Microsoft and the Metaverse

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michael barbaro

From The New York Times, I’m Michael Barbaro. This is The Daily.

[music]

Today: Why so many major companies are now investing in the metaverse, and whether that means those companies will control what the metaverse becomes. I spoke with my colleague, technology columnist Kevin Roose.

It’s Thursday, January 20.

kevin roose

Michael, hello.

michael barbaro

Hello, Mr. Roose.

kevin roose

Happy new year. Is it too late to say that?

michael barbaro

I mean, if you didn’t say it in a card that came into my mailbox 10 days ago, I think so.

kevin roose

[LAUGHS] I’m sorry. I meant to put you on the card list this year, but things happen.

michael barbaro

Well, I left you off my card list, too.

kevin roose

[LAUGHS] I forgive you.

michael barbaro

It’s good that we’re still talking. Kevin, as you know, we turn to you when we need to translate the digital universe, whether that’s cryptocurrency or social media platforms — and, today, it’s a mega merger in the gaming world. So tell us about this deal that was just made public.

kevin roose

Well, earlier this, week Microsoft announced that it was acquiring the gaming studio Activision Blizzard, maker of such hits as Call of Duty, Candy Crush, World of Warcraft — lots of games like that — in a deal that was valued at nearly $70 billion. And this was a monumental deal in the world of gaming. It’s the biggest acquisition ever in the gaming industry.

michael barbaro

Wow.

kevin roose

And on one level, this isn’t all that surprising. Microsoft has been investing in games for years. It owns the Xbox, produces some of the most popular video games, like Halo. It also owns the company that makes Minecraft, the enormously popular video game, especially among kids. So it’s already a big force in the gaming industry, but this will make it an even bigger force.

michael barbaro

Mhmm, and what stood out to you about this deal?

kevin roose

Well, aside from just the size of the deal and the impact it will make in the gaming industry, what caught a lot of people’s eye was that Microsoft framed this as not just another acquisition of a big gaming studio. It framed it as a step toward establishing a foothold in the metaverse.

michael barbaro

Right, the metaverse, and this is a word we hear a lot. And I feel like when I hear that phrase, I nod along, and I pretend to know what it is. And everybody I know pretends to know what it is, but we don’t. So let’s once and for all settle this question: What is the metaverse?

kevin roose

Well, here’s the thing. It’s not really clear yet what the metaverse is. It’s not really all that well defined, and it means a lot of different things to a lot of different people. So I think it’s OK, for the record, that everyone is kind of faking it, because even the people who profess to know what the metaverse is are also faking it.

michael barbaro

Well, to the best of your ability and the ability of those faking it, can you begin to define what this “still being defined” thing actually is?

kevin roose

Sure, so let’s just start with the term itself, metaverse. This term dates back to the early 1990s to a science fiction novel written by Neal Stephenson called “Snow Crash,” which is this story set in this futuristic 21st century world. It’s not a very sunny picture of the future. It’s basically the economy’s collapsed. The Earth is sort of crumbling. And society is shifting from living in the physical world into this thing called the metaverse — this digital world full of immersive experiences, where basically, instead of logging into the internet or going on the internet, the internet sort of just becomes the world.

It’s the air we breathe. You’re always plugged in. You’re always online. All of your experiences, your social interactions, your work, your family time, that all takes place inside the metaverse.

And for a long time, this idea of the metaverse persisted basically in science fiction. It was the premise of books like “Ready Player One,” movies like “The Matrix.” There was this sort of idea that this was kind of a far off future. And then a couple of years ago, some of the most influential people in the tech industry began trying to build the metaverse for real, that they actually thought that we had the technology or we were on the verge of having the technology that would allow us to have an actual metaverse.

michael barbaro

People like who, Kevin?

archived recording

You talked recently about how it was possible to create the metaverse.

kevin roose

Well, the first big tech person I heard talking seriously about the word metaverse was Tim Sweeney —

archived recording (tim sweeney)

Yeah, I think we’re getting there really quickly already.

kevin roose

— who is the C.E.O. of Epic Games, which is the gaming company that makes “Fornite.”

archived recording (tim sweeney)

You’re seeing the beginning components of the metaverse actually coming together now, where multiple people are being put together in an interesting social scenario and hooked up individually.

kevin roose

And Fornite, for those who don’t know or haven’t spent a lot of time around preteens, recently is one of the most popular video games in the world, and Sweeney was basically making the case that Fornite was not just a game. It was the beginnings of something that he thought would eventually become the metaverse.

On one level, Fortnite is a game. It’s, you know, you run around shooting people, and building things, and trying to win the battle royale. But it’s also become so much more than a game. It’s a place where you can spend real money on costumes for your virtual avatar, on dance moves. You can customize your look and your items, and it’s got modes where you can just go and hang out. It’s become kind of a social space. You can even attend concerts inside Fortnite. So what Sweeney started talking about a few years ago was the idea that Fortnite, and games like Fortnite, were sort of on ramp for people to the metaverse, to this thing, this sort of immersive vision of the internet that we would all eventually be living in.

michael barbaro

OK, so what’s the next phase of all this?

kevin roose

So the term metaverse sort of kicked around the tech world for a while, but it really amped up last year.

archived recording (mark zuckerberg)

I believe the metaverse is the next chapter for the internet, and it’s the next chapter for our company, too.

kevin roose

When Mark Zuckerberg announced that he was renaming Facebook, his company, to —

archived recording (mark zuckerberg)

Meta.

kevin roose

— Meta.

archived recording (mark zuckerberg)

Now, the best way to understand the metaverse is to experience it yourself.

kevin roose

And he released this kind of funny, weird video that got a lot of people’s attention —

archived recording (mark zuckerberg)

Imagine you put on your glasses or headset, and you’re instantly in your home space.

kevin roose

— where you saw the real Mark Zuckerberg and then Mark Zuckerberg’s cartoon avatar.

archived recording

Hey, are you coming?

archived recording (mark zuckerberg)

Yeah, I just got to find something to wear.

All right, perfect.

kevin roose

He was exploring this virtual world.

archived recording

Oh, hey, Mark.

archived recording (mark zuckerberg)

Hey, what’s going on?

archived recording 1

Hi.

archived recording 2

What’s up, Mark?

archived recording (mark zuckerberg)

Whoa, we’re floating in space?

archived recording

Uh-huh.

kevin roose

— hanging out with his friends, going to a work meeting, attending a concert, basically living a pretty normal life just in the metaverse.

archived recording (mark zuckerberg)

This is wild.

kevin roose

So this video by Mark Zuckerberg goes totally viral, becomes a huge topic of conversation, lots of jokes, lots of memes, lots of like, “see you in the metaverse” references. But it also sets off this sort of gold rush among other big tech companies who say to themselves, basically, how do we get in on this? How do we make sure that we are building things for this metaverse that will position us to be a big player in it if and when it arrives?

archived recording

Well, my vision is to use Disney Plus as the platform for the metaverse —

kevin roose

Disney talks about creating its own metaverse.

archived recording

— without boundaries, without borders, without constraints.

kevin roose

Nike expresses interest in being part of the metaverse with virtual sneakers.

archived recording

And eventually Nike is going to sell you a pair of digital Air Jordans that you’re going to wear around the metaverse or any game that you want or maybe even to a virtual sporting event.

kevin roose

Even Walmart decides it’s going to get into the metaverse and explore ways to create new shopping experiences for people inside these immersive digital worlds.

And so people are starting to accept that this idea of the metaverse is not total science fiction, that some parts of it may actually come true.

michael barbaro

Right, which I think brings us back to this $70 billion Microsoft deal for Activision Blizzard because there is nothing sci-fi about $70 billion on a company.

kevin roose

Yeah, $70 billion — that’s real money even to a company as big as Microsoft. And on one level, you don’t need the metaverse to make this deal make sense for Microsoft. The games that Activision Blizzard makes are very popular and make a lot of money, and they’re betting on that. But they’re insistent that they’re not just betting on the popularity of these games. They’re betting on this bigger idea, this future concept of the metaverse. And this deal, and the way that this deal is framed, is evidence that it’s not just sort of this thought experiment anymore, that some of the biggest companies in the world are actually spending billions and billions of dollars trying to make the metaverse happen.

michael barbaro

We’ll be right back.

So Kevin, you said that with all of these companies now officially rushing in, we’re truly closer to some version of the metaverse becoming real, so what is it going to look like? And how will it in theory start to change our lives? Can you evoke it for us?

kevin roose

So let’s stipulate, first, that all of this is very theoretical. Most of it doesn’t exist yet, and the parts of it that do exist aren’t fully formed. But there are several views of what this could look like and how it could change people’s lives.

The more utopian view, that people who think the metaverse will be a very good thing for society, is a metaverse that looks basically like a kind of digital oasis — like a place that is full of new and stimulating experiences and adventures. And you can look anywhere you want to look. You can go anywhere you want to go. You could have breakfast at a Parisian cafe and —

michael barbaro

Lovely.

kevin roose

— lunch at a steakhouse in Brazil and dinner in Tokyo. And you could do that all without leaving your living room.

michael barbaro

That does sound nice, and it does sound utopian because nothing about that sounds bad.

kevin roose

And I think that’s the vision that a lot of companies want to be true and want to work toward. There’s also a much more dystopian view of the metaverse that I think a lot of people have been talking about and that’s become quite worrisome.

And so this basically becomes like an inescapable digital prison. I mean, you wake up. You put on your virtual reality headset. You get transported to this world, where everything you do, every interaction you have with another person is being tracked and surveilled, and used to target ads at you. Your virtual world looks less like a Parisian cafe and more like the Mall of America.

You’re just constantly being sold stuff, and the companies that build the metaverse, whether it’s Facebook or Microsoft or someone else, will have almost total control of our lives. And all of this will be happening at the same time that the world outside the metaverse, the physical one, is crumbling due to climate change and inequality because we’re all just being entertained and numbed and distracted by this immersive digital world.

michael barbaro

It feels like option 3, which feels the most realistic to my ears, is some hybrid version of the two things you just described — not utopia, not dystopia, but maybe, Kevin, you and I go have lunch in Paris. And on our way there, we get served with an ad from Facebook about things we might want to do in Paris, something like that.

kevin roose

Yeah, as with most technologies, the real outcome is probably going to be somewhere between the dystopian and the utopian, and it will be piecemeal. We won’t wake up one day and find this metaverse just fully assembled and ready to visit. Instead, pieces of it will emerge over time. We’ll have a more immersive way to play video games, a more immersive way to attend work Zoom calls, a more immersive way to talk with our friends and family, and some pieces of this will be very compelling. Other pieces will be boring or lame. We won’t use those, and we won’t fully escape the physical world into the metaverse. It will just be something that we do for maybe a couple of hours a day.

michael barbaro

Well, that leads me to the question of just how present the metaverse is going to be in our lives, whether we like it or not. Is this something we can kind of opt out of?

kevin roose

Well, I think the mistake that we make is just not realizing the extent to which we already kind of live in an immersive, digital universe. People spend millions of hours a day playing video games, where they are fully immersed and they go by a different name. And they have an avatar and an identity and a community inside those games. But even things like Peloton.

If you have a Peloton Bike, you’re participating in kind of a proto-metaverse experience. You’re not in the metaverse, but you’re taking a virtual exercise class with people located all over the world. And I think a decade or two ago, that would have seemed pretty far out and futuristic to people, and now it’s just Peloton. So in some ways, the way we use technology is already getting much more immersive, and a lot of people, especially young people, spend enormous amounts of time in virtual worlds and also, crucially, spend enormous amounts of money in virtual worlds.

Fornite users have spent billions of dollars on virtual goods for their characters. The gaming industry is already huge, and it’s got these sort of fully developed economies inside of them. And the vision of the metaverse isn’t really all that different. It’s just — it applies to more than games.

michael barbaro

Kevin, if the metaverse is already happening, but it’s still early days, how much room will there be for people to shape it? How much agency will you or me or anyone have in creating the terms of the metaverse — what’s allowed, what’s not allowed, what we see, what we don’t see? So far, it sounds like companies are building the metaverse, which makes me think that they are going to control what it looks like, what it feels like and that we are going to live in their metaverse, not the other way around.

kevin roose

This is a big debate that’s raging in the tech world right now because a lot of people are sort of scared and hesitant about the idea of a metaverse that’s controlled by a handful of giant companies, the way that much of today’s internet is controlled by a handful of giant companies. And so they are talking about ways to build a more decentralized metaverse — a metaverse where Facebook and Microsoft and Walmart might have presences, but where they won’t ultimately control the whole thing.

And so I think that’s a big question mark as this metaverse becomes more real and comes into focus a little bit — how successful will these companies be at sort of claiming their land and building out the infrastructure and attracting people to their own version of the metaverse? And what kinds of experiments and projects might crop up to try to take back some of the control, to not have it turn into what this era of the internet has become, which is a very centralized corporate-controlled experience?

michael barbaro

Right, and Kevin, you made an entire audio series about what has happened on the internet, when a few major companies control what so many of us consume on the internet — when it’s their algorithms dominating what we see, when it’s their systems rewarding conflict and partisanship. And what you found, and what feels indisputably true, is that under the watch of these major internet companies and social media platforms, the internet went from a pleasant place, where people shared baby photos, to a pretty dark place, where people share misinformation about Covid and election fraud, and organize the January 6 attack on the U.S. Capitol. So the stakes of this feel very high — who controls the metaverse and whether it follows that pretty awful arc of the internet.

kevin roose

Yeah, I feel like to keep us somewhat grounded in present-day reality, I should note that all of this might just turn out to be marketing. It could be that the metaverse is just a buzzword that companies are using to make themselves appear futuristic. This deal, this Microsoft acquisition of Activision Blizzard could turn out to just be one company with a large gaming division buying a big gaming company. It could just be a standard acquisition in the corporate world.

But I think we all need to be paying attention to what’s happening in this realm of the metaverse now. Because if it does happen, if the things that these companies are spending billions of dollars developing do become a kind of new version of the internet, then the decisions that they’re making matter. Just as the decisions made 10 or 15 years ago by the people running companies like Facebook and Twitter and YouTube ended up having huge ripple effects, not just on our use of technology but on our politics and our culture. It’s possible that the decisions that these companies are making today about the metaverse will impact our lives, and that the worlds — the digital immersive worlds that are being built now — could be the ones that we live in tomorrow.

michael barbaro

Kevin, thank you very much.

kevin roose

Thanks for having me.

michael barbaro

We’ll be right back.

Here’s what else you need to know today.

archived recording

Did you over promise to the American public what you could achieve in your first year in office? And how do you plan to course correct going forward?

archived recording (joe biden)

Why are you such an optimist? Look, I didn’t over promise, and what I have probably outperformed what anybody thought would happen.

michael barbaro

During a rare news conference on Wednesday, President Biden rejected the claim that his first year in office has been a disappointment now that both his social spending and voting rights bills have collapsed in Congress. But Biden said he had underestimated the opposition he would face from congressional Republicans or how committed they would be to obstructing his agenda.

archived recording (joe biden)

I did not anticipate that there would be such a stalwart effort to make sure that the most important thing was that President Biden didn’t get anything done. Think about this. What are Republicans for? What are they for? Name me one thing they’re for.

michael barbaro

Asked about his most pressing foreign policy challenge, Russia’s buildup of troops on its borders with Ukraine, Biden said, for the first time, that he expects Vladimir Putin to invade Ukraine.

archived recording (joe biden)

And I think he’ll pay a serious and dear price for it that he doesn’t think now will cost him what it’s going to cost him, and I think he’ll regret having done it.

michael barbaro

Today’s episode was produced by Daniel Guillemette, Rachelle Bonja, Eric Krupke and Luke Vander Ploeg. It was edited by Michael Benoist and Lisa Chow, and engineered by Elisheba Ittoop, and contains original music from Marion Lozano and Dan Powell. Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly.

That’s it for The Daily. I’m Michael Barbaro. See you tomorrow.

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