Is the metaverse dead or does it still remain a dream? In the last 2 months, the future of the metaverse — a collective virtual shared space that merges physical and digital realities, integrating augmented reality (AR), virtual reality (VR), and the internet — has been under intense scrutiny. This comes as leading figures and companies in the tech industry present divergent views on its viability, potential impact, and future course.
According to Business Insider, “The Metaverse, the once-buzzy technology that promised to allow users to hang out awkwardly in a disorientating video-game-like world, has died after being abandoned by the business world. It was three years old.”
Was Zuckerberg prepared or not?
The article continues in analyzing the downfall of Metaverse, blaming CEO Mark Zuckerberg, talking about his inability to describe the Metaverse in any meaningful sense, and how it didn’t manage to climb to the top of the commercial world. How it looked like every business had a Metaverse product available in the months after the Meta announcement, even though it wasn’t immediately clear what it was or why they should.
It concludes that since Mark Zuckerberg never seemed to characterize “the Metaverse” as anything more than a slightly modified version of Facebook with cumbersome hardware and avatars, he never had any genuine interest in it.
Instead of having a clear vision for how human contact will develop in the future, it was merely a means to an elevated share price. And Zuckerberg used his enormous money and influence to rally the whole tech sector, as well as a sizeable section of the American business community, behind this ill-conceived notion.
But why? What could possibly drive a man as rich as Mark Zuckerberg to do that? There was no reason.
The Metaverse is not dead
Tim Sweeney, CEO of Epic Games, is a steadfast advocate of the metaverse’s potential.
This perspective is contrasted sharply by Meta, formerly Facebook, which appears to be shifting its focus away from the metaverse despite being one of its earliest and most enthusiastic proponents.
Meanwhile, tech mogul Bill Gates maintains a more cautious outlook, expressing skepticism about Web3 and the metaverse, while acknowledging the revolutionary potential of AI. This divergence of opinion has sparked a lively debate about the future of the metaverse, raising the question: Is the metaverse really dead, or is it simply evolving?
To Tim Sweeney, the notion of a ‘dead’ metaverse is laughable. Epic Games, the company behind the popular video game Fortnite, has invested significantly in the metaverse. In fact, it has raised a staggering $2 billion from Sony and KIRKBI, the LEGO Group’s holding company, to support its development. The online ‘wake’ held for the metaverse was perhaps more tongue-in-cheek than a genuine farewell. Sweeney’s view is echoed by Sandbox CEO Sebastien Borget, who invites players to share their experiences in the “so-called ‘dead Metaverse'”. Sweeney’s argument is that the metaverse is already a reality, with millions of monthly active users in various virtual world video games such as Fortnite, Minecraft, Roblox, PUBG Mobile, Sandbox, and VRChat.
However, Meta‘s recent moves tell a different story. Less than a year after rebranding from Facebook to signify its dedication to the metaverse, Meta is reportedly no longer pitching the metaverse to advertisers. Instead, it is focusing on AI tools and Reels, its short-form video product. This shift coincides with a series of cost-cutting measures, including laying off more than 20,000 employees over six months. The company’s ‘Year of Efficiency’ sees a move away from its ambitious metaverse dreams, casting a shadow of uncertainty over its future commitment to the concept.
Meta continues to invest in Metaverse
Yet, despite these shifts, Meta has not entirely abandoned its virtual world project. A recent Deloitte study, commissioned by Meta, indicates that the metaverse could potentially contribute as much as $760 billion, or 2.4% to America’s annual GDP by 2035. Indeed, the company’s founder, Mark Zuckerberg, insists that they are not moving away from the metaverse vision, but rather recalibrating their approach to it.
So, what are we to make of these conflicting narratives? The conclusion seems to be that the metaverse is not dead, but rather in a state of evolution. The transition from traditional web platforms to the immersive, 3D metaverse is not going to be swift or straightforward. It is a colossal endeavor that necessitates significant investment, both financially and in terms of research and development.
Moreover, the success of the metaverse hinges on widespread acceptance and adoption. User resistance, regulatory scrutiny, and technological hurdles are all substantial challenges that need to be overcome. In this context, it’s unsurprising that even tech giants like Meta are recalibrating their approach, focusing on immediate revenue generators like AI tools and Reels, while maintaining a long-term interest in the metaverse.
However, its potential benefits are enormous. According to research commissioned by Meta and conducted by Deloitte, the metaverse could contribute up to $3.6 trillion per year to the global GDP by 2035. This isn’t merely about dollars and cents; it’s about opening up new markets, enabling innovative business models, and transforming the way we work, learn, and interact.
The Metaverse and its economic impact
Let’s take a closer look at the economic potential of the metaverse for different regions around the world. In the United States, which is well-positioned to harness its potential and lead its global development, the metaverse could contribute between $402 billion and $760 billion in annual GDP by 2035.
American businesses are already using metaverse technologies to create new revenue streams and improve existing ones, selling virtual versions of their products and leveraging it to market their physical goods with virtual overlays.
They are also exploring operational efficiencies, such as training employees in immersive VR environments and optimizing physical processes through digital twins.
In the European Union, where business adoption rates for technologies like AR and VR are relatively high, the metaverse could contribute an additional €259-€489 billion per year to the region’s GDP by 2035.
European businesses, like their American counterparts, are exploring how they can connect with consumers in a digital environment. Farmers are trialing how metaverse technology can improve production, and automotive manufacturers are developing VR-based systems to design and reconfigure their factories and training systems.
Meanwhile, the Middle East and North Africa are undergoing a journey of economic transformation and digitalization.
The United Arab Emirates (UAE) and Saudi Arabia are investing in metaverse ecosystems. They believe it could bring significant benefits to the region’s economy, with the benefits to Saudi Arabia’s economy potentially reaching $20.2 – $38.1 billion in additional GDP by 2035. In the UAE, those benefits could reach $8.8–$16.7 billion.
Asia Pacific is also a world leader when it comes to the development and adoption of metaverse technologies.
Countries like Japan, Taiwan, and Korea have flourishing VR industry ecosystems. People in these countries are already learning, socializing, purchasing items, gaming, and accessing social services on virtual platforms.
According to an analysis by the Deloitte Centre for the Edge, the impact of the metaverse on regional GDP could be between $0.8 and 1.4 trillion per year by 2035.
In developing markets such as Thailand, India, and Indonesia where VR technology is not yet commonplace, there is a booming creator economy, and they are leading the world with AR technology. The metaverse is creating new marketplaces, new types of businesses, new employment opportunities, and opening up new ways of working in the Asia Pacific.
In conclusion, the metaverse’s future depends on a delicate balance of optimism, pragmatism, and resilience. While the initial hype may have faded, the vision of a collective, immersive, online space remains compelling.
It is a monumental endeavor with significant challenges, but if achieved, it holds the promise of revolutionizing our digital lives and driving significant economic growth. Ultimately, the metaverse is neither dead nor fully alive — it is, much like our understanding of it, evolving. It’s important to remember that this is a marathon, not a sprint, and the finish line is still being drawn.
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