Was the metaverse doomed from the get-go?

The marketing industry is obsessed with shiny new things. And it is willing to drop them like a bag of cold sick once the hype cycle moves on to the next big thing. So is there only room for one dominant tech story at a time, or was the metaverse doomed from the get-go? Is it already ‘over’ or was it simply hijacked by snake oil salesmen making a fast buck before quickly moving on to shill the Next Big Thing (see also voice search, 5G, the internet of things and 3D printing).

In his seminal book on the topic, Matthew Ball described the full potential of this brave new world. No one else writes with such lucidity and clear-eyed calm about the changes afoot based on observed realities, without resorting to hype or hubris. It is a book about the past as much as the future. If the concept of the metaverse changes things even half as much as Ball predicts, it’s clearly worth investing time in understanding now.

But Ball is also very clear that the story of the metaverse will develop across decades not days. We just don’t yet have the computational power, bandwidth and latency required to have a persistent 3D world that millions of players can play simultaneously in real time.

Meanwhile, it’s worth remembering that AI has gotten to this point in the hype cycle, going through multiple winters of discontent. We should expect many more peaks of triumphant hype and troughs of disillusionment, fatal missteps and hard-fought battles.

Amy Charlotte Kean’s incisive analysis of the potential threats and need for regulation in these spaces is a warning well worth heeding. She cites Jennifer Haley’s 2013 play, The Nether, as an example to vividly bring the moral ambiguity of a virtual world without real-world consequences to bear. The mistakes made when we ushered in Web 2.0 without considering the human capacity for vile exploitation are in real danger of being repeated with its successor.

Countless client presentations, consultant reports and investor decks in 2021 and ’22 treated this hypothetical, likely future as if it were here already. Then there was the lazy journalism that reported on basic stunts involving QR codes and a microsite as proof it was taking off.

The metaverse discourse became one of promoting faith over facts. Some proclamations could simply be put down to over-enthusiasm about the potential of the technology. But when advocacy becomes akin to zealotry, it attracts bad-faith actors willing to exploit the hype.

Anyone who dared criticize or interrogate their claims were treated with disdain akin to heresy, Luddites who should ‘have fun staying poor’. Those seeking evidence of the recent arrival of the next stage of the internet were dismissed by strawmen arguments reminding us that ‘people dismissed the internet itself as a passing fad once’. People were forced to pick sides. You were either a metaverse maximalist or a scathing skeptic.

Instead of a sensible discussion about the potential, calmly assessing the implications for communications and wider society, we were faced with nonsense PR proclamations with little resemblance to the compelling vision articulated by Ball and others.

As James Whatley, CSO at Diva Agency, highlighted, The metaverse had been co-opted by hype merchants describing everything from mobile gaming to QR codes and AR, which was some feat for a purely hypothetical concept.

The hype became self-defeating. By being close-minded to criticism and concern amid the rush for glory, they undermined the very cause they evangelized. Of course, this level of hubris was impossible to sustain without concrete results.

Meta’s metaverse-focused Reality Labs division lost $13.7bn across 2022 and $4.3bn in the last financial quarter alone. In the blockchain arena, Web3 is Going Just Great reported gleefully on collapsing virtual property prices and NFT rug-pulls. Branded wastelands were launched in Decentraland with visitors in the literal tens. Most of last year’s metaverse reveals were underwhelming because the underlying technology wasn’t yet capable of provoking awe.

Contrast this with the astonishing breakthroughs achieved by the likes of ChatGPT and MidJourney in recent months and it’s no wonder that Zuckerberg has quietly dropped the metaverse discussion, turning the company’s attention and resources to the more tangible opportunity in AI.

Now that the dust has settled on the hype, we can see who the true builders of what might still eventually evolve to become the metaverse might be.

Epic Games is arguably making the hardest running in developing the virtual spaces of the future. Last year it introduced a new open-source programming language for developers called Verse with a focus on interoperability between platforms, one of the key tenets of a functioning metaverse. It also recently announced a fairer ecosystem for creators in Fortnite, Creator Economy 2.0, which will share 40% of Fortnite’s net revenues with publishers of all eligible islands.

Its preview of Unreal Engine’s 5.2 showed us incredible realist new substrate material systems and procedural tools for developers to render lifelike graphics in games. And the crux of it all? Epic is working with Lego to create a kid-friendly immersive platform that enables creativity and exploration safely. The likes of Roblox, Fortnite and Minecraft remain hugely popular gaming platforms with over 420m monthly global players between them.

Although they aren’t likely to ever be interoperable, they represent a stepping-stone in the right direction to the metaverse. They command huge numbers of players and are available to play cross-device (i.e. you can log in on a PlayStation, PC, tablet or mobile and enjoy roughly the same experience).

Another key tenet of the metaverse, digital ownership, is booming on these platforms, with three-quarters of Roblox players spending money on virtual fashion and over 50% changing their avatar’s outfit weekly.

Their success is also emblematic of a profound generational behavior shift. Tim Sweeney, CEO of Epic Games, has long predicted that playing in 3D environments would overtake video consumption. For many young people that future is already here.

Gen Alpha, those born after 2010, is growing up with some of the most significant changes in media habits in decades. Ofcom’s 2022 report into children’s media habits and attitudes found that six in 10 children aged three to 17 played online games, rising to three-quarters of 12–17-year-olds.

Over half of UK and US kids between nine and 12 regularly play Roblox, and it’s no coincidence that their core users are the iPad native generation. The genie isn’t likely to go back into the bottle. What is less clear is what they will graduate into playing once they reach adulthood.

Roblox recently introduced a new tier of age-gating for content, immersive ads, generative AI tools for creators and new social features as it moved to signal that older audiences could enjoy experiences specifically tailored to them.

Elsewhere, Netflix is investing billions into R&D in the gaming space, launching 40 games in 2023, with a further 70 in development. Starbucks has reimagined the NFT as a token-based loyalty scheme linked to exclusive rewards and experiences through its Starbucks Odyssey program, while Spotify has been testing token-based playlists with NFT partners.

Gaming remains a vastly underused tool for brand-building as well as activation. The metaverse hype just helped put the spotlight on an existing entertainment behemoth.

Ironically, AI is enabling advances in the generative rendering of virtual worlds and natural language interactions, which may bring the metaverse into view faster than we expect.

Simon Harwood is head of strategy at agency the7stars.