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Ubiquitous Content, Abundance & the Value of Brand in the Metaverse

Why will people buy digital things when everyone can create them for free?

Key takeaways:

• The divide between digital content creators and consumers is disappearing, with platforms like Roblox leading the way.

• Generative AI is reducing creation barriers, allowing anyone to produce digital content, potentially saturating platforms.

• Digital demand remains strong as online identities and brand affiliations become more crucial.

• New, digital-first brands could emerge from community interests, challenging established brands.

• Open brand platforms encouraging community remixing could redefine brand engagement online.

In a not-so-distant path, the line between creator and consumer was clear. Fast forward to today, and that line is all but a blur on the horizon behind us. Our content consumption today is highly oriented towards user-generated content, UGC. In large, fuelled by the magical distribution machine that is the internet.

We’re now entering the third phase of UGC. From text to video to 3D objects and spaces.

Many creators today, and many more tomorrow, monetize their creations inside immersive online spaces where we, as consumers, spend an increasing amount of our time and attention. Places like Roblox, Fortnite, and Zepeto.

For instance, a key part of the Roblox ecosystem is the content flywheel and the economic flywheel that the user-generated content power. 

People create stuff, and others buy, play, use, and transact with it.

This flywheel of attention and commerce also attracts consumer brands, following a simple rule of thumb: where attention goes, commerce follows.

Any user on a platform like Roblox can choose to become a creator. But, it requires skills and know-how. You have to use a 3D modeling tool to create virtual assets. You have to program in Lua (Roblox programming language) to create experiences. The complexity creates a natural constraint on how much is made. This constraint also regulates marketplace demand and supply.

But what happens to the marketplace and demand if anyone can create anything?

Ubiquitous Digital Content

The internet was a distribution revolution. It enabled anyone to publish anything across the world at zero cost. The current wave of generative AI innovation represents a massive creation revolution. It will allow anyone to create (almost) anything at a lower and lower cost.

This wave will hit platforms like Roblox, too. The company already teased its Assistant feature for creators earlier this year:

The barriers mentioned above? Gone, more or less. Anyone can create anything whenever they want. Need a new hat for your avatar? Ask the assistant.

We’ll have an abundance of digital content on platforms like Roblox.

Will that destroy the supply/demand curve and collapse the marketplace? Some people make that logical reasoning. It’s a recurring pushback I see when I write on LinkedIn about generative AI inside UGC platforms. But the answer to those questions is no.

Things That Matter

The reason is relatively simple. We generally want things that matter. 

– From “Making the Case for Virtual Fashion”

We will be as selective with how we use objects to signal connection and affinity in virtual spaces as we are in the real world.

What will change is what those things are. Where they come from and which network they connect us to.

Community-First Brands

Many fashion and lifestyle brands already invest heavily in immersive platforms like Roblox and the broader digital object economy through NFTs, etc. Demand for digital objects that provide connection and signal quality from widely recognized brands like Nike and Gucci will be massive in the future.

But I’m convinced we’ll also see the proliferation of a new type of brand. Born inside digital spaces and growing out into the physical world. This could, for instance, be Roblox group communities that have formed around a shared interest or passion.

As generative AI collapses the cost and complexity of creating, it will increase the ability for these communities to manifest themselves through experiences and objects. This, in turn, will strengthen and grow the community, and we will see some of them start taking the form of entirely new types of digital-first, community-first brands.

This could create competition for the “legacy” brands that are busy porting their brand equity from physical to digital. It also creates opportunities for them.

Remixing

In a previous post, I discussed how future entertainment franchises have to modify their thinking from “IP as product” to “IP as platform.” One of the core concepts in this framework is opening up previously protected assets and allowing the community and fans to come in and contribute through remixing, expansions, and extensions.

This idea also broadly applies to consumer brands as they venture into immersive, collaborative online spaces.

Established brands will have opportunities to “niche down” into sub-subcommunities by partnering with them, allowing them to co-create and remix on top of selected brands. In a physical context, this would be much more complicated. In a digital, it’s infinitely scalable.

The biggest challenge is that it requires brands to relinquish some control and allow new participants into the fold.

Regardless of how it plays out, generative AI will allow millions of people to transition from consumers to creators of 3D digital objects, goods, and experiences. It won’t collapse marketplace demand for such things but rather make it spin faster.

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