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Will the metaverse meet the same fate as 3D TVs and VR glasses? Disney’s decision to pull the plug on the entire metaverse division suggests the worst. What is the future for the metaverse?

The metaverse is without a doubt one of the most popular terms of recent years. Mark Zuckerberg even found it so interesting that he subsumed his companies (Facebook and WhatsApp, among others) into an umbrella organization called Meta. Even at corporate IT events we attended, a keynote or session was not complete without someone mentioning the metaverse. In concrete terms, however, little happened; it remained mostly vistas and generalities.

The above sentiment now seems to be percolating through the industry. We hear a lot less about the metaverse in 2023 than in previous years. Actually, since Facebook’s name change to Meta, it has only gone downhill, so to speak. There was also a growing realization that the metaverse as it is today is still very much like Virtual Reality (VR). As it happens, VR was and still is another example of something that was very much praised to the skies (and can certainly look impressive). The practical usefulness of it in many areas, however, is debatable. In that respect, Augmented Reality (AR) is a lot more promising, especially in business environments.

Disney has seen enough of the metaverse

The metaverse has some primary use cases. One is the ability to enter a virtual world without having to physically go anywhere. We have seen examples of entire stores you could go to in the metaverse. The idea is that you can then virtually walk through aisles and along shelves. This gives you a better overview of what’s available in a store. It is something you can’t do as well in a webshop. For now, however, it does not come close to physically being in a store and actually holding the products in your hands. Smelling a product is obviously not an option either. This is not to say that this will never be possible, but it will take some time to get there.

A second use case that immediately comes to mind for the metaverse is around entertainment. Wouldn’t it be nice if movies and series became more interactive? That you, the viewer, really become part of the action. That’s what Disney wanted to set up when it created the special metaverse division. It wasn’t a big division of the company (about 50 employees), but it did have its own SVP, whose job it was to make sure that Disney played a significant role. In itself, this was a logical move amid the hype surrounding metaverse, because Disney obviously has a huge range of content that, in theory at least, would allow for very cool things with respect to metaverse.

However, practice turns out to be more challenging for Disney than theory. Today, it announced that the company is pulling the plug on its metaverse division. This decision is part of a larger round of layoffs that will see some 7,000 employees lose their jobs.

Reality check for metaverse

The end of the metaverse division, by the way, does not mean that Disney has lost all faith in developments in the field. CEO Bob Iger, who recently took over from Bob Chapek at Disney, at least seems to still see a future in it. He recently invested in Genies, a company that makes it possible to create avatars for use in metaverse applications. He also serves on its board.

So Disney’s decision to pull the plug on the metaverse division does not mean that it has given up on the metaverse as a whole. Rather, it is a reality check. The metaverse is nowhere near what it should be but what has been promised for years. Meta has been investing billions in Oculus for several years, for example, but end users don’t seem particularly hot for it yet. It also has a clear gaming angle, just as VR had and has. That doesn’t appeal to everyone either.

If there is very little return on investment, and an organization has to resize, as is the case at Disney, a metaverse division is pretty high on the list to cut. With about 50 employees, it didn’t represent much in terms of size within a huge company like Disney anyway, of course. So one can also wonder how badly they wanted this to be a success. Perhaps it was also more of a trial balloon for Disney.

Does the metaverse have a future?

Toward the future, by the way, the metaverse will become a reality, we estimate. It will just come about a lot slower than many players in the market want. That’s how it always goes with new technologies. There is a great temptation when a new technology backfires to immediately claim that it will not work at all. But that is not justified. We just shouldn’t expect miracles in the short term. In the longer term, however, it can lead to major changes.

In fact, a professor named Amara reportedly once devised a law for the above phenomenon. This law goes by the name of Amara’s Law these days. It is not as popular as that of the recently deceased Gordon Moore, but also very valuable. It states that we tend to overestimate the impact of technology in the short term, but underestimate it in the longer term. That’s good to keep in mind. No doubt we are going to hear a lot more about the metaverse. Perhaps not under that name and with a different approach. But the technology around interacting with the digital world will only advance.

Also read: Microsoft plans to add 3D avatars to Teams