Metaverse future seems farther away than what experts thought in 2020

Ten years ago, a tech company took a swing at creating new ways to be online and failed miserably in convincing its users to embrace it in their daily lives. The company was Google and the product was Google Glass. Glass was meant to liberate people from using their smartphones. Google Glass failed as users found it dorky and socially destructible.

History repeated and the users rejected the core premise of Metaverse as the method of virtual meetups, virtual workplace concepts, and living a VR (virtual reality) life through corporate-gated, expensive, and uncomfortable headgear. Andrew Bosworth CTO and Head of Reality Labs at Meta published a detailed blog last December showing Meta’s belief in the VR future. However, he had forgotten that the last time the corporate giant requested customers to wear a glass — users had recoiled.

My thoughts have been clear on Metaverse. In my blog “Meta (Facebook) Problems – Part 1: The Metaverse” I stated:

I have been a long proponent that the Metaverse will succeed in-game life. For me all other Metaverse’s fall short on promises. The Pandemic proved we cannot be caged. The more we are caged, the more we want to escape and experience the world. Going to Japan is ok, but being physically present is what I want. The economy is telling us, how quickly people switched from spending on goods and virtual life to services (travel, meeting people, going to offices, etc).

Not just Meta but other Metaverse companies, according to me, had missed the simple philosophical concept known as “Boorstin’s consumption community”. In simple terms, it states that in the modern era of high mobility, people look not only to the neighborhood as a basis for feelings of the community but also to the communality of consumption behavior (e.g., drinking beer, meetups, etc.). Metaverse is a twist on Boorstin’s concepts. It is an artificially manufactured location, which can be entertaining enough to visit but one which cannot offer human connections as it advertises.

Three key aspects of Metaverse from 2020 to Present

Metaverse took center stage in 2020-22 when social media giant Facebook decided to rebrand itself as Meta. Snow Crash, a novel by Neal Stephenson, became a sudden hit. Neal also became a futurist. I want to look at the progress that has happened in the metaverse since. Is Metaverse living the growth hype it had created during the pandemic?

1. Catch me if you can – Technology is not yet here

Even before Facebook become Meta, the development in extended reality (XR), virtual reality (VR), or Augmented reality (AR) had started (actually sometime around 2010). The problem for all the companies invested in bringing an alternate reality via headgear or other means had proved much more difficult than they had anticipated. Alternate reality has become a “catch me if you can” problem to develop from a technology perspective. What seemed plausible 9 years ago in 2016 to build normal-looking glasses by 2023, is now another 9 years away. Apple, which once targeted to launch its AR glasses in 2023, pushed its launch to 2025 and now has delayed the project indefinitely.

It’s not that growth has not happened in the last few years but it has been limited to industrial use cases such as civil engineering or industrial design or gaming.

2. Gaming in the virtual world has seen substantial growth

Meta Quest 2 has sold an estimated 20M units since November 2020. This is comparable to Sony’s Playstation 5 and Microsoft’s Xbox sales.

Source: Jack Soslow Twitter

— Jack Soslow (@JackSoslow) December” target=”_blank” rel=”noreferrer noopener”>

— Jack Soslow (@JackSoslow) December” target=”_blank” rel=”noreferrer noopener”>2021 was the year of VR, and I have one stat to show you why: This year, Oculus has sold more headsets than Microsoft did Xboxs. This marks the beginning of ARVR’s predominance. A thread on ARVRs growth, use-cases, and future below:

— Jack Soslow (@JackSoslow) December” target=”_blank” rel=”noreferrer noopener”>12:35 PM ∙ Dec 16, 20212,917Likes814Retweets

Gaming as I have said previously appears to be a solid business model and use case for metaverse and alternate realities. The transition to the virtual world will accelerate as the current generation of digital natives gain more authentic virtual world experiences. There is real money to be made via virtual experience in games. Big brands such as Nike and Louis Vitton have metaverse strategies. Advertisements and in-game purchases are where the progress is the most.

VR game revenue, based on estimates of a Newzoo report, will reach $3.2B by 2024, which is a staggering CAGR of 44% over a six-year period.

3. Sudden shift toward AI

Meta which went full force in building the metaverse future has decided to put a break on metaverse development. Soon after the name change to Meta, Meta saw a plunge in its stock price as investors and shareholders could not fathom the expense of reality labs.

Losses across the board of the industry have convinced big tech giants that AI technology has more potential in the near term. ChatGPT integration with Bing and the launch of Bard has put enormous pressure on other big players to come up with an AI strategy of their own.

Every company loves to have a healthy relationship with wall street. Meta not only has to compete with TikTok but with OpenAI’s competitors too. Gone are the days to build NFTs or metaverse’s. More investment is coming towards building reel recommendations, advertisement measuring tools, and adding large machine learning models, and features into messaging and automated campaigns.

Three main reasons why consumers are not buying the Metaverse Universe yet.

  1. Absence of Product Market Fit (PMF) features in the headset world. Like Apple sold its user’s music, phone, and internet. XR has failed to find that PMF. There was never a guarantee that XR will replace existing devices in its category but where there is a huge market gap is the use cases of an alternate reality. Technology becomes big when it supports as an alternative. Like iPhone along with the phone supported the internet and music.
  2. Inflation and future economic concerns have for sure delayed the adoption of the technology, AR and VR headsets, which can be used to access the metaverse. The earnings of the chip sector show slow demand by consumers in buying gadgets. The question at hand is, after the economic headwinds subside, could the metaverse satisfy our cognitive need to separate ourselves from our physical beings?
  3. The philosophical aspect of human emotions cannot be kept aside when talking about technology adoption. Our life is an experience and emotions take a big part in that experience. Let us look at the use case below that defeat the purpose of emotional experience and thus limits metaverse adoption.

Use Case: Return of Office – Metaverse failed to deliver a meaningful social experience

The biggest use case that was presented during COIVD was to enable people to work virtually using their avatars and experience the joys of the physical workplace. Further, Return to Office (RTO) which in late 2022 seemed inevitable is now being challenged by big tech bosses. Amazon, Disney, and Starbucks have mandates to come back to the office citing productivity and cultural reasons. 54% of the Fortune 100 companies have mandated at least 1-3 visits per week (hybrid work model) to the office and 32% have mandated full return to the office.

Apart from culture and productivity, there is multiple research showing the impact of camera fatigue on our cognition. Human connections are established with emotional, relational, and well-established trust between co-workers. Metaverse has failed to deliver the promise of a meaningful social experience.

There are a plethora of alternatives available to support remote or hybrid workers.

Future of Metaverse and Concluding Thoughts

One thing is for sure the AI race has put the Metaverse future farther away. Possibly, it was already away considering the technological landscape development in the last 5 years. Having said this, XR is entering a rapid development stage similar to smartphones. Next-generation hardware is being built, buzzy applications are under development and some great hardware products have been launched. We are pioneering near-eye display technology, interaction technology, network transmission, and computing.

To bring a technology revolution we need a generational shift and the upcoming generation is getting hooked to the XR devices.

Gen Z and Gen Alphas are already growing up in the technology driven enviornment. 55% of Roblox’s DAU are under the age of 13. These young consumers are hard to reach via traditional marketing channels, even on social media. So I won’t be surprised to see consumer brands and big tech doubling down on all things metaverse.

Still, the biggest lesson for futurists and technologists in the Metaverse space is to find the PMF. Answers to simple questions like for whom are we building this product, how will they use it, and to what end. I am pretty sure that there are smart people who have asked this question a million times and their problem is bigger that just one use case. It is to tackle multiple use cases at the same time. We can easily find answers for a single-use case like gaming or healthcare or industry or the social world. The problem comes when you build a technology for all of these use cases at once. We had similar segregation in phones until 7-8 years ago. Blackberry had a professional use case while iPhone was more personal. Now there is no Blackberry and iPhone is the answer to all our problems. It will be interesting to see who will be the Blackberry and iPhone of the metaverse world.

BTW, we have a similar war in social media between Instagram, Tiktok, and YouTube and we are yet to see a clear winner. Maybe we don’t need a single winner (just to keep the market competitive).


Nikhil Varshney

Nikhil Varshney is a product manager by profession and technologist by nature. Through this blog he wants to showcase disruption in the technology world. The idea is to break the concept into simple layman words to help everyone understand the basics