Welcome to your weekly digest…my breakdown of the things we’re thinking about and talking about in the Global Intelligence world.
First up this week, the NFL hosts Super Bowl concerts in the metaverse for the first time.
It’s Super Bowl Sunday—the biggest event on the TV calendar noted for its heart-stopping sporting drama…massively expensive ad slots…and half-time concert seen around the world.
But before the Eagles and Chiefs (plus Rihanna) take to the field later today, the NFL was busy staging a few other musical events…in a hugely popular online metaverse.
In case you’re unfamiliar with the term, the metaverse is the next iteration of the internet that will see it morph from a static 2D experience into an all-encompassing 3D internet that exists all around us. We’ll view this new web using virtual reality glasses and augmented reality technology.
Metaverse was arguably the biggest business buzzword of 2022, but it has since faded from view…leading some ill-informed commentators to describe it as a fad or a false dawn.
The reality, however, is that the metaverse has simply entered what I like to call the “boring engineering phase.”
When a new technology emerges, we can begin to see the impact it will have on society once it’s fully developed. This creates huge excitement about the technology.
But development doesn’t happen overnight. It takes time to perfect the systems and make the necessary technologies efficient and cost-effective enough to roll out on a massive scale.
We’ve seen the same trend recently with artificial intelligence. A few years back, talk of AI was everywhere. Then it disappeared from view as engineers got busy actually building AI tech. Now suddenly AI is a hot topic again because we’re seeing the results of this development in the form of ChatGPT and other new AI tools.
It will be the same with the metaverse.
No question, the metaverse is not ready for the mainstream yet. But that day will come. Which (after a long-winded aside) explains why the NFL was hosting metaverse concerts this weekend.
Two days ago, the league began hosting its first-ever virtual concert featuring the artist Saweetie in Roblox, an early cartoony metaverse that’s hugely popular with kids. The platform currently has almost 58 million daily users.
After the concert was first staged on Friday, it was then replayed ever hour for 31 hours until today.
Yesterday, the NFL also launched a new experience on Roblox called NFL Super Tycoon that allows players to simulate the experience of being an NFL owner.
Yes, we’re early in the metaverse era. But major brands like the NFL continue to explore and invest in this space because they know the next generation of consumers will visit these worlds to chat, shop, watch entertainment, and even to work.
The metaverse is the future. It just may take us a little time to get there.
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Next up…is Tesla starting an electric vehicle price war?
Last month, Tesla slashed prices by 20% on some of its model Y cars. This sent shockwaves through the automotive industry since the cost of making the components in Tesla’s cars, like the batteries, has been steadily increasing.
So why did Tesla cut prices?
Tesla enjoys a massive share of the U.S. electric vehicle market, north of 60% by most estimates.
But competitors are catching up. Major automakers like Ford and Volkswagen have been carving out a small but growing share of the market over the past few years with new models like the all-electric Mustang Mach-E.
At the moment, these new models are not necessarily profitable since traditional carmakers like Ford are still building out their electric vehicle production capacity.
Tesla knows that these massive automakers are dedicating more and more of their financial muscle to building electric vehicles. And that big challenges to its business lie ahead. So, it’s trying to reinforce its market position now by making its vehicles cheaper and therefore available to more customers.
Time will tell whether this leads to a full-blown electric vehicle price war.
Tesla enjoyed a strong position in the electric vehicle market because it was the first-mover. But this is not the tech industry, where a propriety technology (like Google’s search engine) can cement near-permanent market dominance.
Electric vehicles are just cars with batteries. Ford, Toyota, Volkswagen, Mercedes, et al. are already figuring out how to build electric vehicles as well and as efficiently as Tesla. So, Tesla market share will fall.
Of course, the market size will also expand, so Tesla could maintain or even increase its profitability even as it loses market share. We’ll see how this plays out. What’s clear, however, is that for the past several years, Tesla essentially had the EV market all to itself. Now, it has a fight on its hands.
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Finally, is a major investment coup on the cards for Hong Kong?
Reports emerged this week that Hong Kong’s leaders are working hard to convince Saudi Arabia’s national oil giant, Aramco, to list its shares in the city.
According to Visual Capitalist, as of the end of last year, Aramco was the third-most valuable company on the planet, worth $1.8 trillion, behind Apple at $2.3 trillion and Microsoft at $1.9 trillion. It was the only non-U.S. company in the top 10.
At present, Aramco’s shares trade in Saudi Arabia. A secondary listing for Aramco in Hong Kong would be a major boon for the city, which lost a lot of talent and investment in recent years to rival Asian financial center, Singapore, over China’s strict COVID lockdowns.
A deal to list Aramco’s shares could be worth billions of dollars. It would also be a further sign of Saudi Arabia’s increasing reorientation away from the U.S. and toward China.
Indeed, Hong Kong’s leader, John Lee, was part of a high-profile Chinese delegation led by President Xi Jinping that recently visited the Saudi capital, Riyadh.
My guess is that this listing happens…but not yet.
Right now, with oil prices rising, Aramco is flush with cash, so it can bide its time and wait for the right moment to list.
But geopolitically, a listing serves the interests of Saudi Arabia as it pursues closer ties with China. So, it’s likely to happen eventually.
That brings us to the end of this week’s digest. Many thanks for being a subscriber. And if you have any feedback or questions, reach out through the contact form on the Global Intelligence website.
Enjoy the rest of your Sunday.
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