Microsoft versus Metaverse
Microsoft will soon kill Zuckerberg's Metaverse before it even begins. And they don't even have to make VR headphones for that. now. Probably sounds crazy, Zack. Invested so much in the metaverse that he rebranded his entire company just to focus on the effort and plans to invest $180 billion over the next decade to build this thing, but his plan is flawed at first glance for several reasons. Zach looks good here. Billions of people use Facebook, Instagram and WhatsApp every day. He needs to connect with friends and family, and he also has the largest virtual reality company. Although VR is still considered a toy for most people, Quest 2021 has actually overtaken Xbox. But while there are plenty of signs he might suck, Microsoft isn't letting him win easily. . There are three main reasons why Microsoft
will defeat Zuckerberg in the Metaverse War. So let's go through them one by one. We created a whole new layer of the platform, which made the situation worse. We bring people. Places and things along with the digital world, my previous two videos on the metaverse. I'm totally overwhelmed with comments. Questioning isn't a metaverse, just a video game. We already have them. These people will point the finger at Second Life, World of Warcraft, and Fortnight to claim that we already have them in verse and that these people are not wrong. It is a great entry point into the Metaverse. But it gets a lot crazier in the long run. These metaversal experiences become larger and deeper through the possibility of interaction. With millions of people in a shared virtual world, digital assets and avatars will move between different spaces, and full economies will emerge that support a wide
range of workers. We don't yet know exactly which platform will be more dominant. One thing is for sure, the game will play a big role here. And that's why Microsoft's strategy is so brilliant. They have been a major player in the video game industry for decades. First with computer games like Home in the 90's and later with Xbox games like Gears of War Facebook on the other hand. And he really gave us Farmville. And few would say that. A classic that builds a platform for great games is one thing, but Microsoft can't do much with it. If they don't actually own the studios they create. So Microsoft has been building a gaming empire for years and will soon get much bigger. In 2014, Microsoft bought Minecraft for $2.5 billion. The game has grown to over 140 million monthly active users and is quickly turning into its own mini metaverse, and now players are creating entire simulations. It ends like this, the Mr. Beast with 2,000 Contemporaries
, then in 2020 Microsoft bought Zenimax, a $7.5 billion media company that gave them the rights to Fallout at Home, and Elder Scrolls, Finally Awakens. All of these games have communities of Modern that change and expand the experience. And now Microsoft recently bought Activision Blizzard for $69 billion. It's absolutely huge money. But Microsoft has $130 billion in cash and that will be very important to its Metaverse strategy. However, this acquisition attracted a lot of attention. And I think most people are wrong. What is going on here? Activision owns some of the biggest gaming franchises in the world like Call of Duty, OverWatch. And even Tony Hawk. These games are on different platforms and are widely available on PlayStation and Nintendo consoles, but will it stay that way? If we spent $69 billion on this studio game? Yes, I would say create some of these little Exclusives on your platform and take advantage of them, and of
Of course that sounds smart. A commercial move for Microsoft, removing Call of Duty from the PlayStation and more people buying the Xbox, but that's not really their strategy. Look, in 2017 Microsoft introduced Xbox Game Pass, which offered access to a massive library of Microsoft games. All for a monthly subscription. It was essentially a Netflix model, but it represented a very significant shift in their business strategy. If, prior to Gamepass, Microsoft bought a game studio and then made those titles solely for the Xbox's sale, it would fall apart in an instant. Perhaps some players will switch from PlayStation 2 to Xbox in the next upgrade cycle. But overall, these gains would wipe out value. Now, however, Microsoft can still sell games at full price on other consoles and offer those games as part of the Xbox Game Pass bundle. Purchasing Activision makes playing Xbox games more attractive and challenging as players now
get all this content for free. As long as they are ordered. Another problem people get wrong about buying Activision is the notion that it will create a monopoly on happiness, even though it's a huge acquisition. The game publishing market is still highly fragmented. Just look at this chart of game publishers by revenue, even after the merger of Microsoft and Activision, Sony and Tencent will still be bigger. Every year a new hit happens in the gaming industry so no one has complete control, at least this chart hasn't been compared to the search engine market yet, you'll see what I mean. Google clearly has a search monopoly. No other company stands a chance against them. But among all game makers, Microsoft competes with Facebook and Meta is not on the list at all. That's because Zach just built it. A few small VR games have yet to win over one of the big game companies. He might just not think that traditional game franchises will adapt to Metaverse,
and that's a frankly open-ended question. In my opinion, the metaverse will more likely outgrow OverWatch or any other well-known game, or that metaverse experience will be built on top of a new IP. Anyway, when the metaverse finally emerges from the gaming industry, Zach will be in big trouble. People can use the Quest headset to access the Metaverse and enjoy the VR experience, but Microsoft will have a huge advantage when it comes to determining how users interact with the Metaverse. However, there is another route to the metaverse, and here it is helpful to consider how journal computers have made their way into every household. Nowadays everyone wants a computer in their home, but when they were first released, most consumers weren't interested. These big, large-scale machines were essentially combat computers. So most people don't benefit from it at home, but they do quite quickly. They became indispensable in work companies, buying computers for their employees because it increased productivity, suddenly employees didn't have to spend hours
throwing paperwork and could instead store information in computers, which meant higher profits. Therefore, every company used them. Interestingly, people used to get used to using computers at work earlier. They wanted to use them at home because the number of home computers was increasing. Just like business apps like games, you might have bought a PC to write letters, but pretty fast. We would love a game on this thing. It's possible that the metaverse follows a similar path. First, your company buys you virtual reality headsets. This allows you to collaborate remotely with anyone working remotely. It's definitely worth spending a few hundred euros. If it can improve productivity, at least a little. Damn it. I've even seen companies send out VR headsets to everyone just for the Christmas party. It's not uncommon for tech companies to spend thousands of dollars on corporate events. So a few hundred dollars per employee seems doable. Zuckerberg is clearly committed to this vision and wants to conduct Horizon workshops. The default virtual work app, but can it beat Microsoft here?
Basically. It is very difficult for companies to shift their attention from consumers to companies, for better or for worse. People simply associate Meadow with her new uncle, who posts daily on Facebook. To be fair, Facebook launched Workplace in 2016, so they're not entirely new to the industry, but Microsoft has been selling software to companies since the 1970s. Here is just one level of experience that is completely different. And this despite the fact that Microsoft is still closely associated with the desktop operating system Windows. Sathya. Nadella has essentially shifted Microsoft's focus away from Windows and fully embraced the cloud. Microsoft. Note that very few companies only use PCs running Windows. Many people want to use Apple products and many developers insist on running Linux. This fragmentation of devices will limit the success of any Microsoft product. It needs Windows to work. So they put the teams together. Most people think that Teams is just an asset and obviously some design elements
are the same, but Microsoft is planning something much bigger with Teams. It starts with document sharing and video chat, basically all the usual business stuff, and then slowly expands into deeper metaverse concepts that Duck is always talking about and understanding. A business collaboration site sounds a lot more boring than a gaming site, but it's really important to Microsoft's Metaverse strategy. If you think that the metaverse is some kind of mirror world where you can communicate with data and applications in an impressive way. Microsoft might be there first for beginners to be honest, Microsoft already has a number of products that allow companies to create so-called digital twins. They are basically virtual representations of physical objects, such as B. Production plants, but it is not enough to just have a 3D model of an industrial company. They want to know what each device is doing and how much energy the device is using. And when the last product batch rolls off the assembly line. It's all part of the Internet of Things. It was all the rage a few years ago, but it
's never really caught on with everyday consumers, except maybe for a smart thermostat here and there. But in a business context, these meta-savvy concepts can be extremely useful. When factory data is synchronized with the digital twin in real-time, companies can start analyzing key performance indicators and even create automated systems to further increase efficiency, although it is interesting when employees see the digital twin data as they navigate through the physical world. This is made possible by augmented reality. Like Soft Hololens, although it's worth noting that Microsoft isn't specifically tied to that particular piece of hardware. As I mentioned earlier, Microsoft is moving away from a single computing platform and wants to work anywhere. Here's how you can use Teams to chat with coworkers on your MacBook. You can also stream Gears of War on your iPhone. Microsoft isn't keen on enclosing hardware and this will be a huge benefit going forward. Microsoft is essentially attacking Zuckerberg on two fronts. They have a large user base and build
a huge empire in the game. Zach is really beat right now but it still seems to be doubling down so let's see why it's hard, really hard to predict the future? If you can. Well, you will get very rich very quickly. However, there is a problem. Sometimes you see clearly into the future and cannot implement a winning strategy. That's what happened to Bill Gates almost three decades ago. It was 1995 and Bill Gates was flying high. They all purchased PCS. Windows made a revolution. Acts and Microsoft were on track to become the world's most valuable company. So Bill took the stage and planned what he thought would follow. This industry will take center stage with its software innovation. Its competitive hardware will take shape. This so-called data superhighway. He was talking about the internet and although we quickly stopped using the term information, highway to describe it. Bill made some important predictions. We're calling it the PC Wallet now because it can
really store whatever you're carrying. So receive news, view the latest news in different places, follow the schedule. It looks a lot like a smartphone to me and the manufacturing didn't stop there. He also explained that cars will have large screens with real-time maps. How customers buy things with their phones and how households would have smart controls. Almost all of these predictions came true, but unusually not because of Microsoft, despite Bill explaining exactly how smartphones are supposed to work. Microsoft has never managed to gain market share against Apple and Google. The same applies to card payments. And Smart Home, Google and Apple also dominate these areas with Microsoft. Usually a distant third. So what does this mean for Zuckerberg and his plans to build a metaverse? This presentation by Bill Gates shows that even if your predictions about the future are correct. That does
don't necessarily mean you're going to win. It is quite possible that everything will be in place. is realized. We will all wear VR headphones as an interface. Virtual worlds, but meta might end up having nothing to do with it. Microsoft missed the mobile internet revolution because it was too focused on Windows. If Satya, Microsoft, Windows could become more agile and compete in new industries.
