Who Will Win The Metaverse? Not Mark Zuckerberg or Facebook
The social networking giant and its CEO have vast ambitions to dominate the next big thing in computing, but other tech giants are in a better position to turn the hype into reality. Who Will Win The Metaverse? Not Mark Zuckerberg or Facebook
Did you hear? Facebook Inc. is going to become a metaverse company. At least that’s the story its management wants everyone to believe after a flurry of interviews and announcements over the past couple of weeks. It’s a narrative that seeks to put the social-media giant at the leading edge of one of the most audacious concepts in tech. I’m skeptical.
But first, what exactly is the metaverse? The term was created by sci-fi author Neal Stephenson in his 1992 dystopian novel “Snow Crash” to describe a virtual space where people interact with one another through user-controlled avatars. Venture capitalist Matthew Ball has also written extensively on what he believes are the main attributes of a metaverse, including a full-functioning economy, its real-time persistence (no pausing), and interoperability of digital “belongings” such as clothing across multiple platforms.
Here’s how I would simplify it: Think of it as a futuristic version of an always-on multiplayer video game where you can play, socialize or even run a moneymaking business in a realistic computer-generated environment.
Facebook Chief Executive Officer Mark Zuckerberg started the hype cycle when he told The Verge in an interview published in late July that his company is going to invest aggressively to be a big metaverse player, saying it will be a place where you feel fully present with others when sharing virtual experiences.
Days later, Facebook announced the creation of a new metaverse product group within its virtual-reality business, telling the media it intends to hire hundreds of new employees for the project. Then on its earnings call last week, Facebook revealed it will spend billions annually for its Facebook Reality Labs, where the metaverse business resides.
We have heard similar things from Zuckerberg before. When the company acquired the virtual-reality startup Oculus for $2 billion in 2014, he excitedly wrote that it would enable immersive virtual experiences where you feel “present in another place with other people.” Sound familiar? Two years later, he told Bloomberg Businessweek in an interview that VR would render an alternate reality and that Facebook was going to invest a large amount of money to make that happen.
Facebook’s actual track record on VR tells a different story. Has the company made significant progress since it bought Oculus seven years ago? Not really. Its latest VR headset, the Quest 2, has sold about 4 million units in the U.S., and it isn’t much more advanced than the original version. In fact, Oculus’s technology has been surpassed by smaller competitors such as Valve Index, which offers better fidelity.
It speaks to the flaws in Facebook’s strategy. The two critical components needed for companies to take advantage of the opportunities that may arise from any potential metaverse are advanced semiconductors and software tools. Facebook is not strong on either front. For its VR devices, the company uses off-the-shelf chips from Qualcomm Inc.
That isn’t going to cut it. When Apple Inc. launches its own virtual-reality headsets, chances are it will use internally developed chips that deliver superior performance and will likely offer far better user experiences. It’s not going to be a contest.
On the software side, so-called programming engines and digital object-creation tools will be key to running and populating the virtual worlds in any metaverse. Here again Facebook is far behind Epic Games Inc. Epic’s Unreal engine is already the foundation for large multiplayer experiences from 100-person battle royale games to music concerts.
Nvidia Corp. has also launched a software-development platform that is being used to create virtual world simulations, taking advantage of the company’s graphics technologies. Even if Facebook invests billions of dollars, it will be nearly impossible to quickly or easily replicate the specialized expertise that these semiconductor and software companies built up over decades.
If it is not going to be Facebook, who is poised to do well in the metaverse? Apple, Epic and Nvidia are well positioned, given their respective technological leadership in these hardware and software areas. And the two main mobile operations systems — Apple’s iOS and Alphabet’s Google Android — will likely benefit as apps and devices run on their dominant billion-user platforms.
Ultimately, maybe it’s a good thing Facebook doesn’t look poised to win the metaverse. First, there’s the issue of trust. When the company acquired Oculus, the startup’s co-founder assured users they wouldn’t be required to use a Facebook account or be inundated by in-headset ads. Facebook reneged on both of those promises.
Also, maybe a technology giant that is monetarily incentivized to propagate the most engaging polarizing content isn’t the best fit for a healthy metaverse either.
The Metaverse Is Coming And It’s A Very Big Deal
Imagine walking down the street. Suddenly, you think of a product you need. Immediately next to you, a vending machine appears, filled with the product and variations you were thinking of. You stop, pick an item from the vending machine, it’s shipped to your house, and then continue on your way.
Next, imagine a husband and wife. The husband offers to go to the store but the wife can’t remember the name and type of product she needs. Her brain-computer interface device recognizes it for her and transmits a link to her husband’s device, along with what stores and aisles it’s located in.
Welcome to the metaverse, alternate digital realities where people work, play, and socialize. You can call it the metaverse, the mirror world, the AR Cloud, the Magicverse, the Spatial internet, or Live Maps, but one thing is for certain, it’s coming and it’s a big deal.
Google the term metaverse and you’ll find several definitions. Wikipedia defines it as a collective virtual shared space, created by the convergence of virtually enhanced physical reality and physically persistent virtual space, including the sum of all virtual worlds, augmented reality, and the Internet.
The word “metaverse” is a portmanteau of the prefix “meta” (meaning beyond) and “universe”; the term is typically used to describe the concept of a future iteration of the internet, made up of persistent, shared, 3D virtual spaces linked into a perceived virtual universe.
Currently, you can only experience the internet when you go to it, but with new connectivity, devices and technologies, we’ll be able to experience it all around every single day.
If you have trouble visualizing it, here’s a concept video from Adobe and of the best examples of what it could look like. The video starts at the 2-minute mark.
More than just a term from a Neal Stephenson sci-fi novel, the metaverse is being built today. Wired’s Kevin Kelly wrote a cover story in 2019 titled “Welcome to the Mirrorworld”. In it, he describes how augmented reality will spark the next big tech platform.
In essence, “we are building a 1-to-1 map of almost unimaginable scope. When it’s complete, our physical reality will merge with the digital universe.” In other words, get ready to meet your digital twin, and the digital twin of your house, your country, your office, and even your life.
So what happens when the world becomes a billboard, robots have spatial reasoning and virtual assistants own the relationship with the consumer? If this question made you pause for a second, definitely read on.
Today, the metaverse is a shared virtual space where people are represented by digital avatars (think Ready Player One). The virtual world constantly grows and evolves based on the decisions and actions of the society within it. Eventually, people will be able to enter the metaverse, completely virtually (i.e. with virtual reality) or interact with parts of it in their physical space with the help of augmented and mixed reality.
Leslie Shannon, Nokia’s Head of Trend Scouting, referred to the importance of the metaverse, or spatial internet, in a recent talk during the VRARA’s Global Summit.
During her talk she stated that, “The spatial internet is the culmination of everything that AR and VR is developing today. It’s the idea of taking information about things, locations, or historical events and actually locating that information out there in the world where it’s most relevant.” Augmented reality and virtual reality will be the ways you will see this information layer.
Marketing and communications professionals need to pay attention to the metaverse because it’s the next frontier for online interaction. Just like social media revolutionized the online marketing landscape, so too will the metaverse. While we don’t have one shared metaverse at this time, there are companies positioning working on creating it.
Fortnite, Minecraft, and Animal Crossing are games now but they already have big user bases, detailed worlds, and user-generated content. Facebook is also positing itself towards the metaverse with its virtual reality social media platform, Horizon (currently in beta), and Live Maps.
Niantic, Magic Leap, Microsoft and many others are working on it too.
The pandemic too has shifted culture online. Family reunions on Zoom, weddings relocated to Animal Crossing, graduations on Minecraft and virtually trying on clothes have all become common practices. With online social gatherings becoming more mainstream and online video games increasing their world-building, “it’s inevitable that brands will play a significant role in the metaverse.”
Companies will need to transition their marketing strategies from online ad buys to existing in a shared, virtual economy. Companies will need to do market research on their new customers in the metaverse. How people act and what their preferences are in the metaverse could be totally different than how they behave and what they shop for in real life. Add to that the layer of business to robot to consumer, where virtual assistants and robots own the relationship with the consumer and it all starts to make sense.
While there are sure to be ads in the metaverse, brands can actually be part of creating the metaverse itself. Frederic Descamps, CEO of Manticore games said, “Even in [the film] ‘Ready, Player, One,’ who actually made the Metaverse there? It will be all about the act of creation.” Brands should approach this with responsibility and ethics and not make our world one giant ad. This is of the utmost importance.
Like the real world, CMOs must have an awareness of the culture inside the metaverse. Digital clothing, world-building, or marketing can have a real impact on brands. In December 2019, clothing options were released in GTA V that looked similar to what the protestors in Hong Kong wore.
In the game, “players dressed as Hong Kong protesters took to the [fictional] streets of Los Santos.” Gamers, donned in black, with yellow hard hats and gas masks rioted in the game. Chinese players took notice, dressed their characters up as police, and fought back against the gamers dressed as protestors.
In the metaverse, people won’t be individually wandering around. They will have friendships, relationships (with autonomous NPCs, holograms or other people) who will affect their decisions. Brands will need to continue adapting to relationship styles of play and interactions. Customers won’t just be able to talk to brands like on social media, they’ll be able to interact with them in 3D form.
Online shopping is a given in the metaverse. But it’s more than digitally trying on clothes people can purchase for real life. Virtual fashion, avatar “skins”, and virtual real estate (housing, cars, etc.) will have their own worth in the metaverse. Companies will have to design brands for different people at different stages of wealth. People who invest heavily in the metaverse may have their own businesses and property, therefore partner opportunities with businesses that don’t exist in physical reality.
Fashion is a big part of creating a character or being represented by an avatar. Virtual fashion houses and designers have a chance to enter a whole new market of digital-first clothing. The metaverse is about identity in ways that haven’t been possible before.
In Fortnite, real-world celebrities play the game and players become celebrities themselves. A 2018 Reach3 Insights study found that “most streamers aren’t vastly different from the friends’ players already spend time with in real life, making those streamers that much more relatable and valuable.” In the metaverse, brands won’t be able to hide behind the scenes with pre-made ads, commercials, and products. They themselves will have to be personable and approachable.
People go to Wendy’s Twitter for the chance to get roasted. People will go to brands in the metaverse because they feel a connection, not necessarily a need for that product or service. Wendy’s is one company already experimenting with the metaverse.
In November 2018, they set up a “Food Fight” mission in Fortnite and live-steamed it to Twitch. Wendy’s didn’t appear in the game, but they did ask players to go after the in-game restaurant, Durr Burger (as a dig at Wendy’s rivals). Wendy’s went from zero Twitch followers to more than 7,400 and got around 43,500 comments during the game.
Jimmy Bennet, Wendy’s senior director of media and social said they didn’t pay for Twitch or Fortnite because it’s more exhausting to go after paid promotions than natural outreach. Bennet said, “We didn’t have to do so much heavy lifting and put so much money to support it because we were able to organically lean into the experience.” This is the type of mindset CMOs and brands will need for the metaverse.
Another great example of the how the metaverse is starting to manifest itself in entertainment was John Legend’s recent Bigger Love virtual concert that used the Wave XR’s technology to broadcast a virtual John Legend, raise funds for charity and was seen by 500,000 live attendees.
A Huge Opportunity
A new iteration of the internet is being worked on and this will have massive implications for society. Marketing, communications, and branding professionals will face new challenges but also new opportunities. This new era of the metaverse will unleash amazing creativity and open up new frontiers and horizons for brands and businesses. Now the question is, how are you getting ready?
Metaverses And Cryptocurrencies
Cryptocurrencies play the medium of exchange within the Metaverse, allowing users to exchange virtual goods. The two metaverses mentioned above enable players to transact using cryptocurrencies. Decentraland’s ERC-20 based token, MANA, is the legal tender for users to purchase plots of digital land, as are SAND tokens for The Sandbox. Such coins also give users the opportunity to participate in its development.
Users can use MANA tokens to vote on policy updates, land auctionsand subsidies for new developments on Decentraland, while users can use SAND tokens for more or less the same purpose. Moreover, cryptocurrencies can further open up the possibility of transacting goods from different games or metaverses on interoperable marketplaces.
The Metaverse allows people to interact with one another, digital objects and the physical world through their avatar in a virtual environment.
As nonfungible token sales appear reanimated after a nearly two-month dry spell from their apex in May, a particular NFT application is gaining popularity more than ever: metaverses. Metaverses have gained their fair share of media attention lately, with big moves coming from companies like Facebook and Epic games. However, not everyone — even those who have been in crypto for a long time — has caught on to what metaverses are, despite the hype. But as more companies, celebrities and artists venture into the space, it has become another domain that deserves some thorough consideration.
The Metaverse is a network of virtual environments in which people can interact with each other, digital objectsand the physical world through their avatar. While definitions of the Metaverse vary, they orbit around technologies such as virtual reality, augmented reality, digital twins and blockchain. Herman Narula, CEO of Improbable, described the Metaverse as “something more than a game but less than the real world. The metaverse is to virtual worlds as a website is to the internet.”
For weeks, Mark Zuckerberg has been beating the drum for metaverses. The Facebook founder views virtual worlds as the next iteration of human interaction online. Zuckerberg sees Facebook transitioning from a social media firm with a set of connected applications to a metaverse company with a set of interconnected experiences. And its recent move to introduce Horizon Workrooms is a step in that direction. It’s also in a prime spot to run after its metaverse objectives, as it has invested heavily in VR technology for several years.
Another one bursting onto the scene is game and software developer Epic Games. Epic Games, of course, already has something to show for when it comes to metaverses, with the successful virtual concerts of Ariana Grande, Travis Scott and Marshmello that were held inside its flagship game, Fortnite. The $1 billion in funding that it received in April, with an additional $200 million deal from Sony Group, will help it pursue long-term growth opportunities with metaverses, especially as it is already remodeling the future of live events.
Why the Metaverse?
The Metaverse offers a vastly unique experience for everyone. It’s a way for artists to connect with fans more interactively and perhaps individually, which is a step up from the livestream format delivered by artists like Post Malone, Dua Lipa, Gorillaz and many others when the pandemic struck in 2020.
On the other hand, Facebook’s Horizon Workroom is geared toward replacing boring Zoom call meetings with a more interactive environment — a virtual conference room, if you will — for remote workers. Others also see a wide variety of applications that the Metaverse is going to be useful for. Education systems, for one, can benefit by allowing students, particularly in the medical field, to receive simulation training as opposed to just a one-way communication where teachers merely deliver the lessons to the students.
Metaverses And NFTs
The tie-in between metaverses and nonfungible tokens comes from NFTs’ capability to add a certificate of ownership or authenticity to the assets belonging to the digital world. Projects like Decentraland, The Sandbox, Landemic, CryptoVoxels, and SuperWorld involve acquiring a piece of this digital asset, which is primarily virtual land. NFTs help in verifying its uniqueness, and even its provenance.
For instance, Decentraland is based on the Ethereum blockchain and uses ERC-721 tokens called LAND to facilitate trading plots of virtual lands called parcels. This makes each land distinct and helps users establish ownership of a piece of the entire Decentraland real estate. This is built on its consensus layer, which maintains a ledger that tracks the ownership of each parcel.
LAND tokens enable owners to do various things within their digital real estate, like hosting games or experiences, organizing contests and events, or even renting it. The same concept applies to The Sandbox, the second-largest metaverse NFT project in terms of sales, behind Decentraland.
Growth of Metaverses
At this stage, metaverses haven’t reached their full potential, and companies are just beginning to explore the ways they could penetrate the space. Facebook and Epic games are just the two most recent examples of big names jumping on the bandwagon. However, companies like Microsoft and Amazon are also getting in on the act. Amazon, in particular, is developing a virtual “Amazon mall” where users can shop and interact with the products they want to buy. But whether or not these are going to support NFTs is still uncertain and maybe even unlikely.
Nonetheless, NFT sales from metaverses are gradually gaining a strong foothold against other categories. In the second quarter, their weekly sales topped $8 million at one point.
Total sales from 2017 through August 2021 amounted to $138 million, which is enough to take a 6.77% share of NFT sales by category. This puts the metaverse NFT category in third place for NFT sales, behind digital collectibles and artwork.
And as more and more well-known personalities and big companies take part in the trend, the numbers could very well improve before the end of the year. The growth of metaverses and NFTs in general is unprecedented, especially in 2021. Sales of NFTs in the metaverse are already up 428% from 2020 and averaged 149% growth during the past four years. If this explosive growth keeps the same pace, it would not be surprising to see sales breach the $120-million mark by early 2022.
Building The Metaverse Without Bias
New industries create attractive employment opportunities for women, and the Metaverse falls squarely into that category.
While the COVID-19 pandemic decimated certain industries like tourism and retail, other entirely new industries have emerged. Two years ago, the concept of a “metaverse” was virtually unknown. Today, the term is trending everywhere online, with new companies and funds entering the space every week — billions of dollars have already been poured into this industry. Just last week, Mark Zuckerberg announced that Facebook will become a metaverse company.
Meanwhile, few “metaverse” companies have any real scale or customers, which makes it easy for onlookers to dismiss it as a trend that may flame out. We would caution against that.
The last time we saw a boom like this was in crypto in the mid-2010s. People who jumped on the crypto bandwagon during those early days — think Mike Novogratz, Joseph Lubin, Tyler and Cameron Winklevoss, and Anthony Pompliano — are now considered to be true experts on the topic. They have also made tremendous fortunes by acting quickly when they first spotted the opportunity.
That’s because new industries can unearth massive opportunities for people who are creative and agile enough to identify new niches and reinvent themselves. They also create opportunities for the underrepresented because traditional hiring requirements for previous related work experience fly out the window when nobody in the world truly has relevant work experience.
This brings back the old adage attributed to the Dutch philosopher Desiderius Erasmus of Rotterdam: “In the land of the blind, the one-eyed man is king.” If no one’s an expert, then everyone has the chance to become one.
Time For The Metaverse
Now is the time for the adventurous and ambitious to plant a flag in the parcels of the nascent metaverse industry, as today’s metaverse startups will be some of tomorrow’s Fortune 500 companies. While that might sound a bit far-fetched, consider that Coinbase — now valued at more than $54 billion — was founded in 2012 when 1 Bitcoin (BTC) sold for about $12 and was something hackers messed around with in their dorm rooms.
It is at this point when an industry is taking shape — like primordial ooze — that opportunities are greatest, and not just for economic gain but also for personal brand building. When you join a company at the earliest stages in a new industry, you become not only a company co-founder but also an industry pioneer. Those early employees lay the foundation for the entire industry, shape its trajectory and set the ethos and ground rules. Around the Metaverse, a new generation of leaders will emerge. It’s an exciting time to consider becoming one of them.
Metaverse jobs will span between everything from blockchain and gaming programmers to animators, designers, marketers and even accountants, recruiters and lawyers. Small businesses in the real world could become big businesses in the Metaverse, where business owners are not burdened by the perils of the retail brick and mortar. Amazon stores and Etsy shops can become metaverse goldmines, where customers can interact with products in 3D and transact seamlessly due to the expediency of blockchain technology.
Tremendous Opportunities For Women
Despite all this industry growth, as two women working in the metaverse industry, we often find ourselves to be the only women on male-dominated work calls. Months ago, when we first discussed the new opportunities afforded by these uncharted waters, we had a conversation that played out something like this:
Julia: Do You Think The Metaverse Industry Will Look Different Than The Crypto Industry, With More Women In Senior Roles?
Janine: Well, I have to dig a bit deeper into my career history to make that connection. In my early twenties, when I was working in private equity in New York City, I was recruited for a job in Las Vegas working for a casino gaming company.
Back then, Vegas was experiencing a bit of a gold rush of its own, and they were strapped to hire local talent that was sophisticated enough to handle the extreme growth, so they recruited from the coasts. When I visited Las Vegas for interviews, I met with many women in very senior roles — which felt very different from the male-dominated workplaces I knew in New York City.
Julia: What Does This Have To Do With Job Opportunities For Women?
Janine: Booming times create talent droughts, which means that hiring managers have to think creatively about how to fill spots. All of that unconscious (and conscious) bias that often keeps women out of the prime seats is shoved aside in the interest of just filling the job that needs to get done.
And the result is that the women who show up during these rare windows of opportunity often find themselves in the right place at the right time. They earn seniority and experience that makes them invaluable. That’s precisely what is happening in the metaverse today.
Put simply, there are enormous opportunities for women in the metaverse industry today. A simple search for the word “metaverse” on LinkedIn jobs pages reveals few jobs anywhere other than Roblox. But at the current rate, there will be thousands of metaverse jobs in the very near future. With our currently low unemployment rates, opportunities will abound.
Scientific evidence suggests that women are more risk-averse than men, which may (among many, many other reasons) explain why women are underrepresented in boardrooms, C-suites and other positions of power. Arguably though, much of this disparity in risk-taking behavior among men and women can be attributed to “nurture” and societal norms that have been fostered rather than “nature.”
Risk tolerances and attitudes are not fully immutable, and the Metaverse presents an opportunity to rewrite history and build a more equitable (albeit virtual) society.
Web 3.0 is here, and virtual worlds represent a blank slate — a chance for women, not just men, to get in early and make their mark on the Metaverse. (Notice earlier in this piece we mentioned pioneers who dove into crypto in the mid-2010s, nearly all of them men.) History has a tendency to repeat itself.
But This Time, Things Can Be Different. Here’s What We Know:
It’s Still The Early Days For The Metaverse. Early Days Mean High Risk. High Risk Can Mean High Reward.
Core to the very idea of the Metaverse is that everyone is an avatar. In the Metaverse, talent trumps any bias, including physical appearances. The Metaverse is opening up an entirely new parallel economy for participants who are willing to immerse themselves in the global communities that are building them. Now is the time for women to take risks and jump in.