Zuckerberg has metaverse rivals who mean business
LONDON, Dec 23 (Reuters Breakingviews) - Many successful consumer technologies began life with a narrow focus. Think 1980s executives wielding bulky cellphones or scientists sharing research on Tim Berners-Lee’s newfangled World Wide Web. If the metaverse goes the same way, Microsoft (MSFT.O) – rather than chief proponent Meta Platforms (FB.O) – will be in pole position.
The metaverse refers to a more immersive version of the current internet: pulling on a virtual-reality headset, meeting friends at an entirely digital theatre, and watching a movie together, for example. Among its cheerleaders are “Fortnite” maker Epic Games and Mark Zuckerberg’s Meta – formerly Facebook – which is looking to capitalise on its VR unit.
But regular punters’ appetite for the metaverse is uncertain. To many people, existing video games like those available on the Roblox platform are already part of it. But the next step, VR headsets, remain pricey, not to mention heavy: Meta’s Quest 2 costs $300 and weighs half a kilogram. Meanwhile, subtler augmented-reality glasses are still nascent. read more
Then there’s the unproven appeal of virtual experiences. Eventbrite (EB.N), which helps people organise concerts, cooking classes and such, saw sales collapse by two-thirds in 2020, despite the number of events on its platform falling by just 2%. It’s not clear that giving 2D online gigs an extra virtual dimension would have made much difference.
By contrast, corporations look a more fruitful target. The latest wave of Covid-19 has shuttered borders again, and finance chiefs are looking to keep a grip on expenses. Meta’s Horizon Workrooms software already allows for VR meetings. Yet although Microsoft boss Satya Nadella isn’t thumping the tub like Zuckerberg, that kind of customer is the software giant’s domain.
Slack Technologies’ experience shows how quickly Microsoft can catch up. By bundling its Teams product with existing subscriptions, users rapidly came from a standing start in 2016 to overtake former workplace-chat leader Slack within about three years. Slack agreed to sell itself to Salesforce.com (CRM.N) for $28 billion in December 2020. Metaverse-wise, Nadella’s firm has partnered with Accenture (ACN.N) to build “the Nth floor”, a virtual office the consultancy’s employees can beam into.
“If this is the future you want to see, I hope you’ll join us,” said Zuckerberg. At least at first, his enthusiasm may help arch-rivals more than it helps his own business.
(This is a Breakingviews prediction for 2022. To see more of our predictions, click here.)
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- Facebook founder Mark Zuckerberg on Oct. 28 said the social network’s parent company would be rebranded as Meta Platforms. Zuckerberg said that the new name reflected its work investing in the metaverse, which he described as “the successor to the mobile internet”.
- Chief Financial Officer David Wehner said on Oct. 25 that investment in Facebook Reality Labs, which includes the company’s augmented and virtual reality hardware, software and content, would reduce operating profit in 2021 by $10 billion.
- Microsoft on Nov. 2 announced Mesh for Microsoft Teams, which aims to combine “mixed-reality capabilities” with the software firm’s flagship workplace-chat product, as well as introducing personalised avatars.
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