Is the metaverse a fad or the future of tech?

Yahoo Finance tech reporters Allie Garfinkle and Dan Howley join the Live show to break down the latest news on the metaverse and companies' strategies to compete in it.

Video transcript

SEANA SMITH: Let's talk about the Metaverse. Disney, Microsoft, and even Meta pulling back on some of their investments here within the Metaverse, but there's still some speculation out there that more players obviously entering the space. Apple might even be one of them. So is the Metaverse a fad, or is it the future? We've got a showdown with our two top tech reporters, Dan Howley, Allie Garfinkle here. And you guys have differing opinions on this. So we're going to come out. Maybe we'll have a clear winner by the end of the segment. We'll see. Allie, I'm going to throw it to you first. What do you think-- a fad or the future, and why?

ALLIE GARFINKLE: So I'm going to say it's the future here, Seana, and work with me for a second. I know Metaverse skepticism is very easy. But there are a couple of key reasons here. The first is that kids are into the Metaverse. Now, you actually don't need to trust me on this one. We can actually look at some of the numbers. Let's take Roblox, for example. At the end of last year, Roblox had over 26 million daily active users under the age of 13 worldwide.

Now, to give you a sense of how big that number is, I believe there are 24 million children in the United States between the ages of six and 11. So it's a huge, huge number. So let's start with the kids love it. Second is, for Meta, it's been a chance for them to own their own OS. There's-- Meta has gotten a lot of flack for it, but for them, it's been a chance to build hardware that didn't exist yet. And of course, it's-- that's something that can help them down the line.

Now, owning a bunch of nothing is going to get them nowhere, right, which brings us to the last thing that Apple seems to believe in the Metaverse. Later this year, they're expected to enter the VR market. And everyone agrees, right, that the Metaverse, if it's going to take off, needs that iPhone moment, that hockey stick moment that sends it barreling forward.

And who better to create an iPhone moment than Apple, right? Apple also famously is the most trusted brand in tech at this point, I would say. We can argue about that later. And famously, they make things that are easy to use. One of the chief criticisms of the Metaverse is that it's so hard to get into, but actually, Apple can maybe change that completely. So that's why I'm bullish.

SEANA SMITH: It's a very, very compelling argument because I went into this segment. I am not sold on the Metaverse. I think I'm going to agree with you. Is it a fad, and why?

DAN HOWLEY: I do think it's a fad. It's just-- OK, well, let me run down my points, and then I can just go for a bigger stroll. But my main points here are that the headsets are uncomfortable. I've worn most of them, and they suck. I mean, when you put them on your head, it's-- they're heavy, they're unwieldy. I don't care how much people say or Meta tries to sell you on workouts with the Metaverse. If you wear something like that on your head and run around, that thing's going to stink after a while.

The other thing is there's no killer app. I mean, you can only play Beat Saber so many times or-- what's the other one-- Job Simulator so many times before it gets annoying. And cool, I can watch Netflix on a virtual movie theater screen. You know what I can do? I can sit there and watch it on my couch on my 65-inch OLED, which looks infinitely better.

And the final thing is, it's a solution looking for a problem. There's no, like, real need for what they're trying to offer here. All of the apps, the games, I'd much rather play them on my TV or my phone. I have my TV to watch Netflix already. Why do I need something along those lines? I've tried Google Glass. I've tried the Facebook sunglasses with cameras built into them. Snap glasses I've tried. None of it was compelling enough for me to ever, ever want to buy it.

SEANA SMITH: But what about Apple's rumored entrance here with that mixed reality headset? Is that going to really change the perception at all?

DAN HOWLEY: It could. Look, I'm a skeptic because there's nothing that I want for it right now. Right? I have zero-- I could go on about this idea about--

ALLIE GARFINKLE: We have talked about this so much off-camera. Like, I cannot even begin to tell you. This is a debate we actually have when we are not sitting here with you, Seana.

SEANA SMITH: That's why you guys were the perfect people to bring on set. We wanted you guys to have the debate right here. OK, if you had to pick a clear winner from this, if, Allie, you are right and Meta is-- Metaverse is the future, who's positioned to win?

ALLIE GARFINKLE: Ugh, I don't know if I can bet against Apple, Seana. I really don't know if I can. The truth is, if in Meta's case right now, I think-- I want to say that the market-- the amount of market share that they have is about 80% in terms of name recognition. Remember they did acquire Oculus. That said, I think Apple could make something that's just so easy to use and so much fun and plugged into that ecosystem in a big way that it's hard to imagine--

SEANA SMITH: Very hard to bet against Apple.

ALLIE GARFINKLE: It's really hard to bet against Apple on this one. For me, it is.

DAN HOWLEY: You know, if it does take off, I do got to say Apple. You know, sure, Meta has--

SEANA SMITH: You've got one area of agreement here.

DAN HOWLEY: Yeah.

ALLIE GARFINKLE: We agree.

DAN HOWLEY: I mean, look, they made the smartwatch a thing, right? I mean, sure, Meta has the market share right now, the 80% market share.

ALLIE GARFINKLE: And you made that point earlier with the smartwatch. Fitbit was an incumbent, and Apple--

DAN HOWLEY: It doesn't exist anymore.

ALLIE GARFINKLE: --wiped the floor with them.

DAN HOWLEY: If you look at headphones, true wireless headphones, they're all trying to be Airpods. They all look like Airpods, unless it's Beats, which Apple also owns. Yeah, I just-- you can't imagine that anyone else is going to be able to do it with the kind of fit and finish and software and experience that Apple is. So, you know, if it does take off, it's going to be Apple.

SEANA SMITH: All right, we'll see whether or not we get that headset announcement at the Worldwide Developers Conference in June and whether or not Apple is pushing into that space already. Dan, Allie, thanks so much.