Market Researcher: More than 500 Companies on Metaverse Projects
Market research firm Newzoo has published a new report on the metaverse that says the number of companies on the metaverse has grown from 200 in 2021 to over 500 so far, in 2022.
The metaverse and Web3 technologies have grown by leaps and bounds over the past two years, a growth that was already in progress pre-pandemic but was catalyzed by the realities of the pandemic where a large section of the global workforce was forced to work from home and spend a considerable amount of time indoors. A lot of this at-home time drove people into the virtual worlds and experiences.
The metaverse is now growing into a major global phenomenon. Major brands, celebrities, tech companies, gaming studios, and influencers are hopping into the metaverse with various creative and technological projects.
Several reports show that the metaverse is more than just passing a fad. It is here to stay and will spawn a new mega economy, akin to what the World Wide Web did to our lives right from the 1990s. A recent McKinsey report projects that the metaverse economy will be worth $5 trillion by 2030. A Citi report projects an even higher figure claiming that the metaverse will be worth between $8 trillion and $13 trillion by 2030.
Several initiatives to pave way for that metaverse future. Khronos Group has put together a coalition of companies and groups charged with formulating the standards for the metaverse.
There are already well-known metaverses such as Roblox, a gaming platform where players can create their own games and generate value from these. There is also Epic’s Fortnite, an online video game with different playing modes and additional metaverse-esque features such as virtual concerts.
According to the Newzoo report, digital in-store shopping sessions will become more realistic and pervasive as VR and XR technologies evolve to meet the ideal consumer requirements. A lot of the metaverse experiences at the moment revolve around the acquisition of virtual land, which currently finds utility as 3D ad spaces but will likely serve many other functions as the metaverse evolves. Many virtual lots are currently being sold as nonfungible tokens. A perfect example is Yuga Labs’ Otherside landrush.
The Newzoo report says that the metaverse hype has hit a snag recently as a result of the global macroeconomic slowdown. However, in spite of this, growth in the metaverse, seen as the inevitable successor to Web 2, continues.
The report says the tech economy will be decentralized as we transition from the era of Web2 to Web3 and this will also transform how brands interact, not only with consumers but also with the technology middlemen. The metaverse will also transform how consumers live, work, and entertain themselves.
The Newzoo report states that the evolution of the metaverse will present brands with a massive opportunity. As brands transition from our diffused physical spaces into the metaverse, brands are also presented with an opportunity to reach users that would otherwise not be reached with traditional forms of advertising.
Many of the top global brands are already implementing metaverse strategies in their brand experience. These include players such as Louis Vuitton, Nike, and Balenciaga.
At the same time, over the past year, trade in nonfungible tokens (NFTs), has grown into a multi-billion-dollar market. Fears of a global recession have also led to a crash in cryptocurrency, best illustrated by the collapse of Terra Luna and the dip in Bitcoin and Ethereum prices. However, the Newzoo report remains optimistic about the prospect of top projects. The report delves into the top trends in both the metaverse and blockchain industries.
The report states the future metaverse will be persistent, and will create a more permanent space where users can immerse themselves in new experiences. According to the report, the metaverse will be interoperable and will have its own economy while also providing users with a platform where they can express their identities across interconnected 3D spaces. The metaverse will also blend both physical and digital experiences. It will be populated by all kinds of entities just like in our physical worlds, ranging from individuals to businesses, informal groups, and organizations.
The report also delves into blockchain and states that blockchain games will only gain traction when the leading game developers create high-end games that users can play purely for fun rather than for profit. Such games will necessarily have to incorporate novel utilities for NFTs. Success will only ensure when blockchain games can appeal to vast audiences in the mainstream, beyond a niche of crypto investors who simply play for money and not for enjoyment. The report cites collectible card games like Gods Unchained as a perfect example of a blockchain-based game that deploys a good utility for NFTs. Success will hinge on creating sustainable blockchain-based economies, something that is currently lacking in “90% of the crypto games”, according to Newzoo’s metaverse lead Mihai Vicol.
The Newzoo report doesn’t predict the revenues that will be generated in the metaverse or its eventual worth.