The Metaverse Well Runs Dry

The once-thunderous stampede into the consumer metaverse has given way to crickets, according to the latest investment data from Crunchbase on Tuesday. Based on its numbers, the well of venture capital funding for metaverse startups — which soared in 2021 and 2022 — dried up in 2023. In fact, in terms of U.S. investments that broke $100 million or more, the grand total was zero.

Not that these environments are completely dead. The database service spotted at least some life in the enterprise metaverse, stating that “the largest late-stage venture round in the space last year was an $82 million Series D for Augmedics, a developer of augmented reality image guidance technology for surgery.”

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But that hardly compares to the glamorous proposition touted by the likes of Meta — which so far has already lost tens of billions on the tech and, still failing to draw people into its Horizon Worlds metaverse, is reportedly shifting priorities to artificial intelligence.

Naturally, this market isn’t about a single technology, but a variety of techs and experiences spanning augmented reality, virtual reality and more, and it’s tied deeply to the gaming world. The latter industry, which had been facing supply chain disruptions, delayed titles and post-pandemic behavior changes, was rocked by a series of layoffs in 2023 across Unity, Epic Games, Microsoft and many others last year. Analytics firm Newzoo once predicted that this market would break $203 billion in 2022, but ultimately pegged 2023 global gaming revenue at roughly $183 billion.


Apple’s introduction of the Vision Pro put a spotlight on augmented and mixed reality last year, but it’s not clear whether it will last. The device, which opens for preorders this week and ships on Feb. 2, isn’t actually in customers’ hands yet. But ahead of the launch, the company hoped to amp up the Vision Pro’s appeal by announcing a new service called Apple Immersive Video on Tuesday, in addition to new viewing experiences in Disney+ using content from popular franchises, such as “The Avengers” and “Star Wars.”

Of course, Apple never uses the word “metaverse” when discussing the Vision Pro, and it’s not alone. Metaverse builders have been telling WWD that, although they’re still deeply committed to the concept, the label itself is played out and should be retired. In retail terms, that means brands and platforms are more apt to discuss virtual commerce, immersive shopping and 3D stores, including digital, physical and combined “phygital” goods, but not the dreaded “m” word.

Throughout the past year, platforms like Decentraland, Over and The Sandbox insisted that fashion brands were still committed to exploring the virtual terrain, but agreed that it needs a new name. So did Evelyn Mora, chief executive officer and founder of Vlge. She told WWD in June that the word is officially over, but the spatial computing concept it represents isn’t. “I think we can come up with different terminologies.”

Apparently, these environments are in their Fight Club phase of development, where the most important rule for metaverse initiatives is not to talk about the metaverse.

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