Two years ago, the Metaverse was supposed to be the next technological game changer. Time magazine devoted its cover to the emerging virtual realm proclaiming that, “The Next Digital Era Will Change Everything.”
While the statement rings true, the digital technology most likely to “change everything,” at least in the short run, is Artificial Intelligence. As it turns out, the ability to create celebrity deep fakes and use a chatbot as a ghost writer is far more compelling to read about than something most people over 30 associate with outer space.
And for tech mavens looking for the fastest path to profit, the immediacy of implementation and sheer breadth of functions that can be enhanced through AI have made it a far more attractive near-term tech investment.
As a result, the Metaverse has become somewhat forgotten, leaving it largely as a playground for teens, tweens and 20-something gamers. Except for a small and growing number of forward-looking companies who recognize that major social and cultural shifts are most often driven by those same teens and 20 somethings and not their parents and grandparents.
Can you imagine a world without Facebook, Snapchat, Instagram and Tik Tok? All of them got their start with the youngest of consumers and now are as mainstream as McDonalds, Walmart, or apple pie.
Roblox, the largest and most popular virtual gaming platform (aka Metaverse platform) generated $750 million in revenue for Q4 2023, up 30% from the previous year. And while Beyond Inc. celebrated crossing the 6 million user threshold for its most recent reporting quarter, Roblox has a monthly user base of 214 million players and generates revenue of $7 million a day, according to CNN.
Roblox CEO David Baszucki has outlined a vision for the platform as a place where people can date and form “real-life relationships, a move that could blur the lines between the Metaverse where roughly half of 12- to 17-year-olds engage today and the current most popular social media platforms.”
It would be neither surprising nor entirely unreasonable for executives in this industry to dismiss Roblox and other Metaverse platforms as children’s playgrounds with little or no impact on the industry. Except for two things.
The first is that children today have a major impact on the spending decisions of the households in which they live and have a comparably large impact on our culture. The second is that time is not static. You cannot talk about the lifetime value of a customer and the importance of building that relationship and ignore the first two-thirds of that life.
Major brands including Ralph Lauren, Nike, Crocs and Lego have all launched activations on the site. According to CNN, Roblox had more than 300 brand activations in the fourth quarter of 2023 alone, and Walmart has added an experience that lets them make real-world purchases for delivery by mail.
At a time when traditional retail channels are under assault and consumers are re-evaluating their path to purchase, it’s worth keeping an eye on the quiet growth of the Metaverse.
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