Metaverse has potential, with or without Meta Platforms

Meta Platforms (previously known as Facebook) reported a $10 bn loss in its AR and VR division on Thursday, following which the stock tanked 26%. The company missed estimates on Revenue, EPS, average daily and monthly users, and also the guidance for the next quarter was worse than expected. Mark Zuckerberg became poorer, as a result. The company is still in the early stages of developing its VR/AR platforms and tools. Not sure when or how good the company's haptic glove will be but with the amount of money FB has, I am sure they can churn out something. Does the reaction of FB investors mean that they have lost all hope in FB's big bet? Does metaverse have any potential?

I was watching a YouTube video from MrWhoseTheBoss (~10 million subscribers) where he was discussing the pros and cons of NFTs. The link to the video is here. I agree with some of the problems he highlighted i.e. One does not always get the copyright to the image that one buys as an NFT. Second, he mocked the aspect of people buying digital land. He talks about a platform called Next Earth where one can buy digital copies of land on earth, for example, I can buy the digital land on which Eiffel Tower was erected. Of course, anyone can launch a website like this and sell the same digital land. However, he mentions that digital land has no use case - something I do not fully agree with.

A lot needs to happen before one can say that acquiring digital land makes sense. First, VR/AR needs to be more interesting and "real" so that users actually want to be in a VR world. We are still years away from it when offices can actually be virtual. It seems very Sci-Fi for now. I also think a VR headset such as Oculus Quest isn't the future (I could be wrong, Wiimote was quite a success).

However, as I had written earlier in a piece, companies are buying land in Metaverses being operated by The SandBox and Dencentraland. No experience in the Metaverse can be real. I can't go on a trek or swim in the sea. However, I can go to a pub or a casino. Again, a lot more development needs to happen. However, based on this recent report casinos are already operational in the metaverse.

Decentral Games’ casino has made $7.5 million in revenue over the past three months with daily-user counts topping 5,000.

Source

The image doesn't speak of a truly immersive experience but it's a start and users are flocking to the platform. I think FB is headed the right way, and so are MSFT, Apple, Disney, and many other companies betting on the success of VR. Surely movie theaters can go virtual, concerts can be virtual. Metaverse has a high probability of being a reality in my opinion.

As far as the land is concerned, a lot of platforms will be developed and innovation will mean that some lose their first-mover advantages and will be buried in history. In fact, casinos and concerts should not need any digital land to be purchased. An immersive experience can be developed without anyone having to buy any land in the metaverse. The whole land thing is overpriced. However, if Decentraland is the platform of the future i.e. platform of choice of a large enough network, then even that land is undervalued. Betting on land in the metaverse is still quite an open question.

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