The Metaverse is attracting interest and investment. And there's much talk of the corporate opportunity in the metaverse. However, at its core, the metaverse will be about entertainment and escapism. And people don't go to places to escape and then perform mundane chores like banking or government dealings. So yes, there is an opportunity for businesses to engage with clients in the metaverse - but my bet is clients won't want to reciprocate.
A Bank in Disneyland!
I recently read a post announcing the establishment of a bank branch in Disneyland in California. With 18 million visitors to Disneyland every year (and 58 million at Disney World) it provides the bank with an excellent environment to service and acquire customers.
JUST KIDDING - I've never read anything about a bank opening a branch inside a Disney resort. But I did read an article about the Bank of America branch that was in Disneyland from 1955 to 1993. Whilst offering a very cute 1950's style interior - the need for a bank in the park disappeared with the advent of ATM's (to get cash to buy over-priced burgers) and then Online Banking ... although I'm guessing very few people open their Banking App when they're at Disney (maybe they use it to kill time when queueing for 3 hours).
Disney does have an associated credit union in Partners Federal Credit Union which primarily exists to service the 200,000+ employees of Disney. But even Partners Fed doesn't have a branch at the resorts. Because PEOPLE DON'T GO TO DISNEY TO BANK!
We go to Disney Land/World to escape, to be entertained. NOT to bank.
So what has Disney got to do with the Metaverse?
Consider the Spielberg movie Ready Player One, where people find an escape from the challenges of real life in a virtual reality universe called the OASIS. They go there to meet, play, be entertained. But the most important word here is "escape". There's no suggestion of banking, insurance, government agencies, or work in the OASIS. That's not what it's for.
Disney is the same. It's a place to escape, be entertained, and have fun. Would you go there to apply for a debt consolidation loan? Get a new quote on your home & contents insurance? Renew your driving license? Well, maybe if it was Micky Mouse renewing the license 🤣
Maybe I'm completely wrong - but I don't see the point in embedding mundane services like banking in a virtual world like the Metaverse. Many disagree with me and are investing in building solutions to offer services like banking, financial advice, wealth management in the metaverse.
This is Fidelity's financial learning center in the metaverse.
So what is the corporate opportunity in the Metaverse?
Honestly, right now I don't see one. You could do business and service clients in the metaverse - but just because you could doesn't mean you should. Does the investment honestly make sense? Like Disney - there might be millions of people there, but are they there to bank?
I saw a post from a financial institution showing how they recently hosted their first board meeting in the Metaverse. WHY? It looked like a game from the original Nintendo Wii console with people with heads, bodies and no arms/legs all sitting around in a room. (Image shown is from Nintendo, not the FI's board meeting). So WHY do that?
I get it - it's fun, cool to be playing with new tech. But surely in a board meeting you want to see faces, reactions, and who's checking their phone. Which is better facilitated by Zoom. Perhaps the board completed the meeting and said "OK, that was fun and interesting, but let's not do it again, and let's not try to engage customers here."
I'm pushing on 50 years. So I was concerned I'm just getting old and "don't get it". So I asked a couple of the millennial developers I have the pleasure of working with if I was missing something. I got a resounding "Nope. We don't get it either. And the graphics are currently terrible." In fact - they said they crave real human interaction at the moment (after 2 years of lockdowns and social distancing). Now that may change when hopefully the COVID pandemic is a distant memory. But I still don't see people going to the metaverse to talk to a financial advisor or apply for a loan.
There was a huge amount of hype about the business opportunity in Second Life back in the early 2000's. And it still exists and claims 30,000 - 50,000 active users per day. An estimated 1,400 companies established a presence on the game but quickly found that users weren't engaging with their brand so they abandoned their investment. There was a hype and FOMO (fear of missing out) amongst brands that brought them to Second Life - but it turned out to be just hype. (For more information - check out https://productmint.com/what-happened-to-second-life/ )
As depicted in Ready Player One, virtual reality could be a really fascinating concept in the coming years. But will it be a place I want to do business with my service providers? I'm not seeing it right now. But happy to be proved wrong!