Microsoft is about to kill Zuckerberg’s metaverse before it even launches and they won’t even need to build a VR headset to do it now. This probably sounds crazy, after all Zuck is so invested in the metaverse that he renamed his entire company just to focus on the effort. He’s planning on investing 180 billion dollars over the next 10 years building this thing but his plan is flawed for a few reasons.
At first glance Zuck looks well positioned here as of billions of people use Facebook, Instagram and WhatsApp every day to connect with friends and family. He also owns the biggest virtual reality company even though VR is still seen as a toy to most people.
The quest actually outsold the Xbox in 2021 but even though there are plenty of signs that Zuck will be able to deliver Microsoft isn’t just going to let him win. There are three key reasons why Microsoft will beat Zuckerberg in the war for the metaverse so let’s go through them one at a time.
3 Reasons Why Microsoft Will Beat Zuckerberg
We are creating an entirely new platform layer which is the metaverse. We’re bringing people, places and things together with the digital world. Isn’t the metaverse just a video game? We already have those. The people are pointing to Second Life, World of Warcraft, and Fortnite to make the point that we kind of already have a metaverse and these people aren’t wrong.
Gaming is a great entry point into the metaverse but in the long term, things are going to get a lot crazier. These metaverse experiences are going to become bigger and more immersive with the ability to interact with millions of people all in a single shared virtual world.
Digital assets and avatars will move between different spaces and full economies will emerge to support a wide range of contributors. We don’t know exactly what platform will be the most dominant yet but one thing is for sure, gaming is going to play a huge role here and that’s why Microsoft’s strategy is so genius.
- Microsoft has been a massive player in the video game industry for decades now, first with pc games like doom in the 90s and later with Xbox games like gears of war. Facebook on the other hand only really gave us Farmville and not many people would call that one a classic.
- Building a platform for amazing games is one thing but Microsoft can’t do much with them if they don’t actually own the studios that create them so Microsoft has been growing a gaming empire for years and it’s about to get a lot bigger in 2014 when Microsoft bought Minecraft for 2.5 billion dollars. The game has grown to over 140 million monthly active users and is quickly morphing into its own mini metaverse. Now players are building entire simulations like this Mr Beast competition with 2000 simultaneous contestants.
- In 2020 Microsoft bought Zenimax media for 7.5 billion dollars which gave them the rights to Fallout Doom and the Elder Scrolls. All of these games have communities of modders that are changing and growing the experience and now most recently Microsoft acquired Activision Blizzard for 69 billion dollars that’s an absolutely massive amount of money.
An Interview with Mark Zuckerberg about the Metaverse
Mark Zuckerberg said that Facebook will not build its own virtual reality headset but instead partner with Oculus VR, a company it invested $2 billion into last year. He said that the partnership would allow users to share experiences through social media.
Will the metaverse have the same problems as the internet?
The metaverse will have its own set of issues, but it won’t necessarily be the same ones we’ve seen online. For example, the metaverse will likely have fewer spam bots because they’ll be unable to access our personal information. It’s also unlikely that the metaverse will suffer from the same kind of identity theft that’s become common on social media sites.
How do you make money off the metaverse?
Facebook already makes money off the metaverse: it sells advertising space to businesses so they can advertise to your friends. And if you’re logged onto Facebook when someone buys something from one of those ads, you get a commission.
But the metaverse could potentially be used for more than just selling things. A user could write a story or post a video there, and then publish it to the web. Or maybe someone could use it to play games together.
Is this what Facebook wants to do?
No. According to Business Insider, Facebook CEO Mark Zuckerberg told investors at a conference earlier this month that the company doesn’t want to build its own virtual reality headsets. Instead, it plans to work with Oculus VR, a startup it invested $2 billion in last year.
Zuckerberg says that the partnership will let users share experiences through social media and allow them to communicate better with friends.
A new study suggests that the average person spends 1.5 hours per day on Facebook. That means that every single day, Facebook is making over $1 million dollars off of us.
A recent study conducted by researchers at the University of California Berkeley found that the average person spends nearly 1.5 hours per DAY on Facebook. That’s almost 2 HOURS EVERY SINGLE DAY!
Sharing Some Thoughts
Microsoft has 130 billion dollars in cash laying around and this is going to be really important for their metaverse strategy this acquisition has drawn a lot of attention though and I think most people are misunderstanding what’s really going on here Activision owns some of the biggest gaming franchises in the world games like call of duty, Overwatch and even tony hawk these games are cross-platform and widely available on PlayStation and Nintendo consoles but will they stay that way if you spent 69 billion dollars on this game studio.
Yeah I’d say you make some of those a little exclusive to your platform and take advantage of that and sure this sounds like a smart business move for Microsoft take call of duty away from PlayStation and more people will buy Xboxes but that’s actually not their strategy see back in 2017 Microsoft launched the Xbox game pass which offered access to a huge library of Microsoft games all for a single monthly fee.
It was basically the Netflix model but it marked a very significant shift in their business strategy before game pass if Microsoft bought a game studio and then made those titles exclusive to Xbox sales would instantly start dropping sure maybe some gamers would switch from PlayStation to Xbox during the next upgrade cycle but in general these acquisitions would be value destructive but now Microsoft can continue to sell games for full price on other consoles while offering these games as part of the Xbox game pass bundle buying Activision makes Xbox game pass more enticing and sticky since gamers will now get all that content for free as long as they are subscribed.
The second issue people get wrong about the Activision acquisition is the idea that this will create a gaming monopoly even though this is a huge acquisition the game publishing market is still remarkably fragmented just look at this chart of game publishers by revenue even after combining Microsoft and Activision.
Sony and TenCent will still be larger new breakout successes happen every year in the gaming industry so no one has complete control at least not yet compare that chart to the market for search engines and you’ll see what i mean clearly google has a monopoly on search no other companies stand a chance against them but of all the game publishers that Microsoft is competing against Facebook and meta aren’t even listed that’s because Zuck has only built out a few small gaming initiatives for VR and has yet to acquire any of the big gaming companies
It could be that he just doesn’t believe that the traditional gaming franchises will adapt to the metaverse and this is honestly an open question in my mind is the metaverse more likely to grow out of overwatch or some other familiar game or will these metaverse experiences be built around new intellectual property either way if the metaverse ultimately evolves from the gaming industry zuck is going to be in big trouble people might be using quest headsets to access the metaverse and enjoy VR experiences.
But Microsoft will have a massive advantage in terms of actually defining how users interact with the metaverse there is another path to the metaverse though and it’s useful here to look at how personal computers wound up in every household everyone wants a computer in their house these days but back when they were first released to the public most consumers had no interest in them these big bulky machines were basically glorified calculators so most people had no use for them in their homes but pretty quickly
They became indispensable at work companies bought their employees computers because it increased productivity all of a sudden employees didn’t need to spend hours shuffling paperwork and could instead store information in computers that meant increased profits so every company rolled them out the interesting thing was that once people got used to using computers at work.
They wanted to use them at home too as the number of home computers increased so did the demand for non-work applications like games you might have bought a home computer to type up letters but pretty quickly you’d want a game on that thing it’s possible that the metaverse will follow a similar path first your company buys you a virtual reality headset so you can collaborate remotely with everyone working remotely spending a few hundred bucks is totally worth it.
If it can improve productivity even a little bit heck i could even see companies sending everyone a VR headset just for a holiday party it’s not uncommon for tech companies to spend thousands of dollars on corporate events so a few hundred bucks per employee seems doable Zuckerberg is clearly bought into this vision and wants to make horizon workrooms the default application for virtual work but can he beat Microsoft here fundamentally?
It’s very difficult for companies to switch their focus from consumers to businesses for better or worse people just associate meta with their crazy uncle who posts unhinged rants on Facebook every day now to be fair Facebook launched workplace back in 2016 so they aren’t completely new to the industry but Microsoft has been selling software to companies since the 1970s it’s just a completely different level of experience here and even though Microsoft is still closely associated with the windows desktop operating system.
Satya, Nadella has essentially pivoted Microsoft away from a focus on windows and fully embrace the cloud Microsoft understands that very few companies will exclusively stick to using pcs with windows on them tons of people want to use apple products and many developers insist on running Linux this device fragmentation was going to limit the success of any Microsoft product that required windows to run so they built teams most people think of teams as just a slack ripoff and clearly some of the design elements are the same.
Microsoft is planning something much bigger with teams it starts with document sharing and video chat basically all the normal business stuff and then slowly grows into the deeper metaverse concepts zuck is always talking about and i get it the enterprise collaboration side of things sounds way more boring than the video game side but it really is critical to Microsoft’s metaverse strategy if you think about a metaverse as a sort of mirror world where you can interact with data and applications in a more immersive way Microsoft might honestly get there first for starters.
What does the future hold for the metaverse?
It depends on how successful Facebook is with its plan. If it works out, the metaverse could eventually replace traditional social networking sites like Twitter and Instagram.
If it fails, it might just fade away.
When I first heard about the metaverse, I thought it sounded pretty cool. After all, it sounds like a way to connect with other people without having to leave my house.
But now, I’m starting to think that the metaverse is just another form of social media. Maybe it’s not going to replace Facebook, but it will probably take some of their business.
So what are your thoughts? Do you think the metaverse will succeed? Let me know in the comments below.
M Hamza Malik is a writer, blogger, and engineer who loves to create, write, and share his insights about computers, products, and technology. Hamza has spent the last years reading books, tech, and computers, which brings him to writing, giving his character a spark! Therefore, PCFIED is where he started his journey professionally.