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Matthew Ball is the CEO of Epyllion, a diversified holding company which makes angel investments, provides advisory services, and produces television, films, and video games. Matthew is also a Venture[…]

The Metaverse seems to be developing from a relatively small segment of the economy: consumer leisure. 

As such, it’s no surprise that gaming companies are at the forefront of designing the Metaverse.

Some experts argue this is positive for consumers because — unlike enterprise, SaaS, tech, or productivity companies — gaming companies design experiences to make us feel good, not to get us to do something.

MATTHEW BALL: With a better understanding of the Metaverse, it should be no surprise that gaming companies are at the forefront. And that's because of how they've been trained for decades, not just in design, but in ethos, in philosophy, in feel. There's lots of things we do because we have to, because we can't help ourselves. 

But we don't play games we don't enjoy. So many believe that gaming companies moving to the forefront of our economy as opposed to enterprise, SaaS, or tech and productivity companies is positive because it means that we have people who are designing so that we feel good, not designing so that we do something. 

Almost all technologies are defined by constraints, either those which affect them or those which they relieve. And so, what's fascinating about the Metaverse is the ways in which it seems to be originating from a relatively small segment of the economy: consumer leisure. And at that, a niche one, video gaming. How is it that consumer products were typically last to enter the internet era, yet could be first to the Metaverse? 

And the answer is that the constraints that affected all prior waves, meant that you couldn't do much entertainment with them. If you couldn't send an image, but you could send a document, then of course it's going to be for business, it's not going to be for consumers. That happened with the early internet, with early computers, and then with smartphones. But in gaming, the historical constraint was 'Simulation fidelity.' And what that meant is that the utility of a real-time-rendered simulation, 3D or 2D, wasn't good enough. 

A healthcare professional couldn't use it. The military couldn't use it. The government rarely used it. But it did work for "Pong." It worked for "Space Invaders." It worked for "Legend of Zelda." And so the accumulated consequence is that for close to 70 years, all of the expertise that is now relevant for the Metaverse has been built and incubated in the gaming sphere. That's not just design principles, obviously they're best at building a virtual world, but it's also more nuanced. 

They have constructed complex marketplace economies, and most importantly, all of the hardest technological problems for the Metaverse- the challenges of networking globally- the constraints of having affordable but super powerful hardware to actually produce a real-time-rendered simulation- the world's best expertise comes from the gaming sector. 

Today, when we think about the closest experiences to the Metaverse, we typically identify platforms such as "Minecraft," "Roblox," or "Fortnite." The scale of these services is really astonishing. Roblox has, on the average day, about 55 million users. By the way, about 65% of them are over the age of 13. We also have Minecraft, which is about 80% that size. And Fortnite has about 70 to 80 million estimated monthly users, and even more engagement time. 

All together, there's roughly 800 million people on the average day, who are spending hours in these virtual social worlds. One of the most fascinating things about the development of the Metaverse in contrast to the "gaming industry," is that we can distinguish them by their focus. 

They focus not on game-like objectives- win, kill, shoot, defeat, score- but non-game-like objectives. Instead, the goal is: identify, express, socialize, build, explore. And that's one of the ways in which many of us have belief that this is a scalable experience, because it meets a human want, and it demonstrably brings many people together. 

And we saw this, especially during the pandemic. That COVID positively affected the gaming industry, it's growth rate and adoption, is self-evident. It destigmatized what many previously considered to be antisocial, and certainly not aspirational behavior. There were many schools in the United States which celebrated a graduation, a birthday, inside of "Animal Crossing." 

There were talk shows hosted in these environments. Others just saw the ways in which this was actually a viable educational forum, or at minimum, one for socializing. Not everyone was convinced, but many parents saw this and they now understood its benefits- not just that it wasn't pernicious. That's more profound than any short-term acceleration. There's a famous line from the former Department of Commerce chair in the United States, where he said, "Today's supercomputer is tomorrow's PlayStation." 

Supercomputers were not designed for everyone, but in video gaming, the constraints have been relaxed so that those technologies and that expertise is applicable everywhere. John Hopkins University is now performing live-patient spinal surgery using game engine-rendering technology. 

The U.S. and British militaries are using unreal engine for simulation training for active combat. We have reached the point in which the constraints to simulation fidelity and functionality have relaxed enough that the expertise in gaming can be applied elsewhere, such as the Metaverse. And this is one of the reasons why we see not just the world's largest technology companies rushing into category, but we see plausible arguments that the leaders of tomorrow are today's gaming companies.

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