Why Meta Is Teaming Up With Microsoft To Build The Metaverse
What marketers need to know from the Meta Connect event
Meta, owner of Facebook and Oculus, hosted its annual Meta Connect event on Tuesday and unveiled its latest go-to-market strategy for its metaverse ambition: teaming up with Microsoft to drive adoption among enterprise users first, and hoping these knowledge workers will want to use immersive devices to access metaverse for non-enterprise use cases given time. This is not an unprecedented path — desktop computers followed roughly the same adoption curve and made the jump from offices to homes over 30 years ago.
Still, the question remains: is working in a 3D metaverse environment, even with the full integration of Microsoft software suite, as much of a leap in productivity and benefits as the upgrade from analog tools to PC? In other words, would working in metaverse be compelling enough to make people want to use it beyond office hours? Meta certainly seems to believe that the experience it provides will be a huge jump for the remote workers in an increasingly hybrid work environment, as it leverages VR’s killer feature, the embodied presence, to replicate in-person interactions and facilitate better communication and collaboration.
The amount of people working remotely have leveled off in recent months. A recent report from WFH Research found that the U.S. workforce is working from home about 30% of the time, and that figure hasn’t changed much in months. If Meta can manage to capture even half of this audience segment, which would amount to about 15 million users, it’d be a big win for realizing its mainstream metaverse ambition.
Source: WFH Research
For comparison, Meta shared in February that Horizon Worlds, a social VR platform that essentially serves as the springboard for its metaverse development, had hit 300,000 users worldwide. (If that seems low, at least it looked much better than the meagerly 8,000 daily active users that Decentraland, a fellow metaverse-aspiring platform evaluated at $! billion, reportedly has.)
Bring On the Pro
To accompany this pivot towards the enterprise market, Meta also unveiled its latest high-end VR headset. Formerly codenamed Project Cambria, the Meta Quest Pro will debut on October 25 starting at $1,500, a rather lofty price that Meta justified with cutting-edge technical specs for an in-market VR headset.
As Meta CEO Mark Zuckerberg shared with The Verge, the target consumers for the new Quest Pro are the people who routinely upgrade their PCs, saying “basically, this is a step toward all 200 million of those people who get new PCs every year starting to instead do some of the work in VR, in addition to all the folks who are gaming, hanging out socially, etc.”
The reception to these announcements has been quite mixed overall, with some pointing out that, in the age of “quiet quitting,” no one wants to be forced into donning a VR headset to attend 3D zoom meetings. And some of the early reviews pointed out that, even with Microsoft’s software integration, the technical limitations of VR headsets today, even for a high-end one like the Quest Pro, still faces significant drawbacks in battery life (about two hours per charge), low resolution, and the weight of the device. All of these downsides only put more pressure on Meta to deliver a compelling use case that would justify the cumbersome user experience.
Meta’s Oculus currently dominates the VR headset market, simply because it is pretty much the only big player left in the space. Per data from the IDC, Meta sold 8.7 million units of Quest 2 in 2021, accounting for nearly 80% of the market share in VR headsets sold worldwide last year, After Meta, the top manufacturers of VR headsets by shipment are rounded out by far smaller competitors that don’t have the resources and the market leverage to create a competitive environment to spur breakthrough innovations in VR.
That being said, Meta’s dominance in VR hardware may not last too long: putting aside the upcoming Apple mixed reality glasses that could drastically alters the competitive landscape, there has also been reports that suggest Pico, the interactive media unit of TikTok parent company ByteDance, is set to start selling its Pico 4 VR headset in the U.S. next year, which, if true, will further shake up the VR headset market.
Not-So-Strange Bedfellows
In this context, it is not hard to see why Meta has decided to team up with Microsoft: not only does it now have a new angle to sell its VR headsets to a new set of enterprise customers, who are less cost-sensitive than regular consumers, but it is also a strategy that perfectly aligns with its larger metaverse ambition. Microsoft has the enterprise software that companies actually use, while Meta owns the best-selling VR headsets on the market. Of course, Microsoft has invested heavily in HoloLens, an AR headset that is also being positioned as an enterprise-facing device, but Oculus headsets have far more scale and name recognition. By working together, the two companies hope to combine hardware and software to give virtual hybrid work a concerted push, which, assuming that the mixed-reality headsets follow the aforementioned adoption trajectory of PCs, does theoretically seem like the most practical way forward.
For Microsoft, it will continue to hone in on making productivity apps fit for a hybrid future. Already, the company has started testing a new Places app to help manage hybrid work teams, and announced a virtual avatar update for its Mesh virtual collaboration platform. Meanwhile, Meta’s Workplace will integrate with WhatsApp later this year to expand communication with front-line employees, presumably starting with McDonald’s, which Meta recently signed a deal with to serve as the enterprise communication platform for employees of the fast food chain. Oh, and Horizon Worlds avatars will finally have legs.
As part of the partnership, Microsoft is also bringing 2D versions of its Office apps to Quest through its Progressive Web Apps (PWA) technology, which I suppose will be good for giving a presentation in the Horizon Workroom. But, if Microsoft is smart, it should start to consider rebuilding its Office suite for a 3D environment — which naturally brings up the question of what the future of work would look like if we were to work in the metaverse. In a virtual world of embodied presence, would 2D word documents and spreadsheets still make sense? Or would we need to evolve the formats of our productivity output into something post-text and more immersive and experiential? If so, would Microsoft even be the right company to build the 3D productivity (and creative) tools of the future? Or would someone like TikTok or Roblox be a more natural fit for developing toolkits made for embodied presentation in 3D environments? That being said, there will be plenty of strange bedfellows on the long road to the metaverse, and Microsoft is certainly the best partner Meta can hope for at the moment.
It’s Not “All Work No Play”
While this enterprise-oriented partnership understandably overshadowed everything else that Meta announced at the event, there are some non-work-related announcements that slipped through as well. For starters, Microsoft’s Xbox Cloud Gaming will soon become available on Meta’s Quest VR headsets, allowing Xbox Game Pass Ultimate subscribers to stream 2D games in a 3D virtual environment, playing them on a giant screen projected inside a Quest headset. While that pales in comparison to actual VR games, it opens the door for more future Xbox cloud-based games to be integrated into Meta’s metaverse platform.
Perhaps more intriguingly, Meta also struck a deal with a VR content deal with NBCUniversal to bring Peacock and a slew of interactive VR experiences based on NBCU IPs — such as hit sitcom “The Office,” Universal Monsters, DreamWorks Animation, Blumhouse and Universal Studios’ Halloween Horror Nights — to Horizon Worlds in 2023. Needless to say, it will certainly make the after-work happy hour parties in the metaverse a bit more fun.
At the end of the day, however, the people that Meta needed most to get on board with its metaverse plan are not other people’s employees, but their own. It is not secret that Meta employees have expressed mixed feelings about the company’s pivot to the metaverse. Among the respondents to a Meta employee survey conducted by Blind, an anonymous professional forum, only 58% said they understood CEO Mark Zuckerberg’s metaverse ambitions. Reporting based on a leaked memo claims that even Meta’s own employees are not using Horizon Worlds, presumably due to its lack of use cases.
Thanks to the new Microsoft partnership, perhaps now they will have a good reason to start using it, and, in the best case scenario, kick off the first domino piece in the eventual mass adoption of the metaverse.
