The global metaverse market is predicted to exceed $3 trillion by 2032. That’s a surprising valuation considering current scepticism, a stagnating user base, and claims that the metaverse is dead.
There’s no doubt that the metaverse paints a picture of immense potential. For most people, it all feels like a big letdown so far, which begs the question of where this market growth is expected to be coming from. Or, in fact, is the metaverse actually dying?
The Rise and Fall of the Metaverse
On October 28th, 2021, Facebook made the bold move to rebrand its holding company to Meta.
Mark Zuckerberg explained the name change as a “time for us to adopt a new company brand to encompass everything we do.”
At the time, it appeared to usher in a new era. Soon, computers and smartphones would be replaced by VR headsets and augmented reality. The world would conduct business, socialize, and transact, all in the Metaverse.
The Meta CEO said he expected the metaverse to reach a billion people in the next 10 years. The announcement led to widespread enthusiasm, particularly among the crypto community and VR headset enthusiasts. 3 years later, Meta has gone on to invest $46 billion in the metaverse. It’s a huge sum of cash, and so far, the company doesn’t have a whole lot to show for it.
Reality Labs is the division of Meta in charge of the metaverse technology. It’s only generated a total of just over $6 billion over 3 years – an eye-watering $40 billion. While Meta’s big bet on the metaverse is yet to pay off, the world’s focus has shifted to other technologies like generative AI.
The Current State of the Metaverse: Challenges and Realities
Disney’s elimination of its metaverse division during staff cuts in 2023 paints a bleak picture for the metaverse’s current state. It is still several years from hitting the mainstream, a frustration for major tech and entertainment companies that have invested heavily in the industry.
Consumers have been slow to adopt VR devices like Meta Quest, Apple Vision, and Google Glass. One reason for this could be their high cost and bulkiness, and it may still take several more years to improve their design while reducing costs.
Technological innovation is undoubtedly good for consumers, but it can take years for the prices of revolutionary technology to become affordable for the mainstream consumer.
Right now, it appears that there are unmet expectations regarding the quality and limited use cases for consumers. The virtual world where we could be anyone and do anything has yet to materialize. People aren’t currently able to walk immersed in a digital reality or interact with a world enhanced by augmented reality.
Another potential reason for the metaverse’s slow growth trajectory is its relationship to Web 3. The two technologies are intertwined – they go hand-in-hand. The metaverse needs the next generation of internet technology to deliver on its promises.
Web 3 is still building a new version of the internet, which provides a more decentralized, open, and user-friendly environment. Its technology is an evolution of cryptocurrency – another industry still in its growth and development phase. Of course, virtual worlds need virtual currency for the digital economy to form.
There is a tremendous synergy between the two industries, with Web 3 developers even building their own visions of the metaverse with projects like Decentraland, The Sandbox, and Axie Infinity. These platforms all take a gamified approach to their worlds, where users can play, earn, build, buy, and trade assets while retaining decentralized custody.
According to CoinHint.com, projects like Decentraland garnered colossal attention across crypto media and initially had a substantial user base, but have seen a decline in recent years.
It really leaves you wondering – do we just need to be patient? Or is the metaverse actually dead?
The Reasons Behind the “Metaverse Death” Narrative
The metaverse simply hasn’t lived up to the hype – not yet, anyway. In an increasingly impatient world, the technology hasn’t arrived quickly enough.
From the second Zuckerberg announced the Metaverse would shape the future of the internet, it heaped grand expectations on the concept. It became the darling of the media industry, with publications like the Verge describing it as “an expansive, immersive version of the internet.”
It was the heir to the technology throne, walking a glowing path towards a futuristic world. But the technology failed to deliver.
People focus on one thing at a time; new technological waves quickly wash ideas away. VR was such a big, shiny object, but generative AI buried it in an instant. It’s not surprising either because OpenAI’s unveiling of Chat GPT wasn’t a futuristic idea or a prototype. It was the real deal. Ready for people to transplant the technology into their everyday lives. It launched a year after Meta’s rebrand and acquired 1 million users in just 5 days. Now, over 200 million people use an AI chatbot every week.
Compared to generative AI, the metaverse now seems like a big disappointment. Combine that feeling with tech company balance sheets showing a metaverse black hole totaling billions – you can be forgiven for thinking the metaverse is “dead.” Some say it has already been dumped in the tech industry graveyard of failed ideas.
Is the Metaverse Dead, or Just Evolving?
So, is the metaverse dead? Or is it just biding its time in the background?
While it’s taken a back seat for now, the future of the metaverse is far from over. Advances in VR and AR continue to lay the foundation for an immersive metaverse experience in future years. Releases like the Apple Vision Pro headset have brought a fresh injection of excitement during 2024, potentially acting as a catalyst for new innovation.
Experts like Louis Rosenberg, founder of Immersion Corporation, continue to assert that the metaverse death is nonsense; it’s simply evolving and that the ‘metaverse is inevitable.’
Where Do We Go from Here? The Future of Virtual Worlds
The focus has also been shifting to build a physical-digital convergence where technology moves to enhance physical reality rather than replace it. Augmented reality now promises more than simply consumer entertainment.
Industrial and enterprise applications are fueling developments that could revolutionize how businesses engage with customers, design products, and conduct operations. Think virtual reality training systems, digital manufacturing twins, and remote assistance as just a few examples.
The concept of the metaverse is changing from an all-encompassing digital world to an ecosystem that interconnects with physical reality.
