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Business Valuation In The Metaverse


Understanding virtual space from a business valuation perspective as it continues to attract business owners and investors alike.

The metaverse1 is no longer only a term in science fiction; it has evolved rapidly and is building its network in all dimensions – from online games, images, art to virtual land development – creating a workspace, learning space, entertainment space, business space and investment space.


Business Models


Platform Providers

Traditional platform providers adopted a Centralised Model by creating platforms almost fully controlled by game developing companies. These companies profit from direct sales of subscriptions/in-game virtual items.

With the rise of blockchain technologies, a Decentralised Model has been introduced, examples of which are The Sandbox and Decentraland. It creates a self-sustaining secondary market in a virtual world with the application of blockchain technology and non-fungible tokens (NFT).

Product Providers

Companies conduct business by creating and selling virtual products to metaverse users. The uniqueness and rarity of a virtual product is the key to its value when

Its creator famous

The product is the first of its kind in the virtual world

The product is rare due to its limited supply

Companies with a strong brand image inevitably enjoy the greatest advantage. For instance, Gucci has created a virtual garden exhibit on Roblox2 where players can view, try and purchase digital Gucci items. Balenciaga has designed virtual outfits for players to purchase at Fortnite3 and more international fashion brands are planning to launch their product lines in this virtual land.

Service Providers

The metaverse eliminates the limitations of space and time compared to the operation of a traditional business. Apart from providing virtual products, many companies have already come up with their own strategies in conducting service-type businesses for the metaverse community.

Immersive Experience
A Travis Scott concert hosted on Fortnite grossed around US$20 million. The concert featured an interactive in-game experience for the audience.

MTRC is planning an entertainment and educational space in The Sandbox in which users can experience driving a train/operating a railway station.

New Services
The Seoul Metropolitan Office of Education has launched virtual science classes for elementary/middle schools, in which astronomical objects can be visualised with VR/AR and AI applications within the metaverse-based creative science classroom.

Microsoft Mesh is a virtual workspace integrated into Teams that enables colleagues to collaborate within a virtual environment using VR headsets. This allows companies to launch workspace environments/training labs across the border within the virtual space.



Key parameters to measure a business in the metaverse


We focus on the future cash flows that businesses can generate within the platform from the sales of virtual products and services.

Tangible assets become relatively less important when compared to a physical business. The cost structure is also different, with the marginal cost of producing more virtual items closer to zero.

A virtual operation can be valued based on its:

  • Active users on the platform;
  • Ability to generate interest in sales of its own virtual assets;
  • Pricing strategy of the product/service;
  • Value of the virtual land on which it operates;
  • Competitive positioning.


Key Takeaways


Products and Services

  1. Evaluate the platform provider’s ability to generate interest, its active user base and growth, its user-stickiness, and its offerings on the platform. 
  2. Compare the cost structure of each platform provider, as their transaction fees vary. 
  3. Leverage the branding and offer products with different tiers of rarity in order to optimize pricing and supply scale for profit maximization. 

Marketing or Investing

  1. Foot traffic in the area in which the business or company is advertising.
  2. Transparency and ease of data analysis of the platform provider. 
  3. Purchase of virtual land and products is considered speculative in the current stage; the risk profile of an opportunity will need to be examined with due care.


1 The Metaverse can be defined as any computer-generated virtual space where users can interact with each other in real-time. Each user is represented by his/her own avatar in this virtual world.  
2 Roblox is an online game platform.
3 Fortnite is an online video game. 


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Hong Kong SAR China

Jazz Chow

Director | Head of Business Valuation Hong Kong | Asia

Valuation & Advisory Services

Hong Kong

Jazz is Director, Head of Business Valuation at Colliers Valuation & Advisory Services department.  She is a dual degree holder in business administration and law.  She specializes in valuation of business enterprises, intellectual property, intangible assets, and a wide range of financial instruments for listed and private companies.  Her valuations are used for various purposes, including IPO, merger and acquisition, financial reporting, management consulting, and litigation. 

With more than 15 years of experience in business and financial instruments valuation and advisory, Jazz has conducted complex valuations in various industries, including:

•            Automobile and Electric Vehicles

•            Casino and Gaming

•            Entertainment

•            Environment Protection

•            Food and Beverage

•            Hotel and Hospitality

•            Internet

•            Infrastructure

•            Marine and Ship Building

•            Metal and Mining

•            Oil, Gas, and Petrochemical

•            Pharmaceutical

•            Port and logistics

•            Property Development

•            Publishing

•            Solar/Water power plant

•            Telecommunication

The types of financial instruments Jazz values include convertible bonds, financial guarantees, real options, preference shares, pre-IPO share options, OTC financial products such as swaps, interest rate derivatives, equity-linked financial derivatives, and employee pension plans.

Prior to joining valuation field, Jazz has worked at multinational banks such as BOC, HSBC and Sumitomo Mitsui Bank as economist and VP in the research department. 


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