Facebook recently announced that it would change its name to Meta and fully dive into the metaverse business. And it’s not just Facebook. Microsoft and other large tech companies have also identified the metaverse as a future cash cow. So, why is it that everyone is focused on the metaverse?
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“The metaverse is a virtual world in which you can make money while having fun”
Simply put, the metaverse is a kind of virtual world. It is a portmanteau of ‘meta’, which means virtual and transcendent, and ‘universe’. The term metaverse was first coined in Neal Stephenson’s 1992 novel “Snow Crash”. In the novel, the main character, a pizza delivery man, goes back and forth between the real and virtual worlds to save the real world. The word ‘avatar’ also first appeared at this time.
While the concept of the virtual world has already been around for some time, what sets the metaverse apart from previous concepts is a solid community and economic activity that transcends time and space. By combining various technologies and economic models, metaverse not only allows virtual world participants to communicate vividly, but also supports the creation of added value through things like virtual items and real estate.
Various technologies need to come together to build such a system. Creating a virtual world requires graphic technologies such as artificial intelligence (AI), virtual reality (VR), and augmented reality (AR), data processing technologies such as cloud computing, and high-speed communication network technology such as 5G.
While the metaverse could be realized quickly due to the rapid development of these related technologies, the reason why it was has become a hot keyword right now is the COVID-19 pandemic. As activities in the real world are being limited, there is increasing demand for using the virtual world as an alternate means of satisfying social needs, especially among gen Z, which is very used to the online world.
Roblox steps into the metaverse
While Nintendo Animal Crossing and Naver ZEPETO are often mentioned as platforms that shaped the metaverse concept, Roblox is probably the platform that contributed most to its popularization.
Roblox is a game platform on which users sign in as their own personal avatar to communicate and play various games with other users. Roblox has seen rapid growth during the COVID-19 pandemic, as it caught the attention of kids stuck at home.
As of July 2021, the number of daily active users (DAU) stood at 37.1 million and the number of monthly active users (MAU) at about 199 million. A whopping 80 million people started using Roblox in 2020 alone. Users spend an average of 2.6 hours per day on Roblox, and 67% of all users are under the age of 16, meaning the proportion of underage users is very high compared to other game platforms. In Korea, Roblox ranked 3rd among game apps in terms of monthly users and 1st in terms of usage time.
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For this reason, Roblox has recognized the safety of minors as the top risk to its business and is preparing related measures. In its securities filing submitted to the US Securities and Exchange Commission (SEC) last year, the word ‘safety’ was mentioned 121 times, and the word ‘parental’ was also mentioned 6 times. Precautions implemented by Roblox include usage rules, AI-based censorship, and the ability to prevent users under the age of 13 from being contacted by users not on their friends list. The measures seem to be having some effect as an official from the U.S. Department of Justice commented that this model makes Roblox a leader in the industry.
Roblox is also both a tool for developers to develop their own games and a platform for them to generate revenue. Just as YouTube shares advertising revenue with creators, Roblox also shares revenue with game developers when users use Robux, the in-game currency, to purchase items or avatar outfits. This policy has attracted currently 7 million game developers to Roblox. Of these, about 1 million developers already made profit and over 1,000 earned more than $10,000.
Metaverse market growing with Facebook and Microsoft
With Roblox’ success, major tech companies are paying attention to the metaverse as a future cash cow. Particularly Facebook and Microsoft have put the metaverse in the spotlight. Both companies aim to use avatars in the 3D space to create an immersive world for virtual meetings – Facebook using its Oculus VR devices, and Microsoft using HoloLens and Mesh for Teams.
Facebook particularly stole the headlines recently as it changed its name to Meta and revealed its ambition to become the ‘owner of the metaverse’. The company announced its aspiration to create one virtual world that would combine the world’s largest social platform with Oculus’ VR/AR technology, the virtual meeting system Horizon Workrooms and even its own currency. Facebook’s cryptocurrency project, Diem, is also expected to be integrated into this world.
Unlike Facebook, which aims to build an enormous world, Microsoft is skeptical of certain companies building and owning virtual worlds. Quite the opposite, Microsoft is focusing on ‘connecting’ various virtual worlds. This role is to be played by ‘Mesh for Teams’.
At its annual “Ignite 2021” conference on November 2, Microsoft introduced various devices, including “Mesh for Teams”, which is used for video conferences in the metaverse. Microsoft supports companies to build their own metaverse using the Mesh for Teams API. When applying the metaverse to Teams, Microsoft plans to introduce 3D avatars that do not require a VR headset. Using AI, the avatars will express the user’s movements or gestures. Microsoft plans to make the same avatars used in Teams available to other metaverses.
As Nicole Herskowitz, general manager for Microsoft Teams and M365, explained in a recent interview with The Verge “We got hit by meeting fatigue in the virtual world. After 30 or 40 minutes max in a meeting, it was very hard to stay engaged and focused”. She emphasized that Mesh for Teams would help reduce the cognitive overload of having to be on video calls all day long.
Each following a different strategy, Facebook and Microsoft have recently been collaborating to expand their respective metaverse businesses. On November 11, Facebook and Microsoft announced that they would integrate their respective enterprise collaboration platforms, ‘Workplace’ and ‘Teams’. Because Workplace is focused on broadly connecting the entire company, whereas Teams is used for instant communication between colleagues working on the same task, the two services will operate complementary to each other.