The word “meta” has evolved very quickly from the slang of yesteryear to meaning something a lot more tangible and relevant to all of us. The Metaverse is a digital translation of our physical world – a consolidation of many interconnected digital spaces that comprise a virtual world.
The Metaverse is no longer a concept belonging to sci-fi books and movies but has become something of great commercial value and opportunity to both up-and-coming entrepreneurs as well as established companies across a plethora of industries. Take, for example, live entertainment: in the Metaverse, you can buy property as an NFT (non-fungible token), build a virtual stadium and hire it out to performers who sell tickets to an online audience who want to attend the event through their VR (virtual reality) headsets.
This transaction touches so many industries:
- real estate;
- software design and architecture;
- advertising and media;
- social media; and
- financial and payment services.
The Metaverse has the potential to disrupt virtually all sectors of the economy and presents an opportunity for commercial exploitation by large corporations.
Below we have highlighted two key players we think are critical in the Metaverse: telecommunications operators and software providers.
- There is a lot of potential for telecommunications operators in the Metaverse and this will be a space where we expect to see a lot of rapid innovation and technological development. Through connectivity, telecommunications will play a pivotal role in ensuring the swift ability to interact with and move between all available virtual spaces.
- Augmented and virtual reality (AR and VR) devices and equipment are already available in the market and telecommunications operators will likely want to make these products available just as they do with phones and other smart devices.
- Software developers have a primary role to play in the development and maintenance of the core architecture of the Metaverse. Companies entering the Metaverse will need to leverage off software developers (either in-house or as third-party service providers) to ensure their transition into the virtual world as well as their presence and operability in it.
We have not yet reached a 100% virtual world in which we can do everything we do in the physical world. However, there are already key components of the Metaverse being established and companies are quickly learning to develop and invest in technology and infrastructure in order to immerse themselves in the Metaverse and reach a whole new market.
The measurement of a business's success does not change in the Metaverse – they are still aiming to attract as many subscribers/customers as possible. However, although the success metric might not be different, the marketing strategies of companies will require a conceptual shift or adaptation to the Metaverse. The focus in the virtual world is on the user's experience: revenue will be linked to a user spending more time in that company's virtual space.
As is always the case with technological disruption, companies must assess their commercial and legal risks before charging down the Metaverse path. The Metaverse is essentially an all-consumer-facing platform. There is and will continue to be a lot of data processed in the Metaverse and the usual risks of security and privacy and damage to brand and reputation will apply equally.
The jurisdiction of regulators and other law enforcement authorities will also not stop at the borders of the Metaverse. As it grows and more companies and users enter the space, these risks will grow proportionally and companies must ensure that they build comprehensive safeguards at the very beginning of their immersion into the space. This means building privacy and security into the design of their virtual spaces and having watertight contracts in place with software developers.
In future editions, we will expand more on the commercial opportunities and legal risks in the Metaverse. For organisations contemplating their entry, it would make sense to not only gain an appreciation of the risks involved with these new opportunities and to mitigate such risks, but also to derive and provide commercial products and/or services to other companies who might also be dealing with such risks.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.