WHO ELSE CANNOT BUILD THE METALVERSE?

The Metaverse may be the next computing platform to replace the Internet, but its development process will likely differ from its predecessor. The US government programs and public research universities were responsible for the creation of the Internet. This was partly because few people in the private sector understood the potential commercial value of the World Wide Web. However, it was also true these groups were the only ones with the computational talent, resources and ambitions to create it. This is not true for the Metaverse.

Private industry is not only fully aware of the potential Metaverse has, but it also has the strongest conviction. Major tech companies want to not only lead the Metaverse but also own it and define it. Open-source projects that have a non-corporate ethos will continue to play a significant role in the Metaverse. They will also attract some of most creative talent in the Metaverse, but only a few leaders are likely to emerge in the initial Metaverse. You’ll be able to recognize each one.

Microsoft is an example. The company has hundreds of millions of federated user identities via Office 365 and LinkedIn, is the second largest cloud vendor in the world, has an extensive suite of work-related software and services that span all systems/platforms/infrastructure, clear technical experience in massive shared online content/operations, and a set of potential gateway experiences via Minecraft, Xbox + Xbox Live, and HoloLens. The Metaverse gives Microsoft an opportunity to regain the OS/hardware leadership that it lost during the transition from PC to mobile. More importantly, Satya Nadella, the CEO, understands that Microsoft must be available wherever work takes place. It’s difficult to imagine Microsoft not being a major driver of the virtualized future for labor and information processing.

While Facebook CEO Mark Zuckerberg may not have explicitly stated his intention to create and own the Metaverse , it is clear that his obsession with it. This is smart. Facebook is the company that has the most to loose from the Metaverse. It will create a larger and more powerful social graph, and serve as both a computing platform and an engagement platform. The Metaverse allows Facebook to expand its reach across the stack. Despite numerous attempts to develop a smartphone OS and deploy consumer hardware on the platform, Facebook is still the FAAMG company that remains confined to the app/service layer. Facebook, through the Metaverse could be the next Android/iPhone (hence Oculus), as well as a virtual goods equivalent to Amazon.

The Metaverse benefits of Facebook are enormous. It boasts more users, daily use, and user-generated content than any other platform. Its Metaverse-oriented assets, which now include patents for brain-to-machine and semiconductor computing interfaces, are also rapidly growing. Facebook, however, has a poor track record as a platform where third-party developers/companies could build sustainable businesses. It is also a leader in a consortium (e.g. Libra), and in trust management.

Amazon is interesting in several respects. It will always be the main place where we buy stuff. (It already sells within Twitch). The company has hundreds of million of credit cards and is the world’s biggest cloud vendor. It also offers many consumer media experiences, including video, music, ebooks, game broadcasting, and audiobooks. Third-party commerce platforms (e.g. Fulfilled by Amazon, Amazon Channels, is developing what they hope to be the first major gaming/rendering engines purpose-designed specifically for cloud computing. They are reportedly currently working on AR glasses and are the leader in digital assistants in-home and at-work.

Also, Jeff Bezos, the founder and CEO of Amazon, is very passionate about the role that underlying infrastructure plays. AWS is Amazon’s best business. The web runs on it. Amazon’s “Fulfilled by Amazon” is where the company buys and sells the products directly, rather than Amazon buying them and selling them. While Elon Musk’s private aerospace firm, SpaceX, has set a goal to colonize Mars, Bezos made it clear that his goal with Blue Origin was to help build out space infrastructure similar to his AWS early web protocols. Amazon doesn’t need any control over the UX or ID, as it enjoys huge increases in back-end infrastructure usage.

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The Internet is an enormous data mine and the Metaverse will be able to reap greater data-related returns than the web today. Google is the best at monetizing this data on a global scale. Google is the largest digital software and services provider outside of China, and is therefore the market leader in indexing the digital and physical worlds. Nearly 10,000 people contribute to its mapping efforts. It is also the largest operating system (Android) and the most accessible of all the major consumer computing platforms. Despite being unsuccessful, Google was the first company to take on the wearable computing market via Google Glass. Now, it is making an aggressive push into digitizing homes via Google Assistant, its Nest Suite of products, and FitBit. The Metaverse, therefore, is most likely to bring together all of Google’s vast investments, including its massive purchases of dark fiber, wearables and virtual assistants as well as edge computing on Stadia.

Apple will not drive or operate the Metaverse. It is true that it has the second-largest computing platform (and the most valuable) in the modern era, as well as one of the largest game stores (which means that it pays developers more than any other company on Earth). The company has also invested heavily in AR devices and “connective tissues” that will help the Metaverse (e.g. beacons, Apple Watch, Apple AirPods. Apple’s business strategy and ethos are at odds with the idea of creating an open platform for creation, where all users can access the full range user data and device APIs. This is all to say that Apple is more likely than the operator/driver to dominate the way the West interacts with Metaverse. This will likely work out for everyone, just like the Internet.

Unity is a foundational tool for the Metaverse, which requires a wide interplay of experiences, assets, and common APIs. It is used in more than half of all mobile games. Unreal is not available for architecture, design, engineering. Director Jon Favreau was the one who produced Disney’s The Mandalorian, but he also produced Unity’s photo-realistic Lion King. It also runs one of the most powerful digital advertising networks, which has the nice side effect that it powers 10B minutes of mobile entertainment every day. It’s unclear what role Unity will play in the Metaverse. It does not have a store, user account system or direct-to-consumer experience. Its ancillary services (i.e. The majority of its ancillary (i.e., non-engine or advertisement) services have not been widely accepted. Additionally, Unity-powered games tend to be simple mobile games rather than ones that can connect to the Metaverse. Its influence on standards, playtime and content creation is so great that it’s hard to imagine it not being acquired by a major technology company with more assets and benefits.

Unity’s acquisition was difficult to justify in the past. Although the company is highly valuable, any potential acquirer must keep Unity platform-independent in order to maintain its market share, developer support, influence, and market share (e.g. Google could not make Unity only available on Android/Chrome without losing thousands of developers. However, this doesn’t mean Unity can’t become a proprietary engine. This would be a costly move due to the loss of value and the high price Unity must pay. However, if Unity’s acquisition goal is to secure a foundational role on the new Internet, the acquirer has an incentive to keep the engine available across platforms. The price could easily become irrelevant.

Valve must also be able to offer a viable route to the Metaverse if Epic is successful. In terms of playtime, revenue, and users, Valve’s Steam is order larger than Epic Games Store. It is the owner of several long-running multiplayer games, including Counter-Strike and Team Fortress. It also has a long history of content and monetization innovation. The company was the first to try out AAA free-to play games as well as player-to-player markets. Valve, which has spent many years developing and releasing VR hardware and generates billions of dollars each year, is privately owned and managed by a group of technologists who are passionate about open-source technologies and disdain closed ecosystems. However, Valve’s source engine, Source has not seen widespread adoption and, unlike Epic, does not appear to be tasked with bringing together its assets and capabilities to create the Metaverse.

Other

Although it is easy to imagine a single company or experience as the one that will bring about the Metaverse, the actual process of building the Metaverse will be led by a Cambrian explosion. There won’t be any leader or major winner. There are many start-ups that are trying to create early, proto-Metaverse-styled experiences. Ubiquity6, as an example, hopes to use millions of individual content creators to “map” the real world then build smartphone/AR/VR-accessible digital experiences atop these maps. Singularity6 has a similar name and is working to create a virtual world. This, unlike Fortnite is intended to grow into a Metaverse. Genvid, a portfolio company, is also developing SDKs that enable anyone to create server-generated experiences that millions of people can enjoy together via livestreams that include light client-side interaction. Although it lacks many of the core attributes of the Metaverse, such as individual “presence”, this allows for massive numbers of players to create fully shared virtual environments. This is not possible with cloud gaming or locally-rendered gaming.

Magic Leap believes that owning the hardware layer can make it the main driver of the Metaverse. Neal Stephenson, Chief Futurist at Snow Crash is the company’s chief futurist. Most of the FAAMG companies believe that glasses are a key element in our digital future. They collectively invest billions in the form factor. Snapchat is a social network with a huge following. It has also invested billions in glasses and location-based experiences. Minecraft or Roblox have more than 100MM monthly visitors, Fortnite has probably fewer. They also have the ability to combine intellectual properties such as Marvel and DC. These “games”, however, are more dependent on user-generated content, user-led experiences, and there is no underlying goal like “winning” or “surviving” Minecraft. Instead, the “game’ is creation. However, users have created many other “games” with similar goals. Roblox claims it will pay out more than $100MM in 2019 to its game creators all over the globe (a group that includes single “developers” and studios with “10 to 20 people”. The company notes that they don’t pay developers directly, unlike the iOS app store. Instead, they get direct payments from users. In the fall of 2019, Roblox introduced its “Developer Marketplace”, that allows developers to monetize their games as well as the assets, plug ins, vehicles, 3D model, terrains and other items they create for them. Many other games, like Grand Theft Auto Online, which has over 50MM+ monthly active users, have added socializing-oriented modes such as a casino, where players can create, operate or take part in activities just for the fun of “hanging out”.

 

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Building Together

We don’t know enough about the Metaverse to be able to form strong opinions on who will lead it and how they will get us there. It’s likely that the Metaverse will emerge from a network made up of many different platforms, technologies, and bodies working together (albeit reluctantly) and accepting interoperability. Today’s Internet is the result of a messy process. The open internet, which was primarily academic, developed alongside closed services that were geared towards consumers and looked to “rebuild” or reset open protocols and standards.

It’s difficult to see any major technology company being “pushed out” or deprived of a significant role by the Metaverse. The Metaverse will not only increase the pie, but big transitions can disrupt when they are hard to see and incumbents slow to react or have limited capital. This is not true right now, but it doesn’t mean that market share will shift or that Epic won’t rise to the top.

It is possible that China’s metaverse, which has been forked from the West, will be more diverse than the Western one. Tencent, a tech/media conglomerate, is an obvious anchor. It publishes the majority of Western games that are released in China. Epic Games is also owned by the company.

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Even though they may be possible, the visions, technologies and capabilities that I have described feel like science fiction. Many of the pieces are beginning to fit together. The questions that are being asked now are about who, why, and where. It’s therefore helpful to go back to the (long) creation of the World Wide Web. Imagine it if the World Wide Web was not designed by technologists and nonprofits looking to share research files or messages but instead, it was created to collect user data and sell ads.

Sweeney is concerned that his company will not lead the initial efforts to create the Metaverse. He fears who else might. Sweeney stated in May 2017 that as we build these platforms towards the Metaverse, if they lock down and control these proprietary companies, they will have far more power over us, our private data and our private interactions with others than any other platform in history. He was more specific two months later: “The extent of power possessed Google and Facebook. It was about the military-industrial system that President Eisenhower stated it. They are a serious threat to our democracy.” Sweeney, the founder and controlling shareholder of Epic, “would never permit” Epic to share user data with any other company. We won’t share, sell, or broker access [to it] for advertising like many other companies.”

Although there aren’t 100 players, it’s still a battle royale.

Source: https://www.matthewball.vc/all/themetaverse