BigTech were huge beneficiaries of the pandemic, indeed their cash piles are resulting in more and more aggressive spending in M&A. Part of this is what we can term the Great Rush to Metaverse consolidation.
I’ve coined the Great Automation, Great Correction and Great Rush to describe meta-trends we are seeing in the world of business, technology and the markets that encapsulates after-shock waves of how the Fed dealt with the pandemic shutdowns.
Google’s AR glasses was likely already in the works, just as Apple’s have been delayed to 2023. It’s such a pity Magic Leap didn’t scale their products to keep things interesting. If only Amazon or someone like that acquired them.
Google recently begun ramping up work on an AR headset, internally codenamed Project Iris, that it hopes to ship in 2024, according to two people familiar with the project who requested anonymity to speak without the company’s permission. I believe the Verge broke this story.
BigTech is able to focus more on acquisitions which is a major consolidation push, the opposite of what China is doing with its BigTech sector to improve common prosperity in its society. In some ways, this means America will be a Metaverse Dystopia of Tycoons and China’s version of the Metaverse will actually be over-regulated into a false kind of Utopia.
Microsoft, Alphabet and Amazon all announced more acquisitions in 2021 than any other year in the past decade, according to Dealogic. Google parent Alphabet’s 22 deals, Microsoft’s 56 deals and Amazon’s 29 deals in 2021 were all 10-year highs, according to Dealogic. While Dealogic data only accounts for publicly disclosed deal values, based on those records, Alphabet and Microsoft’s aggregate deal volumes were also at 10-year highs, at $22 billion and $25.7 billion, respectively.
Alphabet 22 deals for $22 billion in 2021 alone
Microsoft 56 deals for $25.7 billion in 2021 alone
This gives BigTech an absurd amount of leverage to own and rule over the Metaverse and the various platforms and gateways and internal exchanges within its digital walls. Companies like Unity are working on remaking the entire physical world into the Metaverse. That is an astounding project and could have an incredible TAM.
We don’t specifically know how the Metaverse will evolve but we know who some of the biggest players will be.
Project Iris is the name for Google’s AR glasses that could be ready by 2024 or 2025, around 2 years after Apple’s.
Google’s headset is still early in development without a clearly defined go-to-market strategy, which indicates that the 2024 target year is aspirational and we could even expect it to finally come as late as 2026. The Metaverse won’t just appear, it will be slowly built by trial and error, just as VR products haven’t really caught on in the last decade either.
The Great Rush
What I think perhaps it best displays however is how hard the best technology companies in the world will compete to own real-estate, platforms, gateways, hardware and ecosystems within it.
Already in 2022 we’ve seen a jubilation over digital art and NFT platforms and a Bitcoin price that appears to be correcting again.
The Metaverse shows signs of consolidating crypto, DeFi and related ecosystems into the hands of BigTech and the same companies that rule the world with duopoly moats and NASDAQ dominance. The early signs is that radical centralization of Silicon Valley will own the Metaverse landscape, platforms and advertising real-estate.
Google’s AR glasses are a metaphor for what we already know: Facebook and Google will keep failing in hardware as Apple and Amazon do better. BigTech’s M&A and revenue growth in the Cloud and Ads ensures it can easily swallow the small ecosystems of crypto and their so-called decentralized brethren.
Companies like Binance and Bitmain may remain, but several others like OpenSea or Coinbase may not. Time will tell but the Metaverse narrative has for the most part already been set with momentum, money and consolidation since America is not regulating its various duopolies and monopolies that nobody can compete with. Microsoft’s interest in Gaming has displayed this vigorously in 2022.
Project Iris’ first pair of AR headsets will use cameras to bring together graphical elements with a live video feed of what’s in front of you to create the augmented reality experience. The first prototypes of Google’s new headset are reportedly already being developed at a facility in the San Francisco Bay Area.
I actually think companies such as TikTok and Snap have more to gain from this AR trend in the Metaverse. Mixed reality. It’s not clear how dominant Meta can be in the Metaverse, which is pretty ironic.
The Hype and the Digital Real
Great that Google is trying to keep up, historically it’s failed many times in hardware of this nature. Yet its phones show serious signs of progress. The hardware is powered by a custom Google processor, like its newest Google Pixel smartphone, and runs on Android, though recent job listings indicate that a unique OS is in the works.
Here the Great Rush will press digital transformation and innovation among BigTech leaders. Google’s strategy is to use its data centers to remotely render some graphics and beam them into the headset via an internet connection. That sounds vaguely innovative! Google Glasses flopped circa 2012.
For many, the metaverse "remains more aspirational than real," but several tech giants foresee the digital world as their next big investment — and they're expecting it to pay off. From virtual-reality headsets to new ways to shop, proponents of the metaverse say it will have a "profound effect" on daily life, similar to the rise of the internet, according to a LinkedIn Editor.
The Headset Wars
Google is planting a flag in the so-called "headset wars." The tech behemoth will join rivals Apple and Meta (Facebook's parent) in developing an AR headset it hopes to have on the market by 2024.
We have to imagine ByteDance who acquired Pico will also be involved. China’s Metaverse might be much more organized and regulated, which I think sounds a bit more like Utopia vs. the Dystopian Ad-based internet American will likely want to prolong. Personally, I’d rather live a censored life if it was orderly and where common prosperity > was prioritized over BigTech profits. This is because for young people, wealth inequality spirals into a real problem in the decades ahead.
The Great Rush in VR, mixed reality hardware and so forth should be interesting to watch in the 2023 to 2027 period.
Google's Augmented Reality OS team, led by recent recruit Mark Lucovsky, is looking for new members to help "develop the next-generation technologies that change how billions of users connect, explore, and interact with information and each other," the job description said. That’s exciting I suppose if you want to put your eggs in Alphabet’s basket. The Metaverse frankly, is not likely to be their strength in the future of technology. What will happen to search in the Metaverse? Surely YouTube can survive.
We still don’t know if Google will be investing in AR and VR the same way as Meta, which is spending billions of dollars each year on its AR project, or Apple, which reportedly has two AR products in the pipeline. Google Cloud is doing well and they are quite diversified in artificial intelligence with both DeepMind, Google Brain and quantum computing initiatives.
Leaks suggest Apple’s AR headset will launch later in 2023 and could have a more premium price starting at $2000. It could also come with more advanced sensors for facial tracking, eye-tracking, etc. This might mean Apple will pivot into Advertising when the Metaverse arrives. It’s already creating a smart car product likely with an elegant software integration component as well (Project Titan). Realistically I imagine this to launch about in 2027.
Thanks for reading my weekend rambling on this, I’m always thinking about the future intersection of business and technology. That I suppose is what an amateur futurist does.
Have a great weekend!