How does Metaverse monetize? Business Model and Money Making Explained

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Crypto Basics

The metaverse is becoming a compelling emerging field that is attracting the attention of investors and businesses worldwide. With the advancement of virtual reality (VR) and augmented reality (AR) technologies, the metaverse is gradually becoming a huge business opportunity. This article will analyze the profitability and business models of the metaverse in detail, and discuss how enterprises can realize value creation and revenue growth in this virtual world through virtual assets, digital currencies, and innovative business cooperation models.

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The basic framework of meta-universe profitability

Metaverse, as a collection of virtual worlds, is not only an entertainment and socialization platform, it is also a huge business market. From the virtual consumption of users to the commercial operation of enterprises, the profit models in the metaverse are very diverse. In brief, the core of metaverse profitability can be dismantled from the following aspects:

  1. Virtual asset trading: including virtual land, virtual goods, NFT (non-homogenized tokens), etc. The buying and selling of these digital assets provides a way for businesses and individuals to make money. Platforms like Decentraland and The Sandbox allow users to earn profits by purchasing virtual land and developing it twice or renting it out.
  2. Digital Currencies and Payment Systems: The Metaverse platform commonly uses digital currencies for transactions, which users can earn by selling their creations or items, or through the rewards system provided by the platform. These currencies can be circulated between different platforms or exchanged for real money.
  3. Advertising and brand partnerships: with brands moving into the metaverse, advertising has become an important way to monetize. Companies can attract the attention of users by creating virtual advertising spaces within the virtual world, or combine advertising and experience through cooperation with virtual platforms to form a new business profit model.
  4. Virtual services and experiences: In addition to the buying and selling of virtual goods, users can also earn income from virtual services in the metaverse. For example, virtual real estate development, role-playing, education and training, etc. These services provide new money-making opportunities for participants.

Metaverse's business model

In the meta-universe, different companies and platforms use different business models to gain profitability depending on their characteristics. Here are some common meta-universe business models:

Virtual Real Estate Development and Transactions

Virtual real estate has become a popular investment area in the metaverse. In some well-known meta-universe platforms such as Decentraland and The Sandbox, users can purchase virtual land and monetize it by developing projects such as virtual stores, entertainment venues, museums, etc. The value of the virtual land depends on its location, the degree of development and the demand of the users.

  • Land Sale and Lease: Purchase virtual land and develop it twice, then sell or lease the virtual property for a profit.
  • Advertising Revenue: Earn revenue by placing advertisements on virtual lands, especially in areas with high user activity.

This business model has already attracted a number of big brands, such as JPMorgan Chase and Nike, to buy virtual land in the metaverse and use it for branding and product displays.

Virtual Goods and the NFT Market

NFTs, as an important part of the meta-universe, have opened up a whole new revenue channel for users and creators.NFTs are a form of digital asset, unique and irreplaceable, that allows users to monetize by creating, buying, and selling NFTs.

  • Creators Profit: Creators such as artists, game developers, etc. can convert their digital creations (e.g. artwork, costumes, props, etc.) into NFTs and profit from the sale of these NFTs.
  • Secondary market trading: NFTs are not limited to initial sales, but can also be resold in the secondary market. By trading in the market, holders are able to profit from price increases.

For example, well-known NFT platforms OpenSea and Rarible provide a marketplace for trading digital assets, and users can buy and sell a variety of virtual goods on these platforms.2021, OpenSea's trading volume exceeded $14 billion, making it an important embodiment of the meta-universe's profit model.

Virtual Advertising and Brand Marketing

With the influx of brands and advertisers, the metaverse has become a new advertising platform. By embedding advertising or branding elements in the virtual world, companies are able to reach a wider group of young users. The strength of meta-universe advertising lies not only in its immersive experience, but also in its ability to provide opportunities for user engagement and interaction.

  • Virtual display and interactive advertising: enterprises can create advertising display walls and interactive experience zones in the virtual world, and users can get in touch with brand information when they participate in the interaction, which improves the conversion rate of advertising.
  • Brand cooperation and customized merchandise: Brands can launch customized virtual merchandise or apparel by cooperating with virtual platforms to attract users to buy.

For example, Nike, through its virtual platform Nikeland, launched a series of virtual marketing campaigns on the Roblox platform, which successfully attracted the participation and consumption of a large number of young users.

How do you make money in the metaverse?

In addition to business models at the corporate level, individual users can also make money by participating in the meta-universe. Here are some common ways to monetize:

Creation and sale of virtual goods

The creation and sale of virtual goods is one of the most direct ways for individual users to make money. Through their creativity, users can design virtual clothing, decorations, buildings and other items on the Metaverse platform, which are transformed into NFTs for trading.

  • Customized Virtual Costumes: Users can design their virtual character's costumes according to their favorite style and sell them through the platform.
  • Virtual artwork: art creators can transform their digital artwork into NFT and sell it on the market.

Provision of virtual services

In Metaverse, users can not only buy virtual items, but also earn income by providing virtual services. For example, the development of virtual real estate, the planning of virtual activities, and in-game coaching services can all be used as ways to make money.

  • Virtual Real Estate Agents: Help other users buy, sell or lease virtual land for a fee for their services.
  • Virtual Performances and Event Planning: Users can organize virtual concerts, exhibitions or other entertainment events and profit from tickets, advertisements and more.

Reward system for participation in the platform

Many meta-universe platforms offer a reward system for their users, who are rewarded with virtual currency or NFT by participating in the platform's activities, contributing content or completing tasks. These rewards can be spent within the platform or exchanged for real currency.

  • Participation in tasks and activities: Users can participate in various activities within the platform, such as virtual games and competitive competitions, and receive rewards for excellent performance.
  • Contributing content: on some meta-universe platforms, users can be rewarded by the platform for contributing content (e.g., developing mini-games, uploading artwork, etc.).

concluding remarks

The business model of the metaverse is still evolving, and as technology develops and user needs change, profitability will become more diversified. Whether it is enterprises trading through virtual assets or individuals profiting from their creations and services, it shows us a new field full of opportunities. In the future, the metaverse may further integrate with the real world, bringing more innovative business models and profitability. For investors and entrepreneurs, early participation and accurate market judgment will likely bring lucrative returns.