The future lies beyond tech – a long(er) read

As entertainment companies start planning their next big steps for the coming year, the success and failure of their strategic decisions will hinge on one big, and perhaps surprising, existential question: is this it for the tech industry?

Planning for 2023 seems to mean planning for disruption, and this is no easy thing to do – especially given the changes already wrought by the last three years of predominately virtual working. If anything, these years have enhanced the perceived value of digital potential. Yet, this hype has set up inflated expectations for an even bigger reality check as conditions, priorities, and needs swing back in the opposite direction.

The next smartphone moment

Everyone wants to get into the new platforms for innovation before their competitors do. In other words, they assume the future is going to be largely based elsewhere and want to be the one who got there first. Hence the recurring topics of NFTs, VR, and the metaverse, similar in mindset to the push for voice speakers: everyone wants to own land in the ‘new smartphone’ territory early, whatever it turns out to be.

Despite the seemingly constant state of disruption, however, both in the last three years for the world as well as for the tech industry as a whole – if we take a step back, very little has fundamentally changed since the first sweep of smartphones dominated the market. The real question is not what the next new smartphone moment will be, but whether there will be one at all.

This question should be all the more prominent in the planning of entertainment companies as we watch the tech behemoths begin to shift pace in the face of a global economic crisis. Between layoffs, changing ownerships, strategic pivots, hiring and budget freezes, and more, it seems evident that major change is afoot, and the unfettered growth of the sector is not the constant it used to be.

The voice speaker precedent

Voice speakers were to 2016 what the metaverse et. al. are today, with ecosystem-first companies vying for the next frontier of digital engagement. Their trajectory is something metaverse / VR / NFT-curious entertainment companies would do well to learn from.

The likes of Google Home and Amazon Alexa have been on the market for nearly a decade (the first Echo hit the market in 2014). Since then, both companies have regularly run promotions, free giveaways, and multi-million-dollar ad campaigns – and yet, less than a fifth of all consumers own / use one regularly, peaking among 45–54-year-olds (not exactly the most trend-setting demographic).

The first iPhone was launched in 2007, giving smartphones a seven-year head start – yet iPhones alone have a consumer penetration of over a third globally (nearly half, in English-speaking markets) and more than half of all consumers own / regularly use an Android smartphone worldwide. In addition, smartphones took off much quicker, with these levels of penetration already having roughly stabilised back in 2016 (source for all: MIDiA Research Consumer Surveys from 2016-2022). Within nine years of their first launch, smartphones were mainstream. Within nine years of voice speakers’ first launch, with the benefit of rampant free giveaways never afforded smartphones, they are still a minority. Why the difference in runway?

There were three factors behind the smartphone’s (or at least the iPhone’s) initial success: 

1. It was a solution to existing behaviours, preferences, and needs (and then some)
2. It offered this solution to a user-friendly standard that was not just as good, but better than any other on the market – at a competitive price point
3. It looked and felt cool to use

When the smartphone came out, most consumers already had some kind of handheld phone, in addition to several other similar-sized devices like a digital camera, a Gameboy, or a form of portable music player. The iPhone offered all of these in one, at a similar cumulative price point. Point one: check. It offered seamless purchasing, upload / download and update capabilities, a full keyboard that could appear and disappear at need, Wi-Fi connectivity (cutting down on pricy per-text cell phone contracts), and social platform apps that allowed users to take desktop behaviours on the go (and that was just the device on its own; free headphones and gift cards for teens were the icing on the cake). Point two: check. As for point three, they also looked cool. Looking down at a phone is the penultimate attitude of disinterest, of aloofness, of teenage scorn, and smartphones offered endless opportunities to do so – that, with the sleek advertising, smooth design, and brand-positioned social clout, made them sell like nothing else on the market.

The ’cool’ factor is surprisingly critical in taking existing developments, however (un)important, into the mainstream. The iPhone was to the Blackberry what Tesla is to the Prius. Neon-lit sci-fi gaming setups versus sweaty arcade basements; the casual Friday night Elf Bar versus the beanie-accompanied vape cloud. Practicality is one critical ingredient, and seamless usability is another – but aesthetic is what makes the cultural impact take hold.

Voice speakers failed all three tests.

Texting became the dominant way of using a phone before letter-first keyboards existed and you had to hit a number 3-4 times to get the letter you wanted (a more inconvenient way of transmitting written messages has arguably not existed since Morse Code). Consumers wanted to use text: they wanted to write multiple instant messages to each other, to their parents, to their entire communities via social networks, and to the dark empty void of space in anonymous forums. Sci-fi films may have favoured futures where protagonists spoke to their kitchens, but no one with a smartphone was actually out there asking for sentient dwellings. Nevertheless, Amazon, Apple, and Google all collectively decided that voice speakers were going to become the next big thing, and thus began the race for dominance.

They were an artificial solution to behaviours and needs that did not demand streamlining and did so in a more jarring way, providing a poorer user experience than doing things ‘the old fashioned way’ (writing lists on paper – or even making a note on ones’ smartphone), and the constant need to repeat oneself in mono-syllabic phrases at great volume, often in front of other people, was the opposite of cool.

Moreover, they failed specifically in the cases they should have succeeded at. Voice assistants do not understand many regional accents, and, critically, they have a lower success rate with responding to women’s voices. With women being far more likely to work from home and statistically more likely to be the de-facto household manager, the opportunity was critical to making sure this demographic was using the voice speakers to ask for at-home radio stations, make shopping lists, schedule reminders for taking kids to football practice, etc. And yet, more men than women own / regularly use voice speakers. They are not optimised for the demographic they should be most useful to, and the user experience is choppy, frustrating, and inaccurate. Small wonder their penetration remains so low.

The metaverse is no different (and neither is VR)

Consumers are not asking for a metaverse; they are already drowning in digital options. Tech companies that were in the right place at the right time fifteen years ago that are now in need of a new big thing to stay relevant are just building it anyway, with the presumption that audiences will come around eventually.

What the ‘metaverse’ is supposed to be is not even entirely clear. Will it be a fully-immersive VR experience, complete with haptic feedback and 3D workflows? Or will it essentially be FarmVille or the Sims, just with a less escapist premise? A replication of ‘real life’ for when the world actually burns, or a way for people to wholesomely connect from opposite ends of the globe? Now, in any of these cases, it offers nothing that consumers do not already have in some form or another, with worse graphics, usability, and integration with other activities. And, it does not look cool.

VR is a slightly different proposition. We know what VR is. But does it do everything that it does better than other propositions out there (namely, still smartphones / desktops / AR)? No. Is it cost-competitive? Also no. Does it look cool? Depends on your taste, but not really (at least for now). The price is not likely to lower any time soon, and in a cost-of-living crisis with entertainment prices already skyrocketing due to multiplying subscriptions and rising prices, it is unlikely to prove an appealing wholesale leap of faith anytime soon. Neither is their production cost likely to be conducive to voice-speaker-esque free giveaways. Mainstream uptake will elude VR for a few years or more at least.

Not all is lost

These technologies still have a purpose in which they fulfil all three qualifications.

VR is unable to work with the metaverse as a perfect recreation of a reality that science itself continues to discover more about and does not yet fully understand. However, VR can work as a tool to teach technical skills like surgery, engineering, and deep-sea object recovery. It can also build out fantasy worlds, the limit of which is the creators’ imagination – making it an ideal canvas for future games endeavours, and potentially even video / TV show development.

Similarly, the metaverse cannot function as a perfect digital recreation of IRL. However, at its core, what it envisions is a truly interconnected ecosystem where one login gives a user email, video calling, social engagement, creator tools, and shopping site access – where the entirety of any single persons’ online identity is frictionless, secure, and multi-device / platform accessible. Where users can use Zoom to call a friend on FaceTime, or send a Tweet to a Reddit account without having to log in separately. Ironically, this future-focused vision is either already being built in isolation (Microsoft, Google, Facebook, Apple), making a truly interconnected system impossible between the 'walled gardens’ of their deliberate ecosystem strategy plays, or by independents which offer cross-platform logins and content sharing through the network of an open-source ‘Fediverse’ (Mastodon) but still have clunky usability and not enough uptake. As a result, this is an opportunity space that is simultaneously already saturated, and fundamentally unaddressed. The existing closed ecosystems will continue to hold their ground – no one metaverse will change that. Expect small challengers, plug-ins, add-ons, and more designed to break down those walls to emerge, like Mastodon’s Fediverse, which may not last long on their own but will be quickly replaced by others in an endless-pawn approach, rather than playing a Queen piece.

All of these technologies will have their places and functions in entertainment and beyond. However, to imagine they will have the same impact as the smartphone would be sipping the Kool-Aide of naiveté. These new technologies will be part of the infrastructure of the digitally integrated future, yes. But VR will be like the tractor to the smartphone's streetcar (they both still go 'vroom'); and the metaverse like an elevator to the stairs of web 2 (better for skyscrapers, but still just to go up and down). Tech companies will fade from prominence in the zeitgeist and fall into place alongside railway companies, microwave manufacturers, advertising agencies, etc. This is not the end for tech, but tech, as with everything else, is finding an equilibrium on the other end of its drawn-out hype cycle.

As the pandemic eases, the climate crisis looms, a cost-of-living crisis bites its chilly winter teeth, global conflict continues (and so on…), the growing cultural awareness is that there is more to life than digital technology. Our smartphones are getting ever faster and the algorithms ever more precise, but trains are still falling off tracks, 5G is not a guarantee (nor is clean water), an entire country can run out of energy to heat its homes if the weather drops a few too many degrees, and certain cities are so polluted that thousands die per year. As our lives shift back into the ‘real world’, the stark problems that still loom out there stand in stark contrast to the frivolity of a digital world built to distract. One that has become so ubiquitous, it is starting to fail at its job.

The future of entertainment lies elsewhere – not without tech, but beyond it.