Where Did the Metaverse Go? Examining a Failed (and Costly) Trend

Several companies, including Meta, invested billions of dollars to bring the metaverse to life, but these investments did not pay off, and industry giants have moved on. Was this a case of failed incentives, or is it too early to give up? Remember the Metaverse? We Do, Even If It Failed

The promise of an interconnected virtual world where our alternative selves would work, play, and live alongside others in a doppelganger-like fashion was once at the forefront of investment and innovation. The concept of the metaverse, first described in 1992, took shape after the COVID-19 pandemic; as forms of remote contact gained importance due to the challenges faced by the human race during these difficult times.

One of the companies carrying the metaverse banner was Meta, which worked hard to bring these technologies to mainstream audiences, spending billions on the two pillars that formed the basis of this offering: the Quest virtual reality headsets series and its trademark virtual world, Horizon Worlds.

Companies like Sony, Disney, and even Microsoft followed Meta’s lead, starting to release products aimed at the metaverse-interested audience, investing millions of dollars in these ventures. For example, Sony acquired technology to broadcast sports in virtual reality spaces, and Disney, calling it “the next great storytelling frontier,” created a division to restructure these experiences.

The world of decentralized finance was also fully behind this trend. In 2022, Dappradar estimated that $7.6 billion was invested in metaverse offerings, and names like Animoca Brands invested billions in metaverse-centric funds.

However, innovation quickly began to erode, and from the beginning of 2023 until July of the year, investments remained below $707 million.

Companies also began to feel the heat of a trend that wasn’t growing; Meta’s metaverse division, Reality Labs, lost money quarter-over-quarter. Microsoft abandoned a group focused on integrating virtual reality technologies with industrial applications and some metaverse divisions. Disney also shut down its metaverse group amidst a wave of cost-cutting layoffs. At the same time, a new trend emerged that yielded much more attractive results. The rise of ChatGPT, one of the most revolutionary artificial intelligence products to date, showcased the technology, demonstrating that investments in artificial intelligence (AI) could bring more rewarding results than the metaverse.

Giants like Microsoft and Meta declared a shift by transitioning to these new technologies. In March 2023, Meta’s co-founder and CEO Mark Zuckerberg stated that while the metaverse (which it wasn’t) would remain “central for them,” their “biggest investments” were focused on developing and integrating AI into their products.

Billions flowed into AI to provide the necessary infrastructure to power these agents, which offered immediate monetization opportunities. Microsoft co-founder Bill Gates directly advocated for AI over the metaverse, calling the metaverse “not that revolutionary.”

As of 2024, the future of the trend was sealed; although some ventures remained active on a smaller scale, most companies abandoned the trend and chased the AI bubble.

So, what happened to the metaverse? Analysts seem to think that the industry overestimated the impact of its offering and that the technology to open the doors to this experience was expensive and cumbersome. However, others still see the opportunity for a digital twin world to grow with the advantages of social contact alternatives, arguing that this technology needs to evolve to become less intrusive and more user-friendly.

You Might Also Like;

• Highways in Japan Are Becoming Part of the Renewable Energy Plan
• Scientists Announce New Nanogenerator Producing Electricity from Vibration
• The Ultimate Megastructure: What is a Dyson Sphere?