How will you seize real opportunities in tomorrow’s virtual world?

As the corporate world embraces the metaverse, it’s time to explore the potential for players in all sectors.

In brief

• The metaverse is evolving rapidly – and organizations are recognizing the need to find their place in it
• We shine the spotlight on existing virtual platforms to illustrate how the metaverse works
• As Web 3.0 shifts the focus from read and write to collab and create, organizations can help shape tomorrow’s virtual world

During Covid, business and social interactions automatically shifted to the digital space. Post pandemic, interest in virtual ways of communicating and collaborating is here to stay. Against this background, it is hardly surprising that developments in the metaverse are catching the eye of organizations and private individuals alike. If it continues to evolve as anticipated, the metaverse will be offering a collective, virtual shared space in which people can interact remotely and have multi-sensory experiences.

In a series of articles, EY explores the metaverse and addresses the key questions facing organizations as they seek to understand, enter and thrive in the virtual world.

This virtual space – virtual world – is enabled by Web 3.0, which represents the consistent development of the internet towards more digital social interaction, semantic and context-based search algorithms, and a strong orientation towards media-based information and entertainment. Web 3.0 provides the basic building blocks of the metaverse. The virtual worlds themselves are distinct platforms and developers and users are shaping these environments based on their vision, strategy and emerging technological advances.

The metaverse supports the shift from Web2.0 to Web 3.0 – in other words from “read and write” to “read, write, own and participate”. This innovative, collaborative approach is an invitation to organizations across sectors to find – or create – business opportunities in this new space. First movers have recognized the potential of this new medium to engage and interact with potential customers and communities, as reflected in the broad range of industries and use cases for this futuristic idea. In recent years, we’ve witnessed exciting developments such as unexpected brand collaborations, the opening of virtual offices and the advent of the Chief Metaverse Officer.

Early activities in the field have been focused on brand collaborations with players from both the physical and virtual worlds. One prominent example is the collaboration between Adidas and the Bored Ape Yacht Club (BAYC), widely received as one of the strongest brands within the Web 3.0 world, who released a collection of NFTs (Non-Fungible Tokens) end of 2021. Further examples include car manufacturer Audi, which turns its vehicles into rolling virtual reality experiences with holoride in-vehicle tech, or food giant McDonald’s patent applications for the virtual brand, branch and services.

In this article, we examine the leading platforms – Decentraland, The Sandbox and the upcoming Otherside – as examples of how the metaverse is evolving. They offer unique and fresh gaming and socializing experiences but have key differences when it comes to design and functionality. Companies and individuals need to take these into consideration when deciding which platform fits their unique needs. It’s also important to note that the list of available platforms is set to grow as more and more actors jump on the metaverse bandwagon.

The earliest metaverse-like platforms, The Sandbox and Decentraland also enjoy the largest user base. Among the growing number of 300,000 Decentraland players, 18,000 visit the platform on a daily basis. The Sandbox, on the other hand, has 500,000 uniquely connected wallets and a daily user base of around 10,000 players. While Decentraland and The Sandbox offer comparable user experiences, the key platform concepts are different. Decentraland is more decentralized, focusing on user-driven decisions, while The Sandbox has only planned to shift its structure towards a DAO (Decentralized Autonomous Organization) in 2022. Furthermore, The Sandbox offers more complete content creation tools and has seen more corporate partnerships in the past. It remains to be seen how Otherside will complement this space.

To use the platforms, users need a computer as neither one is mobile-ready. The Sandbox needs players to install a desktop client currently available for Windows and macOS. Both platforms use identification via an Ethereum blockchain-supporting wallet such as MetaMask. Decentraland can be used directly via any internet browser, although some (Chrome, Brave) work better than others (Firefox).

Decentraland and The Sandbox use in-game currencies for buying and selling assets. Both are based on the ERC-20 token standard for defining tokens on the Ethereum Blockchain. MANA, the cryptocurrency of Decentraland, has a total supply of 2.80 billion tokens, with a current price of USD 2.35 and a market capitalization of USD 5,736,097,349. MANA is mainly used for buying land and wearables but also serves as a voting share for the DAO that manages Decentraland. SAND, the utility token of Sandbox has a total supply of 3 billion with a current price of USD 2.95 and a market capitalization of USD 4,528,715,461. Similar to MANA, it serves as a medium of exchange for buying and selling land and assets but also for governance to vote in upcoming decisions concerning the platform.

Besides the ERC-20 tokens, both platforms feature different NFTs based on the Ethereum Standard (ERC-721) enabling unique assets. Both platforms enable the purchase of customizable parcels. Decentraland offers a total of 90,601 parcels, 16mx16m in size with over 6,000 parcels already sold. As of 2022, the cheapest parcel is available for 4,000 MANA, equivalent to roughly USD 13,000. The parcels are themselves tokens, which can be customized. Users can also customize their avatars by creating or buying wearables like clothes or skins, which are also unique tokens called WEAR.

The Sandbox offers almost twice as many parcels – 166,464 – and they are also larger in size at 96mx96m of digital space. The cheapest parcel as of March 2022 is priced at 3,400 SAND (approx. USD 14,000) and there are 100,000 parcels still available.  Sandbox features ASSETS, GAMES and LAND. By purchasing LAND, developers and players can design landscapes or games of their own for others to explore. ASSETS are unique items which can be wearables, art or other types of collectibles. GAMES can be designed using the Sandbox game maker and can be published on LAND, which can be bought or rented. They can be provided free of charge to other players or subject to a fee, payable in SAND.

Parcels on both platforms can be combined to form larger districts. In The Sandbox, players or companies who want to create great visibility for their games or advertisements can pay for premium land around highly crowded places – much like in the real world. This can create more traffic for pay-to-play games, advertising and market visibility.

Around 10% of the land in The Sandbox is held by the creators for use in special events. In Decentraland, some parcels are also restricted for community-owned districts that serve a special purpose. One example is “Genesis Plaza”, the starting point for every new player, which features introductions, tutorials and a meeting place. Other famous districts are the shopping, gaming or gambling districts, where companies or unique players can rent space for creating brand visibility or holding events. When it comes to unique events, art exhibitions or showcases, Decentraland has shown that it can handle and setup events like the Metaverse Festival, featuring a great set of artists, stages, mini games, or collectibles with more than 50,000 visitors.