Notes from the Metaverse – Is this still a thing?

Remember where you were in October 2021?  That’s when Mark Zuckerberg announced a corporate name change and his bold plan to build the next digital frontier, the Metaverse.  Just 3 months later, Microsoft announced its intention to acquire videogame maker Activision Blizzard for the jaw dropping price or $68.7 billion.  Central to Microsoft’s investment thesis: Acquiring a launchpad into the Metaverse.

Fast forward to December 2022. Meta’s stock has dropped by more than 60% and over 11,000 employees have been dropped from the company payroll.  Meanwhile, the US Federal Trade Commission has filed an antitrust suite to block Microsoft’s takeover of Activision Blizzard, throwing a significant spanner into their Metaverse ambitions.

While most new technology hype cycles move fast, this one has turned faster than a carton of milk left all day in a hot car!  In a year’s time the Metaverse has gone from “the next big thing” to a punchline on late night TV chat shows.  Still, to paraphrase Mark Twain, the news of the Metaverse’s demise may be somewhat exaggerated.  Like so many disruptive technologies, this one will not be as quick to mature as the initial spinmeisters promised but look a little closer and you’ll see plenty of signs of life.

In the crucible of the pandemic, sports teams and leagues around the global ramped up their search for new ways to engage their fans and to move beyond the confines of stadium capacity and traditional media viewership.  For these rights holders, the Metaverse offers enormous promise.

A recent report published by London based research and advisory firm Enders Analysis states that of all the industry sectors they’ve investigated, “sports organizations are the closest to solving the creative problem of what people will actually do in the Metaverse.”  They point to sports simulation videogames like Electronic Arts’ Formula On2 ‘22, FIFA ‘23, and NBA 2K23 that are building deeper and broader immersive sports experiences.  The Enders report sees a short leep from these products to ones that allow fans to engage in curated virtual spaces and interact with other fans, players, team management/coaches and the like.  Of course, where there are new communities of dedicated fans there will also be sponsors and merchandise vendors finding new monetization opportunities.

Along with sports teams and leagues, the Enders report notes the progress that sports broadcasters and making in blazing a trail to the Metaverse. The Brooklyn Nets, for example, have created a “proof of concept” 3D video production system that will ultimately allow for the layering of virtual and interactive elements into their live broadcast feeds.

Meanwhile, Hollywood continues to invest in Metaverse projects. Since rejoining Walt Disney as CEO in November, Bob Iger has reiterated his argument that virtual technologies are the “new frontier of storytelling.” In fact, during his brief hiatus from the CEO role, Iger was a board director and investor in Genies, a Las Angeles based start-up developing an “avatar ecosystem.”  Look for Iger and other multi-platform media companies to continue build, buy or partner their way into the Metaverse.

While tech giants like Meta and Microsoft attract more than their fair share of headlines (and regulatory scrutiny), there are a raft of start up and scale up companies all with their own ambitions to colonize virtual lands.  These include hardware companies like Magic Leap who are focused on enterprise AR/VR devices and software for applications in healthcare, product design, and employee training; and Decentraland, an early-stage tech company building a browser based, 3D platform for content producers and enterprises to experiment with new virtual products and experiences.

So even though the Metaverse may not be living up to the hype of all those breathless 2021 press releases, the game is really just beginning.  The smart money is on the companies and executives who are finding ways to delight customers, even if in small ways, with products and services that they are more than happy to pay for.