Why leaders need to prepare to run a blended reality business

Interested in learning what’s next for the gaming industry? Join gaming executives to discuss emerging parts of the industry this October at GamesBeat Summit Next. Learn more.

It’s 2006. Second Life is featured on the cover of a prominent magazine with the headline “Virtual World, Real Money.”  Nissan, Starwood, and Sun Microsystems just jumped in. Were they all a decade ahead of their time? Clairvoyant? Blind experimenters? Maybe all the above. But time will still tell. 15 years later, Second Life is still holding on.  And while it reported significant user growth during the pandemic, it hasn’t transformed the digital landscape as originally predicted.

Fast forward to today – metaverse is a household term and articles like this one are catching attention. According to research from the Oliver Wyman Forum, 13 percent of the population already identifies as a “citizen of the Metaverse,” willing to pay to access the Metaverse and considering virtual assets as equal or more valuable than other financial investments. 

Will the Metaverse be as transformative as the rise of the Internet was 25 years ago? Or are business leaders risking a wasted investment? 

It’s important to note that the idea of the Metaverse itself is not new, in fact, it’s over 20 years old.  For many years there have been virtual worlds with social and economic systems in place and users depicted as avatars in an open ‘sandbox’ in which one can enjoy a wide range of immersive content. While today’s metaverses provide a space intriguing for any digital marketer, what leaders should actually be preparing for is the rise of blended reality. Here’s why.

What is blended reality?

Since it is mainly accessed through gaming (think Roblox), today’s gamers’ metaverse provides a new and novel marketing channel. As Chris Dixon, an early investor in Oculus said, ‘Disruptive technologies are often initially viewed as “toys.”’ What will drive true mass adoption of the Metaverse, on a similar scale to the rise of the Internet, is the transition of these emerging technologies into our everyday lives.

Just look at Unreal Engine, a 3D creation tool that started in gaming but is now powering film and TV, architectural design, and the automotive industry with immersion indistinguishable from real life. Now, imagine those capabilities delivered in real-time, overlaid on the physical world, truly portable and discreet. This will be a blended reality—not a standalone Metaverse, but a new medium that’s integrated into daily living. A place where NFTs and other immersive digital experiences become seamlessly integrated, versus today’s separation between reality and the gamers’ metaverse.

While this vision may be a few years out, the transition, when it comes, will happen at lightning speed. Companies should explore the possibilities that this technology can offer, just as with crypto, where many banks and retailers have already completed the engineering that will allow instant activation if mass adoption occurs. Similarly, for a blended reality, the risks of missing that window are too great to ignore. 

Three critical lessons from the past

Like the early days of the internet, companies should explore the possibilities that this technology can offer and can learn from the 2000s transition from a physical to a digital-first world when it comes to innovating for a blended reality. 

First, experiences need to be additive, not duplicative. Customers won’t want a replication of what they can already get in the real world—they’ll want inspiration from novel experiences that bring utility beyond what’s currently available. 

Second, the basic rules of branding will continue to apply. Experiences need to be relevant, convenient, competitively priced, and grounded in a brand’s purpose. 

Third, the blended reality form of the Metaverse won’t be a walled garden; it will augment our physical and digital lives. It will follow the path of the original digital disrupters that have become omnichannel (such as Amazon, Warby Parker, and Casper). The critical lesson is to design from the new medium back, not to layer it onto the existing model. Take Starbucks. Nobody likes waiting in line to order their drink, it can be a frustrating experience and is a poor use of physical space. The introduction of the mobile app for ordering, with over 25% of customers adopting, means that the store can be re-configured for pick-up vs delivery. Not only does this enable a higher throughput of customers but also allows for the design of a more inviting entryway not clogged by impatient and caffeine-starved consumers.

The blended reality will excel at customer discovery, something that digital doesn’t do well; the smartest companies will experiment and envision new ways to serve consumers as they seamlessly engage across mediums.  

When will all of this happen? The time for mass adoption of new experiences has been shrinking (look at TikTok only taking five years to reach 1 billion users!). However, there’s still a large contrast between the speed of software versus the time needed for the hardware to catch up. But once these hardware challenges are solved, we’ll see an explosive growth of innovation in the space. And for companies not ready, it will be challenging, if not impossible, to keep up. 

It’s clear that a new wave of disruption is coming; luckily, there’s enough time for us to prepare to catch it. My advice: start with experimenting sooner than later and you’ll be breathing the rare air of the bleeding edge of the future, no matter what ‘verse gets sung.

David Mayer is senior partner of Brand Strategy at Lippincott.

Originally appeared on: TheSpuzz