McKinsey & Company recently published a report analyzing value creation in the Metaverse. With more than 120 billion in investment attracted by the Metaverse in 2022, the firm predicts that it will generate up to 5 trillion in value by 2030.
We highlight the fraction of the report dedicated to the ownership of digital assets in the Metaverse. Although NFTs (non-fungible tokens) have been the protagonists of a veritable wave of speculation that has given them a bad reputation, the truth is that they are at the core of new ownership models in the digital world.
NFTs are tokens registered in blockchain that carry a unique identifier. This identifier is similar to the license plate of a vehicle: the license plate is a unique code that enables the identification of vehicle characteristics: owner name, technical inspection status and so on. The unique code of NFTs performs the same function for digital assets.
The future of NFTs in the Metaverse can be clearly seen in the field of video games. Ever since this industry's inception, when players purchase a game they acquire a copy of it, but they must accept a user agreement that only grants them permission to use the assets within the game.
By converting game assets into NFTs, companies like our client Triple O Games guarantee users' ownership of the assets they obtain during their gameplay. This sovereignty over their assets enables communities of players to trade with each other.
Since tokens are programmable, both the game developer and the player who puts the asset up for sale can benefit from a percentage on each subsequent transaction. For example, if someone spends considerable time and skill to obtain an asset of unique rarity (a weapon, a power-up, etc.), not only can they decide to monetize their effort by selling the asset to another player, but every time the asset is sold afterwards they can receive a small fraction of each transaction.
Video games are the first iteration of the Metaverse where we can see in action the role that NFTs will play in the future. Although companies like Meta (Facebook) are trying to lead the charge into the Metaverse, the reality is that users will be a fundamental part in the creation in the Metaverse.
Any user can already create and animate characters indistinguishable from reality using artificial intelligence-based tools, easily accessible online.
In 10 years, video games that today cost between 60 and 100 million euros to produce will be made for a few thousand euros, without programming skills, thanks to artificial intelligence. In other words, we will create our own epic (or relaxing, evocative, etc.) productions.
Similarly, the Metaverse will end up filled with virtual assets created by everyday users. Each of us will be able to create characters, objects, worlds, complete unforgettable experiences. Underneath it all, a blockhain layer will certify exchanges of ownership and distribute the resulting wealth to its rightful owners.
You can read the McKinsey study here.
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