When Mark Zuckerberg said in November 2021 that he was changing the name of his company from Facebook to Meta, he embraced a digital universe known as the Metaverse.
A month later, Microsoft founder Bill Gates, wrote In two or three years, he believes most virtual meetings will “transition from a two-dimensional grid of video to a metaverse, a 3D space with digital avatars.”
Shortly after, Microsoft announced it was buying video game giant Activision Blizzard for $70 billion, saying the deal would “provide the building blocks for the Metaverse.”
But since then, interest in virtual universes has stalled. Technology investors have turned to new trends such as artificial intelligence. Despite the enthusiasm, some Metaverse projects from companies like Disney and Microsoft have been shut down.
Enter apples. At a global developer conference that begins Monday, the tech giant is expected to unveil its virtual reality hardware product: high-tech goggles that blend the digital and physical worlds.
The company is betting that it can lure consumers with a better mixed-reality product than Meta, whose high-end Quest Pro headset hasn’t sold well, and that it can spark mainstream interest in virtual reality in a way no other company has. The Apple headphones, expected to cost about $3,000, look like ski goggles, according to current and former employees familiar with its development.
Apple has done this before. Eventual successes like the iPod, iPhone, and Apple Watch started as niches and grew into big businesses. But even Apple executives are skeptical about the company’s prospects in virtual reality, which they say may not yet be ready for the mainstream.
Apple declined to comment.
The idea of an immersive, all-encompassing online world made more sense to many investors when people were staying indoors during the height of the pandemic. Metaverse-related startups raised about $664 million in venture capital in the first five months of 2023, down sharply from more than $2.93 billion raised during the same period in 2022, according to data compiled by PitchBook. The drop cuts recent metaverse startup investment to about a quarter of its peak in the first half of 2022, PitchBook said.
“The investment frenzy in the Metaverse has come and gone, and now people are focusing on AI,” said Doug Creutz, an analyst at Cowen & Company. “People who jumped on it because talking about it being a sexy thing have backed off. “
This year, Microsoft shut down a virtual reality world it acquired in 2017 called AltspaceVR. The company also fired some employees who worked on the HoloLens mixed-reality headset and eliminated or reassigned teams that had been working on the Metaverse project to familiarize themselves with the changes, according to a person familiar with the matter.
In a statement, Microsoft said it remained committed to the Metaverse, noting news that it was rolling out 3D avatars for Microsoft Teams meetings.
Disney also fired about 50 employees who had been working on the Metaverse project, according to a person familiar with the matter.about news Microsoft and Disney cuts reported earlier wall street journal.
At Meta, Mr Zuckerberg’s plan to restructure the company around technology centered around the metaverse has been costly. Meta’s hardware division, Reality Labs, including its Oculus headsets, is a big reason for Meta’s recent surge in spending. The unit lost about $4 billion in the first three months of the year.
Mr Zuckerberg cautioned that building the metaverse would be a money-losing proposition with little hope of early payoff.Still, it took a lot of time longer Exceeded his expectations. In recent months, Mr. Zuckerberg and his lieutenants have spent more time talking about Meta’s expertise in artificial intelligence, even as he bristles at the idea that the Metaverse is no longer his focus.
“One way to say it is that we’re somehow moving away from the vision of the metaverse,” he said on a conference call with investors in April. “So I just want to up front that’s not accurate. Over the years, We’ve been focused on AI and the Metaverse, and we’ll continue to focus on both.”
“We’ve always been clear that our metaverse vision is a long-term vision, and nothing has changed. We’re committed to our metaverse vision, and we’re seeing good momentum,” said Meta spokesperson Ashley Zandy.
Thursday, Mr. Zuckerberg to tease A version of the Meta Quest 3, the company’s newest VR headset, will cost $499 and may arrive this year. To date, consumers have spent more than $1.5 billion on apps and games in Meta’s Quest app store.
For Apple, its new headset could be the start of a long-term plan that could eventually lead to more popular virtual reality products like a pair of lightweight glasses.
Some analysts have suggested the company could take an experimental approach, gauging how early adopters use it and then making changes before rolling out future versions to a wider audience. It’s similar to what it did with the Apple Watch. It was originally marketed as a universal companion to the iPhone, but was later redesigned as a fitness gadget.
Despite the decline in interest, many feel it’s too early to dismiss the idea of virtual universes. Companies that had preached the Metaverse before Meta became popular, like Roblox and Epic Games, remain committed to their long-term vision.
Venture capitalist Matthew Ball, who has written a book on the Metaverse, said mainstream attention to the concept after Facebook’s name change has raised questions about how soon people will be in the metaverse. Wacky predictions of time spent in an immersive online world.
“It’s more about poor timing management,” Mr Ball said. “The intense focus on the Metaverse in a short period of time, which some believe exists now or is about to exist, is sure to disappoint a lot of people.”
With tens of millions of participants, user-generated content, and a digital economy, Roblox and Epic Games, which makes battle royale game Fortnite, could offer a more compelling vision of the Metaverse.
Roblox, a platform with millions of games often aimed at kids, had 66.1 million daily active users in the first quarter of 2023, up 22% from the same period last year. Craig Donato, the company’s chief business officer, said Roblox is working to expand into other immersive online experiences, but is nowhere near a full-fledged Metaverse.
“We were very close to innings one or two,” Mr Donato said.
March, Epic Games Releases New Tool The aim is to help Fortnite players create and monetize their own games on the company’s platform, spurring the creation of Fortnite’s online economy — a cornerstone of the Metaverse vision touted by the company’s CEO, Tim Sweeney. Mr Sweeney said mainstream interest in the metaverse attracted people who weren’t really invested in the space.
“Unfortunately, a lot of people are trying to hang on to this trend without actually delivering the goods,” he said. “But if you look at the trend, it continues to grow, and it looks like it continues to grow exponentially.”
Brian Chen and Karen Weiser Contribution report.
