Metaverse's potential
2021 was the year the term metaverse went mainstream. There was a slew of announcements from tech giants looking to capitalize on the buzz. The most well-known was Facebook’s rebrand to Meta in November. Microsoft didn’t fall behind with its $70 billion acquisition of Activision Blizzard. Even Epic Games got in on the action by announcing a $1 billion investment to build the metaverse. Although these were the most high-profile announcements the list is far from comprehensive.
But why is everyone so bullish on the idea? First of all, there have been advancements in key technologies. Virtual reality, crypto, and blockchain have matured over the last 10 years. Not only that but people are spending a greater part of their lives on digital activities. Gen Z already spends ~8 hours a day watching TV, playing video games, or engaging with social media. Simply put, we have all the ingredients and trends to make the metaverse a reality.
What’s does this mean for you? Well, two things are clear. It’s still way too early to experience the metaverse as it’s portrayed in the media. But a great time to start investing in projects in the space. After all, money is pouring in to develop the hardware, content, and ecosystem to make it all possible. Global X estimates that this market can even cross the $1 trillion mark.
Although gaming is the closest thing to the metaverse at the moment it’s only one side of its true potential. Sotheby’s already launched an art gallery to showcase and sell NFTs. Snoop Dogg launched the Snoopverse where he can have concerts with other musicians. Even McDonald’s filed trademark applications for a virtual restaurant in the metaverse. To quote Meta’s CEO, Mark Zuckerberg:
the metaverse will reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers
Digital lands, NFTs and so on
Okay, so what do the numbers say? Well, let’s look at the performance of the main drivers of the metaverse today: Digital land, NFTs, and Gaming.
As seen below the land in the three most popular digital worlds has for the most part appreciated. Only Decentraland’s plots of land haven’t kept pace with the growth of the other two. Even so, Decentraland remains a popular option to host digital events. It recently hosted the first Metaverse Fashion Week in collaboration with luxury retailers. The Sandbox which debuted as a mobile game in 2012 saw an appreciation in LAND value recently. The increase coincided with its Alpha launch in mid-November 2021. Meanwhile, NFT Worlds is the youngest of the bunch having launched late last year.
Even though digital land is what comes to mind when thinking about the metaverse, the real star is NFTs. The charts below don’t do justice to the impact NFTs have had on crypto. After all, a recent study found that NFT sales reached $17.7 billion in 2021. 78% of NFT transactions were on the Ethereum blockchain.
Last but not least is blockchain gaming. This area’s growth is driven mostly by virtual worlds, with Axie Infinity being the exception. After all, Axie accounted for “nearly two-thirds of the Blockchain Gaming Industry” in 2021 according to this report. This amount of success will surely mean further investment in blockchain gaming from other studios.
As you can see a few players dominate the space at the moment. This will change as private experiences launch and interconnect with new open platforms. The market opportunity for early backers is huge, in the trillions of dollars. Lucky for you, we’re still in its infancy. Big names are backing its future, time for savvy investors looking for new opportunities to do so as well.
Source: Report from Bloomberg and Tech Crunch
I’m a digital marketer based in Brooklyn chasing matches across the globe. Interested in how web3 will impact marketing and business.
