Facebook has gone through the wringer in recent weeks. Luckily Mark Zuckerberg sees a billion-dollar opportunity at the end of the tunnel: digital clothes in the metaverse.
Zuckerberg said in the Q3 2021 earnings call Monday: "If you're in the metaverse every day, then you'll need digital clothes, digital tools, and different experiences. Our goal is to help the metaverse reach a billion people and hundreds of billions of dollars of digital commerce this decade."
He also referred to the metaverse as the "holy grail of online social experiences" and said it's something he's "wanted to build since even before I started Facebook."
The idea of making billions of dollars from virtual outfits isn't without precedent. Epic Games, for instance, has generated more than $9 billion in annual revenue from Fortnite, a free-to-play game that makes money in part by selling character "skins" to players for virtual tokens. Roblox employs a similar business model and generated $454 million in revenue for Q2 2021, up 127% year-over-year.
But both Fortnite and Roblox target younger audiences who have already become accustomed to the idea of paying money (often from their parents) for virtual outfits. Facebook wants to target a much larger segment of the population. Zuckerberg referred to the metaverse in the earnings call as "the next computing platform." He said it could help Facebook reduce its "dependence on delivering our services through competitors," which suggests it would be more akin to a mobile operating system than a video game.
Facebook might have a more difficult time convincing this broader user segment to join the metaverse, much less pay for outfits within it. Roblox and Fortnite users are typically in those virtual environments to play games first and foremost. Those games happen to be fun, enticing users to spend hours a day in these "metaverses." It isn't yet clear how Facebook will attract users to its metaverse, and without that key component, planning for the billion-dollar digital clothing economy feels premature.