A Metaverse Twist on Entertainment Platforms

A few months back at its own Ignite event, Microsoft announced grand visions for how the world could be interconnected with a single platform of services meshed together. Towards the end, they also pushed a bland metaverse narrative showcasing how companies could use extended reality to improve onboarding and collaboration.

At that time, I noted that their trajectory with the metaverse was missing the mark and they weren’t ready for prime time (you can read the full post here). Well, yesterday’s 70-billion acquisition by Microsoft surprised me and has me pondering what the future may hold.

I’ll be breaking down some synergies and challenges I foresee mixed in with plenty of nostalgia for the beloved intellectual properties which is now under Microsoft’s watch.

A newer adventure begins…

An early Blizzard game is a tale of 3 Vikings lost in time. Each one had specialized skills and had to work closely together to bring the best of themselves forward to defeat their enemies and return home. This acquisition is one of those cases of bringing together a diverse set of skills and capabilities to create something more powerful together. The question will be if Microsoft decides to get lost along the way much like it did with other acquisitions such as Skype. I believe it is safe to say they destroyed the future of what Skype could have given to its users… and only a few years later did Microsoft bring Teams up to speed just in time for the wave of remote working during the pandemic. Fortunately, in the entertainment space, a feared acquisition of a beloved game platform, Minecraft, years ago seems to have gone over well enough to continue being a popular platform to this day.

So why invest in this space?

Besides the price of an acquisition being just right, Microsoft is looking to catapult itself into the future with a potent combination of intellectual property (IP) and computing platform.

Back in my day, having a console with multiple controllers and Call of Duty (CoD) was a must-have for any get together… it served as a social glue to gather around and provide an ongoing source of entertainment. With the coming avalanche of metaverses, the holders of intellectual properties like CoD will be able to take old assets, rehash them, and sell them as a digital goods and services while continuing to create the next big franchise. Play-to-earn schemes will also become standard practices using IP as a wrapper for those digital items. Should Microsoft enable and grow this concept of social entertainment glue, their properties can entrench them further into society as a required digital good to be subscribed to.

Another Blizzard property is Starcraft where a player commands 1 of 3 different alien factions. Unlike what you see with chess, the different factions are not mirror images with a different look and feel. Starcraft set itself apart from its predecessors in that players had options to pick really different factions. The player decided which faction appealed to them and how best to command their resources to victory over other players. You’ll also notice In the title box above that a selling point of the game is to be able to “compete FREE over the INTERNET” and these two core capabilities will remain the same with metaverses.

Players choosing what represents them best when they engage with others on a common platform.

So apart from the intellectual property advantage, a key promise of the metaverses is the ability for users to enter a common space to interact with each other and consume entertainment together regardless of what device they’re using. This new paradigm may seem like technology companies will lose their proverbial dinner by having users migrate to a common metaverse platform, however, a well-positioned company will get a whole food court instead of just a food stall; where users come to sit down and consume services from their preferred providers in one place.

These metaverses then become virtual malls and if the computing for this metaverse happens on Microsoft’s hardware all the better. Microsoft can use technologies like it’s Mesh to enable users to interact with each other and the outside world while collecting toll fees for computing from the services or users transacting on the platform.

Potential challenges

• It’ll be important to avoid schemes that would be perceived as money grabbing schemes when it comes to re-hashing intellectual properties as digital goods especially those promoted as non-fungible tokens (NFTs) to its players. Microsoft with Activision Blizzard will need to tread carefully as they transition to a metaverse economy of digital IP.
• Another challenge is a persistent one for any extended reality technology and that is to figure out how to bring people together and not keep them glued to screens. There is plenty of room for innovation to engage users without the need of a screen in front of their face to see the magic before them.

What could be next?

The race to own a metaverse users wish to spend their time and money in will move full “steam” ahead. I believe, Steam is the most likely next big target for a company like Sony or Apple to crack into the entertainment portal / metaverse platform space.

In any case, ultimately the intellectual property will drive the ability for a company to take a good platform and turn it into a killer platform to attract the number of users needed to command control of their data and transactions. Digital transformation is still alive and well and Microsoft now has a treasure chest of IP to deploy through its digital ecosystem.