If you read the headlines you would assume the metaverse boom is over, but it’s a far cry from the truth.
Let’s face it. In the last 18 months we’ve recently seen a lot of commentary about the big tech companies (Amazon, Microsoft, Meta and Google) pivoting their attention away from building the metaverse.
→ Microsoft to effectively cease its industrial metaverse unit by cutting 100 jobs across the HoloLens and Xbox teams. Efforts and resources going into augmented reality, virtual reality and metaverse projects are now being refocused from the consumer to the enterprise.
→ Amazon cut 9,000 jobs across it’s cloud services, advertising and Twitch livestreaming business units. They are moving towards creating a metaverse-ready technology infrastructure by ramping up their compute power for serverless applications.
→ Meta let go of 11,000 employees last year and just announced a cut of 10,000 more in Q2 this year, with Reality Lab’s wearable and metaverse teams are understood to be amongst those affected. Zuckerberg recently reiterated the importance of Reality Labs, publically stating the unit remains a priority for the company.
→ Alphabet culled 6% of it’s workforce in January and axed its white-label cloud-streaming service Stadia, effectively ending their crusade into the lucrative gaming market. They are focused on offering Google Cloud tools to businesses to help run their online games.
There’s a lot of noise about the tech giants not investing in building the metaverse from a consumer perspective. So is the metaverse going to happen or not?
Metaverse technology is maturing and developing
The truth is that the big tech companies have learned two things:
→ It’s all about the cloud. Amazon AWS, Google Cloud, Oracle and Microsoft Azure are all major players in building the infrastructure to power the metaverse. This is their bread and butter and what they are world-class at.
→ It’s all about entertainment and gaming. Although Amazon and Google have stepped away from building inhouse games projects, Microsoft has continued to invest in the content creation side of the metaverse game equation with planned acquisitions of Activision & Blizzard (subject to regulatory approval). They see the value of making big commitments to hardware and software innovation for creating immersive experiences.
Apple and Meta continue to invest in hardware solutions for the metaverse, but the game for big tech (apart from Microsoft) seems to be firmly rooted in building the best infrastructure for cloud gaming.
Big tech is massive on infrastructure and there’s no real evidence (other than Microsoft’s M&A deals) that big tech can build great games.
Having made a series of small bets on a variety of metaverse projects, companies are now starting to specialise on what they’re really good at.
They have all experimented in one way or another and are going through the tough process of killing off the projects that have the least chance of winning and doubling down on the ones that can become major players.
When will great metaverse consumer experiences get built?
All metaverse applications are essentially video games. And whether it’s a video game, enterprise application or a defence simulation — they’re all built on the same technology stack.
What people tend to overlook is that the metaverse is not one thing. It’s an ecosystem of technologies that make up a stack powerful enough to effectively deliver it.
If we look back to the development of the internet and the web it took several decades to come to fruition, with the original TCP/IP protocol developed in the 60s and the web protocol developed later at CERN in the 90s. It took the HTML browser to link all the pieces of the puzzle together.
Today, game engines such as Unreal & Unity serve as web browsers for the metaverse, but web servers for deeply immersive experiences (like those portrayed in the film Ready Player 1) are still in their infancy.
However games such as Fortnite, Roblox and Minecraft have highlighted the vast consumer appetite to experience immersive games — demonstrating that the metaverse already exists today.
So we have an entire industry of web 3, music, art, gaming and cultural communities who each have a strong view on what the metaverse should be. But the cold truth is that consumer experiences are currently falling short of this vision in a number of areas.
Scale, quality, interactivity and operating costs are just some of the factors that come to mind. You could even argue that when current scale limits are being pushed, the cloud costs alone could be restricting innovation in the metaverse space.
Why the metaverse will happen
The metaverse is poised to make a significant impact on our lives due to several factors, including physiological and neurological behaviours, time spent online, and social behaviours. The immersive interactivity of the metaverse taps into our natural desires for engaging experiences and caters to our neurological needs for stimulation.
With the younger generations (particularly Gen Z) spending more time online and creating a wealth of digital content, their minds are becoming increasingly attuned to digital simulation.
The metaverse also facilitates social connections in a world where gaming and social interactions are converging through platforms like Discord and Twitch, which accommodates the growing digital native population and the emerging digital middle class in developing markets like India and West Africa.
Another set of factors driving the adoption of the metaverse are remote working trends, the desire for escapism and our need for control. As remote work becomes more prevalent and automation reduces human working hours — people will have more time to seek out experiences that may not be possible through physical travel.
Escapism plays a significant role in this, as the metaverse offers alternative experiences when travel is restricted by cost, climate or other factors. The metaverse can provide a sense of control and personalization that is increasingly sought after in a world where trust in centralised organisations is dwindling and the demand for decentralisation grows.
The metaverse’s potential will be fueled by globalisation and the emergence of new economic models. The interconnectedness of our world has paved the way for shared virtual experiences that transcend geographical boundaries.
It will even offer innovative economic opportunities, such as virtual goods, services and digital real estate — which can contribute to the creation of new markets and industries. As these factors continue to evolve and intertwine, the metaverse’s adoption by consumers is likely to accelerate and become an integral part of our lives.
Technology stimulates creativity and innovation
Tech adoption curves suggest that delivering outstanding customer experiences can lead to a profound, lasting impact.
We’ve already got some impressive tools in the metaverse arsenal, such as creative studios, generative AI, advanced devices, potent game engines, high-speed networks and a solid cloud infrastructure.
However there’s one critical challenge we still need to overcome: simulation compute scale.
Presently, simulation processing constraints are determined by the power of single CPUs, making it difficult to build expansive virtual worlds with a large number of players.
Surprisingly (because games developers are very creative in designing around technical constraints), games engines have a limit of less than 100 concurrent players in a single shard even for simple games. Spatial partitioning platforms have a fixed theoretical mathematical limit of 15k concurrent users (with >1k CCUs in a real physics simulation rarely achieved in practice) and are costly and difficult to use.
Once we conquer this hurdle it’s clear the creative industries will flourish by offering captivating experiences that keep us engaged and immersed.
So stay tuned, exciting developments lie ahead!