Monetizing the metaverse with billing fit for the future

The inevitability of the metaverse needs to be considered in the same way as the early reactions to the internet

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Niall Norton, General Manager, Amdocs Networks

Amdocs

25 Jul 2022

Monetizing the metaverse with billing fit for the future

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According to Nick Clegg, Meta’s president of global affairs, the "metaverse is coming, one way or another."

Judging by the string of significant acquisitions made with the metaverse in mind over the past year, the former Liberal Democrat leader is onto something. Notably, Microsoft and Sony signed respective $69 billion and $2 billion deals to acquire two gaming companies, with gaming often held up as one of the first metaverse use cases.

The inevitability of the Metaverse needs to be considered in the same way as the early reactions to the internet when it was emerging; the engagement tools were not great, and the technical challenges on connectivity and interoperability were immature, but the communications and productivity benefits were clear. The same applies to the metaverse and it cannot be ignored.

From a consumer perspective, we recently carried out research revealing that while 41% of people think the metaverse is in too early a stage to jump in, 80% can see promise in it.

Despite the industry investment and growing consumer appetite, key challenges remain before it can become a functioning (virtual) reality for business as well as people. The good news for the telecoms sector is that communication service providers (CSPs) are central to overcoming the most important challenges. How involved and engaged the CSP community becomes is yet to be determined but the central role in terms of connectivity, ease of use and quality of experience are all CSP-controlled domains.

I’ve covered the need for both ubiquitous connectivity and interoperability in a recent article, but to summarize: telecommunications networks need to be able to deliver the ultra-reliable low latency connectivity required to support the content-rich services expected in a metaverse-led future; and collaboration between telcos needs to be prioritized to enable the seamless interaction that the metaverse promises. This connectivity is “broadband” not just 5G or fiber; it is a holistic service provision.

The issue of ubiquitous connectivity will be mitigated as telcos deploy 5G standalone networks and further embrace the benefits of the cloud. And just this month, the Metaverse Standards Forum was launched as a discussion forum for the key metaverse players – including Meta, Epic Games and Microsoft – to promote interoperability during its development.

As these issues are overcome and the metaverse train rolls on, CSPs need to ensure they position themselves as valuable players in this game, able to handle the new demands it will place on their services.

Hardware barriers  

Research from McKinsey predicts that the metaverse could be worth $5 trillion by 2030, but there are obvious costs associated with its take-off. Aside from the infrastructure and software investment needed from technology and telco companies, there is also a cost to the consumer, which may prove to be a significant hurdle that needs to be jumped. A recent survey from Amdocs found that cost of entry is a critical barrier for US consumers, with hardware proving a significant investment. Of those surveyed, 26% don’t want to spend more than $100 on metaverse hardware, and only 11% would be willing to pay the current cost of headsets ($250-$350).

To prevent the cost of the metaverse making the digital divide worse – a fear shared by half of survey respondents – mitigations such as leasable devices should be implemented to make it more accessible while the necessary hardware remains expensive. It’s likely that these ‘access devices’ will become much like mobile phones in the future, acting as an accessory as well as a tool. Therefore, having them available on a lease or subscription basis will enable users to upgrade to the latest model more easily.

Facilitating consumers’ access to the metaverse is critical for telco companies as they will rely on income from people using the metaverse to recoup their sizable infrastructure investments. To be a success for all involved, the metaverse needs to be accessible to everyone.

Bundling connectivity

While cost unfortunately remains a barrier for consumers, Amdocs’ recent survey researching the future of gaming found that 81% of UK gamers would be willing to pay at least £7.60 for cloud gaming if they could ensure a bundled, dedicated 5G connection. And this figure is likely to rise when the metaverse becomes a reality, as more unique AR experiences and metaverse-based interactive experiences were both cited within the top three 5G benefits gamers are most looking forward to. Furthermore, this shows that cost concerns could be alleviated if consumers are guaranteed the 5G level speeds and ubiquitous connectivity that is needed to fulfil the promise of the metaverse.

So, as well as assessing how consumers will pay for metaverse-related hardware, CSPs will need to reevaluate their billing practices to enable consumers to access their new services. For example, in the future we could see consumers adding a metaverse access charge to their recurring subscriptions alongside things like Netflix, Spotify and their phone bill, which will add a new revenue stream for CSPs and enable them to more easily monetise the metaverse. And it is likely that bundled services and community offers will apply also for specific services as the most successful CSP’s embrace the more innovative metaverse service providers.  

More specifically, in some circumstances CSPs could lower costs by providing bundled services that give consumers access to the metaverse as well as ensuring network speeds and latency are up to scratch. For example, they could build a package that includes everything a user needs to enjoy a unique and immersive, metaverse-based experience. This would entail a 5G mobile connection that seamlessly transitions from indoor wireless access to outdoor coverage, and the hardware accessories needed to dive into a virtual or augmented reality world. What’s more, these bundles don’t have to stop there. In the future, CSPs could partner with organizers or major sporting events such as the Olympics, World Cup or Wimbledon to offer virtual access alongside consumers’ subscriptions, enabling them to enjoy these events in the metaverse.

Nick Clegg has a point when he portrays the rise of the metaverse as inevitable, but significant network infrastructure investment is needed to enable it to become a reality, alongside huge technological developments from across the wider technology industry. Now is the time for CSPs to ensure they’re ready to provide consumers with reliable, secure and easy to use windows into the metaverse. By bundling metaverse access with seamless connectivity and hardware subscriptions, telcos can make themselves a foundational part of this new virtual world.

This article originally appeared on VanillaPlus

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