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Futureverse announced today it has merged eight Web3 companies together into one company to create an open metaverse ecosystem.
The goal is to create a single collaborative metaverse ecosystem with the united goal of improving the Web3 and open metaverse experience. Aside from Animoca Brands, this is the first I’ve seen of anyone executing a rollup strategy involving both the metaverse and Web3.
Who would have thought the metaverse would start in Auckland, New Zealand, where the company is based. Futureverse is the culmination of five years of strategy, research and development to create the foundation for an open and scalable metaverse infrastructure with world-class content and a highly engaged community, said Aaron McDonald and Shara Senderoff, two of the cofounders of Futureverse, in an interview with GamesBeat.
They said that bringing the eight companies together means that Futureverse is now a company of over 300 full-time people across 16 countries, and it has generated a lot of revenue already. Besides McDonald and Senderoff, the other cofounders are technologist Marco Brondani and financial leader Daniel Gillespie. What’s remarkable is that the company did a lot of this work — which they call a “metaverse operating system” — quietly.
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“Now we’re getting our time in the sun. And if you’re trying to do something like what we’re doing, you don’t want to pull the lever on marketing, or customer acquisition, until you have the infrastructure,” McDonald said. “Because you only get one shot at that. And if it’s a bad experience, then people are never coming back. Our mission is to bring people into Web3 who’ve never been there before. It’s very dependent on making sure that user experiences are solid. And that just takes time to do.”
Alongside today’s announcement, Futureverse released an ecosystem trailer showcasing one of its upcoming metaverse environments, watch here. You can read the Futureverse white paper here.
For the metaverse to become a reality, infrastructure is critical, said McDonald, CEO of the company. The Futureverse infrastructure consists of four core tools (identity, artificial intelligence, communications and payments) all vertically integrated via The Root Network: a decentralized blockchain network optimized for user experience.
“For the past five years we’ve been developing the tools and infrastructure to co-create the future with our communities. We’re enabling companies and creators to deliver the open metaverse experience that they want for their audience,” McDonald said. “We don’t see the metaverse as one super app controlled by a single company. Futureverse is your seamless portal in and out of all apps in the metaverse; with you comes your passport, friends, communications, finances and content.”
And the company is creating a layer of user-owned content designed with storytelling at its heart to bring it all to life. The Futureverse roll-up combines all of these core elements needed to create the “open metaverse” under one roof, to improve user experience and accelerate adoption.
“A lot of companies are telling you that they’re building the future. We are not,” said Senderoff. “We believe that the future is a collective vision. The future is the only truly decentralized idea. Futureverse proposes a more virtuous model for the internet both in values and technology, designed to shape what’s to come and who controls it, together.”
The Futureverse roll-up includes the following companies:
- Altered State Machine, leading AI protocol for AI powered metaverse and game characters and content.
- Non-Fungible Labs, creative and engineering studio, designer of ecosystem avatars and world environments (including FLUF World) DOT, Dynamic Object Transformer 3D programmatic avatar and asset creation software.
- Sylo, developer of the Sylo protocol, decentralized communications for the metaverse powered by The Seekers gamified node infrastructure.
- Centrapay, digital asset payments SDK, enabling Web3 payments in popular global payments networks.
- Centrapass, developer of the decentralized digital identity protocol/SDK and decentralized asset custody protocol.
- Immersve, a multi-chain payment protocol and web3 / metaverse Mastercard product that bridges web3 and metaverse infrastructure with the Mastercard network.
- Shadows Interactive, a Los Angeles-based Animation Studio and creator of the Party Bear collection.
- Altered Phoenix, a gaming studio with experience developing gaming titles covering a range of genres and platforms.
In addition to the technology infrastructure, this merger positions Futureverse and their digital asset intellectual property as a leading ecosystem for total NFTs, NFT transactions, unique holders and NFTs per holder.
In addition to the development of new content to showcase the technology, Futureverse has already amassed an expansive cultural footprint both within the Web3 space and beyond, through strategic partnerships and a variety of projects with the following talent and companies: FIFA, Warner Music Group, Authentic Brands Group, Muhammad Ali Enterprises, Snoop Dogg, Timbaland, Keanu Reeves and Alexandra Grant, with more to be announced soon.
The Futureverse content includes the newly announced FIFA AI League, an AI football game; Muhammad Ali: The Next Legends, an AI boxing game; FLUF World, a metaverse ecosystem of character collectibles. It’s a global, creative community that includes the popular collections of Flufs, Party Bears, Thingies, Burrows, ATEM Car Club, AIFA All-Stars, ASM Genesis Brains, Dr. Grordborts: Rayguns and The Seekers.
“We’re working with some of the largest social media influencers in the world, and some of the largest sports athletes in the world,” Senderoff said.
The core elements of the Futureverse include a new blockchain network — The Root Network, an identity protocol, artificial intelligence platform, a communication protocol, payments rails and character creator technology.
With the Futureverse merger, the company combined the core elements necessary to create the foundation of any metaverse application, McDonald said. With user safety and user experience at its heart, Futureverse aims to lead the onboarding for the next generation of open metaverse and Web3 users. Over this infrastructure, a rich content layer creates powerful community network effects, the company said.
The idea is to build a lot of cool tech and obscure it from the users. The company is creating content and making it interoperable.
“The idea of the operating system is more of a metaphor than the traditional notion of an operating system technically,” McDonald said. “But these are the core components that we think are the most important things that will form the layer of what we would say is the metaverse. And by that I mean the metaverse exists at the data layer, primarily, not in some super app.”
He added, “It’s not just a game. We’ve had games for ages. That’s not new. And the thing that’s really important to the metaverse has been able to have users at the center of it. And they’re in control of those those assets that they can take between applications. And so the core things are identity and authentication, communications, social graph, intelligence and payments and assets. If you put those things together, that’s what we think the metaverse mostly is — having a portable experience around those things.”
The company is focused on the open metaverse, but it isn’t waiting for standards to materialize. Rather than wait for standards to happen, the company is trying to prove that the technology works and that standards built around this technology will achieve interoperability.
“We think we think our approach has got a lot of merit because it’s a system that exists independent of blockchains, although can be anchored in any one of them,” McDonald said. “It’s a system that building on top of an existing standard, rather than trying to create an entirely new one. Our approach is to prove that it works within our ecosystem, but build it in an open way so that others can look at that and see here’s something that works.”
Futureverse has also launched Futureverse Foundation, a charitable foundation with advisers artist Alexandra Grant and actor Keanu Reeves.
Futureverse Foundation invests in underrepresented artists, creatives and communities in order to build more diverse, equitable and inclusive spaces — in both the metaverse and real world.
Through a shared value of advancing socio-economic equity and support of artists globally, Futureverse Foundation is designed to support underrepresented artists and exhibit their work on digital and physical platforms.
Futureverse Foundation will make grants to support diverse and underrepresented artists and nurture their unique artistry on global platforms. Futureverse Foundation also seeks to help keep the metaverse widely accessible, healthy, and evolving.
The companies in the Futurverse roll-up are backed by leading venture capitlists, including The Chernin Group, Anamosa, Airtree, Goldentree, Delphi and Warner Music Group.
The state of the market
Interestingly enough, this isn’t the first company that I’ve heard talk about a “rollup” in the Web3 and metaverse space.
Midnight, headed by former M&A leader Steve Wade, is aiming to do a rollup in this space. So is Chris Ko’s Fenix Games, which said it recently raised $150 million, with a focus on making investments. This kind of rollup happened in the last big tech transition in mobile games through companies such as Chris DeWolfe’s Jam City, which rolled up a lot of mobile game studios.
“This is the kind of market where those things will happen,” McDonald said. “You go through those different cycles of like expansion and consolidation. And I think we’re in a consolidation stage. And during consolidation, you usually usually have three things happen. Companies fail. Companies get bought up and amalgamated. And the companies that were in a good place get bigger. You transition from the bull market to the consolidated market where the quality shines through.”
Senderoff said that the talent war is also a problem because many of the companies that got funding in the bull market are now scrambling to hire talent, but that talent base is in short supply, even in the current job environment.
“I think that’s a huge advantage as we have 300 people who have been working in this space for five years,” Senderoff said.
One of the good things about the economic environment is that it’s cheaper to do the rollup now than it would have been to try to do it last year. The good thing is that McDonald was involved in most of the eight companies as a founder, investor, or advisers.
“The conversation was more organic than you would have seen in another scenario,” he said. “Everyone was working together in some way because of the thesis we had around the connected venture portfolio.”
It wasn’t always easy to make sure that all of the various boards and shareholders were aligned on the vision. That took months of work. Futureverse raised a sizable investment round to finance it, and it is in the process of raising more. The company isn’t disclosing those details yet.
The company also started working with major brands to develop a big “customer funnel” that could feed users into its ecosystem through a variety of means, from games to other content.
Carry a big stick
As to how Futureverse assembled its merger so quietly, McDonald said that was his style, to do things first and then talk about it later.
“Others talk first and build later,” he said. “We’ve spent the necessary time doing the building. Kiwis tend to do that. Walk softly and carry a big stick. That’s why we’ve been under the radar. That’s very much starting to change.”
The quiet part lasted a while. In fact, McDonald said his efforts to do this started about six years ago, starting in 2016. McDonald had a background in various engineering roles in telecommunications, “if you call engineering digging ditches and laying cables,” he said.
He helped install broadband throughout New Zealand in the early 2010s. After he reached the role of senior network architect, he moved into business roles and managed a portfolio of telecom and IT infrastructure companies worth $1 billion. Then, in 2016, he started his venture studio Centrality. He got hooked on a blockchain and then he started Non-Fungible Labs and Altered State Machine (where he worked with Senderoff who invested in the company) to focus on building content funnels that would bring users into Web3 infrastructure.
As talk of the open metaverse began to percolate — where the next-generation internet isn’t dominated by one company but is instead created by companies creating interoperable infrastructure — McDonald focused on a vision of making a group of startups working together and cross pollinating.
“Our thesis was, was based on the idea that if you’ve got a portfolio of companies that could work together to solve problems for each other, then you can build a more resilient portfolio,” he said. “And you’re actually accelerating product-market fit in a way because if one of your portfolio companies would use another portfolio company’s technology, that means there was market validation at an early stage.”
The metaverse dream
McDonald said the dream is to create a better user experience by combining tech from a lot of startups, rather than separately building the same technology over and over again to do the basic things to enable commerce across virtual applications.
The problem of interoperability was that it was a chicken-and-egg game. But if McDonald’s company owned the different operations, it could provide the catalyst for different companies to work together. Beyond connecting virtual experiences, they then saw the need to go deeper into Web3, where users could own their own “identity, their data, their social graph, their communications, all of those things — then lots of companies could interact with that customer, or lots of apps can interact with that customer in a more seamless user experience.”
So the company began investing in companies and incubating technologies that it needed. The company was approached by some growth-stage funds that liked the idea of building something broader than just one company. As an investor in Altered State Machine, Senderoff was researching the intersection of AI and the metaverse. And they started talking about the Futureverse platform.
The idea was to put the user at the center of a lot of services.
“That’s how we came up with our metaverse platform,” he said.
Gaming is playing a role in all of this as the “substrate of the customer experience,” McDonald said. That means that every part of the experience will be gamified, from the avatar to the purchase journey to the social connectivity and finances.
As to how big the metaverse will be, McDonald said some people are making the mistake of thinking that something like Ready Player One is just a single game.
“They’re trying to compartmentalize the metaverse into a game. And actually the metaverse is just the internet. And so if you step back and say the metaverse is really just the internet — but with those unique properties of user own content, concatenation of the user experience silos, and a more immersive experience online — if that is the metaverse, then your opportunity scope goes up.”
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