Do you recall the metaverse craze? It’s the term for virtual worlds accessed through VR, browsers, or apps. During that time, Facebook rebranded as “Meta” in 2021, and 2022 was quite the rollercoaster.
Fast forward to 2023, and there has been a significant drop in enthusiasm. Is the metaverse dead? Public opinion leans that way.
Yet, behind the scenes, insiders see a silver lining. The metaverse hype‘s end lets them focus on their goals without distraction.
So, the question of when the metaverse will come out remains. And once it does return, will the metaverse resurge with new uses or fade away?
Is Metaverse Dead?
Skeptics have boldly proclaimed, “The metaverse is dead!” Their contention is that the virtual realm has lost its direction.
This viewpoint arises as the metaverse, previously celebrated as the “next phase of the internet,” has been overshadowed by generative AI, the new forefront of technological transformation, amid widespread layoffs and project cutbacks.
But this couldn’t be further from the truth. The metaverse is very much alive, thriving, and evolving rapidly. It is bigger than any single corporation or platform.
Still, has the metaverse truly lost its spark, or has it simply stepped out of the limelight temporarily?
Many feel that the metaverse has yet to live up to its hype. Despite massive investments, VR hasn’t set the business world alight. Microsoft even shuttered Altspace VR, acquired in 2017, focusing on generative VR and massively investing in OpenAI.
So, what’s on the horizon for the metaverse? Is it exclusively for gamers? Could Apple’s Vision Pro offer the immersive experiences promised by the metaverse, albeit for those with deep pockets?
As is often the case with evolving technologies, it may be premature for the metaverse to fully shine. But it’s set to make an impact as hardware and software continue to evolve.
The Metaverse Reality Check: Hype, Mistakes, Opportunities
The metaverse, with approximately 520 million active monthly users, as reported by Metaversed, saw a modest increase of 25 million users this year compared to a more significant 43 million rise in 2022.
One common error among brands entering the metaverse trend was their hasty entry, lacking a clear grasp of its mechanics, objectives, or target audience. Many companies failed to comprehend how their customers could engage in the metaverse or harness its potential assets.
Numerous brands rode the metaverse hype wave without considering the pivotal role of consumers. UNIT9, having launched its metaverse advisory group, suggests that the decline in metaverse popularity stems from numerous brands seeking attention to a concept still awaiting a concrete definition.
Regrettably, the metaverse’s reputation has suffered. Many companies rushed to create “first-to-market” initiatives, merely using technology for the sake of it to garner PR headlines.
This rush to adopt new technologies frequently leads to a dip in performance, where early adopters’ experiments and implementations fall short. This, in turn, prompts reflection on the genuine benefits and utilities of these innovations.
The Metaverse: A 2023 Update
In 1992, Neal Stephenson’s novel “Snow Crash” unknowingly sowed the seeds for the metaverse, a concept now integral to Web3, the internet’s next phase.
So, where are we with this ambitious idea of revamping the internet in 2023?
Let’s break it down into the upsides and downsides.
The Upsides of the Metaverse
1. Traditional Companies Embrace the Metaverse
Companies from fashion icons like Adidas and Dolce & Gabbana to financial giants and tech titans are all in on the metaverse. They’re not just testing the waters; they’re hiring metaverse strategists and diving into research.
In March 2023, big names like Tommy Hilfiger, Diesel, and Coach took the virtual stage at Decentraland’s Metaverse Fashion Week (MVFW), showing how they’re winning over Gen Z through the metaverse.
Fashion giants like Tommy Hilfiger, Dolce & Gabbana, Adidas, Diesel, and Coach made waves at Decentraland’s Metaverse Fashion Week. They showcased how the metaverse enhances customer engagement, especially with GenZ.
Siemens, Europe’s manufacturing juggernaut, invested €500 million in Germany for industrial metaverse projects in July 2023, believing that traditional industries need to support the metaverse’s success. This move underlines how traditional players are exploring metaverse potentials.
2. Digital Twins Enter the Scene
The metaverse is forging alliances with AI and IoT, paving the way for the emergence of digital twins – virtual replicas of tangible objects. In this realm, the boundaries of possibility are boundless.
An exemplary demonstration of digital twin technology’s metaverse potential is found in the partnership between PropVR, the 3D visualization division of Square Yards, and Unreal Engine, the cutting-edge real-time 3D technology developed by Epic Games.
This partnership empowers clients to explore real estate properties within a virtual world, mirroring the intricacies of reality.
This collaborative effort signifies the inception of a novel era in digital engagement, offering the promise of immersive experiences that will change how global real estate brands approach home construction and property sales.
3. Apple’s VR Headset Debut
In June 2023, Apple unveiled the Apple Vision Pro, a groundbreaking virtual reality (VR) headset. This release marks Apple’s most significant product launch since 2015 and underscores their commitment to shaping the metaverse’s future.
While Apple doesn’t explicitly brand it as a metaverse project, the headset’s features seamlessly align with the metaverse’s goals. Instead of labeling it as such, Apple positions its VR headset as a catalyst for a new era of spatial computing.
Apple may name its product as it pleases, but these substantial enhancements, enabling AR, VR, and mixed reality, demonstrate the metaverse’s growth trajectory in our daily lives.
These actions serve as essential building blocks, transforming the concept of a virtual world into a tangible, experiential reality.
4. Push for Interoperability Grows
The metaverse thrives on collaboration. Achieving interoperability – seamless asset transfer between metaverses – is the ultimate goal.
Positive signs emerged in early 2023. Decentraland’s MVFW expanded to include Spatial.io and Over metaverse networks, promoting interoperability via Linked Wearables – NFTs that span multiple metaverse platforms.
The Sandbox and Affyn partnered to create an interoperable metaverse, letting users traverse different virtual worlds with ease.
As research advances, a metaverse where virtual environments interconnect becomes a real possibility.
5. EU’s Metaverse Strategy
On July 11, 2023, the European Commission laid out its plan to boost new technologies, including the metaverse.
They’re investigating how to set fresh benchmarks for virtual worlds, recognizing the metaverse’s growth potential.
While prioritizing safety, they also embrace the metaverse’s possibilities in healthcare, art, education, engineering, logistics, and more.
But not everything in the 2023 metaverse has been smooth sailing. Now, let’s explore the other side of the metaverse in 2023.
The Downsides of the Metaverse
1. The Decline in Metaverse Tokens’ Value
Owners of virtual lands and metaverse tokens have endured a tough year, witnessing a substantial drop in their assets’ worth.
Popular decentralized apps like Decentraland and The Sandbox have seen their virtual land prices plummet by over 80%, denting the industry’s overall value. Metaverse crypto tokens haven’t been spared either, contributing to a shrinking market capitalization.
As of September 2023, the combined value of Sandbox, Axie Infinity, Enjin, and Decentraland stands at just $1.23 billion. This marks a significant drop of 92% from their November 2021 market cap of $16 billion.
2. Reduced Venture Capital Funding
In the first half of 2022, metaverse projects secured around $120 billion in investments.The funding for metaverse initiatives during the same period this year plummeted by a staggering 99%.
This massive drop in financial support suggests that venture capitalists (VCs) are feeling less optimistic about the metaverse in this year.
While the bear market is partly to blame for this lack of confidence, it also signifies the waning of the fear of missing out (FOMO) that once drove metaverse investments.
3. Tech Giants Tread Cautiously
In October 2022, Microsoft created a dedicated team for the industrial metaverse. However, just four months later, the tech giant let go of all 100 employees in this new metaverse team.
Meta, too, has scaled down its metaverse efforts. Reports suggest that Meta suffered a whopping $7.7 billion loss in the first two quarters of 2023 and over $30 billion since it started investing in the metaverse.
Now, the company is shifting its attention away from the metaverse and channeling its energy into exploring cutting-edge technologies like AI.
The retreat of major tech players from the metaverse landscape raises eyebrows. It’s only natural to worry when industry leaders pull back their investments in such groundbreaking technology.
The metaverse in 2023 has been a rollercoaster. What lies ahead for the rest of the year and beyond remains uncertain.
When Will the Metaverse be Released?
Technology’s evolution isn’t merely a matter of “when,” but rather a complex interplay of “when, for whom, how, and to what end” it arrives. Focusing solely on the “when” question can be misleading, especially for those eagerly awaiting the metaverse’s arrival after two years of anticipation.
Take, for instance, the question of when mobile technology arrived. It’s not a straightforward answer. The journey began in 1973. It wasn’t until 2014 that half of Americans owned smartphones, and by 2020, for half of the world.
During this multi-decade evolution, mobile technology became deeply ingrained in society, evolving and driving change across various industries.
Jumping ahead to 2023, the metaverse buzz may have waned, but it’s not indicative of stagnation or regression.
Virtual worlds, their inhabitants, investments, and cultural impact continue to grow. Real-time 3D simulation and gaming technology are expanding and diversifying, finding applications in healthcare, civic management, design, and industries like automotive and mining, fostering progress that transcends the ebb and flow of hype.
In essence, the metaverse’s progress may not be as flashy, but it’s steadily advancing, much like the mobile revolution, impacting numerous facets of our lives.
The Metaverse’s Economic Impact
The thriving metaverse offers compelling evidence of its enduring vitality, underpinned by its immense global economic potential.
Now, let’s explore how this potential could reshape economies worldwide by 2035:
- United States: Positioned as a global metaverse pioneer, the United States stands to gain between $402 and $760 billion in annual GDP. American businesses are already capitalizing on the metaverse. They sell virtual versions of products, market physical goods with virtual flair, and enhance efficiency through VR employee training and digital process optimization.
- European Union: With a solid tech foundation, the EU could see an additional €259-€489 billion annually. Businesses are finding innovative ways to connect with consumers digitally, while farmers experiment with metaverse tech to boost production, and auto manufacturers embrace VR for factory design and training.
- Middle East and North Africa: The UAE and Saudi Arabia are betting on the metaverse for economic transformation. Saudi Arabia’s GDP could soar by $20.2-$38.1 billion, while the UAE might see $8.8-$16.7 billion in benefits.
- Asia Pacific: Leading the metaverse charge, countries like Japan, Taiwan, and Korea boast thriving VR ecosystems. People here learn, socialize, shop, game, and access services in virtual spaces. Deloitte’s analysis predicts an annual GDP impact of $0.8-$1.4 trillion by 2035.
- Developing Markets: Even in markets like Thailand, India, and Indonesia, where VR isn’t ubiquitous, a booming creator economy and AR technology lead the way. The Metaverse spawns new marketplaces, businesses, jobs, and workstyles across the Asia Pacific.
In a world where digital frontiers blur with reality, the metaverse’s economic impact is ready to transform societies and industries alike.
When Will the Metaverse Emerge?: Key Takeaways
In the metaverse world, the “when” question isn’t just about timing; it’s a complex web of factors. Although the initial excitement may have faded, it’s crucial to recognize that the metaverse remains far from stagnant.
This apparent slowdown could indeed mark a transition from hype to authentic innovation. Beyond this, its substantial economic impact rises, with the capacity to change economies worldwide by 2035.
In 2023, new technologies like AI are set to capture the attention of both venture capitalists (VCs) and users. This is just one of the many technologies that will enhance the metaverse. Increased investments in AI can actually benefit the metaverse by improving its usability.
Moreover, efforts to tackle issues like interoperability between different metaverses yield results. Partnerships are enabling smaller-scale interoperability between metaverses, bringing the virtual world closer to its goal of seamless connectivity.
So, while the metaverse may not be as flashy as the initial hype suggested, it’s steadily advancing and impacting various facets of our lives.
However, it’s crucial to recognize that the metaverse is a complex and ambitious concept. Its realization will require time, collaboration, and innovation from various stakeholders to reach its full potential.