Facebook, Tencent, Nvidia... Tech giants rush into the metaverse
The metaverse has become the next battleground for tech giants.Original Title: "The 'Beachhead' of the Metaverse: Not Just Facebook and Tencent"
Written by: Chenglin Pua, 01 Blockchain
Facebook founder and CEO Mark Zuckerberg stated at the end of June 2021 that the company's future plans extend far beyond social media, aiming to build a metaverse. Zuckerberg claimed that he hopes to transform Facebook into a metaverse company within the next five years.
On July 29, 2021, Facebook released its audited financial report for the second quarter of fiscal year 2021. During the earnings call, an analyst asked about Facebook's investments in the metaverse and its related vision, to which Facebook executives provided corresponding answers. Facebook stated that it will continue to invest approximately $5 billion annually in the development and construction of the metaverse.
In addition to Facebook, other major tech companies such as Tencent and NVIDIA are also actively laying out their plans for the metaverse. In March 2021, the gaming company Roblox, in which Tencent invested, went public with a market value of $38.2 billion; in April, NVIDIA announced the launch of Omniverse, a real-time simulation and collaboration platform for enterprises, referred to as the "metaverse for engineers."
The Metaverse Has Become a "Battleground"
The metaverse has indeed become the next battleground for tech giants. So, what exactly is the metaverse?
The concept of the metaverse first originated from American author Neal Stephenson's 1992 science fiction novel "Snow Crash." In the novel, a virtual world is depicted where people can experience sensory feedback from the real world through various high-tech devices, creating a parallel, perceivable virtual world outside of reality. In the real world, we have our own bodies, while in the metaverse, we have our own virtual avatars.
The best interpretation of the metaverse can be found in Steven Spielberg's "Ready Player One." In this film, the reality of 2045 is a chaotic hell on the brink of collapse, where people place their hopes in the "Oasis"—a virtual world within a global free-to-play super game. By simply wearing VR devices, people can enter this prosperous virtual world, which starkly contrasts with the real world, and experience different lives.
Source: Movie "Ready Player One"
According to Roblox, a true metaverse product should possess eight key elements:
- Identity: Having a virtual identity, regardless of its relation to the real identity.
- Friends: Having friends in the metaverse for social interaction, regardless of whether they are known in real life.
- Immersion: Being able to immerse oneself in the metaverse experience, ignoring everything else.
- Low Latency: Everything in the metaverse happens synchronously, without asynchronicity or delays.
- Diversity: The metaverse provides a variety of rich content, including gameplay, items, artistic materials, etc.
- Accessibility: Being able to log into the metaverse from any device, immersing oneself anytime and anywhere.
- Economic System: Like any complex large game, the metaverse should have its own economic system.
- Civilization: The metaverse should form a virtual civilization.
Creating a virtual metaverse requires support from many advanced technologies, including blockchain technology. For example, the metaverse needs to provide items, artistic materials, and an economic system. NFTs based on blockchain systems can become new carriers of value, allowing virtual items to be assetized; by mapping digital assets, online equipment, decorations, and land ownership can have tradable carriers.
Additionally, the efficient and reliable financial system of DeFi can accelerate the construction of the metaverse. Financial operations in the metaverse can be free from geographical, economic, and trust limitations, and can be automatically executed through smart contracts, avoiding opaque operations.
The combination of DeFi and NFTs can expand into areas such as content, property rights, records, and identity verification within the metaverse, helping to create a transparent and autonomous financial system that accommodates more diverse assets and complex transactions, supporting the construction of metaverse civilization.
The Metaverse Frequently Breaks Out, Major Companies Sequentially Layout
In April 2021, American rapper Travis Scott held a virtual concert titled "ASTRONOMICAL" in Epic's game "Fortnite," transporting players to fantastical scenes like the deep sea and outer space. The 10-minute concert attracted 12.3 million simultaneous viewers in the game, setting a record for the most players online at once for a music live event in the game's history, not including additional viewers on Twitch and YouTube. That month, "Fortnite" saw a 6 million increase in mobile installs, generating $44 million.
"ASTRONOMICAL" Virtual Concert
In May of this year, "Mole Manor" collaborated with the Strawberry Music Festival, allowing players to enjoy a holographic concert by the band New Pants within the game. Tencent's game "Peace Elite" invited Hua Chenyu to hold a virtual concert during its two-year anniversary party, where the game 3D modeled Hua Chenyu's virtual image, recreating the MV scene of his song "Bullfighting," and launched a series of player interaction methods.
Hua Chenyu's Virtual Concert in "Peace Elite"
In March 2021, mobile game developer GreenPark Sports reached a multi-year agreement with the NBA and secured $14 million in its first round of financing. The company will create a virtual space for NBA fans, allowing them to watch NBA games together. Fans can also compete in various challenges and equip their avatars with real NBA gear like jerseys and hats.
Moreover, the "metaverse" can also be seen in major titles like "Cyberpunk 2077" and "GTA Online." The metaverse, closely integrated with entertainment and gaming experiences, is becoming an inevitable trend and gradually revealing its potential.
Game Scene from "Cyberpunk 2077"
The gaming market remains a rapidly growing sector. A report from Newzoo on the gaming industry indicates that by 2022, consumer spending on games will grow to $196 billion, with a compound annual growth rate of +9.0% from 2018 to 2022.
Rapid Growth of the Gaming Market, Source: Newzoo Report
The metaverse can combine gaming and social interaction, which makes giants extremely optimistic about its future and begin to lay out plans for the enormous market that will arise.
Facebook Sees the Metaverse as the Next Growth Point
Facebook's metaverse layout began seven years ago. In 2014, Facebook acquired Oculus VR for $2 billion, igniting people's expectations for the future of VR.
In 2017, Zuckerberg expressed the company's ambitious 10-year roadmap for gaming technology, which includes artificial intelligence (AI), virtual reality (VR), augmented reality (AR), and new connectivity products. At that time, Zuckerberg also stated that Facebook would invest another $3 billion over the next 10 years, aiming to bring AR/VR to hundreds of millions of users.
On September 26, 2019, Facebook officially launched the new social VR world Facebook Horizon, set to debut on the Oculus platform in 2020. Facebook stated that it would "play an important role in helping to build a broader metaverse that spans VR/AR." Today, one-fifth of Facebook's workforce is dedicated to AR/VR business. From 2014 to early 2020, Facebook has invested nearly $5 billion in AR/VR.
Now, Zuckerberg has found a more fitting concept to describe his strategic vision for Facebook's future: the metaverse.
At the end of June 2020, Zuckerberg stated that Facebook's future plans extend far beyond social media, aiming to build a metaverse.
On July 29, Eastern Time, during Facebook's earnings call, Zuckerberg mentioned "metaverse" 20 times, indicating the importance he places on this emerging concept.
During the meeting, Zuckerberg also provided a specific timeline, hoping to transform Facebook into a metaverse company within the next five years. He stated that building the metaverse is the vision of many tech companies and even the entire tech industry today, and it can be seen as a transformation following the mobile internet, but it is not something that one company can achieve alone. He mentioned that he would collaborate with other companies, as well as numerous individual creators and developers, to work towards this goal. The metaverse will be a physical internet, operated collaboratively in a decentralized manner by many participants.
Facebook is determined to bet on the future, and it indeed has significant advantages in this field, including the largest user base in the world and a wealth of UGC (user-generated content), as well as strong capital and resources to support long-term exploration.
Tencent: Crazy Buying to Win the Battle
Long-term metaverse researcher Matthew Ball compares gaming to the "gateway" of the metaverse. Tencent, which monopolizes the social needs of Chinese users, also wants to occupy this gateway and attempts to leverage its accumulated momentum in social networking to create a new universe.
At the end of 2020, Ma Huateng wrote in Tencent's annual publication "Three Views": "Now, an exciting opportunity is emerging. After a decade of development in mobile internet, we are about to welcome the next wave of upgrades, which we call the 'True Internet.' The doors between the virtual world and the real world have been opened, whether transitioning from virtual to real or from real to virtual, all aimed at helping users achieve a more authentic experience."
From the description, Ma Huateng's "True Internet" resonates with today's metaverse. In Ma Huateng's view, the True Internet is the next "battle that Tencent must win."
In March of this year, Roblox went public on the New York Stock Exchange. This company, which is not well-known in China, saw its market value approach $40 billion on the same day, a tenfold increase compared to a year ago. Roblox primarily provides a game engine and software tools that developers can use to create games, and players can "spend money" in various games, allowing developers to earn direct income. When Roblox went public, its prospectus emphasized that what they want to create is a metaverse, a virtual space that exists in science fiction.
Roblox Stock Price Trend
The prospectus stated that people play, work, consume, and even earn money "backfeeding" their real lives in the virtual world created by Roblox. The real world is continuously virtualized and digitized, and the connection between reality and the virtual is mutual. This is the basis for Roblox's belief that they are not just a gaming platform, but a more meaningful metaverse. As people turn their attention to the metaverse, they find that Tencent has long been laying out its plans in this field.
In February 2020, during Roblox's $150 million Series G financing, Tencent had already invested and exclusively represented Roblox's product distribution in China. Tencent is not only a shareholder of Roblox, the "first stock of the metaverse," but also a shareholder of Epic. Epic is short for Epic Games Inc., an American video game and software development company. Its most famous technology is the Unreal Engine used in its own "Unreal" series of games, and it has developed well-known games such as "Gears of War," "Infinity Blade," and "Fortnite" using this engine.
In April 2021, Epic announced that it had secured $1 billion in financing, primarily for the development of the metaverse. This financing set a record for the highest financing in the metaverse sector, and Epic's valuation reached $28.7 billion as a result. Last August, when it completed a $1.78 billion financing round, its valuation was only $17.3 billion. In just eight months, Epic's valuation surged by 65.9%. Tencent owns 40% of Epic, undoubtedly making it a representative giant in the metaverse field.
"Thanks to our new and old shareholders for supporting our vision for the metaverse," said Epic CEO Tim Sweeney. "This round of investment will help us accelerate the creation of social experiences in 'Fortnite,' 'Rocket League,' and 'Fall Guys.'"
NVIDIA: Launching the Engineer's Metaverse
In the eyes of NVIDIA founder Jensen Huang, as technology continues to develop, the virtual world and the real world will intersect and merge. Now is the peak of the metaverse world, and NFTs will play an important role within it.
NVIDIA launched the Omniverse beta in October 2020, with over 17,000 customers testing the experience, including numerous companies such as BMW, Ericsson, Volvo, Adobe, and Epic Games participating in Omniverse collaboration. Omniverse is an open platform designed for virtual collaboration and accurate real-time simulation of physical properties, referred to as the engineer's metaverse. Engineers can simulate various things such as robots, cars, and factories within it. Users and teams can connect major design tools, resources, and projects in a shared virtual space for collaborative iteration, transforming the complex visualization workflows of creators, designers, and engineers.
The platform has the following four characteristics: First, realistic rendering effects, providing a tangible realistic experience; second, audio input and facial animation output; third, stunning visual effects; fourth, actions become creations.
BMW Group is the first automotive manufacturer to use Omniverse to design an end-to-end digital twin of an entire factory, simulating a complete factory model that includes employees, robots, buildings, and assembly components, allowing thousands of product engineers, project managers, and lean experts in the global production network to collaborate in a virtual environment, completing a series of complex processes such as design, simulation, and optimization before producing new products in reality, reportedly improving efficiency by 30%.
BMW Uses Omniverse to Improve Its Production System, Source: BMW Official Website
Additionally, Volvo uses Omniverse for car design; Ericsson simulates 5G wireless networks through Omniverse; and the British architectural design company Foster + Partners utilizes Omniverse for seamless collaboration across 14 countries, among others.
The Omniverse, which allows for real-time collaboration in the virtual world, is rapidly applied on a large scale across various fields due to its efficiency and low cost, with the metaverse taking concrete steps in the industrial sector driven by Omniverse.
Ericsson Uses Omniverse to Simulate 5G Wireless Networks, Source: Ericsson Official Website
Jensen Huang has high expectations for the Omniverse platform. He believes there will be a larger market, a larger industry, and more designers and creators designing digital things in virtual reality and the metaverse, rather than in the physical world.
At the top computer graphics conference Siggraph 2021 held on August 11, NVIDIA released a documentary revealing a "stunning secret." It turns out that for the past three months, every online product launch hosted by CEO Jensen Huang was not actually participated in by him. Behind this astonishing conspiracy, the virtual collaboration platform Omniverse developed by NVIDIA played a crucial role. With the combination of RTX ray tracing technology and Omniverse, artists can break the boundaries between reality and the virtual. RTX ray tracing technology scans Huang, capturing thousands of photos from various angles in the studio, which are then processed through 3D modeling and post-production. The creative kitchen behind this is built by artists on the Omniverse platform, ultimately combining the two using AI to create a lifelike illusion.
This unexpected demonstration of deception has directly refreshed our understanding of the metaverse.
Building the Metaverse Faces Daunting Challenges
Several industry insiders have stated that although the financing for metaverse products often exceeds hundreds of millions, making the prospects seem bright, the entire industry is still in its early stages, with many components and infrastructures yet to be established.
Technologies such as VR/AR and blockchain in the metaverse still have a long way to go before they are fully mature. Although there are now VR/AR products that allow us to experience virtual reality well, their ecosystem is still in its infancy and requires more engineers to participate in building it. The software and hardware facilities also need continuous iteration to achieve more realistic effects; blockchain technology has only been developing for over 10 years, and its ecological technology still has significant room for growth. Concepts like NFTs and DeFi, which have gained popularity in recent years, also need more time for testing and iterative development.
In addition to technological challenges, the construction of the metaverse will also face some social challenges.
For example, the issue of finance. In the metaverse, we will inevitably face the question of which currency to use. Currently, the world primarily uses the US dollar, so should we also use the dollar in the metaverse? Many non-American users would likely disagree, making cryptocurrency a good choice. However, this choice would make the metaverse a territory that governments find difficult to regulate, potentially leading to many illegal activities such as money laundering. Achieving consensus among numerous users on currency is a social issue that the construction of the metaverse needs to address.
Furthermore, the regulation of speech and control of extreme ideologies are also social issues that the metaverse must confront. For instance, the online discourse during the US elections was filled with misleading content. This content poses a threat to social stability in the United States and can even lead to more social problems. As the next generation of the internet, how to regulate and control extreme speech and ideologies in the metaverse is also a social challenge; otherwise, the metaverse may become a breeding ground for extreme ideologies.
