Less than two years after the metaverse became common parlance, The Wall Street Journal branded it the “meh-taverse.” And the media isn’t alone in turning its back on the once-hyped technology: Disney recently dissolved the team that was developing strategies to monetize the metaverse. And it hasn’t proven to be Meta’s golden ticket, either; the company formerly known as Facebook recently conducted two rounds of layoffs that impacted more than 21,000 people.
Does this doom-and-gloom news mean the metaverse is over before it even truly began? If consumer appetites for innovative and immersive digital experiences are declining, do early metaverse pioneers look foolish now?
The answers require that we separate the original hype—especially around how quickly immersive 3D worlds could be brought into existence—from reality.
A necessary reckoning
You’d be forgiven for interpreting last year’s breathless headlines as a promise that a future vision of the internet, rife with interoperability, open source coding, and seamless transitions between physical and digital reality, was more than futurists’ dreams. Neither the metaverse nor Web3—an internet based on the rails of blockchain technology—could meet the hype cycle, even as that same hype cycle blurred the line between these two concepts. Now, it’s just as important to disentangle next-generation, immersive experiences from “gaming” as it is to separate this kind of marketing execution from trading speculative cryptocurrencies.
But let’s not get caught up in semantics. Consumer appetites to engage in gaming experiences aren’t going away—66% of the American population games, according to the Entertainment Software Association. In short:
- Digital behaviors have rapidly evolved. Gaming—which experienced explosive growth during the pandemic—is not a new category. To the contrary, once-niche titles are now becoming increasingly mainstream, and gaming publishers are moving away from events that were once industry standards, like E3, because of their ability to provide scaled storytelling and experiences around their libraries of content.
- Major platforms are evolving to accommodate and welcome gamer audiences. Mainstream platforms like YouTube and Netflix are building out gaming products and courting influential gamers to create content for them, posing an existential challenge to the once-dominant gamer-focused platforms like Twitch and Discord.
So what’s really happening?
To many observers, the October 2021 rebranding of Facebook’s parent company as Meta kicked off a cycle of metaverse that lasted well into 2022. Some of the recent waning interest in this tech innovation can be attributed to Fortune 100 companies’ struggle to turn metaverse hype into profits for investors akin to what they reaped until U.S. stocks entered a bear market in June 2022. (In Q1 2023 earnings, Mark Zuckerberg confirmed the company’s commitment to its metaverse aspirations.)
But even though the metaverse hasn’t become profitable along a timetable that satisfies stakeholders and investors, the metaverse may still have legs. While Disney laid off its metaverse strategy team, they retained its lead, Mike White, to continue to “connect the physical and digital worlds” of Disney’s intellectual properties. For the world’s largest entertainment company, a short-term staffing decision isn’t a verdict on the metaverse as an idea that could revolutionize its industry.
Last summer, Gartner positioned the metaverse at the “Innovation Trigger” of its hype cycle construct, with an anticipated trajectory to reach the “Plateau of Productivity” within the next ten years. But there’s no telling how long it will take for the hype cycle to truly play out, particularly if Sony and Apple’s hardware updates encourage incremental participation in VR spaces. Sony is also exploring new ways to integrate interoperable drops—otherwise known as NFTs—as gamers’ initial allergic reactions to NFTs are eclipsed by their desire to receive exclusive awards or avatar wearables.
Focus on breakthrough digital experiences, not just the metaverse
We are no longer in a landscape where any mention of “metaverse” will immediately gain traction. However, novel, immersive, breakthrough, pioneering thinking will always get celebratory pickup and coverage.
Digital innovation has always been on the trajectory toward more immersive, more interactive ways to engage. For the metaverse, Web3, or the subject of this year’s innovation headlines, generative AI, we must focus on the business problems and strategies these tools can solve, as opposed to seeking opportunities to wield innovation for its own sake.
Solving business problems through innovation remains a smart strategy. We see luxury brands’ continued investment in immersive gaming spaces as warm introductions to younger and more diverse audiences. Similarly, food-service brands’ introduction of Web3 loyalty mechanics can propel new repeat purchase behaviors and increase brand preference. And as gamified technologies continue to scale in adoption, we will see ever more consumers purchasing virtual goods.
The role of innovation is to invite audiences to participate in unexpected places and in unexpected ways. The buzzwords used to refer to or describe these experiences are not (and have never been) the driver or fuel for future growth. Rather, the experiences marketers build must unlock new, deeper opportunities to connect with their priority audiences.