Welcome to the Metaverse: where are we?
Guide to those who are still looking for their place in the Metaverse
- In the past 15 years, I cannot remember any other tech hype word that had such a strong and rapid impact on the business world.
- Business leaders and decision-makers are being confused with data and numbers.
- The metaverse is a complex of several technologies and use-case scenarios, mainly: multiplayer video games, multiuser AR experiences, multiuser VR experiences, and blockchain.
- Developing “something” for the metaverse does not mean you will be in all of these use cases or technologies. Each use case is a separate project and has its own target customer, dev team skills, and therefore, also its own roi.
- I am not against the metaverse. I don’t like using a term when it’s not clear. You can research this area, the related technologies, and its use cases. I am certainly happy to see the renewed interest in new technologies. But, if you want to plan a business expansion, then take your time to plan carefully.
The goal of this article
The goal of this article is to shed some light on what is the metaverse, why is it so difficult to define it, and how you should treat this topic in your business strategy, assuming that it crossed your mind. This article is not a consulting session, and its recommendations do not apply to any type of organization. But I hope you could use this information to your own best, and that it will lead you to a better decision-making process.
Why do I write about metaverse?
About a month after Zuckerberg presented his metaverse strategy, I started receiving questions from private clients, asking if I can develop the metaverse? Since at the time, I was not familiar with the term, I asked back: what do you mean by metaverse? This opened a pandora box.
Some would describe a multi-user open world where people can wander and communicate with each other. Others would describe a highly detailed and styled small space where people would have a chance to interact with the products of the company, such as clothes or other objects, and eventually make a purchase. Others would describe a video game environment. Others would ask for a platform where users could interact but also create content by themselves.
If it just meant I have to deal with explaining to clients how to better describe their product, it would have been acceptable for me. I have been evangelizing augmented reality for over a decade now, and my core clients are people who usually have an idea and need help to make it a reality. I am proud that such people find me and trust me with their first “baby”. So I have no issue speaking with people who are not fluent with technology.
But, this time it was different. It didn’t end there.
In less than a few months, I have seen leaders reorganizing their company strategy according to the metaverse; I saw people changing their titles even inside big companies, calling themselves “metaverse designer \ consultant \ etc”. No other professional area or technology has seen such a rapid development from 0 to job titles in less than 8 months.
Consultants are riding the hype
With such rapid development, it was no surprise to me that also big consulting firms would jump right in (PWC, McKinsey, BCG, Accenture, KPMG released reports between April and June 2022). The summary section of Deloitte’s 50 page booklet, which also describes the metaverse eco-system (released in June 2022), you can read:
I really appreciate Deloitte reports so far. But I cannot accept this report’s summary. How can you recommend enterprises to go into an unclear territory, without clearly defining what would be the benefit for them? The summary clearly says that the market varies so much, that businesses must explore it by themselves. Why should they?
Mckinsey gathered some big numbers. My question is: how many industries are included here? Do you include the revenue of Robolux, Minecraft or Fortnite? Do you include revenue of any other multiplayer game? Because that’s a huge industry…
BCG has a big report as well. Although most of it still has some big confusing numbers, this report separates the metaverse term into 3 main segments: the web3/blockchain, AR/VR, and Virtual multiuser world. The summary says:
So BCG agrees that the metaverse is separated into various technologies, and use-cases, and that organizations must choose their focus according to a business target.
Accenture has an impressive report of 100 pages about the trends of 2022. It has defined 4 big trends for 2022, and analyzed each of them carefully, providing recommended steps per each. I did not yet read this fully, and this seems worth reading. But the part related to web3 and metaverse still felt a bit confused compared to the other three sections.
KPMG tried to make 10 predictions for the future. I’m quite skeptical about most of them. But I do like one of the quotes they got from Nick Facey, one of the experts they interviewed. Although he was talking about a different topic, I believe this is true also for the metaverse term.
I have a lot of appreciation for these firms and their reports. I believe that many others feel similarly. But reading these documents only confirms to me how complex and confusing the concept of the metaverse is.
Why Zuckerberg is so interested in the metaverse?
Although the term itself already existed since the 80s, Zuckerberg managed to make it hype. In November 2021 he changed the company name to “Meta”, and refocused Facebook’s strategy around the metaverse. Let’s take a few moments to understand why he did this.
Facebook’s core business is coming from watching paid advertisements while users scroll through the various content Facebook has in the social feed (over 95% of the revenues). The other 5% comes from the Virtual Reality content and the Oculus device line. That explains why a drop in the public interest or public usage of social apps, like Facebook and Instagram, makes the company worried. As you might have heard, the younger generations are moving out of Facebook and Instagram into other social apps, like tiktok or discord.
The political issues Facebook is facing don’t help either. One of its senior managers has left the company, and he explains how the company is not doing enough to control its power and data management (The Guardian).
Unlike other giants like Apple, Amazon, and Microsoft, Facebook is not as diverse in its business. And this lack of diversity is very dangerous to the sustainability of the business. Facebook must find this diversity.
Direction number 1: VR devices. Direction number 2: putting people into a social virtual space. Then inside that space, you can give them ads.
By choosing the name “Meta”, Zuckerberg is riding on the future success of the Metaverse, since it is the Meta-Universe = Universe of Meta.
What is the metaverse?
While some describe the metaverse as the next evolution of the internet, where blockchain allows users to own digital identities and digital properties, and AR / VR tech will be used to provide more immersive experiences with online content. This is all futuristic at the moment, in my opinion, since tech infrastructure and hardware are not ready yet. This article tries to stay realistic for the next 3 to 5 years.
Zuckerberg describes the metaverse as a platform where users are given certain tools both in visual and coding, which will allow them to create content.
But this description is not only very wide, it also covers part of what is considered to be the metaverse by others. Because he describes a creative environment where people create content. But where is the part where people interact with that content?
Only one thing I am confident about. Facebook wants us to choose THEIR metaverse, because this is how they could expand their advertising business.
Learn from existing products
But we need to understand that we will have, and already have now, many more such virtual worlds (such as: Sandbox, VRChat, Decentraland). There will be a competition.
Please check out this review about VRChat, which is a free, open, virtual world, that allows creators to publish new content. Introduce yourself to this world before you decide to change your organizational structure.
Read those who doubt the concept
When you are in doubt or confusion, you should trust your guts and study more. Try to read more of the ones who reject the topic, rather than another supporting article. Here is a good video that sums both opinions and sides:
What should you do with all this information?
In a previous article, I gave recommendations on how one should describe their game concept. For years I have been helping people refine their dreams and define them more efficiently before going to a developer. This is because when going to a developer, words get lost in the translation, and often things get changed. Since development is often very costly (in time, budget or effort), you should minimize this as much as you can.
How does this relate to metaverse? Since metaverse term is very wide in its nature, a developer cannot understand what do you mean. It’s like asking someone “let’s get together!”. But from your request, it’s not clear when and where. This is a very easy recipe for failure.
What should you do?
Break your idea into its core components. Take these set of questions for example:
- Do you want a virtual store where users can try out clothes and take screenshots of themselves and share them on social networks?
- Do you want them to be able to speak to other customers? (If you said yes, please reconsider. If you cant understand why I think it’s a bad idea, not from a technical point of view, by the way, feel free to book a consulting session, since we have a lot to talk about…).
- Do you want the buyer to talk to a sales representative?
- Must anyone wear a VR headset? (If you answer yes here, consider that this project just got significantly more complex).
The medium matters. The device matters
The Device used changes everything. If we build a VR experience or AR experience or a digital shopping experience on PC, each has a dedicated device. We cant use the same device for all three cases. Even if one device could do that in the future, which is not so near as one may think (for many reasons I can describe in another article).
This is true for any product actually. When you build a web product, you need to make sure it is suitable for both mobile and pc. Same point for building an augmented reality app. If you have it on mobile and then you want to switch for eyewear, it will require new development.
What can you do to implement your metaverse?
By now you should know that you probably don’t need to implement a metaverse for yourself. You probably want to make sure that the content you produce, could be used in the main existing products.
Even if you want to create a private space for your clients only, you should be able to partner with an existing product and work things out with them. Developing a 3D world all by yourself is a waste if it’s not your core business.
It’s totally acceptable to ride the buzz around this term from a marketing point of view. But if you actually want to develop something in this area, you would need to invest a great deal of time and effort in becoming knowledgeable in the technical area.
You were fooled by marketing experts with numbers that include many industries. It’s like saying “look at the profit of the transportation industry! you should get into that”, while including trains, autobus, vehicles, motorcycles, bicycles, and luxury sports cars in the same report.
I’m not saying don’t research this area or stop investing your time in this. But, if you want to plan a business expansion, then take time to plan.
Starting a new innovation is like jumping on a new surface. It may look stable but you can’t know what’s ahead. Will it be a new land that no one yet discovered, or will it be a melting glacier? If you can’t know and no one can promise you, I would recommend treating your next moves carefully.
Oh, and please watch Ready Player One, if you hadn’t by now…
Some extra tools and talks
These are some tools I found in the past few months, while researching this area. I do not have any gain from these tools, I do not guarantee their quality, and these are definitely not the only ones out there.
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