We are witnessing the birth of a new era, the era of the metaverse. But what really is the metaverse? Well, it is a permanent, shared and collective virtual space, created by the union of a physical reality and a virtually enhanced digital reality. Its purpose is to allow the user to enjoy enhanced immersive experiences. In addition, it is accessible through any type of device and independent of the access device itself.
As a curious fact, it is worth mentioning that the term “metaverse” was first used by science fiction writer Neal Stephenson in his novel “Snow Crash”, published in 1992. It referred to a collective, fictional, virtual world that was compatible with reality. And just a few years later, reality has once again overtaken fiction. Now that we have put this new virtual universe into context, let’s take a closer look.
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The metaverse is a new world in which video game creators, social networks and virtually every platform and brand want to enter to capture at least a portion of what is estimated to represent a market of around 700 billion euros by 2024, not an outlandish figure if we compare it to the 450 billion euros it generated in 2020 according to Bloomberg analysis based on data from Newzoo, IDC, PWC, Statista and Two Circles.
Virtual worlds in the metaverse are expected to grow in the coming months. Therefore, with these forecasts, according to Grand View Research we could count on it could reach a compound annual growth rate of 41.6% from 2023 to 2030, reaching $936.57 billion by 2030.
Also, because no single vendor will own the metaverse, Gartner predicts that these new environments may have a virtual economy enabled by digital currencies and non-fungible tokens (NFTs). The metaverse will affect every business that consumers interact with every day.
These 3D virtual and shared worlds, in which video games have so far played a predominant role, are intended to be a convergence between the physical and digital realm, the evolution of the internet and social networks, and of course, a new opportunity for online businesses and social networks to capitalize on these new sources of revenue.
In December 2022, Meta announced that it would contribute $2.5 million to support independent academic research in Europe that will explore issues and opportunities in the metaverse. In this way, academics from seven European countries will investigate how metaverse technologies will affect privacy, security, inclusion and the nature of future employment.
And as game creators continue to bring their existing titles into the new 3D online world, making the interaction between gamers and social networks more and more similar, the market opportunity may expand into live entertainment with events such as concerts and sporting events. According to existing analyses, the total size of the metaverse market is expected to be 2.7 times the current advertising revenues in video game software and services by 2024.
Image: Bloomberg
In fact, video game creators such as Epic Games and Roblox have already organized concerts within their video games. Revenues from live online entertainment businesses could become part of the overall metaverse concept, including movie screenings, music events and sports. Bloomberg expects that this item could exceed €170 billion in revenue by 2024.
While Roblox, Microsoft’s Minecraft and Epic Games’ Fortnite have been the early leaders in the race for metaverse leadership, there is plenty of time ahead for other game makers and of course, social networks, to modify their existing services or launch new metaverse-oriented worlds. Currently, the metaverse business landscape features prominent players such as:
Video game creators
Developers
Social networks
Gaming, AR y VR
Live entertainment
Of course, it should be noted that Microsoft announced the acquisition of Activision Blizzard in January 2022, which became the Redmond company’s largest transaction in its 47-year history and, of course, a move that puts Microsoft in a prime position in the race for the gamer metaverse, with such well-known titles as World of Warcraft. However, this decision is currently on hold pending UK approval.
ByteDance, the parent company of TikTok, has also entered the metaverse race. Having developed virtual reality glasses called Pico 4, it is working on the development of Pico Worlds, with the intention of allowing its users to interact in a digital universe. In addition, in January 2023, with the aim of promoting multi-stakeholder participation, the World Economic Forum announced a collaboration with Microsoft and Accenture to create the Global Collaboration Village, a metaverse platform for public-private cooperation.
While the first name that comes to mind for the general public when thinking about the metaverse is Meta, the reality is that there are multiple virtual reality spaces available to the public, outside of massive video games like Fortnite, Roblox or World of Warcraft.
One of the first is Mesh, Microsoft’s metaverse, which it defines as “a persistent digital world, connected to many aspects of the physical world”, a digital environment to help people meet more comfortably and facilitate creative development regardless of location, a new world that Microsoft reaches with Teams, its business communication and collaboration platform, and in which LinkedIn could play a relevant role in the near future.
Among the best-known metaverses that have been making people talk for the longest time, RecRoom and VRChat also stand out. RecRoom was born in 2016 as an exclusive virtual reality project, however it is currently a free metaverse where you can interact with other users, create rooms and customize avatars. Meanwhile, VRChat’s popularity has been mostly attributed to content creators on platforms such as Twitch and YouTube. Thus vtubers, i.e. virtual content creators, were born. Although they were initially focused on virtual reality, both metaverses are now available for other non-VR devices.
But as we were saying, there are many more metaverse proposals, such as that of Zepeto, of South Korean origin: this platform was launched since August 2018 and currently has more than 200 million registered users and about 20 million monthly active users, it is not surprising that this is why it is the metaverse in which Zara bet to carry its first mixed clothing collection.
Speaking of fashion for the metaverse, Pull&Bear announced its arrival in this digital universe through ReadyPlayer Me, the multi-game avatar platform for the metaverse. Springfield, on the other hand, has landed in the metaverse through Roblox and Decentraland. At the end of November 2022, it launched its new collection called “Springfield Metacollection”, which was developed thanks to Playoffnations and AlterHeaven.
The metaverse has also reached the eCommerce sector, and Flipkart, a leader in the sector in India, launched a virtual shopping experience called “Flipverse“. This initiative could make them the direct competitor of Meta. It was born with the objective of bringing consumers closer to their preferred brands through a two-way communication.
As you can see, the metaverse concept is not something new, nor has it been discovered by Zuckerberg: it is increasingly present and has a lot of life ahead of it.There are other lesser-known proposals such as Decentraland, Cryptovoxels, Sandbox.game, Somnium Space, Axie Infinity and Webaverse.
As Sergio García, from from the agency specialized in blockchain Floc said in our podcast, these decentralized metaverses “everyone who has tokens has decision-making power, you are the owner of the percentage of tokens you have in the community, like a small shareholder with votes for certain decisions and votes. There is a nucleus that creates the bases and statutes of the platform.
Each organization will have its rules and regulations, there will be a distribution of tokens, in this distribution that are generated over time gives benefits to those who participate and generate, but there will also be people who buy and sell what you have bought. Another thing you can do is go to events, meet other users and watch YouTube or Twitch videos.”
Other examples of little-known metaverses are Hiperfy, Substrata, Spatial or Uttopion, the Spanish metaverse that has segmented its content into qualitative communities (Sportsville and Musichood), which is in full growth. Also, in September 2022, the Metawoodproject was born, a metaverse focused on the audiovisual field, which aims to do away with “the fourth wall” through total immersion.
If you thought the metaverse was a fad, not so much. Gartner predicts that 25% of people will spend at least one hour per day in the metaverse by 2026, whether for work, shopping, classes, socializing or entertainment. Although the future of the metaverse is promising, Spaniards still have doubts about it.
In any case, the transition to the metaverse will be more demanding than the hype around the term might imply. Dan Rabinovitsj, Meta’s vice president of connectivity, explained at MWC 2022 that both fixed and mobile internet connectivity networks are not yet ready for the metaverse: “We are working closely with our colleagues to think about what the next step is in terms of innovation. If you look at the pace of innovation in the telecom world, compared to other markets, it has been harder to go faster in this environment,” said Rabinovitsj. “One of the things we have been trying to change is that innovation trajectory.”
In fact, Mark Zuckerberg himself explained that “creating a true sense of presence in virtual worlds delivered to smart glasses and VR headsets will require massive advances in connectivity.” Thus, these advances will need to be “bigger than any of the transitions we’ve seen before.” Zuckerberg explained that large-scale immersive video streaming will require entirely new types of networks. In any case, Meta itself has a privileged position in this field, with its own devices for connecting to the metaverse, such as the Oculus goggles.
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