Tumbleweed in the metaverse | FT Tech

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Remember the Metaverse? By now we were all supposed to be piloting personal avatars through immersive digital landscapes. But a sudden glut of investor interest has dribbled away. Facebook was so keen on the concept initially that its CEO Mark Zuckerberg renamed the company Meta. Spending $10bn a year to fund his ambition,

he initially planned to hire 10,000 Metaverse workers in the EU alone. Luxury brands dived in, positioning for cash rewards in virtual worlds, helping to send valuations of the Metaverse economy stratospheric. Goldman Sachs reckoned $8tn over the next 20 years. While Citi predicted $13tn. But today, Zuckerberg talks more about AI and even efficiency than he does the Metaverse.

Reality Labs, the division that makes Meta Quest headsets, continues to lose money. It posted an operating loss of $13.7bn last year. And just one-tenth of visitors to its flagship social space, Horizon Workrooms, are return users. After advertising losses and big redundancies, Zuckerberg has been forced to refocus on Meta’s social media apps.

The Metaverse now receives just 20 per cent of company investments. And Zuckerberg’s new text-based service, Threads, targeted at rival X, formerly known as Twitter, seems to have little if anything to do with buttressing the Metaverse.

The malaise has spread. Microsoft canned its Metaverse division just four months after creating it and laid off 100 people. Disney has closed its own Metaverse division, shedding 50 jobs. Confusion remains over what the Metaverse is even supposed to be. It’s beset by technical shortcomings, and apathy is widespread. Forty of organisations are paying no attention to the Metaverse at all.

The virtual real estate platform, Decentraland, was recently valued at $1bn. But virtual land prices have since tumbled. Meta remains bullish, however, investing heavily in augmented reality kit, still hoping to change the way people live and build the next computing platform.

But Apple’s newly released mixed reality headset seems to have upended the Metaverse, introducing a new era of spatial computing and extinguishing what little investor enthusiasm remained less than two years after its dramatic unveiling. For anyone still dodging tumbleweeds in Zuckerberg’s crumbling construct, they may not have long left.