(bright music) - [Speaker] I am a mother of five.

- [Speaker] I really didn't see myself being able to go back to school.

- [Speaker] There was a lot of self-doubt.

- [Speaker] Cost of higher education, that was a big hurdle for me.

Once I found Amazon and all their free education programs, I was hooked.

- Amazon's footing the bill for it, so we're gonna take advantage.

- [Speaker] I'm able to work towards a degree in computer and electrical engineering.

- [Speaker] Network engineering.

- [Speaker] Environmental engineering.

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I feel like the sky's the limit.

- [Presenter] Thank you for joining us for the Crosscut Ideas Festival.

(bright music) Before we begin, thank you to our founding sponsor, the Kerry and Linda Killinger Foundation.

We'd also like to thank our title sponsor, Amazon.

- Hello and welcome to the Crosscut Festival.

My name is Steven Kent.

By way of introduction, I am not an expert on all things metaverse, but I have been covering high-tech and high-tech entertainment on high-tech society for 30 years now.

My guests, however, definitely qualify as experts on the subject.

I am joined today by two panelists, Dr. Jesse Schell, a distinguished professor at Carnegie Mellon and the founder of Schell Games which is a pioneering company in the VR game space.

I'm also joined by Michael Pachter, managing editor at Wedbush Securities and absolutely one of the most quoted men in high-tech.

Welcome, Jesse and Michael.

Thank you very much for joining us today.

- Glad to be here.

- Same.

Thank you, Steven.

- Why don't we start by defining the term metaverse.

What is the metaverse?

Jesse, let's start with you.

- Whew.

Well, different people mean different things.

I guess, the way I always look at it is I find, when people are talking about metaverse, they're talking about things that are virtual, spatial, and social.

So to my point of view, any online world where you are connecting up with other people in a spatial location constitutes you're now, somehow, in the metaverse, whether that be Roblox or Fortnite or something else.

- Okay.

Michael?

- I have a more expansive view, and it might be easier to tell you what it's not.

It's not Roblox and it's not Facebook.

So I think that the concept really means that it's a persistent world that crosses virtual and real and augmented reality.

So real world, virtual world, augmented reality.

Pokemon GO is augmented reality.

And I think that the concept of the metaverse is that you and any intellectual property associated with you, any actual property associated with you, can traverse the metaverse, can go from real world to virtual world, to augmented world, and your stuff comes with you.

And so I think the analogy would be if you own a pair of Nike shoes, sneakers, you can walk into a Puma store and Puma's not gonna kick you out 'cause they might hope you'll convert to buy Puma sneakers.

But if you decide that you wanna, you know, take something into Facebook, they'll boot you right out, or Roblox, they'll put a wall up.

So the metaverse is going to let you own things, create things, use things, whether they're virtual or real, any place that you happen to be.

And, you know, I think that the best description that I've heard is Web 3.0.

It is another way of building the internet that crosses over from 2D, two-dimensional, and three-dimensional virtual worlds and into the real world.

So again, everything Jesse said is accurate, I just have a broader view of what it's going to evolve into.

- Okay, well, not being an instigator here, but I'm gonna, since there was a little bit of a conflict, I'm gonna ask, I'll start with you again, Dr. Schell.

You included Roblox and Facebook as a part of the metaverse, is that correct?

- Yeah.

I guess the main issue I take with the idea of the "metaverse" is that I think it's the wrong way to think about the way people are going to interact.

I think the right way to think of it, in my opinion, is many different metaverses because these are often going to involve virtual worlds of some kind.

And virtual worlds are all about boundaries.

If I get a bunch of equipment in World of Warcraft to bring it over into the Pokemon world, doesn't help the World of Warcraft world and it doesn't help the Pokemon world.

It kinda breaks both of them.

So instead we have boundaries between these worlds.

And so I know some people have, their ideal is, "No, there are no boundaries.

Everything I get everywhere I can use everywhere."

But, you know, certainly in my experience so far, that is, I think, neither practical nor desirable in most cases because boundaries are what make worlds interesting.

So the way I look at it is we're likely to have many different metaverses.

- Okay.

Michael?

- Let me draw a definitional distinction.

'Cause again, every single thing Jesse said I agree with, and he's right.

I think that using the words worlds and metaverses interchangeably is probably not gonna be where we end up in 10 years or 20 years.

Worlds, yes, 100%.

I think there's one metaverse, just like there's one internet.

And when I look at Amazon, who's the sponsor of this session, so thank you very much, Amazon is not the internet.

They are the leading retail e-commerce site on the internet and the leading cloud provider on the internet, one of the big advertisers on the internet, but they are not the internet.

And Roblox is not the metaverse.

They are a leading game platform in the metaverse.

So I completely agree with Jesse, just like we can't go, you know, play cosplay, LARP, you know, events in a library 'cause the library doesn't want us to disrupt, you know, what other people are doing.

Or we can't make a phone call during the movie in a movie theater because there are rules.

You have to respect, you know, the wishes of others.

I agree, we're not gonna wear our Nikes into World of Warcraft.

That doesn't make sense.

But I just use those as examples of the idea that, I think the most important thing that has to be portable, and I think this will cross all worlds, is the wallet.

And right now, if you try to buy something in a game, and I'll use games 'cause it's pretty evolved.

If you play three different games made by King, you know, Candy Crush, Candy Crush Soda, and Candy Crush Jelly all on your iPhone, you have three different accounts for the currency that you purchased.

The dumbest thing I've ever seen.

The reason why?

Apple decided.

I asked King years ago why they wouldn't have a portable wallet across their games.

Apple decided.

The metaverse will get rid of that.

There will be a single wallet.

And that wallet is probably going to be loaded up with real currency.

It could be crypto, it could be anything.

But you're going to be able to buy something any place you want from that wallet, which is good.

It's less waste, it's more efficient, it will encourage people to try new things.

So as Jesse said, and I'm 100% on board with this, the metaverse will consist of an infinite number of worlds, but it won't be one world.

That one world is not gonna be Facebook/meta, it's not gonna be Roblox.

The model is going to be some pioneer, whether it's Unity or Epic or somebody we've never heard of, is going to come up with a platform that is open, that has a pyramid of brands and professional creators at the top, and everybody who uses it at the bottom, and everybody's going to be able to contribute to this universe, this metaverse, by creating content, and everybody's going to be able to monetize.

So I think it's like defining music and saying music only consists of recorded artists, you know, who have made albums.

That's just not true.

Music consists of us singing in the shower as well.

Nobody would pay us, but we're able to do it.

And we now have that bridge between amateur and professional, shows like "American Idol" or platforms like TikTok that where people can demonstrate how talented they are and then if they're able to convince enough people to buy their music, they sell it.

I think the metaverse is that.

So as we've seen music evolved to TikTok videos and "American Idol", we're gonna see the internet allow people to create content.

And if it's good, we should be able to buy it.

And if we're able to buy it, that's the beginnings of the metaverse.

- So with that in mind, I'll start with you, Michael, on this one, where would you say we are on the evolutionary scale right now for the metaverse?

- We need a lot of failures so that people can figure out what not to do.

We need a handful of successes through innovation.

You know, I think, in fairness, we're about, we are to the metaverse in 2023 where we were to the internet in 1995.

And so had you asked me in 1995, "Who's gonna win the internet," I would've said AOL for sure, the dominant email, you know, network.

I would've said Microsoft, the dominant operating system.

And I would've said Dell, the dominant computer maker.

And, you know, Dell, to some extent, I suppose, has succeeded.

Microsoft absolutely succeeded.

And AOL is an afterthought, doesn't exist anymore.

But had you asked me to describe gaming in 1995, multi-player gaming, I would never have conceded a Fortnite, where a person on their phone could play with a person on a PC and another person on a console.

That's crazy to me.

And yet we can do that.

So tech is a barrier and participation is a barrier to the evolution of the metaverse.

Even when Facebook and Myspace before that, and Twitter after that had launched, I had never conceived of Snapchat.

Like, who came up with that?

But it's brilliant.

And even when we had things like YouTube videos, if you had described TikTok to me, I would've said, "Oh what a rip-off," but it's better.

I don't know why, but it works.

So I think that the metaverse will be done growing when another generation of creators is born and matures.

I'd say we have another 20 years before it's fully formed.

And I'd say we have about 5 to 10 before it really starts to take shape.

So we're in the very, very early innings.

And I think, fortunately for future generations of creators, you've got guys like Facebook literally pissing away billions and billions of dollars chasing their dream of the walled garden that's going to fail, and people will learn from that.

And fortunately, you've got visionaries like Tim Sweeney at Epic, who want to take on the world and make this as open a platform as possible and allow people to create to their heart's content.

So, you know, I think that when Tim Sweeney ultimately wins, the metaverse will actually be formally born.

- Okay.

Dr. Schell, where do you see us on the evolutionary scale?

- It's interesting 'cause there are so many different things happening in parallel.

On one level, I think we have a number of things that haven't evolved much lately, right?

The internet itself has changed very little in the last 30 years.

So the question is, where are the changes going to come from?

Okay, the reason it's hard to talk about it is there's multiple things happening in parallel.

We're going to see huge advances, certainly in terms of our interaction with AI and AI characters as part of gaming worlds and also non-gaming worlds.

We're going to see big advances in terms of our ability to interact spatially.

We're going to use mixed reality in ways that we don't fully understand yet.

And we're going to find ourselves up against this privacy crisis.

Because what makes mixed reality work is having cameras all over everything all the time, scanning in the interior of your house and every place that you go.

And we're going to have this whole question of like, "What of that are we ready to share into the cloud, and what aren't we ready to share?"

So one of the things that I know is true is that with these things, games always lead the way.

Because games can afford to take crazy risks and only sort of work, whereas like normal applications, like they have to work.

I can have autonomous cars in a video game and it's fine 'cause they crash a lot, but having them in the real world is problematic.

And so the whole, I guess what I'm getting to is watch where games are going and then we will see the rest of culture start to follow that.

And so this is partly why I think Roblox and Fortnite are very important in this regard.

'Cause on one level, Fortnite's just a game.

People are just playing a game.

But on another level, it's this cultural force where concerts that thousands and thousands of people are showing up for are happening within the context of this video game world that was never designed to be a concert venue.

And when you look at sort of the spirit of Roblox, it's kind of against the way that most adults think of video games.

But the kids who are playing Roblox now are going to demand that things start to work more like that, that they are able to create content within their own worlds.

So I think that we have some interesting steps that we've taken.

But in terms of deeper, more social connections and spatial connections, we have a long way to go.

- Okay.

Just for readers or for listeners in case they're not familiar with the terms, when we say virtual reality, that's where you're pulled into a reality that doesn't exist.

It's manufactured around you.

Augmented reality, as Michael pointed out, like Pokemon GO, puts a virtual thing on the screen in the reality, in real reality around you.

And mixed reality takes your world and then overlays a different reality on top of that.

Can we agree on those terms, or is that correct?

- Yeah, that sounds right.

- Yes.

- Okay, just wanna make sure.

Next question.

There's a lot of discussion about the adverse effects of technology on society.

People can only communicate online or via texting, isolation, those kinds of things.

Starting with you, Dr. Schell, how do you see the metaverse impacting society?

- Oh, that's a great question.

And Steven, I should mention, I'm not technically a doctor.

I'm a professor, but not a doctor.

I keep meaning to mention that.

In terms of how it impacts society is gonna be a really great question because, in some ways, these technologies are going to make us more anti-social because we will spend more time interacting with virtual constructs and virtual versions of ourselves.

But at the same time, there are opportunities for it to make us more social.

We're doing a lot of work with mixed reality right now where we're seeing that, the killer app for it, for the ability, when you have the ability to put on a pair of glasses and overlay geometry into your real world, one of the strongest ways to do that is to open up a wall of your house and have it lead into a room of another person you know and to have these sort of more intimate connections, to be able to have your friend virtually be sitting on your couch and have a chat with them as if they're in the room with you.

So in some ways, these technologies will do what social media has done, which is push us farther apart from each other to create these identities that aren't our real identities and make people feel weird about themselves because they think other people are better than them.

But at the same time, we can use some of these technologies to connect to each other in closer, more intimate ways.

And I honestly think this is the whole history of all telecommunications technologies, is that they bring us closer together and farther apart at the same time.

And it becomes a question of using them wisely and using them well.

- Okay.

Michael?

- I mean, Jesse's concerns about privacy are really well taken because that, I think, is the only impediment to the metaverse, really massively enhancing interaction among people.

Leading with games, I think, is also the right thing.

If you roll back about 25 years ago, there were almost no multi-player games.

I mean, they existed, but hardly anybody could figure out how to connect to one another.

And now all the big games on the planet are massively multi-player, whether it's Fortnite or Call of Duty.

And I'd say that's really good for society.

You may be stuck, you know, in your basement playing Call of Duty, but you are talking to people.

And, you know, as long as it's not harassing people, I mean, I have friends that I know through games that I've never met.

We are sitting here in three corners of the US right now and we're communicating as if we're in the same room, and that's awesome.

So, you know, technology allows that.

I think that the impediment to this happening, the two impediments, are protocols, so uniform standards so that everybody who's building their vision of this it'll work with everybody else.

That's the way to really accelerate adoption.

And that's why I said Facebook can't win.

Facebook wants you to log in to Facebook in order to access the metaverse; you have to be able to go to any screen and log on.

And then privacy/safety, you know.

And those are kind of the same thing.

We can't feel threatened by going into this space.

It has to be safe, and we have to feel that we'll be respected.

And that, again, kinda rolls back to protocols and standards, that, you know, you have to make it, as Jesse said earlier, so when I go into Warcraft, I'm not bringing AK47, you know, I can't do that.

So it's gotta be safe for the integrity of the game.

It has to be safe for the players.

If I choose to be anonymous, I should be allowed to be anonymous.

So it should be private.

But I think this is a really giant leap forward for people to be able to communicate.

And I think, again, Jesse's analogy to the early telecom.

Calling your mom and saying goodnight when you live in a different city, you know, we've all done that, and the metaverse is gonna allow us to see our mom every night and say goodnight.

So it's really a welcome advancement in tech, and I think that people are gonna embrace it.

- Okay.

Michael, I've got you first.

How dependent are virtual reality and the metaverse on each other's success?

- Well, virtual reality's hard.

And Jesse, far more expert in that than I.

But it's hard because virtual reality is a chicken and egg concept, where the virtual reality headset, you know, is the chicken and the software, the things that you use it for, are the eggs.

And you just can't get chickens without eggs, and you can't get anybody to make eggs without chicken.

So it's hard to develop software for a limited market.

And the hardware so far is still too expensive for most people.

I think Oculus is, they just raised price back, but it was down to 300.

It's back up to something close to 400.

PlayStation VR is 500, and we need a PlayStation, so another 500.

It's $1,000 to even think about it.

And, you know, so with $1,000 entry, who's making PS VR games?

You know, you can't assume there will be more than a couple million players.

So VR is really a complicated concept.

We know, for the last 8 years or 10 years of Oculus, that the software that's leading has been games, and I expect that that will continue.

But nobody's come up with a way to give away the hard work for free.

I think that virtual reality is never going to be big unless a killer app like healthcare adopts it, or like education adopts it.

And so, again, I'm not advocating that this should happen, but if we had the government look at virtual reality the way they look at electric cars, you know, something that's good for the environment, so we'll provide a subsidy, so you can pay less for your Tesla, then virtual reality would take off.

And the way to do that is to, you know, incorporate it into education or healthcare.

That'll happen eventually, you know, I think.

But I think VR is gonna be a real tough sell as long as you have to spend 300 bucks minimum to get into the market.

And again, that Oculus headset, pretty much you need a internet connection or PC, so you're limiting your audience to pretty wealthy people.

- Okay.

Just for our viewers, just so you know, Jesse Schell, his company Schell Game has actually had a couple of several VR bestsellers, so what's your opinion on this?

- I mean, I think I have a more optimistic view of virtual reality and where it stands right now.

I do agree that pricing is critical and I do, part of what's happened with Meta's Quest Two product is they really seem to have found the, you know, the right formula by pricing a headset about the same as a game console and having it have a lot of high quality content is clearly the successful path.

There's somewhere near 20 million Quest Two headsets out there right now, which is more than there are Xboxes out at the moment.

So in terms of as a gaming platform, I think we're already there.

We're already there in terms of having a solid community of people who are excited about playing this way.

Now, the thing I think is important is this is a kind of play that isn't for everybody.

It's a little too immersive and too intense for some people.

It's fine, so.

I don't look at VR and say, "Oh, this is going to absolutely replace what we have in the," you know, "I don't think it's going to replace traditional gaming, but I do think it's going to take a big seat at the table."

And just like the relationship between, you know, movies and television, you know, movies are bigger and grander and, you know, television is sort of smaller and cheaper, I think we're going to have some of that similar relationship.

But the part that confounds all of it is what's going to happen with mixed reality, because the next generation of headsets we're gonna see, you know, Meta's got the Quest Three coming out and Apple's gonna be making some announcements before too long, and all of the rumors are that these are all going to be both virtual reality and mixed reality headsets at the same time.

And exactly how people start to use that, it's gonna be very interesting to see.

This all reminds me a great deal of the early days of home computers.

You know, there was a lot of talk of like, "Well, will people really want computers in their home?

They're too high-priced.

We're never gonna get there.

You know, the Apple II came out and it was like, "Yeah, this is pretty cool, but it costs $1,000 and no one's gonna wanna do this 'cause the software's just not good enough."

And then a couple years later, the Commodore 64 comes out, which is pretty much the same thing, but it was priced lower, and they sold something like 30 million units.

So I think it really is a lot about price.

The prices are coming down, the features are going up, and we'll see what happens.

- But Michael brings up a really good point and I wanna follow up with you on this.

Meta, at a time when consoles would typically drop their price by $100, Meta did go up by 100 and then took a real hit in the sales with the Oculus Two, did they not?

- Yeah, they've been doing some unexpected things with pricing where they brought their price up and then they brought their price down.

I'm not exactly sure, but, you know, they seem to be fussing around with the price point, you know, in minor ways.

But, you know, in the end, I guess the thing I look at is the thing that appears to be true is people haven't, the game console market has shown us that people are willing to spend around, you know, 4 to $500 for a high-end gaming experience that they really like.

And so they seem to be exploring in there.

And of course, it's not always 4 to 500.

Look at the Nintendo Switch, which likes to be in the 2 to 300, right?

So I think we're gonna see, I think the formula for headsets is gonna be a price point between 200 and $600, that involves an experience that involves no tethering.

That, I think, is gonna be the long-term model that we're going to see be successful in the VR space.

And it's possible now, and it can continue to be possible.

And part of what I find fascinating is it drafts off of the mobile market.

The mobile market, for weird reasons, people are willing to spend 800 to $1,200 on phones.

They don't think they're doing that, but they are because there's chicanery that the phone companies do.

And so as a result, like phones are really high-end hardware, the same hardware from a previous generation is what goes into the headsets.

But because it doesn't have to be compressed, it can be spread out and overclocked because then it doesn't overheat.

Anyway, it's a lot of nonsense, but the fact, as long as phones keep on the path that they are, headsets will be able to follow on that same path.

But I would say even, I'll put out there that even 10 years from now, 200 to $600 headset with no wires is gonna be what constitutes normal in the VR and mixed reality market.

- Okay, just before I go, that sound about right price point to you as well, Michael?

- The price point's fine.

I'm glad Jesse brought up phones because phones are different, and I will explain that.

First of all, I'm the odd person who actually buys phones.

And I got 400 for my iPhone 11 and traded in on a 13 and cost me 450, so every two years roughly.

So I'm spending $225 a year for a phone.

So let's call that a dollar a day.

I spend seven hours a day on my phone, and Apple reminds me of that.

So what a value.

That's just incredible.

That's why we do it.

Because we actually access everything there.

We shop on our phone, we read the news on our phone, we tweet on our phone, we take pictures with our phone.

But I think Jesse's 100% right.

If VR can figure out a cell phone type model where they come up with a piece of hardware that we all feel is essential and we have to have it, then you will go from 20 million headsets to 5 billion headsets.

And that's what the phone has done, not by design.

You know, phones were invented a long, long, long time ago.

I've had a cell phone since 1990.

But people determined that they had to have them if they were essential.

And the reason cell phones have worked so well is they were the only way to access the internet in lesser developed countries.

In Indonesia, Philippines, Vietnam, you know, everybody who accesses the internet does so on a phone, and fewer people do it, you know, based in their home.

So if you look at gaming, and that's a perfect example, there are maybe 250 million console gamers on the planet and, or households.

There are three and a half billion mobile phone gamers on the planet.

So you get the massive adoption if you can get the hardware into people's hands.

And I'm most interested in mixed reality because there might be an in between, there might be a hybrid.

If anybody can ever figure out how to do VR that well on a phone, then instantly five billion people in that addressable market who can access it.

And again, I think that's going to happen.

And if anybody can figure out how to do VR on any screen, your PC or your TV or your phone, oh my God, are they gonna win.

So I don't know when that's gonna happen.

I was a cynic about 3D television, I will be a cynic about TVs for virtual reality, but I can't even conceive of somebody, you know, who has yet been born who's gonna come up with something that I don't even know exists.

That guy is, that guy or a woman, is going to be born and they are gonna figure something out that we haven't figured out yet.

And they might be in our audience right now and figure it out.

So anyway, I completely agree with Jesse.

If you get to the right price point where you get widespread adoption, this is absolutely gonna work and it's gonna work fast.

- Okay, well, I have to insist, if there are in our audience now and they get an idea from listening to us, we do deserve a commission.

- There you go.

- But other than that- - We'll get a dividend- - Audience engagement- - A dividend from enjoying what they create.

How's that?

- Well, fair enough.

We are taking questions from the audience as well, and we actually have quite a few in already.

So I thought I might stop my questions and ask you a few questions from the audience.

Gary B asks, "How is what you guys are saying different from what Zuckerberg said the metaverse would be?"

Michael, I'm gonna start with you on this one because you're more likely to be different from Mark Zuckerberg a little bit.

- Yeah, two words: walled garden.

So Mark Zuckerberg is fine if the metaverse exists within the confines of Facebook and the way you access it is to join Facebook and go to the Facebook app and log in and use your Facebook wallet and do whatever activities are built in Facebook.

So I would say that Facebook Meta is to the metaverse what Disneyland is to eating.

Yes, there are restaurants there.

But who goes to Disneyland to eat out?

And, you know, they have them and what they do is they feed the people who are captive inside Disneyland who have paid the toll charge to get in.

So Facebook thinks that that's what we're gonna do.

We're gonna go to their theme park, their metaverse theme park, and eat at their restaurants, and he is just absolutely bonkers wrong.

- Okay.

Jesse, I'm guessing you're not gonna completely agree with that one.

- No, it's hard for me to look at things like the success of the App Store or the Android store, which are both just giant walled gardens.

You could argue that, of course, an open solution will defeat both of those, but I don't see that happening anytime soon.

The problem with Open Solutions is they generally suffer from the tragedy of the commons, whereas, you know, places where, whoever owns the place is making a profit tend to be the places that stay.

I think it's a beautiful dream of having a completely open, completely open systems like that, but in practice I find they tend to be the exception and not the rule.

- Okay.

Just following up on this for both of you guys.

The visions of the metaverse that people are gonna be most familiar with right now are probably the visions from "Snow Crash" and especially a "Ready Player One" accurate, Jesse?

- I think people often think that way, and I think that's generally, I look at those things as kind of confused and wrong.

Because with both "Snow Crash" and "Ready Player One", the visions that they bring are that the way we're going to wanna interact virtually is going to be a mirror of the way we interact with the real world.

And that the closer it is to a real world physical interaction, the better it is.

But the truth is that's not how anything works.

We don't want to have distance in virtual worlds.

We wanna be able to go to where we wanna go to when we wanna go there.

And the other thing that's confusing when you look at the worlds of "Snow Crash" and the worlds of "Ready Player One" is they are a blend of functional worlds and entertainment worlds.

And functional and entertainment worlds are really different.

'Cause in functional worlds, I just, like if this is the, I don't know, I'm doing my taxes, I don't wanna, like, travel into the tax kingdom and take a long walk, no.

I wanna get in, hit the buttons, get my numbers done, get out.

I want to eliminate as much reality from possible and just get it done.

When I'm doing entertainment and fantasy things, then I want to create spaces and places.

And those two things, they're not really going to blend.

Historically, they haven't, and I don't think we're going to see that going forward.

I expect the functional worlds and the entertainment worlds to largely be very different from each other.

- Okay.

Michael?

- I can't say it any better than Jesse just did.

And I would say that "Ready Player One" and "Snow Crash" are part of what the metaverse is going to evolve into, just like movies and broadcast television are part of filmed entertainment.

But we've expanded that to include YouTube and TikTok videos and selfie videos.

So there's more, there's just a lot more.

I think Jesse described the more, very well, I can't really add anything to that.

It's part of what's gonna happen, but not the only thing that's gonna happen.

- Right.

Terry asks, "It seems like Facebook is backing off priority being the metaverse.

Is that him," I believe he means Zuckerberg, "giving up on it?

And what should we take away from that?"

Jesse, I'm gonna start with you on that one.

- Yeah, I mean I can't say exactly where, I don't know if I have a clear answer on that.

I think it's been absolutely fascinating, Zuckerberg's choice to take a company that was basically about textual social media and then to decide to be the greatest virtual reality innovator in the world.

That was an incredibly bold choice because it is such a, it's quite a leap from kind of one experience to another.

So far everything that we have seen in terms of our interactions with Meta are a deep commitment to innovation in the virtual reality space.

How long can they continue to lead in that space?

I think we're going to find out.

But so far they seem strongly committed, and we'll see how the next couple years go.

If they have a few down years where they, you know, the Quest Three and whatever's beyond it can't get any traction, you'd have to think that a pivot is necessary.

But if they continue to be the market leaders that no one else is touching, people may look back and say, "Wow, this was a really smart, bold, long-term strategy."

We'll have to see.

- Michael, what do you think?

- I agree that they win virtual reality.

I think that they've got the investment.

I think they have the tech.

I think they have the drive, the desire, the leadership.

So they will win.

I don't see anybody passing them in VR.

I don't think they win the metaverse.

I think that, you know, just as we just described, VR is part of it, it's not all of it.

They'll participate for sure, and their hardware will participate and their software will participate, but they can't limit access to the metaverse to Facebook members.

They just can't do that.

And to me, it's like McDonald's becoming the only restaurant on the planet because they serve more burgers, you know, they serve more meals than any other restaurant.

That's not good enough.

And they're really good at what they do, inexpensive food, you know, serve fast and high quality.

Facebook's really good at what they do and they will continue to be really good at what they do, but the Metaverse is so much more than Facebook that I don't think that company is equipped to adapt and grow into what our vision of what this is gonna ultimately be ends up becoming.

So we'll see.

I've been skeptical about companies transforming before.

I was skeptical that Netflix could go from renting DVDs to streaming video, and they seem to have done pretty well doing that.

So who knows.

- I'm gonna chime in with one thing very quickly.

I think there's a misinterpretation, not by either of you, gentlemen, obviously, about the mission of VR labs.

You know, we look at VR labs and we think, "Okay, they do virtual reality," we don't realize they're also working on augmented reality, mixed reality, artificial intelligence, and the metaverse.

The scope of what they're doing is much broader than what people think.

And whether or not they're able to incorporate that all together is only the future will tell.

But it's not like Mark Zuckerberg said, "Okay, I'm putting all my every last chip on this one color, on this one bet."

And it's a shame that people don't see the broadness of what he's trying to accomplish.

Just wanted to throw that in there.

Cassandra asks, "Do you think the metaverse is something the public wants," or, "the public want," and an interesting punctuation there, "beyond gamers?"

Michael, let's start with you on that one.

- The metaverse is something that, as Steve Jobs famously said when he came up with this buttonless phone, "We're gonna build it and we're gonna explain to them why they want it."

You're not building the metaverse because people want it; you're building something people are gonna use.

And as they use it, they're gonna love it.

And honestly, I remember my parents, who are both gone now, fearing the internet.

They were afraid to actually even log on to a website 'cause they thought somebody would be watching them.

You know, we've gotta overcome the fears.

And the metaverse, everybody will find something in the metaverse that they find beneficial, that improves their life.

So people want it, they just don't know it yet.

- Okay.

Jesse, you get to finish us up with this answer.

- Okay, so I think the thing that people want, there's a thing that people want that they don't realize could ever be possible in their lifetimes.

And when they realize it's possible, they are going to embrace it fully.

And that is the ability to overlap our personal spaces.

For you to be able to have close friends and family members who live far away sit at the same dining room table with you and eat together every night, it sounds impossible.

It doesn't sound like it could be done, but it is going to be possible easily within the next five years, for people to be creating the illusion that we are in the same space, that I'm in your house and you're in my house when really we're just in each other's houses.

And the technology is creating the illusion and overlapping that together.

And so the most powerful things for people are always things that bring us closer together.

And that is what the power and the promise of this technology is going to be.

- Okay.

Guys, you've been a dream panel.

We are officially out of time, but I wanna thank you for taking the time to join us today.

- Thank you, Steven.

Thank you, Jesse.

- Yeah, glad to be here.

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