Why Generation Z feels more comfortable in the Metaverse than in the physical world: 7 startling insights

May 9, 2022 - min read min read

We are still a long way from the mass adoption of extended reality (XR)—which is the collective name for virtual reality (VR), augmented reality (AR) and mixed reality (MR). But among tech giants, the battle is raging for what they see as the next big computing platform. The corona crisis has only added fuel to the fire. That is why, every month, I serve you with an overview of the most important, notable events and changes in the XR landscape.

The marketing experts at Razorfish and Vice Media Group decided that, with all the buzz, it was time to really examine the promise of the metaverse. They did so, thoroughly and with a focus on Gen Z. Because if you want to know the future, you need to ask the kids. 

The study created a lot of waves, courtesy of some rather startling insights. Surprising how different this generation is from Gen Y, and how advanced the adaptation and integration of gaming already is in their everyday life. For Gen Z gamers, the borders between on and offline have already faded. Maybe we are trying to predict something that’s already happened, as 52% of Gen Z Gamers feel more like themselves in the metaverse than in real life. Let that sink in. 

The report made an impression on me, and I think, hope, it will have a similar effect on you. The following seven insights on the next generation could and should influence how we think about branding, marketing, and technology today.

Insight 1: The metaverse makes space for self-exploration

While identifying mainly as a mix between introverted and extraverted, over 52% of Gen Z gamers say they feel more like themselves online than offline. A portion of social anxiety vanishes when everybody starts from the same vantage point—no inherited beauty or fortune can set novice gamers apart from their fellow players. The level playing field when entering a game and the freedom to build an avatar and an identity from scratch make the research group claim that the metaverse is the spot for self-exploration. A safe zone, an honest playground.

“An avatar is a truer version of who you are because you have very little anxiety compared to real life, you can do and say things you would not normally do. For example, I met my current girlfriend of nine years on a video game called Little Big Planet, and had I met her in real life, I probably would have never approached her.” — Gen Z, Male

Insight 2: The metaverse cultivates connection

65% have developed new relationships through gaming. That’s a large majority. Whether they replace or add to existing relationships offline, is unclear. What is interesting is that, for most Gen Z’ers, online friendships develop much faster. Interviewees indicate that an online friendship is easier because both parties dare to open up more. For them, it’s the online self-expression that opens the opportunity to truer connections. You and I may be worried by this evolution. We feel having real friends in real life is super important. However, it remains to be seen if the parallel development of online friendships has a negative impact on the offline ones. What is certain, is that they exist. 

“With my internet friends, I have never met them in real life, but I’ve told them my deepest, darkest secrets. But like, with my real person friends, we won’t get there till like three, four or five years down the friendship.” — Gen Z, Female

Insight 3: Gen Z feels gaming improves their mental health

Ever since games have been around, we’ve been fretting over kids glued to the screen and what that does to their mental health. Rightly so. But now that the world in its entirety is going digital—my mom’s playing Candy Crush—it might be time to reassess and update that concern. According to the study, a stunning 77% of Gen Z’ers claim that gaming reduces their anxiety and stress levels. They might have a point. Think about it: what calms you more, watching the news on climate change, war, and inflation, or walking around your digital farm in your new digital clothes, watering the veggies you’ll go and sell on a nearby island? I rest my case. Is gaming all sunshine, lollipops, and rainbows? Obviously not. But it's not all bad either, at least not for 77% of the youngsters.

“I love exploring a world and just being able to sit there for a really long time and feel like I’m a part of it. I feel like it kind of makes me forget about everyday life, even if everyday life is going fine, like it’s still a nice mental vacation, it’s like socially acceptable daydreaming.” — Gen Z, Female

Insight 4: The metaverse extends their reality

When asked what they expect from the metaverse, 52% of Gen Z say they want to make money, 47% want to meet new people and 39% are there to strengthen existing relationships with family and friends. That kind of sounds like the things you’d suspect people to do in real life. And maybe they do—one doesn’t cancel out the other. Still, when it comes to working, one in three interviewees says that success and building a career in the metaverse are the same as in real life. 37% also states that the metaverse is their way of exploring other places, getting to know other cultures. With aeroplanes destroying the planet, that might not be such a bad thing. On my end, I hope the metaverse will become an elaboration of reality, not a replacement for it. 

“I just want to do something that I haven’t done in the regular world and I may not be able to do in the regular world.” — Gen Z, Male

Insight 5: Gen Z buys virtual goods for their virtual experiences

When a whole generation is planning to spend 15 to 20% of their fun budget in the metaverse, you’d better go and set up shop. People who don’t buy from you in real life may not magically convert, but those already wearing your hoodie or sneakers to school will want to do so in-game as well, because they and their avatar share an identity. The immateriality of digital goods doesn’t really diminish their value, as that value lies in identity-building. Gen Z wants to and will spend their hard-earned money washing cars and babysitting to anything that helps them express themselves online, to things that increase their skills, and align with their values.

“I like to customise my avatar, I don’t want to be bland. I love to be more enthusiastic, be out there. I just enjoy being expressive and seeing the different emotions that the person in the skin can have as well.” — Gen Z, Female

Insight 6: Gen Z welcomes brands in the metaverse

If you wonder whether you’re welcome in this digital realm populated with youngsters, I can assure you: you are. One in three states they would love brands to open up virtual stores for browsing and buying products, and they want their favourite real-life brands to offer skins for their avatars. A Balenciaga adept offline is a Balenciaga adept online. This does mean that advertising as we know it should be reimagined. It’s not about showing ads and merely fishing for attention, that would only bother Gen Z’ers at play. Brands have to give. They have to add something to enrich their gaming experience. Because while Gen Z welcomes added value, they don’t appreciate brands standing in the way of their game-play.

“Brands don’t interfere with the game at all. I think it’s actually pretty cool when real brands are in games.” — Gen Z, Male

Insight 7: Data privacy is a persistent concern

A whole article could and should be written about this topic. It’s the topic for the next century. A possible solution could be to build the metaverse not on the centralised pyramid structure the internet is today, but on the idea and technology of web 2. To use blockchain to set up this digital realm as decentralised as possible and make people the rightful owners of their data. Luckily, Gen Z is very sensitive about their privacy. They are more aware of its importance than you and I when we were 19. Come to think of it, I didn’t even know the word back then. So, fair to say both the threat of privacy breaches and the awareness of the importance of privacy have grown significantly and will continue to do so. Hopefully they will balance out.

My main takeaway from the report is that the metaverse isn’t coming. It’s here. Like all good things, it’s exciting and frightening. The possibilities for brands are innumerable, but to believe you can copy-paste your offline strategy and marketing plan to the metaverse is a big misconception. Online isn’t the same as offline. It’s not a copy, it’s an extension. It plays by different rules and is, for the moment, populated by another generation. Times they are a-changin. Time to get in sync.