The inability to define the Metaverse in any meaningful way didn’t get in the way of its ascension to the top of the business world. In the months following the Meta announcement, it seemed that every company had a Metaverse product on offer, despite it not being obvious what it was or why they should.
Microsoft CEO Satya Nadella would say at the company’s 2021 Ignite Conference that he couldn’t “overstate how much of a breakthrough” the Metaverse was for his company, the industry, and the world. Roblox, an online game platform that has existed since 2004, rode the Metaverse hype wave to an initial public offering and a $41 billion valuation.
Of course, the cryptocurrency industry took the ball and ran with it: The people behind the Bored Ape Yacht Club NFT company conned the press into believing that uploading someone’s digital monkey pictures into VR would be the key to “master the Metaverse.” Other crypto pumpers even successfully convinced people that digital land in the Metaverse would be the next frontier of real-estate investment. Even businesses that seemed to have little to do with tech jumped on board. Walmart joined the Metaverse. Disney joined the Metaverse.
Companies’ rush to get into the game led Wall Street investors, consultants, and analysts to try to one up each other’s projections for the Metaverse’s growth. The consulting firm Gartner claimed that 25% of people would spend at least one hour a day in the Metaverse by 2026.
The Wall Street Journal said the Metaverse would change the way we work forever. The global consulting firm McKinsey predicted that the Metaverse could generate up to “$5 trillion in value,” adding that around 95% of business leaders expected the Metaverse to “positively impact their industry” within five to 10 years. Not to be outdone, Citi put out a massive report that declared the Metaverse would be a $13 trillion opportunity.
A brutal downfall
In spite of all this hype, the Metaverse did not lead a healthy life. Every single business idea or rosy market projection was built on the vague promises of a single CEO. And when people were actually offered the opportunity to try it out, nobody actually used the Metaverse.
Decentraland, the most well-funded, decentralized, crypto-based Metaverse product (effectively a wonky online world you can “walk” around), only had around 38 daily active users in its “$1.3 billion ecosystem.” Decentraland would dispute this number, claiming that it had 8,000 daily active users — but that’s still only a fraction of the number of people playing large online games like “Fortnite.”
Meta’s much-heralded efforts similarly struggled: By October 2022, Mashable reported that Horizon Worlds had less than 200,000 monthly active users — dramatically short of the 500,000 target Meta had set for the end of 2022. The Wall Street Journal reported that only about 9% of user-created worlds were visited by more than 50 players, and The Verge said that it was so buggy that even Meta employees eschewed it. Despite the might of a then-trillion-dollar company, Meta could not convince people to use the product it had staked its future on.
The Metaverse fell seriously ill as the economy slowed and the hype around generative AI grew. Microsoft shuttered its virtual-workspace platform AltSpaceVR in January 2023, laid off the 100 members of its “industrial metaverse team,” and made a series of cuts to its HoloLens team. Disney shuttered its Metaverse division in March, and Walmart followed suit by ending its Roblox-based Metaverse projects. The billions of dollars invested and the breathless hype around a half-baked concept led to thousands — if not tens of thousands — of people losing their jobs.
But the Metaverse was officially pulled off life support when it became clear that Zuckerberg and the company that launched the craze had moved on to greener financial pastures. Zuckerberg declared in a March update that Meta’s “single largest investment is advancing AI and building it into every one of our products.”
Meta’s chief technology officer, Andrew Bosworth, told CNBC in April that he, along with Mark Zuckerberg and the company’s chief product officer, Chris Cox, were now spending most of their time on AI. The company has even stopped pitching the Metaverse to advertisers, despite spending more than $100 billion in research and development on its mission to be “Metaverse first.” While Zuckerberg may suggest that developing games for the Quest headsets is some sort of investment, the writing is on the wall: Meta is done with the Metaverse.
Did anyone learn their lesson?
While the idea of virtual worlds or collective online experiences may live on in some form, the Capital-M Metaverse is dead. It was preceded in death by a long line of tech fads like Web3 and Google Glass. It is survived by newfangled ideas like the aforementioned generative AI and the self-driving car. Despite this long lineage of disappointment, let’s be clear: The death of the Metaverse should be remembered as arguably one of the most historic failures in tech history.
I do not believe that Mark Zuckerberg ever had any real interest in “the Metaverse,” because he never seemed to define it beyond a slightly tweaked Facebook with avatars and cumbersome hardware. It was the means to an increased share price, rather than any real vision for the future of human interaction. And Zuckerberg used his outsize wealth and power to get the whole of the tech industry and a good portion of the American business world into line behind this half-baked idea.
The fact that Mark Zuckerberg has clearly stepped away from the Metaverse is a damning indictment of everyone who followed him, and anyone who still considers him a visionary tech leader. It should also be the cause for some serious reflection among the venture-capital community, which recklessly followed Zuckerberg into blowing billions of dollars on a hype cycle founded on the flimsiest possible press-release language. In a just world, Mark Zuckerberg should be fired as CEO of Meta (in the real world, this is actually impossible).
Zuckerberg misled everyone, burned tens of billions of dollars, convinced an industry of followers to submit to his quixotic obsession, and then killed it the second that another idea started to interest Wall Street. There is no reason that a man who has overseen the layoffs of tens of thousands of people should run a major company. There is no future for Meta with Mark Zuckerberg at the helm: It will stagnate, and then it will die and follow the Metaverse into the proverbial grave.
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