Challenges and Opportunities in the European Metaverse Market

Author: Husnain Izhar

The Metaverse, a virtual universe where people can interact with each other in a three-dimensional environment, is fast becoming an emerging market attracting businesses, investors and talent from around the world.

However, despite the widespread attention the concept has received, Europe still faces significant challenges in the Metaverse realm, hurdles that need to be overcome if Europe hopes to establish a strong presence in the Metaverse. This article explores the current state of the Eurometaverse and examines the obstacles it needs to overcome to realize its potential.

Metaverse Markets in Europe: Niche Operators and Startups

While the US and Asia dominate the Metaverse market, Europe has yet to establish a significant presence in the industry. According to Rolf Illenberger, co-founder of Munich-based virtual reality platform VRdirect,** none of the big European tech companies are currently relevant to the future of the Metaverse. **

Instead, the technology is currently limited to niche operators and start-ups such as Finland’s Varjo, which makes high-end headsets, and Estonia’s Ready Player Me, a cross-playing character platform.

Jake Stott, CEO of Web3 and Metaverse ad agency Hype, expressed optimism that Europe's fintech industry could see payment providers in the space. However, he also acknowledged that they face significant challenges.

Historically, European startups have lagged the US and Asia in producing unicorns. Europe also lags behind the US in venture capital investment. Governments can support these areas by removing barriers to growth and promoting venture capital to help Europe's thriving Metaverse ecosystem.

Talent and Funding Challenge

FOV Ventures, the first European venture capital firm dedicated to investing in early-stage Metaverse companies, has announced a €25 million funding round for early-stage or seed-stage startups.

**Talent retention is one of the biggest challenges facing the European Metaverse industry. **Although Finland offers free high-quality education, it cannot compete with Silicon Valley in terms of wages.

FOV Ventures aims to provide early-stage funding and go-to-market expertise to retain talent in Europe, and has built an edge network where Metaverse professionals provide funding and advice on collaborating with large platforms. The goal is to unite European investors to challenge American resources and keep talent in Europe.

The role of regulation

**Members of the European Commission and Parliament have called for regulation of Metaverse to address issues related to user privacy, data protection and competition. **Margrethe Vestager, the European Commission's executive vice-president in charge of digital affairs in the EU, is considering new antitrust regulations.

However, the nebulous concept of the metaverse presents both problems and opportunities. Some critics have argued that metaverse suppliers are just old wine in new bottles. **

The Metaverse is a collection of technologies that have existed over the years, such as virtual worlds, online games, social media, and augmented reality.