The Metaverse Hype Cycle
The metaverse concept gained significant traction in 2021, driven by hefty industry investments in enabling technologies, the growth of online video games, breakthroughs in AI, and the acceleration of remote work and socializing due to the COVID-19 pandemic.
The rebranding of Facebook to Meta and the announcement of a $10 billion investment in virtual experiences further fueled the hype, with enthusiasts predicting that the metaverse would become the world's new computing interface. Even Bill Gates jumped on the bandwagon, predicting that meetings would move from screens to the metaverse within a few years.
However, as we now know, the hype was premature, and the metaverse has not yet lived up to the lofty expectations. The reality is that building a fully immersive and interactive metaverse is a complex and challenging task, requiring significant advancements in technologies such as VR, AR, and AI.
Despite the hype cycle, the metaverse concept remains an exciting and promising area of innovation, with many potential applications and use cases. As the technology continues to evolve and mature, we can expect to see more practical and meaningful implementations of the metaverse in various industries and aspects of our lives.
Note: The metaverse hype cycle serves as a reminder that technological innovation often follows a predictable pattern, with periods of intense excitement and hype followed by a reality check and a more gradual pace of progress.
What happened to the metaverse? Is it dead?
In late 2022, about the time ChatGPT captured the world's attention, the metaverse bubble popped. Financial losses ensued, notably Meta's $13.7 billion operational loss in its Reality Labs division for 2022 as a whole. Microsoft laid off employees from its Mixed Reality Toolkit and HoloLens teams, cryptocurrency collapsed and consumers, eager to return to their pre-COVID lives, were not clamoring for extended reality devices.
The losses at Meta's Reality Labs unit increased to $16.1 billion in 2023, and Disney cut its metaverse division. Media reports proclaimed the metaverse was dead. The backlash to metaverse overmarketing included industry repudiation of the term itself. In its 2024 debut of the Apple Vision Pro headset, Apple, for example, took pains to disassociate the device from the metaverse, calling it instead an entrée to spatial computing.
Why metaverse technology is still important for businesses
Although the vision of a rapid gestation of fully-realized virtual worlds where humans work, shop and socialize from the comfort of their couches has dimmed, the metaverse isn't dead. Components of it are gaining traction as graphics and capabilities for virtual and augmented reality, bolstered by AI, rapidly improve. The development of new technology such as eye tracking, which uses sensors to monitor and record eye movements, promises to make visual experiences more engaging.
In the area known as the industrial metaverse, epitomized by the Nvidia Omniverse platform, companies are building digital twins to design and monitor physical objects. Businesses are also using virtual reality (VR) to train employees and applying augmented reality (AR) to overlay information on real-world objects, helping their employees work better.
In e-commerce, customers are clamoring for virtual products that "tie back to the physical world," according to a June 2023 McKinsey report, which stated that the market for metaverse commerce alone -- "from home and food to fitness and apparel" -- could drive "$5 trillion in value creation by 2030." A report from data-gathering company Statista pegs the metaverse market at $74.4 billion in 2024 and predicts that by 2030, at an annual growth of rate of 38%, it will reach $507.8 billion with over 2.6 billion users.
A metaverse guide for the enterprise
What are companies to make of a technology phenomenon that's hot one day, cold the next and in the throes of rebranding itself? TechTarget's guide to the metaverse breaks down where this rapidly evolving set of technologies stands today and where it's headed.
Topics covered include the various technologies and platforms that support the metaverse, ongoing challenges, real-world use cases and the metaverse's impact on the future of work. Readers can follow the hyperlinks to other TechTarget articles for deeper dives into these and other topics, as well as to our in-depth definitions of key metaverse terms and novel techniques such as digital threads and Gaussian splatting.