‘We are in a winter for the metaverse and how long that chill lasts remains to be seen.’ — JP Gownder, vice president and principal analyst on Forrester’s Future of Work
The Metaverse has been a popular buzzword in the tech industry for a time now. Big players on the tech scene, such as Meta’s founder and CEO Mark Zuckerberg promised it was the future of the internet and social media.
If you are a frequent reader, you probably remember that we explained the meaning of the Metaverse in a separate article: ‘What is a Metaverse?’. We suggest reading it if you want to find out more about the idea of an immersive virtual oasis.
Metaverse is a synonym for a future world where we would be able to interact smoothly in virtual worlds through avatars, accompanied by artificial intelligence (AI), virtual reality (VR), augmented reality (AG), and other groundbreaking technologies.
The grand promise is currently on its knees. Despite the initial hype, there is only little evidence that shows that the Metaverse is anything more than a pipedream.
Interest in the Metaverse has been dropping-off at a steady pace. The initial hype over the next phase in internet technology was exceeding the reality of the capabilities of current Metaverse technologies, the customers’ interests, and the overall market expectations.
While Meta (ex-Facebook) has been investing approximately $10-15 billion per year in the Metaverse, Zuckerberg’s project has only 200,000 monthly active users and Meta’s stock is down almost 70% in a year. Meta Platforms reported losses of about $10 billion in its Reality Labs division, which is building out the company’s Metaverse project.
Other tech companies such as Microsoft and Nvidia have been investing heavily in Metaverse technologies and projects as well. The competition grew strong within the tech industry following renowned papers such as the Wall Street Journal stating that the Metaverse vision would change the way we work forever, and the predictions by the global consulting company McKinsey stating that the project could generate up to $5 trillion in value.
Now the narrative changed; from a groundbreaking virtual space on the path 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 shouldn’t yet be deemed as a failure. The grand promises at the beginning amounted to sky-high expectations of the new virtual reality. The current state of technology failed to deliver on these big promises in a short time span.
Metaverse was expected to become everything in a short amount of time. From a new reality of social interactions over brands and a virtual real estate market to an immersive gaming experience, Metaverse suffered eventually from an identity crisis.
Any business idea that aims to thrive needs to have a target audience, clearly defined use cases, and the willingness of users to adopt the idea or product. It may take years of work to see potential for investments in companies that are developing such a technology.
The internet was already going in the direction of levelling-up and it was always clear that Metaverse wasn’t that far away. Technologies didn’t wound the concept – high expectations and unrealistic statements did. It is not yet game over for the Metaverse as it still can become our reality.
The Metaverse, recently derided as the Meh-taverse, is an intriguing concept but it is still in its infant phase. The hype contributed to its downfall, but there are several other factors that should be taken into account.
The first one is related to the state of the technology. Getting the technology to a place where it has the capability to bridge the gap between the real and virtual world is a challenging task. All Metaverse technologies have to function at their highest level to obtain desired levels of consumer adoption.
Secondly, Metaverse needed a broader business model that would drive consumer demand in relation to the state of technology. Even though big companies and brands stepped as soon as possible into the Metaverse, the business model should have been more developed on the consumer side. Every market is built on supply and demand, and in this case, the supply seemed larger than the demand.
Lastly, the current climate in the tech industry contributed to the downfall as well. The industry is too concerned with the ‘next big thing’ in tech and we, as users, see that a lot. At the moment, the tech sector rapidly shifted from the Metaverse to AI without reminding us that these two don’t exclude each other.
No need to ask for a moment of silence and write off the Metaverse vision. Once the climate on the market settles, the Metaverse still has a chance to rise. However, learning from its past experiences, it should implement a few things and adapt to ensure its survival.
Contemporary networks focus on providing download speed and bandwidth, yet immersive Metaverse experiences would require a higher degree of performance. For a decent user experience, latency, the time between user input and the network’s response, must be low.
Therefore, bandwidth refers to the amount of data transmitted over time. It is a significant requirement for Metaverse’s scalability and traditional bandwidth just doesn’t make the cut.
When it comes to interactive features, more than 50 milliseconds of delay can be detrimental to user experience. Bandwidth needs to be significantly increased to support the data transfer within the Metaverse virtual worlds.
While there have been particular advances in motion capture and animation technology, it is still hard to create avatars that look, move and interact like real people in real time. During the hype, most people expected to be wearing VR headsets, and piloting avatars in virtual worlds of dragons, robots, and spaceships.
The Metaverse needs to be accessible to everyone, regardless of their technical expertise or financial situation. Many factors within the Metaverse amount to the complexity of accessibility and inclusivity issues. Many think that the Metaverse should be built from the ground with accessibility and user-friendliness in mind.
For example, one of the questions is whether the Metaverse will be an accessible place for people with disabilities. However, the current state of technology recognised that accessibility should be prioritised 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 as supplementary options designed for a niche group of users.
A Metaverse project as a whole should offer a flexible and user-friendly experience for each user, regardless of their specific needs to ensure a wider degree of adoption on the consumer side.
Despite regulations lagging behind technology, non-compliance can slow growth and massive adoption. For example, a possible limitation to the Metaverse may present copyright. According to international treaties regulating the matter and national laws, copyright generally lasts for the author’s life plus an additional 70 years.
Within the Metaverse there are a number of consumers that modify products to tailor them to their specific needs. They are also known as prosumers. Content in the Metaverse has an increasingly short lifespan, from mere minutes to almost two years, and such an environment would require shorter copyright terms that move at the speed of technological innovation.
Secondly, another area where businesses are investing in Metaverse-related technologies is digital twins and the industrial Metaverse. Digital twins are virtual recreations of physical objects and systems, anything from an airport to a factory.
When it comes to such big projects that mirror the industry in the real world, it is evident that the industrial Metaverse will need standards. The good thing is that business leaders recognised that need and recently, IEEE, in partnership with the Spatial Web Foundation, announced their backing of comprehensive standards to enable ethically-based 21st century ‘Cyber-Physical’ Web.
As it has been already established, creating hype and promising extraordinary effects are not enough. In fact, it contributed to the great downfall. A PwC survey of over 5,000 consumers and 1,000 business leaders in the United States determined that three main concerns stand out: privacy and technology restraints, costs, and cybersecurity.
The Metaverse project is expected to take place over several years with divergent technological components maturing on different timelines. That is why the hype ran out – a strategy without a concise long-term vision and clear explanations didn’t manage to produce good business outcomes.
Consumers are likely to trust a particular business if it can implement a concise corporate 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 to use social media. Something that was reserved at first only for corporate digital marketing accounts led to mainstream adoption and connected people all around the world.
It is too soon to acknowledge that the Metaverse concept is dead. The only thing that seems to be dead at the moment is Meta’s Metaverse vision and a business idea created on hype.
The Metaverse is a logical evolution of the internet that provides a more immersive experience. For the concept to survive, it is important to create a strategy on how to transfer business and social activities into the virtual world in a timely manner.
