By Jon Swartz
What is the “metaverse,” and how lucrative will it be for tech companies? It depends on whom you ask, the corporate equivalent of a Rorschach test.
A generally agreed-upon definition of the concept is a digital experience that blends virtual reality, streaming video, mobile games like Roblox Inc. /zigman2/quotes/223883423/composite RBLX +2.86% and “Fortnite,” cryptocurrencies, social media, 5G, artificial intelligence and email. In short, a Sargasso Sea of tech buzzwords that approximates a digital facsimile of how we live in the physical world.
“It’s like anything in tech: Everyone defines an emerging market that best suits their strengths and needs,” Zeus Kerravala, principal analyst with ZK Research, told MarketWatch. “Whoever wins out invariably turns that experience into their walled garden.”
When Mark Zuckerberg shared his version of Facebook parent Meta Platforms Inc.’s /zigman2/quotes/205064656/composite FB +1.02% idea of the metaverse last month, he said he did not want it to be a “walled garden,” but rather part of a larger, open ecosystem. That was a not-so-subtle dig at Apple Inc. /zigman2/quotes/202934861/composite AAPL +1.04% , one of many that Zuckerberg delivered when preaching the openness of the metaverse in the Facebook rebrand.
Apple antagonists Epic Games Inc. and Facebook see the metaverse as a way to attack Apple from a financial, strategic and legal standpoint . But Dioselin Gonzalez, a mixed-reality consultant and former principal software architect at Microsoft /zigman2/quotes/207732364/composite MSFT +1.67% Research, believes most corporations are engaged in a desperate land grab for a piece of the metaverse market so they can turn it into their own version of Apple’s App Store or Alphabet Inc.’s /zigman2/quotes/202490156/composite GOOGL +1.04% /zigman2/quotes/205453964/composite GOOG +0.77% Google Play.
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“Facebook warns of the closed Apple Store, but it will have its own walled garden with metaverse, based on its history,” she told MarketWatch.
At a technology conference in South Korea this week, Epic Games Inc. CEO Tim Sweeney compared the metaverse to a universal app store that works across all operating systems and offers developers an alternative to Apple’s and Google’s dominance of the smartphone economy. Epic, one of the leaders in the emerging metaverse space with its popular “Fortnite” game, has sued Apple and Google in federal court for antitrust behavior.
“Over the coming decades, the metaverse has the potential to become a multitrillion-dollar part of the world economy, open to all companies across the world as equals,” Sweeney said. “Apple and Google policies ban other companies from creating the metaverse so they can dominate it themselves and tax it. We must not allow these two companies to dominate our digital lives.”
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The “multitrillion-dollar” potential of the metaverse, as outlined by Sweeney, underscores investors’ concern about the varying definitions of the metaverse: Market estimates range widely.
Illustrating its vast properties and sweeping technologies, the metaverse market is expected to be an $800 billion market by 2024, according to Bloomberg Intelligence. Roblox CEO David Baszucki, meanwhile, projects a total addressable market of around $200 billion or more each in the categories of mobile, streaming content and social media.
There are much more audacious estimates — Morgan Stanley analyst Brian Nowak vaguely refers to an $8 trillion total addressable market among U.S. consumers — that come with multiple caveats. Adoption “won’t be rapid or easy,” Nowak says, because of uncertainty over the metaverse experience, consumer distrust toward Facebook with their personal and enterprise data, and Facebook’s lack of enterprise tool expertise.
A multiverse of metaverses
For now, nearly every company defines the metaverse as it hews to its strength, says Jacob Navok, CEO of Genvid Technologies, creator of advanced interactive streaming technology. For Facebook, it is the company’s social media prowess. Microsoft CEO Satya Nadella ties its HoloLens device to the metaverse, while Walt Disney Co. /zigman2/quotes/203410047/composite DIS +0.37% CEO Bob Chapek considers Disney+ a facsimile. Sweeney describes the “Fortnite” experience as a metaverse because it’s a virtual 3-D space that mixes gaming and nongaming elements.
“People think of Metaverse with a capital M as a grandiose, theoretical thing that is hard to define,” Alex Howland, president of Virbela, which has developed a 3-D virtual platform for remote collaboration, told MarketWatch. Virbela’s holding company is eXp World Holdings Inc. /zigman2/quotes/209819143/composite EXPI +4.13% . “It’s probably better to think of it in terms of sub-metaverses that serve specific markets in gaming, enterprise and elsewhere.
“Truthfully, this will take at least 10 years,” he said.