Ready for the Metaverse? 10 Questions to Consider About Your Metaverse Strategy 2023
The metaverse refers to the newest layer of the internet. It is made accessible by using special hardware. In one variation, this hardware (typically lenses and/or headsets) creates a 360-degree immersive experience (virtual reality) and can be paired with physical sensations (haptics). In another version, the hardware lets the users see the everyday physical world, but with an overlay of graphics and/or data (augmented reality). These underlying, fundamental technologies continue to develop in ways that will pose strategic legal, compliance and risk challenges in 2023 and beyond.
Among Tech That Will Change Your Life in 2023, the Wall Street Journal's first entry on Dec. 30, 2022, was "The metaverse, now more than just Meta." The WSJ noted that in 2023, Meta (which now holds 90 percent of the market for virtual reality hardware) will face stiff new competition, and consumers and businesses will have more choices than ever in how to engage in the metaverse.
Technology consultant Gartner also recently named the metaverse as one of its Top 10 Strategic Technology Trends for 2023. Gartner estimated that "by 2026, 25% of people will spend at least one hour a day in a metaverse for work, shopping, education, social media and/or entertainment." While any individual venture or implementation may succeed or fail, broad investment continues in the technologies of virtual reality and augmented reality.
The Gartner report notes, among other predicted metaverse developments, "the first bank to establish a presence in the metaverse, predicting a market opportunity of $1 trillion and eyeing virtual real estate," as well as potential uses for retail spaces (such as automobile dealerships), safely training employees to use hazardous materials, digital concierges for healthcare or shopping, virtual workspaces, and enhanced virtual meetings. While we use the collective term "the metaverse," there are in fact many metaverses using broadly similar technology, operated by different companies for different purposes.
Any tech-forward organization is analyzing where it stands in relationship to this developing new layer of the Internet. (Holland & Knight also offered a 90-minute webinar on "Developing a Metaverse Strategy," which remains available for viewing). To facilitate that analysis, we offer 10 questions the metaverse-interested client ought to be asking:
1. How Are You Evaluating What Opportunities the Metaverse May Present Your Business?
The most basic question about any metaverse strategy: Does your organization have one? Where do virtual reality and augmented reality fit on any existing technological roadmap? Who in the organization is keeping abreast of new metaverse applications that may have consumer-facing, employee-facing or business-to-business applications? How do they assess new metaverse developments, such as the recent partnership designed to bring Microsoft's 250 million Teams users to Meta's enterprise platform, for strategic importance?
2. How Are Your Competitors Engaging with the Metaverse?
Metaverse adoption is optional now in the same way that website adoption was optional in the 1990s and mobile app adoption was optional a decade ago. As with websites and mobile apps, metaverse adoption, however, will continue to uptick. Competitive pressures are already shaping metaverse ventures in finance, fashion, gaming and retail, among other areas.
3. Are You Proactively Protecting Your Intellectual Property in the Metaverse?
Whether an organization has developed its own metaverse property or not, it presents another theater in which intellectual property theft and digital counterfeiting will almost certainly play out. Indeed, the risks of criminal activity were sufficient for global police organization Interpol to create a metaverse-based academy to train investigators to fight crime in virtual reality.
As we have detailed in prior blog posts, the framework for enforcing intellectual property rights in the metaverse is still developing and may vary substantially between metaverses that employ a blockchain and land ownership model and those that do not. Understanding how to protect intellectual property rights will take careful analysis from metaverse to metaverse and application to application.
4. Will You Be Promoting Your Goods, Services and Brands in the Metaverse?
As we recently blogged, the metaverse adds a layer of complexity to legal considerations around, for example, sweepstakes and promotions. Design of sweepstakes and promotions and disclosures need to be adjusted to this new reality.
5. Will You Be Acquiring and/or Financing Properties in the Metaverse?
Companies buying and financing properties in the metaverse will face another set of challenges. As detailed in our blog, those borrowing and renting in the metaverse will face a distinct set of challenges, all to be carefully addressed.
6. How Will You Build Privacy-by-Design into Your Metaverse Usage?
The recent potential development of a mixed-reality headset (virtual reality and augmented reality) by a major manufacturer made news. Reportedly, the headset would allow the use of retinal scan to let users make online payments and purchases. Data collection and data use have set off firestorms of litigation and regulation in Webs 1.0 and 2.0 and, absent strengthened and robust data handling protocols, will occur in the metaverse as well.
7. If Your Workforce Will Be Participating Through the Metaverse, Have You Set the Rules of the Road for Working in Virtual Spaces?
A virtual workplace is still a workplace, and existing labor and employment laws and regulations may apply in novel ways. From acceptable use policies in the metaverse, to dress codes for avatars, to, as we've blogged, OSHA regulation of metaverse tech, the health and safety of the workforce will be at least as important a consideration in the metaverse as it is in the present physical workplace.
8. How Can the Metaverse Help You Meet Your Environmental, Social and Governance (ESG) Priorities?
The metaverse is adding a new layer to the traditional internet, rich with virtual and augmented realities. At the same time, the ESG movement is developing new criteria by which companies will be judged by investors, assessing corporate performance according to ESG standards. As we blogged, companies developing metaverse strategies would do well to consider the prospect of new technologies to help – or hinder – execution on ESG goals and how to create and provide evidence on each measure.
9. Does Your Insurance Cover Liability That May Arise out of Metaverse Engagement?
As we have seen with evolution of data breach and ransomware insurance, the market for risk products is constantly evolving. Especially during these early times of the metaverse, knowing how existing policies may map onto the landscape of pioneering virtual activity will take thoughtful review.
10. Are You Aware of and Engaging in Opportunities to Shape the Development of the Metaverse?
The rules of the road for the metaverse are still being created. As we have blogged, standards organizations are now deciding how different metaverses will interact with the public and one another, and governments around the world are doing the same. Companies with a stake in the future of virtual reality and augmented reality have a chance to help shape their own future.