Brands are flooding the metaverse, but gamers just don’t care

Hi, and welcome to Protocol Entertainment, Your guide to the business of the gaming and media industries. This Thursday, we’re taking a look at new survey results about brands in the metaverse, Tim Cook’s new comments on augmented reality and the controversy surrounding Saudi investors tapping into the game industry.

No one wants brands in the metaverse

Remember the peak of the Second Life hype, when companies like Intel, BMW and Coca-Cola all rushed to establish their presences in developer Linden Lab’s virtual world? History appears to be repeating itself with the metaverse, as hardly a week goes by without an announcement of a major brand setting up shop on a nascent metaverse platform.

Here’s some free advice for brands: Don’t do it. The metaverse is still much more of a concept than a place, meaning that you’ll likely spend your money on a platform that won’t be around if and when the whole thing really starts to take off. Plus, if Second Life’s history provides any lesson, it’s that people really don’t care about brands in the metaverse.

That’s also the result of a new survey published by Zipline this week, which recently queried people about their attitudes toward the metaverse, brands and NFTs.

85% of Gen Z respondents said that they “felt indifferent” about brands developing a presence in the metaverse. Apparently, the generation’s universal response to brands setting up shop in virtual worlds is a resounding ¯_(ツ)_/¯.
Generally, people just have other things to do than to check out a virtual land plot or shopping mall owned by Coca-Cola or Burberry: 83% of respondents across generations said their primary reason to use metaverse-ish platforms was gaming.
NFTs, on the other hand, rank pretty low on the list of things that get people interested in the metaverse. Less than 5% of respondents who engaged in the metaverse put NFTs as the main reason.
NFTs also seem to be more of an older people thing: 84% of Gen X respondents said they would be at least somewhat interested in getting an NFT from their favorite brand, to 63% of Gen Z respondents.

Again, the metaverse doesn’t really exist yet, which means that any survey asking people why they use it deserves to be taken with a grain of salt.

However, the metaverse also doesn’t not exist. There are plenty of proto-metaverse platforms that people use for at least some of the things we all might do in the metaverse in the future, including gaming, land ownership and NFT trading.
Brands have begun dipping their toys inusually by sponsoring virtual spaces and clothing lines.
Mark Zuckerberg didn’t make up avatars, 3D worlds and gaming out of thin air; he saw them being successful on Roblox, Minecraft and Fortnite.
Likewise, there appears to be real and growing interest in immersive visual computing, including AR and VR, with some analysts now estimating that Meta sold close to 15 million Quest 2 headsets since its release in 2020.

So what’s a brand got to do? Ignoring all of this new technology or waiting for others to be successful doesn’t really seem to be a winning strategy either.

Brands that do want to spend some of their marketing dollars on metaverse tech should look for things that already work and then figure out how to make them even better with immersive tech, Zipline’s survey suggests.
85% of Gen Z respondents, 75% of millennials and 69% of Gen Xers told the company that they would be interested in hybrid shopping experiences, which includes using mixed reality in retail stores and for online shopping.
“The key is to engage consumers with entertaining and accessible digital content that lowers the barriers to entry and meets metaverse users where they already exist,” said Zipline co-founder and CEO Melissa Wong.

That may be in a popular game or in a real store where people mingle in flesh and blood. Just don’t expect to get much out of spending millions on the next deserted island.

— Janko Roettgers

Overheard

“I am incredibly excited about AR, as you might know, and the critical thing to any technology, including AR, is putting humanity at the center of it, and that is what we focus on every day … [W]e’re still in the very early innings of how this technology will evolve. I couldn’t be more excited about the opportunities we see in this space, and sort of stay tuned, and you’ll see what we have to offer.” — Apple CEO Tim Cook responses to a question about AR during an interview with China Daily USA, hinting yet again that the company’s forthcoming headset hardware is on the way.

“I do think the context of who is wielding the gun against who matters — a game like Wolfenstein kicks back against toxic gun culture by centering its conflict on resistance to Nazi villains. But more often I think shooters lionize and whitewash colonial violence which these attacks are often examples of. And it does bother me and negatively impacts my mental health to contribute to games that I feel culturally complicit.” — A former Call of Duty developer reckoned with the series’ contributions to gun culture in a report from Vice’s Waypointwhich detailed how US mass shootings affect those who work on shooter games and the broader conversation around video game violence.

In other news

Microsoft’s cloud platform will add peripherals. Xbox Cloud Gaming, the game-streaming component of Microsoft’s Game Pass subscription, will soon be adding mouse and keyboard support, The Verge reported yesterday.

Activision Blizzard shareholders break with the board. Shareholders of the game publisher vote to mandate an annual report on harassment, discrimination and other misconduct, against the recommendation of Activision Blizzard’s board.

Meta rebrands its digital payment system. Facebook’s parent company has rebranded the company’s payment system as Meta Pay, with big ambitions to turn into a “wallet for the metaverse that lets you securely manage your identity, what you own, and how you pay,” Mark Zuckerberg said.

Sony is also skipping Gamescom. The once-annual German video game convention is returning after a two-year hiatus, but Sony is among the companies not participatingalongside Activision Blizzard, Nintendo, Take-Two Interactive and others.

Gamers love brands, a bit too much. A new study from market research firm Newzoo found that gamers had higher-than-average positive attitudes toward brand names across multiple product categories, most prominently toward energy drinks.

Apple and others not participating in new metaverse group. A standards-focused metaverse trade group of companies like Epic, Meta, Microsoft and Sony has notable holdouts: Apple, Niantic and Roblox.

Epic will publish another blockchain game. The Fortnite developer is adding another blockchain game to its PC game store with the debut of Mythical Games’ NFT-supported Blankos Block Party, which has more than one million accounts.

Netflix is in talks with ad providers. Co-CEO Ted Sarandos told an audience at the Cannes Lions conference in France that it was in discussions with multiple ad partners to build its ad-supported version of Netflix. The WSJ reported on Wednesday that two contenders are Google and NBCUniversal.

Saudi Arabia is upsetting the game industry

Saudi Arabia’s PIF, the country’s sovereign wealth fund that’s flush with hundreds of billions of dollars, is making waves in the game industry. The PIF has over the last few years acquired stakes in some of the largest game makers in the world, including Activision Blizzard, Capcom, Electronic Arts, Nexon and Take-Two Interactive.

Just a month ago, the PIF purchased a 5% stake in Nintendo, followed by a $1 billion investment in Swedish holding group Embracer Group, which boasts more than a hundred studios after an spending spree over the past few years. Earlier this year, the PIF financed its gaming subsidiary, the Savvy Gaming Group, to acquire esports groups ESL and Faceit and classic arcade developer SNK. Savvy’s CEO Brian Ward has since gone on the interview circuit trying, fruitlessly, to detangle the Saudi government from its gaming investments.

Saudi Arabia’s financial entanglement with the industry is now raising thorny questions about the ethics of such deals, given the country’s horrid history of human rights abuses. In a rare defense, Embracer Group Co-founder and CEO Lars Wingefors wrote 1,200 words justifying the investment. “I understand and respect that there are different views on this topic. I don’t claim to have the right answers, but I want it to be clear that this decision was not taken lightly,” Wingefors said, though his reasoning did little to convince skeptics that Embracer cares all that much about where the money comes from .

— Nick Statt