Author /
Alinda Gupta compiled / oneflumen, Centreless
The Emergence of the Metaverse
The emergence of the metaverse has enabled many unimaginable things, shaping future concepts of work, mental health, and influential marketing. However, amidst the booming development of artificial intelligence (AI), the future of the metaverse seems precarious.
When Facebook rebranded itself as “Meta” to signify its new direction and ambitions, it spent billions trying to become synonymous with augmented reality (AR) and virtual reality (VR). However, after suffering a $26 billion loss from this new venture, “Meta” has decided to shift its focus towards the AI sector. This is not surprising, as the recent success of OpenAI’s ChatGPT chatbot has inspired many other companies to follow suit and leverage generative AI technology to expand their businesses.
Meta, Facebook’s parent company, will form a new product team focused on generative artificial intelligence, bringing together various teams within the company to create innovative tools and experiences, integrating this technology across all Meta products. The long-term goal is to develop AI characters that assist users in “multiple ways.” Meta’s founder and CEO Mark Zuckerberg stated this in a Facebook post on February 28.
But what does this mean for the metaverse as a whole?
How the Metaverse is Losing Momentum
When discussing the metaverse, virtual land cannot be overlooked. In the early stages of the metaverse’s development, virtual land could be seen as synonymous with the metaverse itself.
In the metaverse, virtual real estate dominates, and the price of Ethereum directly affects the value of virtual land. However, the volatility of Ethereum’s price has left many buyers and sellers in a difficult position. According to data from WeMeta, this has resulted in a significant drop in the average sale price of virtual land, plummeting from over $11,000 to less than $2,000.
Moreover, in 2022, the sales volume of virtual land in Ethereum-based metaverse projects (such as Sandbox and Decentraland) suffered a severe setback, with their valuations and other key metrics also experiencing significant declines.
In February 2022, the average price of land sold on Decentraland reached a historic peak of $37,200. However, by August 1, its value had fallen to around $5,100. Similarly, the average selling price on Sandbox dropped from approximately $35,500 in January to around $2,800 in August.
The fluctuations in cryptocurrency prices, especially Ethereum, have introduced new levels of uncertainty to the market, leaving investors uncertain about the future of their virtual assets. Additionally, the current metaverse lacks proper infrastructure, governance, and collaboration mechanisms. This may explain why some believe that in its current state, the metaverse is merely a marketing gimmick.
The Potential of AI
In the past three years, generative AI solutions have attracted over $1.7 billion in venture capital, with AI-assisted drug development and AI software coding being the two most funded areas.
As the field of artificial intelligence rapidly evolves, its impact is being felt across various industries, including marketing and media. Leading research and consulting firm Gartner predicts that the use of generative AI in these areas will increase significantly in the coming years.
By 2025, marketing messages sent by large organizations are expected to be automatically generated by artificial intelligence, with this percentage rising from less than 2% in 2022 to over 30%. Furthermore, the influence of generative AI will not stop there. According to Gartner, a major blockbuster film with 90% of its content generated by AI, from text to video, could be released around 2030.
Despite the immense potential of generative AI, it currently faces access limitations. For instance, the ChatGPT mechanism is not open-source, meaning it cannot be publicly utilized. This limitation makes it challenging for other companies to replicate the technology. However, Facebook aims to launch smaller, enterprise-use and optimization-focused AI models, which will help make generative AI more widely available and accessible.
The Death of the Metaverse: Trend or Reality?
While some reports suggest this is the end of the metaverse, others argue that we should not link Meta’s strategic shift to the overall development of the metaverse. For instance, computer scientist Roy Amara proposed Amara’s Law, which points out that humans often misjudge the timing and potential of technological breakthroughs, tending to overestimate their short-term impact while underestimating their long-term potential. This trend has also manifested in skepticism and hype surrounding emerging technologies such as self-driving cars, virtual reality (VR), and augmented reality (AR), even when the internet was once seen as a trend.
Moreover, AI—especially generative AI—may even have the potential to advance the development of the metaverse by creating more compelling environments and characters.
More importantly, some firmly deny that the metaverse will die or lose its popularity. However, as many companies adopt metaverse technologies, this field is likely to thrive. Achieving this will require some structural changes. For instance, VR headsets need to be more affordable, and virtual systems need to perform better in terms of privacy.
Almost every new invention was once a fervent dream—often a frightening one. However, over time, these new technologies have become so integrated into our daily lives that we cannot imagine a day without them. Perhaps this is the fate of the metaverse. If not, then another immersive technological invention will replace it, leaving us to debate whether the metaverse is at dawn or in decline.
