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Hey folks!
Happy Wednesday! Hope you have a fantastic week ahead. Welcome back to Tech Breakdowns, albeit 2 days late. We have done a few of these now. I started with the Theranos trial that went out to whopping 12 people. Since then, I have covered the Loot Project, the second home ownership company – Pacaso, the founding story of Foxconn among others. I am finding my groove and can feel the quality of my posts going up.
Now to address the elephant in the room – Facebook changed its name Meta last week. On the official announcement post on the Facebook blog, the company said its vision was to “bring the metaverse to life and help people connect, find communities and grow businesses.” Yeah, okay.
The pandemic, for better or for worse, forced a realisation that most of the day-to-day activities that what we thought required us to be present in person can be done from any corner of the world with an internet connection. While virtual communication has largely been limited to Zoom calls, it will not stay like this. I believe that Facebook even with all its resources will likely not be the company to build the metaverse.
Think about the audience on Facebook apps and consider this – who is more likely to participate in the metaverse – someone your dad’s age or a 5-year-old playing games on his mom’s iPad?
This week, let’s look at three companies that could build the metaverse instead.
Companies That Could Build The Metaverse
Roblox: The obvious choice
Earlier this year, David Baszucki, CEO of Roblox, in a virtual meeting with the company’s investors said “Some people refer to what we’re building as the Metaverse.” Launched in 2006, Roblox is an intersection between gaming, programming and social networking. Roblox offers a set of tools to the users to create their own video games on top of the Roblox platform. Roblox designed these tools for rookie game developers, that is, these tools are easy to use compared to the other option of using professional game engines for development. These tools are also flexible and can be customised to create games or experiences in different genres like first-person shooting, simulators, puzzles among others. The genre we need to focus on here is – role-playing. In it, developers create whole worlds complete with cities, community centres, parks etc. along with other fantasy aspects like flying cars or building-sized worms.
Roblox has its own economy that is enabled by its in-game currency – Robux – that can be traded for Dollars (the current exchange rate from Robux to USD is US$0.0035 per 1 Robux). The experiences can be free, paid or freemium and developers received approximately 70% of the Robux that is spent on their mini-verse.
When you enter a Roblox mini-verse, you don’t play as a pre-defined character (like Mario in Mario Bros) but instead, you play as a version of yourself. While setting up your avatar, you can choose whoever you want to be.
If you’re a developer, for example, you can generate income not just by selling your experiences to consumers but also by re-selling your creations (a house, a car) to other developers via the Roblox marketplace.
This ability to be whoever you want has created an in-game economy for virtual goods. Brands have started selling licensed digital replicas like the Nike Air Max shoes and NFL merchandise. A virtual Gucci bag was sold for $4,115 even though its physical-actual-real-world counterpart costs $3,400. Metaverse becomes a real when online life is more valuable to people than the ones in the physical world. It seems like for some the metaverse may already be here. For others, Roblox has made attempts to showcase its ability to build complete and interactive worlds while promoting movies like Ready Player One, Spider-Man and Star Wars.
The case for Roblox: It currently has 48 million users, most under the age of 13. With its in-game economy along with its thriving developer community, Roblox makes for an obvious choice to build the metaverse.
Gather: The start-up choice
Last week, I played an escape room from my browser with my friends in a different country. The game was hosted on a new service called Gather. Gather uses spatial audio technology where the audio of an object (or another user) fades out the further a user moves away from it. This way, a group of people standing in close proximity can see and talk to one another while someone else in the same space standing further away will not.
While my use case for the service has been mostly for social reasons, Gather’s real product is built for teams working remotely. Companies can design a virtual office, complete with workspaces, conference rooms, break rooms etc. The idea is that the employees will log in to their virtual office every day and will be able to interact through Gather for things that would otherwise require Zoom calls. Gather has tools that let you give presentations, whiteboard, take notes and collaborate on web-based documents. On their website, the company also showcases how the same feature sets can be used by schools and student clubs alike.
When you think of a Metaverse, one of the first things that come to your mind is high tech. On the other hand, Gather looks like a game from the 90s. If you look past the visuals, however, you realise that the Gather possesses the essence of the Metaverse. In the almost two years since the pandemic hit, I have tried many similar applications - Kumospace, Spacial.Chat and Rambly, but I liked Gather the best. It’s just fun.
The reason I am optimistic about Gather’s ability to build the Metaverse is accessibility - Facebook’s vision requires VR headsets but for Gather, you just need your laptop. In March 2021, Gather raised a $26 million Series A from 7 investors including Sequoia Capital, Index Ventures and Y Combinator.
Microsoft: The big tech choice
Microsoft already knows a thing or two about the metaverse. Microsoft makes augmented reality (AR) headsets and early this year launched Mesh. Mesh is the technology that will be the foundation of Microsoft’s Metaverse. Mesh is designed to not just run on Microsoft’s own devices but also on traditional VR headsets, phones and computers.
Mesh is a tool for creating virtual environments that can enable user interaction through avatars and share data and 3D models.
Mesh will also enable geographically distributed teams to have more collaborative meetings, conduct virtual design sessions, assist others, learn together and host virtual social meetups. People will initially be able to express themselves as avatars in these shared virtual experiences and overtime use ‘holoportation’ to project themselves as their most lifelike, photorealistic selves.
During the company’s Ignite event, Microsoft announced that you could now create avatars that can be used to represent you instead of having your video on in Microsoft Teams. If you’d like, you can turn on your webcam only for yourself and the avatar could mimic your expressions on the call. It is not just avatars though, the upcoming update will also include pre-built 3D workspaces meant to replicate office areas like conference rooms, break rooms and watercoolers. Microsoft will also let companies design their own spaces as well. ‘Mesh for Teams’ as Microsoft calls it, is just an example of the many things that can build over the largest Mesh platform.
Let’s not forget that Microsoft also makes Xbox game consoles and can leverage that to build the Metaverse. Of the two examples we discussed above, Roblox and Gather, Microsoft has the competencies of both. Couple that with the reach and resources it has, I would argue that Microsoft is in the leading position to be the Metaverse company.
Tech This Week
Facebook says that it is shutting down its facial recognition program and will be deleting the data of over a billion people. Link.
LATAM fintech darling, Nubank filled to go public at a targeted valuation of $50 billion. It was last valued at $30 billion when it raised a $750 million round led by Berkshire Hathaway. Link.
Starting in the Netherlands, Tesla for the first time is letting other EV manufacturers use its Supercharger network. Link.
After years of sleeping over it, a big tech company has finally copied Notion – introducing Microsoft Loop. Link.
TikTok founder Zhang Yiming has stepped down as chairman of the parent company ByteDance. In May, he announced that he would be stepping down as the CEO. This makes him the latest founder to step down from the company since China began its clampdown on tech companies. Link.
Zoom will now show ads to its free users. Strangely, Google wasn’t the first to do this. Link.
Trivia
All responses are welcome and like always clues are available to anyone who asks. Reply to this mail with your answer or to get a clue.
Trivia for the week: ... It’s a phone. It’s an internet communicator. Are you getting it?
Well, this is embarrassing. I messed up the trivia for last week. The puzzle was supposed to say 10100, the Googol number, but the puzzle said 1100, you know, as in 1. Thanks to Dev B for pointing it out.
That's all for this week folks. See you next week!
Shobhit (@ShobhitJethani)
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