What is the Metaverse and How it Will Impact the Sport Industry?
Companies and brands are always looking forward to the future to get ahead of the next trend or phenomenon. Shrewd marketers are researching new ways to connect with fans and identifying (at least, attempting to identify) channels and mediums where fans are more likely to engage with their content. The hunt for the next big thing has now extended past cryptocurrency, past blockchain, and has led to an exciting area known as the metaverse. Thought leaders have predicted the metaverse is the future of the internet and the logical path towards a completely futuristic and decentralized society. But what exactly is it and how will it affect the sport and entertainment industry as a whole?
The origin of the “metaverse” and where the term comes from can be traced back to Snow Crash, a 1992 science fiction novel by Neal Stephenson. In the book, Stephenson describes the arrival of a persistent virtual world where people can interact, claim territory, and even make money. His description formed the foundation of what technology and industry leaders are now considering the evolution of the internet. While it may seem radical that a notion about the next phase of the internet comes from a science fiction novel, even the early days of the web drew skepticism. The metaverse can be seen as the “'successor state’ to the modern internet, with all the same content but fewer limitations as to where and how that content can be accessed” (Alexander Lee, Digiday). Right now, humans’ relationship with the internet can be conceptualized as two-dimensional with people inputting and extracting information in two-way interaction. The metaverse is intended to revolutionize the internet by giving people the ability to engage with the internet through technology that brings us away from the restrictions of physical reality into an open world. And there can even be more than one metaverse worlds, such as Decentraland, Sandbox, and NVIDIA. These different settings all include general characteristics which are:
Identity: Users can express themselves as whoever or whatever they wish through their digital avatar.
Accessibility: the metaverse can be accessed through a variety of technologies, including smartphones, tablets, VR headsets, and more.
Immersion: An experience that utilizes the five senses (sight and sound are the two senses VR can currently capture).
Economy: A functioning economy where users can earn and spend digital or fiat currencies (like Robux in the game Roblox).
Community: Users can interact with other users and share social experiences.
Persistent: The worlds continue even after you take yourself out of the metaverse
Discussions of the metaverse and its impact on society have been ongoing for years, but one global event finally accelerated the conversation: the COVID-19 pandemic. Nearly the entire population was forced to work from home without the traditional live sports and entertainment events we became accustomed to before the coronavirus made its mark on society. No matter which industry you worked in, the size of your company, or even if you had a job at all, the pandemic challenged the population to rethink the norms and values that guided our everyday lives. As many aspects of life became digital in some capacity, people began looking for solutions that were effective given the limitations imposed by the physical world. Cryptocurrency rose as the shift to decentralized finance -- another key part of the success of the metaverse -- gained momentum. NFT collectibles and their blossoming marketplaces began offering a variety of assets that people could purchase, regardless of whether their interests lie in art, gaming, or even music. Blockchain technology backed it all up by proving the authenticity of assets through its decentralized and distributed ledger. Crucial pieces to the functionality of the metaverse have developed where brands and sports properties alike need to begin planning for its arrival -- if they have not already.
So what does this mean for the world of sports now? The metaverse is not a threat when it comes to the success and continuation of live sports on a global scale. However, everything surrounding those games and events could start to look different. One company, in particular, Dapper Labs, has been a leader when it comes to assimilating metaverse concepts into the sports industry. After making headlines with NBA Top Shots, an NFT marketplace for NBA highlights and other assets, the company recently formed partnerships with the NFL and La Liga. The partnership with La Liga is arguably the biggest move by an NFT company to bring the world’s most popular sport to the virtual world. In doing so, Dapper Labs has strategically captured an element that has been and will be vital to the success of the metaverse: fandom. With nearly half the global population being exposed to the technology Dapper Labs brought to the NBA, the familiarity with blockchain technology and the building blocks of the metaverse are strategically playing out.
Some companies and properties have already tested the waters with experiences that will become the norm within the metaverse. Epic Games’ Fortnite experimented by producing live concerts for Travis Scott and Ariana Grande where players could join the game and attend the virtual experience with others. Both virtual shows exceeded the number of views of any of their physical performances with over 1 million views within the Fortnite world. Properties like the Virtual Athletics League (VAL) have gone so far as to create games that replicate popular culture like their VR Space Jam Arena experience (Alexander Lee, Digiday). An interesting case study can be seen with one of America’s oldest sports properties in NASCAR. Back in August, NASCAR formed a partnership with Virtually Human Studio to include NASCAR-branded horses in their popular game Zed Run. In the game, users can purchase, breed, sell and race digital horses as NFTs to win money. This example is one of many that has illustrated how gaming and eSports have opened the door to the influence digital experiences will have as we move closer to the metaverse reality.
It is important to remember that there is no foreseeable start date for when/if the metaverse will arrive. The pieces of the puzzle are starting to come together and in many ways, it has already begun embedding itself into the traditional sports and entertainment landscape. The brands, leagues, athletes, and influencers who understand the potential of this digital revolution and can find creative ways to monetize their assets will be steps ahead of the rest of their competitors. Even though it is not here yet, the leaders and innovators of tomorrow must be asking themselves: “what should be our company’s metaverse strategy?”