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The Future of the Metaverse

By: Carly Foxx-Boyd    July 7, 2023

Not even two years after the metaverse entered the tech scene and became the topic of conversation among users and businesses alike, and after the hype generated by The Wall Street Journal, the publication giant branded it the “meh-taverse.” Could it be argued that the once buzz-worthy new technology that promised users the ability to hang out in a video game-like alternate universe has died after seemingly being abandoned by the corporate world? It has hardly proven to be Mark Zuckerburg’s golden ticket either. The company formerly known as Facebook recently conducted two rounds of layoffs that impacted thousands of employees.

Does this seemingly doom-and-gloom news mean the metaverse is over before it even truly began? If consumer appetites for innovative and immersive digital experiences are declining, then do early metaverse pioneers look foolish now?

Overpromising and underdelivering

From the moment of its conception, Facebook and Zuckerberg claimed that this alternate world would be the future of the internet and a plethora of untapped potential for ecommerce. Despite all this hype, the metaverse has not proven to lead a prosperous existence. Every single business idea or rosy market projection seems to be built on the vague promises and dreams of some corporate CEO. And when people were finally offered the opportunity to try it out, nobody actually used it.

The metaverse hype and buzz declined even further as the economy slowed and the talk and buzz around AI grew. According to the Business Standard and TechCrunch, Microsoft shuttered its virtual-workspace platform in January 2023, laid off the 100 members of its “industrial metaverse team,” and made a series of cuts to its HoloLens team. Disney shut down its metaverse division in March, and Walmart followed suit by ending its Roblox-based metaverse projects. The billions of dollars invested and the breathless hype around a half-baked concept led to thousands — if not tens of thousands — of people losing their jobs.

But the metaverse was officially pulled off life support when it became clear that Zuckerberg and the company that launched the craze had moved on to bigger and better financial ventures. Zuckerberg proclaimed in a March update that Meta’s “single-largest investment is advancing AI and building it into every one of our products.” Meta’s chief technology officer, Andrew Bosworth, told CNBC in April that he, along with Mark Zuckerberg and the company’s chief product officer, Chris Cox, were now spending most of their time on AI. The company has even stopped pitching the metaverse to advertisers, despite spending more than $100 billion in research and development on its mission to be “metaverse first.”

So, what does this news mean?

We all know how quickly digital behaviors are evolving. Gaming, for example, experienced an explosive growth during the pandemic and is not a new category. Quite the opposite, the once-niche positions are becoming mainstream more and more, and gaming publishers are moving away from events that were once industry standards, like E3, because of their ability to provide scaled storytelling and experiences around their scrolls of content.

Major platforms are evolving to accommodate and welcome gamer audiences. Industry giants like YouTube and Netflix are building out gaming products and recruiting gaming influencers to create content for them, posing an existential challenge to the once-dominant gamer-focused platforms like Twitch and Discord. The solutions require that we separate the original hype from reality. Now, it’s just as important to disentangle the next generation of immersive experiences from “gaming.” Consumer appetites to engage in gaming experiences aren’t going away – 66% of the American population games, according to the Entertainment Software Association.

The task of innovation is to invite and lure audiences to participate and interact in unexpected places and in unexpected ways. The experiences marketers build must unlock new, deeper opportunities to connect with their priority audiences. Addressing real-life business challenges through innovation will always be a smart strategy. Digital innovation has always been on the trajectory toward more immersive, more interactive ways to engage. For the metaverse, Web3, or generative AI, we must focus on the business problems and strategies these tools can solve, as opposed to seeking opportunities to wield innovation for its own sake.

When it comes to the metaverse, advertisers must seek to strike a balance between optimism and caution. While there is certainly still a lot of hype and buzz, it is important to approach it with a critical eye and not get swept up in unrealistic expectations. The key is to approach the metaverse with a balanced and critical mindset.