Tech Giants Eye Shared Virtual Spaces as the Next Big Thing
Facebook and Roblox Invest in the Metaverse
Facebook (FB), Roblox (RBLX), Microsoft (MSFT), and Match (MTCH) are eyeing what could be the next big thing of online growth: a virtual reality where people exist in shared spaces. In this virtual world, which is being referred to as a metaverse, people interact through avatars, attending concerts with their digital friends and shopping in virtual stores as if they were in the physical world.
Investor interest in this new realm is one of the reasons Roblox has such a lofty valuation. Backers are betting its popular video games will give it an early advantage in the burgeoning market. Roblox, which went public through a SPAC deal in March, has a market capitalization of more than $43 billion.
Roblox and Facebook Double Down on Shared Virtual Reality
Roblox is investing heavily in shared virtual realities, both on the development and staffing sides. It sees its platform as a hub for shared virtual experiences, from concerts to school events to meetings. The challenge for Roblox is creating shared virtual spaces that are safe for a six-year-old but attractive to a 30-year-old, since it can be hard to control who enters what spaces.
Facebook is also pouring investment dollars into virtual reality and augmented reality. The company sees the metaverse eventually replacing the mobile internet. In Facebook’s vision, users will be able to access the metaverse from smartphones, PCs, laptops, and a new crop of VR devices. Both companies see the evolution of the meterverse as something which will take a number of years, but which has the potential to revolutionize online interactions.
Market Still in Its Infancy
In order for the market to take off, companies will need to figure out how to generate revenue from these shared virtual spaces.
Roblox makes money when its users buy virtual currency. The currency then gives customers access to items for their avatars, or in-game bonuses. Roblox leverages this in a number of ways. For example, last spring the company teamed up with Gucci (PPRUY) to celebrate the fashion brand’s 100th anniversary. Roblox users could purchase limited-edition Gucci items for their avatars.
The metaverse is still in its infancy, but technology companies are eyeing it as the next big thing. It will be interesting to see how metaverse technology changes the tech industry and how everyday people interact online.
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