"Metaverse" has become the new buzzword among public-facing companies these days, with everyone from Amazon (AMZN) to Walmart (WMT) clamoring to claim a piece of the digital pie.
While banks and investors continue to claim that the metaverse will be worth trillions in the future, the average person is not so convinced. That's because the meaning of the term is tenuous at best. Even social media giant Meta (FB) is struggling with the concept, reporting a $10.2 billion dollar loss in 2021.
The spoils could be great for a company that has what it takes to execute the metaverse concept in a simple, comprehensible way. And now a long-beloved name has stepped into the ring to try to do exactly that.
Lego made an announcement on April 7 that it's planning to construct a kid-friendly metaverse in tandem with Epic Games, suggesting that something truly exciting is coming down the pipeline.
Epic, the video game studio behind the billion-dollar selling title "Fortnite," has already proven it has the chops to build virtual spaces people love to spend time in. "Fortnite" raked in five billion dollars in its first year and has continued to drum up an enormous stream of revenue for Epic ever since.
Lego Aims For The Metaverse
Roblox
Lego's move appears to be an effort to construct a virtual world to spirit players away from the enormous popularity of Roblox, (RBLX) an online platform and storefront where people go to buy and play games made by other Roblox users.
They can also create their own games using Roblox Studio, the company's proprietary software as long as they have a Premium account, which starts at $4.99 a month.
Naturally, Roblox developers make money on the games they create, making the platform a viable way to earn cash. Users can enroll in Roblox's Developer Exchange (DevEx) to do this. And while the platform has been accused of taking advantage of its young developers for profit, it hasn't stopped people from using it.
With 47.3 million daily users as of 2021, Roblox remains a roaring force among young people. At its 2021 Investor Day event, Roblox said that more than 50% of its user base was under the age of 13.
There's Another Big Name Attached
Lego is not the only company investing in this venture. Epic Games also announced on April 11 that it had raised $2 billion in funding to continue building its metaverse. Half of that money came from Kirkbi, Lego's parent company, which said its investments are "focused on trends we believe will impact the future world that we and our children will live in."
The other billion was contributed by Sony Group Corporation (SNE), which is clearly all about being on board. In a press release, CEO Kenichiro Yoshida said, “We are also confident that Epic’s expertise, including their powerful game engine, combined with Sony’s technologies, will accelerate our various efforts such as the development of new digital fan experiences in sports and our virtual production initiatives.”
The funding round brings Epic's current valuation to $31.5 billion.
