Metaverse Impact: Redefining Business Models Through Virtual and Augmented Technologies

A recent study explores the transformative impact of the metaverse on business models, revealing three waves of innovation driven by virtual environments, goods, and metaverse-enabling technologies. The research highlights the profound potential of the metaverse to reshape value creation and capture across multiple sectors, emphasizing the need for continuous exploration and adaptation.

A recent study by researchers from the University of Salento and the Polytechnic University of Bari explores the transformative potential of the metaverse on business models. Despite businesses rapidly adopting metaverse technologies, the field remains under-researched, with a need for a comprehensive understanding of its implications. This study aims to fill that gap by providing a historical overview of the metaverse's impact on business model innovation (BMI), identifying key elements introduced by the metaverse, the value creation and capture actions it enables, and the sectors most affected. Utilizing a systematic literature review (SLR) with bibliometric and content analysis, the study reveals three distinct waves of impact that the metaverse has had on business models, each signifying a progression in how businesses create and capture value through the metaverse.

The First Wave: Pioneering Virtual Environments

The first wave, spanning from 1998 to 2006, marks the initial phase of BMI with the emergence of virtual environments and communities. Companies began leveraging virtual marketplaces and supply chains, fostering new forms of value creation through enhanced collaboration and agility. Trust and loyalty within virtual communities became crucial value capture mechanisms, particularly in e-commerce platforms like eBay, which utilized customer reviews to build consumer trust. The transition from real to virtual environments introduced substantial modifications to previous business models, leading to the establishment of virtual networks where virtual communities interact. This virtualization transformed physical stores into virtual marketplaces, allowing companies to reach new consumers and increase visibility in a global market. Recognizing the power of virtual relationships, companies expanded this effect along the entire supply chain, enhancing their capability to manage information and flows of goods in real time, thus improving agility and customer response.

The Second Wave: Rise of Virtual Goods and Currencies

The second wave, from 2007 to 2014, saw the rise of virtual goods and currencies, such as avatars and tokens, driving further innovation. This era introduced the concept of the metaverse as a roadmap for the future web, guiding companies towards the integration of virtual reality technologies. Virtual goods became a major new source of revenue, complementing existing advertising strategies. Devices enabling real-virtual interaction, such as AR technologies, enhanced user experiences in various industries, including entertainment and retail. For example, new devices capable of interacting with smart TVs or during 3D film screenings introduced a novel way to generate value for consumers. The application of early metaverse concepts in banking and retail led to the creation of virtual branches, improving customer experience and operational efficiency. Information security and privacy became paramount as virtual transactions increased, with new professional roles emerging to ensure data security and negotiate virtual goods' costs. Virtual communities continued to enhance trust and loyalty, reducing uncertainty in the purchase decision process and increasing user engagement and willingness to pay.

The Third Wave: Consolidating Metaverse Technologies

The third wave, from 2015 to 2023, is characterized by the consolidation of metaverse-enabling technologies, including augmented reality (AR), virtual reality (VR), and blockchain. These technologies facilitated the creation of sustainable meta-products and services, such as digital twins in the fashion industry, which reduced costs and resource waste while enhancing stakeholder involvement. In healthcare, AR and VR were used for training and remote assistance, significantly improving operational efficiency and patient care. This wave also saw the advent of meta-solutions for education, marketing, and cultural experiences. In tourism, AR-based applications allowed consumers to virtually experience tourist destinations, enhancing customer targeting and engagement. Virtual goods and currencies continued to evolve, with NFTs becoming integral in banking and gaming sectors.

Sectors Embracing the Metaverse Revolution

The study highlights that 22 different sectors have been involved in the metaverse transformation, with marketing, fashion, manufacturing, technology providers, tourism, education, and retail being the most prominent. The most applied metaverse-enabling technologies are VR, AR, and blockchain, indicating their critical role in driving business model innovation. The metaverse's ability to innovate business models is profound, enabling companies to transition towards new value creation and capture mechanisms. This transformation is driven by the metaverse's potential to offer radical, incremental, and exaptation paths of innovation, ensuring competitive advantage and sustainability in a rapidly evolving digital landscape.

Future research directions are proposed to address the emerging gaps and to build the next wave of metaverse-based business model innovation, underscoring the need for continuous exploration and adaptation as the metaverse becomes increasingly integrated into various business sectors.