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So, what is the metaverse exactly?
The metaverse is generally defined as a collective virtual space promising an immersive three-dimensional digital world where we can work, play, socialise and do business together while at the same time owning our assets enabled by augmented reality (AR), virtual reality (VR) and non-fungible tokens (NFTs). Supported by a number of technologies, this platform offers a wide range of advantages and opportunities with use cases that can be explored across a wide range of sectors and industries.
Explore new horizons in the metaverse
The metaverse is an evolution, not a revolution. And it’s one that business leaders should not ignore. It may profoundly change how businesses and consumers interact with products, services and each other.
A metaverse that works for business is quickly evolving, and so are tested strategies to navigate it: ones that can create value right now and become a key asset for organisation in the new normal and for years to come.
“For businesses, the implications of an immersive, persistent and decentralised digital world could be enormous.”
Many forward-thinking companies are already venturing in the metaverse to:
- Enrich customer experiences
- Introduce virtual products and services exclusive to the metaverse
- Collect new data on customers
- Market physical and digital products and services
- Support metaverse payments and finance
- Offer hardware and applications that support metaverse activities
Trust and risks in the metaverse: Six key considerations
Economy
Cryptocurrencies, non-fungible tokens (NFTs) and other blockchain-based digital currencies, assets and exchanges will likely underpin value exchange across the metaverse. Further innovation will be needed 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 — will likely play 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
The metaverse will need rules of engagement for users, rules for how the metaverse itself can change 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 actors a new world of entry points for attack. Authenticity — and trust more broadly — should also be front and center, 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.
How PwC can help
These are the strategic capabilities we bring to aid our clients to realise their goals in the metaverse:
Business strategy and value creation
Identify close and long-term opportunities, vision, operating models, brand identity
Trust framework
Creation of risk taxonomy specific to your organisation and its initiatives; design of technology risk frameworks and controls; assessment of vendors and partners to mitigate potential risks
Project management
Contracting, build and deployment, stakeholder management
Data security and privacy
Metaverse-specific cybersecurity, privacy protocol, and data governance
Legal and regulatory considerations
Tax evaluation, Intellectual property (IP) rights, regulatory compliance
Financial evaluation
Establishing sound economic models for monetisation, enhancement of revenue streams
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Breaking New Ground
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Feel free to explore our microsite featuring bi-monthly market updates on the metaverse and digital assets to help you keep abreast of these emerging themes.
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Are you taking the right approach to metaverse? Contact us to learn more about this evolving technology and see what these opportunities can mean for your business.
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Luke Soon
Partner, Asia Pacific Digital Assets and Support Services, PwC Singapore
Tel: +65 9049 6290
