The metaverse loses steam

Hype around the metaverse has cooled, but it hasn’t disappeared.

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The Future. Glitchy tech, expensive hardware, and consumer belt-tightening have killed any hope that the next iteration of the Internet will be profitable anytime soon. As more tech giants see a quicker return on AI investment, they’ll continue to cut jobs and abandon projects deemed nonessential especially those in the metaverse. 

Not living in a simulation
Unlike AI, which can be used and leveraged now, the metaverse isn’t expected to reach critical mass for a while, so companies are putting it on the back burner.

  • Meta’s Mark Zuckerberg talked more about AI on an earnings call in February than the actual metaverse. The company’s flagship app, Horizon Worlds, struggled to attract and retain users within the first year after its rebranding. Sales of its Quest 2 VR headsets also fell in the last quarter.
  • Microsoft recently shuttered AltSpaceVR, a social VR platform it acquired in 2017. Its work on AR headsets has allegedly been plagued with issues, and the company has since restructured the HoloLens team and trimmed its budget.
  • Disney just eliminated the department that was developing its metaverse strategies under Bog Iger’s restructuring plan.

Expectation vs. reality
Hype around the metaverse has cooled, but it hasn’t disappeared.

Decentraland, which saw a 25% decline in active users from November 2022 to January 2023, is seeing an uptick this week from Metaverse Fashion Week, according to DCL Metrics.

And as Zuckerberg promised last month, “the two major technological waves driving our road map are AI today and, over the longer term, the metaverse.” 

Right on.

Kait Cunniff

Kait is a Chicago-raised, LA-based writer and NYU film grad. She created an anthology TV series for Refinery29 and worked as a development executive for John Wells Productions, Jon M. Chu, and Paramount Pictures. Her favorite color is orange.


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