Zuckerberg has described the metaverse as a "virtual environment" you can go inside of - instead of just looking at on a screen
Facebook has changed it’s corporate name to Meta, in a major corporate rebranding exercise – a bold step ahead to recognize its metaverse ambition.
The tech giant said the change would bring together its different apps and technologies under one new brand, but would not change its corporate structure. While it’s still early days for metaverse, it looks like the tech giant is extremely bullish on its metaverse plans.
In July this year, Facebook CEO Mark Zuckerberg first announced its intention to create a metaverse – an immersive digital platform that enables shared experiences using virtual, augmented and physical reality. Now, the trillion dollar social media firm unveiled its plans to invest $10 Billion in Facebook Reality Labs, which will create hardware and software to make the metaverse a reality.
Metaverse, a term coined by sci-fi writer Neal Stephenson, in his 1992 science fiction novel Snow Crash, where the author used the term to describe a virtual reality-based successor to the Internet, is slated to transform the way we live, shop and do business. Experts believe, the Metaverse can create huge opportunities for businesses and can be a boon to increase customer experience and user engagement tremendously.
The announcement comes soon after Facebook’s earnings in Q3 2021, where the company posted better-than-expected profits. According to analytics company GlobalData, Facebook is embarking on a long, costly path to build metaverse as the next big computing platform. The social media giant’s overall earnings transcript sentiments declined by over 3% in Q4 2021 compared to Q3 2021 due to iOS headwinds and investigations, it says.
However, Rinaldo Pereira, Business Fundamentals Analyst at GlobalData, believes, in the past, the company witnessed dips in sentiment due to data issues, scandals, or anti-trust investigations. Such issues were raised in its recent earnings call in Q4 2021 and impacted sentiments.
“Facebook’s moves to improve the brand image and the metaverse launch are steps in the right direction,” he says. “Sentiments have rebounded and started showcasing improvement in 2021 driven by positivity around advertiser spends due to the e-commerce boom and the metaverse.”
Zuckerberg had earlier predicted that Facebook would transition from primarily being a social media company to being a metaverse company. It has invested heavily in virtual reality, spending $2bn on acquiring Oculus, which develops its VR products. In 2019, it launched Facebook Horizon, an invitation-only immersive environment where users can mingle and chat in a virtual space with a cartoon avatar through Oculus headsets.
What’s interesting about Facebook’s metaverse is that it has a strong enterprise angle. This means another sweeping transformation in the workplace. As workers have grown weary of video-conferences during the pandemic, Zuckerberg is particularly excited about the idea that co-workers could be brought together in a virtual room that feels like they are face-to-face.
Zuckerberg has described it as a “virtual environment” you can go inside of – instead of just looking at on a screen. Essentially, it’s a world of endless, interconnected virtual communities where people can meet, work and play, using virtual reality headsets, augmented reality glasses, smartphone apps or other devices.
Many big businesses are getting involved in the Metaverse space. Apple, Google and Microsoft are investing in cloud computing and Virtual Reality (VR) technology, anticipating the growth in this space. Microsoft bought Minecraft developer Mojang in 2014 for US$ 2.5 billion and is betting big on AR/VR and is building what it calls ‘Enterprise Metaverse’ with Mesh, a cloud-based mixed reality app, to make collaboration and software creation easier.
Microsoft’s HoloLens 2 has been widely deployed across the engineering sector and is increasingly becoming an important healthcare tool, especially in surgery. Earlier, CEO Satya Nadella mentioned the metaverse at a conference discussing why the future is not far when you get to meet your digital twin.
And needless to say, the pandemic too has put more businesses online – with more Zoom meetings and virtual events. Our personal lives too from shopping, banking, education and every form of entertainment are dominated in virtual medium. It’s inevitable that brands will play a significant role in the metaverse.
Joris Beerda is the Co-Founder and Managing Director of The Octalysis Group, says, “Just like in game-like situations, the metaverse can offer customers a completely democratized experience, especially when these experiences are hosted on the blockchain. Users can take full control of their identities, while at the same time collaborating with other users and interacting with brands.”
These could be some of the reasons why Facebook’s recent announcement matters to the business world.
Needless to say, it also creates major opportunities to increase user engagement and create deeper customer relations. Wedbush tech analyst Michael Pachter said it was hard to predict whether Facebook could truly transform into a ‘metaverse company’ in five years. But they certainly have a huge advantage of having one billion people log on every day and if they offer infotainment options it’s likely they will succeed. Marketing, media and communication professionals for now need to pay attention to the metaverse because it’s the next frontier for online interaction. Just like social media revolutionized the online marketing landscape, so too will the metaverse.
Earlier this month, Facebook said that it will hire 10,000 people to work on the metaverse. George Monaghan, Thematic Analyst at GlobalData, says that Facebook’s hiring is a sign of big things to come via its metaverse.
“At this point, the metaverse is roughly at the same stage of development as the internet was in the mid 1990s. There’s lots of talk, investment is increasing, and some of the necessary parts are beginning to come together.”
He says, Facebook knows the metaverse has enormous potential. However, Facebook also knows the metaverse has little more than just ‘potential’. The kind of investment we’re seeing shows that the tech giants really believe the metaverse will transform our lives.”