#29 – The Metaverse Part 1 – What is it? When will we have it?
In this episode, we talk about the Metaverse – or is the metaverses? – specify what it is/will be, debunk myths around it and detail its/their key enablers. Everything you wanted to know and also … that you didn’t know you needed to know. This will be followed by episode 30, focusing on understanding what the key players are doing in this realm, as well as implications to entrepreneurs, investors and others.
- Intro (01:34)
- Section 1: The Typical Silicon Valley hype machine?/ Definition of Metaverse (01:57)
- Section 2: Key enablers to the Metaverse (17:44)
- Conclusion (41:21)
- Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder at App Annie, business angel, advisor to startups and VC funds, @bschmitt
- Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro
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Welcome to episode 29. In this episode, we will go into the metaverse, not literally, but we will discuss the metaverse, its definitions, how people see it evolving, its core enablers, and some of the lessons learned that we believe entrepreneurs and venture capital firms should have. Bertrand, metaverse, what is the metaverse?
Big question. I guess that’s a billion dollar question. There’s been so many definition of what the metaverse is or is not. I like one definition from Matthew Ball—a well respected analyst—and I believe he has his own VC firm. By his definition, “Metaverse is a massively scaled and interoperable network of real time rendered 3D virtual worlds, which can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data such as identity, history, entitlements, objects, communications, and payments.”
That’s the full definition. I like it, because you are not missing any piece of the puzzle, at the same time, by its very complexity, I feel it’s showing us that it’s not an easy definition. It might even be seen as a very contrive definition. If you think about the internet, how different is it really? The 3D part for sure. Beyond that, it’s not very clear, actually, except that it’s maybe more unified than the internet that we know. You could argue if you are just inside Facebook, how different it is about just being inside Facebook and just never leaving Facebook.
Of course it to be horrible, at least from my perspective, using Facebook less and less. That’s one vision. Some will say, we’ll talk about what it is, but also what it is not. I will quote again Mathew Ball. For him it’s not just a virtual world. It’s not just a virtual space. It’s not just VR. It’s not just a digital virtual economy. It’s not just a game. It’s not just a virtual theme park. It’s not a new app store. It’s not a New UGC platform. For sure, it’s a big buzzword in Silicon Valley these days, especially thanks to meta rebranding itself. Just from that perspective, it was huge on Google trends. Since the renaming of Meta everyone has been Googling what the metaverse is, I guess. What you think, Nuno?
A lot of respect for Matthew Ball as an analyst, and his definition, as sound as all the other definitions that are out there. I have a couple of objections to his definition. It starts with interoperable. It starts with, “The metaverse as a massively scaled and interoperable network of real-time render 3D virtual worlds.” Interoperability is not a given in the metaverse. Nobody has told us that the metaverse will be an interoperable bunch of worlds working together.
Actually, if I had to make a bet, using my computer engineer hat and architect, we will not end up in anything that is interoperable. We’ll end up in silos of worlds that are interoperable between them, but they’re owned by specific entities. So in my simplistic world of the old internet, if we’re delayering the internet, when we’re thinking through the network layers, the transport layer, where TCP/IP was lying, I think the analogous of what we’re having going forward might, in some ways, be fulfilled by what now people are calling—in my opinion very poorly—web 3.0, which I would call internet three, sort of the blockchain stack and what’s being implemented. Again, I’m not saying it’s all going to be blockchain, but there’s some elements of that that might be blockchain.
Here the analogy is, this is the upper layers, this is the application and presentation layers, that’s where the metaverse will reside. If we’re thinking through this, who owns the applications? Well, the different players own the different applications, and they own their different worlds. They create their worlds around those applications. What I’m seeing is, everyone’s talking about the metaverse, and I’m like, “No, it’s not the metaverse. It’s going to be the metaverses.”
That’s the first issue that I have, because I don’t assume interoperability, therefore you have siloed owners, and therefore it’s likely that we will have competing owners. And we’re already seeing that. We’re going to talk about players and what they’re doing, and Facebook is doing what Google’s doing, and all the other players are doing, to create their own worlds, to create their own entities.
For me, it is clearly virtual. It is clearly a realm that goes beyond the physical world. It’s not clear to me that it’s only virtual. Our favorite movie, Ready Player One, edifice a bit of that. It’s not clear that it’s fully virtual. There might be some consequences in the real world as well. Input and output manifests itself in the real world, but it’s certainly a world that is constructed beyond the world that we’re in.
I think the experiences that are being created are experiences that are either synchronous or asynchronous. I don’t think they all need to be synchronous experiences, so that’s the other part I have an objection from his definition. They don’t all need to be persistent. If anything has been taught to us, people don’t want persistency in everything. The advent of messaging tools and communication tools like Snapchat has shown us that people actually sometimes just want to send something that disappears, and they want to do stuff that is not persistence.
Actually, if anyone’s building virtual worlds or metaverses right now that are listening to us, please do allow us to have the ability to make stuff disappear and never be found again, which we’re missing in the internet today for the most. Definitely, I think the experiences don’t all need to be persistent either, but there is an element, and that for me is what is a metaverse. It’s sort of a different type of universe in itself, where those manifestations are bound by different rules, by a different ecosystem, by different interactions, and that what makes it powerful.
I agree with Matthew and him saying this is not a new app, not a new as a generated play. It’s not just a very basic virtual 3D world. It’s much more complex than that. I agree with all of that stuff, but I do think it will have different manifestations. In the world where it has different manifestations, the likely prayers that we’ll be able to build it are players that already have virtual experiences that are very powerful.
Gaming companies come to mind. Gaming companies would be an obvious creator of metaverses. We’ll talk about, later on, a bunch of companies, but obviously companies like Epic Games, and what they’re doing seem to be well positioned in the creation of these metaverse or metaverses. We’re looking at companies that are very pervasive today in the tech stack, like Facebooks, etc, of the world.
I have great respect for Matthew. I think the definition’s a decent one. I think he’s taking a couple of things for granted and making the definition very complex, but I’m not sure it’s a given. I’m not sure any of these elements are given. Interoperability—I come from a world I spend a lot of years in Telecom— interoperability is never given in systems, never, never when there are different players that have different incentives, it’s never given that there will be interoperability, so I wouldn’t give that as a part of the definition of what it is.
I respect Matthew Ball a lot. That’s why I pick his definition, because it’s probably as good as it can get. I think the big issue is that metaverse means different things to different people. How do you define this? And the fact that when you hear in the news at push of a metaverse, everyone means something different. I don’t see how a single player being as big as Facebook, who owns that piece of puzzle. If one player is not owning it, good luck with interoperability.
Of course, if you think interpretability from an internet perspective, like different players have some level of interoperability, yes, you can have common standouts, that’s possible. But to go that far, massively scaled interoperable network of speedy worlds, it’s not an easy one at all. And the other piece is, how is it beneficial? That’s the part where I’m constantly struggling.
Typically you start something, you need to solve a pain point. Here I’m not clear about the pain point we are really solving. And that’s probably a bigger piece of the puzzle for me. That connection to 3D it’s great, but what does it really enables that you cannot enable otherwise? Don’t get me wrong, I like a lot of 3D games, first person shooters, so there’s a logic for using 3D in a lot of situation, but for that one, I’m not that clear.
Maybe to go back, you touched briefly about the book, Ready Player One, which was made into a movie. It was really an eye opener. It was at the time a preocular, so naughty at the same time, where it helped for a lot of people to maybe visualize more what it will mean. This is notion of metaverse. It made you think, and interestingly enough, it made for an ugly physical world. The rise of the metaverse in that book was accompanied by the real world getting worse and worse, and that’s one reason why people will go to the virtual world. I’m certainly hopeful we are not going in that direction. You know, more point on the book or movie?
It’s a wonderful movie, because it precisely shows some of these experiences that I was talking about. It’s obviously synchronous, but there’s stuff that happens asynchronously. There’s manifestations in real life. There’s haptics and things that you suffer through as well. I think this whole world, this novel notion that it’s virtual worlds, it might be virtual or hybrid worlds, who knows? It’s just a different manifestation. It’s a different world in some ways that we play at.
In some ways, the movie, the book, edifice this perfectly. It shows that you start having lines that are not so well defined between both worlds. If we look at our world today, in current analogies around gaming, we already feel that a little bit. There’s already a lot of behaviors that happen in the internet, on the internet where people have different manifestations, avatars, personalities, identities, etc. They’re very, very different from their real life. I’m an active gamer. I have presence in games—a couple of games—I won’t go into which ones anymore, so people don’t chase me, but there’s one game that I play all the time. I’m a member of an alliance in that game. I mean, nobody has a clue of what I do for a living. Nobody knows what I do. They just know if I’m a good player or I’m a bad player. You know if I can be trusted to do X, Y, or Z, or not, that’s it.
In some ways, this is sort of the next level of that. It’s, it’s this world creation at a different level in terms of fidelity. That’s how I see the metaverse evolving. In some ways, it reminds me a little bit how we always tweak names. All of a sudden everyone started talking about software as a service in SaaS and somehow people magically forgot there was things before that already existed that were defined, like application service providers and stuff like that. Everyone’s like, “No, no, the SaaS thing’s told you.” It’s sort of not new. It’s sort of an evolution of something, and either there was an evolution in business model, or there was an evolution in terms of fidelity of the service.
The way I think about metaverse is not necessarily as a revolution. I think of it as an evolution. It’s an evolution of fidelity, an evolution of backend systems, an evolution of experiences, an evolution of input and output—we’ll talk about that later on—but not necessarily just the revolution. People already have virtual experiences. They already have dual lives in some ways, or sometimes more than dual lives. They have very multifaceted lives with very different aspects to them all the time. That’s how I think through through the metaverse. It’s sort of a continuum of evolution and technology acumen and fidelity. That’s how I think through it.
Staying on the definition, I got another one that was interesting from Shaan Puri, “The metaverse is a moment in time where our digital life is worth more to us than our physical life.” I like the simplicity of this one in a way.
It’s all philosophical definitions, it works really well.
Yeah, it kind of compares to the Puri definition. It’s a digital versus physical life, where or when is it worth more? Worth, I guess, not just in money, but more in experience, in enjoyment. In some ways, I wonder how much we have not already bridged that gap, at least for some of us enjoying more digital life. Potential is there for some of us, I would say actually, by this very definition.
I think it’s a wonderful definition, and I hope it’s absolutely wrong that we’ll never get to that point, where our digital lives are worth more to us than physical, because that’s not great state of affairs, but it is a great notion of value. I think more than the specific notion of one has more value than the other, is a notion where we value it so much, because we have these experiences that are significant to us, that are either virtual or hybrid, but they’re significant to us. Those experiences live in that world or in those worlds, rather than necessarily need to go back to real life afterwards.
In that since I like his definition quite a bit. I just hope we don’t get to the point where it is more important than our real life stuff, because that’s not a good sign. Because at that point in time, then you spend more time there. I mean, you shouldn’t interact in real life. I actually wrote the text when I was much younger, which is fictional short story about the day where all the servers went down around the world, and people came out and they got to smell trees again, and see the flowers, and they went back to that life, so I hope that world never exists, that world of we’re just in the midst of different virtual worlds all the time, don’t come back to real life and smell the coffee, so to speak.
For me, at the same time, I feel we are in some ways now already there, to be frankly, by this definition, because I don’t know you, Nuno, but so many hours we are spending in front of our screen zooming, podcasting. This is already virtual, in some ways, this is already digital. We are spending so much time chatting with friends, doing video calls with family.
By this very definition, we are already there in some ways—at least some of us are—building digital friendship on some common topics of discussion. In some ways, I don’t disagree with you that I enjoy seeing the trees, going outdoor. And at the same time right now it’s cold and rainy.
Meeting friends, right? I think COVID has shown us how much we miss meeting each other as well in real life. I hope we don’t lose that.
But at the same time, it has shown the strengths of bonds that go beyond the physical and where you can keep that going, even with the distance, even we start being able to travel. In some ways, I feel I’ve been closer to some of my friends than before, because now we are even more ready to just be into some chat group, exchange ideas, topics and do video calls. I was not doing video calls much with friends before. Now it’s become much more common, because of course, yes, we want to see each other. In a way, it’s that or not talking to them anymore.
But isn’t the starting point for the most cases, I wouldn’t say all of them, but for the most cases, isn’t the starting point a real world interaction and knowledge and working with each other, and knowing someone physically at some point in time. Isn’t that still most of the case? Those are the strongest relationships. I certainly don’t have very strong relationships with my mates on my alliance in my game, and we’ve been doing this together for several months. I’m like, “It’s fine, right? But I don’t know who you are, and cool.” so I don’t know.
It depends if you know the other person. I would agree if you don’t know person in the sense of you don’t know their name, you don’t know their connection, but there are some people I met through common interest, and it’s been mostly virtual. In some ways, people in your neighbors, your random friends… In some ways, it’s just that, it’s very random at the same geographic location.
Of course there are stuff you want to do in your real life, you want to have dinner and lunch and stuff with drinks with people you… Not over video. I found this doesn’t work so well to do that virtual appetizer and that sort of stuff. I don’t know your take on this. I’ve tried a few and I can say it was great for that. It’s great to have local people, but at the same time, I feel our interests are becoming so specialized in the way that it’s not easy to find people, where you show passion for astronomy, for instance, or passion for music, or for playing piano, or for professional interest being a VC. I just see the value of that. I see how it’s becoming more and more easy to just go virtual for with a lot of relationships.
Thank God half of my neighbors are not VCs. That’ll be a tough life. Maybe the interesting segway to this is, what is the enablement of this metaverse? Is it just software? Are we just working in a world that is software only? What piece does hardware play? How important are these different elements of input and output that we have in our lives, you know, goggles, glasses, headsets? Where are the key boundary conditions for us to start go into that world of metaverse?
That’s a great question. For me, intuitively, I’m a big believer that we have been to focused on some big items like VR goggles. This time, promise it’s coming. The second coming is there, and Apple is going to with these Apple glass, and the world would be different. I have so much trouble to believe in that, while at the same time acknowledging that some stuff have been, in a way, quietly transformational. If I pick AirPods, in some level the Apple Watch, for me, these have been quietly transforming experience. Me—the way I use my phone—has been quite transformed with AirPods, not just phone, tablet laptop, because suddenly you don’t have a cable, suddenly you can move freely. Suddenly just works.
As a result, you can do stuff much more easily than before. I feel some of this type of business has always been undervalued by many analysts and many people trying to see a transformation point. Maybe it’s just the piece of the puzzle, for me is obviously VR, AR. These big items that everyone talk about and myself, I have probably bought and trying them all, from the first Oculus 3 to the latest quest, to Google, which had Google Cardboard experience for underway—if people remember—to other VR platform for Androids that ended up being trashed.
Of course, we have seen all of this VR Google for windows. Sony as their own for PlayStation. Once you have tried them and played with them, and sometimes played for 10 hours or so, play a full game, for instance, I must say as a tech has improved very significantly. That the first thing, it’s not as bad as before. Initially you had to set up a lot of stuff. You had to put a lot of cables, you had to basically set it all that up in your living room, because no space was big enough, and to make it work in your home, even if you’re at a big home. But then you cannot keep your living rooms like this, so you have to pack and go. But just completely unrealistic except for people, who had a space just for it.
Now it’s much easier. It’s much more simple. Facebook did a great job with a latest quest. Quest to make it much more practical, wireless specifically, so you need potentially to move a bit of furniture. The same in term of reaction time it’s better, even if the graphics quality is still a relatively entry level.
Personally, I know so many people like me where, ultimately, you play a bit, you find a few key experiences that are already enjoyable and provide you a very different type of gaming. For instance, in my case, I only found gaming interesting so far, but after a few games and after playing like this, you discover you cannot just… Normal games, if you’re really crazy, you can play 3, 5, 10 hours. Good luck doing that with VR. You need a break after one hour, typically. In some cases, even after 10 minutes.
So that’s a big issue, and you have this disconnection from reality. You cannot hear what’s happening. These are very few situations, where I can really be in a situation where I cannot hear what’s happening around me. I mean, we have a kid at home. In case something go wrong, I cannot just be like, “You know what? Too bad” when in my VR environment, and I let my kid die in the other room, because I was not aware of my surroundings. I mean, that’s just not possible. I just feel a lot of situations where it just not as practical as people try to make it be.
Let’s go by parts—two pieces—one is the fundamental virtual reality element. In the fundamental virtual reality element, I own Oculus Quest 2. I’ve probably used all the key headsets out there in the market, HTC VIVE, bunch of others. I sort of go back to what was my most amazing experience in that virtual reality world. It’s not one of my portfolio companies, but I happily was in LA visiting Wave. They used to be called Wave VR. I think they’re now wave XR. So shout out to Adam, the founder there.
They were about to launch a concert or an event—I don’t know how they called it properly—with Imogen Heap. Imogen Heap, the singer, who used to be half of Frou Frou, for those who remember Let Go from Garden State, from the movie. Literally, he put the headset on me. I started listening to it and I just got in as she was singing, Let Go. I actually didn’t take the headsets immediately after, so I had to wait a little bit. I don’t know if they realized it or not the people that were around me, but I just was crying.
So I didn’t want to show my tears. I was crying. I was like, so exciting. But a couple of elements are very clear about this. To your point, Bertrand, shorter experiences. I think VR is still not ready for the one hour, two hour binges and experiences in gaming or consuming information. There’s the width of the headset, it’s still not great. But definitely you need the immersion. The sound immersion, the senses immersion around particular visual. Cortex as well is pretty important.
Are there other ways of creating this? Yes, there might be other technologies out there that we’re going to facilitate that will not necessarily need to have these headsets on us. But definitely there’s an element of this and how you interact with it that is very powerful. For gaming, I think the accessories around it, the joysticks, everything else, whatever type of mechanisms you have to input into the game is still a little bit of work in progress. Oculus Quest 2 does a decent-ish job, but it’s still not supernatural. There’s obviously a lot of work around that. That’s one element, the element around virtual reality, and I think that links very well with the overall theme of the episode around metaverse and these filter world worlds, etc.
But there’s also the element of augmented reality, of the realities here, but there was an augmentation on it. People even talk about richer reality or extended reality and other types of terms. I was one of the first users of Google Glass. The stuff I had to pull to get a set of Google Glass, I can’t even go into details right now, but I got it, and I was using it, and I used it, and I took videos.
There I have to be very honest, after maybe a week, which was cool of me using it and whatever, I stopped using it. There was a couple of elements to why I stopped using it. One is, first and foremost, I didn’t believe there was enough utility value coming out of it. The ability to take photos of other people and videos, while you’re just interacting with them is cool, like first person stuff, but honestly, after a while you get tired. So there needs to be more utility than that. The user experience, the UI itself needs to take you to a different level of interaction, which you can have through the goggles or through the glasses that you wouldn’t be able to have by just having the phone in front of you.
The second piece was obviously the fact that it was intrusive. People noticed that I was using them. And because it’s intrusive, people would always have these questions, are you recording there, you’re taking photos, then there’s an element of privacy, etc. My view on Google glasses, it was definitely a miserable failure as a play into the world, but it showed me that there’s going to be something around that. I think us, like you and I, Bertrand, who wear glasses or eye glasses. For us, it makes sense that our glasses have some sort of UI, that there is something beyond just having better sight through the glasses, that there is computation that links to these things as our screens, the lenses as our screens.
I think that sort of got stuck in my mind. I definitely think that’s a paradigm that will reappear in one way or the other. For virtual reality, for me, the big, big doubt is how do you create that immersion? And do you need to have the headset by nature? Or are there going to be other technologies that might emerge that are going to make it as if you don’t need a headset, because it’s so high fidelity, such great holographic technologies and other technologies that might emerge that replace the need for you to actually have the headset and be in that world, and do those interactions.
Again, a couple of lessons learned for me. I agree with you that’s not great experiences yet. I have cried watching VR. I don’t know a lot of people who have. But I think this world will exist. There’s going to be a a world of augmentation, which superimposes on the real world. There’s going to be a purely deeply embedded virtualization of the world or virtual world.
Those I think will exist, and we’ll need all these different pieces for it to work. I think we are still missing the hardware. The hardware is really not there. I don’t know if it’s going to be Apple that’s going to finally figure it out or not, if there’s going to be someone else. But there are pieces of hardware that somehow intuitively know they’re going to be like goggles or glasses, or headsets. Somehow they’re going to be like joysticks or whatever for input. There’s pieces that are already, I think, emerging clearly after many generations of attempted plays and many of them failure plays or failed plays, but ultimately, we are not there yet. The attach rates on Oculus Quest 2 are still limited. We’re not there yet. There isn’t scale, and if there isn’t scale, people don’t use it.
I totally agree with you on the privacy side. Actually it’s even worse now. If you think that 10 years ago people will be privacy conscious, imagine today with everything that happened in the last 10 years. I think people have become even more privacy control. There’s nothing more obvious than glasses on your head as an interesting end, of you could argue, that potentially AirPods or equivalent already a very big privacy risk depending on how they are used.
But to your point of crying in VR, I didn’t cry, but I had some really impressive experience, where I was “Wow, this is really transformational for some type of gaming that I cannot do in any other type of environment.” There is a game like super hot VR, for instance. For me, and you can try to do the same on your screen, it’s absolutely not the same experience. I totally believe it enables some new type of gaming. Another one is a climb, where you are doing rock climbing is also very amazing. I don’t see the interest of doing this one on the flat screen.
As a niche gaming product, I’m totally sold. Again, it depends on your personal situation at home and how you can manage it, but I’m sold that there’s some use case smaller than the current console use case, because again, less practical. But beyond that, it’s a tough one. I’m a big believer on some more subbed off stuff. I remember how people went crazy about digital watch, Apple Watch and the competitors of the Apple Watch. At the same time, no one realized what was going on with the AirPods. In a way was just too basic. But for me, it’s still more transformational than Apple Watch and no question.
I think that maybe more subbed off stuff we might end up, as you say, with Apple Glasses. For us, who wear glass it’s an obvious upgrade in a way, is no question about that. But they would have to resolve questions around privacy pretty big time, because for me to replace my glass with some special glasses, I will have to feel really good about it, and I will have to convince people on the other side to feel very good about it. Obviously there are prices question, I think, that rumours may cost some really big money. I forgot if it was more one 1K, 2K. It may be pretty big. For stuff without a clear use case, I guess even Apple will have trouble to pull that out.
Talking about apps, moving from hardware to apps, of course gaming is the first one you think about. In terms of gaming, I mean games like Fortnite, like Roblox, like Pokemon Go, of course. As a king of AR gaming, I think we had an interesting stat where in the US, for instance, more kids are playing Fortnite than basketball and football combine. For me is that we start going big in metaverse.
When kids go play football basketball go get injured. It’s like, where are you doing that?
That’s kind of stuff you can play at night, you can play when it’s cold, you don’t get injured easily, so there are a lot of benefits. For me, it’s very interesting, because you see, especially in the US, where sports are keen for kids for methods as well. It’s very interesting that in a way, quietly, Fortnite has taken over. It’s Fortnite, but again, the others like Roblox. It’s kind of a quiet revolution. Fortnite didn’t present itself as a metaverse or these, or that, it’s just a game that people want to play. Ultimately computer games that are free, because it’s a freemium model, can scale very quickly depending on the type of gaming.
At the same time, you see them adding some stuff like DJ concerts has been a very typical add-on on Fortnite. At the same time, it feels more like a show for some PR reasons that a true transformation to anything beyond gaming. I don’t think Fortnite has converted itself much beyond gaming. But one thing I’ve seen in gaming in general, at least is big free-to-play gaming, not just Fortnite, but free-to-play gaming in general is that for some it has become a new way, for instance, to do dating. I don’t know your experience, but I find that as a natural evolution that’s a new playground, so maybe from gaming to dating, there is a natural translation. Beyond that, I don’t know.
I think games are the ultimate sandbox for social interaction in some ways, if done the right way. Anything that’s social in nature, like dating and stuff, can come out of it. There’s definitely a phenomenon of a lot of dating happening, because of a lot of the games you mentioned. On top of the titles you mentioned, and some of these titles are not necessarily in the metaverse or on the way to the metaverse. They were played in normal screens and that is what it is. They could potentially be rendered in some other virtual world technology, but they’re not.
But if we look at like some of the granddaddies in the VR space, like Rec Room, it used to be called Against Gravity—the company—I think they’ve now changed names also to become Rec Room, which is maybe a little bit younger crowd in terms of what Rec Room is and how people interact. There’s all sorts of interesting games out there that are emerging. Some are higher fidelity than others. You mentioned concerts within games. There’s obviously concerts by themselves, as the one I watched, and some of them are pretty cool as well.
Trip for mental health—an app that is pretty popular on Oculus and a few other platforms for mental health. There’s a creation of an app economy little by little, with content, with games, with utility tools and a variety of other things being done. It’s still a bit clunky. I don’t think it’s really ready for prime time. It reminds me maybe of the very early, maybe the first year of the Apple app store. It’s a little bit clunky still. Then we have obviously all the underlying enablers to these worlds that are being created. Certainly the 3D worlds that that we’ve been talking about until now, software platforms like Unity, Unreal, and various others that are just the core components of what will enable a lot of these virtual world that are being created as we speak.
It’s funny to talk about concert. I was reading some views about a VR concert app and people were just complaining constantly and it had like two out of five star ratings, so barely three. People were complaining, “I don’t want all these people around me. I just want to listen to my concert.”
I was testing a product recently and I have to swear I hadn’t used my Oculus Quest 2 in a couple of months. As I was using it, I had to update the software Oculus Quest, and then I had some issue around the boundaries around the use of the oculus quest. Then I realized I was looking at it the wrong way. Then I was, “Thirty minutes just for me to have Oculus Quest 2 up-to-date so I could actually test the product I wanted to test. Guys, you surely should do a better job at this.” There’s even some basic issues right there right now that are not related at all to anything else, just the poor experience in the platform to start with.
A software update can’t be more seamless in this environment. This is literally true. I had to be updating the software on my headset, but I had to have my headset connected to a charger. Do you see the problem in that? Is that not clear to the people who design this thing? If I’m connected to the thing, then I need to be close to a plug, which might not be the boundary that I’m playing in, so I need to redefine the boundary, but there’s a problem in redefining the boundary, it doesn’t allow me to do that. So I’m like, I was outside a room with my head like this, trying to click the software update. Just my head tilted, my headset stuck to a cable, stuck to a charger, stuck to a wall. I was like, really, this is not virtual reality. I mean, this is reality at it’s worse. I’m just tangled in it.
It sounds worse than updating Windows 11. I don’t know how you…
Degrees of magnitude worse, physically worse.
So you managed to do this. That’s something I’m always forgetting using a Mac, you go back to updating Windows and it’s such a nightmare. I don’t know why they don’t care more about that side of the puzzle.
But this is even worse. The the Oculus guys are doing a much better job at this. It’s like, “Really? I have to be plugged to do an update? Really?”
We talk about concert, for instance, myself, I subscribe to concert app done by Berliner Philharmoniker and it’s amazing the ways they record in 4K, high quality audio concerts. It’s Omni classical concerts. But for me, what I’m buying is, I want an extremely high audio qualities at the first piece. Don’t give me compressed audio. And two, I enjoy that part of seeing on videos the orchestra playing, and people playing their instruments, and it’s perfectly optimized in terms of you have the right zoom at the right moment on the right piece of the orchestra. For me it’s amazing how they do it. Consistently, you know, every week, you have new concerts.
For me, that’s really what I’m buying. The path I’m on, I’m going to go to some weird 3D concerts, where the sound quality poor, where the video is non-existent and irrelevant, just because there is some social stuff around me. I mean, why would I go there? Maybe actually for dating. If I was in the scene for dating, but that’s not my case. But beyond that, I don’t know. Or looking for friendship like you will do in a real. I don’t know, I just think you are missing on everything from the real concert, which is good quality sound, fun, entertainment. They always claim one million users or stuff. It might sound big, but I’m not sure how transformational it is.
Maybe should we talk about the key software underlying platforms? I believe there are two big players—Unity and Unreal—that are providing key elements of the metaverse. There are companies that you would use to develop 3D games and not just games, 3D apps. It’s really a layer above more lower layers. For Microsoft, Apple, the FDX 3D, they have meta, but Unity and Unreal, they really are a level above and they let you build these applications.
Disclaimer, I was a small business under in acquisition by Unity—company called Ziva—just announce a few weeks ago that is focused actually on making people face more real and 3D computers. Definitely there is some action in that space making it more real, more human, more lifelike, and I think it’s smart. It’s really is a right direction to go. What are you so on these players? I think they would be quite indispensable as a part of the stack.
I don’t see a world over the next five to 10 years, where we have these virtual worlds built upon that doesn’t have these companies as the core companies for that enablement. Maybe there will be new companies that will emerge. Maybe there’s some of the big tech giants have their own tech that they will put at the table at some point. But right now they’re pretty irreplaceable in terms of development.
In some ways in a world that doesn’t necessarily thrive on interoperability, they provide at least a bit of a layer of interoperability, because we have two dominant ones. So that’s not necessarily bad. Maybe bringing all of this together, and before we move into a discussion on what some of the key players are doing in these spaces, a couple of things that I would like to at least share from my perspective on first principles, what I would call sort of things we need to believe in for this world to arrive upon us. For this world of metaverse or metaverses to arrive upon us.
One is we need to have the right devices, devices that are hopefully not super major cumbersome. Some level of complexity is accepted, as we’ve saw in the early days of the iPhone and smartphones, but it can’t be ridiculous. It needs to be seamless experiences at a certain point in time. It needs to be used by mainstream users, so people that don’t need to take college degrees to know how to operate the settings on your VR headset. Queue in our friends at Oculus Quest 2. To those elements of accessories, of main output and input systems, need to be relatively simple to use and manage.
I think the app ecosystem is probably the part where I’m the most relaxed. I think it will happen. We already have a lot of great things being created. It’s just a matter of quality of graphics and the fidelity, and the simplicity of the cycles under which they can be created that will change. But I believe probably the talent is already there. The quality of game design, the quality of app design is already there, so it’s really taking it to the next level, so that the opposite side of the fence—the top end of application layer—I’m probably the most bullish on and probably the most open on. I think we’re well on our way.
Then all the pieces in the middle, where right now we’re under really the thumb of a couple of very dominant players, which is not good or bad. It is what it is. It it gives us at least the notion of perceived interoperability at the very least, but maybe there’s more to come there. There’s more to come in the middle where there’s more to come in the enablement platforms that were not quite seeing it. Certainly, you were mentioning, obviously Unity’s acquisition of the company that you invested in, Ziva. These companies are becoming more acquisitive, so they clearly are still missing pieces of their own stacks to really deploy these platforms at scale to the next level of applications that are being foreseen in the market.
Overall. I think if I had to grade it, I think the part where we need a lot more evolution quickly is the hardware side. I know there’s been a lot of money spent on this, a lot of vaporware as well, a lot of great stuff out there that doesn’t quite make the cut over time. But that’s probably the area where we need, where I’d give the lowest grade and where we need the most development in the next few years.
Yeah, and one piece that is not always talk about is that when we talk about this virtual concerts, for instance, and they claim one million users, blah blah blah, is a dirty secret in a way that you have very few players or spectators together at once. The way today is a system is working, the architecture, is very limited in how it’s working. At best you have hundreds, maybe thousands of users who can really see each other, interact with each other. It doesn’t really go beyond that today. So we are very deep structural issues that might get solved in the next ten years. But my point that were not there yet, and I feel sometimes people don’t realize that piece of the puzzle.
For me that was actually one of the piece that I was excited about when Stadia was announced, because the way Stadia was designed, which is a system that is mostly cloud based, and at home, on your phone, on your TV, you just have a remote access to a server. It enable new way to really build new type of games and applications that could be more natively multiplayers at scale, except that, of course, Google stopped publishing division for Stadia and decided that ultimately, let’s just like port some random games you have on PC and console, and too bad for this great vision where we could build something truly unique.
So this concludes our 29 on the metaverse. We went through the definition of the metaverse, as well as some of the key enablers of the metaverse. In our next episode, episode 30, we will go into the key players of the metaverse, and we will conclude about the so-what for entrepreneurs and VCs. So thank you for listening. Thank you, Nuno.
Thank you, Bertrand.
See you next time.