In 2023, A Metaverse + NFT Winter Cool Market Hype Will

The industry around the metaverse reached a fever pitch in 2021 and early 2022 as technologists raced to build it, brands tried to market themselves in it, and employers aimed to collaborate virtually inside it. But the conversation saturated in irrational exuberance. First, the metaverse doesn’t even exist yet. Less than half of today’s online consumers say they are likely to do so ever become metaverse users. Metaverse supporter Meta has lost billions of dollars in each of the past quarters in its Reality Labs division. And NFTs aren’t faring much better: NFT trading volume fell 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 like the World Wide Web is its 2D counterpart. But it will take a decade for this 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 cool the market. In the medium term, this will not be a bad development: It will allow both technology providers and companies to do the hard work of building the infrastructure and use cases that move the market forward more gradually. But in 2023, you’ll have to wear a sweater and a coat until things finally warm up. Specifically, we predict that:

• We don’t want to 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 creators $6 billion. While metaverse precursor experiences have been popular—for example, 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 personal experiences to virtual ones. What is needed is innovation – especially hybrid, physical-digital experiences – rather than “metaverse washing” or repackaging of old immersive experiences. But that won’t happen in 2023.
• Brands will move from “cool” NFTs to loyalty programs. Brands that launched consumer-facing NFTs were once expected to look cool and innovative. Those days are over. Consumers lack interest in NFT stunts or art. Brands will move on. The next frontier for NFTs lies in customer loyalty programs. By 2023, smart brands will follow the likes of Louis Vuitton and Starbucks, both of which use NFTs to provide access to exclusive customer experiences and benefits.
• Employees will be a bright spot by using metaverse collaboration. Forrester expects metaverse technology to gain popularity over time via a “reverse consumerization of IT” effect, where people use the tools at work, become familiar with them, and then adopt them for personal use. The starting point for this journey will be to add metaverse-style experiences into collaboration suites as a feature, not a stand-alone product. For example, Microsoft is adding its Mesh components directly to Teams, allowing users to navigate virtual 3D spaces with avatars and participate in collaborative digital whiteboards. 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 as well.

Can check out free guide for predictionswhich covers Forrester’s best predictions for the year.

This post was written by VP, Principal Analyst JP Gownder and it originally appeared here.