Once hailed as the future of everything, the metaverse is now the tech world’s forgotten child.
Remember when Facebook rebranded to Meta and the world couldn’t stop talking about digital avatars and virtual land? Yeah, that hype is dead.
The dream of living life online is fading fast. The prices of virtual land, one of the primary products of the Metaverse, dropped 72% last year.
Major players are cutting ties. Chinese tech major, Alibaba, has gutted Yuanjing, its metaverse unit, while entertainment giant Disney axed its metaverse team entirely.
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Reality bites
But it’s at Meta that you can truly witness how real Big Tech’s retreat from the metaverse is.
Reality Labs, which was to be the beating heart of Meta’s vision, combining VR and AR to make the metaverse a reality, has been more of a financial black hole than a technological breakthrough.
Reports have indicated that it quietly buried metaverse plans to shift focus to AI, and that is been asked to cut its spending by 20%.
The financials for Reality Labs, which has shed jobs, make for ugly reading. It bled $4.4 billion in third quarter of 2024 alone and is expected to see losses “increase meaningfully” in the fourth quarter due to “ongoing product development.”
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Not cool enough
The metaverse, a virtual world where people interact through digital avatars aka online extensions of themselves, was tech’s big vision of the future.
A huge amount of money and effort went into turning that Web3 dream into reality, with the market projected to hit $800 billion by 2028. Interlinked with crypto, metaverse saw tokens associated with it clocking in at more than $26 billion.
But despite years of hype around its potential, the metaverse never delivered its killer app — like AI’s ChatGPT moment that made it indispensable. Instead, it’s mostly been a space for gaming and virtual events.
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Who stole its lunch?
Unfortunately for virtual worlds, AI is the shiny new toy Big Tech can’t put down.
Meta, Microsoft, and others are pouring billions into AI, seeing it as the more immediate and lucrative frontier, as Sebastien Borget of The Sandbox, a metaverse platform, puts it.
He says it bluntly: AI levels the playing field for new entrants. And hence companies cannot afford to lose the competitive advantage in AI.
The metaverse has also been a bit of a victim of its own hype, Sandra Helou, group CEO of Metaverse firm MetaMinds, tells MONIIFY.
Many companies jumped into the metaverse without fully understanding how the tech would be used — or any real fix for some of the infrastructure challenges.
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True believers
So, should you delete your avatar? Look, while the metaverse might feel like a dying dream for some, there is still some juice in the space.
Shiba Inu, the memecoin-turned-blockchain ecosystem, just dropped early access to its metaverse, where users can own, trade and develop blockchain-based virtual real estate using SHIB ecosystem tokens.
Indian media brand Shemaroo Entertainment is in the mix too, launching its own on the NEAR blockchain, offering interactive Bollywood content through virtual reality.
And then there’s Brendan Greene — the guy who created the massively popular PUBG: Battlegrounds. He’s cooking up a metaverse project he calls a “3D internet.” No NFTs, no gimmicky land grabs — just worlds built on shared protocols, like websites today.
MetaMinds’ Helou points out that the metaverse is finally finding practical uses, such as for virtual training courses, while Borget still believes in the metaverse’s promise of a vibrant digital world, combining content, tech and product.
But even he admits that widespread adoption won’t happen overnight.
For now, the metaverse is a tech dream searching for its second act — or maybe just its first big hit. Until then, your avatar might just have to keep waiting.
Edited by Amitoj Singh and Ankush Chibber. If you have any tips, ideas or feedback, please get in touch: talk-to-us@moniify.com
