A Beginner’s Guide to the Metaverse (and Making Money in It)
Suddenly, Metaverse has become the biggest buzzword in tech, and every investor wants a piece of the pie. But what is Metaverse actually? Has it been completely exaggerated? What are the big money-making opportunities among them? [Read this for a preview of the Euro Metaverse companies investors think are worth watching]. We address some of these issues in this beginner’s guide.
What is the Metaverse?
Science fiction author Neil Stephenson coined the term “metaverse” in his 1992 book Avalanche to refer to a computer-generated universe. It is often thought of as a highly immersive, shared virtual world where people come together to play, socialize and work. It is also related to the development of Web 3.0, which some believe will be the next chapter in the Internet’s existence – a blockchain built on a blockchain that, in theory, will democratize access and power, And weaken the control of the biggest tech companies. This concept is not new. Back in the early 2000s, there were many precursors to the metaverse, including Second Life (launched by Linden Lab in 2003) and the Habbo Hotel by Sulake in Finland. They’ve dropped a lot of people’s attention since then, but both are still going — Second Life still has 200,000 daily active users.
Why did we think the metaverse will take off quickly this time?
Big tech companies are firing on all cylinders at the metaverse. Mark Zuckerberg is all for it, and Microsoft wants to build the corporate metaverse. Meanwhile, online multiplayer games like Fortnite, Minecraft (owned by Microsoft), and Roblox have made social gaming a mainstream phenomenon and created platforms that could be the cornerstone of developing a metaverse. Some game developers believe that Roblox—yes, the boxy gamefi beloved by kids ages 7 to 12—may be the most powerful metaverse platform of the future. Meanwhile, Minecraft runs on Hadean cloud software, which can scale to thousands of users per world.
Scaling virtual reality to massive computing power is only now emerging. Companies like Hadean and Improbable that focus on creating massively distributed computing can get 10,000 players on the same server at the same time. Many Metaverse companies are talking about hosting concerts and sporting events for 50,000 people at the same time – something that would have been unthinkable a few years ago. Cryptocurrencies and non-fungible tokens (NFTs) have made it easier to buy and sell items within Metaverse, opening up business opportunities. But more importantly, these rotating displays will eventually make it possible to move your credentials and objects between different metallic countries –
Is the metaverse just for playing video games?
Do not. Games are an obvious starting point, but if you look at the broader Web 3.0 perspective, the metaverse is much more than that. Fortnite hosted concerts by Ariana Grande and Travis Scott, while the concert last year garnered 33 million views. That’s why startups like Stage11 Paris are interesting. Stage 11, which just raised a $5 million seed round from Otium Capital, is building immersive music experiences for virtual worlds and has partnerships with artists like David Guetta, Snoop Dogg, Ne-Yo, and Akon. From musicians to fashion designers, a slew of creatives will build their businesses around providing goods and services for virtual worlds. London-based Gravity Sketch recently launched a virtual collaboration room where designers can collaborate on the same 3D design project remotely.
On the more business-focused side, there is potential in conferences, education and healthcare. Swedish startup Warpin, for example, is producing VR training videos for the company and is running a pilot project with digital doctor service Kry, in which people with social anxiety disorder are able to overcome their fears by entering an immersive virtual social scene with a therapist. In general, every company likely has some form of metaverse presence, said Mike Allender, CEO and co-founder of Talewind Studios, which develops games for the Roblox platform. “Every company now has a 2D website and In the metaverse, it will contain a 3D version. From seed stage startups to tech giants, hundreds of companies have found their place in the Metaverse ecosystem.
Do I have to wear VR glasses?
Will not. Some metaverse experiences do rely heavily on VR headsets—for example, immersive meetings and training. So companies like Varjo and Magic Leap that are developing VR glasses, and companies like Ultraleap and Gleechi that are developing methods for hand tracking and manipulating virtual objects, are definitely worth watching. But very few kids wear VR goggles while playing Roblox or Minecraft. They are mostly on mobile devices. Emma Ridderstad, CEO and co-founder of Warpin, said: “Before we use glasses, we will use mobile phones, experience AR with different senses, for example, try on shoes, try makeup before buying them.” .
What are the main risks to the metaverse?
Lawyers have warned that Metaverse will have disputes over intellectual property and ownership, data protection, content licensing, and risk to crypto assets. There have to be many lawsuits to set the rules—for example, in September, Roblox settled with the National Music Publishers Association, paving the way for artists to debut their music in the Metaverse.
Is the metaverse completely exaggerated now?
Not really. There are a lot of headlines right now, but investment in the space remains low. In April, U.S. game company Epic received a $1 billion round led by Sony, and last week The Sandbox, a game studio owned by Hong Kong-based VC Animoca Brands, received a $93 million Series B round led by SoftBank. Still an outlier.