Virtual plots of land in Decentraland, the first and largest blockchain-based metaverse, have sold for millions of dollars, and its casino has racked up nearly $8 million in revenue.
Backed by Meta CEO Mark Zuckerberg’s prediction that the immersive virtual reality worlds were the future of social media, along with Citi’s estimate last week of a $13 trillion economy by 2030, venture capitalists and developers have been pouring billions into various projects.
See also: Qualcomm Opens $100M Metaverse Fund
So, how many users does the hippest and hype-ist metaverse in crypto have after two years? About 18,000 a day, Decentral Games founder Miles Anthony told crypto industry news outlet CoinDesk in early February.
That’s after two years in business. Compare that to Fortnite, a massively multiplayer game world which is building out a non-adventure section that it plans to turn into a proper metaverse. Launched in 2017, it had 75.5 million monthly users by 2019, according to Epic Games, and an estimated quarter billion users.
Although metaverses are functionally different than more traditional MMOs, the are still largely classified as games in the non-fungible token (NFT) world.
In blockchain-based metaverses like Decentraland and The Sandbox, everything is made of NFTs, from the plots of land to the avatars players use to socialize — and, as many large companies that are pouring money and marketing into the metaverse hope — engage in commerce and connect with brands.
The problem is, the user numbers aren’t likely to scale like Fortnite’s did, growing from 50 million in 2017 to 350 million in 2021.
First and foremost, the technology just isn’t there yet. The virtual headsets required for the truly immersive 3D experience are expensive and not even close to modern games’ standards of graphic user experience. Nor even is the 2D experience available on PCs and mobiles.
“Decentraland’s graphics look like something from a late-1990s Nintendo or PlayStation game,” the Financial Times’ global technology correspondent, Tim Bradshaw, wrote on April 5. “Even so, my early-2020s Mac struggled to render them smoothly.”
Unready Player One
But the broader problem is that metaverses suffer from something of an identity crisis: Are they intended to be entertainment or something broader and more complex?
Virtual reality is a phrase that tends to be thought of in gaming terms, but it’s very clear that the venture capitalists (VCs) and brands rushing into the market with experiential marketing offerings and commercial spaces are very clearly focused on the “reality” part.
The fictional metaverses were places to escape from reality by living another, semi-fantasy life — one where you’re better looking, more athletic, more successful and can forget about your dreary life and going-nowhere job.
However, far and away the most successful real metaverses are essentially gaming platforms that pre-date blockchain. Roblox, with 55 million daily active users, is really platform for other developers’ games — some of which are interactive metaverses.
Many investors and analysts have pointed to Fortnite’s concerts by artists like Ariana Grande that have attracted millions of viewers. Yet, Fortnite is an MMO game that had to create a non-combat zone for its concerts. While its CEO has said the platform is evolving, entertainment is still the key.
That said, Warner Music Group is planning concerts in The Sandbox, the No. 2 blockchain-based metaverse, and Meta has its own concert plans to bring in eyeballs.
And yet, for all the talk of metaverse users buying fashion NFTs to bling out their avatars in a virtual show of style and status at the recent Decentraland Fashion Week, brands have been focused on more traditional commercial pursuits. Tommy Hilfiger, for instance, was selling not only NFT clothing and accessories, but real goods, too.
Earlier, Samsung set up a virtual pop-up store with entertainment it hoped would bring users to the merchandise marketing room, and fast-casual chain Chipotle was letting users of (non-blockchain) metaverse Roblox earn rewards points good for real burritos. And drugstore chain CVS certainly isn’t going to making a fortune selling virtual Band-Aids in the virtual stores it’s creating.
That’s the point that makes investors’ metaverse bets gambling: No one knows if people really want to stop for a virtual burrito after the concert ends.