Sébastien Borget is a big fan of Twitter. The boss of The Sandbox posts short videos there almost every day in which we see him and his avatar wandering around the metaverse he co-founded.
One minute, the Frenchman is at a concert. Another, he's jumping from building to building or walking through a shop... Each video is different, except that he's always quite alone. There are, at best, a handful of other avatars in his company 🙃
It's a fact, metavers like The Sandbox (owned by Animoca Brands) , Decentraland or Axie Infinity are relatively little used.
One figure speaks for itself: according to DappRadar, there are on average fewer than 1,000 daily users on Decentraland and The Sandbox. A particularly low figure, especially when you consider the valuation of these companies. Based on its latest fundraising, The Sandbox is worth more than $3 billion!
This huge contrast has led some to say that these new virtual "eldorados" are just bubbles, and have no future.
But is this really the case? 🤔
As usual, things are (much) more complicated. We surveyed platforms, users, investors and businesses!
An enormous potential
To understand the expectations surrounding metavers, we need to go back to its origins and its potential.
Metavers has not broken through in the last two years by chance. It has accompanied the rise in power of the "Internet of value" - the famous Web3 - and crypto-assets. Although cryptos fell sharply in 2022, the market has more than doubled since 2020.
In this Internet of value, there are new currencies, cryptocurrencies, new objects, NFTs, and also new spaces: these are the metavers.
The metavers offer a new playing field for companies. Several reports, including one published in mid-2022 by the consultancy McKinsey, suggest a potential of several trillion dollars - $5,000 billion by 2030. Inevitably, companies are taking an interest 🤑
Hundreds of Web3 companies such as Dogami, which offer to breed dogs in the metaverse (you may not like it), have emerged on this trend.
"The metaverse allows us to transform industries such as gaming, where you directly own your assets," explains one of its co-founders, Bilal El Alamy. Dogami has just raised 14 million euros.
Many traditional companies have also understood what is at stake. Gucci, LVMH, Carrefour and Nike have all set up shop in The Sandbox. Some brands, such as Gucci, allow you to buy products directly - virtual handbags for 4,000 euros in the virtual world of Roblox. Others allow you to buy products in their virtual shop that are then delivered to you in the real world.
Banks and insurers have also understood very well that they need to get in on the act. JP Morgan, HSBC and Axa, to name but a few, have all taken plots of land and created virtual branches.
A vision summed up by Cyrille Magnetto, VP Innovation at AXA France, as follows: "The metaverse allows us to present a different image of the brand, attract new customers and bring in tech talent. Some of our staff are already using metavers to go out and prospect for customers."
The fact remains that, while some experiments are interesting, sales are still very low. "A lot of brands won't say it, but it's not taking off", explains a good connoisseur of the sector.
Despite sometimes exorbitant prices, particularly in the luxury sector, volumes have not exceeded a few hundred thousand dollars, according to our information.
Most importantly, customers are not legion. Why?
Firstly because access to metavers is not simple. Not everyone can get to The Sandbox at the snap of a finger. "We're still in the seasons phase where we're testing the game and the technology before opening it up to the general public," confirms a company spokesperson.
Managing the scalability, in other words the growth, of the protocol is a real challenge. At present, no metavers are capable of supporting the presence of several hundred thousand users with sufficient quality and security.
Then there is the subject of user experience, which is still very far from satisfactory. "We get to the end of gaming experiences pretty quickly," explains one investor. Not to mention the equipment required: wallets to identify oneself on decentralised platforms or VR headsets for 3D metaverses.
Continuing to invest
But is this a reason to give up? Far from it. And while the metaverse has been the target of much criticism, particularly since Mark Zuckerberg's Meta group made it its priority, some believe that this is, on the contrary, the best time to learn and "build".
The industry is growing, points out Frank Desvignes, partner at True Global Ventures and investor in The Sandbox. "We've gone from 10 to 230 creative studios in The Sandbox over the last 12 months," he explains.
For many, the buzz around the metaverse has created huge expectations, but we need to be patient. "We're at the very beginning," insists Frank Desvignes. "The metaverse experience will improve and that's what will attract users and convince companies to invest."
Axa is one of those companies. In early 2023, the insurer 🇫🇷 will launch an "experiment" in the metaverse for its customers. "Completing the experiment will earn you an NFT, which will give players advantages in the metaverse and also outside it," explains Cyrille Magnetto.
Part of the rewards may come in the form of the platform's token (the SAND at The Sandbox, the MANA at Decentraland), which can itself be converted into bitcoin or traditional currencies.
Idemo for Dogami. Players will be able to obtain discounts or privileged access to partner products or derivatives. This model based on gamification and ownership is at the heart of what the metaverse promises. Frank Desvignes sums it up simply: "Play, own, earn and have fun" 😎
The metaverse is not doomed. After undoubtedly growing too fast, it needs to mature and manage the market downturn. "It's just having its teenage crisis", sums up one investor in the sector. The real challenge, especially for companies, is to be ready when it comes of age.
