Meta is already spending billions of dollars annually on virtual reality and augmented reality to compete with Internet giants such as Microsoft and Google to build a metaverse that captures the user’s largest network. Over the next five years, the company plans to hire 10,000 new staff to work on metaverse projects such as wristbands that allow users to interact with the virtual world with subtle finger movements.
In addition, Meta will release Horizon Home, an app for social networking in VR. This allows users to socialize as an avatar while wearing a headset developed by Oculus. Facebook acquired it in 2014 for $ 2 billion.
“By creating a virtual world, we can basically set the rules of the virtual economy,” says Touve, who anticipates land acquisition. “The more people who participate in the network, the more valuable it is. The network effect can lead to a market where the winners dominate.”
Why companies are entering
Touve sees advertising as one way to monetize the Metaverse. Meta has already patented multiple technologies using hyper-targeted advertising and sponsored content. Revenue is also generated in the Metaverse through a virtual store where users can purchase digital products that correspond to real items developed by consumer brands.
“There are many opportunities for digital commerce with a very attractive underlying economy,” said Touve, who said investors are more seriously considering VR headsets after decades of disappointment. I am.
Famous consumer brands such as Nike and Forever 21 have created virtual world stores to increase real-world revenues.
In fact, JP Morgan believes that Metaverse is a $ 1 trillion annual revenue opportunity, pointing out that $ 54 billion of virtual products are already sold each year.
Professor Roshni Raveendhran of Professor Darden believes that such predictions are not fancy, based on current usage levels.
“In the retail industry, companies are already allowing people to try different products and clothes using VR and avatars,” she said. “The Metaverse accelerates the trend.”
Shoe brand Vans recently opened a virtual skatepark to connect with its customer base. Meanwhile, Chipotle has launched a virtual restaurant where the first 30,000 visitors receive a real burrito voucher. The list of brands building the consumer experience at Budweiser, Gucci, Autodesk, Benetton, Coca-Cola – Metaverse continues.
“Some companies are building digital spaces with these words, allowing them to connect with potential customers and introduce a variety of new products and services,” says Touve.
These big brands often rely on small, innovative “web3” -focused startups with expertise in animation, creative design, game design, blockchain, and programming. Among these innovators, the next generation of Meta, Apple, Google, and Amazon, who are the rulers of the “web2” online world, may emerge.
Yuga Labs, creator of the Bored Ape Yacht Club NFT (basically a digital image validated by a cartoon ape blockchain), recently secured a $ 450 million investment from venture capital firm Andreessen Horowitz. , Yuga was valued at $ 4 billion. The company has announced plans to launch its own Metaverse and sell or transfer 100,000 lots of digital land in that Metaverse. At that time, the sale of cryptocurrency worth $ 310 million was sold out in a few minutes. It’s not a bad day’s work.
Proponents believe that this low-cost, high-margin business has the potential to transform the global retail industry. Critics consider the Metaverse to be a fad. One of the reasons they question is the key technologies to achieve these sci-fi visions, such as creating a graphics rendering system that can animate thousands of avatars sharing the same experience, such as at live concerts. It is a problem. This means that computing platforms need to support billions of operations per second. In contrast, even the most popular live online games such as Fortnite can only host up to 100 players at a time.
In connection with the hardware challenges, Raveendhran said: “There are reports that VR causes health concerns such as eye strain and headaches. It takes time for people to understand how to use these devices for extended periods of time.”
Metaverse-led bets are placed on producers of components such as semiconductors, cameras, displays, servers and sensors. This reflects the growing demand for processors, computing power, wearable devices and cloud storage that underpin the Metaverse experience.
“There is an important opportunity for investors to get involved at the beginning of the next evolution of the Internet,” Touve said.
Apple’s recent $ 3 trillion market valuation is partly supported by speculation that it will launch a headset this year that could revolutionize consumer technology, similar to the original iPhone.
In addition to this, Touve said there is a great opportunity to create an immersive virtual workspace framework in response to changing work practices. Microsoft has already stated that it is developing an “enterprise metaverse,” a version of the metaverse for enterprises. “VR is primarily used for gaming, entertainment, or social experiences, but enterprise users will increase adoption very quickly,” Touve predicts, with the move to remote work during the COVID-19 pandemic. It looks tenacious and points out that it is driving the demand for virtual collaboration. A tool that has the potential to lead a new era of talent management globalization.