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The Metaverse: an immersive virtual world where we can interact with each other via smartphones, PCs, special glasses or VR headsets. A digital world that until recently had a huge buzz and excitement about the opportunities it could have brought to both businesses and consumers.
The Metaverse came with a variety of investment and monetization opportunities where users could purchase a wide variety of digital goods and services for their avatars and their own virtual experiences. Ranging from branded accessories to cars in virtual stores and even being able to buy virtual land. The NBA’s Brooklyn Nets made sports history as the first professional sports team to broadcast a game in the metaverse, which they call the “fresh.”
Big early bets have also been placed on the Metaverse. Meta has spent eye-watering amounts of money on its metaverse game. Reality Labs, the division within Meta that houses Metaverse projects, recorded cumulative losses of nearly $24 billion for 2021 and 2022.
Related: What Is The Metaverse And Why Is It Important For Entrepreneurs?
Not as popular as expected
But just as quickly as the hype around the Metaverse built (virtually at the same time that Mark Zuckerberg was making huge announcements about Facebook’s future being connected to an immersive 3D world and renaming the company to Meta), interest was also rising. off. Evidence of this can be seen by looking at Google’s search traffic for the Metaverse, which declined significantly in recent months, returning to pre-announcement levels.
Over the course of a few years, tech and entertainment giants invested heavily in building this virtual world, only to discover that most of us don’t have much of an appetite for the Metaverse. It seems that we are much more attached to reality than technology leaders first thought. Retail and air travel statistics confirm that we are returning to the real world after the Covid-19 lockdowns. Most people still don’t understand what the Metaverse is, how it works, or what it means to them, which, given the massive investment and media attention this space has received, could be counted as a pretty big failure.
Meta has been actively downsizing its virtual world business. disney And Microsoft both are closing their Metaverse chapters. Apple seems to have all but given up on its virtual reality headset, while Tinder has announced it will abandon its plans for dating in the virtual world.
What was once a potentially exciting business and investment opportunity has become a horribly expensive gamble that so far seems to have almost failed. The Metaverse looks set to turn into a major corporate meltdown, at least in the short term, with billions of dollars in investment at risk and reputations tarnished.
Technology innovators and leaders tend to think in terms of the hype cycle: the rollercoaster ride from concept to widespread adoption. For now, it appears huge sums of investor money have been spent on a technology whose potential has yet to be realized – and may never be.
More recently, Mark Zuckerberg made an announcement to the market about Meta’s renewed focus on AI, which could likely be a sign that he’s quietly killing the Metaverse project and walking away from the huge investments he’s made in this technology. And while Zuckerberg has pointed out that the Metaverse is a long-term investment for Meta — and has promised to tone down the Metaverse rhetoric — this gamble increasingly looks like an example of corporate hubris.
Related: Why Your Business Should Prepare for the Metaverse
The metaverse is out and AI is in
Generative AI has stolen the thunder of the Metaverse. The real-world application of OpenAI’s ChatGPT is hard to compete with right now, and with good reason. It has immediate and very real and meaningful applications that can be immensely helpful to individuals and businesses. It has a meaningful impact on the bottom line of businesses around the world and is not speculative like the Metaverse.
AI also goes way beyond ChatGPT. It can currently be divided into four areas:
- Automated intelligence: Automates manual routine and non-routine tasks.
- Assisted Intelligence: Helps people perform certain tasks faster and sometimes better.
- Increased intelligence: Helps people make better decisions.
- Autonomous intelligence: Automates decision-making processes without human input.
Whether it’s machine learning, smart applications and devices, digital assistants or autonomous vehicles, AI has a very real reach in the global economy, now and in the future, helping it avoid becoming a fad. As a result, it is seen as a safer and less risky investment bet.
What needs to change for the Metaverse to recover?
For the Metaverse to have any chance of success at some point in the future, consumer education must be central. Solve the mystery surrounding the virtual world and its applications for both consumers and businesses.
The magnitude of the challenge should not be underestimated. At its best, from a user experience perspective, the Metaverse requires hyper-realistic 3D rendering technology that would be offered through normal glasses. This virtual world is simply too early to make any real impact at this point, and is therefore currently seen as a dangerously speculative and risky investment.
The Metaverse isn’t about to die on the vine overnight. In time, we will no longer be asked to spend our time in virtual worlds with wacky avatars just chatting with friends or hanging out on some digital land we bought. Virtual spaces will become much more natural and realistic over time. And that’s the crucial ingredient: time.
I think with its evolution, we’ll see it being adopted more broadly, maybe in a more limited and targeted way — probably for short bursts, that is, really immersive experiences like product launches, concerts, meetings, education and training, socializing, and so on. much more , rather than the imprecise or unrealistic concept that we will somehow spend much of our waking days in a virtual world.
Related: 5 metaverse trends that will shape the next decade
Is the Metaverse dead?
An investment in the Metaverse is only as valuable as the demand for the technologies involved. When the hype was at its peak, the value of an investment (albeit a risky one) in the virtual world had to be debated, but when that hype dries up and the gamblers leave, that investment soon becomes worthless.
While Meta has confirmed that it remains a long-term focus, and large companies such as Siemens, Proctor and Gamble and others are using Metaverse technology for various applications related to their business, no one has yet brought that magic application or experience to the table as of yet, probably because the hardware devices necessary to achieve this do not yet exist.
So is the Metaverse dead? I do not think so. Not yet anyway. It’s too early to make that call. It’s not that the real world is back and the online world is gone, but that the two will run parallel. It’s not that the online universe will disappear, but rather that it may have reached its limit – for now. If you’re into significant risk-based investing, have a passion for state-of-the-art technology, and place bets that are wildly speculative, there’s probably an angle for you to explore in the Metaverse, but get advice and proceed very carefully.