2022 Showed Metaverse FOMO Is All Hype

One of the new job descriptions that crept into organizations in 2022 was “Web 3.0 Officer”, also known as the “Chief Metaverse Officer.”

It sounds very impressive, although it would be interesting to understand what these people actually spent their time doing in 2021. Lots of meetings, mountains of analysis, a lot of reports read, and some written. Perhaps a little light on concrete initiatives that were actually implemented.

From the vantage point of nearly 2023, it is easy to be cynical about the metaverse because it doesn’t exist yet and is surrounded by so much hype. 

Should we read anything into the fact that Facebook shares were at USD378 in September 2021, just before the company changed its name to Meta, and they are now traveling at around USD115? Is this a metaphor for the metaverse itself?

Even though we don’t yet have a metaverse, analyst house Forrester has noted that business leaders across all industries have a strong sense of FOMO — the fear of missing out — when it comes to the metaverse.

Consumers not enthralled

In the report “Don’t Let FOMO Dictate Your Metaverse Strategy,” the analysts say that not only is there no metaverse today, there also won’t be one in the next few years. 

“There are metaverse precursor experiences such as Meta’s Horizon Worlds, brand campaigns on Roblox, or skeuomorphic experiences in Decentraland,” the report says.

“Wendy’s garnered 650 million media impressions from its campaign on Meta’s Horizon Worlds. But just because companies are building platforms to host these experiences, sell real estate, and generally cash in on that executive FOMO, consumers aren’t flocking to these environments. In fact, consumers aren’t nearly as enthralled with these experiences as those who are creating them.”

While business leaders fret about FOMO, consumers are indifferent.  According to Forrester’s Media And Marketing Benchmark Recontact Survey, 2022, just 23% of U.S. online adults are familiar with the metaverse (or what they think is the metaverse).

“Before spending money, understand that this is not an investment in technology with future opportunities”

Familiarity in Europe is even lower: Just 21% of online adults in Italy and the U.K. are familiar with it. Unsurprisingly, familiarity declines with age, especially with adults older than 45.

Forrester points out that precursor metaverse platforms have relatively few regular users, let alone adults. They say the fuss over NFTs doesn’t remotely reflect adoption and that Web3 virtual worlds and games are the realms of crypto asset enthusiasts.

Also, there are some fundamental challenges yet to be overcome.  The virtual worlds and games are islands you can’t move between, and the platforms “lack interoperability on all dimensions, from avatar mobility to identity.” 

A virtual version of the real world “only serves a limited number of cases.”

Learning and perception

That is a fairly brutal critique, so what is to be done? Instead of debunking the metaverse as an idea that will never arrive, Forrester has some advice for channeling all that nervous FOMO energy: be methodical and understand that it will take for the business cases to emerge and the technology to deliver on the vision.

“Before spending money, understand that this is not an investment in technology with future opportunities,” the report says.

“Today’s metaverse precursor experiences orient on one-time campaigns (of finite length) to promote brands, sell (potentially exclusive) NFTs, and entertain consumers through games, concerts, virtual events, and more.”

“Brands are not running their businesses on these platforms (e.g., sale of a full range of goods or services, account services, customer support, etc.). The large-scale investment will wait for lower-risk scenarios,” the report adds.

Also, forget about revenues in the short term. Any initiatives will be experimental and brand-building only, and the outcomes will be around learning and perception.  

Forrester does put a timeline on the metaverse development, which will be interesting to observe and test.

In the next three years, metaverse users will be “digital immersive” who love to live online and actively invest in creating personalized social media presences. 

This will develop over a four to seven-year time frame, and a cohort of “digital socialites” will become invested content creators, but they’ll still lag behind the digital immersive. 

Then, over eight to ten years, Forrester sees the consumer base broadening beyond intense online games and social media users. 

This is where goods and services will be sold, and 3D environments will become part of existing experiences in websites and mobile apps. The holographic interface will have been developed sufficiently at this point for it to go mainstream.

It is a while to wait, and those Web 3.0 and Metaverse officers will face real challenges in that time in justifying their salaries. 

However, in eight to ten years, it might be the consumers and not business leaders experiencing FOMO on the metaverse. If that happens, then that is the point at which it will start to get real.  

Lachlan Colquhoun is the Australia and New Zealand correspondent for CDOTrends and the NextGenConnectivity editor. He remains fascinated with how businesses reinvent themselves through digital technology to solve existing issues and change their entire business models. You can reach him at [email protected].

Image credit: iStockphoto/Domepitipat