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A metaverse is a network of 3D virtual worlds focused on social connection and commercial activities. Its promise is a stunningly realistic 3D digital world where you can (for example) purchase and sell goods and services, sign and enforce contracts, recruit and train talent, and interact with customers and communities. This makes it a brand new marketplace.
Technology visionaries imagine that this world won’t run primarily on platforms whose owners control data, governance and transactions. That is the game changer. Instead, customers and businesses will be able to take their identities, currencies and assets anywhere they wish. And unlike today’s web experiences, much of this digital world will continue to exist even when no one is in it.
The metaverse is an evolution - not a revolution - that is based on the convergence of existing technology, bringing with it a world of opportunities
To some, the "metaverse" is the next great ®evolution of the digital world. Think about it. We already live in an increasingly interconnected world. Now this new concept of the future of the web promises to move the virtual and the physical even closer to us with the augmenting effects of maturing technologies. This transformational promise opens up new channels and methods of interaction - how we meet and build relationships with each other, how we spend, how we engage with products and services providers , and ultimately how we define our virtual "us".
Already, early adopting companies are looking to the metaverse to:
- Enrich their consumers’ experience
- Introduce virtual products that are only available in the metaverse
- Market physical and digital products and services
- Support metaverse payments and finance
- Offer hardware and applications that support metaverse activities
The six elements of PwC’s metaverse framework
- Economy
- Interoperability
- Governance
- Identity
- Experience
- Persistence
Economy
Everybody’s talking about cryptocurrencies, non-fungible tokens (NFTs) and other blockchain-based digital currencies, assets and exchanges. These will likely underpin value exchange across the metaverse. However, further innovation will be required as governments, companies and new, digital-only organisations work to build trusted digital monetary systems, offer new data monetisation propositions and conduct lending, payments, real estate investment and more in the metaverse. Decentralised autonomous organisations (DAOs) - with voluntarily agreed-upon rules enforced by a computer programme that runs on a blockchain - are set to take on more important roles.
Interoperability
A true metaverse requires seamless interoperability among users and platforms, based on web 3.0 and still-to-be-determined standards. While this interoperability will offer new possibilities to reach and understand customers, it will also raise new challenges for gathering and protecting data, and for cybersecurity and privacy. It may also undermine business strategies built around keeping users and their data in a given platform. Competitive advantage may shift to those companies that offer (through hardware or software) trusted ways for users to enter the metaverse.
Governance
Just as in the real world, the metaverse will require rules of engagement for users, rules for how the metaverse itself can evolve over time and enforcement mechanisms, including for tax collection, data governance and regulatory compliance. Early movers may be able to help set these rules. Security will be paramount, as a new, decentralised digital world may offer malicious players a new world of entry points for attack. Authenticity - and trust more broadly - should also be front and centre, to reduce the disinformation that has often plagued the internet.
Identity
In the internet today, identity is often linked to platforms. It may be true, pseudonymous or anonymous. The metaverse, decentralised and interconnected, will need trusted digital identities - for people, assets and organisations - that port across platforms. Companies active in digital identity now may both help set the metaverse’s standards and be able to offer a necessary service. Digital identities may also be central to permitted data collection and data governance in a decentralised environment.
Experience
A shared, persistent and immersive 3D digital world will offer unique experiences, based on its own aesthetics - beliefs, ideals and tastes as expressed in individual choices. Some trends for user experience are already becoming clear, in games and VR / AR environments. Companies that create trusted metaverse experiences and protect privacy rights may win consumer loyalty, while those that stay on top of metaverse trends may be well placed to forecast consumer preferences and behaviour.
Persistence
A true metaverse should reflect in real time the changes made in it by different participants, entering and leaving it in different ways, in different places, at different times. When you take your metaverse headset off, the metaverse and other participants will continue their activities uninterrupted, with (for example) smart contracts enforcing agreements and trading assets. This persistence will likely require a new approach to digital assets and activities, including services and applications that are portable, dynamically configurable and extensible.
Type of metaverse use cases
- Basic applications of new technology, focused on exploration and Proofs of Concept (POCs)
- Typically use cases developed with partners
- Applications of digital experiences that complement and connect to physical or otherwise already existing digital experiences
- Leverage multiple components of the enabling technologies of the metaverse
- Digital native experiences that leverage multiple components of the enabling technologies of the metaverse and create multi-user experience
- Transaction represents the beginning of the customer experience that builds to lifetime loyalty
- Create network effects through communities
- Multiple business lines that are innovating across multiple aspects of the metaverse enabling technologies and provide complementary economies of scale
- Connected across multiple metaverse ecosystems while still maintaining competitive edge on experience and technical superiority
What can you do from now to stay ahead?
- Hurry up
- Develop a strategy
- Test the waters
Hurry up
Most companies - even many technology companies - lack institutional familiarity with the metaverse’s concepts, which are evolving quickly.
How PwC can support you?
Upskilling programs
- Introduction to key concepts and underlying technologies
- Deep dive into structural components (incl. crypto-assets/NFTs, DAOs, smart contracts, ...)
- Review of market developments, key players and use cases snapshot.
Develop a strategy
Identify gaps to close and long-term opportunities to build from the metaverse and its key concepts, then work on foundational measures.
How PwC can support you?
Strategy design and readiness assessment
- Assess if and how the Metaverse could be embedded in your firm strategy
- Identify low hanging fruits and assess impact of more structural shifts
- Review potential for application, assess and prioritise use cases
- Perform a readiness assessment and plan for any required investments
Test the waters
Select a few opportunities available within the metaverse’s underlying trends today to offer new experiences to your customers.
How PwC can support you?
PwC Metaverse hands-on
- Buying or leasing digital real estate for sales, advertising or customer support
- Launching NFTs collection to enhance brand awareness and connections to customers
- Selling digital versions of physical goods
- Initiating educational or recruitment sessions
What you need to consider for the long-run
In addition to the immediate actions detailed above, the following steps will be key to build the capabilities that will help shape and support your success in the metaverse tomorrow.
- Focus on Trust
- Rethink core competencies
- Align physical and digital
Focus on Trust
The metaverse and its currently existing components offer new challenges for cybersecurity, privacy rights, regulatory compliance, brand reputation and anti-fraud efforts. Companies should, for example, consider security at the services level, so that no matter where your asset goes, security is maintained. To foster trust among consumers, shareholders, regulators and other stakeholders, communicate early what to expect from your metaverse initiatives and how you will mitigate the potential risks. Blockchain and AI, for example, can in some cases automate the authentication of identity, assets, transactions and contracts.
Rethink core competencies
What offers competitive advantage in a shared, decentralised digital environment may be different from what you have today. You may need upskilling and recruiting to close skills gaps, as well as new approaches to data and business relationships. If, for example, your digital strategy is based on owning a digital platform, you will likely need to accelerate your services and security infrastructure. If you are working with a platform, assess how ready they are - and make sure that you can take your data with you if you switch providers.
Align physical and digital
If you have added or plan on adding digital services and/or assets to your portfolio, drive for a consistent brand experience across both the physical and digital constructs. Just as your web presence needs to match your physical location experience - so must your metaverse experience.
Video
Metaverse: Beyond the hype | 11 May 2022 (panel recording)
PwC’s "Metaverse: Beyond the hype" event was held on 11 May.
The round table discussion "Metaverse: What leaders need to know", moderated by Thomas Campione (Blockchain & Crypto-Assets Leader at PwC Luxembourg) included a panel of local and international experts bringing their unique perspectives:
- Frank Desvignes, Founding Partner, True Global Ventures
- Christian Fisch, Associate Professor for Business Economics and Entrepreneurship, Interdisciplinary Centre for Security, Reliability, and Trust (SnT), University of Luxembourg
- Anne Hoffmann, Deputy Curator & Digital Development / Social Media, Les 2 musées de la ville de Luxembourg
- David Palmer, Blockchain Lead, Vodafone Business
Did you miss it? Watch the recording of the discussion.
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Contact us
Thomas Campione, CFA
Advisory Director, Blockchain & crypto-assets Leader, PwC Luxembourg
Tel: +352 62133 50 93
Grégoire Huret
Advisory Partner, Corporate Finance Leader, PwC Luxembourg
Tel: +352 49 48 48 2132
Patrice Witz
Advisory Partner, Technology Partner and Digital Leader, PwC Luxembourg
Tel: +352 62133 35 33
Thierry Kremser
Advisory Partner, Deputy Advisory & Technology Leader, PwC Luxembourg
Tel: +352 49 48 48 2269
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