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At CES 2022, metaverse is built by small players, but Meta's influence looms

SNL ImageTekle Holographics demos its metaverse concept at CES 2022.
Source: S&P Global Market Intelligence

Tech giants such as Meta Platforms Inc. and Microsoft Corp. have been touted as the leaders of the metaverse vision. At CES 2022, the tech industry's largest event, upstart companies are actualizing the next version of the internet, and their thoughts on the heavyweight influencers, notably Meta, are mixed.

Meta Chairman and CEO Mark Zuckerberg announced his company's name change in October 2021 amid a wave of fever-pitched scrutiny about societal harms of which the social media giant was aware. While there were questions about the timing, the company's rebrand was a signal to the world that it was pivoting its focus to metaverse development — the next iteration of the internet in which people partake in everyday tasks in a fully virtual world.

Others in the big tech ranks followed shortly after, announcing their own product lineups and initiatives focused on building out the metaverse. But at the Consumer Technology Association's flagship trade show, multiple smaller-scale companies developing metaverse technologies exhibited on the convention floor and participated in panel discussions, suggesting that the metaverse may come to fruition not just from a few big participants but from many smaller names, too.

What the metaverse means to them

"I think the metaverse is more than what Mark Zuckerberg thinks it is," said Michel Tzsfaldet, founder and CEO of Netherlands-based Tekle Holographics, a company selling immersive 3D holographic technology.

In an interview with S&P Global Market Intelligence, Tzsfaldet described the future-scape as an entirely digital replication of the real world, where users can be examined in virtual hospitals and have business meetings between colleagues or perform everyday tasks like repairing a car or picking out a couch.

His hope for the future of the metaverse is to collaborate with big tech companies, notably Meta, given its vast financial resources. Tekle has already worked with established titans including Microsoft and NVIDIA Corp.

"The small players are the creative ones that have the technology," he said. "If we don't let [Meta] buy us, we can guide the direction that the metaverse is going towards."

Despite a higher regulation risk in U.S. President Joe Biden's administration, Tzsfaldet has few fears of regulation efforts on metaverse technology, citing the immaturity of the space, as well as bickering between lawmakers on Capitol Hill.

"I think the metaverse is more than what Mark Zuckerberg thinks it is," said Michel Tzsfaldet.

In a Jan. 5 conversation about metaverse workplaces, Georgina Wellman, Sine Wave Entertainment's vice president of business development, said the metaverse is "whatever you want it to be."

Breakroom, the company's metaverse platform, describes itself as a multi-user engine that simulates real-world environments. It is accessible through multiple mainstream computing and hardware solutions, including virtual reality headsets.

Wellman listed off possibilities for workplace collaboration in a metaverse environment, noting that the feeling of presence is delivered more strongly in the metaverse than in a Zoom Video Communications Inc. or Microsoft Teams call.

A love-hate relationship with Meta

Some metaverse-focused business leaders said that Meta has made mistakes, but it has achieved quite a lot and will lead the charge on influencing metaverse conversations.

"I think Meta in a lot of ways is helping with the accessibility problem [of metaverse tech]," said Chris Stavros, founder and CEO of makeSEA, a company offering mixed reality experiences for businesses and educators. During a Jan. 5 panel on learning in the metaverse, Stavros said Meta Platforms' influence on extended reality, or XR, technology through Facebook Technologies LLC makes devices cheaper for schools to purchase.

"In the schools that we're working with — as much of a concern and frustration as there is about some of the issues around Facebook — they're still using those devices and making it work," Stavros said.

Another panelist, Rohan Freeman, Sine Wave Entertainment's founder and CEO, said the metaverse should focus on "quality" creations from users and not metrics-driven elements of traditional social media business models, where increased user engagement leads to more money for social platforms due to further presence of advertisements.

Among several ills that befell Meta over the past few months, the company was scrutinized for its platforms' recommendation algorithms that pushed harmful content to younger users, notably teenage girls. Congressional efforts have been made to rein in these algorithms and were discussed heavily in a hearing with Instagram LLC head Adam Mosseri in December 2021.

"We as people don't want to be commodified," Freeman said. Facebook, like any other entrenched business, faces the challenge of being able to innovate in the face of scrutiny and deliver an honest experience to its users, he added.

Challenges and looking ahead

On the convention floor, metaverse technologies — such as virtual reality, augmented reality, 5G and blockchain — have played a major role and will continue to do so in the years to come. But a generalized consensus of what the metaverse is has yet to be fully realized.

Steve Koenig, vice president of research at CTA, told Market Intelligence on Jan. 3 that the metaverse is an evolutionary story that will likely take 20 years to conceive.

Following Meta's rebrand, Zuckerberg said the metaverse would become a significant profit driver later on in the decade. The company will be hiring some 10,000 people in Europe over the next 10 years to help build its metaverse infrastructure. Meanwhile, Wall Street analysts have said the name of the company will not influence any key metrics until more details about these investments are known.

When asked about skepticism and privacy harm concerns that may propagate in a metaverse environment, executives flipped the question back to the real world.

Sine Wave's Wellman said the metaverse is a place where people "can go and collaborate, and you can choose where you go, so you just have to choose wisely."

Tekle's Tzsfaldet believes that if we want the metaverse to be an exact copy of the real world, it will not be perfect.

"We can strive for utopia, but it won't be," Tzsfaldet said. "It's human nature that it won't be."