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Establishing Digital Presence in Metaverse Games - Revenue Opportunities for Video Industry Players

Metaverse is a buzzword that has been catching a lot of attention lately. Now, what exactly are metaverse games? These are games that converges games, video, and social media altogether. They include social elements where players can interact with one another, going beyond “traditional” games that focus on objective-based play like scoring points. We see weddings on Animal Crossing, concerts on Fortnite, and even graduation ceremonies on Roblox. More recently, we see Ariana Grande holding a Rift Tour Concert on Fortnite in August.

Images of Wedding on Animal Crossing, Travis Scott 2020 Concert on Fortnite, and Graduation Ceremony on Roblox

Companies in the video industry have to be mindful of metaverse games more so than ever. Metaverse games have been gaining huge traction, with userbase that are reaching that of popular social media platforms. Looking at Fortnite as an example, their userbase of 350M is roughly equal to Twitter at 353M and about 1/3 of Instagram’s 1160M userbase.

Source: PCA

Besides userbase, metaverse games command lucrative income with Fortnite’s monthly average revenue per user (ARPU) of USD7.70, clearly outshining Facebook’s ARPU of USD 0.09 in terms of spending. Facebook’s ARPU was USD7.89 – mostly from advertising.

Source: PCA

This shows how effective metaverse games are at getting their users to spend money on their platforms - so much so that Facebook wants a piece of the pie. In June, Facebook added game studio “BigBox VR” to their portfolio of virtual reality game studios. The studio’s major game “Population: One” is comparable with Fortnite and can be expected to compete head on with metaverse games.

In today’s context, companies in the video industry will lose out if they do not consider metaverse games as part of their business strategy.

How can video industry players then leverage on these platforms? Video companies have to establish their digital presence by incorporating their businesses into metaverse games to capture these monetisation opportunities.

They can achieve that by adopting the following 3 ideas:

1) Taking advantage of in-game real estate to advertise

2) Creating co-branded goods

3) Setting up a digital storefront

Mastercard Logo in League of Legends

Companies can advertise by simply placing their logo in games to increase player awareness regarding a brand or product. We see it in action games where the MasterCard logo is placed in the League of Legends environment. These in-game advertising familiarises players with a brand or product, translating them into potential revenue.

Gucci and Roblox Collaboration

Video companies can also sell exclusive co-branded goods in the metaverse as an alternative revenue stream. It can be a replica of physical goods, an outfit, an inventory, or even weapons with logos printed on them. Earlier this year, Gucci collaborated with Roblox and the bag - “Gucci Dionysus Bag with Bee”, was resold for over $4,100. Notably, the price of the digital good exceeded the price of the physical good. This made a huge statement regarding additional revenue.

Net-A-Porter on Animal Crossing

Lastly, Video Industry players can set up a digital storefront to anchor their spot in these metaverse games. Net-a-Porter, a luxury women’s fashion brand, sells its physical collections through their storefront in Animal Crossing. Interested players can scan the in-game QR code which takes them to the eCommerce site to complete the transaction. Likewise, players in the Video Industry can establish a digital storefront that enables them to showcase their content and stream snippets of their video. A QR code can then direct players to subscribe to their full content via existing OTT platforms. By setting up a digital storefront, Video Industry players will benefit as it exposes more users to their content and provides an alternative traffic source.


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