Take Five: The Metaverse – VC Cafe

0
15

It’s hard to keep up with the news, there’s just so much going on. So, as we all suffer from information overload, I’m coming back to my old trusted format of “Take 5” – highlighting 5 links in topics that catch my attention. As an investor in early stage startups in gaming and metaverse/web3 at Remagine Ventures, I naturally consume a lot of content on this topic, and this post also helps me digest and separate signal from noise.

since the departure of Sheryl Sandberg, Mark Zuckerberg is much more ‘out there’ – personally launching and announcing products, giving interviews and going on podcasts. The latest appearance, a 3 hour conversation with Joe Rogan, comes in a troubling time for Meta/Facebook as I covered in my latest post on VC Cafe.

A few takeaways from the podcast:

  • Meta is launching a new hardware VR headset in October this year (currently called “Project Cambria” but it’s likely to be “Quest Pro”)
  • The new device will cost $800 and will help users experience a feeling of “social presence.”
  • And finally, the company’s vision for the metaverse, which includes ‘telepresence’ as you can see from the quote below:

The Holy Grail is building something that can create a sense of human presence. Right? It’s like I’ve spent the last almost 20 years of my life building social software, you know, making it so that whatever limited computation you have, you can kind of share something about your experience. And it started off with primarily text, right, when I was in college, then we all got these smartphones and had cameras so that it became a lot of photos. Now the mobile networks are good enough that it’s starting to be a lot more video. And to me, this kind of like immersive experience is clearly going to be the next step.

Mark Zuckerberg, Meta’s founder and CEO

You can read other highlights of the interview on Techcrunch. On a related note, the rumours about Apple’s new headset are intensifying with their trademark filings on a ‘Reality’ headset.

Joe Rogan hosted Mark Zuckerberg on a 3-hour conversation on the metaverse and Facebook’s woes
  • ReadyPlayerMe (RPM) – the company provides developers a customizable plug-and-play system for 3D avatars. Last week RPM raised $56M led by A16Z to build the first interoperable identity platform in the Metaverse. Most multiplayer games (say Fortnite or PubG), are closed economies. A user can invest in their character (by buying or earning virtual goods), but that character belong’s to the game publisher and cannot be used anywhere else.
Ready Player Me avatars (source)
  • Inworld AI – readers of this blog would have already heard about Dall-E, the AI for creating stunning visual art from text input. Inworld AI, takes this type of technology to create game characters using text. The company announced a $50 million Series A last week, led by Intel Capital and Section 32. The company is also backed by Disney.

3. Industry reports

It’s hard to keep up with the number of Metaverse reports that are coming out, but I thought I’d highlight two of them:

  • Pitchbook Vertical Snapshot: The Metaverse – Published on August 22nd, 2022, this 37 page report brings some interesting data to the discussion, like how many startups exists globally in the space, the VC activity breakdown and an interesting landscape of the companies building the metaverse. You can download a copy here.
The Metaverse market landscape (source)
  • The Pwc 2022 US metaverse survey – According to a recent PwC survey of over 5,000 US consumers and 1,000 US business leaders, 50% of consumers call the metaverse exciting, and 66% of executives report that their companies are actively engaged. If true, that means that two-thirds of top executives in the US report that their companies are actively engaged in the metaverse in some way. What does this actually mean? See the chart below.
Top priorities for companies to capitalise on the Metaverse (Source: PWC)
  • McKinsey’s 77 Page Report “Value Creation In The Metaverse” – already covered on VC Cafe in ‘investing in the pillars of the metaverse‘, this McKinsey report has caught the attention of corporates thinking about how the metaverse will affect their industries and sizes the opportunity at $5 trillion by 2030. For example, how do you think the intersection of metaverse + health/ construction/ tourism/ education would look like? Would you pay for immersive experiences?
Current metaverse adoption by Industry Source: McKinsey

With the dip in crypto, the value of NFTs has taken a beating. And perhaps, rightfully so. NFTs without utility (i.e. digital collectibles) are only valuable if there’s an active market of supply < demand. But as trading volume (demand) goes down, so does the price and people will only buy them if they believe they will increase in value again. Perhaps the most successful franchise of all is BAYC (Bored Ape Yacht Club) which succeeded in not only creating a utility (social access to events and other owners) but also transcend the medium to food and drinks (including M&Ms), music (Snoop Dog and Eminem at the VMAs), apparel, etc. Check out the list of derivate IP from the BAYC collection below.

Vougue business recent published an article analysing brands income from NFTs (using this publicly available data by Dune). Nike leads the chart with $185.3 million (partly thanks to their acquisition of RTFKT), followed by Dolce & Gabbana at $25.7 million and Tiffany & Co. at 12.6M.

Consolidated brands NFT sales (source: Dune)

Many other brands (from apparel to sports teams to banking) and exploring how can they access the metaverse to engage with younger consumers. Watch this space.

5. Metaverse is more than just gaming, but gaming will be a major entry point

Gaming will be a major point of entry for the metaverse. The early adopters, the commerce activity, the immersive social experiences will start as games. Who’s best positioned to lead in that space? I covered the topic in depth in my recent post on the top 10 companies investing billions in the metaverse.

There will continue to be major consolidation in the space, with EA (until recently rumoured to be acquired by Amazon) and perhaps Ubisoft probably next. The H1 2022 gaming activity report by Investgame shows who are the top 15 strategic investors in the gaming space.

The top 15 strategic investors in gaming

Final thoughts

Why should anyone care about the metaverse? Is it just a dream pipe or a fad? To be honest, it’s too early to really call it, but as Matthew Ball, author of “The Metaverse and how it will revolutionise everything” explains in the 14 minute video below, despite the technical challenges, the metaverse has the potential to change everything and become the next iteration of how we socialise, buy, learn, play and work on the Internet.

Eze is managing partner of Remagine Ventures, a seed fund investing in ambitious founders at the intersection of tech, entertainment, gaming and commerce with a spotlight on Israel.

I’m a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google’s first physical hub for startups.

I’m also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we’ve built 11 schools and 50 libraries in the developing world.

Eze Vidra
Latest posts by Eze Vidra (see all)

Go to Publisher: VC Cafe
Author: Eze Vidra