As early as 2021, Newzoo[1] in its trends lineup predicted that the popularity of games as social platforms promoting various types of activities and events would be one of the leading directions in the coming years. The latest data collected by J.P. Morgan[2] points to growing opportunities for the development of the metaverse and investment in this world.

Every year, $54 billion is spent on virtual goods, including "skins" (which let players customize their in-game equipment) and extra lives — nearly twice as much as on music. Around 60 billion messages are sent daily in the game Roblox. The game Second Life has reached a GDP of around $650 million, and in 2020, $80 million was paid out to the game's residents for various types of virtual goods and services. Republic Realm purchased a plot in the game Decentraland for $913,000 and is building a shopping district there inspired by Tokyo's Harajuku neighborhood. So what is the metaverse, and why should marketers direct their efforts there? These and other questions are answered by experts from Mobiem Polska.

The Metaverse – Interpenetrating Worlds

The metaverse is a shared, social space based on virtual and augmented reality. Matthew Bell[3], in setting out the conditions that define the metaverse, speaks of several essential aspects of Web 3.0. By design, it is a world based on the real one, encompassing physical and virtual dimensions, with avatars of real people, a functional economy allowing brands to create and distribute digital goods. The metaverse is to be powered by content and events created by a host of authors, and it is to be interoperable — that is, allowing avatars and goods to be transferred between its parts. The metaverse must be synchronous, happening live, and continuous — lasting endlessly, without pauses or resets.

Google Trends data shows that in Poland, interest in the term "metaverse" skyrocketed in October 2021, when Facebook was transformed into Meta. The term for this cyberpunk vision first appeared back in 1992 in the book Snow Crash, which sits on the border between science fiction and futurism. Meanwhile, the motif of immersing oneself in a metaverse in pop culture is encountered many times, e.g., in The Matrix, Ready Player One, or Log Horizon. Certain aspects of this reality could be seen in games such as Second Life, World of Warcraft, Pokémon GO, or Fortnite.

- The metaverse is inevitably born primarily from games. Even earlier 2D games like Second Life were meant to be a substitute for virtual life. Thanks to constantly evolving technology, we are beginning to delve ever deeper into the concept of the metaverse. Mobile games, thanks to their accessibility, will certainly accelerate the pace of the metaverse's development and give a broad segment of society access to it, and that will give advertisers new opportunities — comments Michał Pietruszka, Head of Mobile Product, Mobiem Polska.

For quite some time now, we have been able to observe the interpenetration of these two worlds. For example, virtual galleries invite people to exhibitions, as the London-founded auction house Sotheby's did on the Decentraland platform. Meanwhile, artists create works inside games, like Alan Butler in Grand Theft Auto. Socio-political movements are emerging, such as clashes between Hong Kong residents and police in GTA V, and learning is becoming more tangible thanks to AR (augmented reality) — Immersion.pl created an app in cooperation with NASA that lets us drive a Mars rover.

Brands in the Metaverse – How the Giants Do It

According to Goldman Sachs, the TAM, or total addressable market for advertising, is over $1.1 billion, digital penetration was 37%, and examples of presence include: virtual billboards, branded stores, company clothing, and branded games. Interesting cases of cross-industry collaboration in metaverse style can be found in Roblox's activities with Gucci, Chipotle, Vans, or Nike.

The metaverse gives marketers and advertisers advertising opportunities greater than ever before. Big brands have been collaborating for years with game producers that are taking the world by storm. A major success was Balenciaga's collaboration with Fortnite by Epic Games. Items inspired by the fashion house were available in the game and were also sold in the designer's physical store. Interestingly, Balenciaga created its own gameplay titled "Afterworld: The Age of Tomorrow," which fits into marketing trends.

- Previous advertising creations in mobile games have most often been full-screen video executions, affecting the immersiveness of players' experiences. Subtle messaging through banners or billboards embedded in gameplay is one way of combining advertising with the gaming environment; examples of such activity have been found for years in games like FIFA or NBA. Creating "skins" or items referencing a brand is one of the strategies that global brands put into practice. Sponsoring levels or puzzles by brands is another solution that does not negatively affect players; an example could be Hidden Valley in FarmVille or the pleasing-to-the-eye Honey Nut Cheerios in the game Angry Birds[4] — says Michał Giera, Mobiem Polska.

Will Virtual Real Estate Take Over the Market?

What does marketing in the metaverse look like in practice?

According to a Republic Realm report, in June 2021 the average value of a virtual plot in 4 pioneering metaverses (Decentraland, Somnium Space, Cryptovoxels, and The Sandbox) was $6,000, but by December 2021 it was already $12,000. This jump is partly due to brands increasingly buying space where they can build their virtual stores or create branded experiences for players. It is worth taking a look at the plot map in the game The Sandbox, which is filled with logos of well-known companies, including Atari, Warner Music Group, or Ubisoft. Another example illustrating the scale of the market's potential is Republic Realm's purchase of land in Decentraland for a mere $913,000, where it created the Metajuku shopping district inspired by Tokyo's Harajuku neighborhood.

Web 3.0 vs. People

1. Interest

According to GWI[5] data conducted across 9 markets, including Germany, France, Italy, and the UK, more than half of respondents are interested in engaging with the metaverse. However, only 1 in 3 respondents knows and understands the concept of this space. Why do users want to participate in the metaverse? One of the most common answers (43%) was the belief that the concept of a virtual world will make online gaming more popular, will develop social games (40%), and will make gaming more accessible to new audience groups (38%).

- There is an echoing tendency to create social spaces in games for interaction between users. Games are increasingly expected to include elements of existing social media. This may benefit brands that, thanks to buzz marketing, will reach a wider audience — says Michał Giera, Mobiem Polska.

Other reasons why consumers are interested in participating in the metaverse are business issues related to content creation, game development, and opportunities for brands to enter this sector. 41% of respondents claim that Web 3.0 will make content creation easier/more popular. Moreover, more than 1/3 of respondents believe that the metaverse will help increase opportunities for independent game developers and will create more opportunities for brands to establish themselves in the gaming industry.

1/3 of people taking part in the GWI study see an opportunity in the metaverse for additional financial opportunities for gamers. Confirmation of this argument can be the success of the game Axie Infinity[6], which during COVID-19 was the only source of income for some Filipinos.

2. Behaviors

GWI[7] data shows that respondents interested in engaging with the metaverse are already intensively using the benefits of technology and the internet for both practical and social-entertainment purposes. 46% of those surveyed made an online purchase, and 42% took part in a video call in the week of the survey. 1/3 of respondents played an online game with friends, and nearly 20% of respondents watched an e-sports tournament broadcast in the month of the survey, while 12% of respondents declare using VR sets while gaming. Moreover, people use social media to look for groups with similar preferences (26%).

3. Devices and Ads

To fully harness the potential of in-game advertising, one should look at mobile devices.

- We play primarily on smartphones. As GWI[8] data shows, 74% of all internet users played on a phone at least once in the past month. The same study[9] found that 32% of gamers purchase the products they saw in ads. At the same time, this is the group that tries least to avoid any form of advertising (1/5 of study participants). For mobile gamers, it is important that the game is free (63%), which means they are willing to exchange free gameplay for ads — adds Michał Giera, Mobiem Polska.

[1] https://newzoo.com/insights/articles/newzoos-games-trends-to-watch-in-2021/
[2] Onyx by J.P.Morgan, Opportunities in the metaverse
[3] https://www.matthewball.vc/all/themetaverse
[4] https://adriancrook.com/a-fresh-look-at-in-game-sponsorships/
[5] GWI, Chart of the week – understanding the metaverse
[6] https://www.cnbc.com/2021/05/14/people-in-philippines-earn-cryptocurrency-playing-nft-video-game-axie-infinity.html
[7] GWI, Chart of the week – understanding the metaverse
[8] GWI, Optimizing in game ad strategies
[9] GWI, Optimizing in game ad strategies