Improbable, the London-based outfit that develops infrastructure for virtual worlds in gaming, academia, and business, said it reduced losses by £131 million [~$160 million] last year following its decision to focus on building technology for the metaverse.
According to the latest financial results published on Sept. 26, Improbable cut losses from £150 million in 2021 to £19 million last year. Revenues soared 160% to £78 million from £30.1 million the year before. The revenue growth is in line with company projections.
In 2022, Improbable said it aimed to achieve profitability by year-end. The target was missed, but the company remains bullish. CFO Dan Odell revealed that Improbable’s “business has matured significantly in the past two years, and these numbers are testament to that.”
Improbable ventures into new worlds – sport
Founded in 2012, Improbable is a British start-up that builds and operates virtual worlds for brands. The company raised over $100 million last year in a funding round led by the likes of UK blockchain firm Elrond, Japan’s SoftBank, and Andreessen Horowitz. The raise valued Improbable at $3.4 billion.
After a string of losses between 2020 and 2021, the company turned its attention to developing its metaverse platform, Morpheus. Improbable also closed its China operations and sold two game development studios as part of the restructuring. It blamed the units for the losses.
Those changes may now be starting to pay dividends. Announcing Improbable’s financials on a video call Tuesday, CEO Herman Narula revealed the company is focusing on sports as it develops its metaverse platform for international brands, according to a report by Sifted.
He said the firm “has never been more swamped with demand for ‘metaversal’ experiences.” Improbable recently closed a deal with Major League Baseball in the U.S. to broadcast an all-stars game inside a metaverse stadium.
“Something very interesting is happening in sports—an industry that historically has relied on broadcasts and in-person attendance is waking up to the possibilities of massive virtual experiences,” Narula said.
“Sports are fiendishly under-monetized. A club like Real Madrid will make less money per fan than Candy Crush.”
The home plate views and other angles are super cool well done team! pic.twitter.com/XVNuU3hCuC
— Herman Narula (@HermanNarula) September 20, 2023
Improbable is experimenting with projects like the Victory League, a soccer fan engagement effort. According to its website, on Aug. 5, Victory League created a watch party in the metaverse that included interviews and a game brought by soccer legends to raise awareness and funds to rebuild schools in Ukraine.
Peter Lipka, Improbable’s chief operating officer, says big brands in sports are starting to see potential in hosting virtual events “where reach is not limited” by physical attendance.
AI meets the metaverse
In its results presentation, Improbable announced plans to reorganize its key businesses to focus on three primary areas of interest: metaverse tech development, metaverse experience development, and metaverse venture building.
CFO Dan Odell said, “The focus is now on industrializing what we are doing by being involved in events with more people where there is scope to drive and monetize engagement levels.”
The company is embedding generative AI capabilities within its metaverse platform as part of efforts aimed at tackling challenges related to networking, rendering, simulation, voice, and streaming at scale. Herman Narula said AI will make it easier for brands and users to create their own metaverse experiences.