“Why the Metaverse will be Epic”

John Kosner
7 min readJun 13, 2022


Avatars from Blueberry Entertainment

By John Kosner & J Moses

It’s June, 2025 and we have tickets to the NBA Finals in Boston. Before we attend the game, we’re picking up one-of-a-kind outfits from Blueberry Entertainment. Yes, these outfits are actually for our avatars only (we have them for every game) … we’re attending the Finals in the NBA metaverse. And 19,580 fans will be there in person at TD Garden and the game will still be broadcast on network TV. But now there’s a new way to experience all of the action. NBA Commissioner Adam Silver has made the point that globally 99% of NBA fans never have the opportunity to see a game in person — now we are all another step closer. As is the connection between sports and games.

Peter Warman, the co-founder and now chairman of Newzoo, has fashioned the game’s version of “Moore’s Law” — namely that every five years since the breakthough of online games in 2002, total engagement with games (measured by the number of people playing multiplied by hours spent) doubles. We’ll call that “Warman’s Law.” Over the past 20 years, we’ve seen unique accelerants like mobile and the free-to-play business model. The most-recent doubling to 1 trillion hours of engagement from 500 million has been driven by streaming of Esports and game streamers on Twitch, YouTube and their Asian peers.

Warman makes the point that games and their developers put engagement first and believe money will follow. And it has. He estimates that in 2022, games will drive a stunning $203 billion in DTC (direct to consumer) purchases alone. That is larger than film, TV and music combined and growing faster than all of them. Warman forecasts that the next double will be driven by the Metaverse and, within that, NFT’s (non-fungible tokens) and P2E (play-to-earn) games — introducing ownership and authenticity to digital, making it easier to integrate with the “real” world.

Warman also has a measured definition of the Metaverse that we agree with: “a place people go to engage in any way or combination of ways they desire, together with others.” Games biz whiz Dylan Glendinning of Everblue Management, adds: “a place where your digital identity is just as important as your physical identity.”

We believe this is already happening.

Will the future of the metaverse be 3D interactive, virtual or augmented reality, all or none? Right now, we don’t think it matters. From a tech standpoint, the key to us is compatibility … and that’s why we think a game company is best situated to help fans begin to realize that potential. Game companies already allow players the most flexibility to express themselves in digital environments — not just to socialize, but to play games, flex for each other, even build actual businesses together.

When we were growing up, turning on the TV was the default leisure activity. Now, games are mainstream — both as an activity and a business. There are the games, the gamers (3.1 billion worldwide; half spending $11 per month on game content … talk about “RCS” — recurrent consumer spending!), the young audiences, game engines and game developers. And, ascendant in youth culture per Warman’s stats, Esports.

There are a number of game companies with tremendous potential to build big businesses in the Metaverse … our focus today is Epic Games. They appear to have all the pieces — and a key differentiator, Unreal Engine (UE).

It starts of course with Epic’s existing metaverse, the online game Fortnite. Epic released Fortnite originally in 2017. It has become a global phenomenon, attracting 350 million players. Every day, gamers gather to play with friends and other players in the Fortnite metaverse. They own stuff. On the platform, they attend concerts, hang with celebrities, shop the Epic Games Store. It’s annually a $5 billion ecosystem with its own currency, V-Bucks, that can be bought with real-world funds, but also earned through successful activities within the games. In fact, Epic sells $3B of digital skins alone per year. Later this year, the Fortnite Esports tournament will return after a 3-year COVID hiatus.

Now imagine Fortnite gamers able to stroll around a much larger 3D metaverse. One that includes not just TD Garden but also SoFi Stadium, Wrigley Field, movie theatres, music clubs and sports betting establishments. In their gear. With their friends. Packing their Fan Tokens. Able to use their V-Bucks to watch sports, concerts or movies.

And, Epic has another huge advantage. It owns Unreal Engine, the game engine Epic uses to run Fortnite. It is a strategic asset. Games are notoriously expensive and difficult to create. Unreal is free-to-use for non-commercial use and levies a low royalty fee on big-budget games, saving thousands of developers millions of dollars of dev work. UE offers a full menu of products that can easily be purchased and integrated into any game; new development will enable the creation of NFT-based P2E games. Today, most popular games today are sitting on either Unreal or its competitor engine, Unity. Per Epic, 48% of next gen console titles are being built on UE as well as eight titles that have generated over $1 billion. Here is what matters most: all of these games built on the Unreal platform have some form of compatibility and a partnership opportunity with each other.

This is critical because we believe the Metaverse will mirror today’s game business: walled gardens. And the key to success in the Metaverse will be compatibility or in the Web3 vernacular — “composability.” If you own stuff and currency in one metaverse, you’re going to want to take it to other metaverses. We might live in a decentralized future but a definitive advantage goes to the metaverse where the most people hang out — because that metaverse is going to be able to leverage the other metaverses, drive subscriptions, micropayments, etc. Discord plays that centralized decentralized role as a communications platform right now.

In addition to its 350 million Fortnite players and all of the new game development using UE, Epic is also building a war chest and mounting a challenge to Roblox and Minecraft in pursuit of time spent from young audiences. In April, Epic announced a $2 billion funding round, featuring additional investment from Sony and The Lego Group parent company KIRKBI. Including the new funding, Epic now has a valuation of $31.5 billion. Teaming Epic with the creators of both the Playstation and The Lego Group presents significant opportunities.

Of course, the competition too will be epic.

Meta, formerly known as Facebook, is single-mindedly focused on building the metaverse — in a way as Jack Dorsey observed that only a founder-led company can be. Meta is VR-centered as it has continued to build out its Meta Quest platform. But will our children choose Facebook as a metaverse hub vs. one created by a game company? We don’t think so. Games are the biggest entertainment category for Gen Z and Millennials and a close second (to music) with Gen X.

Microsoft could have an early edge. Not only will it host sports (key partner with the NBA) and games (Xbox, Halo and soon, presumably, Activision) but it is among the major corporations funding the first iteration of the Metaverse, focused on making virtual workplaces productive, leading with its Teams product (270 million monthly active users). Microsoft is also a trusted brand. Note: Xbox and Unreal Engine have been partners now for 20 years. Within games, Roblox has more players compared to Fortnite, plus the ability for users to author content within their ecosystem. And Niantic, the Pokémon Go creator, raised $300M at a $9 billion valuation last November to build a metaverse based on augmented reality and the outside world. Niantic’s Lightship AR Developer Kit (ARDK) enables game developers to build AR games for free if they have a basic knowledge of the Unity game engine, the key UE competitor.

To Newzoo’s Warman, the Metaverse is nothing more than a natural evolution, pioneered by games two decades ago. We agree and see both sports and games as early winners. Sports because its large passionate audiences drive new experiences and businesses. And games because they will define the development of the Metaverse. On that front, Epic has a significant head start with Fortnite, a healthy balance sheet, strategic partnerships and Unreal engine. But like the gauntlet run by the NBA Finalists, there’s a Murderers Row ahead with Meta, Microsoft, Niantic, Roblox, Riot, Take-Two, Sony, Steam and the many, many others.

Game On!

This is the fifth in a series of essays about why games are ascendant in culture, especially among young people, and what those of us in Sports, Media, Investment … all of us in business … can learn from games. In our last installment, “The Adrenaline Economy”published in May, 2021, we noted that Fans want action, involvement, real-time engagement. Entertainment options providing that electrical current are thriving; those that don’t are falling behind. We noted that one service with adrenaline is TikTok, “The World’s Fastest Growing Game.” We wrote that the massive virtual goods business in games worth $79B annually is coming to sports, finally, with the advent of “NFTs,” non-fungible tokens, “Is Gonzaga an NFT?” And we opined about how games naturally promote and benefit from super-engaged communities “A Trillion Hours! Why Community Is The Game Behind The Games.”

John Kosner is President of Kosner Media (www.kosnermedia.com), a digital and media consultancy, and an investor and advisor in sports tech startups. He was the senior digital executive at ESPN for 15 years. J Moses has been in and around the Sports, Games, and Tech businesses for over 40 years. He has been a Director at T2 since 2007, and is currently an Executive Producer on a scripted Esports show for the CW (www.optinstudios.com).



John Kosner

John Kosner is best known as the leader who built ESPN into the world’s leading digital sports destination from 2003–17. Https://www.kosnermedia.com