Virtual Worlds, Real-Life Use Cases: How Web2 and Web3 Tackled the Metaverse at CES 2023

What is the metaverse? Well, it depends on who you ask, as the loose term referring to a future immersive virtual world continues to morph across industries. Will it be a social platform? Will virtual reality (VR) headsets be the gateway to entry? Will it blur the line between reality and technology?

At this year’s massive four-day Consumer Electronics Show (CES), it was clear that both Web2- and Web3-native companies have different views on the path forward.

The term “metaverse” was first coined in Neal Stephenson’s 1992 science fiction novel “Snow Crash,” though the development of technologies to enhance the metaverse experience has expanded rapidly in recent years. Mainstream companies like Meta (formerly Facebook) have shifted their focus to innovating in the sector and countries such as Japan have laid out plans to integrate metaverse technology at a national level. Platforms, like The Sandbox, Spatial and Decentraland have sprung up to offer virtual social experiences, though a fully immersive, interconnected metaverse does not yet exist.

Blockchain technology is being used as a tool to propel the metaverse forward, and the Central Hall of the Las Vegas Convention Center was filled with new technologies familiar to the Web3 world. From metaverse company Ixana’s haptic VR technology to Samsung and LG’s smart televisions with blockchain integrations such as non-fungible token (NFT) wallets and marketplaces, CES offered a glimpse into a fantastical decentralized future.

But some Web3 builders say that the metaverse isn’t going to arrive as the result of a major technological breakthrough – instead, it will find a way to seamlessly integrate into everyday life.

“Bridging the digital and physical in an unremarkable, everyday kind of way, with unremarkable everyday technology is actually the core [of the metaverse],” said Cathy Hackl, chief metaverse officer of Journey, a Web3 consultancy company, on a panel at CES.

Web2 brands create meaningful experiences

Whether it was the Metaverse Fashion Week in March, Snapple’s Metaverse Bodega in August or October’s Metaverse Music Festival, many mainstream brands took their first steps into Web3 this past year. However, some critics have been quick to label these activations as simply a “PR stunt.”

Justin Hochberg, CEO and Founder of metaverse agency Virtual Brand Group, told CoinDesk that brands have reason to explore the metaverse beyond producing a one-time activation – they can deepen relationships with consumers, expand into new markets and avoid challenges associated with the physical world.

“The laws of gravity don’t apply and there are no supply chain issues,” Hochberg said. “When we can create a race car as easily as a scarf, it opens up the creative floodgates to what you want your brand to be.”

Dentsu NXT Space isn’t alone in its efforts to bring work to the metaverse. Japanese company FORUM8 International is looking to build a productivity-oriented metaverse for companies to establish their offices in the metaverse. The company also displayed its tech on the floor, showcasing software that will allow companies to take work online.

“We’re trying to build something easy to use, integrating communication features – in the office you want to have face-to-face communication, you can enter meetings by entering meeting rooms, [or you] can start voice chat in VR and have a text chat in the office,” said Luc Kuenemann, software engineer at FORUM8 International.

While more brands are stepping into the metaverse, their approaches don’t all look the same. From clunky headsets to bodysuits to immersive computer experiences, much of the technology shaping the metaverse is taking different forms. Kuenemann told CoinDesk that considering these differences will be crucial in figuring out how to unify social experiences.

“How do you integrate mixed realities – people who want to work in VR, AR or simple 3D experiences?” asked Kuenemann. “How do you get all those people together to work the way they want to work? It’s a big challenge to tackle [in the metaverse].”

Crypto elements

While the various metaverse showcases at CES incorporated a range of Web2 technologies, the Web3-native brands that showed up to the event made the case for blockchain and cryptocurrency to be an integral part of some of these innovations.

Sandy Carter, SVP of Web3 company Unstoppable Domains, told CoinDesk that the company’s technology, such as crypto wallets and blockchain domains, is creating the onramps for mainstream metaverse experiences.

“We’re the gateway into Web3…and that’s where a lot of people are today. That digital identity piece is one of the first building blocks of the metaverse and Web3,” said Carter.

Digital identity, in the form of a wallet ID or an Ethereum domain, is one way that Unstoppable is helping users take their identity across decentralized applications and other blockchain-based products. Carter told CoinDesk that “more integrations [of identity] with utility,” are coming up in 2023, and interoperability will be a key component in making the metaverse accessible.

Although the crypto space is largely still dealing with the widespread fallout of FTX’s unraveling, Web3 companies remain optimistic. The Blockchain Association’s inaugural presence at CES was aimed at highlighting how blockchain technology and cryptocurrency can underpin many of the technological trends forecasted for the year ahead.

Ron Hammond, director of government relations at the Washington, DC-based crypto advocacy group, told CoinDesk that the current state of the market isn’t stopping innovation in the space, as many companies are still exploring crypto payments, NFTs and decentralized finance (DeFi).

“We’ve gone back to the basics of rebuilding, focusing on the tech and not talking about [crypto] prices as much,” said Hammond. “We desperately need that energy after the fall of FTX.”

He also noted that among cryptocurrency products, utility is on the rise, and it’s only going to grow as we enter the new year.

“Folks in DC are clamoring for real-world use cases and it’s all around [CES].”

The bet on branding

Web3, a buzzword itself, is an ecosystem of similar buzzwords that come with barriers to entry. So as terms like metaverse, blockchain and NFTs make their way into the conversation, some individuals and companies have been eager to distance themselves from the jargon.

Kirthiga Reddy, co-founder and CEO of Web3 marketing agency Virtualness, said on a panel that NFTs shouldn’t be the go-to term for the technology and that it’s actually a reference to metadata. Rather, descriptions that speak to its identity and interoperability offerings are what’s necessary to facilitate adoption.

As more brands enter Web3, they’ve attempted to demystify these technologies by calling NFTs “digital collectibles.” Starbucks’ Odyssey loyalty program, Meta’s minting and selling of digital art on the platform, and NFT collective Front of House’s preferential restaurant booking tokens are just a few examples of initiatives that are veering away from the use of “non-fungible token” in favor of language that eases the onboarding process.

“The terminology has replaced the reality of what’s going on,” said Ted Schilowitz, a futurist at Paramount Global. “For me, I sort of want to pull back on it. I want to talk about the way technology propels innovation forward.”

A common thread throughout CES was the creation of frictionless experiences that focus on what fans and communities really want. These experiences also need to be delightful – which will prove key to mainstream metaverse adoption.

“In the metaverse we are all world builders and we all have a chance to build,” Hackl concluded. “At the end of the day it’s about people.”

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