The Wild West of the Metaverse

The Near Future from the Prospect of Platforms and Users

The Metaverse has been at the center of attention of the IT and gaming industry since last year.

There will be many who are confused about what exactly the Metaverse is, or many who think that the Era of the Metaverse is both near and far. TENTUPLAY has published a Metaverse White Paper on April 12th analyzing the current state and future prospects of the Metaverse.

(If you are interested in learning more about the Metaverse give the White Paper a read! You can download the White Paper at the TENTUPLAY homepage)

 

Until the ultimate form of the Metaverse that we can see in science fiction such as the movie Ready Player One emerges, what form will the Metaverse era take in the early stages, or the near future?

In the case of the internet and the smartphone app, while initially there were multiple attempts to create different forms of platforms, but as time passed the business ecosystem stabilized. As the Metaverse is being pointed to as the next generation of the internet, we can assume that there will be a period of fierce competition and evolve. If we consider the current situation as the birth of the Metaverse, in the following 2~5 years, we believe the Metaverse will take the following form.

 

<Platforms’ Perspective>

1. The Metaverse Era Will Emerge in Its Infancy as a Group of Metaverse Platforms Rather than a Singular Platform
2. These Metaverses Will Be Asymmetrical and the Strategy of Exclusivity
  1.  

<Users’ Perspective>

1. The Main Audience of the Metaversal Era Will Extend Their Presence to Multiple Platforms, Digitally Nomadic Rather than Settler.
2. Digital Natives Require Interwebbing Services, Independent but Interwoven into the Metaverse

In this post, we aim to discuss what the near future will look like from the platforms’ perspective and in the next post we will discuss what is to come from the users’ perspective.

 

<Platforms’ Perspective 1>

The Metaverse Era Will Emerge in Its Infancy as a Group of Metaverse Platforms Rather than a Singular Platform

If we follow the definition of the Metaverse as stated by the TENTUPLAY Metaverse White Paper, the characteristics of a Metaverse as follows:

1.Users can access as individuals with distinct personas
2. Users can freely participate in social, economic, and cultural activities
3. A virtual space existing independently of, or supplementary to, the physical world,

While all three characteristics are important, what we want to focus on is the expression of the Metaverse being a virtual “space”, one being rife with potential. Before the smartphone became as widespread as it is now, the space of the “app” was pretty much non-existent. However, now the space of the app has become central to businesses and consumers. The internet (web) also shows a similar evolution. If the Metaverse emerges as the next generation of the internet, as many industrial experts and media organizations have predicted, then the influence of the Metaverse’s space will be immense. In other words, the companies that control the Metaverse will have influence on pretty much most businesses, allowing for collection and use of a massive amount of data while also being able to control the hardware market as well.

What this means is that there will be multiple companies trying to enter into the market of building Metaverse platforms. Already, Fortnite and Roblox have constructed successful Metaverse spaces, platforms such as Decentraland have polished the road, and now companies like Facebook are attempting to build new spaces.

Because the Metaverse is a platform strongly affected by the network effect, ultimately we predict that in the long term the market will eventually be controlled by one or two major platforms, similarly to how the internet search market was dominated by Google and the Smartphone OS market was dominated by Android and iOS. However, until certain platforms grow to dominate the market, we believe that a variety of different companies will build Metaverse platforms and create a competitive market. This competition will be the force which pushes the Metaverse forward and serve as a foundation for the evolution of Metaverse platforms. 

The market shares of various OSs that competed in the smartphone OS market in 2010 (source: statcounter)

It peaks our curiosity to see which companies will build platforms and how they will compete, alongside how the market will develop. It will also be of great interest for companies to observe the market while trying to find business opportunities.

 

<Platforms’ Perspective 2>

These Metaverses Will Be Asymmetrical and the Strategy of Exclusivity

While the central characteristics and concepts of the Metaverse will be shared by all the companies that will construct platforms, how these concepts and characteristics are actualized will likely be different.

As the market of the Metaverse has yet to be fully actualized, let’s examine the social media market as an example of what we can expect. The central concept of social media is a space in which users can share their thoughts and daily lives as content. However, each platform has a different orientation. Twitter emphasizes anonymity, meanwhile Facebook does the opposite. Also, while Twitter and Facebook both are focused on a mix of text, image, and video, Instagram is much more focused on the aesthetics aspects, putting image and videos front and center. What this means is that each social media platform encourages a different culture and centers different forms of content. 

                                                                                                                                           Various social media platforms with different cultures and content. 

The same goes for OTT streaming platforms. Netflix, Amazon Prime Video, Hulu, etc all share the same purpose, providing video content for their users. However, to create asymmetry with other platforms and appeal to users, they are focusing on creating their own exclusive content. In the case of Netflix, we see them producing exclusive content such as The Queen’s Gambit, Marvel’s Daredevil, or Kingdom. Amazon and Hulu are also adopting similar strategies, creating or producing their own exclusive content. This sort of asymmetrical distribution of content may be uncomfortable for consumers as they must have accounts for multiple platforms and also pay the fees for multiple platforms, but it operates as a strategy for platform designers to appeal to users.

If we accept the first premise discussed above, then the Metaverse era will begin with multiple companies building multiple platforms, which will all be competing for users and market control. Such competition will inevitably lead to the need for asymmetry in services, products, and content. If platform providers cannot create asymmetry, or in other words, being able to appeal to customers in a way that your competition cannot, there is always the method of offering lower prices than the competition. Users will measure the pros and cons of these asymmetries and use it to measure which platform they wish to use. This also means that while some users may choose to only use one platform, there will be many users who choose to utilize multiple platforms following the services, product, and content because of these asymmetries. 

If you look at the Metaverse platforms which are being discussed as market leaders such as Roblox or Zepeto, their user base mostly consists of digital natives in Gen Z. These users are already used to joining and being active on multiple platforms.

We will be discussing how these users will act in the Metaverse era in the Users’ Perspective of the near future in our next post.

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