Move over metaverse, it's AI's turn in the spotlight

It seems that metaverse has been dethroned by AI. It might even be relegated to the dustbin of tech ideas like 3D Television and the MiniDisc. Or perhaps, it might be sidelined into the world of gaming and entertainment, where it began.

While the companies that invested in metaverse insist it is still part of their long-term plans.

What is metaverse?

The metaverse is an immersive virtual reality environment that allows humans to interact and collaborate. Where users have complete autonomy.

The key benefits to users include:

1. Expanding their social network.
2. Learning from simulated experiences.
3. The ability to express themselves with unique avatars and digital artwork.
4. Entertainment.

The weakness of the metaverse is that each of these benefits can be found in the real world. The "hook" with the metaverse was a hypothesis that post-COVID humanity would lack the need/ability/desire to interact face-to-face. While the Metaverse is cool, it's unclear what problem it solves.

• We have lots of social communication/networking apps.
• We can create digital twins of physical objects in simulators.
• Photoshop and similar tools are phenomenal for creating digital art.
• We have games and entertainment on many devices that don't require wearing a helmet or visor.

Do we need all of these use cases fulfilled by a single universal app? Can a universal app to it better than all the specialized applications we have at our disposal? I'm not sure.

Why do I think it might be getting relegated?

News from Meta

Mark Zuckerberg appears to have bowed to shareholder pressure.

In November 2022, when Meta announced layoffs, Zuckerberg said the metaverse was a “high-priority growth area.”

More recently, in March 2023, he positioned the metaverse as just one of a number of investments. He also said, “Our single largest investment is in advancing AI and building it into every one of our products. We have the infrastructure to do this at unprecedented scale and I think the experiences it enables will be amazing.”

Microsoft Downgrades Metaverse Project

Microsoft first formed the Industrial Metaverse Core team in October 2022 to work with clients in health care, retail financial services and energy, among other industries. The aim was to build software interfaces that could be used to drive and improve other metaverse-related projects.

In February, Microsoft cut team members from its industrial metaverse project as part of a broader move cutting off 10,000 jobs, which was around 4.5% of its workforce.

Tencent De-prioritizes Metaverse

Accoring to Reuters, in February Tencent abandoned plans to develop virtual reality hardware as a sobering economic outlook prompts the Chinese tech giant to cut costs and headcount at its metaverse unit.

Republic Cancels $75 Million Metaverse Fund

Republic is the third-largest equity crowdfunding portal in the U.S. and the owner of the largest U.K. portal, Seedrs.

In March of 2021, they launched the “Realm Metaverse Real Estate" fund available exclusively to a handful of accredited investors. It was incredibly popular and maxed out the entire $75 million reservation max in a very short time.

Then with the increased regulatory scrutiny caused by recent crypto exchange failures, the offering was cancelled.

“Based on the feedback we received from the SEC as well as other regulatory events that have transpired since we began this process, we no longer see a path forward for this offering. Unfortunately, that means that, as of now, the offering will be cancelled...We are working on making the necessary adjustments to eventually bring a similar offering to market.”

Google Trends

A search on GoogleTrends reveals that the metaverse never had as much traction as AI, and, since November 2022, AI is blowing up!

Careful! When people get this excited, the Scam-startups often begin to emerge.

Summary

Like blockchain, metaverse is cool tech searching for a problem to solve.

While metaverses could become as ubiquitous as smartphones, the version we are working on today might be the Palm Pilot or Blackberry in this comparison. Investing in apps for Blackberry devices didn't give many businesses a leg up in the app store battles on Android and Apple.

Likewise, unless there is a clear business case for trying a metaverse solution, most companies might want to wait and see how the metaverse tool unfolds. At the end of the day, metaverses are tools.

Most likely, the metaverse will be developed to maturity by gaming companies for entertainment before it's ready for everyday business uses.