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Over the course of a year, the number of companies working on the Metaverse has grown from 200 in July 2022 to more than 500 now, according to a report on the Metaverse by market researcher Newzoo.
A year ago, many people could presumably say they had never heard of the Metaverse. But with the explosion in demand for virtual life thanks to the pandemic, the metaverse quickly spread as a vision of life in persistent 3D spatial worlds that were all interconnected in an online universe.
Today, just about every major tech company, brand, influencer, and gaming company gets involved in the metaverse, the universe of virtual worlds that are all interconnected, like in novels such as Snowfall and Loan player one. This is the way to reach the younger generations of tomorrow. Last week, McKinsey said the Metaverse will have a market value of $5 trillion by 2030. And Khronos Group announced a coalition of groups and companies to come up with standards for the Metaverse.
Roblox is one of the most popular games in the world and it has become a platform where players can create their own games and profit from them. Roblox and Epic’s Fortnite have added features like virtual concerts, and influencers are claiming their rights.
The metaverse gives birth to virtual shows hosted by the most popular fashion and luxury brands. And the first iteration of blockchain games focuses more on the economic aspect and lacks the “fun” element to support new players. But the hope is that these games will become stepping stones to the metaverse by bringing interoperability and true digital ownership.
Newzoo said digital in-store shopping sessions are likely to become more realistic and mainstream as XR and VR technologies evolve. The virtual earth – which is essentially a 3D advertising space – has taken the non-fungible token (NFT) space by storm.
Mihai Vicol, Head of Metaverse at Newzoo, in an interview with GamesBeat that the hype has cooled in recent months due to the global macroeconomic downturn, but he said interest in the Metaverse is growing as a natural successor. of the Internet Web2.
Newzoo said the transition from Web2 to Web3 will decentralize the technology economy, changing the way brands interact with users and technology intermediaries. And it will certainly change the way consumers live, work and experience entertainment, Vicol said.
He said the evolution of simulated 3D worlds presents a huge opportunity for brands, with a transition from diffuse physical spaces to virtual worlds offering brands a chance to reach a condensed mass of users that are hard to reach by other forms of advertising.
Major companies such as Nike, Louis Vuitton, Balenciaga and Meta have recognized the change and are executing metaverse strategies.
As NFTs grew into a multi-billion dollar market in 2021, they suffered a crash alongside the cryptocurrency market due to fears of a global recession. Coin valuations and public interest have declined in recent months, but Newzoo remains optimistic that the best projects will succeed. The report examines the major trends in the metaverse and blockchain space.
The report notes that there is no single definition of the metaverse. Jonathan Lai of A16z described the metaverse as persistent, shared 3D virtual spaces in a virtual universe.
Tim Sweeney, CEO of Epic Games, called it a real-time, 3D social media where people can create and engage in shared experiences as equal participants in a societal impact economy.
And Newzoo defines it as an interconnected and interoperable network of persistent virtual worlds populated by a large number of players who interact with each other through 3D digital avatars, which provide users with a heightened sense of immersion and presence.
Newzoo cited investor Matthew Ball for noting aspects of the metaverse such as scaling, where the cap on virtual spaces will go from 100 people per area to potentially infinite. He said it will have persistence, where it will feel like a permanent place where you can be immersed in new experiences. It will be interoperable, have its own economy and allow users to express their own identity through spaces. It will combine digital and physical experiences and will be populated by a wide variety of individuals, informal groups, organizations and commercial enterprises.
Where is the blockchain going?
One of the key questions is whether blockchain technology is the stepping stone to the metaverse, enabling interoperability and ownership through authentication on the blockchain’s digital ledger. But could there be another way? I asked Vicol why some hardcore gamers resisted NFTs and if blockchain games are about to go mainstream?
“You mentioned most native or hardcore Western gamers’ distaste for blockchain games, and frankly, I don’t blame them,” Vicol said. “Just 15 months ago, blockchain games were virtually non-existent. Maybe we had a few titles like CryptoKitties or Axie Infinity. But play-to-earn games did not exist.
Now we’ve seen the rise of Axie Infinity as well as the subsequent collapse of some of these games. The problem is that they are not played by players. Rather, they are played by cryptocurrency fans who want to make a profit on the games.
“The problem is that these games are not sustainable. And if you ask those people who play those games, almost everyone wants to enjoy those games,” he said. “And in a sustainable ecosystem, it’s just not possible for 100% of players to be able to make a profit. There must be a number of players who play the game for fun, so they put in five bucks and at the end of the day they don’t expect to walk away with $10 or $50.
Vicol believes that blockchain games will only grow when top developers release high-end games that are fun to play. These games must find a new use for NFTs if they are to succeed. Only then will the games appeal beyond crypto investors and appeal to mainstream players. Some games like collectible card games like Gods Unchained may have found the right utility for NFTs, Vicol said.
“You have to have a sustainable ecosystem, and in 90% of crypto games I don’t think that’s been the case,” Vicol said. “I believe that sustainable blockchain-based economies can be built in six months or maybe two years. But we are not there yet. »
It’s also unclear if the metaverse also needs cryptocurrency to be successful. Gabby Dizon, CEO of Yield Guild Games, predicts that we will have 10 million crypto wallets this year, but crypto is in a world of pain with Bitcoin falling to less than half of its recent value. The number of crypto wallets will depend on a recovery.
Vicol didn’t say when he expects blockchain games and the metaverse to hit the mainstream.
“The real question is whether people will actually play these games,” he said. “It is still too early to tell. You can throw billions and billions into the industry, and you might get at least a few decent games that will be played by millions of players. But I think it’s still too early to call him. I really don’t think the future of the metaverse is necessarily tied to the success of blockchain games.
He added, “Now whether or not you need blockchain to create an open metaverse is an ongoing question. There are people on both sides of the argument. But I think titles like Roblox or Fortnite have shown that you don’t need blockchain.
Vicol thinks it takes shared standards for the metaverse to get the whole platform off the ground. He sees brands getting into virtual real estate and virtual world apps such as Decentraland and The Sandbox. These worlds don’t have many users, but they are also at a very early stage of development.
Newzoo has not made its own prediction for the revenue associated with the Metaverse or its eventual value.
“I was a little intrigued by all these big consulting firms handing out numbers like $8 trillion (Citi) by 2030,” Vicol said. “I was a little puzzled. So we don’t have any metaverse revenue estimates yet, but we are considering potentially creating the estimates.
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