INTEREST IN THE METAVERSE has exploded. Global Google searches for ‘metaverse’ skyrocketed 7,200 per cent last year, and metaverse online gaming platform Roblox reportedly hit over 55 million daily active users in February 2022. Meta committed more than US$10 billion to its Reality Labs division, which makes metaverse-related hardware such as VR goggles. And Microsoft said its planned $69 billion acquisition of gaming company Activision Blizzard would “provide building blocks for the metaverse.”
Total metaverse-related investment is also proving to be significantly larger than it was for AI, which attracted $39 billion in investment in 2016 — arguably a similar stage in its development trajectory to the metaverse today. While total VC and PE investment is somewhat comparable — AI was $6 billion to $9 billion in 2016; the metaverse is $6 billion to $8 billion so far this year — M&A activity is much bigger. We attribute this to the fact the metaverse has emerged, for the most part, as a pure digital play for many companies, exemplified by Microsoft’s intended purchase of Activision Blizzard for around $69 billion.
Meanwhile, the sectors leading metaverse adoption also plan to dedicate a significant share of their digital investment budgets to the metaverse, with energy (18 per cent); automotive, machinery and assembly (17 per cent); high tech (17 per cent); tourism (15 per cent); and media and entertainment (15 per cent) among those leading the charge in terms of allocating share of digital budget to metaverse-related activity over the next three to five years.
The broader investment landscape is dominated by three categories of investors:
Meta, Microsoft, and , among others, are taking deliberate actions toward shaping the metaverse. The most prominent example is ’s name change to Meta, solidifying its intent to become a leader in the space, but others include Microsoft’s intended Activision Blizzard acquisition, , the planned release’s PlayStation VR2 headset, and the possibility of Apple entering the AR space in 2023.
