Publishers and consumer products marketers, as well as owners of literary characters and other intellectual property, are trying to figure out how to take advantage of the metaverse to reach young consumers. A three-hour webinar on February 24 called “The Metaverse for Kids and Young Adults: How It Is Impacting Licensing” gave an overview of this hot topic. The virtual session was the focus of the first of two International Kids Licensing Days held in conjunction with the Bologna Licensing Trade Fair, which runs alongside the Bologna Children’s Book Fair.

What is the metaverse? Definitions vary, but speakers at the event agreed for the most part that a metaverse is a global, immersive virtual space, usually 3D, where users can do many of the things they do in real life. “The start of the metaverse is 3D places and experiences,” said Neil Haldar, v-p of publishing for video game company Streamline Media Group. “Think about the metaverse as sort of like a 3D video game.”

An interactive game these days “is not necessarily about an adventure or fighting, it’s more about everyday life,” said Emma Chiu, global director of Wunderman Thompson Intelligence. She cited the example of Sims 4 Spa Day, in which the premise of the game is to get a massage and a facial, as well as a recent update of Animal Crossing in which users catch a fish, forage for mushrooms, or plant a tomato and then prepare a recipe. “The younger generation won’t be thinking about offline or online—for them it’s just life,” she said. “Their understanding of reality is much different than the older generation’s.”

“The metaverse is an industry that’s coming to be,” said Jon Ollwerther, president of Kartoon Channel! and executive v-p of business development at Genius Brands. “Everyone today is helping to define what it is.” He explained that many activities that consumers are used to, like video conferencing, texting, and chatting, as well as gaming, are components of the metaverse. “Different parts and pieces of what’s considered the metaverse are already here,” he said. “Society is becoming metaversal.”

David Kleeman, senior v-p of global trends at Dubit, says Roblox, which he calls “a proto-metaverse,” is currently the best example of what being in the metaverse will be like. “It’s not a game, it’s the YouTube of games,” he said. Roblox users, represented within the world by their avatars, can not only make or play a game, but attend a book launch, concert, or the Brit Awards; watch the premiere of a movie or TV show or a trailer for a book; collect and trade digital trading cards or comics; host a birthday party or hang out with friends; wear customized gear and outfits based on favorite characters or brands; and spend in-game currency.

Ultimately, the true metaverse will be interconnected. Unlike today, users will be able to go from one area to another. They could wear a t-shirt they bought in one brand’s shop into another brand’s environment or create a digital comic book mash-up or game involving multiple properties and brands. “In the future, the metaverse will be an interconnected and limitless world where digital and physical lives fully converge,” Chiu said.

“Roblox is not a metaverse because it is only within its own platform, but otherwise it has all the elements,” Kleeman explained.

A Two-Way Street

Fan-created content is a big part of both today’s 3D environments and the future metaverse. “It’s a user-generated space,” Chiu said. “People don’t say they are creators, they just are by participating.”

Kleeman said that users, especially young adults and children, expect to find their favorite brands and properties wherever they go. “If they don’t find their favorites, they’ll put them there themselves,” he said. “There’s a give and take between brands and their fans.” There are 2,000 Lego games on Roblox, for example, “none created by Lego.”

One reason experts expect the metaverse to evolve is because technology is such an intricate part of the lives of Gen Z consumers (those ages 10 to 35 in 2022) and Gen Alpha (under 10). According to Chiu, 79% of Gen [Zs]OK? say their everyday life depends on technology and 75% say their social life depends on tech. Gen Z users want to see brands and properties online, too, and are willing to purchase. More than 75% of Gen Z consumers said they had bought a digital item in a video game, and 60% say brands should sell their products on metaverse platforms.

The Insights Family has identified similar trends. The researcher says that the number of six-to-nine-year-olds who have spent at least $5 on in-video game experiences has risen 51% since last year, while teen ownership of non-fungible tokens, cryptocurrencies, and digital collectibles—all components of a metaverse—is quickly on the rise. For example, teens are buying NFTs of trading cards and sneakers, both to collect and for virtual self-expression. “This is normal for kids, even if adults don’t understand it,” said Matt Smith, insight manager at the Insights Family.

All of this research highlights that there are opportunities for marketers to reach kids, teens, and young adults. “Brands can put themselves in an ever-evolving world that engages the fans, rather than a one-time experience,” said Smith. “They can create experiences where fans can engage on a deeper level and build a stronger relationship. This is far more immersive than any other type of advertising.”

IP Owners’ Virtual Presence

Property owners and brands can enter the metaverse, or proto-metaverse, in a variety of ways. They can create “skins” for users to customize their avatars, as Disney has done with its Star Wars and Marvel IP; offer digital products that users can wear, use, or collect; advertise, create a promotional event, or set up a shop within a world; or develop an entire environment around their product or character.

DeAPlaneta is a Spanish entertainment company that distributes content and represents its own and third-party properties for licensing. Some of the IP it works with include the Smurfs, Mr. Men, and Pippi Longstocking. Anna Campistol, head of the company’s digital business, said that DeAPlaneta is just starting to develop digital environments for the properties it owns.

She cited a number of examples of children’s IP with a presence in metaverse-like platforms. Sanrio, for example, sold digital furniture and accessories based on its characters, which include Hello Kitty, for use in Animal Crossing. MGA Entertainment and its L.O.L. Surprise! toy line have a presence in Roblox, allowing consumers to decorate, dance, and engage in other activities, surrounded by branded goods and imagery. The licensors of both the Smurfs and Care Bears allow consumers to purchase characters and other elements to use in developing their own themed games in The Sandbox, a user-generated game platform. IP such as the Minions and Baby Shark have appeared in Zepeto, a platform where fans create custom 3D-animated avatars and use them to navigate through Zepeto World as well as other environments.

Campistol noted that, as a licensing company, DeAPlaneta looks for ways to link physical and digital items to drive sales of physical goods. For example, when it does a deal with a retailer, it would try to incorporate both physical and digital items as part of the initiative.

Kartoon Channel!, a free app with more than 13,000 half-hours of content for younger children, is developing a family-friendly digital environment called the Kidiverse, set for launch this year. It will integrate content tied to the same properties that are available through Kartoon!, as well as third-party IP. Among the properties featured on Kartoon! and soon the Kidiverse are Llama, Llama (for which Kartoon! parent Genius brands serves as licensing agent) and multiple Dr. Seuss TV programs.

Once Kidiverse is fully up and running, children will be able to create avatars, play games, collect NFTs, and participate in other virtual activities. “This is ‘My First Metaverse,’ ” Ollwerther said. “We’re not trying to alter kids’ behavior or attract them to a new thing. We’re looking at what kids want to do and how we can facilitate that.”

Ollwerther noted that children will not look at the Kidiverse as a metaverse. “It’s just going to be part of the fabric of their lives,” he said. He cited a parallel with his niece’s love of Llama, Llama in the physical world. “She isn’t just playing with plush toys, reading a book, or watching on TV. It’s all, ‘Let’s do Llama, LLama,’ ” he said. The metaverse is a way for fans to interact with their favorite characters or other content in much the same way, just virtually.

“It’s crucial to develop these spaces for fans to interact with the characters,” Campistol said. “You need as many points of interaction as possible.”