Business and Tech

Metaverse years away from being a global phenomenon, says Pioneer – AFR

Big brands are rushing into the metaverse, but the path to profit is still unclear and mass adoption could be years away, one of the industry’s biggest players, Sebastien Borget, said in an interview with AFP.

Borget is co-founder of The Sandbox, a platform that started out as a game for mobile phones and PCs but is morphing into a virtual world where anyone can buy land in the form of digital tokens.

Fashion brands like Gucci and Adidas, financial firms Axa and HSBC, and Warner Music are among those who have already decided to set up shop in The Sandbox.

“It’s above all a place for creativity and experience,” said Frenchman Borget, distancing himself from the idea that it was just a commercial venture.

“Brands don’t go there to make money, we don’t know how.”

Enthusiasts are convinced that in the near future internet users will shop, meet friends or go to concerts on platforms such as The Sandbox or its main competitor Decentraland.

Users will put on virtual reality headsets, buy and sell cryptocurrencies, and store all their transactions on the blockchain — a kind of digital ledger.

At least that’s the theory.

– Digital Owners –

The Sandbox is still largely a quest game, with players bouncing through landscapes rendered in block graphics, collecting treasure, and defeating enemies.

Players are also encouraged to build their own worlds and invent games.

The Metaverse version – where players do mostly the same thing but can earn cryptocurrency rewards and buy additional gear for their avatars – was only made available to the public for special events.

Around 350,000 visitors came when it last opened in March, Borget said, well short of his goal of attracting “hundreds of millions”.

“We hope to achieve this within five to 10 years,” he said.

But there’s still a lot of public skepticism about the Metaverse and the broader Web3 phenomenon — an idea for a blockchain-based internet focused on individuals rather than major social media platforms.

Cryptocurrency trading underpins web3’s commercial side, but the major coins are extremely unstable and transactions can consume a large amount of energy.

The crypto ecosystem is largely unregulated, has gaping security holes and little insurance, leaving users vulnerable to fraud and fraud.

But Borget is confident that offering a space for individuals to socialize, trade, play – and most importantly, own their digital footprint – will win.

“For the first time, users have ownership of their digital content,” he said.

“The avatar, the wearables, the gear, the land, the homes…everything is theirs. They can dispose of it however they want.”

– Early adopters –

Despite its focus on the social and creative aspects, The Sandbox has a clear commercial motive.

It takes five percent commission on all transactions and collects profits from the sale of virtual land. Sales last year were $200 million.

Many big companies have stepped in, and Borget points out that The Sandbox only has 166,464 virtual lots on offer.

“This map has a finite number of plots, which is not the case for all decentralized virtual worlds,” Borget said.

“We’ve sold 70 percent of it so far.”

The company’s virtual land revenue surpassed $500 million last year, and Borget claimed its metaverse had a 64 percent market share.

But Borget said brands are still looking for the best way to develop their virtual stores and offices.

“Brands have been slow to embrace the web,” he said.

“With web3 they are trying to get on a little earlier so as not to repeat the mistakes of the past.”

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