entities.
According to Virtualhumans.org, there are more than 200 virtual influencers to date, with some of the most popular ones being Lil Miquela, AI Ailynn, Reah Keem, and Bangkok Naughty Boo. Virtual Humans is a site that offers information on virtual influencers. As of December 9, 2021, the platform has welcomed 29 new virtual influencers.
Aside from being a virtual influencer database, it doubles as a virtual influencer creation platform and works with organizations and influencers to cover every aspect of virtual influencer creation, from trend targeting to audience growth.
While virtual influencers can be found on practically any social media platform, such as Instagram and TikTok, Twitch is becoming a popular avenue for them.
This interactive platform enables both human and virtual creators to do livestreams and engage with their audience in real time. Virtual streamers like AI Angelica and Violet are bringing a variety of content to their streams.
Meanwhile, Epic Games, Fortnite’s developer, is shifting its focus to be able to deliver immersive 3D-optimized experiences that will rival the capabilities and offerings of traditional 2D social platforms. In 2021, it has secured funding of $1 billion from its investors. This funding will be used to accelerate efforts to create connected worlds and experiences in games like Fortnite and Rocket League, according to Epic Games CEO Tim Sweeney.
Riot Games, the developer behind League of Legends, launched its own array of virtual influencers, a virtual K-Pop group called K/DA. The developer also created another virtual influencer that rapidly gained popularity on social media: Seraphine. To date, she has more than 400,000 followers on Instagram and almost 350,000 followers on Twitter.
The virtual influencer’s engagement rates averaged 35%. Compared to other popular human influencers, whose engagement rates vary between 3% and 20%, Seraphine’s posts enjoyed up to 10x more engagement. Her post on her collaboration with K/DA enjoyed a staggering 50% engagement rate.
Other notable virtual influencers in the gaming sphere include Vocaloids like Hatsune Miku from Project DIVA, Ulala from Space Channel 5, and the virtual pop group Genki Rockets from No More Heroes.
Generally speaking, virtual influencers are enjoying 3x more engagement compared to their human counterparts.
Global fashion brands like Prada, Yoox, and Puma are creating their own virtual influencers to showcase what they’re offering.
Prada, for example, introduced Candy, a computer-generated avatar that’s used to promote the brand’s new fragrance collection. Yoox also has its own virtual influencer, which it named Daisy. Daisy is featured in various campaigns with multiple global fashion brands like Calvin Klein and Tommy Hilfiger. Puma’s Maya was created to promote the brand’s new line of sneakers.
Aside from being embraced in fashion, virtual influencers are also making waves as brand ambassadors for companies like LG Electronics, SM Entertainment, and Ikea. During last year’s CES, LG Electronics held a virtual press conference where Reah Keem, a virtual influencer designed by LG, introduced the South Korean electronics company’s latest offerings.
SM Entertainment, one of the largest entertainment companies in South Korea, debuted its latest girl group, Aespa, in 2020. This debut was unique in that it featured artificial intelligence twin avatars for each of the group’s four members.
Another prime example of the real-world uses of virtual influencers is Imma, a computer-generated influencer created by the Japanese virtual human company Aww Inc. Like her human counterparts, Imma has been working with multiple global brands like Magnum Ice Cream and Ikea. Ikea, for example, has partnered with Imma to create an installation in the retail giant’s Harajuku store, which depicted the virtual influencer’s living room. Passersby can get a glimpse of Imma as she goes about her daily activities in a computer-generated space that she “curated.”
While still in its initial stages, the metaverse is already reshaping different aspects of various industries. One such industry that has benefitted so far from this emerging virtual phenomenon is the entertainment industry, particularly the gaming industry. As the metaverse continues to take shape— whether it’s in top metaverse games, such as the glimpses that Roblox metaverse or the Sandbox metaverse has to offer, or social platforms—it brings with it plenty of opportunities for innovation and growth.
So, what is the metaverse? While it’s still difficult to define, we know for sure that it’s something that’s worth looking forward to in the years to come.
CloutBoost is an innovative video game marketing agency that’s up-to-date with the latest trends and technologies within the gaming industry. We’re helping brands innovate, stay relevant, and maintain a competitive edge amid these digital and technological shifts. We know gamers and we know how to best engage them, which is why we can help connect brands with like-minded gamers.
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