• Julian Jackson

The Metaverse: What is it and what does it mean for the sports industry?

Huge parts of the technology sector are aligning their visions for the future in the metaverse, a world beyond the internet built on shared experiences and digital-first products. The pursuit of it could already have major implications for the sports industry.


By Eoin Connelly for SportsProMedia.com - 22nd October 2021



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Some of the biggest companies in technology are preparing for a new online existence.

They are spending billions on more naturalistic interfaces; investing heavily in technologies that offer greater telepresence, or the feeling of moving physically through a virtual space. They are developing products that can be used right across an individual’s digital life.


They are working towards the ‘metaverse’ – or at least a template of it – a ‘successor state to the internet’ with ramifications for everything people do together, including sport.


In April, Epic Games, publisher of the smash hit video game Fortnite, announced a US$1 billion funding round from backers including Sony that would, in the words of founder and chief executive Tim Sweeney, “help accelerate our work around building connected social experiences” and “support our vision for Epic and the metaverse”.


By July, Facebook founder Mark Zuckerberg had said that his organisation would be repositioning itself as a ‘metaverse company’ over the next few years. Meanwhile, Microsoft chief executive Satya Nadella said in May that it was building an “enterprise metaverse”.


Almost 10,000 Facebook staff are said to be working on AR and VR devices


As much as there is a shared vision of a collective future in the metaverse, there is some debate within the tech community as to the specifics. The term itself is borrowed from science fiction, first used by the novelist Neal Stephenson in 1992’s dystopian Snow Crash, and the basic concept is recognisable in the stories of Ready Player One and The Matrix.


The reality is yet to settle. In a widely read and influential 2020 essay, ‘The Metaverse: What It Is, Where to Find it, Who Will Build It, and Fortnite’, the venture capitalist Matthew Ball set out seven criteria for the purest version of the metaverse.


It would ‘be persistent’, never resetting or pausing; ‘synchronous and live’, working in real time at the same time for everyone; have no cap on concurrent users and give all users a sense of ‘presence’; be ‘a fully functioning economy’; be ‘an experience that spans the physical and digital worlds’; have ‘unprecedented interoperability of data, digital items/assets, [and] content’; and ‘be populated by “content” and “experiences” created and operated by an incredibly wide range of [independent and corporate] contributors’.


The technology and economic conditions to produce something that comprehensive may well be decades off, if they prove technically possible at all. Instead of focusing on that outcome, then, it is more productive to consider how a metaverse framing is informing the strategic outlook of major tech groups and the tangible effects that has already produced.


"Every brand will need a metaverse strategy in the future and the ones that have them now are at the forefront."

Christina Wootton, Vice President, Brand Partnerships, Roblox


Despite historic consumer friction, Facebook is doubling down on virtual reality. It recently unveiled Horizon Workrooms, which uses Facebook’s own Oculus Quest 2 VR headsets to create a 3D environment for conference calling and collaborative work. Facebook’s interest in VR and AR is longstanding: it bought Oculus for US$2 billion in 2014. According to a March report in The Information, almost 10,000 Facebook employees – around a fifth of the total staff – are currently working on augmented and virtual reality devices.


The longstanding physical limitations of VR still confine it to the fringes of popular culture – including in gaming, where it has made the most progress. Video games, however, provide the fullest sense to date of what a metaverse looks like in practice. Massively multiplayer, open-world video games like Fortnite offer the best prism through which to assess changes in online behaviour.


“If the last generation is about sharing, the next generation of social is going to be about participating,” said Sima Sistani, co-founder of the video chat service Houseparty, in an interview with the Washington Post in September.

Houseparty was acquired by Fortnite publisher Epic Games in 2019 and Sistani sees the influence of gaming developers as logical in facilitating the more interactive future of online communication.


“I come from a media background,” she added, “and people moved from traditional media to social media. And this new generation is moving from social media to games. That’s where they’re having these conversations. That’s where it’s beyond the ‘like’, beyond the news feed. And that, that’s the metaverse.”


The expectation within companies like Epic is that the metaverse will not be dominated by a handful of gatekeepers in the way that the internet, in its post social media incarnation, has become. There is, nonetheless, an opportunity emerging for companies who can sustain the virtual worlds that fill it.


Former Liverpool CEO Peter Moore leads Unity’s sports and live entertainment division


Having made its start in mobile gaming, Unity describes itself as the leading platform for creating and operating real-time 3D content. According to its own figures, there were five billion downloads per month of apps built using its products in 2020, while it was also used for more than half of all games across mobile, PC and console. Increasingly, it is moving beyond gaming into other economic sectors like the automotive industry, architecture and construction.

It has also hired Peter Moore – most recently seen as chief executive of soccer club Liverpool in a period where they won the Premier League and Uefa Champions League – to head up its sports and live entertainment division.


“Everybody has a slightly different view,” says Moore, speaking to SportsPro on a Zoom call in late September, when asked how the company thinks of the metaverse. “We’re very clear at Unity. We see the metaverse, we think we’re already somewhat into it. We’re doing a metaverse thing right now, you and I, where everything that we’re doing is online or connected, everything will have a digital twin. Every environment will have some form of AR, VR or mixed reality around it: what we watch, how we interact, how we purchase things.”


Moore’s rich career to this point tracks the progress of digital communities. After moving into technology from Reebok, he was president of Sega of America as it introduced online gaming to the living room with the Dreamcast. He then moved to Microsoft as its Xbox console and Xbox Live took that from dial-up to broadband.

"Every environment will have some form of AR, VR or mixed reality around it: what we watch, how we interact, how we purchase things.”

Peter Moore, SVP and General Manager, Sports and Live Entertainment, Unity


A stint as president of EA Sports followed, where the emphasis moved from physical unit sales of titles like FIFA and Madden NFL to year-round live services based around remote competition and in-game updates and purchases.

“And at Liverpool it was very simple,” Moore recalls. “It’s a massive global football club, where it was very clear to me from the get-go that 98 per cent of our fans on a global basis would never ever get to Liverpool.”


Bringing the club close to those fans, he says, was a challenge he was keen to engage with during his tenure. “And so we built infrastructure,” he adds, “we worked with IBM, to be able to bring massive amounts of content, interact with our fans in a unique way.”

Now, Moore believes the solutions that can really deliver that are moving closer.


“When I left Liverpool at the back end of last year, I thought, yeah, I’m gonna move to Santa Barbara,” he says. “And you know, I’m in my late 60s, time for a break now. Somebody showed me a roll element of what I’ve just shown you and I said: ‘Man, this is game-changing.’ No pun intended.”



Metacast builds fully interactive images using a technique called volumetric capture


Moore is leading SportsPro through a presentation of Unity’s latest innovation, Metacast, which aims to provide a dedicated real-time 3D platform for sport and entertainment.


Essentially, the service builds fully interactive images using a technique called volumetric capture, not dissimilar from that used in the development of 360-degree video replays, but in this case built from scratch.


Metacast is able to process around five million voxels – three-dimensional pixels – per second. Viewing angles can be manipulated to any position without sacrificing detail, while the computer-generated images also avoid the ‘uncanny valley’ effect and collision detection issues of traditional computer-modelled graphics.


Moore demonstrates Metacast across three different settings. The first of these is a UFC fight captured on a green screen – Unity announced a long-term partnership with the UFC to explore the technology in October. This, he says, illustrates the platform’s capabilities in not just viewer enjoyment but deeper professional analysis, from technical appraisal to the assessment of impact injuries. There is also capacity to manipulate backgrounds, dropping in geo-specific advertising or creating new environments.


He also shows coverage built during the Rugby World Cup in 2019, expanding on the analytical uses of the software and the ways in which ecommerce can be directly baked in – a viewer can, for example, identify a pair of boots for purchase within the platform. Finally, he takes the action to a basketball session in a high school gym, displaying how Metacast can map 3D worlds simply and accessibly, and how it can be used to communicate ideas for coaching.



As Moore sees it, there are already elements of the metaverse evident in “this always-on, always digital environment that’s around us all the time”. Tools like Metacast, however, promise a fuller realisation of that concept.


“I’ve watched broadcast technologies evolve pretty slowly,” says Moore. “Everything’s in 2D. And as we think of this new metaverse, where everything will have a digital twin, everything will be three dimensional. Because your vehicle will be autonomously driven; you’re going to be watching the game on the OLED screens of your vehicle. In your home, you’re going to be watching the game and they are on your coffee table.


“I also have live entertainment as part of my remit. So I’m thinking about music concerts, not just being in that arena, but being broadcast all around the city in which that concert is taking place. And then I think about the venues themselves, utilising both AR and VR and mixed reality to bring these shows to life in ways that have never been done before.”


Interest in hybrid events, inevitably, was accelerated by the Covid-19 pandemic, but their possibilities have been surveyed in open-world games for some time. The American DJ and music producer Marshmello performed a set in Fortnite back in February 2019, which was watched by over ten million people within the game itself.


In May, Warner Music Group (WMG) invested in virtual concert platform Wave, joining minority shareholders including Chinese digital media giant Tencent, Twitch co-founder Kevin Lin, and artists like Scooter Braun, John Legend, Justin Bieber and The Weeknd. The deal will see WMG talent appear in events taking place in a shared digital space operated by Wave – a development with obvious implications for sports events.


"We already know that shared 3D immersive experiences in the metaverse can be a lot more memorable than watching something on TV.”

Christina Wootton, Vice President, Brand Partnerships, Roblox


More bespoke virtual and hybrid event platforms are also appearing. Atlanta-based Surreal Events launched this year as a specialist in building interactive 3D environments for trade shows and conferences, and it may be that some sponsor activations also follow that route.


“Live events have major potential,” says Christina Wootton, vice president of brand partnerships at interactive game developer Roblox, in a September email interview with SportsPro. “We already know that shared 3D immersive experiences in the metaverse can be a lot more memorable than watching something on TV or interacting on the more traditional social media platforms – our community members often share these memories and selfies when they go to events like virtual concerts, viewing parties, and other events with their friends on Roblox.”


Roblox launched back in 2006 but has flourished more recently, registering an all-time high of 48 million daily active users in August 2021. Monthly earnings also surged 100 per cent year on year at that point to between US$167 million and US$170 million. Hugely popular with younger players, it bills itself as a ‘human co-experience platform’ and offers simple tools for users to design their own games within its colourful worlds.


Wootton claims that the technology powering Roblox evolves “almost daily” and has seen a huge leap in the sophistication of its digital communities during her eight years with the company.


“The breadth of technology that supports what we’re doing is quite unprecedented: we go all the way from a mobile client to a 3D cloud engine, to a free developer toolkit, to backend infrastructure,” Wootton says. “We are innovating across all of these areas to provide more massive, immersive experiences and enable new ways of connecting people, for example, through our recently launched Spatial Voice technology [for real-time 3D video chat].”


With its multiple co-existing spaces, Roblox is one of the richer previews of the metaverse and the role brands would end up playing within it. The company has worked with partners including the National Football League (NFL), soccer clubs FC Barcelona and Liverpool, WWE and Nike to develop in-game content.


“We also see brands more and more embracing our existing creator community to help build the experience and items,” Wootton adds. “For example, Vans partnered with Roblox developer studio The Gang Stockholm to build their Vans World experience, and Gucci worked with creator Rook Vanguard on virtual items for their Gucci Garden.”



This is incentivising Roblox developers but much of it is also feeding into what is now called the ‘direct to avatar’ or D2A market. This is where consumers buy products with real money that can only be used by their avatars in a virtual environment. For the sports industry, that has so far involved the creation of digital-only special editions of soccer boots, jerseys and sneakers in games like EA Sports’ FIFA soccer titles or Take-Two Interactive’s NBA 2K series.


In the fashion sector, these ideas are further advanced – as noted by Wunderman Thompson in its 2021 report, ‘Into the Metaverse’. Ralph Lauren and American Eagle have issued designs that can only be worn by Zepeto and Bitmoji avatars respectively. Pokemon Go users can dress their characters in virtual clothing from The North Face and Gucci, the latter of which has also partnered with Wanna on AR-only footwear.


All of this is driven by a need to make a deeper impression within digital spaces.


“A carmaker who wants to make a presence in the metaverse isn’t going to run ads,” explained Epic Games’ Tim Sweeney to the Washington Post in September. “They’re going to drop their car into the world in real time and you’ll be able to drive it around. And they’re going to work with lots of content creators with different experiences to ensure their car is playable here and there, and that it’s receiving the attention it deserves.”


The next evolution of digital ownership would be in allowing users to take their products from one virtual setting to another. That is what Matthew Ball means by ‘unprecedented interoperability’. For now, the closest a digital product has come to the unique quality of its physical equivalents is in the form of non-fungible tokens (NFTs), one of the most talked-about tech phenomena of 2021.


NFTs use the blockchain ledger to independently verify sole ownership of a single digital file, and have enabled a ballooning, headline-dominating trade in the nascent digital fine arts sector. Until now, they have primarily been explored by sports rights holders, teams and athletes as an extension of the collectibles market. They may have potential, however, in securing other kinds of digital transactions – perhaps underpinning not just D2A purchases but transfer markets in esports or fantasy gaming.


There have already been experiments to that end. Developed by Australia’s Virtually Human Studios, Zed Run describes itself as ‘a provably fair digital horse racing game built on blockchain technology’. Users can buy, breed, race and sell NFTs of racehorse avatars, trading in Ethereum cryptocurrency with the potential to make quite real profits and losses. Stock car racing series Nascar has already agreed a sponsorship deal, along with the Stella Artois beer brand and legacy video game publisher Atari.



Performers take part in a virtual production for Zed Run, a digital horse racing game powered by Unreal Engine technology


NFTs hold some limitations, not least in the broader regulatory concerns around cryptocurrency and opaque flows of money through its markets, or the alarming reports of its environmental cost. Still, much as sports teams have agreed partnerships with the likes of Socios to investigate the opportunities offered by fan engagement ‘tokens’, operators in the metaverse are trying to work out how to guarantee their own internal economies.


“We have our own currency called Robux which lets users buy digital items and limited edition items to dress up their avatar and unlock new areas or games within an experience,” notes Wootton.


“For NFTs and other digital-native products, we’ll have to wait and see. An economy where goods and currency flow freely in a safe and secure way is one of the fundamental characteristics of the metaverse. By providing unforgeable proof of ownership, NFTs create trust in the system and makes users comfortable spending real money to acquire digital goods.


“A form of this is already taking place on Roblox. We have ‘limited’ items offered as part of experiences on the platform. Users then can sell or trade these items on the platform, creating a vibrant marketplace for valuable virtual goods.”


There are many unresolved questions about the metaverse, with much to be understood about what might actually be coming. Increasingly, though, it is a little clearer where major companies will be looking.


“Conversations about the metaverse are quickly expanding across entire organisations, beyond marketing, innovation and licensing divisions as they come to understand the opportunity of the platform,” Wootton says. “Just like 15 years ago when brands were building teams to advertise or create channels on early social media platforms, every brand will need a metaverse strategy in the future and the ones that have them now are at the forefront.”


This article was originally published in SportsProMedia HERE


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