Metaverse Economy: Business Opportunities and Revenue Models
Imagine a virtual world that mirrors our own. A space where u can meet new people, discover new places, and even get a driver’s license. This world is coming and there’s a chance you might have heard of it, it’s called the Metaverse.
The Metaverse is set to revolutionize the way we experience virtual spaces by offering a platform that operates like the real world. With infinite memory and history, this virtual world will allow everyone to interact and engage at the same time, regardless of their location.
However, the Metaverse development is not just limited to gaming, gigs, and virtual meetings. It has the potential to transform numerous aspects of our daily lives, from firefighting and filmmaking to manufacturing and medicine. A whole new world is impending and with it are multitrillion-dollar opportunities!
What is the Metaverse?
Metaverse is a term that describes a virtual world where people can interact with each other and digital content in immersive and realistic ways. Think of it as an extension of the internet, but with more possibilities and more fun!
The metaverse is not just one platform or app, but a network of interconnected virtual spaces that can host different kinds of experiences. You can explore, socialize, play, learn, create, shop, and more in the metaverse. You can also customize your avatar and express your identity and style. It can be accessed by using familiar devices such as smartphones, tablets, computers, VR headsets, and AR glasses.
Source: Meta Website
Technology has allowed us to write, talk and now see each other. The metaverse will mark a new step in our digital evolution, allowing us to share a space together and feel like we are truly there.
Some Stats and Key Points about the Metaverse:
- The metaverse is a promising new economic arena expected to contribute over $3 trillion to the global GDP by 2031, making it a game-changing phenomenon and an exciting opportunity for businesses and individuals alike.
- The metaverse is expected to be built on blockchain technology, which will allow for secure transactions and ownership of digital assets.
- It’s still in its early stages, but companies like Facebook, Google, and Microsoft are investing heavily in it.
- The metaverse has the potential to revolutionize how we work, socialize, and consume entertainment. Some even compare its impact to that of the internet a few decades ago.
How will businesses use the Metaverse?
The metaverse harbors immense potential to revolutionize the economy and transform businesses. As per PwC, it could profoundly alter the way businesses and consumers interact with products, services, and each other, creating a significant impact on the overall landscape.
The metaverse will infiltrate every sector in the coming years, culminating in a market opportunity worth more than $1 trillion in annual revenues, according to JP Morgan.
The metaverse is built upon key concepts that hold immense relevance for businesses today, particularly in the digital economy, where innovations such as cryptocurrencies are increasingly gaining prominence. Given its decentralized nature, the metaverse serves as a vital facilitator of what we refer to as the creators’ economy. By eliminating intermediaries, it creates a direct link between artists, content creators, and their audiences, thus generating substantial value for the economy and business models alike.
Successful Metaverse Business Platforms:
Some examples of metaverse technology incorporated successful business initiatives are:
StageCraft by ILM (Industrial Light and Magic):
Industrial Light and Magic is revolutionary visual effects company famous for recent shows like Marvel’s Thor: Love and Thunder. StageCraft is ILM’s virtual production toolkit and and end-to-end solution to all it’s visual effects set requirements.
StageCraft in action on the set of Thor: Love and Thunder.
In the past it would have taken an army of set designers months to build a set like this. Now with ILM’s StageCraft Technology set can be designed virtually, transforming the production process. It is the technology that underpins the metaverse- the ability to conjure up realistic computer-generated worlds in real-time.
Chris Hemsworth as Thor in Marvel’s Thor: Love and Thunder being filmed with ILM StageCraft on site at Sydney’s Fox Studios.
Roblox:
Roblox is a huge online virtual world with hundreds and thousands of different experiences, a place to explore, meet other people and role play.
It has over 200 million active monthly users and a net worth exceeding $25 billion, with about more than eleven and half people developing games for Roblox.
Roblox even has its own currency called Robux, which users can buy with real money. It may look like simple games with retro style visuals but is literally the torch bearer of the Metaverse. Roblox’s creator’s promise ultra immersive virtual experiences that digitally mirror those in the real world.
To most people Roblox is just a gaming company but it’s not. It is a technology platform which allows people of all ages to be able to create ad develop experiences born out of their imagination and publish it for the world to view.
Image Source: Roblox
Decentraland:
Decentraland is a groundbreaking blockchain-based platform that offers users the ability to create and explore virtual worlds. Powered by Ethereum, a cryptocurrency that enables smart contracts and decentralized applications, Decentraland allows users to purchase and sell land parcels, referred to as LAND, using MANA, the platform’s native token.
In addition to buying and selling LAND, users can build their own content, including games, art, and experiences, on their parcels and monetize them. This feature provides an opportunity for creators to earn money from their work and further enhances the platform’s economy. Decentraland is among the top platforms for the metaverse economy, where digital assets and services can be traded by users. It offers an immersive and interactive experience for users to express their creativity and establish a presence in the metaverse.
Image Source: Decentraland
Fortnite:
Fortnite is a battle royale game that has transcended beyond being just a game, becoming a social and cultural phenomenon. With over 350 million registered players, Fortnite has become an interactive virtual world that hosts live events, concerts, and collaborations with celebrities, brands, and media franchises. Its creative mode is also a standout feature, enabling users to design their own maps, games, and experiences.
Fortnite has become a key player in shaping metaverse culture, providing users with endless possibilities for expressing their identity and creativity through avatars, emotes, skins, and items. Its impact has been felt across the gaming industry and beyond, as it continues to push the boundaries of what is possible in the metaverse.
Image Source: Fortnite
Revenue Models in the Metaverse Economy:
- Advertisements:
One of the most well-known business models in the Metaverse is the advertising model, which allows developers to receive a share of the revenue generated from ads displayed directly on the platform. This model can be applied to various applications, including defi-apps, as well as external websites and web pages for games.
Advertising in the Metaverse is similar to advertising in the real world, and businesses can advertise both physical and digital products. This creates a new opportunity for companies to market their products and services in a unique and innovative way. For businesses that are unsure about offering services in the Metaverse, or want to gain a better understanding of its potential, the advertising model provides a low-risk way to get started.
- NFTS:
The most successful NFTs (non-fungible tokens) go beyond simply being virtual representations of real-life objects. They are unique, interactive, and often have a limited supply, which adds to their exclusivity.
One of the most popular forms of collectible NFTs are virtual pets, such as CryptoKitties, CryptoPuppies, and CryptoCelebrities.
CryptoKitties, in particular, gained widespread attention for its ability to showcase the potential of blockchain technology and expand the Ethereum network. The popularity of these NFTs also demonstrated that people are willing to invest in virtual goods using cryptocurrencies like Bitcoin and Ethereum.
Image Source: CryptoKitties Website
Despite the popularity of pet-themed NFTs, creators are not limited to these options. In fact, the beauty of NFTs is that they can be used to represent almost anything, and there is room for innovation and creativity in this space. So, whether it’s a unique digital artwork or a rare collectible, the possibilities of NFTs are endless, and creators can explore whatever ideas they feel passionate about.
- Virtual goods:
Virtual goods and services have become a significant source of revenue for many successful metaverse companies. These companies can sell a wide range of virtual goods online, such as weapons for gamers, characters, clothing, furniture, and more.
There are several ways to sell virtual goods, but the most common method is to sell them through your own website, where you can provide the goods directly to customers. Some examples of companies that offer such services include Inworldz, There, and Red Light Center, as well as video games like World of Warcraft, Sandbox, and RuneScape.
Image source: Second Life Platform
Alternatively, you can also sell your products through specialized virtual goods marketplaces like Second Life Marketplace or Sansar Store. These marketplaces provide an opportunity to sell your products without having to set up and maintain your own website. Moreover, they allow you to reach a wider audience beyond your website’s reach.
By using virtual goods marketplaces, businesses can save time and resources that would otherwise be spent on website development and maintenance. This approach can also provide a broader reach and access to a larger customer base. Ultimately, whether selling goods through a personal website or a virtual marketplace, metaverse companies can tap into the growing demand for virtual goods and services and expand their revenue streams.
- Digital land
Selling virtual real estate or other virtual space in the Metaverse is one of the most popular business models for virtual worlds today. This model has various variations, including land speculation, developing and selling “ready to build” lots, and renting land. Many users also collaborate with real estate companies or brokers in Second Life to list or develop their properties.
Image source: Second Life Marketplace
Here’s how it works: users can buy into their virtual island in the Metaverse and then use it to build their businesses. The revenue model for this type of project is similar to a traditional online business model. Users pay a monthly fee to rent their space in the virtual world.
The market for virtual real estate is ever-growing, and it provides a unique opportunity for businesses to expand their reach in the digital world. This model can be especially beneficial for those who want to establish a presence in the Metaverse without having to invest in physical locations. Moreover, virtual real estate provides a space for businesses to experiment with new ideas and strategies before implementing them in the real world.
By using virtual real estate as a business model, companies can capitalize on the growing demand for virtual space and expand their revenue streams. The flexibility and opportunities offered by virtual real estate make it an attractive option for businesses looking to establish themselves in the Metaverse.
- Tourism:
Another option for making money in the Metaverse is to offer guided tours of your location. If you have a particularly beautiful building, piece of land, or a well-designed city district, you can attract tourists and other visitors from around the Metaverse by offering guided tours of your digital world for a fee.
One of the most significant features of the Metaverse is its expansive nature in terms of space and possibility. From a tourism perspective, this means that users from anywhere in the world can explore areas they may never see in person through digital experiences. This also means that you can create impossible lands that are only possible in a digital space.
Image source: Decentraland
Offering guided tours of your virtual world not only generates income but also helps to build a community around your location. It allows visitors to engage with your world on a deeper level and offers them the chance to learn about its unique features and history. Additionally, guided tours can be customized to fit the interests of different users, providing them with a unique and personalized experience.
By leveraging the power of the Metaverse, businesses and individuals can create exciting opportunities for tourists and visitors alike. Guided tours offer a chance to explore and engage with digital worlds on a whole new level, opening up endless possibilities for new experiences and adventures.
- 6. Business Services:
Companies and individuals who offer services within the metaverse are often referred to as “metaverse service providers”. Many creators start out as service providers and eventually grow their businesses into full-fledged enterprises, similar to businesses outside of the metaverse.
The service-based business model involves selling a variety of services to visitors in your virtual world, such as land development, avatar customization, furniture, and decor. These services can be sold directly from your store or through a shopping cart system.
As a metaverse service provider, you have the opportunity to provide unique and personalized services that cater to the needs of your customers. By offering high-quality services, you can build a loyal customer base and establish yourself as a reputable business in the metaverse.
Challenges and Risks in the Metaverse Economy:
Metaverse offers new opportunities for innovation, creativity, and social interaction, but it also poses some challenges and risks. Some of which are:
Regulatory uncertainty:
The legal status and jurisdiction of the metaverse assets and activities are unclear and may vary depending on the platform, country, and context. This creates challenges for taxation, consumer protection, intellectual property rights, and dispute resolution.
Cybersecurity threats:
The metaverse economy relies on the security and integrity of the digital infrastructure and data. Hackers, scammers, and malicious actors may try to exploit vulnerabilities, steal information, manipulate transactions, or disrupt services.
Ethical dilemmas:
The metaverse economy raises ethical questions about the impact of virtual reality on human behavior, identity, and well-being. For example, how to ensure fairness, accountability, and transparency in the metaverse markets? How to prevent addiction, harassment, or discrimination in virtual environments? How to balance the rights and responsibilities of the users, creators, and providers of metaverse content?
Conclusion:
There is no doubt that the Metaverse will continue to capture the imagination of people around the world in the years to come and indeed it’s an exciting time to be at the forefront of this emerging field.
As technology advances, companies are tirelessly making strides towards creating immersive experiences that will bring us closer together than ever before. However, while the vision of the Metaverse is exhilarating, there is still much work to be done before it becomes a widespread reality.
