The metaverse. What do we think of it? Is it meaningful at all? Ordinary life is hard enough; how difficult can imaginary life be?
You can often tell when there is a lot of hype about a subject – its proponents claim that this or that trend is a BILLION-dollar industry. The BILLION is always emphasised. But you know, toothpicks are also a BILLION-dollar industry.
Yet, when it comes to the metaverse, it’s not quite that easy to dismiss.
Whatever you might think of Meta CEO Mark Zuckerberg, he has been an extraordinary investor, recognising early on the value of Instagram and WhatsApp. When Facebook, Meta’s predecessor, bought Instagram, he paid $1-billion, which was generally thought at the time to be certifiably insane. At the time, the company had 17 employees. Instagram now constitutes about 44% of meta’s income – or about $10-BILLION dollars a QUARTER.
And now Zuckerberg has become so enamoured of the metaverse that he changed the name of his company to indicate this is definitely the direction the company is going. Not only that, but the company has invested $10-billion, sorry, BILLION, so far in the effort.
Zuckerberg has told shareholders that the effort would bleed capital for the next three to five years, and some products wouldn’t be ready for 15 years. Ok, so this is long term.
But why is he so confident? Business Maverick last week held a live event to discuss the metaverse, which was hosted by my colleague Ray Mahlaka. The speakers were Bright Khumalo of Vestact Asset Management and Richard Frank, chief technology officer at Flow Communication. You can catch the event here.
The metaverse, as we all know without having to Google it, is a network of 3D virtual worlds focused on social connection which you access through a virtual-reality headset. There are in fact multiple metaverses – some for gaming, some for personal interaction, some for exercise and physical gaming.
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The whole point of the metaverse is that it’s immersive; you are completely contained in the world. When you physically look around, you look around in the world. For some purposes, the utility of the metaverse is obvious; if you are playing a computer game, it’s just more fun if you are physically in it. For others, the utility is a bit more obscure. How much difference does it make to attend a work function in the metaverse rather than on Zoom?
In some ways, the utility is recognisable, if a touch gimmicky. Meeting colleagues to brainstorm and interact in the metaverse might be more valuable than working remotely or even, in certain circumstances, meeting in person. Or it might be just an extra layer of complexity and irritation.
You can see why the idea is interesting for Meta. One of the most popular virtual-reality headsets is the Meta Quest, which launches the company into the world of physical products, the avenue which has created so much value for Apple. Meta is also heavily invested in personal and group interaction in Facebook, where there is an urgency since the platform is starting to look a bit dated. You can see the attraction.
Yet, this will not be a single-player dominated space, as Facebook largely was and, in many ways, still is. Microsoft, which has always had a strong gaming aspect, also has a headset and gaming applications. The competition between these two giants is ironically one of the things that underpins this unusual and varied subsector.
Business Maverick’s event was sponsored by property group Lew Geffen, and it’s in the property sector that some wonderful and wacky stuff is happening in the metaverse. Virtual land sales hit a record high of $500-million in 2021, and were expected to reach more than $1-billion, sorry, $1-BILLION, in 2022.
In one of the metaverses, Sandbox, a property company called Republic Realm said in June 2021 that it had bought a 16-acre plot for close to $1-million. Only five months later, prices for virtual land reached a new high. But sadly, they then collapsed this year, and are now down by three-quarters.
Only this week, Nedbank announced that, in a collaboration with Africarare, Africa’s first metaverse, it has secured a 12×12 village in Ubuntuland on which to establish its presence as the first African financial services organisation to enter the metaverse.
The press release said Africarare “was highly sought after by companies and individuals wishing to capitalise on the multiple opportunities presented by the metaverse”. Hmm. Could be fun, but you do have to wonder.
The press release said “early settlers” in Ubuntuland include MTN, World Data Lab and M&C Saatchi Abel. Not sure about that terminology, but whatever. One key question is whether people will part with their money in the metaverse, and for what. Clearly, for some things they will, like participating in games and sports.
But would you pay the equivalent of the $500, more or less, it now costs to attend a Rolling Stones concert if you are attending virtually? To be honest, I wouldn’t. But would some people out there? You know, I think they would, particularly if they were able to get up close and move around.
The metaverse is clearly something to watch. BM/DM