Is the Metaverse cancelled?
It all depends on who you ask. On the one hand, industry analysts still see incredible potential in the concept of a new virtual environment for work and play. Researchers suggest global metaverse investment will surpass $1.3 trillion by 2030, with a CAGR of 44.5%.
Studies also suggest there are more than 400 million unique monthly active users leveraging existing metaverse environments. Roblox, Decentraland and similar tools are still attracting significant attention worldwide.
What’s more, market leaders are investing in new tools to help us traverse the metaverse. Apple is diving head-first into the XR market with the Apple Vision Pro. Siemens invested more than a billion in an industrial metaverse hub this July. Plus, Nvidia is exploring new ways to help developers create, run, and manage the metaverse.
But there are some caveats too. In recent months, numerous companies have shelved their metaverse plans. Even Meta seems less passionate about the metaverse than it once was.
Here’s the rundown of what the market looks like today.
Is the Meta Metaverse Cancelled?
Search for “Metaverse cancelled” online, and you’ll find countless reports suggesting Meta has officially killed its Metaverse plans since the start of 2023. Despite numerous claims from the tech giant that they’re still investing in immersive experiences, Meta’s focus seems to have changed.
A short while ago, it seemed like the “Metaverse” was all Meta could talk about. Zuckerberg positioned the concept as the future of the entire company and even renamed Facebook in honor of those ambitions. It seems like references to the Meta Metaverse are few and far between.
In March, Meta’s CEO Mark Zuckerberg shared a note regarding his plans to lay off over 10,000 employees as part of a shift to the company’s “year of efficiency”. This note only mentioned the metaverse twice in other 2000 words.
Though Zuckerberg did say building the metaverse was still “central” to the company’s plans to redefine the future of social connections, the company’s messaging is now focused primarily on AI.
It’s also worth noting that Reality Labs, the XR-focused division of Meta, is facing the same push for efficiency as the rest of the company. The company has cancelled various metaverse-focused projects, such as developing the Meta Portal device.
Additionally, while Meta plans to release the Meta Quest 3 by the end of this year, other XR projects have been sidelined. In July, for instance, Meta stopped developing the “Meta Quest Pro 2”, the upgraded version of its enterprise-focused headset.
Metaverse Cancelled: Major Projects Being Shelved
The Meta Metaverse isn’t the only next-level digital landscape beginning to look like a distant dream. In the last few months, we’ve seen a handful of other reports suggesting trouble in the metaverse.
Microsoft reportedly cancelled its Mixed Reality HoloLens 3 headset earlier this year, after revealing business executives were struggling to agree on a go-to-market strategy for the product. Microsoft has also struggled with its vision for an industrial metaverse solution this year.
However, the company also shared that it would be shifting its focus to another Metaverse project. Microsoft now appears to be investing more heavily in Microsoft Mesh, the cross-platform remote collaboration solution powered by extended reality.
Elsewhere, the news hasn’t been quite as positive. Disney’s plans for a family-friendly metaverse have all but disappeared after the company began laying off crucial members of its extended reality team in March. The brand’s “next generation storytelling” department, championed by CEO Bob Chapek, was cut from the company entirely.
This department was intended to find ways of bringing Disney theme parks to living rooms, using cutting-edge extended reality and next-gen immersive features.
Even Neopets, the retro gaming company which burst back into the spotlight in recent months has apparently cancelled its own metaverse plans. When asked why the Neopets Metaverse was cancelled, the CEO, Dominic Law revealed two insights.
First, according to the company, the Neopets community reacted negatively to the concept of a metaverse, showing very little interest in immersive experiences. Additionally, the brand suggested it had “limited, scarce” resources to work with.
Though the official Neopets Metaverse is cancelled, however, some analysts believe the company will continue to invest in Web 3 technologies, like NFT games.
Are Issues with the XR Market to Blame for Metaverse Blips?
So, why is the metaverse cancelled, or at least appears to be on hiatus for major brands like Meta?
There are a few possible answers to that question. The first is the current state of the economy, and its impact on technology brands. It’s no secret that even the biggest tech vendors have been hit by significant budget cuts and funding issues in recent years.
Layoffs were everywhere during the first few months of 2023, and XR companies have been feeling the pinch too. Even Meta is struggling. Though the tech giant’s revenue has improved in recent months, it was struggling with massive losses at the beginning of the year.
Meta’s quarterly results released in July showed an operating loss of $4 billion for the Reality Labs XR division. This brings the total loss for the division from the last year to more than $13 billion.
Samsung’s revenue also dropped as it entered the XR market this year, falling by around 22%. Even Apple has struggled with financial issues on the path to releasing its spatial computing device.
This all indicates that the XR market is in a state of flux. Issues with supply chains and limited access to technology are still hampering production. Plus, technology companies are struggling to access the right talent to fill their metaverse focused teams.
However, the problems with XR revenue might not be the only reason for the influx of “Metaverse cancelled” reports. After all, many tech giants are still pushing forward, despite potential losses. Even Meta has said it plans on seeing continued operating losses in the future, as a result of increased research and development expenses.
Is the Metaverse Cancelled Because of Customer Trends?
Outside of issues with funding and technology development, changes in customer sentiment and interest might be the reason for many “Metaverse Cancelled” announcements.
As mentioned above, Neopets sees a lack of positive sentiment towards Web3 technologies as a core reason for the failure of its Metaverse vision. Additionally, much of the hype for the metaverse seen in the last couple of years has been side-swept by new tech developments.
Generative AI is quickly becoming the new hot topic among consumers and businesses alike. While countless consumers can’t fully understand what the metaverse is, or what it can provide in terms of value, Generative AI is easier to grasp.
The accessibility of tools like ChatGPT, DALL-E has lead to widespread and rapid adoption of more intelligent tools. Companies are already seeing the impact generative solutions can have on employee productivity and efficiency.
This has pushed companies previously focused on the metaverse to rethink their priorities. Microsoft, for instance, seems to be going all-in on it’s AI innovations with the help of Open AI and the Copilot ecosystem. This leaves very few resources available to continue investing in metaverse tools.
Similarly, Meta has confirmed that AI will be its core focus for the coming year. The company has already debuted generative AI tools. It also announced the development of a top-level product group at Meta, focused on working with generative AI.
While a shift in focus based on technology trends doesn’t necessarily translate to “Metaverse cancelled” for major brands, there will likely be an impact on the marketplace. Even the biggest tech companies need to re-align their priorities from time to time.
Is the Metaverse Over?
So, is the metaverse cancelled?
The jury is still out. It seems clear that various metaverse innovators are struggling right now. Metaverse plans are being put on hold or scrapped entirely. Companies are shifting their focus away from immersive technologies to focus on the next “big thing”. Even customer sentiment is changing.
However, that doesn’t necessarily mean the Metaverse is definitely dead. All the biggest brands, including Microsoft and Meta, are still showing an interest in the metaverse, and new XR innovators are emerging all the time.
The metaverse might not be “cancelled”, right now. However, we could experience a short hiatus in the industry, at least until the market changes again.
