BIG TECH’s BOLD MOVES IN THE METAVERSE

Several companies, including the big tech, have all jumped on to the metaverse bandwagon to stay ahead of the game.

MARK ZUCKERBERG Founder and CEO, Meta

By Ayushman Baruah

Ever since Facebook renamed itself as Meta and committed to building the metaverse, this emerging technology has taken the world by storm. Several companies, including the big tech, have jumped on to the metaverse bandwagon. It is like everyone wanting a slice of the freshly-baked pizza!

Meta founder and CEO Mark Zuckerberg continues to focus on the metaverse despite its Reality Labs division reporting nearly $4.3 billion in loss during the fourth quarter, the largest quarterly loss within the department since financials for the business were first published.

During the fourth quarter earnings, Zuckerberg said the company is steadfast in its metaverse strategy and has no plans of changing it. “None of the signals that I have seen so far suggest that we should shift the Reality Labs strategy long term,” he said.

He has further added that the company would launch another ‘next generation consumer headset’ later in 2023.

On Reality Labs, Meta’s CFO Susan Li said, “We still expect our full year Reality Labs losses to increase in 2023, and we are going to continue to invest meaningfully in this area given the significant long-term opportunities that we see. It is a long-duration investment, and our investments here are underpinned by the accompanying need to drive overall operating profit growth while we are making these investments.”

The reported losses must be seen in context of the global economic uncertainties and layoffs by the big tech. Meta said it laid off approximately 11,000 employees across its Family of Apps (FoA) and Reality Labs (RL) segments. FoA includes Facebook, Instagram, Messenger, WhatsApp, and other services. RL includes augmented and virtual reality related consumer hardware, software, and content.

Big Tech Investments

In a bid to lay its metaverse foundation, in January last year, Microsoft announced the acquisition of Nasdaqlisted Activision Blizzard, a leader in game development and interactive entertainment content publisher. Microsoft said this acquisition will accelerate the growth in its gaming business across mobile, personal computer, console, and cloud and will provide building blocks for the metaverse.

Microsoft will acquire Activision Blizzard for $68.7

Key Takeaways

l Indian IT services companies are tapping into the potential of the nascent metaverse to help enterprises develop interactive and immersive experiences for their customers l Mark Zuckerberg says Meta is steadfast in its metaverse strategy and has no plans of changing it l Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms l The metaverse will evolve across three overlapping phases: emerging, advanced, and mature, according to Gartner billion. When the transaction closes in fiscal 2023, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony. The company has studios around the world with nearly 10,000 employees.

“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” Satya Nadella, Chairman and CEO, Microsoft said at the time of announcing the acquisition. “We are investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.”

Mobile is the largest segment in gaming, with nearly 95% of all players globally enjoying games on mobile. Upon close of the acquisition, Microsoft is expected to have 30 internal game development studios, along with additional publishing and esports production capabilities.

Last year, chip manufacturer Nvidia launched its first software- and infrastructure-as-a-service offering – Nvidia Omniverse Cloud – a comprehensive suite of cloud services for artists, developers, and enterprise teams to design, publish, operate, and experience metaverse applications anywhere.

According to Nvidia, using Omniverse Cloud, individuals and teams can experience in one click the ability to design and collaborate on 3D workflows without the need for any local compute power.

“The metaverse, the 3D internet, connects virtual 3D worlds described in USD and viewed through a simulation engine,” Jensen Huang, Founder and CEO of Nvidia said during the launch. “With Omniverse in the cloud, we can connect teams worldwide to design, build, and operate virtual worlds and digital twins.”

Indian It Services

Indian IT services companies are tapping into the potential of the nascent metaverse in a bid to help enterprises develop interactive and immersive experiences for their customers. Two of India’s leading IT services companies, Infosys and Tech Mahindra, were among the firsts to announce their foray into the metaverse.

Infosys, for instance, launched a metaverse foundry to help its clients explore the potential of the nascent metaverse. The foundry harnesses the power of technologies like augmented reality and virtual reality (AR/VR), blockchain, non-fungible tokens (NFTs), Internet of Things (IoT), applied artificial intelligence (AI), cybersecurity and 5G to deliver value in the metaverse.

Infosys claims to have developed over 100 readyto-apply use-cases and templates. For example, one template that is popular with many large enterprises is for setting up an immersive retail experience where shoppers can explore a branded metaverse environment, buy products as NFTs or connect to an online checkout counter to make purchases that are delivered in the physical world.

Likewise, Tech Mahindra launched TechMVerse, its metaverse practice to deliver interactive and immersive experiences for its customers. In its initial phase, Tech Mahindra said it will leverage the opportunities presented by the metaverse through various use cases in areas like car dealership, NFT marketplace, virtual banking, and gaming. Initially, the operations of TechMVerse will be spread across four hubs – Dallas, London, Pune, and Hyderabad.

“One of our key focus areas is helping our customers’ digital journey and technology is helping us build the differentiators. Metaverse is clearly a key differentiator. Like any other new technology, our metaverse offering will be initially incubated in a smaller group and then shared with our clients because for most of them, it is also a new way of running their business,” C.P. Gurnani, CEO & MD, Tech Mahindra said during the launch.

Future Roadmap

The metaverse will evolve across three overlapping phases: emerging, advanced, and mature, according to research firm Gartner. “The market is beginning to explore and experiment with applications and usecases with high, long-term value…Between 2024 and 2027, more direct opportunities for the metaverse will arise,” said Anushree Verma, senior principal analyst, Gartner.

“From 2028 onward, the vision and potential for the metaverse will become much clearer and easier to manage for both organisations and individual users,” she added.

Verma believes that IT services companies will focus on “current high-value use cases such as gaming, wayfinding and navigation apps, and AR and VR experiences. The size of the deals would vary a lot by the use cases depends on the kind of products or services offered”.