Reggie Fils-Aime skeptical about Meta's metaverse

Reggie Fils-Aime doesn't see a lot of promise in the version of the metaverse being pursued by Meta (formerly Facebook).

The former Nintendo of America president explained his reservations in a South by Southwest keynote this weekend, as recorded by Bloomberg.

Part of his skepticism had to do with the company's track record, both with physical products like Portal and with innovation in general.

"You have to admit that Facebook itself is not an innovative company"

Reggie Fils-Aime

"You have to admit that Facebook itself is not an innovative company," Fils-Aime said. "They have either acquired really interesting things -- like Oculus, like Instagram -- or they have been a fast follower of other people's ideas. That's Facebook. Inherently they are not an innovative company, other than the very original social platform that was created many years ago."

More specifically, he questioned the company's motivations in pursuing its vision of the metaverse.

"I believe that in order to be innovative, you really need to be thinking about the consumer first -- and I don't think they do," Fils-Aime said. "I think they think about advertising revenue first because that's 98% of their revenue."

Fils-Aime said the key for any company hoping to innovate is to have an innovative culture. If you want to bring new and different ideas to market, then you need to reward and encourage that throughout the organization, from marketing to product development to accounting.

Finally, he questioned the idea that people would be willing to spend considerable chunks of their day in VR.

"That's why I'm much more of a believer in AR," Fils-Aime said. "There's a lot of examples of successful AR today. Pokémon Go is AR. Nintendo 3DS had AR capabilities. I think the idea of wearing a light set of visuals, glasses, and using that at different points of your day to interact with a digital experience I believe in the end is going to be much more compelling.

"As a person who has tried just about every VR device and just about every VR experience, I don't think it's ready for primetime yet"

Reggie Fils-Aime

"And I say this as a person who has tried just about every VR device and just about every VR experience, I don't think it's ready for primetime yet. Doesn't mean it's not going to get there, but I don't believe it's going to be an experience you're going to be doing with 100% of your time, or even 100% of your entertainment time."

As for a vision of the metaverse he believes in, Fils-aime said parts of it can be seen already in games like Fortnite ("big, cultural events, performers in a digital game interacting with their fans") and Roblox ("wide range of different types of experiences, all tied together with one currency").

"I think metaverse is just like 'cloud' of five years ago and even 'the internet' of 20 years ago," Fils-Aime said. "It's a label that every business is trying to grab onto, to say that their business if part of the metaverse. For me, the metaverse is a digital space where you interact with your friends in a social and, I believe, gaming type of environment. It's social. It's digital. And there's an ability to really interact with friends and people who have the potential to be friends."

In addition, Fils-Aime's keynote interview had the executive explaining why he left GameStop's board of directors last March after barely a year with the company. In short, Fils-Aime said the company knew it needed to pivot and change its ecommerce strategy, but when activist investors got Chewy founder Ryan Cohen and some of his associates on the board of directors, Fils-Aime found his input unwelcome.

"The issue was that as the strategy was beginning to be developed, I asked to be part of the team to develop the strategy," Fils-Aime said. "I knew the business. I knew it as a consumer. I knew it as a vendor. I had pretty strong opinions on how the business needed to be pivoted. But I was rebuffed.

"The perspective was, 'Reggie, we want to keep the team small and so it's going to be myself and a few of the people I brought on board, who, by the way, don't know this business, don't understand the players, etc. etc.' I took that as code as 'Thank you, but we really don't want any other ideas.' For me, that was not acceptable."

Fils-Aime also wasn't complimentary of how the management team had handled the retailer since his departure, saying, "There has not been an articulated strategy. You can go on the GameStop website, try and find a strategy, there is no articulated strategy. Leadership says, 'Well we don't want to articulate our strategy because we don't want anyone to steal our strategy.'"