Market View: A metaverse 101. Why Zuckerberg’s rebrand was shrewd.
This article continues our market view series, where we look into the macro and micro-environments, the politics, economics, trends, and technological advances that create the opportunities and challenges that we need to navigate in our market.
Last October, in a shrewd forward-thinking move Mark Zuckerberg rebranded the Facebook suite of products, apps, and services to “Meta” and announced that the future of Facebook would be in the metaverse. By December the “metaverse” was the new favourite tech buzzword and now, just a couple of months later, the term is widely used. For those of us who live and breathe new tech, our acceptance really does move that quickly. But, as we start to socialise again and meet others for a coffee, or over a BBQ on the weekend, I find that most people I talk to don’t understand the concept.
Put most simply, a metaverse is a persistent, online shared space, where people, objects, and places are rendered using animation and graphics. A metaverse is typically depicted as an immersive experience using virtual reality. But, a television or a computer monitor would display the world just fine too. (And has for years!)
The metaverse is not a new concept – the term was originally coined by Neal Stephenson 3o years ago in his novel Snow Crash (1992); and a metaverse titled “OASIS” was the setting for Ernest Cline’s 2011 science fiction novel Ready Player One that, adapted for the screen, went on to gross over US$580M at the box office under the direction of Steven Spielberg in 2018.
Not only is the concept 30 years old, gamers have been engaging in Massively Multiplayer Online (MMO) environments for two decades, with Second Life amassing more than a million regular users in 2003 and revenues from MMO Role Playing Games (MMORPG) exceeding half a billion dollars by 2005.
But games are different, right? Not really – games have been transcending their perceived traditional boundaries for almost as long. Duran Duran staged live concerts within Second Life in 2006 and the trend has continued since. In 2020 rapper Travis Scott’s performed within the wildly popular Battle Royale game, Fortnite. His performance watched by more than 12.3 million live viewers. Last August, Fortnite hosted Ariana Grande for a multi-day tour and live music event in-game.
It’s fair to say that this is a model that has been evolving and growing for more than two decades, so what is different now?
Not a lot in a tangible sense – just positioning and drive. Facebook has been a place where people have interacted with each other, shared images, scheduled events, posted life updates, and generally curated the visual representation of their life they want others to see since they opened the platform to everyone in 2006.
Zuckerberg acquired the VR headset company Oculus in 2014. Last year he spent more than US$10B in developing those technologies. Looking forward, he simply wants to get as many people as possible wearing his headsets and sharing social experiences in the virtual environment he controls and, most likely, can sell targeted advertising space within.
People have been engaging with others this way for decades but we have almost reached the proverbial tipping point where the software and hardware required have advanced to the point where it is both technically possible, and affordable, for this to become mainstream.
And it’s not just Facebook and the gaming industry (which is predicted to be worth US$365 billion by 2025) – everyone in Big Tech is interested. Microsoft wants to be a leader in the field with its HoloLens, Apple has been dabbling with Augmented Reality for years (and Apple Glasses are one of the juiciest tech rumours right now). Amazon has already launched augmented reality products and services, you can imagine what they plan next.
It’s easy to understand the social interest in a metaverse – we live in a highly-populated world locked down by a pandemic. It’s also exciting to think of the potential in the fields of education, employment, development of AI, and entertainment.
This is why Zuckerberg’s rebranding of Facebook to Meta was so shrewd. How often do you hear someone say “just Google it” when they’re really saying “open your web browser, go to a search engine, and type in what you’re looking for”? Nearly always. Zuckerberg has now unified and positioned his suite of products and services to be synonymous with where technology is gathering momentum.
The really interesting bit is what this will mean for identity.
Facebook was a major catalyst for people to stop using avatars and pseudonyms online. Before Facebook most people were quite cautious online, maintaining anonymity and keeping any online persona at a proverbial arm’s length from their “real world”. A personal email address was always something like “[email protected]” not the “[email protected]” we see today.
Metaverses will be mainstream in the near future and, while there will be dominant players, there will be more than one mainstream metaverse initially with convergence over time. How identity will be managed is fascinating. There are use-cases for verified identities (education, research, employment, virtual implementations of real-life clubs and groups) and use-cases for anonymity (gaming, exploring, socialising in public spaces).
Two things we can bet on: someone’s identity in the metaverse will be gated by an email address, and identity management and verification will be built upon distributed blockchain and decentralised technology.
1. General Tech News
- Amazon disclosed revenue from its new advertising business – growing 32% in the fourth quarter to a value of US$31B in 2021. (Read more)
- Disney advertised for a business development manager with NFT expertise – the role slated to lead Disney’s efforts in this space. (Read more)
- Twitter launches support for NFTs as a profile picture. Reddit is also likely to offer this as a feature soon.
- In contrast to the principles Apple has been defending in its lawsuit against Epic Games, Microsoft announces the adoption of Open App Store Principles for the Microsoft Store on Windows (but not necessarily Xbox). (Read more)
- Apple announce “Tap to Pay” – a new capability that will allow merchants to accept Apple Pay, contactless credit and debit cards, and other digital wallets through their iPhone without any additional hardware or payment terminals. Stripe will be the first payment platform to support the feature, including Shopify’s Point of Sale app. (Read more)
- Deepmind announce a machine learning project that can write code, semi-automatically. (Read more)
- Meta shares sank 23% after Facebook announces that privacy feature enhancements within iOS last year will result in a US$10 billion decrease in sales and, for the first time ever, user numbers have declined. (Read more)
- Advances in biological science are tipped to transform economies and societies with an estimated economic impact of $2-4 trillion per year. (Read more)
- Google abandons FLoC (a project to deliver anonymous ad-targeting) and replaces it with Topics. Using a similar methodology to FLoC, Topics infers your potential interests from browser activity and communicates those inferences to each website you visit so that it can display relevant ads without any party (other than the browser itself) tracking your behaviour. (Read more)
- Gartner write that passwordless authentication is in the “now” range of the emerging technology horizon, with estimated adoption at 30% – 40% of the way towards the early majority target. (Read more)
- After missing subscriber number targets, Netflix stock fell by a quarter and YouTube is cancelling YouTube originals. Similarly, HBO is making moves in the European market, which will disrupt Pay-TV providers. With so many different entertainment services with exclusive content, it has become unaffordable for people to view every show they wish to watch. I suspect it will not be long until our “subscription economy” becomes a “consumption economy” – where the user only pays for what they consume from a service. We’re already there with AWS, Digital Ocean, and many other digital service providers; and we’re starting to see elements of aggregated content for consumption through mediums such as Apple’s News app. Will this model reach a wider range of content consumption sources by late 2024?
2. Carrier News
- Shentel, SRT, and Buckeye Broadband’s email service (Mail2World) was disrupted by a ransomware attack, preventing customers from accessing their account, sending, or receiving email. (Read more)
- Starlink, the low-earth orbit broadband company owned by SpaceX is working to restore Internet connectivity to Tonga via gateway stations installed in Fiji. (Read more)
- Cisco announced its intention to join Google, Amazon, Microsoft, and others in the private 5G market with an “as-a-service” 5G offering. Analyst Gabriel Brown suggests that a white-labelled product would make sense, allowing operators “to extend their reach and benefit from Cisco’s enterprise footprint”. (Read more)
- Despite the increase in infrastructure and coverage, not many users are accessing or utilising 5G connections. Jordan McDonald writes that 5G is still missing a “killer app, an essential and definitive application of the technology that could show consumers and businesses alike that 5G is worth embracing”. (Read more)
- Comcast Technology Solutions has pitched a VideoAI software-as-a-service that captures rich metadata for multiple applications. Of course, the primary application discussed is targeted advertising. (Read more)
- Apple’s Private Relay has proven incompatible with T-Mobile’s content filtering services. Subscribers of T-Mobile’s Web Guard will need to choose between the services. (Read more)
3. Industry News & Competitor Activity
3.1 General News
- Microsoft announce support for MTA-STS for all outgoing messages from Exchange Online. (Read more)
- RMail launch the RSecurity SMART AI engine for RMail for Outlook – specifically designed to protect against Business Email Compromise (BEC) imposter attacks. (Read more)
- Microsoft announce a new update is coming within the next few weeks to close a security loophole within the Outlook app. (Read more)
3.2 Synacor Zimbra
- A new Chinese cyber-espionage group exploited zero-day XSS vulnerabilities in Zimbra Collaboration Suite to steal session cookie files and access the inboxes of European governments and media agencies. Zimbra was notified in December, but did not release a patch until early February – releasing an initial patch on the 4th of February, before releasing a secondary patch on the 8th of February to resolve a newly discovered zero-day exploit. (Read more)
- No other notable updates this reporting period.
- Synchronoss reported accelerated cloud subscriber growth in the fourth quarter of 2021. However, last year we saw Verizon follow in the proverbial footsteps of AT&T and T-Mobile by abandoning the CCMI, cancelling their RCS contract, and shifting to Google. Synchronoss also continue to suffer sinking share prices… Several signs (along with industry rumours) that Synchronoss is suffering internal turmoil. Watch this space.
- No other notable updates this reporting period.
- Open-Xchange launch an updated version of OX Drive for iOS that integrates natively with the Files app on Apple devices. (Read more)
- No other notable updates this reporting period.
- Rigorous testing of our app-specific password feature is drawing to an end. We expect to roll this security enhancement out across our different regions starting in March. As always with new features, this will be released under feature-toggle (allowing you to enable the feature when you are ready) and with white-labelled help documentation (so you don’t need to build this from scratch) – allowing you to be in full control of your change management and customer communications.
- Our audit for compliance against WCAG 2.1 Level A and AA was extended into the new year and is now drawing to a close. We expect to ship the latest release including this update to a highly-accessible and inclusive UI in late February or early March.
- Our planned roadmap features to enhance a user’s control of their privacy and your ability to commercialise the platform are currently being fully scoped. I expect to report a target release time frame in the next market view update in April.
Please reach out to me to discuss any of the above in more detail.