In a landscape that’s still in its formative stages, Meta, formerly known as Facebook, is one company that’s moved extremely quickly to accommodate the metaverse. But will the tech giant’s early activity be enough for the company to become a future market leader? Throughout Meta, multiple departments have focused their efforts on developing virtual reality products for communities, creators and commerce, as a means of bringing CEO Mark Zuckerberg’s vision of the metaverse into reality.
“What I think is most interesting is how these themes will come together into a bigger idea,” Zuckerberg said. “Our overarching goal across all of these initiatives is to help bring the metaverse to life.”
As data shows, the metaverse is set to grow at a steady pace over the coming years, although its total year-on-year growth is set to decline following a fast-paced 2021. This illustrates how the ecosystem is still many years away from becoming ready for mainstream use or even being functional on any large scale.
Meta’s charm offensive has accelerated the early growth of the metaverse. Over the past year we’ve seen a range of walkthroughs featuring Zuckerberg discussing his vision for the future in a number of virtual spaces. However, onlookers have been quick to highlight that Meta’s idea of the metaverse is nothing new, and that other companies like Roblox, Nvidia, and Microsoft have also been busy creating their own interpretations of the metaverse with virtual and augmented reality technology.
Another concern regards just how underdeveloped the technology in place to support the metaverse is. In the version of the metaverse that Facebook’s building, the digital avatars available are overly cartoonish and clunky - owing to a lack of intricacy or sufficient computing power available.
According to Facebook executives, Andrew Bosworth and Nick Clegg, “Meta is not going to build, own, or run the metaverse on its own. We are starting conversations about our vision for the metaverse early, before some of the technologies even exist. ... We’re discussing it now to help ensure that any terms of use, privacy controls or safety features are appropriate to the new technologies and effective in keeping people safe.”
Meta’s rebuild will be imperative for the company’s role in the metaverse. With many challengers waiting to take the initiative, one slip up and the groundwork Meta has made in terms of marketing and development could be lost to a rival.
"It is likely that ‘the tide will raise all boats’ and Facebook's actions have allowed many companies to discover new products or sales channels," explains Maxim Manturov, head of at Freedom Finance Europe. “Given that FB is a tech giant, then for smaller companies like Roblox or Unity, the metaverse creates more accelerated growth opportunities, which was momentarily reflected in the price and which is why there was such interest from investors.”
“As the metaverse unfolds in 2022, companies like Roblox or Unity have a lot of work ahead of them. They need to offer much better graphics in games. Unity is betting on becoming a leader in the metaverse by creating 3D content in AR and VR. The industry needs to move quickly in this space. Unity is empowering creators with its tools. In doing so, it is strategically positioned to capture most of the market share of the metaverse,” Manturov added.
Roblox’s inroads into the metaverse
Robox is just one of a range of challengers aiming to disrupt Meta’s metaverse market dominance in the mid-term future.
In May 2021, the gaming platform hosted the Gucci Garden, which was a two-week art installation angled towards building brand awareness among younger customers. The virtual space was a digital reconstruction of a real-world installation in Florence, with Gucci aiming to share the brand’s story ahead of its centenary. When entering the arena, visitors were able to view, try on, and purchase digital Gucci products to dress their avatars before walking through a series of themed virtual rooms.
However, Roblox, much like Meta, has endured a difficult time on Wall Street of late. The company recently announced that it had missed its Q4 earnings despite revenue climbing by 83%. This may be further indication that the metaverse hype hasn’t yet transferred from tech boardrooms to the public just yet.
Despite this, there is certainly plenty of potential locked away in the metaverse. The battle to rule the metaverse is far from over. In fact, it’s only just begun.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Dmytro Spilka
Dmytro is a finance writer based in London. His work has been published in The Financial Express, The Diplomat, IBM, Investing.com, FXEmpire, Investment Week and FXStreet.
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