In this issue
- Horizon Worlds: Lonely planets
- South Korea: Blockchain bona fides
- Macau: Digital deal-in
From the editor’s desk
Dear Reader,
“Build it, and they will come” — as the saying goes. But for Mark Zuckerberg, some divine intervention might be needed in relation to the business he cofounded.
Meta’s Horizon Worlds metaverse has in recent days been found to have attracted fewer than half the number of users it had been targeting. And that’s with a marketing machine behind it that’s biblical in scale.
The simple (yet also difficult, for Zuck) lesson here is that new technology can be a hard sell. Many in the crypto industry know this, having spent heroic amounts of energy creating a financial ecosystem that many people still don’t understand the slightest thing about. Indeed, their success in developing crypto to its current level of maturity and sophistication stands as a testimony to their dedication.
Building something that’s far less abstract and which generations of people have enjoyed previous iterations of, thanks to the advent of video games in the 1970s, should be far easier, right? Not so fast.
People typically take the path of least resistance when it comes to technology. The most popular tech — think messaging apps, camera phones and, yes, even Facebook — fulfills a desire or a perceived need quickly, simply, and at a price most people can afford, or, in the case of many Web2 services, for free.
Metaverses will surely thrive, but they may not yet be sufficiently understood beyond the still-small circles of Web3. And all the marketing in the world won’t outweigh sheer utility when it comes to popularizing them.
Zuck and other Web2 heavyweights looking to get into the Web3 space would do well to remember that. Just because you put the name of a new and in this case very much developing technology into your company brand doesn’t mean you’ll succeed in dominating it.
Web3 is still a decentralized exploration of utility that is being developed at some distance — and by a different community — from the big shots of Web2 such as the cofounder of Facebook. And try as they might, the previous tech generation’s path to ascendancy within it is — as we are seeing — far from as assured as the bets on tech they were making ahead of the peak of the Web2 wave.
Until the next time,
Angie Lau,
Founder and Editor-in-Chief
Forkast
1. Flatlining
By the numbers: Meta — over 5,000% increase in Googe search volume.
Horizon Worlds, Meta Platforms’ metaverse, is grappling with glitchy technology and a dearth of users, the Wall Street Journal reports.
- Meta initially had hoped Horizon Worlds would have 500,000 monthly active users (MAU) by the end of this year. It recently reduced its MAU target to 280,000, and the metaverse currently has fewer than 200,000 users, according to the Journal’s review of leaked company documents.
- Meta’s internal documents are also said to show that most visitors to Horizon Worlds do not return after the first month and that only 9% of its creator-built worlds have been visited by at least 50 users.
- Horizon Worlds is a network of 3D virtual spaces in which users can socialize, play games and attend events. It is currently available in the U.S., Canada, France and Spain.
- At the start of this month, Meta quietly put Horizon Worlds on “quality lockdown” to deal with persistent bugs and user complaints. The move is putting the launches of new features on hold to improve the current user experience.
- Zuckerberg debuted the company’s new mixed-reality headset, the Meta Quest Pro, last week. It will cost US$1,500, more than three times the price of its Quest 2 headset.
- In November 2021, Facebook rebranded itself as Meta to focus on its metaverse strategy and Quest, its virtual reality headset.
Forkast.Insights | What does it mean?
Metaverses, at least at this stage, look like a solution seeking a problem to solve. It’s not only Meta that has struggled to attract and keep users — other metaverse companies are suffering, too.
Decentraland and The Sandbox, two companies with metaverses valued at more than US$1 billion each, have been under increased scrutiny over how many users they regularly attract. A recent report by DappRadar, the analytics company, suggests that the two metaverses pull in no more than a few hundred people each day.
That DappRadar report has been disputed by both Decentraland and The Sandbox, and Decentraland has asserted that it actually serves about 8,000 people each day.
Regardless of the actual numbers, the truth is that metaverses — like other “breakthrough” technologies, such as 3D televisions or virtual reality headsets — are still clunky and awkward places to be in, whether through Meta’s headsets or the processor-intensive interface of a browser.
There’s also not a lot to do in the metaverse. Shopping is unexciting, and events online aren’t as big a draw as people had hoped. There are also broader issues around bad user behavior that none of the above companies seem to have yet fully grasped. Zuckerberg believes that Meta will thrive by bringing its metaverse to the office environment. But as countless observers have noted, two years of working on Zoom have done little to convince workers that the world needs more screen time.
2. Linking up
By the numbers: digital ID — over 5,000% increase in Google search volume.
South Koreans — “the world’s most tech-savvy population” — could replace their physical identity cards with blockchain-based digital identification as early as 2024, according to a Bloomberg report.
- The South Korean government plans to include digital ID capability in a smartphone app as part of the country’s push to embrace blockchain technology.
- Suh Bo Ram, director-general of the digital government bureau, says Seoul is aware of dystopian concerns over “Big Brother” issues such as surveillance and privacy.
- Suh also says digital IDs will rely on decentralized identity, meaning that the government will not have access to people’s smartphone data or information about when and how their IDs are being used.
- The government plans to launch its digital ID scheme in 2024, and around 45 million South Koreans are expected to adopt the technology within the first two years of its implementation.
- The government’s adoption goal may be helped by the fact that South Koreans are at the top of the Portulans Institute’s worldwide ranking for enthusiasm and ability to apply technology to everyday life.
- Blockchain-based digital IDs would be South Korea’s second such project after it introduced blockchain-based driving licenses for 1 million people in 2020.
- Full digital ID coverage could unlock economic value equivalent to up to 13% of GDP in any given country by 2030, according to a report by McKinsey & Co.
Forkast.Insights | What does it mean?
South Korea’s embrace of all things blockchain has made it a bastion of state-driven adoption of the technology. Like other pioneers of new tech, a first mover has much to gain, but also a lot to lose.
Digital IDs were a contentious concept even before blockchain came along. Several existing digital ID programs with low adoption rates have been affected by limited functionality, poor user experience and coordination difficulties.
Nigeria’s rollout of an electronic ID in 2017 stalled due to a lack of oversight. Thirteen separate state systems were built and used by different departments with little or no integration. GOV.UK Verify in the United Kingdom, another digital ID service, has been adopted by less than 10% of the British population and has so far been used for only a small number of government-related purposes.
Even if South Korea can provide digital IDs to its entire population, questions remain concerning who will be able to access and manage people’s data. There is no shortage of examples of ugly misuses of identification programs, including the tracking and persecution of ethnic and religious groups.
Digital IDs, if improperly designed, could also be used in yet more targeted ways against individuals or groups by governments or private businesses, a practice for which China is notorious. Had the South Korean government been able to use digital IDs to pick out protesters during recent marches against the country’s relationship with the U.S. military, digitally progressive people around the world might rethink the wisdom of this technology.
3. Game on
Gambling hub Macau is aiming to grant a digital currency the status of legal tender, the Chinese territory’s Executive Council announced last week.
- The proposal didn’t identify which digital currency, but Macau’s foray into central bank digital currency (CBDC) comes amid China’s own CBDC rollout.
- The bill, titled “the Legal Regime for the Creation and Issuance of Currency,” also proposes penalizing refusals to accept legal tender as an administrative offense, with fines ranging from 1,000 patacas (US$124.30) to 10,000 patacas.
- Macau has been following China’s digital yuan trials with great interest, as China’s CBDC expertise could help Macau develop its own digital currency, said Secretary for Economy and Finance Lei Wai Nong in June.
- Macau is home to the world’s largest casino industry, which contributed more than half of the city’s U$28.1 billion GDP in 2019, before the Covid-19 pandemic.
Forkast.Insights | What does it mean?
China’s ambitions for its CBDC could not be more evident: it would like to disrupt the global dominance of the U.S. dollar.
After nearly eight years of development, Beijing is now taking its digital yuan, officially known as e-CNY, into the wider world, starting with its neighboring territories.
Hong Kong was the first jurisdiction outside China’s mainland to begin exploring the rollout of e-CNY earlier this year, and now it’s Macau’s turn.
Hong Kong’s position as a global hub for international finance made it a priority for Beijing to establish its currency there. Macau, a global hub for gambling, is also a hotspot for capital inflows and outflows of a different kind.
Both territories could serve as springboards for the digital yuan to flow beyond China’s immediate periphery. There is already talk of whether e-CNY will become the only means by which gamblers can participate in Macau’s casino scene.
As China presses ahead with the development of the world’s most advanced state-issued digital money, Washington is still pondering how much government control a theoretical digital dollar should involve. Will the future U.S. dollar, digital or not, still be strong?
