Ornella Hernandez

<div id="highlights-block_628fe8d9cc4a9" class="highlights">
 <ul>
 <li>Companies including LEGO Group are working on augmented reality technologies to grow metaverse usage</li>
 <li>LEGO, alongside Sony, invested $1 billion into Fortnite’s developer to scale their metaverse dealings</li>
 </ul>
 
</div>



The metaverse took center stage at much of Davos this week.&nbsp;



The consensus: It’s still early days for digital realms that proponents say will one day replace much of our daily lives, from work to play.&nbsp;



One <a href="https://www.weforum.org/open-forum/event_sessions/the-possibilities-of-the-metaverse" target="_blank" rel="noreferrer noopener">panel</a> at the annual gathering of the world’s elite, hosted by the World Economic Forum (WEF), “The Possibilities of the Metaverse” gathered thought leaders including Philip Rosedale, the founder of High Fidelity and Second Life, Magic Leap CEO Peggy Johnson, as well as Edward Lewin, vice president of government and public affairs at the LEGO Group.



Asked to define the metaverse, Johnson described it as the digital infrastructure of the internet, a network of different — sometimes overlapping — virtual worlds accessible via a phone or computer.&nbsp;



Johnson, who heads enterprise augmented reality platform Magic Leap, said corporations will drive widespread metaverse adoption — including tapping emerging technology to develop training for firefighters and medical students.&nbsp;



The future of the metaverse is going to be “inspired by our inner child,” Lewin said. One in three internet users is a child or young adult well-positioned to design virtual worlds that work for them, he added.&nbsp;



The LEGO Group’s parent company, KIRKBI, recently <a href="https://cms.blockworks.co/fortnite-developer-epic-games-gets-2b-from-sony-kirkb-to-drive-metaverse-efforts/" target="_blank" rel="noreferrer noopener">invested</a> $1 billion with Sony into Fortnite developer Epic Games as it grows its metaverse ambitions. He added their main goals are to promote the safety and well-being of kids and families, as well as promote privacy and ensure choice when it comes to sharing data. 



Rosedale’s avatar-based virtual platform, Second Life, meanwhile, has been around for almost two decades and has its own economy. But it’s not built on the blockchain.&nbsp;



He described the million person user base to be on average 40 years or older, and they “come together, get to know each other or work together.”



Asked his views on digital privacy, he said it’s a “tremendous challenge” to balance security, privacy and freedom of speech.



Unlike in the real world with safeguards like passports, in Second Life, he added: “There must be a balance between preserving your identity so you can truly be someone else if you wish to, while still being able to connect with others in a way that creates responsibility and consequence.”



The <a href="https://cms.blockworks.co/davos-survey-finds-metaverse-optimism/" target="_blank" rel="noreferrer noopener">WEF released a poll</a> Wednesday that gauged public opinion of the metaverse. More than two-thirds of respondents from China, India and Peru were bullish, while only a third of those surveyed from Great Britain, Canada, Japan, Belgium, France and Germany were keen on a hyper-connected metaverse.



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davos

Metaverse Takes Center Stage at Davos as Adoption Questions Loom

Sebastian Sinclair

<div id="highlights-block_6254c9ca036e5" class="highlights">
 <ul>
 <li>Epic Games has secured a whopping $2 billion in additional funding from Sony and KIRKBI to further its metaverse ambitions</li>
 <li>While some see the Fortnite developer&#8217;s position to port their games to Web3 as a challenge, others view the move as a positive</li>
 </ul>
 
</div>



The developer of one of the world&#8217;s most popular games, Fortnite, has scooped up $2 billion in additional funding in a bid to accelerate its metaverse ambitions.



Epic Games said Monday it had received $1 billion each from existing investors Sony Group Corporation and KIRKBI, the family-owned investment company behind The LEGO Group.



Following regulatory approval of the deal, Epic&#8217;s post-money equity valuation stands at $31.5 billion.



The fresh funding will be used to build out Epic&#8217;s vision for the metaverse and support its continued growth, according to a <a href="https://www.epicgames.com/site/en-US/news/sony-and-kirkbi-invest-in-epic-games-to-build-the-future-of-digital-entertainment" target="_blank" rel="noreferrer noopener">statement</a>. Epic said it is attempting to create novel &#8220;social entertainment&#8221; by exploring the connection between the digital and physical worlds.



“As a creative entertainment company, we are thrilled to invest in Epic to deepen our relationship in the metaverse field, a space where creators and users share their time,” Kenichiro Yoshida, president and CEO of Sony Group Corporation, said.



Sony&#8217;s participation in the round extends upon its <a href="https://www.roadtovr.com/sony-epic-games-investment-implications/" target="_blank" rel="noreferrer noopener">$250 million cash infusion</a> for Epic in 2020 and a further <a href="https://www.roadtovr.com/epic-games-unreal-engine-1b-investment/" target="_blank" rel="noreferrer noopener">$200 million</a> a year later. Epic&#8217;s accrued capital is slated for the developer&#8217;s project to build “real-time 3D social experiences leading to a convergence of gaming, film, and music,” its CEO Tim Sweeney reportedly said at the time.



While the funds have been flowing, questions are mounting over how the developer will best attempt to monetize their efforts in a world seemingly designed for decentralization and individual ownership of digital assets.



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true">This does not mean LEGO in Fortnite, but Epic Games is working with them to create a &quot;Digital Experience&quot; and with references of the metaverse, it doesn&#39;t rule out anything to do with Fortnite 👀&mdash; T5G (@Top5Gamingx) <a href="https://twitter.com/Top5Gamingx/status/1512038899304087555?ref_src=twsrc%5Etfw">April 7, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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&#8220;What they&#8217;ve been building with Fortnite, is what they&#8217;re kind of calling a metaverse, but I&#8217;d say it&#8217;s a closed ecosystem, where they rely on external investments and deals with large intellectual property rights, instead of a more open web3 metaverse,&#8221; Lost Relics and Codebit Labs Director Cliff Cawley said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;It seems that some companies are merely using the term metaverse as another marketing term to ensure their balance sheets remain profitable for themselves,&#8221; Cawley added.</blockquote>



Fortnite is a hugely popular free-to-play battle royal game where 100 players are dropped on an island and duke it out by crafting, shooting and looting their way to a top spot. 



While the model is free-to-play, Epic generates substantial profit through microtransactions via its in-game store. Players can purchase skins, emotes and sprays in exchange for the company&#8217;s in-game currency called V-Bucks, which are purchased using fiat.



Epic uses V-Bucks to turn a large portion of its profit. In 2018, the company generated $5.5 billion in gross revenue from its Fortnite title and $3.7 billion the following year, according to <a href="https://s3.documentcloud.org/documents/20696836/epic-apple-trial-epic-games-exhibit.pdf" target="_blank" rel="noreferrer noopener">leaked documents</a> from last year&#8217;s Apple v. Epic Games trial.



&#8220;It would be next to impossible for Epic to smoothly transition Fortnite into a Web3 Game,&#8221; Simon Kertonegoro, CEO and founder of MyMetaverse, said. &#8220;Its game mechanics and monetization are already set up to run in a Web2 way.&#8221;



Web3 refers to the idea of a decentralized internet where ownership of data is possessed locally by the individual. Metaverses, meanwhile, refer to the experience individuals will have based on an intersection of technologies including virtual reality, blockchain and Web3 infrastructure. 



Both concepts are in their early infancy, but development and major funding have continued to push the bounds and explore new revenue streams that share collectively in the success of a particular title.



While revenue models will need to be hashed out, some blockchain gaming developers believe Epic&#8217;s foray into the metaverse will help position the budding industry front and center.



&#8220;We should definitely anticipate more innovation happening in the space as new economic models are introduced,&#8221; Brian Akaka, chief marketing officer at Laguna Games, the developer behind the upcoming non-fungible token (NFT) title <a href="https://cms.blockworks.co/crypto-unicorns-nets-26m-in-token-sales-led-by-tcg-backed-vc/" target="_blank" rel="noreferrer noopener">Crypto Unicorns</a>, told Blockworks.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;It is important for game developers to incorporate new mechanics as a natural part of gameplay, rather than treating it as an add-on.&#8221;</blockquote>



Kertonegoro believes Epic is poised to take advantage of an entirely new title centred around the concept of monetizing in-game assets that give players the option to share in the profits of Epic&#8217;s sales.



&#8220;I believe Tim Sweeney and Epic Games, in general, are smart enough to know that, in the end, the solution that&#8217;s best for players will always win,&#8221; he said.



Epic continues to distribute only a single class of common stock outstanding and remains controlled by its CEO and founder.



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