Where Does the Metaverse Stand Following The 2022 Bear Market

In Brief

• According to Google Trends, interest in the Metaverse has flatlined since peaking in January of this year.
• Recent lay-offs at Meta have compounded fears of an industry failing to make its case to potential users.
• However, multiple survey data look promising for Metaverse enthusiasts, showing an interest in Metaverse use cases.

The future of the Metaverse looks uncertain. According to Google Trends, interest in the Metaverse hit an all-time high in January. Interest in the term crashed in the second quarter of this year and has plateaued since.

With so many billions of dollars in this industry, BeInCrypto asks where this industry is going, and where we are after a year of market drama and Metaverse hype.

The term “Metaverse” first appeared in the 1992 novel “Snow Crash” by Neal Stephenson. Initially, it was a science fiction term to describe a virtual reality where users would escape from the dystopian world outside. Since then, the term has moved from fiction to fact.

However, recent reports of Metaverse adoption have been mixed. An article by CoinDesk – using data from DappRadar – reported that there were only 38 “active users” on Decentraland within a 24-hour period. The Sandbox reportedly had 522 users at the same time.

Metaverse platforms have pushed back. Pointing out that DappRadar’s numbers only include the unique wallet address interaction with each platform’s smart contract. It does not include users who do not use their in-game token. Many use the Metaverse as a solely social platform.

So where do we stand?

Metaverse Beyond The Hype
The concept of a metaverse built on the blockchain is far from the accepted future of interactive media. According to experts, it is not guaranteed to become the dominant medium. AR and VR have competed better for the attention of technologists, futurists, and academics.

So, is the blockchain a necessity for the future of the Metaverse?

“Whether or not cryptocurrencies are crucial to the metaverse is largely a definitional question,” says Nils Pihl, co-founder, and CEO of Auki Labs, which specialize in virtual and augmented reality. “If you’ve defined the metaverse as a spatial version of the internet where identity and ownership are managed by blockchain, then clearly it is crucial – but that feels like a cheap trick.”

“If blockchain had never been invented, the Metaverse could (and would) still be envisioned and built towards. Neal Stephenson coined the term long before blockchain was even a concept, and he was far from the only visionary describing this kind of cyberdelic future.”

Reflecting on the lull in interest, he says: “The hype was entirely based on people hoping to make a profit, and not to inhabit these virtual worlds. Everyone was betting that someone else would be interested. Build something that people want to use, not something that people hope to sell.”

A Mixed Picture For The Metaverse
The lay-off of over 11,000 Meta employees last week has raised alarm bells across the tech sector. With preexisting and widespread skepticism about the Metaverse, people are again questioning the viability of a business model based on the as-yet ill-defined concept.

For others, the concept of “true ownership” remains a key reason for a blockchain-based Metaverse.

“As our digital lives become a greater part of who we are as individuals, then true ownership of digital assets will be crucial to the long-term success of any metaverse,” says John Burris, Chief Strategy Officer for VCOIN at IMVU. “Blockchain technology is what enables true ownership.”

Collectively, we’re in the very early days of metaverse development and in time I think we’ll see the industry gain more traction… When the turning point does happen we’ll all see it. In the meantime, we and other Web3 innovators will continue to build the infrastructure needed to have a robust, dynamic experience for users.”

“Most of the entrepreneurs and innovators we interact with on a regular basis are not relying on Meta to move this space forward. While their difficulties are unfortunate for Meta, it’s not likely to stop the builders in Web3 from continuing to build.”

So What Do Surveys Say? It’s Not Entirely Clear
Whilst competing visions remain, an October 2022 survey of Metaverse “enthusiasts” by Sitecore showed a keen interest in many aspects of these new digital worlds. Including new experiences, escaping reality, online festivals, and concerts, meeting new people and virtually testing new products and services.

Again, this is a survey of enthusiasts. And many of these user experiences are inherent to the definition of a Metaverse. But there are still hurdles to cross.

An earlier survey of the general public by Wunderman Thompson Intelligence also found similar enthusiasm, but it also discovered that only 15% of respondents “knew what the metaverse was and could explain it to someone else”. This is a very worrying metric for the industry.

A November survey by TELUS International found that 65% of respondents believe the Metaverse would be “mainstream” within five years. More importantly for businesses, respondents said they would pay a 5% premium for a product or service that was supported by a quality metaverse experience, with nearly a quarter saying they would spend up to 10% more.

How these survey results meet with reality is unclear. But by multiple metrics, there is still enthusiasm for the Metaverse when people ask. Whether that will transfer into actual use is another question.

Trends For The Future
There are bright spots to look to going forward. Gartner has identified six trends driving the use of Metaverse over the next three to five years. They include Metaverse gaming – which Gartner predicts will grow by 25%.

Others include “Spatial computing” which can digitally enhance real-life objects and landscapes by adding unseen information.

In order to preserve its natural heritage, Tuvalu plans to upload its entire country to the metaverse. Their Foreign Minister, Simon Kofe, said “As our land disappears we have no choice but to become the world’s first digital nation.”

One thing is clear: we still need a clearer idea of what the Metaverse is and how exactly it will function. For Web3 natives and advocates of decentralization, the blockchain will often be critical. Whether or not that dream is fulfilled is a tale for another time.

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