As per McKinsey & Company Senior Executive Survey, 57% of enterprises are already building used cases within a metaverse ecosystem in the past 6-12 months. Furthermore, the survey also highlighted that almost the same (59%) of consumers are planning to migrate their majority of physical activities into a metaverse by December 2022. Also, the top key activities majority of consumers plan to execute within an extended virtual life (reality) remain predominantly leisure centric such as social conversations, entertainment services (live concerts, sports, corporate, social events, etc.), gaming collaboration, and shopping transactions. On the enterprise side, internal used cases dominate the metaverse penetration curve, such as marketing & promotional campaigns, training & employee development, internal communications, product design, and events. On a broader basis, it can be witnessed that there is an acceleration of engagement touch points across both consumer and enterprise segments but still at the initial stage attributed to event-based deployment strategy rather than metaverse being at the epicenter of digital budgets on an ongoing basis.
Build Vs. Buy: Metaverse Ecosystem for Media Enterprises
Media enterprises early movers in building multi-faceted monetization avenues
In 2021-2022, media & entertainment, energy, automotive, industrial engineering, high tech, and travel & tourism segments were at the forefront of embedding metaverse engagement touch points within their digital ecosystem.
Furthermore, media enterprises follow a contextual monetization avenues-based approach compared to enterprises in other industries (freemium model) for each event-based activity. Although, due to uncertain ROI, media enterprises primarily focus on revenue share-based metaverse event launches with audience cum gaming hubs such as Roblox and Fortnite as the core go-to-market strategy in the past 12-18 months. A couple of examples are highlighted below:
M&E metaverse ecosystem launches, 2021-2022
|
Enterprise
|
Type
|
Metaverse Ecosystem
|
Monetization aspect
|
|
Vans (sneaker company)
|
Event and IN-GAME
|
They launched a 3D virtual skatepark for digital users to practice their skateboarding skills along with the purchase of Vans clothing, shoes, and other gear within the storefront. Augmented physics layer to embrace real-life skating experience. In collaboration with Roblox
|
Ecommerce
|
|
Nike
|
Event and IN-GAME
|
Launched Nikeland enabling digital users to participate in competitive mini-games such as tag, the floor is lava, and dodgeball with the community. In collaboration with Roblox
|
Free access with digital users awarded blue and gold medals enabling them to exchange the same for virtual products etc
|
|
Insomniac
|
Event and IN-GAME
|
Launched two-day music festival "Electric Daisy Carnival." In collaboration with Roblox
|
Physical tickets offered access to the virtual stage (500,000 in total
|
|
Warner Brothers
|
Event and IN-GAME
|
Launched a virtual movie party for the title "In the Heights" with digital users' music, dance, and Latin culture experience. In collaboration with Roblox
|
None
|
|
Indian couple hosting a wedding
|
Event and IN-GAME
|
Launched in collaboration with TardiVerse, the couple can simultaneously combine physical and virtual rituals.
|
None
|
|
Tennis Australia
|
Event and IN-GAME
|
Launched virtual live streaming to enrich fan engagement in the metaverse encompassing unique content from 300 cameras around the stadium, behind-the-scenes, AO radio, and archival footage from the 70s. In collaboration with Decentraland
|
6,776 ART Ball NFT for sale on OpenSea
|
|
Stage Inc
|
Long-term
|
Launched beta interactive experience virtually offering digital users a little free concert from Grammy-winning rock band Muse.
|
Ecommerce and ticket sales
|
|
Epic game
|
Event and IN-GAME
|
Launched second virtual music concert in collaboration with BTS, with the earlier one garnering 0.75mn concurrent views and ticket sales worth US$20mn. In collaboration with Fortnite
|
Ticket sales
|
From the above table, it can be seen that most deployments have been in collaboration with B2C audience hubs as a service such as Roblox and Fortnite to mitigate market risks attributed to access to millions of monthly active users. A good example is Roblox having a close to 42mn daily gaming population. As B2C platform collaborations (i.e., Roblox) remain the dominant go-to-market (GTM) strategy with the transaction (blockchain) and eCommerce as the preferred monetization avenues, as a shift from event to long-term investment becomes pivotal, this will eventually increase both value chain and operational complexities. Thus, paving the way for leveraging B2B metaverse platforms such as Journee, Room, Sokin, Iconic Engine, etc., to improve personalization, scalability, premiumization (user experience), and time to market (TTM), and lowering total cost of ownership (TCO).
Metaverse 1.0 deployments will be beyond event-based engagement touch points with a global reach.
We at Birlasoft believe that the global metaverse ecosystem is still nascent, i.e., 0.5 deployments with a prominent focus on the event-based experience. As the consumer demand shifts from a single towards multi-dimensional connected environments, e.g., avatars moving from one event to another seamlessly, this will gradually demand media enterprises to embrace the following:
- Move from a standard audience hub as a service revenue sharing agreement to a customized and vertically integrated converged ecosystem with a single data lake, environment preparation, and multi-platform distribution at scale.
- Pre-embedded live streaming services as de-facto to strengthen premium QoE (quality of engagement)
- Accelerating used cases and applications to the non-gaming population to enhance geographical reach in the long run
- Cost-effective (SaaS-based pricing mode) and tightly integrated across the metaverse value chain technology stacks will witness strong adoption.
- Green ICT infrastructure and robust compliance-backed marketing & brand promotional value proposition
Therefore, as the market dynamics evolve from 0.5 to 1.0, building a converged, cost-effective, but scalable metaverse ecosystem will become a necessity, thus pushing enterprises towards technologies that not only offer foundational capabilities but next-gen functionalities such as:
- Real-time multi-channel social plug-in vital for a competitive edge is essential functionality enabling digital users with interactions, online physical gestures, selfies to be placed on networks, etc.
- Augmented physics and mobile accelerator plug-ins to provide digital users with physical experience within the virtual metaverse ecosystem. This is predominantly to offer a seamlessly integrated experience across both the physical and virtual world to enhance uninterrupted premium QoS (quality of service).
- Device and platform agnostic experience enhance operational efficiencies and market agility of each event-based metaverse ecosystem.
- Dynamic real-time pre-configured 2D to 3D templates enabling hyper-personalization and strengthening premium QoE (Quality of engagement)
Thus, creating unique functionalities to boost the premium quality of engagement (QoE) will be vital for most media enterprises in the next 2-3 years, resulting in mitigating the uncertain ROI risks and a long-tail procurement strategy tightly embedded with a digital footprint will be essential.
Third-party Vs. In-house or a hybrid best-of-breed approach
As next-generation functionalities (augmented physics, device agnostic, lightweight rendering, etc.) will lie at the epicenter of not only enriching but personalizing user experience and engagement, the majority of media enterprises will follow a highly centralized (i.e., CTO/CXO to dominate the budgets) but differentiated procurement strategy. Furthermore, a lack of internal competencies is one of the flagship challenges for media enterprises embarking on the metaverse journey; resulting in embracing best of breed third party B2B platforms to not only lower TCO but also exploit multi-faceted used cases-based monetization avenues (both external and internal) along with improving operational efficiencies.
Furthermore, a time to market is crucial. The demand for complex multi-dimensional customization and integrations (with content management, security, analytics, live streaming, high-performance shared storage, rendering, UX design, CRM, customer service, other internal & shared systems, etc.) will further enhance the penetration of B2B metaverse platforms within the media & entertainment segment in the next 2-3 years. Also, as tier-I media enterprises. (mainly digital service providers) aggressively integrate metaverse ecosystems within their long-term digital strategy, lowering third-party technical debt dependencies will move premium metaverse environments and associated workflows either in-house or hybrid (In-house ICT department to monitor, integrate, and customize end to end best of the breed value chain and build newer engagement used cases over foundational infrastructure, and software-defined workflow layers).
We at Birlasoft believe that almost 10-15% of tier-I media enterprises will be building internal competencies (both on the technology and resources front) along with close to a third (30-35%) embracing a hybrid model by 2025. Therefore, economies of scale and scope are key for not just tier-I but also tier-II and tier-III media enterprises unified B2B metaverse platforms will be integral to the metaverse technology GTM across the leading M&E segments (such as sports franchises, gaming, digital service providers, broadcasters, and OTT live streaming services).
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