South Africa’s metaverse and non-fungible tokens (NFT) market is expected to gain popularity this year, as more local companies dabble with immersive technologies to deliver operational and revenue improvements.
Dubbed the next evolution of social connection, a “metaverse” is a virtual reality (VR) space where users in different parts of the globe can interact with each other and with virtual beings in a computer-generated environment.
The metaverse made its debut into the public lexicon last year, after Facebook founder Mark Zuckerberg bet his resources on the metaverse strategy as the next big thing in social media technology, and later changed Facebook’s name to Meta, in a major rebrand strategy.
This saw many firms across the globe buying into the metaverse “gold rush” and dabbling with the new technology, including Microsoft, Snapchat owner Snap, Google, Tencent and Binance.
Other major brands that have also pivoted to be prepared for a coming boom in the metaverse include Adidas, Nike, Samsung and Sony.
Industry pundits told ITWeb, while SA is still in the infancy stages of adoption, this year more companies are expected to experiment with the metaverse and NFTs, as they evolve their digital strategies to meet customer demands and increase profit margins.
“NFTs and the metaverse are going to be rife, particularly in the local art and entertainment industries,” says Tyrone Rubin, CEO and founder of MetaLabsAfrica, which helps African brands design and explore VR and augmented reality experiences in the metaverse.
“In 2022, more media agencies, artists and brands will start acknowledging the value that can be unlocked by these technologies and they will build ecosystems around it. With time, local organisations across various sectors will be exploring various aspects of the metaverse, which has become an exciting space and inspired us to establish our company.”
Cashing in on NFTs
An NFT is a secure digital file that validates ownership and is stored on the blockchain system, where each NFT can represent a unique digital item and thus is not interchangeable.
NFTs have become hugely popular across the globe in recent months, with expensive items such as real estate, digital artwork and music being ‘tokenised’ and sold online at exorbitant prices, leading to a huge jump in shares of companies linked to NFTs.
According to Rubin, the blockchain-based cryptographic trend is increasingly drawing the interest of South African companies and it will be woven into their metaverse strategies.
Several developments unfolded in SA last year, with companies such as Cape Town-based art gallery Worldart and digital asset company Invictus Capital unveiling NFT-based art collections.
“NFTs are becoming vitally integrated in the metaverse, where users have to buy an NFT avatar. We are already seeing massive gains in the gaming industry, for instance in Axie Infinity, an NFT-based online game, where participants play to earn money.
“Crypto-currency will increasingly play an important role in this space, because companies and individuals will purchase things using it to buy NFTs or Bitcoin. So whatever will be purchased in the metarverse will use 90% crypto and the rest will be via credit/debit card,” adds Rubin.
One example of a local firm that has already intertwined the metaverse world with NFTs is Johannesburg-based innovation company Mann Made. The company became the first in SA to build a metaverse marketplace named Africarare – a 3D VR immersive hub that showcases some of the best of African art creativity in the form of NFTs.
Jason Welz, senior crypto fund analyst at Invictus Capital, told ITWeb that South Africans have adopted crypto-currencies more rapidly than many developed nations, a trend expected to lead to an uptick in the adoption of NFT and metaverse strategies.
“I don’t think South Africa will follow a path different to the broader market, and I expect the NFT and metaverse to continue to grow rapidly [locally]. Already there are initiatives that hope to help drive this growth and get our talented local artists their first exposure to this new, exciting, truly global space,” he states.
According to Welz, metaverse and NFTs will unlock infinite business opportunities for South African businesses, with the art and broader entertainment industry likely to be the trendsetters. Other industries where transparency and immutability are important are expected to follow suit over time, he continues.
“Some will use the technology pragmatically, to improve business practices. An example is the diamond mining industry – through blockchain and NFT technology, it is possible to create an immutable record of each stage of a mined diamond’s life cycle,” asserts Welz.
“The legal industry may also adopt the technology to assist in record-keeping surrounding contracts, for example.
“The use case I’m most excited about – largely because the local market is already mature enough to support it – is for the use of NFTs to represent ownership of physical art stored securely with a custodian.”
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