Maybe Metaverse, NFTs aren’t the next big thing
For a few years, everyone seemed to think that 3D TV would be the next big thing. Networks raced to create 3D programming, and while it all looked cool, it turned out that two dimensions were enough for most people, and 3D TV essentially disappeared.
You can make a next big argument for 3D printing, smart homes, voice assistants and a few other things. All of these exist, but they are mostly niche products. Now, Mark Zuckerberg, the creator of Facebook and CEO of what is now called Meta Platforms (META) has bet a large part of the company’s future on people wanting to be in the metaverse.
This has been followed by many retail brands and fast food chains that have created metaverse properties. The problem is that a virtual world can solve some real problems — a meeting in a virtual boardroom might be a better experience than a Zoom meeting — but the metaverse isn’t a better way to get a coupon for a Wendy’s value meal.
Non-fungible tokens (NFT) have followed a similar path. Many companies have jumped on board and major sports leagues, and many major entertainment players see digital collectibles as a source of income. But people may actually want to own physical collectibles, since buying an NFT feels a lot like buying nothing.
Meta
Real can be better than digital
Meta and the other companies working on practical metaverse solutions can actually solve some problems and create some valid uses. For example, a doctor may be able to participate in a complex operation without being there, and the job interview process may benefit from something more personal than a video call, but cheaper than flying candidates in.
For actual human interaction, however, it seems possible (perhaps even likely) that people want actual personal experiences. Facebook, Instagram, TikTok and social media in general are generally built on people actually doing things.
You can’t really post a video of yourself eating virtual ghost peppers or in a digitally enviable location. A lot of social media is ‘look at me’, and well, you have to actually do something for people to want to look.
NFTs are similar. We can call them originals and collectibles, but isn’t the point of owning a collectible to be able to show it off? Yes, there is the possibility of an NFT going up in value, but whether its baseball cards, Beanie Babies, pogs, Pokemon cards, record albums, or anything similar, the market was generally short-lived.
Both McDonald’s (MCD) and Wendy’s (WHEN) has spent significant money creating a presence in the Metaverse. The problem – and it’s a very big one – is that you can’t actually eat in a virtual world. It is the core value offered by fast food chains. You give them money and they give you food.
Some percentage of their customers might want to battle Hamburglar for a discount on a Happy Meal or make virtual baked potatoes in a pretend Wendy’s, but it seems like the crowd will be pretty small. Both Metaverse and NFT have logical uses. Taylor Swift fans are likely to buy an NFT related to her new album if it offers exclusive content or a benefit when purchasing concert tickets, but most NFTs probably aren’t.
Most collectibles make sense to own if you get more enjoyment out of owning the item than what it cost to buy. It’s not a metric that’s easy to quantify, but in most cases,
“I’ll sell this later for more than I paid for it”, is a really bad reason to buy most things.
When a non-tech company says it’s creating a metaverse property, I question whether management is simply chasing the next squirrel. Zuckerberg may be right, or he may just be building the product he thinks people want. He was of course very right about Facebook, but not every sequel is a hit.
Zuck could have his own “Empire Strikes Back” or “Rocky II”, the metaverse feels a lot like he’s betting big on “Speed 2: Cruise Control”, “Next Karate Kid” or even the truly regrettable “Blues Brothers 2000.”
