Through the years, trends in business have evolved following the global shift of processes to a more technologically-inclined setting. One of the biggest trends in business today is the metaverse, and it is gaining popularity and support for many reasons. One of the reasons behind the metaverse’s seemingly linear trajectory toward growth is the opportunities it provides to businesses in terms of selling and marketing their products.
But the metaverse is vast, and even if you as a business owner or marketer would want to indulge in all of its benefits, it’s still important to know which business models will bring the best value for your business and convert interactions into solid sales. Even though businesses like crypto mobile apps and NFT marketplaces may metaverse-native and an obvious fit, that doesn’t mean that even a shoemaker couldn’t benefit from testing the waters, so keep an open mind and keep reading this post.
What is the metaverse?
Before delving into the most value-inducing business models, you must first know what you’re getting into. The metaverse as a concept first appeared in 1992 in Neal Stephenson’s science fiction novel titled “Snow Crash.” The term refers to a virtual-reality world where we live parallel lives in the internet.
Today, the metaverse still holds the same fundamental meaning, only more profound—it’s a virtual world where people can interact and roam without having to step out of their room, powered by the virtual reality technologies that currently exist. In the context of business though, interaction is merely one of the many things it’s capable of fostering—profit and exponential growth for enterprises are others.
In the few years that the metaverse as a concept has made waves in several industries, several metaverses have been created to utilize its potential for establishing value among consumers. One of the earliest proto-metaverses was Second Life, but today we have Decentraland, Roblox, Worlds of Warcraft, Fortnite, and yes, Meta Platforms, formerly Facebook. Facebook’s name changing to Meta is not merely out of aesthetics, but a huge step towards the creation of a community where both people and business can grow.
Business models in the metaverse
With the loads of opportunities to market your business in this virtual community of potential buyers and sellers, finding a business model that will help you cement your presence in the market is considered a must in the contemporary ways of marketing. In this regard, here are some business models that have gained momentum and established consistency in providing value for businesses.
#1 Marketing in the metaverse
One of the things a metaverse is able to do well is to facilitate great advertising initiatives that set the trend in today’s marketing industry. This is the reason why many businesses look into marketing strategies that work well with the metaverse, as you can do almost anything you want in this virtual world, all without having to exhaust funds for physical marketing materials.
Currently, the key to propagating an efficient business model relative to advertising is catching the taste of the generation that’s most actively engaged in the metaverse (in this case, Gen Zs).
A marketing agency centered around the metaverse is a great business to start right now. It’s almost the same as the first digital marketing firms that popped up when the internet was only beginning to take shape. This business model pulls from experience in digital marketing but includes all sorts of metaverse-native assets like branded 3D merch, VR or even AR events, and collaborations with other brands to provide immersive experiences for their potential clients.
An acronym for a Non-fungible Token, NFTs are uniquely designed digital assets that exist on a blockchain. NFTs are the key to ownership in the metaverse, as they are unique, irreplaceable, indivisible, and have well-defined ownership, characteristics normally attributed to real physical objects. Each NFT may represent either a virtual good or a real-life asset, and they are all uniquely assigned an identification code and metadata that makes it impossible to replicate. NFT is a business model that is considered brimming with potential as it is closely tied with cryptocurrencies, a similarly rising digital financial industry branded as the future of money.
What’s cool about NFTs is you can create them the way you want, set their value, and market them way you want—you can even add underlying functionality to NFTs to give them extra value, like using them as passes for real-live concerts or using them as reward tokens for your loyal customers.
Additionally, NFTs can help you expand your business’ connection with a wider platform, possibly entering into collaborations with big crypto names such as Ethereum and Bitcoin. You can also personalize NFTs depending on your brand’s personality, embedding colors, graphics, and other designs that symbolize your enterprise and effectively establishing value among consumers.
#3 Virtual real estate
Virtual real estate was at the core of the metaverse and NFTs’ popularity boost at the beginning of 2022. It turns out that, through NFTs, you can actually own virtual land inside the metaverse, and since you can transact with NFTs, you can sell land lots later on. Since everyone is fighting over the most popular spots in virtual worlds like Deventraland and Roblox, becoming a virtual real estate agent is a very profitable business.
This works in pretty much the same way as real estate does in real life. Those who do not see the potential to realize substantial profit through by buying and selling virtual lands would think this to be outrageous, but it’s a viable business model nonetheless.
You see, in the real world, land has value because it’s a limited commodity. In the metaverse, the case is the same. All worlds are created with a pre-defined number of plots of land, some of which are sold publicly and others which are kept by the platform. This is one big reason to believe that flipping virtual lands is a profitable investment, especially if you can get in on the group of people who’re lucky enough to buy first.
Additionally, you can also develop virtual land the same way you would develop real land—you can build on it, lease it, put up a business, or even create homes for other metaversians. It’s also immune theft because each piece of virtual land sold has a unique identification, secured by the highly reliable non-fungible tokens which are permanently recorded on the blockchain.
#4 Clothing and fashion
If you own a clothing line with a physical store, there’s a way for you to extend, and possibly even shift your fashion brand into the metaverse. Virtual clothes and other wearables are now one of the most viable business models in the industry, and they have the potential to get your “real” brand in front of a much larger audience.
With the metaverse, you will be able to market your clothes on the platform by creating virtual twins of them that customers can try on their 3D virtual selves or avatars. It is an interactive, efficient, and cost-effective way for business owners and marketers to test new products and concepts before spending money on production.
Major brands such as Gucci, Nike, and Vans have started using the metaverse as a platform to market their products, further defining this business model’s capacity for growth, profitability, and marketing.
If trading virtual lands shows potential for growth and value in the metaverse, then it is also right to include virtual construction initiatives in the list. With the limited supply of available land to utilize in the metaverse, owners would want to quickly utilize the space they have to get a return on their investment.
As such, construction services have become quite trending in the metaverse, and we have seen the likes of MetaEstate and Voxel Architects become the pioneers of the business model in this platform. If you are familiar with SpaceAge, Stoneage, and GlassAge, these are some of the projects the Voxel Architects have worked on. On the other hand, the Haolinju Restaurant and MetaChi’s Headquarters are some of the virtual properties that MetaEstate has established.
Of course, this isn’t so much virtual construction as it is 3D building design, since you don’t really “build,” but you get the idea.
Practically all of the current metaverses evolved from or were always online gaming platforms. Long before any of the previously mentioned business models were introduced to the metaverse, it was already used by the community of gamers in the space to communicate, trade, and even earn money indirectly by selling game assets like gear, weapons, potions, ammunitions, in exchange for wash that was wire-transferred to a bank account.
Nowadays, the rise of play-to-earn game models have paved the way for users to earn even more money by playing games.
Games are also effective in marketing your products, because if you happen to have a collaboration with a gaming platform, you will be able to advertise your product effectively to a big community of players. The Ethereum-based game Sandbox is a prime example of gaming being a catalyst for marketing products, as this game with over 2 million registered users has received the interest of major names in the industry such as Adidas and Warner Music, as well as big celebrities like Snoop Dogg. That said, you should note that Sandbox is struggling to find active users lately, which is something that these brands probably don’t appreciate.
#7 Character customization
If you are familiar with the game Roblox or even Sims, you’ll appreciate why character customization is also considered a good business model to venture into if you are a business owner or a marketer. Better known as avatars in the metaverse, a user can replicate his features from head to toe, even his clothing, in the metaverse either through the efforts of the metaverse’s developers, or the services of a third-party.
When it comes to marketing a product or service, character customization can be utilized as it is possible to integrate your business into the accessories and clothing that an avatar can wear. Luxury brands such as Gucci, Ralph Lauren, and Givenchy all have collaborations with the open-world game Roblox where players can wear their clothes in the game. This opens opportunities for the brands to be introduced to the virtual versions of the consumers, possibly converting each digital purchase into a real-life profit.
#8 Virtual goods
With the prevalence of online shopping, the sale of virtual goods has become a big source of profit for companies operating in the metaverse. Virtual goods, much like virtual lands, are assets that a consumer can use in the metaverse the same way they can be used in the real world.
The most common forms of virtual goods sold in the metaverse are weapons or supplies used in games, actual avatars and their clothing (as mentioned above), and furniture, among others. The sale of virtual goods in the metaverse also offers you the freedom to either set up a specific website for your business, or you can also use a specialized marketplace like the Second Life Marketplace to market your goods.
Marketing virtual goods is easy, as even though a single metaverse can be big, the amount of interaction users can have with a product can still be substantial, especially if your product is publicly listed in a popular marketplace. Think of it as a virtual bazaar, and all you need to do is to put your products out for the public to see.
You can also apply traditional marketing strategies to attract a particular market segment. For example, if you want to reach a senior audience through the metaverse, you can create campaigns to offer senior discounts on certain products, and that’ll get their attention.
Truth be told, some of the big brands that sell virtual goods, sell the virtual versions of their real products at an even higher price than the real, physical counterparts. Something to consider!
The business models included on this list are only some of the many models you can look into if you are a marketer or business owner who wants to explore what the metaverse has to offer. A single metaverse is capable of showcasing all these models and more, and it is up to you to decide which ones you will invest in.
If you’re still not sure, it’s okay to test the waters first and check which model works best for your enterprise and the marketing strategies that you would want to employ in the metaverse. While the metaverse itself can represent a virtual mimicry of the real world, there might be some marketing strategies that will not do as well in the virtual platform as they do in real life. The opposite is also true. In fact, some marketing strategies that work in the metaverse may not even be possible in real life.