The formula for more immersive digital experiences
Learn how innovative technologies like Web3 and the metaverse are ushering in a new era of the internet.
Innovative technologies and how people use them: From the steam engine to the search engine, it’s an elegantly simple formula that has been defining business success for centuries.
But like many things elegant and simple, getting that formula right can be frustratingly complicated, and especially when all those technologies and the many ways that people prefer to use them seem to change by the month.
Getting your strategy right—and executing on that strategy with excellence—very often make the difference between your business winning or whiffing: with your products, your customers, and your bottom line.
And now add to the mix the evolving new “formula” of Web3 (emerging technologies) and the metaverse (how people can use those technologies in more immersive ways). Is this the next revolution? And what are companies doing to explore, test, and deploy innovative new offerings that are driven by Web3 tech and designed for meta-versed consumers?
To find out, we surveyed hundreds of organizations and synthesized findings from 20 large-company case studies to provide a detailed, on-the-ground update of the evolving Web3-metaverse innovations and opportunities. It’s all laid out (simply and elegantly) in our expansive new KPMG report, “Shaping Your Strategy for Web3 and the Metaverse.”
Mindset could actually be the biggest barrier for Web3 today, because not enough people are thinking strategically about the impacts it will have on their business.
Insight from the KPMG and InnoLead report, "Shaping Your Strategy for Web3 and the Metaverse."
What’s in a name?
Perhaps the biggest obstacle for many companies today on Web3 and the metaverse is to establish a clear definition for each term and how it applies to their business.
Indeed, based on feedback from our report’s 265 survey respondents (primarily C-level and directors), just 26 percent said their organizations had a solid understanding of Web3, and only 29 percent said the same for the metaverse. Despite that level of uncertainty, though, just about all our respondents said they expect to use Web3 and the metaverse in some form, with less than 4 percent saying they had no plans for either.
Against that backdrop—“we may not be sure of what it is, but we know we want to do something”—it can be tempting to run ahead with an ad hoc project that checks the box on “innovation.” And especially with a whopping 86 percent of respondents acknowledging that they are keeping a close eye on what their competitors are doing in this space.
But, as we detail in the report’s extensive case studies, that “do something” approach is not one that leading companies are using to effectively innovate and execute on Web3 and the metaverse. So, here’s a closer look at each area, and some of the emerging insights and leading practices outlined in our report.
39%
Compared with other teams and functions, the percentage of R&D and innovation teams responsible for exploring Web3 and metaverse technologies.
Web3
Let’s start with some definitions: Web3 is the next evolution of the web, with Web1 being the original “World Wide Web” that arose in the last 1990s, and Web2 the more dynamic version that took hold in the mid-2000s, driven by personalization, user-generated content, social media, and more.
Web3 continues the web’s shift to a more decentralized platform, with technologies like blockchain, tokens like cryptocurrency, smart contracts, and a growing number of decentralized apps that are not controlled by any single entity. Other emerging Web3 technologies include virtual reality (VR) and augmented reality (AR), which play a key role in delivering robust metaverse experiences; and generative AI, which can create virtual goods and services.
To make progress on Web3, we encourage our clients to adopt a start-up mentality and identify a meaningful pilot program. Beyond simply a return on investment, look for a return on innovation—much like a start-up would. Success can mean establishing new capabilities and a roadmap for long-term Web3 utilization and transformation.
In our work with clients, we’ve identified at least three essential steps to get started:
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Metaverse
Broadly, the metaverse describes the emergence of more immersive, three-dimensional digital experiences—virtual “worlds” in which avatars interact, collaborate, and transact business with digital tokens. Gaming platforms (Fortnite, Minecraft, Roblox) have been at the metaverse’s leading edge for years, but virtual work, education, and e-commerce are rapidly catching up.
And make no mistake, consumers are taking note: Two-thirds of the consumers in a recent KPMG survey said they were aware of the metaverse, but that includes 8 of 10 of the Millennial and Gen Z respondents. As we outline in our report, many of the early lessons on the metaverse have come from that leading edge of gaming, which has considerable real-world results to point the way.
Here are five learnings from that industry that can inform just about any business:
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Meet the innovation engine
Amid hyperbolic headlines and economic headwinds, it can be tempting to file Web3 and the metaverse under “review again in 2024.” But that does not reflect the facts on the ground that we have observed, and especially at companies leading the way on innovation.
Two examples: A lack of funding shaped up as one of the least concerns in our survey, with just 10.2 percent of respondents citing it as an issue for Web 3 and 9.8 percent for the metaverse. And another recent KPMG survey of investors found that nearly half (45 percent) of VC and institutional investor assets were in the metaverse, and most investors expect to continue to increase that allocation over the next five years.
In the end, the only constant is change. After all, the steam engine was a sensational innovation of the industrial revolution that has long since fizzled out. And the search engine … well, it powered the information revolution, but at 20-plus years, it’s a relatively “mature” technology by today’s terms.
Is your company ready for the next revolution?
Explore more insights and opportunities around innovation:
Insight
Benchmarking Innovation Impact 2023
A definitive guide for leaders in innovation roles within large organizations.
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