Metaverse which broadly refers to shared virtual world environments that users can access via the internet is a whole new paradigm paving the way for yet another exciting investment frontier. As the digital world continues to embed itself in people's daily lives, the metaverse in a few years could represent over a $1trillion market opportunity.
In the last few years, by challenging the Web 2.0 centralized model, Web 3.0 Metaverse virtual worlds have benefited from rapid innovation and productivity gains. Crypto space has devised a multi-million dollar primary and secondary market for artists and asset owners by removing capital controls and opening the digital borders to free-market capitalism.
A recent report published by Grayscale "The Metaverse, Web 3.0 Virtual Cloud Economies," estimated that proceeds from virtual gaming worlds might grow from $180B in 2020 to $400B in 2025.
Metaverse virtual worlds have nearly 50,000 all-time users, today, which is 10 times since the beginning of 2020.
Online Gaming is just the most promptly addressable segment where value is already shifting to Web 3.0, but the Metaverse opportunity goes far beyond gaming. The Grayscale report estimates Metaverse to be a trillion-dollar revenue opportunity across social commerce, advertising, hardware, digital events, and developer/creator monetization. Though the report does not mention timeline experts in the industry believe that in a couple of years metaverse will be a $1trillion market annually.
Over the past couple of weeks, the crypto domain has witnessed large sums of money poured into Metaverse projects. One of the leading crypto exchange KCS and blockchain gaming platforms ENJ granted $100M to build the Metaverse. The existing virtual world gaming projects MANA and SAND have seen their tokens jumping over 500% value since the start of November.
In Quater 3 of 2021, total fundraising for crypto was $8.2 billion, as per the report, $1.8 B of which went to Web 3 and NFTs. Within Web 3 and NFTs fundraising for gaming applications overshadowed all other verticals, hitting around $1 billion. A key dynamic within this growth trend is the continued shift of game developer monetization. Gamers are progressively shifting away from paying to play premium games towards free games, which developers monetize by selling users in-game items to enhance gameplay as well as social status within these virtual worlds.
