(In this article I lay out how AR will eat the world. In the second part, for paid subscribers, I do a dive deep into the financial and political implications of the Metaverse project by Facebook (now rebranded as Meta), and suggest how to react strategically to benefit from it. I don’t want to give too much away, but if you think you can opt out of the Metaverse, you’re almost certainly mistaken. Unless, that is, you immediately begin to position yourself in one of the ways I describe.)
As usual I won't bury the lede: we are headed to an AR dystopia, and there’s no getting around that, short of massive social changes.
AR, as you almost certainly know, stands for Augmented Reality. Virtual Reality (VR) blocks 100% of your view and replaces it with a screen. AR is the much more transformative, and challenging, technology. With AR, you are still looking at the world in front of you, but there’s another layer of information that’s digitally overlayed on top of it. For example, you may be playing Pokémon, and you see little creatures when you look at your phone’s screen, and those creatures appear to be part of the actual world. They are digitally embedded in it.
Ideally, from a tech standpoint, AR isn’t done with your phone, it’s done with glasses or a beam that shoots pixels right into your eyes or special contact lenses or even a neurological implant. It’s done is a way that you don’t have to think about it — your vision has been enhanced, and you rarely have to spend time fiddling with the settings or device. Because AR doesn’t completely cover up your view of the world, it can be an always-on solution, even from the early days.
Imagine for a moment some of the possibilities that open up with AR. A construction worker walking through a building might see every pipe labeled with its function and if it’s been hooked up. He might see walls project in front of him exactly were they need to be built. A company might use it along with face recognition so that you see the name and job title of everyone who passes you in the hallway. It might be vital in emergency medical situations — if a lady with a vengeful husband has just overdosed on your narcotics and you need precise instructions on how to plunge a syringe full of adrenaline right into her heart, AR could project a circular bull-eye in just the right location and show you an animation of how to drive in the needle. Highly useful, no?
There are some beautiful applications here, and it’s a beautiful technology, but it will almost certain to lead us down a wildly dystopian path. I could speculate endlessly about the exact shape this dystopia will take, but let's begin with what is going to happen for sure, based on what we already know about the world and human beings.
The worlds most expense ad space
If asked to name the wold’s most expensive ad spaces, you might pick a commercial during the super bowl or a billboard in Times square. Those are indeed valuable, but in the end, the answer to the question, "Where does everyone want to have their ads shown?" is: In people’s field of vision. And when is the best time to show someone an ad? When they are mostly likely to act on it. With the potential to put highly targeted ads right in the field of vision of someone right when they are mostly likely to make a purchase, AR is going to open up the greatest and most lucrative land rush for advertising the world has ever seen.
Here’s one way AR advertising will work: imagine you’ve gone into a grocery store and it has a special promotion. These have been have for years with a free sample of food or whatever to try to get you to buy items. In this case imagine if you walk into the store and they hand you a pair of goggles and they say, look, if you wear these you will get 25% off anything that flashes in front of your face, or 10% off everything just for wearing these for a while you're in the store.
Who knows the specifics, but certainly there will be incentives for you to put on their goggles. You won’t do this unincentivized, though in the beginning novelty and entertainment will be part of that incentive, more about that soon. In general, though, nothing about this future that I'm imagining is a place where incentives don’t matter; incentives still matter and in fact this is why I think what I'm describing is inevitable, because the incentives exist to do this and so people will do it. Incentives exists for stores to loan out AR googles (or have an app that works on yours), and so they will incentivize you to put them on, and you will, just like my local grocery store got even me, someone who never signs up for reward programs, to eventually sign up, because a third of the items they sell are discounted for people in their system.
How does the grocery store benefit from an app controlling a layer of your AR goggles? This might be the perfect space to get you additional information about the products you are looking at, or they might resell that space to vendors who want to promote their products in your field of vision. This is of course nothing new as a business model. Right now vendors pay stores for premium placement on the shelves in one form or another. Ask someone who works in the biz how much a prime end-cap near the register. AR placements are simply an extension of paying for that kind of premium real estate. The meta information about which ads influence you, where you look, motion tracking at such a granular layer, that’s incredibly valuable data.
One great thing about AR ads in a store is that they can literally lead you to the product. Advertisers could pay to highlight their products with a flashing arrow in in their visual field that say “30% off Campbell's soup this way, now only for the next 20 minutes!” These AR experiences will of course integrate fully with whatever rewards points system the store already has. All the traditional tools that are used for advertising will be applied to this new medium of visual field overlays.
Or, as one more grocery store example, consider the current system for pricing items. Right now it’s widely inefficient. To change the price of a can of soup, the store has to update their database in the back and print up a new physical label and bring that out and put it on the shelves. That’s crazy. Why not just replace those labels with QR codes, and when a customer looks at those codes, they see the current price info and any other product info the store wants to provide?
This system opens up another possibility. Assuming the glasses pull their data from the store’s application, and assuming that stores will know who those glasses belong to (because they are linked to the customer’s rewards account), stores can price discriminate at the individual level. In-a-rush professionals pay more, slow-shopping house wives pay less. If consumers resist this on the grounds of fairness, that resistance will be eliminated in the same way that airlines got everyone to pay a different price for the same class of seats.
Are you not entertained?
The problem with most dystopian visions is that they are so... awful. Who would want that? Even in our era where Covidains choose to double masks alone in their cars, most people will demand any collective nightmare we have to live through is at least entertaining, engaging, fun. More Brave New Wold than 1984. More Tik Tok than Time Magazine. Not to worry! Advertisers will have our backs. I guarantee they'll make these overlays as entertaining as possible, as engaging as possible. You can expect fun animations, cartoon-like colours, plenty of cute characters and content and story lines and all the things we have seen for years with advertising, not to mention any new touches that the technology makes possible. These ads will be so good you'll tell your friends they have to visit aisle 3 of the local Safeway just to check them out what happens to the tuna cans.
This is what phase one of our upcoming AR dystopia looks like. The largest retailers begin to offer you as a consumer a bit of added visual information, and you'll be incentivized to see it, and the experience will be novel and fun. During this phase, we'll also see stores beginning us offer additional tools made possible by AR. More info. The ability to ask Siri where’s the Sriracha and follow the on-screen indicator to the exact shelf.
The honeymoon period turns into a relationship
As AR technology and techniques begin to mature, using the AR will go from a novel, fun, almost game-like experience, to the normal background level of entertainment tech provides as you go about your business, like how you put in your AirPods when you go out for a walk. And you'll see that everyone else at the grocery store is also wearing AR devices, just like everyone else you pass at the park has on their own soundtrack device.
As it becomes more and more the norm for people to have some device that creates an informational layer between them and reality, more and more tools will be built up that depend upon the existence of this layer, in the way that now everything you want to do depends upon the internet you can’t do really anything without interfacing with it.
In this second phase of AR adoption, companies will increasing exploit the reality that people have a virtual reality placed between themselves and the real world, and that they can incentivize you to allow them to tap into it on on a regular basis. In this phase, AR moves beyond niche applications to become a fact of life. If you're waiting for a bus, the best way to find out when the next one arrives will be to look at a QR code on a pole or special poster, and then your AR glasses will display the number of minutes until it's there. You'll have an informational overlays that become part of everyday life and you grow to depend on these the same way that many of us now depend upon Waze or Google Maps to navigate the streets of our own cities.
One screen to rule them all
At some point, there will be a growing realization that it’s stupid for us to have lots of different screens everywhere, each one a different size and configuration. And just like smart phones eventually replaced calculators and watches and maps, at some point it will seem dumb to carry around our smart phones and our laptops and our iPads, and we have big mounted screens in our living room and even our damn fridge gets it’s own dedicated screen. How much simpler would it be to just have one screen, that’s right in front of your eyes, all the time. So much better, right?
Once this realization sets in, almost everyone will get own AR device, just like everyone bought a smartphone. Your AR device may be your smartphone, and at the very least the two will talk to each other, so that urgent text message pops up right in your field of vision. The AT&T store will sell you a legacy android device, or, for just an extra $20 a month, you can get Google Glass v4 for free. No reason not to upgrade, really.
Especially since, by this time, so many of your experiences will be intermediated by AR. Why use those crappy store goggles they let you have for free, and they claim have been sanitized before each use by ultra-strong UV light but who knows? So much better to have your own pair that fits you perfectly, and begin to phase out all those other device-specific screens. And while we’re at it, let’s phase out the microwave buttons. Much better to let your AR system send it commands and see a cool animation when the popcorns done, and while we’re at it why can’t my oven display my casserole in the corner of my vision so I know the exact moment the top turns turns a perfect brown.
Your attention please
At this point in the evolution of AR we reach a level of dependence such that if it were taken away from us, and we had to interface directly with the world, or go back to our very old tools like paper maps, we would be, quite literally, lost. In this phase most people will spend at least some significant portion of their day using AR, and their device will have apps from different companies, running with our permission of course, but with a series of incentives for us to install them and let advertisers or information providers put information between our eyes and the world.
As these devices become more and more a part of delivering us with all kinds of information, from prices to directions to emergency traffic warnings, AR becomes more and more integrated with our environment, and just like with the internet, it becomes less and less optional.
At this point in the story, we have a battle for the layer right front of your eyes, as stores and advertisers and governments and perhaps your mobile service provider take up as much of your visual field as they can, as often as they can, pushing right up to the edge where you delete those app, if you can. As use of AR becomes more widespread, the infrastructure around us will adapt in ways that make using AR ever more important.
For a time you will still be able to do things like shopping without the glasses — you just might be charged a default product rate that’s higher than others, and of course if human-readable price labels are replaced with QR codes, you won’t know the prices until you arrive at the front of the store and the scanner reads all the RFID tags in your cart and you learn how much each item costs.
Everyone has their own threshold for adopting technology and service, but as wearing AR devices becomes more and more advantageous, and not wearing them becomes more and more of a hassle, we’ll see almost everyone owning a device, even if they don’t yet use it all the time.
At this point, the people who don't have AR systems available to them may start to look like weirdos. These will be updated versions of those those strange people who still occasionally stop you on the street to ask the time or for directions. Don’t they have cell phones? You have to wonder if there's something wrong with this person, are they homeless or is something else going on here?
Your attention or else
Our journey has taken us from AR as something that you want to have, to something that are strongly incentivized to have, to something that you basically cannot live without. We’ll begin to see some aspects of our lives that require the use of AR glasses. These may begin with controlled environments, like physically dangerous work environments.
Eventually, you'll have a device, in front of your eyes, that’s expected to be on more and more of the time. It’s a conduit for important information, from vital news to information about a bridge out ahead. And it’s harder and harder to live without the AR layer, as more and more of the things you want to do are impossible without it.
So now in effect what you have is a captive audience. You have people who do not have a choice other than to see the world through this lens. It’s become mandatory, or effectively mandatory, to view the world intermediated through AR. At this point, it's game over. At this point, there is no way out of the system. The system has you by the balls. And the system knows it can depend upon you seeing the world through their tools.
You are a captive audience. And, How valuable are captive audiences? I’m going to repeat that question, because it’s key to understanding the final phase of the coming AR dystopia. How valuable are captive audiences? Remember that this is a world in which incentives still matter as much as they ever did. How big is the incentive to access a captive market? What are the rewards to being the entity that becomes the Google of AR, the primary source of information and control over what gets put in front of everyones eyes? Well, you become a god.
I’m going to repeat that as well, because it may seem like it's hyperbole but it's not. The people who control what goes in front of your eyes, those people are effectively gods. They controlling how you see the world. They can manipulate you, they can direct you, they can encourage you, they can cajole you, they can virtually twist your arm. They can make life very good for you, or they could make life very bad for you. It's completely up to their control, and there's a very good chance that how good or bad they want to make your life, will have a lot to do with how much you’re paying, in one way or another.
Remember the now well understood axiom about online services like social networks. If you aren’t paying for the product, you are the product. In this case there will of course be premium services that you can get through your AR. Buyers Clubs that allow you to get special deals. There will be those carrots. And then there will be the sticks. Either way you are going to be paying.
Now we move from a world in which corporations have driven adoption of AR, to a world where municipalities have, as tends to be the case with government, slowly come around to the tech, and they have begun offering augmented services like those virtual bus signs and routing. At some point in this transition, governments will begin to view AR as a key tool of social control and order.
Amber is here to see you
Right now many phone systems have Amber alerts which let the authorities push out a notification to every single person. In the case of an Amber alert, that’s about someone who might be a kidnapped or missing. These are notices that the authorities have determined to be vital information, and right now they can now be sent to your phone screen, and everyones phone screens at any time and in real time.
Of course once AR systems are widely used, Amber alerts will be required to take up a certain amount of your visual real estate, just like it has to show up in an unmistakable way on your phone. In terms of these notifications, at first they will be used in a restrained way, but of course as time goes by, as we’ve seen it with any medium, when someone can put information in front of your face, that's going to be used for much more, because the incentives exist to use it, because attention is valuable.
Speaking of alerts: Before we get to fully automated cars, imagine how much better driving could be, from the perspective of a municipal government, if all drivers had them on? They could let you know in real time to detours ahead, virtualize traffic lights to optimize their timing based on road conditions, alert you about a nearby firetruck without loud sirens and with plenty of time to pull over even in busy traffic. They could remove speed limit signs and replace them with an app that flashes an alert right in front of your eyes if you go too fast. If you go way to fast, a speeding ticket could be mailed right to your house. No need for an officer to block traffic or risk her life by pulling your over. How great would that be?!
Meet the new gods
At this point it doesn’t really matter whether it’s the government or a handful of huge companies with the an oligopoly of control over this visual layer. They have control over how we view the wold, and we are the ultimate captive audience. The possibilities really are unlimited.
Maybe you can imagine. What what would you do if you were a god, and your captive audience could be fed anything. And not only that, but as some sort of the threshold is crossed where AR becomes the norm as opposed to just something that some people have, then these gods can begin to increase the stick for not using it.
Here we are getting into speculative possibilities, but the argument is not that this particular speculative possibility will come true, but that something like this has to come through in some way — if you have a situation where there is a very powerful tool and there are very powerful incentives to use it in a particular way, then will be used in that way. Guaranteed.
We get to a place with very aggressive sticks as incentives. I already mentioned some of those for drivers, who might at some point be compelled to wear AR glasses as a condition of being on the road. But why exclude pedestrians? Won’t they have to see traffic lights as well? Bicyclists will want to see the virtual bike lane they’ve been granted, and potholes highlighted with flashing circles (you didn't think all those potholes would get filled, did you?).
Beyond issues related to traffic, we’ll see all manner of pressures to use the app as a mechanism for social control or safety. As mentioned in the simulation hypothesis episode of The Filter, it’s easy to see how AR glasses might be used in ways related to the pandemic. AR could highlight information related to social distancing, flashing warning signs in your field of vision if you get too close to a stranger, just like modern cars give you proximity feedback when parallel parking. AR could tell you if that person is a suspected carrier, based on their previous proximity to people who’ve tested positive. AR can alert you in real time to all manner of virus and other public hazards.
The world out there is a dangerous place, and the longer we live, and the safer our lives become overall, the more effort will go into eliminating new and existing risks. If you try and opt out of this new kind safety net, or safety mesh, you will be viewed as selfish and dangerous. Devices and data will be interconnected, and if you go off the grid, you’ll no longer be sharing your threat data with others, and the threat you yourself pose will be harder to judge.
At this point We’ve moved from a world where there are many many benefits from AR goggles, and a small stick for not wearing them, to a world where where the stick is so big it's just unimaginable that you would leave your home without them on. The AR glasses intermediate every aspect of how you navigate the world, and are an always on, always in your field of vision layer for amber alerts, political propaganda, or commercial messages that, for a high enough fee, you might be able to opt-out of. Otherwise though, and in all important ways, you are the ultimate captive audience.
We have other terms for completely captive audiences. We call them hostages. Or prisoners.
The only way the Metaverse works
I now turn from the general path AR is destined to take us on, to the question of how Metaverse will have to work, and what you can do to profit from it, or at least get out of the way.