Metaverse Falters as Business Interest Wanes, Virtual Reality Thrives Regardless
Summary:
The much-hyped metaverse, a combined virtual and augmented reality universe, has failed to retain the business world's attention, falling short of its anticipated potential. Defining events include Meta's (formerly Facebook) loss of $46.5 billion in metaverse investments and Disney's 2023 division layoff that cut $5.5 billion in costs. However, the story around virtual reality (VR), developed initially as a metaverse tool, is one of success and growth. The VR market was valued at $19.44 billion in 2022, and despite the decline of the metaverse, its incorporation with VR technology may offer promising opportunities for remote work and productivity.
Over the past few years, there's been massive excitement around the concept of the metaverse, a combined virtual and augmented reality universe where users can interact, partake in various activities, and socialize. However, after just three years, the buzz seems to have fizzled out, with the metaverse failing to hold onto the attention of the corporate world.
The metaverse had once captured the collective fascination of tech enthusiasts, investors, and forward-thinkers alike. Big players like Disney and Meta (previously known as Facebook) invested significant amounts in the metaverse, boosting expectations for its success. Despite the initial flurry, the metaverse appears to have fallen short of its anticipated potential. As put by tech journalist Ed Zitron in Business Insider, the once-adored technology failed to maintain the interest of businesses.
Signs of the decline were apparent, Zitron cited Meta's substantial financial loss in metaverse investments as evidence. Reality Labs, Meta's research arm dedicated to virtual and augmented reality, has lost a staggering $46.5 billion in metaverse investments since its creation in 2019. Following this financial setback, Meta reportedly ceased promoting its metaverse to advisors.
In a similar vein, Disney, under the leadership of returned CEO Bob Chapek, laid off its entire metaverse division in 2023, a little over a year after its establishment, resulting in the elimination of $5.5 billion in costs.
Although the story of the metaverse may be one of disappointment, the narrative around virtual reality (VR) tells a different tale. The first head-worn augmented reality display was introduced by Ivan Sutherland in 1968, but it wasn't until the 1980s and 90s that the gaming industry embraced and evolved the concept. Oculus Rift, developed in 2012, brought a high-level VR headset to the gaming market and soon captured major attention; Facebook bought the company for $2 billion in 2014.
The industry foresaw the necessity of tools to enhance user experiences within the metaverse. During its peak, massive strides were made in VR and AR technology development to provide immersive experiences merging physical and digital realities. Despite hefty losses in the metaverse sector, Meta's VR investments have seen reasonable performance. In 2023, Meta unveiled its VR headset, Meta Quest 3, retailing at $499. The US VR market stood at $19.44 billion in 2022, with forecasts for significant expansion by 2030.
A KPMG study also revealed a substantial consumer demand for VR products, with 61% of US adults willing to spend $200 or more on devices like VR headsets for use within the metaverse. VR's scope extends beyond the metaverse and gaming, permeating various sectors such as healthcare and education.
Notably, John Robb of Global Guerrillas Report predicted VR's success as early as 2022 amidst the metaverse hype. He proposed that by 2040, an AR/VR mix would primarily drive reality, with digital overlays being prominent and encompassing the professional and personal lives of over 3 billion people. Half a billion people might earn a living operating within this space.
While the metaverse may be experiencing a rough patch, VR, initially developed as a tool for the metaverse, is shining brightly and shows tremendous potential. As remote and flexible work becomes commonplace, the combination of VR and the metaverse may create exciting possibilities for team collaboration and productivity.
Published At
4/7/2024 6:37:00 PM
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