Whatever happened to the metaverse?
I read an article this week headlined, “Mark Zuckerberg Quietly Buries the Metaverse”.
The chat around one of the hottest topics in 2021 and 2022 has gone decidedly quiet and the change in sentiment has hit one of the world’s biggest companies, Meta. So, what does the future hold for the metaverse and one of its biggest proponents, Mark Zuckerberg?
One giant hype-fuelled rebrand
The hype that heralded the arrival of the metaverse was heady and extreme.
You’ll remember the weeks and months when you couldn’t open a paper or website without seeing how immersive virtual worlds – accessed via VR technology – were going to change everything in our world. Much like for all things digital asset and web3 focused in late 2021, the only way was up.
There had been discussions on the subject of the metaverse for decades in tech and science fiction, but the ultimate endorsement came in October 2021 when one of the world’s largest companies, Facebook, led by one of the world’s most visionary entrepreneurs, Mark Zuckerberg, declared that the company would rebrand. Such was Zuck’s belief in the future of the tech that he renamed his company Meta.
“I expect people will transition from seeing us primarily as a social media company to seeing us as a metaverse company,” Zuckerberg said. And as all things metaverse-related rocketed in interest and value, Meta’s early move looked like a brilliant one.
“Year of Efficiency”
But a few months on from the rebrand, the crypto winter set in, and interest in many future technologies, such as the metaverse, digital assets and web3, quickly waned.
Of course, the macro backdrop didn’t help, and Meta has been at the centre of the tech sell off that has taken place in concurrence with war, rising inflation and rates. Meta has had to lay off tens of thousands of staff, and reprioritise, focusing on 2023 being a “year of efficiency” (i.e. cost cutting) rather than moonshots.
So strong has the pivot been that Zuckerberg recently said that the metaverse is no longer “the majority of what we’re doing” and its plan to hire 10,000 people in Europe to work on Metaverse-focused projects has been quietly put on the back burner.
Shareholders had good reason to demand change. In 2021 and 2022, Reality Labs, the division housing metaverse projects, recorded $24bn of losses. Even the world’s richest companies can’t ignore losses like that, and they’re currently scrambling to find efficiencies to plug the gap.
Don’t believe the hype
Of course, Meta wasn’t alone in its enthusiasm for the new technology, and there is a chance we may look back in decades to come and see Zuckerberg as a bold, first mover yet again.
However, passing judgement today, the huge amount of resources they’ve poured into developing software and hardware looks errant. The re-brand looks rash, too.
Personally, I’ve always been sceptical about the concept of the metaverse. Whilst I recognise the promise of the metaverse holds much more than just simple virtual worlds, the tech has been in development for decades in one form or another and has never hit the mainstream. The explosion in investment in 2021 was one of the most clear-cut bubbles I’ve seen.
Around this time, I thought it was also amusing to see how many large organisations were splashing the cash on metaverse projects. The lesson there is that large organisations are generally not a good indicator as to whether a future technology is going to take off or not.
A lot of money was invested – it’s just a shame that fundamental market economics (eg. demand - do consumers actually want the metaverse?) don’t conform to media hype.
The outlook for Zuck
More than at any other point in its existence, the outlook for Facebook/Meta looks unclear.
Seen by many as an “old person’s” social network, with TikTok and Snapchat capturing the attention of GenZ, the purpose of the company is now up for debate. Despite Zuckerberg’s prediction, I don’t think we’ll be looking upon it as a “metaverse company” anytime soon.
Now the metaverse is dead (or dormant) what does Zuckerberg have planned? Well, the next bright shiny thing in tech, of course, namely, AI, with Zuckerberg declaring last month: “We're creating a new top-level product group at Meta focused on generative AI to turbocharge our work in this area.” Onto the next big investment theme…
Of course, Zuckerberg is a visionary, but given how the foray into the metaverse crashed and burned, the pivot to AI feels a little desperate. But then again, he and his company are just moving with the times, adapting to the (AI obsessed) world around them. So stand by for another rebrand?
