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Business Unusual

The Metaverse - a potential future internet

26 May 2021 7:15 PM

Combine high speed internet with powerful hardware and software to build a virtual world to rival the real one, welcome to the Metaverse.

The starting point is the end of testimony in the court case between Epic Games and Apple. Epic Games allowed players of their game Fortnite to make purchases via their payment platform at a 30% discount which is in breach of the Apple terms and so they were removed from the App store cutting off millions of players.

Apple CEO Tim Cook was the last to testify and offered some views that the judge chose to question herself. Epic contends that Apple operates its App store as a monopoly and falls short on allowing for competition.

You be Judge Yvonne Gonzalez Rogers and see what you take is on the following

  • Apple charges 30% for all transactions for apps earning more than $1 million per year and does not allow links or directions to pay via the web

  • The Judge asks why not allow an alternative - Tim Cook said that doing so would not allow them to get an return on their IP

  • Apple says they ensure apps are safe (1-2% have issues, a lot less than Android)

  • Apple says they don’t charge if there are no transactions and make the code to build apps very cheap or free for most.

  • They recently dropped fees for companies that earn less than $1 million a year, they pay 15%

  • So is getting a 30% cut of payments for facilitating them justified?

  • Judge Rogers asked if banking apps are subject to the fee, they are not, she asked why gaming apps should pay if banks don’t

  • Cook did not answer directly opting to focus on how the App stores many free apps attract a large audience for gamers

  • The judge then asked why continue to profit from the game after the first transaction which might come as a result of Apple inviting them in when getting players to stay is down to the quality of the game and not the App store.

  • Cook maintained that they chose a system that works for them

What will the judge say? There were three weeks of testimony and over 4500 pages of evidence. Epic is looking to get access to a 100 million plus user base to sell more items with a better margin. There is a lot riding on the case not just a lot of money.

Judgement will take some time.

One of Epic’s views is that they are not a game and should be viewed more like a bank in that they are a platform for users to do a variety of activities which includes transactions and not simply selling access. Epic CEO, Tim Sweeney has long argued that they are building a Metaverse.

What is the Metaverse

The term was coined in the 90’s and is a virtual place that combines the internet, virtual reality and augmented reality.

Originally the idea was that this would be cyberspace, but that has come to mean the internet and so this is the more immersive edition.

Tim Sweeney owns the controlling share of Epic Games which is valued at $28 billion which makes Sweeney a very unassuming billionaire. Is he just a maverick, in some respects he is, but considering TenCent owns 40% and made that investment back in 2012 suggests they see the metaverse as a big bet on the future.

Take a listen to his take when asked about what the new virtual spaces might allow and how they could avoid the pitfalls that social media and the likes of Apple have seemingly fallen into. He was talking to the New York Times Andrew Ross Sorkin in November 2020.

Despite the hope to not head towards the dystopian version, I am willing to bet it will but that at some point it will course correct.

If you would like to see what they might look like watch Ready Player One, it imagines a gamer that needs to fight to stop the controlling and profit driven businesses that are looking to take over the virtual OASIS or to give it its full name - Ontologically Anthropocentric Sensory Immersive Simulation. It is set in 2045 which might line up quite nicely with the time it will take before we really are at that crossroad.

Worth noting that the effects in the movie are rendered on computers and that at the core of Epic games is the Unreal Engine, software for generating virtual words that is often used for making movies and today they released early access to their Unreal Engine 5 which renders games that look like you are watching a movie.

This may be the first crossover with Epic via Fortnite having hosted virtual concerts with most of them having more attending via in-game or live streams to make them bigger than the largest live concerts ever. The version with Travis Scott had over 20 million taking part.

We have spoken before about artists that might struggle to make a world tour to satisfy all their fans, this adds the option that at the end or the beginning of a tour the artist would host this kind of virtual tour allowing those in locations they will not be able to travel to still attend.

Early versions of metaverses include Second Life which allowed you to be a version of you in a virtual world where you could buy and sell virtual items with currency that could be exchanged for real currency. Back in 2003 a digital currency was already in place as a precursor to the explosion of cryptocurrencies in 2009.

The successor is Decentraland, a new virtual world run on cryptocurrencies and non-fungible tokens. It is early days but the space is not controlled by a single entity but rather a DAO or Decentralised Autonomous Organisation. The space that is available can be bought from the community and used to build spaces for games, galleries or manufacturing businesses.

The landgrab is being fuelled by those old enough to remember someone being willing to spend 10 000 bitcoin to buy two pizzas.

It has a long way to go as both the software and the hardware needs to both get better and cheaper to get major traction. Bandwidth is the third element which is also improving but will need to improve more to support the kind reality that games offers now.

Facebook is looking to be part of this space too with Horizons which is almost ready so just over the horizon.

Two that have proved just what can be achieved are the likes of Minecraft and Roblox games that have expanded beyond the definition of a game to include education, art and business in creating worlds or items for in game play.

And in case you think that this will be a happy place free from all the nastiness of the real world, there are already issues relating to theft of virtual items, Ponzi schemes and all manner of cons that are actually much easier to do when you can rip off so many more people in places that have very few laws and even fewer cops.

In the same way we were doubtful just how much a mobile phone might impact our lives, it is likely that the developments of the internet and the hardware and software to create virtual worlds will be the way we use the internet in the future.




26 May 2021 7:15 PM

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