Good morning from Geneva.
With all the ongoing generative A.I. fanfare, we risk forgetting that before there was ChatGPT, there was the metaverse, the three-dimensional iteration of the internet that users could enter via virtual reality headsets.
Even a year ago, the hype was still so big that someone forked over $450,000 to be rapper Snoop Dogg’s neighbor in the “Snoopverse" and Citi estimated the metaverse economy would be worth $13 trillion by 2030, Fortune editor-in-chief Alyson Shontell reminded participants at Fortune's Brainstorm Tech conference this week.
But in the blink of an eye, the boom turned to bust. Meta Inc., which—as its name suggests—went all-in on the metaverse, saw its stock tumble by almost three-quarters in the second half of 2022, partly due to the billions it spent on its metaverse without having significant revenues to back up its big bet. Disney and Microsoft, meanwhile, closed their metaverse departments altogether.
So what does the future hold for the industry?
“The metaverse hype is dead,” Meta’s metaverse chief Vishal Shah acknowledged in his conversation with Shontell at Brainstorm Tech in Park City, Utah, yesterday. His division’s main product, Horizon Worlds, is now focused on user retention, rather than growth, and on building a valuable core offering, rather than a sprawling expansion. The most popular use cases, he said, are in “social,” gaming, and fitness—not business.
Of course, the metaverse, like other technologies that came before it, may just be returning to earth rather than facing outright extinction. Apple announced its premium augmented reality headset “Vision Pro” just last month. Meta too is still investing in its more “democratic” version of the metaverse, Shah said.
But for now at least, much of the tech world seems to have moved on. The debate on regulating A.I. and the newly launched battle between Twitter and Meta’s Threads are the new talk of the town. Threads just yesterday surpassed the 100 million user count, beating a record set by OpenAI’s ChatGPT.
For the rest of us, I would argue the lesson is to focus on the undercurrent, rather than the comings and goings of waves at the surface. The real question for executives is how to keep their business models relevant in the digital age, not whether they should buy a virtual house next to Snoop Dogg’s. For lawmakers, it is how to maintain trust and shared prosperity when this era’s technologies naturally cause the opposite.
More news below.
Peter Vanham
peter.vanham@fortune.com
@petervanham
