Rumors of the death of the metaverse have been greatly exaggerated

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As meta recently released more than 11,000 employees in November 2022, then another 10,000 In March 2023, some tech industry observers concluded that it was a nail in the coffin for the metaverse.

But before we lower the metaverse coffin Let’s remember why Mark Zuckerberg, CEO of Meta, turned to the Metaverse in the first place. It offers vital context to current events and throws them in a different light.

Contrary to popular belief, the Decline of Meta (the parent company of Facebook, Instagram and WhatsApp) did not grow out of its investment in Zuckerberg’s vision for the future. Meta’s stock plunge was tied to its legacy investments in social media platforms, whose lifeblood — the ability to track users and their data — was being choked off by market forces beyond its control.

A bottleneck came into effect in April 2021 when Apple introduced changes to it Ad Tracking Policy. In short, Apple’s “App Tracking Transparency” feature gave users a clear choice about whether to allow a company to track them or their data across different apps and websites.


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If a user didn’t give that permission, Facebook effectively lost the ability to target an ad and measure its impact. The new rules bit you $10 billion piece from Meta’s advertising business. That represents nearly 25% of Meta’s net income in 2021.

Facebook was aware of its vulnerability to such policy changes. As an advertising-based company, Facebook did not own the hardware platform on which its products were based. It also didn’t own the operating systems and app stores its apps ran on. It was thus subject to the whims of companies like Apple and Google.

Long before 2021, Facebook held talks with Facebook for several years to resolve the issue Apple via an ad-free, subscription-based version of Facebook. The deal would have given Apple 30% of Facebook’s revenue on the Apple platform, but negotiations fell through.

The pivotal point

Six months after Apple’s privacy change, Zuckerberg steered Facebook all the way to the left, renamed it Meta, and hit the ground running on the Metaverse, fueled by spending billions of dollars on R&D and product development.

The company had been positioning itself for this self-renewal for years. In 2012, Facebook launched its own company Open App Store. To own the hardware platform, the company bought the VR headset maker in 2014 oculus. The moves gave Facebook more power to control the fate of its own apps and profit from sales of other apps, much like Apple.

The wisdom of taking self-destructive action in anticipation of market inflection points is common in the tech industry. Equally well known are the dangers of not doing so. Look no further than companies like Blockbuster, Kodak, MySpace, and Palm Pilot—once household names turned tales to warn about for their lack of innovation. Meta did what it had to.

With all the speculation about the demise of the metaverse, two important points tend to get lost. First and most obvious is meta and the metaverse not the same. Even if Meta eventually perished, the Metaverse would be – a shared, stubbornand an open experience characterized by virtual and augmented 3D worlds – is far larger than any single company.

Second, tipping points can take a long time to unfold, and we humans often mistime them. Roy Amara, a Stanford University computer scientist and longtime director of the Institute for the Future, coined a “law” for this trend. Amara’s law states that we tend to overestimate the impact of a new technology in the short term but underestimate it in the long term. The law has much in common with Gartner’s hype cycle for new technologies.

Examples of Amara’s law abound. Think of self-driving vehicles and VR/AR, both of which have been criticized as overrated and unlikely to deliver on their promises. This trend is nothing new. There were even those who believed that the Internet was nothing more than one fad.

Based on Amara’s Law, one could argue that those who insisted that the Metaverse would change our daily lives in the near future overestimated its short-term effects.

There is also evidence that those who explain this metaverse is dead, underestimating its impact in the long run. To use Gartner’s words, naysayers have simply slipped from “the peak of inflated expectations” to the “trough of disillusionment.” But this bottom is just that – a temporary drop until the metaverse hits the “Plateau of Productivity”.

Numerous technology trends point to the inevitable opportunity for the metaverse. For example:

  • Two out of three people on earth will be on the internet.
  • The number of mobile devices is exploding, averaging 3.6 per person.
  • GPUs that didn’t exist 25 years ago are dramatically changing the rendering capabilities of these devices.

The metaverse is not limited to wearable technology. GPU-powered smart devices can render beautiful 3D images and connect to cloud-enabled virtual content, putting the metaverse both before our eyes and at our fingertips. The question will be less about technology or access and more about our willingness to participate.

Will we participate in virtual worlds?

The pandemic has accelerated the creation and normalization of virtual worlds and virtual economies. Online gambling, for example, is now one of the fastest growing industries in the world, with sales estimated at over $196 billion. Gartner predicts that by 2026, one in four people will spend an hour a day working, learning, shopping and socializing in a shared virtual environment. And some posit that the industrial metaverse — how we design, manufacture, and interact with physical objects virtually — could be a… 100 billion dollars market by 2030.

So will we participate? The answer seems to be a resounding and ultimate yes.

All of this suggests that the rumors of the Metaverse’s death have been greatly exaggerated. Like previous iterations of computing and networking—the mainframe age, personal computing and the Internet, and the mobile and cloud era—this next metaverse paradigm shift will take time. And that’s good news for investors, because the best time to invest in future technologies is before they exist.

Doug Griffin is a managing partner at Spartial.


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