Thinking about the short-term and long-term impact of consumer behavior in Metaverse

The topic of Metaverse has been badly researched, and after careful study, it is not a new technology. So why can Metaverse become an upstart in the capital market?

Some tech KOLs said that New Money is madly investing in Metaverse, while Old Money is making a lot of noise. In the short term, the Metaverse circuit is indeed overheating. In the overheated environment, New Money believes that Metaverse’s narrative logic has changed. Starting from the spread of COVID-19, the entire entertainment industry will be heading for a road that was not previously envisaged.

The author of this article is former Amazon Studio Strategy Director Matthew Ball. He analyzes why Metaverse will become the development direction of the entertainment industry from the short-term and long-term behavior changes of consumer behavior . At the same time, the article also uses Epic as an example to illustrate that for game companies, enter the Metaverse. It will also be one thing where the advantages outweigh the disadvantages.

The original translation of the rhythm is as follows:

This article focuses on the evolving users of Metaverse and the role of business behavior in it. Observing the changes in the younger generation of consumers and business behaviors including consumption, investment, time, attention, decision-making and ability, we can find that these changes are either directly related to Metaverse or contribute to Metaverse in other ways. The commendatory description of this change is “trend”, and the derogatory description is “fad”. Of course, Metaverse now has long-term global social significance.

Short-term behavioral changes

The most obvious behavioral change in the past year is manifested in the increasing proportion of our time in the online and virtual world. Moreover, the time devoted to the Internet and the virtual world is “destigmatizing”.

Over the past few decades, “game players” have been spending their free time in the virtual world. At the same time complete a variety of tasks and pursue non-gameable goals, such as someone designing a virtual room in the “Second Life” game instead of killing the enemy in “Counter Strike”. There are a large number of people in society who think this behavior is strange, wasteful, and even anti-social.

COVID-19 has quickly changed this perception, and millions of doubters are joining and even beginning to enjoy virtual worlds, such as “Animal Crossing”, “Fortress Night”, and ” Roblox “. Because the doubters had planned to carry out activities in the real world, and the epidemic forced them to only move indoors. This not only eliminates some of the stigma of the virtual world and Metaverse, it may even encourage this generation of skeptics to participate.

This is like an online supermarket. Millions of consumers are aware of this service, but some users refuse to try it. In their opinion, they do not personally select the items, and the items may deteriorate or be damaged when they arrive. For this part of consumers, the quality of something is not the point of deciding not to use it, but the online supermarket “wrong”. The emergence of COVID-19 has led these people to try online supermarkets. As a result, some consumers still retain the habit of offline consumption, while others accept online shopping.

More users and higher participation have brought higher revenue for developers, which in turn has led to more financing and better products.

In the past year, a large amount of money has flowed into two directions in the field of “Metaverse revenues (Metaverse revenues)”. The first is the rapid legalization and investment of pure virtual assets through Cryptocurrencies and NFTs, and the other is investment in non-gaming brands and talents, such as luxury brands Prada and Gucci, car brand Ford, star Neymar, and rapper Travis Scott. These investments contribute to the diversification of virtual platforms, shifting from targeted games that focus on winning, shooting, chasing, and sorting to more attractive activities, such as creation, exploration, expression, cooperation, and social interaction.

Many companies have begun to use different technological processes, resources and new investment ideas to support the implementation of Metaverse. For example, Hollywood is deploying real-time rendering solutions such as Unreal and Unity engines, and Disney and Industrial Light and Magic are even developing and using their own engines. This change provides greater creative flexibility and efficient shooting schedules, and also supports Hollywood’s “virtual background”. Just as the Disney studio is full of Spider-Man clothes, Brooklyn streets, infinite stones, and various virtual sets, Mickey Mouse Stars is accumulating digital files of virtual assets, such as the planet Nevaro, the ancient city of Mandalor, and Ding. Jalen’s car is the Razor Crown Starship, baby Yoda, and so on.

At the same time, construction operators, construction companies, and car companies are also shifting to tools such as Unreal or Unity, and the application areas of vertical specific solutions represented by AutoCAD are broadening.

This transition means that everything designed in the real world can be transitioned to Metaverse at a relatively low cost and used repeatedly indefinitely. This impact may be underestimated at the moment. Metaverse wants to be available to the extent that it needs to be filled with enough virtual content. However, the production cost of virtual content is high, and short-term successful business cases are lacking. But what if Disney has already produced a lot of material? Then only need to crop the material.

Towards an open asset economy and sharing model

“Economic attractiveness” will promote the development of the entertainment industry in the direction of Metaverse.

There has been this trend since “Fortnite”, which is a game asset that can be accessed and used through proprietary online services and account systems on almost all platforms in the world, including items, currencies, achievements, and progress data. game. Moreover, players do not need to pay for this form.

In fact, the reason why “Fortress Night” can achieve full cross-platform online may be part of the cost of developer Epic. At least at the beginning of the game and conceptually, it appears that Epic bears part of the cost.

Information in the Epic and Apple lawsuits shows that in order to introduce cross-platform online, payment, data synchronization and other functions in PlayStation, Epic paid PlayStation developer SONY for in-app purchases (micro-transaction) to ensure that players do not need Pay for cross-platform.

Although cross-platform online, payment, data synchronization and other functions are beneficial to players, they encourage players to spend more time and money. However, this may lead to the loss of revenue from all participating game publishing platforms. For most platforms, in-app purchases of free games such as “Fortnite” are a source of income. Generally speaking, the platform will charge 25%-30% for in-app purchases. SONY is worried that the proportion of time players spend on PlayStation will exceed the proportion of consumption. In other words, this is a kind of cash subsidy to competitors.

For example, players use PlayStation 4 75% of the time to play games and 25% of the time to use Nintendo Switch. But 40% of the consumption is done through Nintendo Switch. This means that SONY’s revenue was taken away by Nintendo by 15%. In order to avoid this situation, Epic pays twice for the overlapping part. In this case, Epic will pay 25% of the 15% part to Nintendo and SONY respectively.

There is no evidence to show whether this payment model still exists. After all, “Fortress Night” has been running on SONY’s platform for 3 years. Currently, “Fortress Night” still supports cross-platform on the PlayStation platform. In fact, since 2018, SONY has unlocked cross-platform functions for many games, and there is no news of charging cross-platform fees. Therefore, it can be inferred that SONY may have determined that cross-platform games effectively encourage users to increase consumption, and the amount is greater than the aforementioned time loss.

In any case, cross-platform online, payment, data synchronization and other functions have become the bargaining chip of game development companies, and the cancellation of this function may lead to the loss of users of the game publishing platform.

In addition to cross-platform and payment, there is also cross-IP interoperability. As virtual games such as “Fortnite”, “Minecraft” and “Roblox” grow into important cultural driving forces in society, it is inevitable that consumer marketing, brand building and multimedia franchising will become more and more inseparable Open them. In the past three years, “Fortnite” has been linked to the National Football League and FIFA, Disney’s Marvel Comics, Star Wars and Alien, Warner Bros. DC Comics, Microsoft’s Halo, SONY’s God of War and Horizon Zero Dawn , Capcom’s Street Fighter, Hasbro’s GI JOE, Nike and Michael Jordan, Travis Scott, etc. have carried out cross-border cooperation.

In order to collaborate across borders, IP owners must accept what they have rarely agreed to in marketing activities:

·Unlimited license, the costumes in the game will be permanently reserved by the player;

·Overlapping marketing windows, some brand activities have short time intervals or completely overlap;

· No real control.

All in all, this means that there may be scenes in the game where players wearing Yoda, carrying an Air Jordan bag, holding an Aquaman trident, and looking exactly like Neymar exploring in Stark Industries.

Finally, Epic launched the Epic Online Series (EOS) to promote cross-platform game services and virtual items. Soon after Epic acquired the game developer Psyonix, it announced that Psyonix launched “Rocket League” free of charge and transferred to the Epic account system. A few months later, Epic held the “Llama-Rama” event. “Fortnite” players can complete challenges in “Rocket League” to unlock limited-edition costumes and achievements. The unlocked costumes can be worn in any supported game.

At the beginning of the year, Epic acquired Tonic Games Group, the parent company of “Fall Guys”, as part of its investment in building Metaverse. Obviously, Epic promotes the “Rocket Game” experiment in Tonic and Epic Games Publishing games. Epic Games Publishing provides funding and distribution for independent studios’ games, and helps them to be listed on the Epic Games Store for distribution. Epic has integrated the social network service Houseparty, which means that players can transfer goods, identities and even personal images to the Epic Online Series network and apply them to games that support this feature.

We can regard the testing of Epic assets across platforms and unlocking achievements as its early work in the cross-platform and IP mixing of games. It seems that Epic believes that reducing friction between different games will help attract more players to participate and spend more time and money in the game.

What’s interesting is that more notable than these tests are the tests of the blockchain community. Based on the blockchain, players have the economic potential of circulated, truly owned and interoperable commodities. If this trend continues, then revenue may become an irresistible attraction for developers.

Long-term behavioral changes

Although the changes mentioned above are important, they are not comparable to changes in thinking and behavior.

In the first two years after the iPad was released, news reports or videos were often seen. Infants and young children picked up magazines or books and tried to interact by touching them. Although this is easy to understand, we cannot understand the difference in the frame of reference behind these behaviors.

Now, those children who were first exposed to the iPad are over ten years old, and the 4-year-old child in 2011 is now in adolescence. They will now purchase content directly online, a behavior that was not understood before. As this part of the group ages and gradually grasps the right to speak, the transformation of the industry is quietly occurring.

One important case is Roblox, a virtual platform.

Although Roblox was launched in 2006, it had a considerable number of users only ten years later. Thirteen years later, Roblox attracted the attention of non-core players. Today, fifteen years later, Roblox has become one of the largest platforms in history. And, it has already begun to affect the world.

Part of the fifteen years of progress can be attributed to technological changes, such as CPU, GPU and server-side technology, network infrastructure and service upgrades. However, it should be noted that Roblox’s core users are children in the 9-12 age group, which is a group of users who have used iPad since childhood. This is no coincidence. According to data disclosed by Roblox, more than 75% of children of this age in the United States use Roblox regularly.

The younger generation using iPad and the previous generation have different social expectations, behaviors, and social forms. People outside of this generation don’t think Roblox has any new ideas. Roblox will not leave a deep visual impact. At the same time, his narrative logic is not convincing enough. Even his social functions are worse than those used by the Y-generation and X-generation groups daily, such as Snapchat, Instagram, and FaceTime. In the eyes of the non-young generation, social platforms should have powerful social tools.

People in the entertainment industry believe that Roblox corresponds to Lego or watching the Nick Kids Channel, which is a way of behavior that is conducive to education. The activities we carry out are often divided into practical ones, such as car repairs, interior decoration, and leisure ones, such as watching HBO or playing “The Last of Us”. This all belongs to the use of time, and there is no good or bad compared to playing Roblox.

Hollywood has long believed that millennials will grow into pay TV viewers or lose interest in Youtube. In fact, they did not do this. Although these users also watch Netflix and Disney+, the proportion of video in their leisure time is declining generation by generation.

The latest generation of children are socializing, learning and expressing themselves through the virtual world. At present, this behavior will not stop. On the contrary, with the increase in usage, the functions of the virtual world will also be expanded simultaneously, and the ease of use and importance will also be greatly improved. Most importantly, this generation of users will continue to grow and become the backbone of society. This means that their usage habits will guide this change.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/thinking-about-the-short-term-and-long-term-impact-of-consumer-behavior-in-metaverse/
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