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How Will Meta Monetize The Metaverse?

What do we know about the Metaverse?

The Metaverse is a concept (for now). A concept that has motivated Facebook to change its branding to Meta and begin developing the infrastructure of a meta-universe. The drastic pivot that Facebook is attempting to pull off, the Company hopes, will put it at the forefront of the internet’s “next frontier”, just as it was a decade and a half ago when Social Media platforms were maturing.

Meta

Facebook/Meta CEO Mark Zuckerberg has called the Metaverse an “embodied internet … where with just a pair of glasses, you will be able to step beyond the physical world… beyond the limits of distance and physics” and engage in rich people-centred experiences.

A simulation of the Metaverse that Zuckerberg demonstrated last week showcased the potential of the platform. In the demo, a group of avatars met in a virtual room, played a hand of poker before being dazzled by a room-sized 3D artwork sent and paid for by A friend of Zuckerberg exploring New York (in real life).

For all the altruistic CEO-speak regarding the Company’s mission to “Bring people together”, Facebook/ Meta will still have to monetize the Metaverse experience. Conquering the next frontier may have to coincide with a new method for generating revenue for the Company.

 

How will Meta monetize the Metaverse?

A legitimate question that exists is; how will Meta monetize the Metaverse? A model based on highly targeted advertising is what has worked for Facebook in the past. Facebook has reported US $54 billion in revenue so far in 2021, setting the Company on a path for another record year. In contrast, Facebook has booked a comparably paltry US $1.2 billion in revenue in the same time frame from its non-advertising revenue streams, such as the sale of Oculus headsets.

FB Meta revenue

Zuckerberg has maintained that Facebook would always remain free to use. Fortunately, the Metaverse is not yet hamstrung to such a proclamation. Meta should be exposed to more revenue-generating opportunities including, subscription models, hardware sales, ticketing, skins, gaming and pay-to-play models, and SaaS. It might be fair to say there will be a universe of options for Meta to explore.

That’s not to say that Ads can’t be integrated with a metaverse, slotted tidily within the virtual landscape. Meta may even generate a more accurate understanding of their customer base through their metaverse experiences, boosting demand for its ads services as ads become hyper-targeted.