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| Avatars created on Zepeto, a metaverse affiliate of Naver Z. Korea Times file |
By Lee Kyung-min
Market participants are paying keen attention as to whether the "metaverse" will become a future growth investment, boosted by the soaring popularity of online platforms where they can play games using virtual reality (VR) and augmented reality (AR).
A combination of "meta" and "universe," the term refers to a collective, virtual, shared space, where space restrictions have disappeared due to a mixture of virtual and reality.
KB Asset Management rolled out an exchange-traded fund (ETF) that will invest in up to 50 metaverse companies in Korea, China, Japan and the U.S. This is the first time a local asset management firm has introduced a product related to consumer activities in a virtual shared space.
The product, KB Global Metaverse Economic Fund, will invest in the manufacturing of VR and AR devices, including Facebook, Apple and Microsoft, as well as software makers NVIDIA and Unity Software.
Platform operators and content creators, including Roblox, Naver and HYBE (formerly known as Big Hit Entertainment, the agency representing K-pop band BTS), are among the firms that the fund plans to invest in, along with virtual world infrastructure companies, notably Amazon, Qualcomm and Snowflake. About 70 percent of the funds will be invested in the U.S.
PricewaterhouseCoopers (PwC), a multinational professional services network of firms, estimates that the metaverse market will grow up to 1,700 trillion won ($1.5 trillion) by 2030, an explosive increase from 50 trillion won in 2019.
Roblox, Zepeto
Roblox, a Nasdaq-listed metaverse firm in the U.S., reported 700 billion won in sales in the first quarter of this year alone, while its Korean peer Zepeto, an AR avatar platform affiliate run by Naver Z, is used by 200 million people around the world.
The Naver affiliate, often referred to as "the Korean equivalent of Roblox," began offering services in 165 countries in August 2018. Over 90 percent of Zepeto's users are overseas. About four in five of them are teenagers.
Zepeto's business soared in 2020 when the firm received a 7 billion won investment from HYBE and 5 billion won each from YG Entertainment and JYP Entertainment.
Growth potential for Zepeto is greater than for Roblox, where users go only for games, since the Korean platform is more about K-pop and fashion, two of the most popular subjects among teenagers.
YG Entertainment girl group BLACKPINK held a signing event in Zepeto last September, and JYP Entertainment's ITZY held one in February of this year.
Users of Zepeto can share their avatars on their social media accounts, including Facebook and Instagram. This ability to share between platforms is a key reason for them to keep creating user-generated content and sharing them online with other users.
Such user-generated content creation and sharing is how Zepeto is rapidly establishing itself as a new social medium, with over 1 billion pieces of user-created content produced thus far.
Zepeto has its own digital currency for users to buy goods in it. For example, Nike sold more than 5 million items through the site, exceeding sales made in offline shops.
Metaverse spaces blur the lines between media and e-commerce, which is why an ecosystem should be created to support its productive growth, backed by strong data analysis capabilities and profit models. Yet, challenges remain due to a lack of human resources to foster in-depth technologies.
According to a report written by the country's key ministries last December, the level of use of metaverse technology is "still in its early stages," with its focus limited to services providing cultural experiences, without any key promising industry leader to drive the growth of the industry."
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