‘We’re in one winter for the metaverse and how long that chill lasts remains to be seen.” — JP Gownder, vice president and principal analyst, Forrester’s Future of Work
The Metaverse has been a hot buzzword in the tech industry for a while now. Big players in the tech scene, like Meta’s founder and CEO Mark Zuckerberg, promised that this was the future of the internet and social media.
If you’re a frequent reader, you probably remember that we explained the meaning of the Metaverse in a separate article, “What is a Metaverse?”. We recommend reading it if you want to learn more about the idea of an immersive virtual oasis.
Metaverse is synonymous with a future world where we can interact smoothly in virtual worlds through avatars, accompanied by artificial intelligence (AI), virtual reality (VR), augmented reality (AG) and other breakthrough technologies.
The great promise is currently on its knees. Despite the initial hype, there is little evidence to show that the Metaverse is anything more than a utopia.
Interest in the Metaverse has declined at a steady pace. The initial hype about the next phase of Internet technology has outpaced the reality of the capabilities of current Metaverse technologies, customer interests, and general market expectations.
While Meta (ex-Facebook) has invested about $10-15 billion a year in the Metaverse, Zuckerberg’s project has only 200,000 monthly active users and Meta’s stock has dropped nearly 70% in a year. Meta Platforms reported losses of about $10 billion in its Reality Labs division, which builds out the company’s Metaverse project.
Other technology companies such as Microsoft and Nvidia have also invested heavily in Metaverse technologies and projects. Competition within the technology industry intensified following renowned newspapers such as the Wall Street Journal stating that the Metaverse vision would forever change the way we work, and global consulting firm McKinsey’s predictions stating that the project would be up to $5 trillion in value.
Now the story changed; from a pioneering virtual space on its way to mainstream adoption, we can mostly read articles about how the metaverse is dead and how investors are urging big tech companies to stop investing in the technology.
Metaverse should not be considered a failure just yet. The big promises at the start led to sky-high expectations of the new virtual reality. The current state of technology could not fulfill these great promises in a short time.
Metaverse was expected to become everything in a short time. From a new reality of social interactions over brands and a virtual real estate market to an immersive gaming experience, Metaverse eventually suffered an identity crisis.
Any business idea that aims to thrive must have a target audience, clearly defined use cases, and a willingness of users to adopt the idea or product. It can take years of work to see investment opportunities in companies developing such technology.
The internet was already moving toward leveling up, and it was always clear that Metaverse wasn’t that far off. Technologies have not damaged the concept – high expectations and unrealistic statements have. It’s not game over for the Metaverse yet because it could still become our reality.
The Metaverse, recently mocked as the Meh-taverse, is an intriguing concept, but it’s still in its infancy. The hype contributed to its downfall, but there are several other factors to consider.
The first has to do with the state of technology. Getting the technology to bridge the gap between the real and virtual world is a challenging task. All Metaverse technologies must function at the highest level to achieve the desired consumer adoption.
Second, Metaverse needed a broader business model that would drive consumer demand relative to the state of technology. Even though large companies and brands got into the Metaverse as soon as possible, the business model should have been more developed on the consumer side. Every market is built on supply and demand, and in this case supply seemed to outweigh demand.
Finally, the current climate in the tech industry also contributed to its demise. The industry is too preoccupied with the “next big thing” in technology and we, as users, often see that. At this point, the tech sector was rapidly shifting from the Metaverse to AI without reminding us that the two are not mutually exclusive.
No need to ask for a moment of silence and write off the Metaverse vision. Once the climate in the market settles down, the Metaverse still has a chance to rise. However, learning from its past experience, it should implement a few things and adapt to survive.
Today’s networks focus on providing download speed and bandwidth, but immersive Metaverse experiences require higher performance. For a decent user experience, latency, the time between user input and the network response, should be low.
Therefore, bandwidth refers to the amount of data sent over time. It’s a key requirement for Metaverse’s scalability, and traditional bandwidth just doesn’t cut it.
When it comes to interactive features, a delay of more than 50 milliseconds can be detrimental to the user experience. Bandwidth needs to be increased significantly to support data transfer within the Metaverse virtual worlds.
Although remarkable advances have been made in motion capture and animation technology, it is still difficult to create avatars that look, move and interact like real people in real time. During the hype, most people expected to wear VR headsets and pilot avatars in virtual worlds of dragons, robots and starships.
The Metaverse should be accessible to everyone, regardless of technical expertise or financial situation. Many factors within the Metaverse boil down to the complexity of accessibility and inclusivity issues. Many think that the Metaverse should be built from the ground up with accessibility and usability in mind.
For example, one of the questions is whether the Metaverse will become an accessible place for people with disabilities. However, the current state of technology recognized that accessibility should be prioritized to produce more adaptable and flexible products.
When it comes to Metaverse projects, accessibility features such as eye-tracking controls in VR headsets should not be considered additional options designed for a niche user group.
A Metaverse project as a whole should provide a flexible and user-friendly experience for any user, regardless of their specific needs, to ensure wider consumer adoption.
Despite regulation lagging behind technology, non-compliance can slow growth and mass adoption. For example, a possible limitation of the Metaverse could result in copyright. Under international treaties governing the issue and national laws, copyright generally lasts for the life of the author plus an additional 70 years.
Within the Metaverse, there are a number of consumers who customize products to tailor them to their specific needs. They are also called prosumers. Content in the Metaverse has an increasingly shorter lifespan, from just minutes to nearly two years, and such an environment would require shorter copyright terms that move at the speed of technological innovation.
Second, another area where companies are investing in Metaverse-related technologies is digital twins and the industrial Metaverse. Digital twins are virtual reproductions of physical objects and systems, from an airport to a factory.
When it comes to such large projects that reflect industry in the real world, it’s clear that the industrial Metaverse needs standards. The good thing is that business leaders recognized that need and recently IEEE, in conjunction with the Spatial Web Foundation, announced that they support comprehensive standards to enable ethically sound 21st century ‘Cyber-Physical’ Web.
As already established, creating hype and promising extraordinary effects is not enough. In fact, it contributed to the great downfall. A PwC survey of more than 5,000 consumers and 1,000 business leaders in the United States found three main areas of concern: privacy and technology constraints, cost, and cybersecurity.
The Metaverse project is expected to take place over several years with disparate technology components maturing on different timelines. That’s why the hype ran out – a strategy without a concise long-term vision and clear explanations did not lead to good business results.
Consumers are likely to trust a particular company if it can implement a concise business purpose that reflects their needs and values in the Metaverse-related products and services.
In the early 2000s, many people thought they would never need social media. Something that was initially reserved only for corporate digital marketing accounts led to widespread adoption and connected people around the world.
It’s too soon to recognize that the Metaverse concept is dead. The only thing that seems dead right now is Meta’s Metaverse vision and a business idea that was born on hype.
The Metaverse is a logical evolution of the Internet that offers a more immersive experience. For the concept to survive, it is important to create a strategy for the timely transfer of business and social activities to the virtual world.