Metaverse seen by consumers as unimpressive
Despite high revenue projections, the metaverse fails to win consumer interest.
The metaverse is currently grappling with consumer disinterest and various challenges that hinder its growth as it failed to impress a majority of consumers, leading to a notable drop in user numbers across several platforms.
According to Rupantar Guha, Project Manager of Thematic Intelligence Team at Globaldata, the metaverse has initially projected to soar to $400 billion by 2030 from $48 billion in 2020, and the primary reason behind the dwindling consumer interest is the metaverse's confusing nature.
“So from our point of view, most consumers are unimpressed by the metaverse and this is evident across different platforms,” Guha said, “There is some evidence of different reports which suggests that many users do not return to the horizon world after the novelty factor has worn off.”
With no standard definition and various types under development, Guha said that the concept remains elusive to many. The high-end device requirements for certain applications pose another barrier, as they are often beyond the affordability of interested users.
He added that the metaverse experiences during its hype period largely revolved around basic games and social media, leading to a dearth of compelling content. This lack of engaging offerings, combined with postponed projects by major tech companies and concerns over privacy and safety, have led to what Guha describes as a 'Metaverse winter' in 2023.
“As a general user or a layman, it is difficult to understand what is an open-source metaverse. What high-end devices are required for what kind of applications and even in certain cases, high-end devices are beyond the affordability of many interested users,” he explained.
Guha said that privacy and security concerns are significant obstacles in the metaverse's path. The technologies that underpin the metaverse, such as augmented reality (AR) and virtual reality (VR), are seen as potentially harmful due to their intrusive data collection capabilities.
He mentioned that these technologies can generate and process substantial amounts of personal data, including biometric data, raising serious privacy concerns. Additionally, safety issues like virtual sexual assaults and the protection of children on these platforms are pressing concerns that require urgent and effective moderation.
“Much more must be done, particularly because the metaverse is not mainstream yet. So metaverse developers must view moderating behavior as foundational given that the harmful actions will only increase as more consumers sign up to the platforms,” he said.
Despite these challenges, the metaverse's projected growth to $400 billion by 2030 hinges on the maturity of underlying technologies and the development of new, engaging use cases. Guha emphasized that technologies like AR, VR, artificial intelligence (AI), cloud computing, and blockchain are crucial for driving the metaverse's growth.
He also projected that investments in these technologies over the next five years will focus on developing immersive metaverse experiences and platforms. AI, in particular, is expected to play a vital role in creating interactive and engaging virtual worlds and avatars.
Blockchain technology is also seen as a foundational element, supporting the growth of Web 3.0 companies, non-fungible tokens (NFTs), and cryptocurrencies. It is anticipated to attract significant investments from startups worldwide.