Metaverse, wtf

by Rodolfo Rosini

After yesterday’s MSFT/ATVI deal announcement several people are dunking on Kotick’s NBC comments on the metaverse, and the whole concept in general. Now leaving aside the allegations against him that will hopefully will be addressed soon, he is somewhat right. The game industry has been at a forefront of several technologies (GPUs, networking, UI design, AI and I’m sure there are a dozen more), it remains behind compared to the tech industry on the one metric that matters: who has root on the computer upon which stuff runs.

Apart from two console manufacturers (one of which – Sony – is not a serious contender in the software market), the fight is moving onto data centers, mobile devices and the “metaverse” [1] will be just the name of the content running on some infrastructure.

And whoever owns that infra will ask for rent.

Correctly, game companies are realizing they are just targets for M&A and having scale benefits the offsetting of seasonality of game releases (a game can take 5-7 years from concept to release, with up to 500 full time employees doing nothing else).
Incidentally this is why Epic is kicking up a stink against Apple. Epic doesn’t have a hardware strategy (for now?) and if they don’t have an open distribution platform, all their profits are going to be taken away by the platform holders. Same goes for Snap making AR glasses, and Meta investing on VR.
I suspect the M&A feeding frenzy will continue this year. The streaming platform are also moving into this space (Apple Arcade, Netflix), while traditional media and entertainment falls further behind. It’s a massive market that is only getting bigger.

There has never been a better time to start a game company.

[1] We use the term metaverse for lack of a better word. Before the internet or the web, we used terms like “information superhighway” which also meant fuck all in terms of clarity.