Business March 31, 2023
Meta’s Clegg Says Metaverse is Still the Next Big Thing
Meta, the parent company of Facebook and Instagram, has once again reiterated its belief in the potential of the metaverse as the next big thing in computing.
In a virtual press conference held on Wednesday, Nick Clegg, the ex-Liberal Democrat leader turned head of global affairs for Meta, spoke from a virtual space in the company’s Horizon Workrooms to a group of reporters wearing Meta Quest headsets in Washington.
While acknowledging the current limitations and clunky nature of today’s metaverse applications, Clegg expressed confidence that the future will bring a more user-friendly and immersive experience.
“We’re going to stick with it, because we really believe, all the early evidence suggests, that something like this will be the heart of the new computing platform. But it’s going to take a while,” said Clegg.
While many others in the tech world appear to have lost interest in the metaverse, Clegg remains fiercely committed.
Despite the shift in industry focus towards AI and the emergence of a start-up sector around it, Clegg insists the future of computing lies in virtual realities.
However, with tighter economic conditions driving the need to prioritize resource allocation, a number of tech companies have scaled back their investments in virtual experiences, marking a stark contrast to Clegg’s enthusiasm.
Advertising and commerce in the metaverse
Clegg outlined two key strategies for monetizing the company’s investment in virtual worlds: advertising and commerce
While Meta’s success with Facebook and Instagram is attributed to its ability to target specific ads using user data, it remains uncertain whether consumers will be willing to invest in virtual goods or use VR for shopping purposes.
According to Clegg, while some communities such as gaming and fitness have readily embraced virtual worlds, there is still vast untapped potential for its use in other areas like education and healthcare.
At an event hosted by Colorintech @Meta in London
Nick Clegg up to explain the question we're all dying to know the answer to: what is the metaverse? pic.twitter.com/vVa097XlOq
— Ryan Browne (@Ryan_Browne_) March 28, 2023
“I just really want to stress that we’re going to look back on the headware we’re wearing now and think, ‘Gosh, do you remember the days when you would wear a Quest Pro?’
“We’ve always been very clear that we’re in this for the long haul. This is not going to happen overnight,” added Clegg.
The former politician stressed the importance of involving researchers, civil organizations, and other companies in the development of the metaverse to create a more immersive and enjoyable experience.
In other metaverse news, the Dubai International Arbitration Centre (DIAC) recently unveiled its metaverse for dispute resolution. The virtual reality platform enables parties to engage in dispute resolution proceedings from any location worldwide, reported the Khaleej Times.
By eliminating the requirement for physical transportation, the platform reinforces the eco-friendliness and sustainability of arbitration. DIAC can now provide alternative dispute resolution services that are even more effective and accessible than before.
“The launch of DIAC’s metaverse is the result of months of hard work and dedication from the team,” said Dr. Tariq Humaid Al Tayer, Chairman of DIAC.
This offering aligns with Dubai’s objective to become a global hub for the metaverse and strengthens DIAC’s position as the top international arbitration center, explained Al Tayer.
What do you think of Clegg’s metaverse bullishness? Is it genuine or is he paying lip service to his Meta paymasters? Have your say by dropping a comment on Twitter.
Metaverse Gaming Market Expected to Reach $119.2 Billion by 2028
The metaverse gaming market is estimated to encompass $22.7 billion in 2023 and projected to reach $119.2 billion by 2028, according to a recent report from ReportLinker.
The metaverse has been a hot cake in the tech industry in recent years and was boosted by Mark Zuckerberg’s decision to change Facebook’s name to Meta. However, the market has been limping towards AI, which stole the spotlight from virtual reality.
“The global metaverse in gaming market size is estimated at USD 22.7 billion in 2023 and is projected to reach USD 119.2 billion by 2028 at a Compound Annual Growth Rate (CAGR) of 39.3%,” stated the report.
The growth of the metaverse in the gaming market is expected to be fuelled by several significant factors, including the dynamic and evolving landscape of adjacent technology markets “such as extended reality (XR),” which encompasses “virtual reality (VR),” augmented reality (AR), and mixed reality (MR).
Expectation of rapid growth
In 2021, the gaming industry experienced rapid growth, with billions of people playing video games globally and generating over $193 billion in revenue.
Gaming companies quickly became early adopters in exploring the potential of the metaverse. Looking ahead to 2023, it was projected that the metaverse will continue to reshape the gaming landscape.
A survey from last year shows that about 52% of U.S. gamers believe the metaverse will change the game industry.
“According to the survey, just over half (52%) of gamers believe the metaverse will change the video game industry and a plurality (41%) think that the metaverse will have a positive impact on the industry (vs. 25% who disagree),” reads the survey report of Globant and polling firm YouGov.
Moreover, 40% say the buzz around “metaverse gaming is warranted,” though nearly “one-third (30%) were undecided” on that subject.
Who are the big players?
The metaverse is not just a single platform, virtual experience, or game; it is an entire world recreated to provide an immersive experience. Gaming is one of the many experiences in the metaverse that is powered by AI, VR, and AR.
Whenever it comes to gaming, some of the giant games like Fornite, Unreal, and Roblox come to mind.
Read Also: Meta Seeks to Boost Its Metaverse Gaming Credentials
And those are expected to be significant players in the metaverse due to their existing influence and capabilities in the gaming industry, as a report from 2022 states.
“As gaming platforms like Fortnight gain functionality and evolve into technologically advanced social meeting places, it becomes more likely that a functioning Metaverse, with an independent economy, systems, and processes is in our future,” reads the report.
Fortnite has transformed into a social meeting place, offering interactive events and branded experiences.
Unreal’s powerful engine enables immersive media experiences, while Roblox’s user-generated content and virtual currency have attracted millions of users. These factors position them to thrive in the evolving metaverse landscape.
Europe expecting significant growth
Europe is expected to witness significant growth in the gaming metaverse market, with the second-highest CAGR during the calculation period.
The UK, Germany, and France lead the way in technology investment, while Russia and Spain are also adopting new display technologies.
“The substantial growth of the virtual world immersive interactive gaming industry in Europe is a crucial driver for the gaming metaverse market in this region,” stated the report.
The immersive interactive gaming industry in Europe, along with the demand for AR, VR, and MR technologies in the entertainment sector, serves as a driving force, indicated ReportLinker.
@riseofaitech are now entering the Metaverse and the Play2Earn gaming space which, according to a 2021 Bloomberg report, is valued at $500bn with huge growth predictions. @sanboy23@Iamchike2@nainiydd#NFT #Crypto #P2E $AITECH pic.twitter.com/uMzyD2aSqL
— 오라클🔺 (@hoonjitw) June 1, 2023
Initiatives such as the European Association for Virtual Reality and Augmented Reality (EuroVR) and projects like Augmented Heritage and International Augmented Med (I AM) contribute to market growth.
With increasing startups in extended reality, particularly in Sweden, Europe is poised for increased growth in the gaming metaverse markets.
Chinese City Pledges $1.42bn to Boost Metaverse Industry Growth
Chinese city Zhengzhou has announced a plan to boost the metaverse industry by providing a significant 10 billion yuan ($1.42 billion) fund for local companies’ growth and development.
Although the People’s Bank of China banned digital assets in September 2021, the Asian power centre seems liberal towards the metaverse.
Under the new government’s draft, metaverse companies relocating their headquarters to Zhengzhou will have the opportunity to grab a start-up capital investment of up to 200 million yuan ($28.34 million).
In addition, the municipal government will provide a promising opportunity for companies operating in the metaverse sector within the city.
Chinese city Zhengzhou has released a policy draft to support the development of the metaverse industry with a $1.42 billion fund, aiming for a thriving metaverse industry by 2025 pic.twitter.com/5dLGj1Rmp1
— 0xClaudia (@0xClaudiaCloud) May 29, 2023
For each project that receives certification as viable by the government, companies will have the chance to secure a substantial grant of 5 million yuan ($710,000), regardless of their headquarters location.
Moreover, the government is offering other benefits such as rent subsidies for the metaverse company within Zhengzhou.
Open for public to review
The draft is now available on the municipal government’s website for feedback and review by the public.
“The public is now open to solicit opinions, and all sectors of society are welcome to put forward their opinions and suggestions,” reads the translation.
Hence, the purposed plan is only a draft to date, and the government has not mentioned the specific date of the fund allocation.
The metaverse-related sectors in Zhengzhou are expected to generate annual revenues exceeding 200 billion yuan ($28.34 billion) by the end of 2025, according to the municipal government.
Amid speculation about China lifting an absolute ban on crypto, the public is taking this draft as positive news for the industry.
“More positive news for crypto from China, that’s great,” wrote a Redditor in reaction to the news.
“One positive thing after the other,” another agreed, hopeful of China’s liberal step towards the crypto industry.
Will China overtake the West?
Western industry leaders like Meta wanted to be the leaders in the metaverse, but are now pivoting towards AI. Whereas China appears to be positioning itself as a potential metaverse hub.
As part of its commitment to spearheading China’s digital advancement, Nanjing, the capital of Jiangsu province, has also launched the China Metaverse Technology and Application Innovation Platform.
Chinese cities are promoting the metaverse sector as the future of the digital economy.
— ICNN (@icnncryptonews) May 29, 2023
“The Metaverse is a vague concept and every [company] is interpreting it in its own way. In China, it’s very much a government-led concept,” said Brady Wang, an associate director at tech market research firm Counterpoint.
The Chinese government is clearly keen on the technology.
“The key difference [in the metaverse] between China and the rest of the world is it’d be heavily regulated in a centralized manner,” said Zhengyuan Bo, a partner at China-focused research firm Plenum.
Bo emphasised that the monetization of digital assets within the metaverse is constrained due to limited space for growth.
“I think in a decade or two, China will play a bigger role in everything than the US,” speculated one Redditor.
“America hates China because China doesn’t do what America wants it to. They hate it because it exists. I’m happy China is dedollarizing,” another Redditor expressed.
Microsoft Accuses CMA of Irrationally Blocking $68.7bn Activision Takeover
Microsoft has blamed Britain’s Competition and Market Authority (CMA) for “irrationally” blocking its $68.7 billion takeover of Call of Duty video game maker Activision.
The tech giant announced its plan to acquire Activision to “bring the joy and community of gaming to everyone, across every device,” back in January 2022. The proposed takeover aimed to bring Activision’s popular franchises, like Call of Duty, under Microsoft’s umbrella.
“Microsoft will acquire Activision Blizzard for $95.00 per share, in an all-cash transaction valued at $68.7 billion, inclusive of Activision Blizzard’s net cash,” stated the company.
Read Also: Google Opens Up Access to its Search Labs with Generative AI
However, its bid faced regulatory obstruction amid concerns over industry consolidation. The deal’s block provoked Microsoft to appeal, heightening anticipation for the outcome and its potential implications on the gaming landscape.
The regulatory body blocked Microsoft’s takeover of Activision in April, saying it would encourage market monopolies and stifle competition in the growing video game streaming market.
EU offers favorable conditions for businesses
The company has accused the regulator of making “fundamental errors” while blocking its deal.
Microsoft has claimed the CMA had not taken “proper account of three long-term commercial agreements which Microsoft had entered into with the other party” in the filing with the Competition Appeal Tribunal.
After the ruling, Microsoft president Brad Smith slated the regulator, suggesting the decision conveyed a “clear message” that the European Union (EU) offered more favorable conditions for starting a business in comparison to Britain.
Additionally, Activision, which is also the creator of the popular mobile game Candy Crush, accused the UK of having an unwelcoming business environment, stating that it was “closed for business.”
Hence, while the CMA has halted the acquisition, the EU has given the green light for the merger.
Need for broader understanding
Chancellor Jeremy Hunt expressed his belief that regulators should understand their “wider responsibilities for economic growth” following the blockage of the deal.
“I would not want to undermine that at all, but I do think it’s important all our regulators understand their wider responsibilities for economic growth” stated Hunt.
One of the reasons companies like Microsoft and Google are interested in investing in the UK is due to the presence of independent regulators that are not influenced by politicians, argued Hunt.
‘Takeover won’t be unfair’
The fact that the deal was blocked by the UK but welcomed by the EU has made headlines. Evidently in giving the green light, EU officials believe Activision’s takeover by Microsoft won’t be unfair.
In the meantime, it is still awaiting a confrontation with the US Federal Trade Commission which has filed a lawsuit to block the deal. The trial is scheduled to start in early August, with a decision expected by the end of the year.
EU approves — with conditions to license to rivals access to Activision's content for 10 years — @Microsoft's $MSFT's deal to buy 'Call of Duty' maker @Activision https://t.co/kjSxzJzjwm via @YahooFinance
— Alexis Keenan (@alexiskweed) May 15, 2023
“Where we diverged with the CMA was on remedies,” stated Margrethe Vestager, the EU’s competition chief.
She stated that a 10-year free license was granted to consumers, enabling them to stream all Activision games they hold licenses for via any cloud service.
“And why did we do this instead of blocking the merger?” she questioned.
“Well, to us, this solution fully addressed our concerns. And on top of that, it had significant pro-competitive effects.”
However, the Chief Executive of the CMA Sarah Cardell reiterated her support for the decision, emphasizing the regulator’s objective to establish favorable conditions for competition that would foster the growth of both large and small companies.
“I don’t find that we are operating sort of, broadly speaking, in a hostile environment,” stated Sarah.
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