The metaverse is going to be launched soon, and many investors and venture capital firms are already looking for new investment opportunities. According to Olivier Martret, Principal of Serena Capital, a venture capital firm: “We saw a surge of VC firms now investigating the gaming and entertainment industry. A few years ago, the gaming market surpassed the movie and music industry.” Metaverse Investing can be complicated, which is why we at the Digital Twin Insider highlight the following five things to think about when looking to invest in this market.
- Realize How Big the Market Revenue is
“Today, everyone is saying that the Metaverse will be a trillion-dollar market with the emergence of Web 3 [a software], “explained Martret. “To me, we’ve only scratched the surface of the metaverse opportunity.” Many other experts are predicting a similar trend of upward growth. This can give significant ROIs later on for many venture capital firms. It’s important to look at when software launches occur because they can help determine a proper time for a well-positioned investment
- Know Which Industries Make Up the Market
There are many different industries that create the metaverse market. Two of the biggest industries are virtual reality (VR) technology and gaming. Both industries are already valued at billions in revenue (the gaming industry is predicted to hit $256 billion by 2025) and are expected to increase. Many venture capitalists are already pursuing opportunities in these industries, like Serena Capital. “Today, we mainly define metaverse with the gaming/ entertainment prism, targeting mainly a Gen Z audience,” added Martret. Knowing which industries are the main components can help determine which target audiences will be the main users of metaverse technology. The gaming industry alone is estimated to have more than 2.5 billion users worldwide.
- Look at Investing in Hardware and Software
As the metaverse market comprises many different technologies, there are opportunities to invest in hardware and software. Many venture capital funds and investors only look at software or hardware but don’t think about investing in both. Investing in both can naturally diversify investments allowing for a more stable investment plan. The metaverse will require both software and hardware to effectively launch, so their relationship is quite synergistic and can be used to increase an investment’s returns.
- Understand How Business Models Will Change with the Metaverse
As of July 2021, Coca-Cola became one of the first companies to develop a line of products to sell in the metaverse. In partnering with the Special Olympics International, Coca-Cola developed their first NFTs to sell completely digitally. Other companies like Levi’s, Gucci, and Burberry are pairing with virtual reality companies like Roblox to create virtual retail. This will impact many business models in the future, shifting production costs. As Market explains, the metaverse “will clearly change the way we interact and socialize, the way we work, the way we earn money, but also our relationship with money.”
- Know How the Technology Works
It’s important to roughly understand how the technology works in order to estimate an ROI timeline. Knowing what talent is needed, as well as code or hardware can help better determine a proper investment. It’s also important to look at the timing of new software launches, or new games coming out. This can also cause a rise in certain company stocks, which can affect an investment
There are many other aspects to investing in metaverse technology. With these five aspects in mind, looking at investments will hopefully become more straightforward. There are plenty of venture capital funds, like Serena Capital, who are already seeing significant results from their investments. It will only be a matter of time before the market shows its benefits to the majority of shareholders.
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