The metaverse as a concept hasn’t exactly been the easiest sell just yet. With any new technology, there’s bound to be pushback as consumers get comfortable with the idea of something outside of their comfort zone. However, the long-term potential is quite strong, with IDC reporting global shipments of VR headsets will grow to almost 29 million by 2025.
Over time, the industry will see more unique possibilities in consumer and enterprise areas, where companies can create a more social experience around work, fitness, and communication. Only 18% of consumers recently surveyed by Amdocs felt the metaverse would not become popular.
However, a significant hurdle may have just arisen. Meta announced a $100 price increase for the Oculus Quest, the headset that has captured an almost two-thirds share of global VR headset shipments. Now, the metaverse-ready headset will cost consumers at least $400.
While this is still less than the current batch of gaming consoles, it brings a problem. Amdocs found that just 10% of consumers would spend more than $350 on metaverse hardware. This new pricing doesn’t precisely align with consumer expectations.
But it doesn’t need to be a barrier.
What have we learned from the mobile industry?
History shows us that subsidizing hardware works as a lower-cost entry, which can be critical for mass adoption. Just look at the iPhone in its early stages. Hardware manufacturers should start looking towards the mobile industry, offering installment plans for metaverse hardware throughout an internet or wireless contract to lower the cost of entry for consumers.
The option to bundle connectivity with digital entertainment and consumer services has the potential to change the discussion. With pay-TV continuing to lose ground and streaming momentum slowing, the possibility to bundle new experiences like the metaverse and cloud gaming can also be a win for communications service providers.
As the new “experience bundles” emerge, they will bring hardware, entertainment, and connectivity together in one subscription. For instance, Amdocs found that most consumers (78%) are willing to pay at least $10 for cloud gaming if they could ensure a bundled 5G connection as an add-on, while almost half of these respondents (44%) would pay more than $20.
As the metaverse grows over the next five years, this can be a remarkable growth opportunity. The industry needs to look at these disruptive times to provide the right combination of services within the home with the right communication provider partners.
That’s why partnerships become critical here. We’ve seen this approach work in other industry verticals. For instance, home-security service SimpliSafe teamed up with Hippo Insurance to give homeowners access to security devices and property insurance under one plan. These partners work together to deliver safety and security for the home — with only one transaction required. Verizon and Microsoft are also trying this approach, with Verizon offering the Xbox Series X and Series S through its All Access monthly financing program, highlighting Fios and 5G Home as the ideal ways to game without lag.
Preparing to monetize these new offerings
With new individualized experiences also comes the need for a new kind of subscription approach tailored to consumers.
As experiences become more a la carte, there is a need for a new kind of monetization approach. One that can be fine-tuned and uniquely tailored to end-users, backed by machine learning, to understand what they may want or need to fit their experience preferences.
This will be essential to be a player in a new digital world. As inflation potentially causes consumers to hold off on expensive, “nice to have” purchases, creating an approach that allows them to get their foot in the door the way that’s best for them could be a key area for metaverse adoption.
Technology is constantly evolving, so the industry needs to remain flexible and look at new ways to engage consumers and meet them where they are. Otherwise, innovation could be stifled.
