The Metaverse Is “Unstoppable” and an Avenue for Growth, but It’s Still Going to Take Time

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4Q 2022 | IN-6700

Announcements and activity from Walmart, Telefónica, Meta, and Google highlight a month of metaverse news that showcases both the opportunities and challenges coming during the buildup to this future. Telefónica highlighted the network convergence of connectivity, computing, and intelligence, while Walmart presented an optimal approach to entering the metaverse in these early stages. Meta and Google each faced hurdles balancing and evaluating core businesses with new opportunities. Ultimately, the metaverse (or something like it) will arrive, but it will require patience (and proper expectations) before it can live up to its transformative billing and, to do this, the necessary technological advancements to support it.

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Walmart, Telefónica, Meta, and Google Demonstrate the Fluidity of the Buildup to the Metaverse


September 2022 proved to be a busy month for metaverse news, offering both strong endorsements of this future and sobering reminders that the buildup to the metaverse is not going to be easy and it is, in fact, a longer-term vision. Walmart recently announced it launched Roblox experiences to both experiment in the metaverse and target younger customers. The two Roblox experiences are called Walmart Land and Walmart’s Universe of Play, and while virtual merchandise is available, the company is not currently monetizing these assets (users earn tokens to acquire virtual merchandise); Walmart did, however, file for metaverse-related trademarks earlier in the year that suggested the company may sell virtual goods, such as Non-Fungible Tokens (NFTs) and support virtual currencies. In addition to virtual items and gaming, the virtual spaces will also hold virtual events, such as concerts like the Electric Fest planned for October.

Telefónica held its “Metaverse Day 2022” on September 29, and on several occasions, it was stressed that the metaverse is an “unstoppable” force that will happen—the commentary intended to counter the skepticism that can follow the metaverse. During the event, Telefónica highlighted opportunities for Network-as-a-Service, establishing the three pillars of a “metaverse-ready telco” as low-latency technologies, edge computing, and programmable network. Telefónica made several announcements during and around the event:

  • Telefónica is working to support a token economy—Movistar Tokens—and while not virtual currency, it acclimates users to digital transactions with tokens. Telefónica also invested in Bit2Me, which specializes in crypto and decentralized finance.
  • Telefónica also provides an update to its Open2Metavesre initiative to spur development within the metaverse. The company received 2,000 proposals with Wayra (Telefónica’s technological innovation hub) and Telefónica Ventures investing in more than 10 companies (Rand, Crossmint, Gamium, Voicemod, YBVR, Meta Soccer, Helium, etc.).
  • Telefónica announced (or extended) partnerships with Meta (will sell Quest through select operators), Qualcomm (supporting Snapdragon Spaces platform), Unity (partnering laboratory and testing, latency impacts to network), and Niantic (platform and location-based applications).
  • Telefónica acquired Imascono (Extended Reality (XR) engagement, gamification)
  • Telefónica also showcased trials and applications across communications, events, education, entertainment, and customer engagement and retail.

While Meta and Qualcomm extended their partnership, the leading metaverse proponent (Meta) also announced it was freezing hiring, reducing budgets across most teams, and expected further restructuring. Meta cited uncertain macroeconomic factors as the driver for these actions, but the company continues to face headwinds from changes within the advertising market, which is not being offset by its activities in the metaverse and immersive. Finally, Google announced it will shut down its cloud gaming service, Stadia, further reinforcing the time it takes for consumer behavior to change more broadly. With this level of fluidity, is it safe to say the metaverse is “unstoppable?”

The Metaverse (or Something Like It) Is an Inevitability


Mostly, yes, but not because the metaverse is some new inexorable force that can’t be stopped. As discussed in previous ABI Insights and reports, the metaverse is based upon pre-existing market movements across technologies, content, services, workflows, and applications; in many ways, the metaverse is a convenient term to codify these trends and technological advancements. The news surrounding Telefónica’s metaverse event and Walmart’s entrance into Roblox reflect the current optimal approaches to these early stages in the buildup to the metaverse. Telefónica’s Metaverse event reflected the convergence of connectivity, computing, and intelligence across networks, workflows, and applications, while Walmart’s activities highlighted a metaverse strategy that is focused on marketing, is experimental in nature, and targets younger audiences.

Meta’s issues stem primarily from changes occurring within the advertising industry and the competitive landscape of the social media market, rather than issues with its metaverse activities. If Meta’s core businesses were not impacted by these issues, the perception surrounding its metaverse investments would be markedly different. Google’s decision to shut down Stadia comes with little surprise (at least for outside viewers) because cases like this have informally become part of Google’s (perceived) Modus Operandi (M.O.). Google certainly isn’t alone in launching and shuttering relatively new initiatives, but the company’s scale, influence, and presence draw significantly more attention to these cases; so much so that even gaming journalists asked Google outright when Stadia launched if gamers should trust the company would stand behind Stadia for the long haul. ABI Research similarly raised this potential issue when discussing Stadia and even limited Stadia forecasts for this reason.

It is important to keep in mind that the end of Stadia is not an indictment of the longer-term prospects for cloud gaming. The gaming market is notoriously difficult to break into, which Google soon discovered, even shuttering its internal Stadia gaming studio in 2021. Add in a market (outside of China at least) that is still console, mobile (games downloaded to device), and Personal Computer (PC) biased and it should have been known internally that Stadia was going to be a longer-term prospect. The fact that Google said Stadia performed below expectations suggests that it held unreasonable goals, which is the main issue, not Google’s execution of the Stadia platform.

Google shuttering Stadia is not the end of the company’s role in the cloud gaming market. Its cloud gaming platform will remain available for others to lease, and it will serve other groups within the company (e.g., Augmented Reality (AR_, YouTube, etc.). In this regard, the investments made by Google to develop and refine its cloud gaming platform still prove valuable with regard to the buildup to the metaverse. Google can, and likely will, use this tech for a future launch of cloud gaming services when the market is ready. Google may shut down new initiatives in relatively short order, but that doesn’t mean the company won’t bring it back; Google TV, which launched in 2010, for example, was shuttered by 2014 to eventually become Android TV.

Patience Is Key


The recent news discussed here and other headlines like the significant decline in NFT/crypto trading volume (dollars, in particular) reinforce the need for patience. This does not imply that all aspects of the metaverse will develop at the same rate, but as companies begin entering the space, they need to have reasonable expectations. It is too early to assume consumers will rapidly embrace ownership of digital assets and spend significant time in virtual spaces (non-gaming related); hence, calling out Walmart’s strategy, which takes a well-balanced approach to this early stage of the market.

Relatedly, on the gaming front, Netflix’s strategy here is good example to follow with better expectations compared to Google and its Stadia service. After some early estimates suggested the company’s new gaming service was not receiving significant traction, some jumped to the conclusion it was a failure, but Netflix, to its credit, is viewing its efforts around gaming on a longer horizon. The company even announced recently it would open its own in-house gaming studio—realistic expectations with balanced investments.

The metaverse, due to the varied definitions and opinions, elicits a wide range of views. Mention the word metaverse and responses will range from positioning it as the most positive and transformative changes since the Internet, to “oh, the M-word again.” Technological advancements are inevitable, barring unforeseen catastrophic events. This does not mean the proverbial “field of dreams” (build it and they will come) concerns no longer applies; it most certainly does, but it’s more an issue of timing than value. The metaverse use cases and workflows will come and while the fully realized vision is far off, the buildup will still need greater accessibility and networks that natively bring together connectivity (high data and ultra-low latency), computing (distributed and edge computing), and intelligence (Artificial Intelligence (AI) everywhere), so efforts on the technological front need to continue looking at the longer-term horizon.

It will take time, but the metaverse and immersive will provide answers to the five Ws (who, what, when, where, why), while the enabling tech will answer the how, because, as Telefónica stated, the metaverse (or whatever we call it) is unstoppable.


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