Here’s Why Metaverse Hype Shrinks — While Actual Metaverse Usage Grows

Above: From my January compilation of 800+ metaverse job openings

Mitch Wagner has a good article on Fierce Electronics that helps separate metaverse hype from metaverse reality, and naturally I have much to say on that topic:

So the metaverse is dead, right? Wrong. The hype bubble has collapsed. But the metaverse is growing.

“Metaverse platforms are growing slowly but steadily, and hiring commensurately,” says Wagner James Au…  Metaverse platforms grew by 15 million users year-over-year in the first quarter of 2023, to 520 million monthly active users (MAUs), according to a report from the analyst firm Metaversed. That includes 149 platforms either live or in development, mostly browser- based but with some using virtual reality VR goggles.

And that’s just the prominent platforms with strong usage in the US and Europe, Au notes. It doesn’t include mobile-based Garena Free Fire, mostly played in Southeast Asia and South America, and enjoyed by about 10% of the population of the whole planet—700 million quarterly active users.

520 million MAU is a conservative estimate, by the way, even without including Free Fire and other non-localized platforms. For my upcoming book, I count well over 550 million MAU.

Ironically enough, what we’re seeing now is a mirror image of what occurred in 2008-2010, after a couple years of media hype promoting Second Life as the next big Internet platform:

Reporters finally noticed that Second Life’s user growth was flat, and couldn’t live up to all the bold pronouncements they were making only a year or two beforehand.

Now, reporters are declaring the Metaverse is dead — even while the actual active user base, already massive, keeps steadily growing.

In both cases, the core problem is the media failing to understand the core concept, creating a straw man vaguely derived from it, and then destroying the straw man after it inevitably failed to live up to its own distorted expectations.

This time, the straw man is built on two shaky foundations: Meta and its vision of the Metaverse where most everyone uses Meta’s VR headsets and the web3 evangelist version, where the Metaverse is based on blockchain, NFTs, and crypto. 

Neither have been the case:

• Meta’s Quest headset line has always been a niche product, and as I keep pointing out, standalone VR headsets have never been essential to the Metaverse vision, even in the actual book that defined the concept.
• Web3 has also never been part of the essential Metaverse concept, and nearly every web3-based metaverse platform (with the possible exception of Upland), has failed to gain substantial user traction.

So as the media keeps attacking its own flawed conception of the Metaverse, actual metaverse platforms like Roblox keep thriving, and growing. (I just got an e-mail noting that Roblox’s DAU has grown by nearly 25%, but more on that later.)

I’ve seen this pattern play out before. Superficial evangelists and hypesters may abandon the metaverse industry in droves, followed by Meta itself. But it’s no great loss, as they contributed little of value to the Metaverse anyway. Five years from now, as total metaverse platform use approaches 1 billion, they’ll be back, pretending like they never went away.