Virtual reality steps up as metaverse struggles to deliver

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The metaverse has seen significant hype over the last few years, enthralling the minds of enthusiasts and investors alike.

From virtual reality (VR) to augmented reality (AR), the metaverse offers it all. However, the hype has fallen short after only three years, with the metaverse failing to retain the attention of the business world.

Defined as a collectively shared virtual space where users can interact, socialize and engage in various activities, the metaverse captured the imagination of technology enthusiasts, investors and futurists alike.

Amid the hype and excitement surrounding the metaverse, financial investments have been substantial, with tech giants like Disney and Meta (formerly known as Facebook) investing heavily to dominate the space.

However, today, the metaverse has failed to reach its potential. As tech journalist Ed Zitron stated in Business Insider, “The metaverse, the once-buzzy technology that promised to allow users to hang out awkwardly in a disorientating video-game-like world, has died after being abandoned by the business world. It was three years old.”

While the demise is evident, it was foreseen from a mile away.

One piece of evidence of the demise of the metaverse, as Zitron put it, was the money Meta lost with its metaverse investments.

Reality Labs, Meta’s virtual and augmented reality research arm, was the most aggressive investor in the field. Since its establishment in 2019, Reality Labs has lost $46.5 billion in metaverse investments. As a result of these losses, Meta reportedly stopped pitching its metaverse to its advisers.

Disney’s restructuring under returning chief executive Bob Chapek saw the metaverse division laid off in 2023, just over a year after its formation, to eliminate $5.5 billion in costs.

Source: Scott Gustin

VR is a different story

The story of VR as we know it today started in 1968, when Ivan Sutherland presented the first head-worn augmented reality display. Gaming companies adopted and developed the idea in the 1980s and 1990s. Established in 2012, Oculus Rift launched a high-quality VR headset for gaming, attracting significant attention to the product and the company itself. In 2014, Facebook acquired Oculus Rift for $2 billion.

The purchase was seven years before Facebook renamed itself Meta, which sparked the metaverse hype. Meta wasn’t alone in its trajectory, either. As part of its belief in the metaverse’s potential, the industry predicted the need for tools that could enhance the metaverse experience for its users.

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In the quest to materialize the metaverse, VR and AR technologies saw significant progress during the boom. They aimed to offer immersive experiences and blur the lines between physical and digital realities.

Meta has invested heavily in both its metaverse and VR technology. While it has been losing a substantial amount in the metaverse field, its VR investments have performed better in comparison.

In 2023, Meta released its VR headset, the Meta Quest 3, sold for $499. One of its main competitors, Apple, also released its headset, Apple Vision Pro, in 2023, which is priced at $3,499.

According to Fortune Business Insights’ VR “Market Research Report” from June 2023, the United States VR market was worth $19.44 billion in 2022, with the potential for significant growth by 2030.

Source: Fortune Business Insights’

There is also significant demand for VR products on the consumer side. A recent survey by KPMG revealed that 61% of adults in the U.S. are willing to pay $200 or more for devices like VR headsets that are used with the metaverse. Moreover, VR’s benefits go beyond the metaverse and gaming, covering a wide range of areas, including healthcare and education.

John Robb, owner of Global Guerrillas Report — a newsletter platform about technology trends — was able to foresee VR’s success as early as 2022, which was during the middle of the metaverse boom.

Claiming the future would be VR-dominated, Robb said, “2040 will feature an AR/VR mix, but it will mostly be AR, with applications applying digital overlays on existing reality. This will roll out as fast as smartphones did, but with many times the impact. It will be central to the work and private life of 3 billion-plus people by 2040. By then a half a billion people will be earning a living from working, selling, etc., in this environment.”

Future of the metaverse and VR

VR technology, which was developed as a mere tool for the metaverse, is not accompanying its mothership in its downfall.

Instead, VR shows great potential for transformative experiences. Innovators and developers are still actively pushing boundaries, using VR and AR to boost productivity, foster creativity and revolutionize collaboration.

Miguel Palencia, founder of Moonland Meta — a Web3 gaming metaverse launching in 2024 — told Cointelegraph that 40 years ago, people thought the video game industry was dead, until “a few smart companies invested in quality products.”

“I don’t think the metaverse concept is dead at all, it’s just waiting for the right team and the right product to come along and define the generic ‘seal of quality.’ This should, in turn, lead legacy game studios to start bringing their IP to the industry.”

However, this new standard for quality metaverses could take a long time to develop, according to Andrey Baral, chief business development officer of CLS Global.

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He told Cointelegraph, “I think that the future of metaverses is bright, however not in the near future. […] We have multiple very interesting metaverses with a growing number of users; however, ideally, it will take about a generation to transition.”

A hybrid application of VR and the metaverse looks promising, especially in work settings. With the rise of remote and flexible work arrangements, the metaverse offers new possibilities for collaboration and productivity. Whether through virtual offices like Gather or simply team meetings hosted using applications like Google Meet, VR has allowed teams to connect and collaborate regardless of geographical boundaries.

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