Kirk Klasson

Metaverse or Bust

What’s hot for Christmas this year? Minidrones with HD cameras? Version 14 of a 2007 mobile phone? Wearables that measure your significant other’s libido level? A couple of tons of bituminous coal so you don’t freeze to death? What you probably won’t be getting is a $1500 Meta Quest Headset to immerse yourself in a never ending Horizon World’s adventure. Not you, not your kids, not your neighbors or anybody else that you probably know. In fact, even those purchased with an employee discount can be picked up for half price on eBay. After the holidays, smart shoppers won’t even touch them for pennies on the dollar.

And why is that?

Well, economic circumstances are challenging at the moment. The only people who can afford food and gas either work in the tech industry, investment banking or hedge fund management. Some of the smartest economists in the world are already on record that the only thing that Santa’s gonna bring is an old fashion recession which means the only thing you’re gonna find under the tree are socks and underwear from the discount table at your local big box store.

But there may be more to it than that.

Recently, several news outlets have reported that Meta (formerly know as Facebook) hasn’t met its stated targets in terms of number of active users on its Horizon metaverse platform. Actually, that might be a bit of an understatement. According to inside leaks, Meta is now on target to miss its end of the year number of active users by nearly half from 500k down to 280k. But perhaps more important, it appears that users are abandoning the platform after about 30 days losing nearly 100k in one month alone. Which in terms of the real life metaverse market place would make Meta’s Horizons Platform a distant second to Second Life.

There are likely a number of factors at play here. Covid, the near term driver of remote work, has all but played out. Not that people have returned to the office in droves. They haven’t but for very different reasons. Urban employment centers have become extremely dangerous places and companies are taking measures to address this issue allowing greater flexibility with respect to on-prem participation. But most organization aren’t providing employees a $1500 headset to make it happen. And nor will they any time soon. Instead companies headquartered in CA, IL and NY are heading for the hills in TX, TN and SC.

Next, early adopters, aka Gamers, the sun starved mole-rats who prefer virtual worlds to the real one, have not flocked to the Horizon platform as anticipated and those that have didn’t stick around (see Metaverse Schmetaverse – August 2021 ). As predicted, in order for an active user to inhabit a virtual world you need compelling content, and right now there just isn’t any, at least not as compelling as the violence, mayhem and sexual innuendo that you can find in your average game environment or New York City morning commute. And that, too, isn’t likely to change anytime soon.

Back in June of this year, McKinsey issued a report entitled “Value Creation in the Metaverse” where they predicted that, all up-all in, the market value of the Metaverse would reach $5T by 2030. By just about any measure this would be quite a feat given that the Gaming market is only expected to be $32.9B in 2027 according to Statista with a current Annual Revenue Per User of about $21.93. Over the next ten years demographers expect the world wide population to actually shrink with China and the EU bordering on a collapse of population replacement. So to hit McKinsey’s number multiple generations of yet unborn active users will need to subscribe to the metaverse. But given Meta’s penchant for finding millions and millions of bogus active users, this shouldn’t be a problem (see The Curse of the Walled Garden – January 2018).

In August of this year Gartner provided an update to its Hype Cycle for Emerging Tech and as you might expect “Metaverse” was included in the tightly bunched group of newbies climbing the nascent slope of the curve. Given how relatively recent this phenomenon is you might forgive some ambiguity when it comes to exactly what the term metaverse means. At this point, even by polling active subscribers on existing platforms, it might be difficult to determine a consensus as to what a full featured metaverse environment encompasses.

But that’s not the salient feature of this graph. What matters is that even Gartner doesn’t believe that “Metaverse”, whatever that might eventually mean, won’t reach the plateau of productivity for another ten years. Technologies that achieve stable productivity are the basis of businesses that actually realize sustainable profitability. And ten years is five lifetimes in the tech industry.

And Meta doesn’t have that long to become relevant.


Graphic courtesy of SuZQ Art and Images all other images, statistics, illustrations and citations, etc. derived and included under fair use/royalty free provisions.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Insights on Technology and Strategy