As the noise around metaverse and its opportunities grow louder, experts around the world are dissenting the space to see if there is any real economic value there.
With Facebook transitioning to Meta and jumping head first into the space, Sujit Kumar, former MD of Sony Pictures Entertainment and visiting professor at IIM Ahmedabad and IIM Bangalore, talks about Facebook’s move, how India can leverage the space and more.
Edited excerpts:
How do you see the repositioning of Facebook as Meta? Is it a reimagination of a business model or simple rebranding?
While timing—it being under attack from regulators—made it appear as a rebranding exercise in late October 2021, recent performance data suggests it is to counter the dip in revenue and to declare (Mark) Zuckerberg’s intent to make himself relevant to the younger demographics by positioning himself as a frontrunner in the evolving metaverse economy.
What new products or services can we see Meta offering to its users in metaverse, given that it exists only in the social media or personal messaging space?
Through Fortnite and Roblox, millennials and zoomers are already operating in the gaming-entertainment-social network-commerce-retail-advertising-decentralised finance convergence. These, and other immersive virtual environments of tomorrow, are expected to make such experiences more exciting. Neither Facebook nor Instagram enables this today. Through Horizon (virtual reality platform), Meta aims to build on this convergence and enhance its relevance as well as financials. Similarly, Horizon Workplace is expected to pitchfork Meta into the virtualised future of labour where it expects to compete with Microsoft’s Mesh. Through its continuing investments in Reality Labs and Oculus, it is vying with other technology majors to crack the device puzzle.
Meta apps continue to grow in India even as its user base is beginning to stagnate worldwide. In India, Meta is investing heavily in bringing small businesses to its apps. Do you think Meta will push its metaverse properties here or will it stick to the old revenue model for some more time?
WhatsApp Business and payments is clearly a strategic thrust for Meta in India. In my view, for some time, Meta is likely to focus on the advanced economies for its Horizon Workplace and Oculus-related development efforts.
How do you see the Indian industry making use of metaverse?
IT and consulting companies have already started leveraging and enhancing relevant capabilities for their global and domestic clients. The immersive virtual mode is getting traction from the training and development function at enterprises. Millennials and Gen Z-oriented brands have taken baby steps to understand the implications of the metaverse. Some have started experimenting with virtual versions of their products, establishing a presence on virtual platforms and engaging with customers. Titan and other fashion, entertainment and luxury brands are a case in point. Many start-ups have selected suitable niches like development of avatars, decentralised finance, game and finance, etc.
Is metaverse mere hype or is there a real economic value to it?
It becomes easier to comprehend the likely growth trajectory of the metaverse once we accept that, as with eras like electricity and mobile internet, the metaverse, too, will take time to grow its roots and reach its potential. In the case of the internet, till the mid-2000s, bulk of industry growth and revenue went to companies that sold internet-focused hardware and connectivity. Nevertheless, there were the early birds offering “value” without a business model which received support from investors, only to have the world experience the dotcom boom and bust.
Citibank’s Global Perspective and Solutions document of March 2022 estimates the metaverse economy at between $8 and $13 trillion by 2030 with 5 billion users. This could translate to 7-12 per cent of the global GDP with 51 per cent of the population spending reasonable time in it. Gartner’s report for the World Economic Forum has 25 per cent of the people spending an hour a day working—studying, shopping, socialising—in the Metaverse by 2026.
Companies like Meta, Microsoft, Apple, Alphabet, Amazon, Nvidia, Sony, Disney, Unity, Epic Games/Fortnite, Roblox, Niantic, Snap, decentralised platforms like Decentraland, Sandbox, and Axie Infinity, and a whole host of developers, start-ups and sources of capital are working across one or more of these enablers to establish use cases for different customer segments.
iPhone triggered mobile internet and sustainable content platforms like Facebook, Google, Amazon, Netflix, Spotify, AirBnB emerged thereafter. Similarly, the core enablers of the metaverse era, such as hardware and networking, compute capability, virtual platforms, interchange tools and standards, payment rails and services, content services and assets are evolving and have to converge before the grand vision of the metaverse era becomes a reality.
