Industry buzz around the metaverse reached a fever pitch in 2021 and early 2022 as technologists raced to build it, brands looked to promote themselves in it, and employers aimed to collaborate virtually inside it. But the conversation saturated itself in irrational exuberance. For starters, the metaverse doesn’t even exist yet. Less than half of today’s online consumers say they’re likely to ever become metaverse users. Metaverse proponent Meta has lost billions of dollars in each of the last several quarters in its Reality Labs division. And NFTs aren’t faring much better: NFT trading volume dropped 97% in nine months, and the value proposition driving the hype may never live up to NFT cheerleaders’ promises.
Does this mean all is lost? Not exactly. The metaverse will be the 3D experience layer of the internet, much as the World Wide Web is its 2D counterpart. But it will take a decade for that vision to be fully realized.
Where does this leave us in 2023? In the face of economic slowdown, Forrester predicts a winter season for the metaverse and NFTs that will chill the market. In the medium term, this won’t be a bad development: It will allow technology vendors and enterprises alike to do the hard work of building the infrastructure and use cases that move the market forward more gradually. But in 2023, you’ll need to wear a sweater and a coat until things eventually heat up. Specifically, we predict that:
We won’t see the metaverse’s Pokémon GO moment. Niantic’s 2016 launch of Pokémon GO brought augmented reality to the masses, created new social communities, and has earned its makers $6 billion. While metaverse precursor experiences have enjoyed pockets of popularity — such as through a handful of well-attended concerts in spaces like Fortnite — few consumers have found Pokémon-GO-level excitement. Forrester’s data also suggests that the vast majority of consumers prefer in-person experiences to virtual ones. What’s needed is innovation — particularly hybrid, physical-digital experiences — rather than “metaverse-washing” or repackaging old immersive experiences. But it won’t happen in 2023.
- Brands will move from “cool” NFTs toward loyalty programs. Brands that launched consumer-facing NFTs once expected to look cool and innovative. Those days are gone. Consumers lack interest in NFT stunts or art. Brands will move on. The next frontier for NFTs lies in customer loyalty programs. In 2023, smart brands will follow the likes of Louis Vuitton and Starbucks, both of which are using NFTs to enable access to exclusive customer experiences and perks.
- Employees will be a bright spot, using metaverse collaboration. Forrester expects that metaverse technology will become popularized over time via a “reverse consumerization of IT” effect, in which people use the tools for work, become familiar with them, and then adopt them for personal use. The starting point for this journey will be the addition of metaverse-style experiences into collaboration suites as a feature, not an independent product. For example, Microsoft is adding its Mesh components directly into Teams, empowering users to navigate 3D virtual spaces with avatars and engage in collaborative digital whiteboarding. We predict that at least three more of the major collaboration providers — think Google, Slack, Webex, or Zoom — will add 3D metaverse-style features in 2023, too.
For our full 2023 predictions on the metaverse and NFTs, we invite clients to read our 2023 metaverse and NFT Predictions report. You can also check out our complimentary Predictions guide, which covers Forrester’s top predictions for the year.