For some, the metaverse is a buzzword. For others, it is very much a (virtual) reality with undiscovered potential. There is no doubt that the more than 50 million individuals who consider themselves to be content creators have yet to take full advantage of the financial opportunities waiting in the virtual world. With more decentralized finance options available and blockchains becoming the norm for the metaverse economy, there is a unique opportunity for creators to have more power and control as traditional payment systems merge with blockchain and crypto. Blockchain technologies and many of the concepts of open access platforms have enabled the shift in creating the next-generation metaverse that is open to everyone to create, engage and monetize. This new environment that many call the next internet is wide open for the creator economy. And the opportunities expand well beyond creators as publishers have yet to crack the code on making money in the metaverse.
Early adopters of the internet had no idea what the future would hold, especially in terms of advertising and business opportunities as it relates to social media, influencers, and content creation. The same can be said of where we are as an industry with adaptation to the metaverse. With uncertainty comes possibility.
There is a race right now to crack the metaverse and the new virtual world seems to be dominating the news cycle. Recently, former Disney CEO, Bob Iger, announced his new role as director and investor of metaverse startup Genies, and SXSW sessions tackled topics such as what the metaverse means for the future of work, entertainment, and more. The increased investment in time and resources is promising but there are still key issues that need to be addressed before creators and publishers can make a true profit in the metaverse.
Universal adoption of crypto
Some consumers are already using crypto in the metaverse, which simply put is a digital currency designed for the exchange of goods through a computer network. For example, players of the popular game Second Life (SL) use cryptocurrencies like Linden dollars and bitcoin in the digital world of SL which includes the buying and selling of non-fungible tokens (NFTs), which is essentially consumer valued data stored on a blockchain or a type of digital ledger.
The average consumer is likely unsure of how to use crypto payments. In order for there to be wide adoption of the metaverse, there must be more seamless decentralized payment options that require no individual platform signups as that will help improve access to NFTs. The currency used in the metaverse will need to be universal and commonly accepted across different platforms. Digital currency should be whatever the buyer is comfortable making a purchase with – either FIAT or Crypto. But one of the most important payment characteristics will be supporting a frictionless purchasing experience. Metaverse promises an immersive experience and that promise could easily be disturbed by a tedious process of purchasing an asset or a game or getting credits for participating in helping grow the network.
Micropayments are considered to be any transaction for a small dollar amount. Micropayments will play a very important role in the metaverse ecosystem. Many of the purchases in the metaverse will be small value purchases. Currently, with micropayments, transaction fees can make purchases unprofitable for suppliers as the fees are too high. This means creators and publishers are paying high transaction fees to collect micropayments leaving little economic gain. And it is not only transaction fees that are impacting creators. Vimeo recently announced an increase in fees to creators with high bandwidth usage.
The new micropayment platform built using decentralized ledgers, provides a decentralized platform for transactions and truly gives users transparency and control through the low-cost decentralized infrastructure. Blockchain allows for peer-to-peer transactions eliminating the need for traditional restrictions and high-fees from banks.
Untapped metaverse capabilities
As a wide variety of industries look to tap into metaverse capabilities — creators and publishers are no exception. During a SXSW panel, Mark Zuckerberg stated that “the metaverse will bring the next iteration of the internet and unlock new opportunities for the creator economy.”
In the metaverse, users can virtually create any experience that would take place in the real world. For example, think about how gaming might be improved through the use of virtual and augmented reality. Those in the virtual world will likely consume content in new ways from their favorite creators and publishers. Technology capabilities will be next level as innovative and interactive experiences with content are possible. Perhaps a publisher can create their own daily paper or host events in the metaverse previously not possible due to payment structures?
Engagement doesn’t stop at the user level. The metaverse will provide publishers with new opportunities for advertising. And a good starting place is by digitizing products and offerings already being sold. For publishers, this means meeting consumers where they play in the metaverse and providing a more personalized experience.
Shifting in power
Cryptocurrencies will power the metaverse and without creators, the metaverse will not be able to operate. Credit card fees make small-value transactions unprofitable. Traditional online payment services can’t afford to provide the flexibility that those in the metaverse will demand.
As creators, publishers and users explore new possibilities with the metaverse, the power is in the individual. We are creating a new virtual world where a new way of conducting business is not only welcomed but encouraged. The evolution and albeit slow acceptance of NFTs give a glimpse of how users are craving more control of personal finance.
Social media platforms are scrambling to give creators more control and power over their revenue generated. While some creators might appreciate more profits from tech giants, the metaverse offers uncharted territories for revenues thanks to the decentralized nature of cryptocurrencies.
Now is the time for creators and publishers to explore what awaits them in the metaverse as it pertains to profit opportunities. We are redefining what is possible when it comes to the traditional financial model. As we move forward into the metaverse, we can look to early adopters of the internet for inspiration. No one knew what kind of financial opportunities would be possible in the late 2000s. The same is true for the future of revenue and power in the metaverse.