The European Commission just published a letter of intent in which they’ll move forward on an “initiative on virtual worlds such as Metaverse” next year.
While Metaverse companies are diverse, they have something in common: most are located in the United States or China. In terms of market capitalization, the top Metaverse firms are all American: Meta, Google, Microsoft, and NVIDIA.
But things might be changing.
The European Commission’s Letter of Intent
Earlier this month, the European Commission – the executive branch of the European Union – published a Letter of Intent, setting the EU’s policy priorities for the next year.
The EU president, Ursula von der Leyen, confirmed the Commission would put forward an “initiative on virtual worlds” as part of their plans.
This is significant because, up until now, the Metaverse has been dominated by American and Chinese firms. If the European Commission’s initiative is successful, it could level the playing field and give European Metaverse companies a chance to compete.
Building the European Metaverse
The Letter of Intent comes in the wake of calls from French President Emmanuel Macron to build a European Metaverse.
President Macron believes that the EU needs its own Metaverse in order to compete with the US and China. He envisions a Metaverse that would be open to all European citizens, regardless of nationality.
At the moment, the European Metaverse market is limited to niche companies and small startups. There’s Varjo in Finland and Ready Player Me in Estonia that have seen some success in securing funding. Other companies weren’t so lucky: a number of startups shut down after failing to attract investment.
The European Commission’s initiative could change that.
If it’s successful, it could provide the funding and support that these companies need to grow and compete with their overseas counterparts.
Margarethe Vestager, EU’s digital chief, has been pushing to implement the big tech antitrust regulation. The regulation would force companies like Google and Facebook to spin off their monopolies, which would create more competition in the tech industry.
While the regulation hasn’t been passed yet, it’s a sign that the European Union is serious about leveling the playing field for European tech companies.
What Will the EU Get From All of This?
What is the EU’s sudden interest in the Metaverse? Well, if the commission gets its way, the EU will be able to tax Metaverse companies and get a cut of the revenue generated in the Metaverse.
This would be a major boon for the EU, as the Metaverse is expected to generate trillions of dollars in economic activity.
In the wake of the Ukrainian conflict, the EU has been looking for additional sources of revenue. The Metaverse could be just what they’re looking for.