Walking the red carpet at the annual MTV Video Music Awards is an exclusive honor reserved for one-named superstars like Kanye, Taylor or Lizzo. Or anyone with an internet browser.
More than one million virtual visitors were photographed at a metaverse recreation of “The VMA Experience”‘s iconic encounter on the Roblox gaming platform in the weeks leading up to Sunday night’s IRL awards show in Newark, at the Prudential Center in New Jersey.
The Opportunity is a collaboration between MTV and Super League Gaming, a company that, despite stock market skepticism, has positioned itself as a facilitator between curious metaverse brands and web creators. As much as the metaverse — interconnected virtual worlds that could have 5 billion users creating a total addressable market of up to $13 trillion by 2030, according to Citigroup — has been touted as the Internet of the future, platforms popular youth-centric games like Roblox and Minecraft have been places where millions of users and their avatars have been playing, creating and buying together for over a decade. Super League, which aims to provide the pickaxes and shovels for the next Metaverse Gold Rush, is the only company that works with both platforms.
“It’s so much easier and frictionless now to be the educator on metaverse games, because what we’re able to do is say we’re not talking about what’s in five or ten years, we’re talking about what’s been there for years,” said Super League CEO Ann Hand. Forbes. “We can be a consumer entry point, a safe entry point for a brand.”
So far, stock pickers on Wall Street are unconvinced. The Super League is mired in a market “abyss”, according to Hand. Its $36 million valuation and $1 share price is a quarter of what it was this time last year, a slowdown that can only be partly explained by the recent rejection of everything regarding crypto and Web3.
The action has been on a roller coaster since the ‘wallstreetbets’ craze of March 2021, when a mysterious photo of a McDonald’s ice cream cone and a frog emoji briefly sent Super League stocks into the stratosphere. The picture was tweeted by Chewy founder, GameStop chairman, and Reddit whisperer Ryan Cohen, and was interpreted as a reference to Hand, who previously worked at McDonald’s and Project Frog. That week, #SLGG shares were traded nearly 400 million times, despite only having 24 million shares outstanding, and two weeks later the price hit its all-time high of $11.20.
Hand took the opportunity to raise funds, and in no time Super League acquired a pair of virtual production studios and a Roblox-specific advertising platform, dramatically increasing its business. Revenue is expected to exceed $20 million in 2022, according to the company’s second-quarter investor call, up from $11.7 million last year and $2.1 million in 2020. Hand said that the company just signed its first seven-figure partnership deal for a five-week campaign, and the median deal size is now over $250,000. “A year and a half ago, I would celebrate that our average transaction size was $50,000,” she said.
Still, the company reported a net loss of $8.7 million in the second quarter, and bearish analysts online believe profitability issues could lead to a capital raise that will lead to “significant stock dilution.” While these terms may make Super League an attractive candidate for acquisition, Hand said she believes the company is a growth stock that could one day be worth “$500 million to $1 billion” on its own. .
This level of growth would depend on the sustainability of Roblox and Minecraft, which face competition from the biggest companies in the world. Meta spent $10 billion on its Metaverse division in the last year alone, nearly 40% of Roblox Corp.’s total value of $26 billion. Apple, Microsoft, Google, Amazon and NVIDIA have invested tens of millions if not billions of dollars in virtual reality headsets, real-time 3D technology, digital avatar rendering and other aspects of what could eventually form a decentralized virtual successor. to our modern mobile Internet.
Yet in February, Meta’s Horizon Worlds had only 300,000 monthly users, compared to more than 52 million active daily users on Roblox. At the height of the pandemic, Roblox was played by more than half of American children under the age of 16, the company told The Verge, and last quarter Roblox users, half of whom are 13 or younger, recorded 11.3 billion hours of engagement. . There’s little reason to predict Roblox’s decline in the near future, leading some to believe that “The Metaverse” – capital M – might end up looking more fragmented than the grand unified vision currently being promoted.
“One of the things that’s a bit off the mark with Meta’s philosophy is that they’ve already proven that it’s hard to have a social network that appeals to everyone,” said Matt Edelman, director Super League commercial. Forbes. “I think the idea of a ‘Ready Player One’ environment might appeal to a 14-year-old, a 24-year-old, and a 44-year-old who like different games, are interested in different types of content, and have a different affinity for characters and gameplay mechanics and interactive communications, I don’t see it.
Either way, executives and designers agree that Roblox’s signatures — customizable characters, social spaces, and the ability to create and consume — aren’t exclusive to the “TikTok generation” that makes up its player base and will shape probably the culture of all future ones. metaverses. That’s why Super League, which considers its knowledge of this culture its greatest asset, focuses on the metaverse that exists rather than the one that may or may not come.
“At least for now, there’s no indication that Minecraft and Roblox are going to become less popular anytime soon,” Edelman said.
Super League offers its clients in-depth advertising analytics, creator relationships and experience in creating immersive brand experiences that reach a generation of users who have proven capable of ignoring traditional advertising.
For example, Super League dropped characters from Dreamworks Animation’s “The Bad Guys” into popular existing Roblox worlds, reporting that 2.2 million unique users viewed the characters and 62% of them self- selected to interact. When asked via in-game dialogue whether or not they would go see the film, 79% said yes.
To promote the VMAs, Super League designed a world where users can walk the virtual red carpet, play mini-games like a timed racing platformer, and interact with NPCs (non-player characters) to earn rewards. tokens, which can then be used to vote. for one of the actual VMA categories – best performers in the Metaverse. On Wednesday, the Super League announced that 1.5 million votes had been cast. At each engagement point come reminders to tune in to the August 28 show.
“Anything you need to do can be developed on a turnkey basis with partnering with an agency,” says Tyler Hissey, senior vice president of Paramount Media Networks and MTV Entertainment Group. “And the Super League had expertise in both Minecraft and Roblox. It turned out to be very valuable.”
Other brands have established a more permanent presence on the platform, operating worlds that operate year-round and selling virtual merchandise, called “verch”. Early feedback shows that a Nike shirt or a pair of Vans worn by a digital avatar carries the same social capital as the tangible product, to the point that an in-game Gucci handbag resold last year for 350,000 Robux, or about $4,115. Its real-life counterpart was selling for around $3,400.
“Kids these days don’t see a numerical and physical difference,” Hand said. “It’s their life.”
The company has entered into talks with large-scale intellectual property owners to facilitate large-scale permanent worlds that could eventually turn into “multi-million dollar deals” for the Super League, Hand said. She estimated that top-performing games can bring in between $25 million and $75 million in any given year. In total, Roblox reports that $538 million has been earned by the community in 2021, and the platform is happy to promote a model that can serve both teen amateur creators and professional studios, as it requires a reduction 50% of all in-game transactions.
“I think the big push is for self-service,” said Adam Capps, head of developer success at Roblox. Forbes. “We want everyone to be able to develop what they want on the platform and let players decide what they want to consume.”
The next big development in Super League is a full-fledged world, called Super League Arcade, which will arrive at the end of September. The space will be a central hub for players to meet before teleporting into existing games, which Super League has modernized with a special competitive experience, reminiscent of the company’s pre-Metaverse roots as a “small esports league. Hand likens the world to a shopping mall food court, where people congregate before setting off on their individual adventures.
This isn’t the company’s first foray into what they call “owned and operated” worlds. They also run the “Minehut” server on Minecraft and recently purchased “Anime Battlegrounds X” from Roblox. This is its most ambitious, however, and gives the company additional ability to directly monetize its end users. In a sense, the company is taking its own tools and panning for metaphorical gold.
Hand says she’s confident enough about the company’s future to no longer check the company’s stock price first thing in the morning and no longer be kept awake at night wondering if the company will be there in a few years.
“We’ve established a really strong foundation,” she says. “I think the question now for the company, the question I think about a lot, is how big can it get?”