Exploring the Business of Virtual Worlds

World-renowned consulting organization, released the latest research report “Value Creation in the Metaverse”, arguing that the Metaverse will significantly affect our business and personal lives.

Since 2022, more than US$120 billion in investment has flowed into the Metaverse; 79% of active users have spent in the Metaverse; 25% of executives said that they expect more than 15% of the company’s revenue to come from the Metaverse in the next five years.

It could be worth $5 trillion by 2030 and could represent the largest new growth opportunity in several industries over the next decade, including consumer goods, retail, financial services, technology, manufacturing and healthcare.

Composition of the Metaverse

The concept of the metaverse originated in the 1992 science fiction novel “Avalanche”. Author Neal Stephenson (Neal Stephenson) depicts a surreal virtual space “Metaverse” in the novel. People interact and live with virtual identities in this parallel space. In just 30 years, with the rapid development of digital technology, sci-fi bridges have gradually come into reality. Nowadays, various industries are investing in the Metaverse Development upsurge and actively exploring application scenarios.

A “complete” metaverse experience has the characteristics of immersive visual effects, diversified social interactions, decentralization and distributed organizational structure. In a space different from reality, people freely create and trade with virtual identities.

The latest McKinsey research report shows that the metaverse consists of ten layers, which can be broken down into four core building blocks: content and experience, platform, infrastructure and hardware, and enabling factors.

Content and Experience

Content: Enrich the metaverse experience — including first-party content, developer content, creator content and UGC, etc.

Applications: Relevant to specific Metaverse use cases — from learning to collaboration to activities to industry-specific applications

Virtual worlds: environments where large numbers of users can gather, interact, create, and move in and out of different experiences

platform

Access and Discovery: Platforms that facilitate content, experience, app distribution, and discovery — including browsers, search/visual search, app stores, in-app storefronts

Creator/3D Development Platform: A core set of tools and platforms for building 3D experiences — including design, game engines, AI services, creator tools

Infrastructure and Hardware

Devices, Operating Systems and Accessories: Device hardware, components, accessories/peripherals and operating system layers as part of the HMI layer

Infrastructure: infrastructure across clouds, semiconductors, networks, etc., powering the Metaverse

Contributing factors

Security, Privacy and Governance: Security, Identity and Data Governance, Privacy and Content Moderation Platform

Identity: A platform for managing digital identities, avatars and social graphs

Payments and monetization: platforms and tools (e.g., advertising, asset stores) to enable virtual world economies

In a nutshell, the progress from Web 2.0 to Web3 gave birth to the Metaverse.

Three Types of Funders Promote Metaverse Investment

The realization of metaverse experience relies on a series of basic technologies and applied technologies. Importantly, money is flowing into this tech stack.

More than $120 billion has been invested into the Metaverse so far this year; more than double the $57 billion invested in all of last year. Significant investment demonstrates confidence in the potential of the Metaverse.

The broad investment environment of the Metaverse is dominated by three types of investors:

— Large tech companies such as Meta, Microsoft, Nvidia, Apple, and Alphabet are taking deliberate actions to shape the Metaverse. Most prominently, for example, Facebook’s rebranding to Meta cemented its intentions to become a leader in the space, Microsoft’s interest in acquiring Activision Blizzard, Sony’s PlayStation VR2 headset due to be released by the end of the year, and the possibility of Apple’s entry into AR.

— Venture capital is investing heavily in this field, such as NFT market OpenSea financing in the C round of financing led by Paradigm and Coatue, with a valuation of 13.3 billion US dollars to obtain 300 million US dollars; Metaverse Development company Improbable financing 150 million US dollars; Yuga Labs ( Creator of Bored Ape Yacht Club) raised $450 million at a $4 billion valuation.

— Brand companies outside of tech are committing resources to success. For example, Disney appointed a senior executive to oversee its Metaverse strategy, while LEGO invested in Epic Games (maker of Fortnite). Epic Games is also partnering with luxury brand Balenciaga, which has created a dedicated Metaverse division and launched its latest collection within the virtual space.

The metaverse is a universe of interconnected virtual worlds that has emerged as a vision for next-generation computing. “The Metaverse puts us on the cusp of the next wave of digital disruption,” said Tarek Elmasry, senior partner at Blockchainx & Company. , policymakers, consumers and citizens may wish to explore and understand as much as possible about this phenomenon, the technologies that underpin it, and the impact it may have on our economy and wider society.”

Evolution of consumer and business behavior

Blockchainx research shows that consumers are excited about transforming their lives into virtual worlds, with almost six in 10 (59%) consumers preferring at least one virtual world experience over its physical alternative.

Among these consumers, certain types of activities are most favored in immersive worlds: shopping — purchasing physical or virtual goods (79%); participating in virtual social events or playing social games (78%); exercising using virtual reality (76%).