The Metaverse has already failed
“the toughest technological problem of our time is integrating a supercomputer inside a normal-looking spectacles frame.” — Mark Zuckerberg
VC L. John Doerr of Kleiner Perkins once termed the Internet, “the biggest wealth-making phenomenon in capitalism’s history” — and he should know, having financed businesses like Alphabet’s Google.
The Metaverse is a potentially greater revolution than the Internet, namely the next Internet, has Wall Street salivating over the promise of wealth creation.
Mark Zuckerberg, who we all know is the CEO of The Company Formerly Known as Facebook, calls “The Metaverse” the new Internet. It will “succeed mobile Internet” and be “the future iteration of the Internet,” he claimed.
There’s no doubt it’s the new shiny object. The financial excitement is out of control, yet most of what’s Metaversical is either hollow, rhetoric or a re-tread of current firms.
Last month, Bloomberg Intelligence described The Metaverse as “the next major technology platform,” with a “near $800 billion market potential” by 2024, up from a half-trillion-dollar opportunity today.
Video game developers like Roblox (RBLX) look to generate most of the money by selling hardware and software. That makes sense, as the only component of The Metaverse that isn’t pure speculation right now is individuals spending hours in a game.
That $800 billion isn’t as amazing as it seems. According to Matthew Kanterman and Nathan Naidu of Bloomberg Intelligence, gaming items are already a $24 billion industry.
So, the true question is whether Roblox or another firm, like Meta, can make money by doing other things while wearing a helmet and peering into a virtual environment.
The only insight so far is that your life will be more like a video game, but with many of the tiresome, dull portions that you used to want to avoid by playing video games.
Other stuff may include attending virtual concerts, shopping, or viewing the next generation of Tik Tok films. A recent sell-side investor presentation deck recommended “use cases” including performing all your work in a virtual world and taking classes. That’s already caused a huge backlash.
There are no genuine insights in this, other than the fact that your life will be more like a video game, but with many of the tiresome and dull elements that you used to attempt to avoid by playing video games.
The issue is that becoming a genuine “world” from a video game takes many unexpected events to occur. I am convinced that money invested in The Metaverse will be huge, maybe exceeding eight hundred billion yearly.
Do I see Metaverse coming to fruition. Yes. But not in the way most speculators envision.
There are various challenges. One is that the dominating businesses, like Meta, Amazon, and Alphabet, are not good at developing consumer products.
Amazon has gotten it half-right with one product, Echo, which has sold well but also enraged many. That’s good for Amazon, but it hasn’t produced a cultural sensation like the iPhone did.
Most of these businesses, including Meta and Amazon, have failed to build mass-market products, with Amazon’s “Fire” phone being a famous example.
Still, they failed even with Apple. Google has had success as an alternate supplier to Apple’s Microsoft, which is a classic duopoly dynamic in many markets.
Great user experiences aren’t in the DNA of firms like Meta, and, God rest his soul, Steve Jobs has passed away. So even Apple has a limited possibility of creating a really popular interface to a virtual world you’d want to live in.
Those that say Metaverse will fail say it because the firms that grew up on the Internet and have gotten fantastically wealthy off of it have failed to truly comprehend why it exists, they’re so caught up in their desire to replace (and own) it. These firms can’t build the new Internet.
Zuckerberg described The Metaverse as improving virtual reality goggles.
In his words, “the toughest technological problem of our time is integrating a supercomputer inside a normal-looking spectacles frame.”
No, it isn’t the hardest part. The toughest thing is what the Internet’s inventors, including UCLA professor Leonard Kleinrock, accomplished in the 1960s. Together, they created a worldwide network owned by no one and enjoyed by all.
The inter- portion of the Internet is the key. It is a network that connects all others.
For the same reason, Meta or any of its peers will not be able to build the Metaverse. Companies always develop for themselves and never for the common good in their zero-sum game.
That tremendous economic riches often demands something shared, something broader than any one wealthy individual or organisation. It was a rare occurrence that individuals like Zuckerberg, in their avarice, feel they can recreate.
The ancient Bell telephone system was the closest corporate analogue to the Internet and a potential Metaverse. It happened because Ma Bell could purchase every firm in the sector. Ma Bell was disbanded. That won’t happen until Meta buys every single one of its peers — a task too big for Zuckerberg’s balance sheet.
Ma Bell would never have developed an Internet even in their prime. Ma Bell’s successor was Leonard Kleinrock and his team.
Some say that the Metaverse will fail as a source of revenue for the video gaming industry. But as long as Zuckerberg and others want to tilt at that windmill, there will be a market for hundreds of billions of dollars in processors and electronics.
As previously said, Arista Networks is a strong option. That’s a guaranteed money-maker. That money opportunity is why you hear so much about The Metaverse. They are readily fascinated by money, and when there’s a lot of it swirling about, people start thinking about how much more there may be.
Making money is possible, but the Metaverse could be destined to remain a fiction.