Metaverse Latest

Metaverse technologies and virtual gaming have surged in popularity during the Covid-19 pandemic and continue to evolve, grow, and converge each month. Coresight Research has identified the expanding metaverse as a key trend to watch in global retail in 2022 and beyond.

Our Metaverse Latest series provides regular updates on metaverse developments, showing how key players and new entrants are seizing opportunities in the space. We also discuss metaverse trends we have seen recently. In this report, we present developments as of May 24, 2022, and discuss the recent token crash.

Recent Metaverse Developments

Virtual Worlds and Platforms

• On May 3, 2022, music-streaming platform Spotify announced a partnership with metaverse gaming platform Roblox to create Spotify Island, where artists can connect with guests via immersive experiences and sell exclusive merchandise.
• On May 10, 2022, Orderinbox, an innovative NFT marketplace with social media aspects, launched to the public. Creators, brands and retailers can build fan bases and followings and develop peer collaborations and relations.   
• On May 10, 2022, gDEX Metaverse opened to the public. The platform provides management tools for cross-chain gaming guilds, allowing gamers across different blockchains, including Ethereum and Solana, to collaborate and share common gaming goals.  
• On May 13, 2022, Roblox announced that users in its game would be able to visit Samsung’s Superstar Galaxy, an immersive experience featuring pop star Charli XCX.
• On May 16, 2022, Kevin Li, Co-Founder of livestreaming service Twitch, reported that his Web 3.0 gaming company, Metatheory, had raised $24 million for game and ecosystem development. The company is currently working on a new blockchain game, DuskBreakers.
• On May 17, 2022, metaverse infrastructure provider Croquet Corporation announced a new gaming experience for its technology, called Microverse, which is aimed at providing interoperability with other chains and metaverse worlds.  
• On May 18, 2022, in partnership with Blowfish Studios, Animoca Brands (a Hong Kong-based prominent investor in Web 3.0 platforms such as Axie Infinity, Bloktopia and The Sandbox) announced land sales for one of its most anticipated blockchain games yet, Phantom Galaxies, generating $19.3 million in primary sales.
• On May 20, 2022, Hong Kong-based blockchain firm Advokate Group announced the release of its own metaverse and cryptocurrency wallet to support its upcoming platform, MetaGaia. The wallet enables users to complete transactions with both credit cards and the platform’s METG token.
• On May 22, 2022, Singapore-based social metaverse application Bud announced that it had raised $37 million in funding—bringing its total funding to $60 million—to create a metaverse and launch an NFT collection.
• On May 24, 2022, financial research firm Curzio Research reported that it had purchased the most expensive plot of virtual land in the metaverse to date, on the platform TCG Word, for $5 million.

Brands and Retailers

• On May 3, 2022, fast-food chain Chick-Fil-A filed trademarks revealing its intentions to enter the metaverse, aiming to create virtual food and beverage delivery, NFTs and online retail and entertainment services, including online restaurants.
• On May 3, 2022, Hyundai—which sold out of its first NFT collection—announced a new collection of 10,000 exclusive NFTs, 9,500 of which would be sold for 0.15 Ethereum for a total of $2.8 million (Ethereum price as of May 24, 2022). The announcement came after Hyundai’s launch of its Hyundai Metamobility platform.
• On May 4, 2022, Starbucks announced that it would launch a collection of NFTs, which will provide owners with exclusive access to immersive content and experiences.
• On May 4, 2022, in partnership with Decentraland and Web 3.0 design firm Metaskins, luxury brand SFLMaven announced that it would open its first metaverse store on May 18, 2022.
• On May 5, 2022, German carmaker Volkswagen revealed its collaboration with Microsoft’s virtual reality (VR) headset HoloLens 2, envisioning a world in which users wear headsets to receive augmented information about weather, traffic and news in driverless cars.
• On May 6, 2022, luxury brand Gucci announced that it would begin accepting cryptocurrency payments, including Bitcoin, Ethereum and Litecoin, in select US stores. Customers purchasing in-store will be emailed a QR code to use with their preferred cryptocurrency wallet.
• On May 6, 2022, food company Kraft Heinz unveiled a plan to get Lunchables, Velveeta and its ketchup products onto shelves faster using the metaverse, partnering with Microsoft and utilizing Internet of Things (IoT) digital twin technology to take better control of production and supply chain operations.
• On May 7, 2022, sportswear provider Under Armour minted a limited-edition collection of NFTs inspired by professional basketball player Stephen Curry. The move comes after the company’s announcement to mint 20,000 new NFTs over the summer. Stephen Curry has also launched Under Armour sneakers via Decentraland and The Sandbox.
• On May 11, 2022, former professional basketball player Dwyane Wade announced a collaboration with Budweiser, in which the beer company will drop NFT versions of Wade’s jerseys in Decentraland.
• On May 11, sports apparel brand PUMA announced a partnership with Premier League soccer club Manchester City. The collaboration will feature NFTs celebrating the 10th anniversary of the team’s first league title.
• On May 11, 2022, in partnership with soccer player Paul Pogba, KFC, Pepsi and Pizza Hut released an augmented reality (AR) game where users can control a 3D avatar, try to score goals and collect brand-centered virtual prizes.
• On May 11, 2022, Chicago-based brewery Goose Island Beer announced that it had minted a collection of 2,000 NFTs, each priced at $499, to generate $1 million in primary sales. The tokens celebrate the 30th anniversary of the company’s Bourbon County Stout.
• On May 11, 2022, Spanish fashion group Mango announced the opening of a new store on Fifth Avenue in New York City. The store will merge the physical and virtual worlds, showcasing NFT collections along with corresponding physical art that inspired the tokens. The experience will also be available in Decentraland.  
• On May 12, 2022, high-end beauty and makeup brand Charlotte Tilbury partnered with augmented e-commerce platform Obsess to create an immersive experience called the Pillow Talk Virtual Wonderland.
• On May 12, 2022, Meta announced a partnership with the National Basketball Association (NBA) to create the NBA Lane, an interactive, basketball-themed neighborhood within Horizon Worlds. The experience will feature games, including virtual shooting and dunking contests, and exclusive merchandise.
• On May 12, 2022, following a growing trend of VR training, Goodwill Industries announced that it will use headsets and virtual classes to train forklift operators.  
• On May 16, 2022, home décor retailer Crate & Barrel—which previously partnered with payment processor Flexa to accept cryptocurrency—announced that it had created a Senior Vice President of Product Design, Development and Metaverse role. Sebastian Brauer, who previously served as Vice President of Product Design and Development for the company, filled the position.
• On May 16, 2022, footwear brand Clarks announced its Web 3.0 initiative, a partnership with Roblox to create the “Cicaverse” experience, a virtual celebration of its unisex sneaker style.
• On May 16, 2022, following the launch of its virtual world experience with Roblox, Spotify announced that NFTs would be available for artists to sell to fans through the platform with the help of an external NFT marketplace.   
• On May 16, 2022, India-based restaurant group The Olive Group announced a series of metaverse initiatives in a partnership with celebrity engagement platform Hey Hey Global. The collaboration will feature NFTs based on the group’s brands, including Olive Bar & Kitchen, Toast & Tonic and The Grammar Room.
• On May 17, 2022, Getty Images launched NFTs on the Palm blockchain, an Ethereum-compatible sidechain that has previously partnered with NASCAR and Major League Baseball. Getty Images sees NFTs as a way to tap into new markets.
• On May 17, 2022, Vancouver Running Co., a specialty running store in Vancouver, announced a partnership with digital studio OddFutur3 to launch a collection of 5,102 unique NFTs celebrating running culture and its inclusivity.
• On May 17, 2022, casual BBQ franchise Tony Roma’s filed for virtual trademarks indicating its intentions to join the metaverse. The franchise aims to bring unique experiences and menus to customers in the comfort of their own homes.
• On May 17, 2022, popular soccer team LaLiga partnered with TVM, a South Korea-based global sports metaverse company, to create Triverse. The exclusive virial experience will allow LaLiga fans to engage with the team and brand.
• On May 18, 2022, Andrea Panconesi, CEO of Italian luxury retailer Luisa Via Roma and the force behind the brand’s first e-commerce campaign in the late 1990s, announced that he would create an NFT marketplace exclusively for wearables designed by creators and brands.
• On May 18, 2022, consumer goods company Unilever announced that it would create a metaverse for mothers to interact with one another. Inspired by its baby cosmetic product line Baby Dove, “RealMomsVillage” visitors will be able to enter virtual interactive hubs and learn about products.
• On May 18, 2022, sandwich chain Jimmy John’s announced a contest in partnership with Decentraland, allowing customers to create virtual sandwiches. Those who enter the competition can earn discounts for the chain, and the winning creation will be recreated in the real world.
• On May 18, 2022, pizza chain Pizza Hut announced that it would join ComplexLand, a digital festival with custom merchandise that was held on May 25–27. Pizza Hut interacted with fans through virtual delivery drivers, exclusive NFTs and free pizza giveaways.
• On May 19, 2022, makeup pigment brand Reverence Beauty launched a pigment sciences course in its own metaverse, the Augmented Virtual Reality Academy, utilizing proprietary interactive video technology, AR and VR.
• On May 19, 2022, in partnership with payment processor BitPay, Swiss luxury watchmaker Tag Heuer reported that it was adding cryptocurrency payment options for e-commerce in the US. Customers can pay in one of 12 tokens, including Bitcoin, Ethereum and Dogecoin.
• On May 20, 2022, carmaker Nissan announced that it would reveal its new Sakura electric vehicle in the metaverse, following its physical debut at the company’s headquarters. At Nissan Sakura Driving Island, fans and potential customers can take the car for a virtual test drive.
• On May 20, 2022, cannabis distribution company ADC announced a strategic partnership with technology firm Alt Magic to launch an in-browser virtual cannabis dispensary. Customers will be able to pick up products, view product information and make purchases.
• On May 20, 2022, e-commerce giant Shopify announced a partnership with crypto payment processor Crypto.com to adopt crypto payments.
• On May 22, 2022, Adidas hosted a virtual music party in partnership with Tencent Music Entertainment Group’s TMELAND virtual music festival. The event featured performances from popular artists Jay Park and MC Jin, attracting an audience of over 1.3 million.
• On May 23, 2022, GameStop announced the launch of its own Ethereum-based cryptocurrency wallet, the GameStop Wallet, which utilizes Loopring’s Layer 2 blockchain technology.
• On May 23, 2022, Gucci announced a partnership with esports company FACEIT to create the Gucci Gaming Academy, looking to foster the next generation of gamers by providing training, mental health services and more. FACEIT runs one of the largest esports platforms, with over 26 million global users.
• On May 23, 2022, in partnership with Web 3.0 platform OneOf, eBay announced the launch of its first NFT collection. The tokens will feature animated renderings of iconic Sports Illustrated covers.
• On May 24, 2022, burger chain Fatburger launched an exclusive collection of NFTs in honor of National Burger Day. Each of the 500 NFTs unlocks a free made-to-order Original Fatburger.

Technology and Access

• On May 3, 2022, technology startup Americana, which can digitize physical objects (such as clothing, furniture and artwork) into NFTs, raised $6.9 million in seed funding from various partners, including NFT Marketplace OpenSea.
• On May 4, 2022, California announced that it would become the first US state to begin broadly studying how to regulate cryptocurrencies.
• On May 4, 2022, Google confirmed that it had acquired AR startup MicroLED to help it build AR and VR headsets. A week later, during its annual developer conference, Google released a video demonstrating a new pair of AR glasses.
• On May 6, 2022, developers and researchers from semiconductor and gaming engine company Nvidia demonstrated a new pair of ultra-thin VR glasses that resemble sunglasses and can display immersive content and images with a 120-degree field of view. This is a major development for VR headsets, which are typically viewed as cumbersome and unwieldy.
• On May 9, 2022, NFT website NFT Plazas announced the launch of a new service that allows users to upload and pay for metaverse billboard advertisements using an automated system. The company hopes to onboard thousands of brands to metaverse platforms such as Decentraland.
• On May 9, 2022, 3D commerce platform Vntana partnered with virtual shopping platform ByondXR to help brands and retailers enter the metaverse via digital showrooms. The collaboration gives brands the technology to upload 3D designs and models of products and create digital showrooms.
• On May 9, 2022, digital certificate provider Arianee raised $21 million to replace authenticity certificates with digital authenticity cards in the form of NFTs. Resellers can package the NFT and product together to fetch a higher price on the secondary markets.
• On May 10, 2022, Dapper Labs, the blockchain company that created NBA Top Shot and NFT-focused blockchain Flow, launched a $725 million fund to support its blockchain ecosystem of developers and applications.
• On May 11, 2022, in an important step towards NFT protection, the world’s largest NFT marketplace, OpenSea, announced that it is currently testing features to add copy detection and verification to digital assets.
• On May 13, 2022, at the Google I/O developer conference, Google unveiled its translation glasses, which use AR to automatically display translated text from audio input—a major development for instantaneous communication.
• On May 15, 2022, the High Court Justice of London, England, ruled that NFTs would be recognized as private property. Though the ruling does not extend to the underlying content, it still goes a long way in protecting NFT owners against theft.
• On May 17, 2022, trading services platform Robinhood announced that it will launch a new standalone app that allows users to hold cryptocurrency and NFTs. The move puts the company in direct competition with Coinbase.
• On May 17, 2022, Linktree, a social media service that creates a single landing page for users’ brands, announced that it will work with OpenSea to add NFT support, allowing creators and brands to build a community around their creations.
• On May 18, 2022, prominent Web 3.0 investment fund Andreessen Horowitz reported that it had launched a $600 million fund focused on developing virtual world and blockchain gaming platforms.
• On May 20, 2022, AI (artificial intelligence)-based social platform Social Life Network, via its Web 3.0 arm, Decentral Life, announced that it launched a new QR-code application for its digital wallet and payment system. An alternative to payment processors, the application will help retailers seamlessly adopt cryptocurrency payments.
• On May 20, 2022, Qualcomm revealed that it is working on a wireless version of its AR Smart Viewer, which will weigh less, use Wi-Fi 6 and offer a mixed-reality experience, fit with hand and face tracking.

The Token Crash

1.  Cryptocurrencies

While cryptocurrencies have long-term potential outside of economics, they are simply financial instruments right now. Like any other financial instrument, cryptocurrencies are prone to volatile price swings and prolonged periods of skepticism. In the first half of 2022, amid a volatile global economy and supply chain issues, cryptocurrencies suffered their largest collective price drop to date.

From its peak in November 2021, the market capitalization of all tokens has crashed roughly 61% to the (suspected) bottom in late May 2022, wiping out over $1.5 trillion of value (see Figure 1). The NASDAQ Composite, one of the largest stock exchanges in the US, fell 30% from its peak in roughly the same period. Cryptocurrencies appear to be acting as financial investments—correlated with the stock market to some extent—rather than currencies that trade based on supply, demand and utility.

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Figure 1. Market Capitalization of All Cryptocurrencies (USD Bil.) [caption id="attachment_148918" align="aligncenter" width="700"] Source: CoinGecko/CoinMarketCap/Statista[/caption]  

Previously, stablecoins—a cryptocurrency meant to maintain a 1:1 peg with a fiat currency or exchange-traded commodities—were thought to be a safer alternative to traditional, more volatile cryptocurrencies. However, even stablecoin systems have failed:

• Terra (stablecoin) and LUNA (traditional cryptocurrency), both created by Terraform Labs, were two of the most popular cryptocurrencies before their recent failures. Terra maintained a 1:1 peg with the US dollar using complex algorithms and allowing users to exchange Terra to LUNA at various rates, depending on if the peg was above or below the target price. As LUNA’s price crashed, Terra investors became unwilling to exchange to LUNA, driving the peg down and collapsing the system. Terraform Labs is trying to survive through an in-progress rebrand, while many Terra and LUNA projects are migrating to the Polygon blockchain.

Businesses and retailers do not appear to be discouraged from accepting cryptocurrencies and using blockchain technologies, with many retailers and brands, including Gucci and Shopify, announcing their intentions to accept cryptocurrency payments. If anything, the cryptocurrency crash resulted in underdeveloped token systems failing, providing insight into which tokens have long-term potential and teaching the world how to adopt the technology safely.

• Learn more about cryptocurrencies in our separate report, Buildings Blocks of the Metaverse: Cryptocurrencies.

2. NFTs Cryptocurrencies are not the only tokens suffering from massive price and volume crashes. NFTs have dealt with significant headwinds, experiencing an even larger crash than cryptocurrencies did, although specific collection drops still generate enormous interest on single days. The biggest issue with NFTs in the short run seems to be their utility. In 2020 and 2021, we saw astonishing figures for individual NFT sales (in the six- and seven-figure range). However, while many willing buyers remain, the overall value of total NFT sales have dropped significantly in late May 2022 (see Figure 2).

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Figure 2. Total Value of NFT Sales (USD Mil.) [caption id="attachment_148919" align="aligncenter" width="700"] Source: NonFungible[/caption]  

Many NFTs have no function outside of digital art, and the legality of replication and ownership of NFTs remains unclear in many locations. However, the number of brands, retailers and businesses interested and investing in NFT-related campaigns continues to rise, as many recognize that NFTs have a wide variety of use cases outside of digital art:

• Authenticity—NFTs can be attached to any physical item, serving as a certificate of authenticity for luxury goods and other categories which suffer from counterfeits. This encourages an active secondary market and a longer life for the product.
• Digital fashion—In the metaverse, NFTs will come to represent unique items (such as digital clothing and accessories for avatars), which could be tied to real-world replicas of the items.
• Supply chain—Attaching NFTs to physical items can significantly increase supply chain efficiency, allowing retailers to digitally identify bad batches and problem points in the supply chain.
• Creator rights—NFTs give the power of ownership back to the creators, allowing them to go directly to the consumer and take control of their work.
• Loyalty tokens—Businesses can upgrade their loyalty programs through NFTs, which consumers can redeem for physical items.

What We Think

Web 3.0 and its important underlying technologies, including cryptocurrencies and NFTs, are still in their earliest days, similar to the Internet in the early 1990s. Like the dot-com crash of 2001, Web 3.0 technologies are also going through a “weeding out” phase, eliminating unreliable and unsustainable token systems and demonstrating what types of virtual products will be popular going forward.

It might be simple for brands and retailers to ignore the benefits of NFTs and cryptocurrencies, but their long-term uses are evident as the world continues its shift towards a fully digital life. Although daunting, the first half of 2022, and perhaps the next few years, will be the best time to begin testing Web 3.0 strategies and learning from the behavior of cryptocurrencies and NFTs as they respond to macroeconomic events.