SURREAL Events Co-Founder & CMO Adam Voss and Wagner James Au, author of “Making a Metaverse That Matters” and the New World Notes blog, join Yahoo Finance Live to discuss developments involving the metaverse, whether it's a fad or the future, and related VR/AR products.

Video Transcript

SEANA SMITH: Is the metaverse just a fad, or is it here to stay? A new Piper Sandler survey of teens found that only 4% of those with VR headsets use the technology daily. Well, that cannot be good news for the future of the metaverse. So if teens aren't even in on this, will the metaverse really shape our future? Let's get a debate going here. We've got all sides covered on this.

James Au, author of the upcoming book "Making a Metaverse That Matters." We have Adam Voss, Surreal Events co-founder and chief marketing officer, and Yahoo Finance's senior tech reporter Allie Garfinkle all here to weigh in. We'll go around the horn really quickly. James, first, to you. You sound a little bit more bearish. It seems like you're all in on the metaverse. Why?

JAMES AU: Yeah, well, I think the last two years of metaverse hype has been driven by people who haven't really read "Snow Crash." But "Snow Crash" has been the defining guide for people who are building and trying to build the metaverse for the last 30 years. One of the points immediately that jumps out is VR was really never intended as it's conceived by Meta to be what the metaverse would be accessed by. So it's kind of like Meta bought Oculus, and they decided that that was going to be what the metaverse was.

But if you read "Snow Crash," standalone VR headsets are only used by the wealthy and hardcore geeks. So they kind of had this lost leader where they just are making a huge mistake right from the beginning of how the metaverse actually works.

SEANA SMITH: All right, so that's a bullish case there. Adam, let me go to you because you're also a little bit on the fence maybe in terms of how this is rolled out, but more so, just make your overall case whether or not this is a fad, if it's the future, or what you need to see to be convinced.

ADAM VOSS: I certainly don't think it's a fad. I definitely think it is as nascent as social media was in the mid '90s. It has even a more potential-- greater potential for growth, combining identity and body presence, as Charlie Fink for Forbes likes to say-- community, narrative, immersion, and multiple ways to interface. I don't think you need a VR headset. In fact, I think reducing the friction and creating browser-based applications to enter these platforms are more effective.

DAVE BRIGGS: All right, Allie Garfinkle, you and I are in the same camp here, and I reiterate that Piper Sandler stat-- 4% of teens that have a VR headset are using it daily. Why are you so bearish?

ALLIE GARFINKLE: Well, Dave, you're actually just making my case for me. The reality is that the argument I've heard over and over again from metaverse experts is that this is for kids. The metaverse is for kids. They are the ones who are going to be using these headsets. They're going to be the ones who are operating in the metaverse in ways adults are not. However, if kids aren't using these VR headsets, that's still people's primary way of understanding the metaverse.

And, like, if we want to talk about the headsets themselves, right-- let's talk about that for just one second, right? These headsets are expensive, and we know they are too expensive because, for instance, the Meta Quest Pro was cut from 1,500 to 1 grand. The look on your face, Dave, just went--

SEANA SMITH: It's still a heck of a lot of money.

ALLIE GARFINKLE: Yeah, it's still a heck of a lot of money. There are a lot of Americans who can't afford a $400 emergency expense. So, what, they're going to go out and buy a Meta Quest Pro? They're also-- I'll just-- this is just my personal opinion. I also have found them incredibly uncomfortable. I am also prone to, I think-- I don't have metaverse legs, I believe, is what they are called, where when I'm in the metaverse, I actually will get nauseous. And until they actually get that tech in line, I think it's going to be a tough sell for a lot of people.

SEANA SMITH: All right, so, lots of questions here about how exactly this is going to be potentially incorporated in our everyday life. James, what is the use case for the metaverse?

JAMES AU: The main use case for the metaverse is the metaverse itself. And if you look at the numbers, conservatively speaking, at least 1/2 billion active users of metaverse platforms, and that's just from Western-based metaverse platforms alone. It's actually a lot larger if you look at usage in Asia. So, really, if you follow Neal Stephenson's definition of the metaverse as a vast immersive virtual world with user generated tools and customizable avatars, that is already huge. It's at least 1 in 10 of the population online, and it's going to be 20%, 25% of the online user base.

And again, that doesn't require a VR headset. Neal Stephenson himself said, actually, it doesn't need that. And I assumed it would, but then "Doom" came out immediately after "Snow Crash" came out. And I realized you don't need VR headsets. So assuming it requires a VR headset, you're just kind of repeating Meta's assumptions. And as we've seen, they're failed assumptions. But Roblox, for example, has 250 million active users, a lot of whom are adults, is probably about 50 million of those. So it actually has a much larger user base beyond just the kids.

DAVE BRIGGS: All right, Adam, best practical use case.

ADAM VOSS: More people have access to smartphones than they do to clean water. I mean, the metaverse as a channel for businesses and brands seeking engagement, for individuals seeking connection, for businesses to connect with their employees, as well as develop new revenue streams, for us, we look at it as a whole new channel that despite the hype cycle spiraling to the trough of disillusionment, has a huge, huge TAM attached to it that we haven't even started to discover.

ALLIE GARFINKLE: You guys are actually getting into some of the questions that I have because one of my biggest takeaways about the metaverse is that I actually think a lot of average people still don't even know how to really define it. For instance, does it require a VR headset? Actually, like, we're all sitting here, and we're like, wait, it actually doesn't because for instance, Roblox exists, and there are so many users on Roblox, which is desktop-based. There's even Horizon Worlds from Meta, which is also desktop-based. So I think that you're talking about "Snow Crash" a lot. And I think that that's important. But also how can-- my real question is how we can really bring that definition to a broader audience because the metaverse isn't just for sci-fi fans like you and me. So that's kind of where I keep circling back. What is the real definition here?

JAMES AU: Yeah, I start--

ADAM VOSS: The metaverse is messy.

ALLIE GARFINKLE: Go ahead [INAUDIBLE].

ADAM VOSS: Sorry.

JAMES AU: No, I start my book, "Making a Metaverse That Matters," with a definition, which is if you take it directly from "Snow Crash," it's a vast virtual world with highly customizable avatars, user generated content. It's connected to the real world economy. In other words, you can make content and make a living from it.

And really, I just-- I say it's like Roblox or Fortnite or VR chat or Rec Room, but bigger. So these are platforms that are already working really well. They already have large user bases. They're already generating a lot of revenue. And they really fit the definition. There actually is a much larger user base than even Neal Stephenson imagines. So really just try Roblox or Fortnite, or whichever one you're interested in.

SEANA SMITH: Adam, what do you think?

ADAM VOSS: Little m metaverse. I mean, we don't even use the big broad M anymore. I mean, really, metaverses include walled gardens like Meta, or gaming platforms like Fortnite, or open worlds like Decentraland. And until there is a code of interoperability that connects you as the avatar with your goods, with your payment platforms, with your ability to transact, communicate, we have all these disparate platforms, right?

Well, as Lee Munson, who came on earlier, was talking about the bear market drives the investment into these platforms, and these platforms are all-- they're not connected so they're all kind of silos that are wanting to be silos, especially on the brand side because they have that access to data. So in terms of what Neal Stephenson was writing about, that connection won't come until we find a way to solve for interoperability between these platforms

ALLIE GARFINKLE: It'll also be interesting to see when Apple's headset finally launches. It's much anticipated. It's rumored to be in June. It'll be interesting to see if that starts to bridge the gap of some of the things we're talking about, include that operability piece of it, Seana.

SEANA SMITH: It certainly seems like we have a long ways to go before we could potentially see some widespread adoption here. And really, everyone bought in on the metaverse. James Au, Adam Voss, Allie Garfinkle, thanks to all three of you for joining us here today.

JAMES AU: Thank you.