It’s all about AI, and the metaverse has missed its moment.
So says the current conventional wisdom, at least. But it’s not so, countered panelists speaking during WWD’s annual Technology Symposium.
While the metaverse may be in a perceived dip after a series of setbacks — Mark Zuckerberg’s recalibration of the newly named Meta being the most visible, and ironic — there is still strong interest from both consumers and brands because the immersive experience cannot be replicated.
WWD lead tech reporter Adriana Lee spoke with Over the Reality cofounder and chief operations officer Diego Di Tommaso, which is building the first AR open metaverse; Decentraland Foundation creative director Sam Hamilton, who is behind the shared digital experience platform in which users can buy and sell digital wearables and collectibles; and Mathieu Nouzareth, chief business officer of The Sandbox, a virtual world where players can build, own and monetize their gaming experiences, about where the metaverse is headed.
Hamilton said while interest in the metaverse appears to be cooling, it’s all part of an inevitable “hype cycle,” but doesn’t portend the lack of long-term growth opportunities. In fact, while the hype has died down, it gives the metaverse time to grow organically with users who are genuinely interested, instead of people trying to jump on the bandwagon.
“We are in a different cycle in terms of the media and the public; we’re still there building this next level of the internet, which is inevitable. People want a more human experience,” said Hamilton. “We’re still on a really fast trajectory of growth…With all new tech, there’s some instant hype and then a wait for it to actually become mainstream, to onboard people and get the tech in place so that it’s polished.”
Decentraland held its second metaverse fashion week back in March, in which brands built out elaborate virtual spaces. Fewer brands participated this year, and unique user numbers dropped from 108,000 visitors to just 26,000. Hamilton countered that again, it’s due to where we are in the hype cycle, but those brands that did participate had strong consumer engagement.
Breaking new ground to blend the physical and the metaverse for a fashion show, Di Tommaso’s Over the Reality created a site-specific AR event at Milan’s landmark Piazza del Duomo during metaverse fashion week with looks from Italian brand Pinko, Balmain x Space Runners capsule collab of the Unicorn sneaker, which was made in physical and non-fungible-token form, and Pet Liger, the virtual NFT artist who collaborated with Gucci Vault on NFTs. Guests in the vicinity could access the show via their phones to see the looks.
Participating brands such as Pinko, which has about 170 brand-owned stores worldwide, was able to reach consumers outside of their physical spaces.
“The fact that they can bring back these physical worlds and the physical world through AR is for them very powerful model propositions,” he said. “The fact that we can really make it real, this idea, this mantra that we heard about interoperability, the fact that you can move seamlessly between one metaverse and the other. That was a very, very powerful showcase of this capability of Web3 metaverse is not only between metaverses, but also between different versions of the metaverse — even I don’t want to say this word anymore — but moving from VR to AR the same assets represented by an NFT,” said Di Tommaso.
NFTs are also suffering from negative PR, with valuations on virtual assets falling. This is in part due to the limited ways they can be displayed, panelists said. NFTs can be frustrating for consumers. The tech is grappling with the existential question: If you own a Gucci in the metaverse, does it really matter? But Web3 gives users an opportunity to flaunt, and virtually wear, their wares. “With Web3, really we’re showcasing that you have an asset, these assets really exist,” added Di Tommaso. “This is what is really powerful about what we are building now.”
Di Tomasso also noted that this event used AI to create algorithms that enabled the event in ways that would not have been possible just a year ago, so to pit the two techs against each other in terms of popularity is short-sighted.
“Fashion really sees a use case that’s now in the metaverse, and they want to continue experimenting, exploring, trying to connect with their community,” said Decentraland’s Hamilton. He said that while the current fascination with AI is all the rage, brands are integrating it into metaverse workflows. “There’s lots of amazing use cases for [AI in] the metaverse, so technologies that go hand in hand … when people start to combine [AI and the metaverse] you’ll see we’ve got features being released in the next few weeks where we’re starting to use AR technology to bring in NPCs [non-playable characters] to create content. And productivity just is going through the roof because here’s the AI tools that we’re using.”
While the user numbers in the metaverse look small compared to traditional websties, users interact with a brand’s activation for longer periods of time, said Hamilton. He said the average time spent in a scene is 28 minutes.
“Which, in the world of Instagram, that’s unfathomable,” he said. “So brands really do see a value in still building these 3D spatial activations because they know that it’s going to create more of a story and they’re going to be able to connect much deeper with their users.”
Di Tommaso has built relationships with fashion and luxury brands as a pillar of his company, while Hamilton said that the desire for fashion filtered up from Decentraland’s community before brands caught on. “[The community] created such an immersive economy that fashion companies started looking at that and saying, ‘Hey, we can be part of this, and we can make money without the same production costs, and we can be part of something new,’” he said.
Sandbox has worked with fashion brands such as Adidas and Gucci, and found digital twins — where an NFT provides access to a special physical item, or vice versa — are proving to be popular uses. “They’re experimenting on both how they can build the brand, or they can also engage with consumers and eventually how they can also monetize and sell to the user base,” said The Sandbox’s Nouzareth.
While retailers push omnichannel services and IRL-online sales integration, both have their limits, said Nouzareth. “The metaverse can really combine those two together, creating something that is very experiential, with almost no limit, and transactional and engage users and draw them into buying your product.”
The panel took place just days after Apple announced its AR Vision Pro headset June 5. In closing comments, the trio agreed that Apple’s belief in such tech is bound to be a boon for the metaverse. Panelists predicted it will take a couple of years for the average consumer to start adopting it, with it picking up about 2026 despite the high price point.
“It shows a positive trend towards the social internet, which helps all of our platforms.,” said Hamilton, noting that where Apple goes, people usually follow. “I can only see this as a positive sign. In fact, we’ve seen the signs of interest re-invigorated in the metaverse already.”