The rush to capture the metaverse frontier has led to a $2 billion investment in Epic Games from Sony and Kirkbi (which owns the Lego Group) this week. Days before the announcement, Epic Games, the maker of Fortnite, also launched a partnership with Lego to design a metaverse community for children. Chief among the goals for the collaboration is the mission to protect children by focusing on privacy and well being in the metaverse, and providing children and their parents with the tools to control their experiences.
This focus on the protection and safety of children and other vulnerable groups has become an increasingly loud drumbeat around the topic of the metaverse as critics point to the troubled trajectory of Facebook.
On Monday, the same day that Epic Games received its multibillion-dollar boost, corporate activism group SumOfUs released “Risky Business, an investor briefing on Meta,” (pdf) a report meant to compel Meta to hire an independent group to study the “potential psychological and civil and human rights harms of a metaverse.”
Investment firms are banking on trillions in potential metaverse profits
Although some remain skeptical of the very concept of the metaverse, major institutions in technology, medicine, gaming, and the investment community are already convinced that it is the next phase of the internet. In March, Citi framed (pdf) the metaverse opportunity to businesses investing in the space as potentially worth $13 trillion by 2030, while in December Goldman Sachs forecast (pdf) a value of $12.5 trillion in the coming decades.
However, the perils of investing heavily in the future before it fully materializes are already being felt by Meta. In February, the company suffered the biggest one-day stock crash in market history, losing $230 billion in value. The plunge in value happened after Meta’s last earnings report, which outlined slower revenue growth, stoking investor concerns about the company’s spending on metaverse research and development rather than its current flagship products.
Metaverse companies are trying to avoid the public trust follies of Meta
Adding to concerns around Meta’s plans for the metaverse are near constant revelations about the way the company treats its users on Facebook, Instagram, and WhatsApp. The latest damning report in March detailed the company’s efforts to secretly turn the public against rival social media giant TikTok. The news followed last year’s whistleblower report accusing Meta of suppressing research that indicated that Instagram was toxic for teenage girls.
“The board and shareholders should receive a report of a third-party assessment of: potential psychological and civil and human rights harms of a metaverse,” reads the SumOfUs report, which cites Meta’s $10 billion in spending on metaverse projects in 2021. Conversely, Epic Games and Lego included “three principles” of safety in their metaverse launch announcement.
Meta has dominated the negative metaverse chatter, but the risks to any company, particularly its handling of children, are real. Heeding prevailing concerns, Microsoft, Roblox, Niantic and others leading the metaverse are now weaving ethics and safety tenets into the foundations of their efforts.