Since Facebook rebranded to Meta last year, barely a day passes without a new capital raise, brand launch or futures fund for the metaverse, but what exactly is it and what does it mean for sport and its biggest stars?
Despite the metaverse being a relatively recent term, it’s clear a new virtual reality is on the horizon. Meta’s chief executive Mark Zuckerberg wants 1bn users by 2030 and committed $10bn of funding last year alone, while other Silicon Valley giants continue to invest in this space.
The metaverse has quickly become the poster child for Web 3.0 – a new era for the internet built on technologies like blockchain, crypto, NFTs and decentralised autonomous organisations (DAOs).
Some of these concepts are already pervading sport, with crypto-based sport sponsorships exploding and NFTs flooding the market with varying degrees of success.
Web3 departs from today’s centralised, user-generated, and social media-oriented model, as well as its ‘read only’ predecessor, and has been described as a 3D model of the internet.
Today, the primary application of the metaverse is virtual worlds, where users can interact and engage with apps and services in a more immersive way. This is probably best understood by gamers who already do this to some extent everytime they hang out with friends to play Fortnite or Call of Duty.
In future it will likely offer far more opportunities for users, consumer brands and organisations. For sport, its unrivalled fan loyalty, mass market appeal and the transcendent nature of its biggest stars, teams and leagues make it the perfect vehicle for Web3 adoption.
Web3 is built on the premise of a community-first approach to content, engagement and immersion, delivered in a democratised environment.
Sports fans will be able to invest in and influence the content they consume, while creators – be they athletes, brands, leagues or competitions – can generate greater direct value from their IP and share the upside with fans.
This is an extension of the direct-to-consumer drive of recent years as rights holders attempt to capture more first-party data from their fans. Only this month Fifa launched its own streaming platform for this purpose.
The metaverse increases the opportunity to directly own relationships with supporters and build highly engaged communities, rather than rely on third-party social media platforms as the destination to interact.
Super Bowl LVI champions the Los Angeles Rams recently announced the launch of a year-round virtual venue to provide innovative opportunities for fans and corporate partners to engage with them.
Antourage, which recently partnered with Manchester United defender Phil Jones to launch the Red Lion Sports Club metaverse project, has completed a proof of concept, which saw a 20x increase in dwell time and 30x more engagement when content was consumed on owned and operated channels, as opposed to social media accounts.
This demonstrates the significant monetisation potential that Web3 and the metaverse’s first-party platforms will create, appealing to sports brands, rights holders and athletes themselves.
Another key driver for Web3 is greater transparency and accountability, with governance carried out via smart contracts – rules baked into the blockchain and designed to execute autonomously – and users able to vote and exercise democratic rights to influence how the community works.
This is a hugely attractive alternative to the world of social media where trolls and cyberbullies often operate with impunity. The metaverse is envisaged to be self-regulated where users set the rules and vote for change.
Again, the gaming sector has been seen as a Web3 vanguard. Games such as Fortnite have been used as virtual concert venues, and Roblox, which allows users to build virtual worlds, has been adopted by brands such as Nike, McLaren, and Uefa seeking to offer metaverse experiences to fans and partners.
Gaming has also led the way for the play-to-earn model, in which online activity generates collectable and tradeable rewards, that is set to prosper in the metaverse as super fans are rewarded for their engagement and active participation.
And in-game purchases, a market said to be worth around $54bn in 2020, is a clear indicator of how cryptocurrencies can become the basis of transacting in the metaverse.
As ever, broader awareness and understanding will be key to long-term adaptation, but the wind of change is upon us. Sport has seen an increasing willingness to push the boundaries in search of new audiences and riches. This will be no different when it comes to the potential Web3 offers.
Andy Marston is Chief of Staff at Antourage, a Swedish-based media platform that enables teams, brands, and creators to transcend the boundaries of social media and build rich fan communities in a Web3 world.