What do Your Mom and Microsoft have in common?
My very first digital commerce experience wasn’t on eBay. It wasn’t on Amazon. It wasn’t DTC.
It was in the CD-ROM adventure game Diablo, buying potions, armor, weapons, and scrolls.
Gaming is important to commerce, chiefly because games feature the very first emulation of digital commerce that most children will encounter in their lives. The Microsoft acquisition of Activision Blizzard is important to how we engage in commerce and how the next era of content-and-commerce will come into being because it will influence how we build the UI patterns of a commerce-enabled metaverse.
We know, we know, it’s tough to stomach yet more conversation about “The Metaverse” (point-to-back-of-throat… gag). But this is the first of many acquisitions to come as major move their chess pieces into place to compete with Zuck. This is The Pygmalion Effect.
As we discussed in Insiders #108:
The Pygmalion Effect is an example of an other-imposed self-fulfilling prophecy that states the way you treat someone has a direct impact on how that person acts. If another person thinks something will happen, they may consciously or unconsciously make it happen through their actions or inaction.
Microsoft CEO Satya Nadella is consciously aligning to compete with Meta. While Zuck will get credit for the most recent interest in an alternate reality, Microsoft has been building XR functionality with Hololens for nearly a decade. The double-down on gaming by the parent company of Xbox will become one of the largest tech acquisitions of all time, should it pass regulatory hurdles.
The Activision Blizzard catalog is vast. It covers everything from immersive MMOs to casual mobile gaming (AB-owned King Games owns Candy Crush and Clash of Clans). Meanwhile, Xbox has redefined gaming, as it owns Minecraft, and Game Pass boasts twenty-nine million subscribers paying 10 bucks per month. Bringing these together in a “multi-metaverse model” (Satya’s own words in November) will influence how the next generation will expect all future commerce experiences to function.
The UI and UX patterns in gaming directly impacted the early eCom language of the web. The UI and UX patterns in the metaverse will directly impact every purchase experience of the next two decades.
— Phillip
The DTC Era / Now you DT-See me, now you don’t. As discussed in the 2021 Nine by Nine report, traditional retail is a formidable foe and we are creatures of habit. That said, nouveau DTC and eCom-first brands are seeing growth. According to a Retail Dive report, 6 in 10 Americans shopped DTC in 2021. While the survey sample size was small (n=1182), it aligns with our prior reporting. Other data points: 79% of Americans intend to buy DTC in 2022, and 1 in 4 say that influencer marketing turns them off.
The Age of Fractional Ownership / Non-Fun-gibles. Stockx has launched NFTs of their current culture products. Those off-the-chain sneaks are now officially on-chain.
More Sights & Sounds. Microsoft nears a deal to buy Activision Blizzard Inc in a $75 billion all-cash deal for what could be uncharitably be described as the undesirable owner of Candy Crush and Clash of Titans. JK, this is actually a Metaverse play (see our main story). Glassdoor is maybe just a hedge fund? John Green breaks down pandemic phases and gives the current season a one Wordle title. And finally, Lilly Pulitzer launches a hospital collab via designer birthing suites at a West Palm Beach medical center.
New Luxury / ALVMHOMGD. LVMH has taken in a minority share of Aimé Leon Dore for an undisclosed amount. The New York-based fashion team will continue to work in their stateside offices and will continue to operate independently. Best part? Listening to pundits try to pronounce the brand name.
New Luxury / Work in Progress. American workwear brand, Carhartt has mandated company-wide Covid vaccinations for all its workers. Per outlet HipHopWired, “Horse Medicine Twitter” has widely condemned the move, as it defies a recent Supreme Court ruling.
Purpose-Driven Brands / Choco-Shaming. Tony’s Chocoloney barely missed our 2021 Nine by Nine as a customer-centric brand that is committed to investing in fair trade and ethically-sourced chocolate. But this packaging might be a little too heavy-handed. As if me horking down an entire bar of white raspberry sprinkles isn’t shameful enough.
Editor’s note: listen to this podcast with Pashmina Lalchandani for a long-form discussion about the challenges of building a business around ethical and fair-trade chocolate. It’s worth your time.
The New Dada / A NyQuil Marinade and “Brothtails”. Absurdism and performance art intersect in this new viral TikTok trend called “Sleepy Chicken”. It features a breaded chicken breast pan-fried and simmered in NyQuil. Might we suggest a cocktail pairing? Campbell’s Canada has introduced a series of savory “Brothtails,” cocktail recipes that include their soup broths. Sleepy Chicken will pair well with the “Thai Chicken Negroni,” which is nutty, salty, and brings out the pinecone flavor of your favorite flu elixir.
Regulation Ahead. While C.A.R.L.Y.’s (Can't Afford Real Life Yet) have been increasingly leaning on BNPL (Buy Now, Pay Later) services to shop and pay for it through smaller short-term, interest-free installments during the pandemic. According to research firm The Ascent, 61% of Gen Z have used a BNPL. Now, credit-rating agencies and government regulators are catching up, investigating whether the new form of consumer credit should be more closely regulated. Maybe it’s about time, as two out of every five households that have used BNPL have defaulted on the loan, missing one or more payments.
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