The Metaverse was once a niche notion favored by IT geeks; it is now a worldwide phenomenon that some people are calling the next iteration of the internet, Web 3.0, and it has the potential to upend all we know. Reportedly worth $1 trillion USD, there’s no wonder many enterprises are getting an early foot in the Metaverse door.
The importance of the internet to the global economy is immeasurable. The FANG stocks—Facebook, Amazon, Netflix, and Google—are among the most powerful and important firms in human history.
It's no surprise, then, that many businesses and investors are vying for a piece of the metaverse's developing digital ecosystem.
Grayscale Investments estimates it to be worth a trillion dollars, and Jeffries, the investment banking group, believes that investing in the metaverse will be similar to investing in the early days of the internet.
"Metaverse" was first used to describe a parallel universe in which humans interacted with each other in a three-dimensional virtual realm, or as avatars, in the 1992 novel “Snow Crash” by science fiction writer Neal Stephenson.
Fast-forward thirty years, the word "metaverse" has gained widespread acceptance and is expected to continue to develop exponentially. Some analysts predict a total annual run-rate of most marketplaces of $2 trillion and climbing. It's possible for this reason that Mark Zuckerberg stated earlier this year that Facebook would “effectively transition from people seeing us as primarily being a social media company to being a metaverse company.”
The recent rebranding of Facebook as Meta Platforms is the first big step. With its Oculus VR headset, the social media behemoth has taken a big step in integrating virtual reality into everyday life. And the enterprise is not alone.
Prominent participants in the metaverse are expected to include:
Microsoft - rumored to be working on virtual productivity capabilities for its HoloLens headgear, a rival to Oculus, that would enable new ways to communicate online.
Apple - although not yet confirmed by the company, is also rumored to be releasing augmented reality (AR) glasses in 2022. Competing for the metaverse space they could have the advantage due to their years of investment in consumer hardware.
But it’s not just the consumer hardware companies that are in the race to win the metaverse.
With new entrants entering every day, non-fungible tokens (NFTs) are already in great demand. The trading volume of NFTs is expected to exceed $24 billion this year, up from just $0.1 billion last year.
In terms of introducing new NFTs, luxury goods businesses have been among the most active. Designers and merchants are often conservative and have long opposed digitalization, with many losing out on the e-commerce boom of the 1990s and 2000s. They clearly don't want to repeat the same error, which is understandable.
Nike, Burberry, Gucci, and a slew of other brands have announced intentions to give digital copies of their clothing to metaverse fashionistas. With no raw materials to acquire, no warehouses to account for, and no overstock to account for, profit margins have been high.
Adidas Originals sold $23 million in its first NFT drop
Adidas Originals made $23.5 million USD after selling 30,000 of its "Into the Metaverse" NFTs in just a few hours after they went on sale last Friday. According to reports, the corporation made $5,924 in Ethereum (ETH), with each NFT costing 0.2 ETH.
The sports giant created the NFTs in collaboration with the cryptocurrency investor GMoney, Bored Ape Yacht Club (BAYC), and comic series Punks Comics.
The collaboration resulted in the first Adidas Originals NFT line, which pays homage to the designers and gives users access to virtual wearables for The Sandbox, a blockchain-based metaverse game that allows players to purchase and trade digital commodities, including real estate. Adidas had already purchased a piece of virtual land in The Sandbox named "adiVerse" in November, giving us a hint about its virtual reality offerings.
Metaverse real estate
NFTs can also incorporate virtual real estate. Investment firms have been pouring millions of dollars into digital land on platforms like Decentraland and The Sandbox.
At the moment, Snoop Dogg is the center of attention. The iconic rapper revealed in September that he will be "joining the metaverse" on Sandbox, and an unidentified Sandbox player made news earlier this month when he paid over $500,000 real money for an in-game plot of property close to Snoop Dogg's virtual residence.
In fact, since the Doggfather's revelation, total sales in the virtual realm of The Sandbox have increased. This month, the daily trading volume of NFTs surpassed $180 million, up from roughly $800,000 a year ago.
Blockchain technology is one of the most innovative technologies of this generation. What’s more, the hike of NFTs and cryptocurrencies that allow transactions in the metaverse can permit continual virtual experiences in a secure way.
It's encouraging to see culturally significant businesses like Adidas collaborate with the NFT community and include the proper crypto, metaverse, and NFT partners. Who will be the next big enterprise to join the metaverse? In the words of Adidas, “this is just the beginning”.