Will AI-powered next generation metaverse make the comeback

Initial excitement notwithstanding, doubts have emerged about the metaverse’s viability. The question on many minds is whether it has truly faded away, as suggested by some futurists and tech enthusiasts.

Mark Zuckerberg’s enthusiasm for the metaverse in 2021 aimed to create a more interconnected world, merging virtual and physical experiences. The rebranding of Facebook to Meta was a clear commitment to championing this new frontier, promising opportunities for social interactions, gaming, virtual commerce, and more. However, the metaverse’s current reality has fallen short of these promises.

Among the companies experiencing setbacks in the metaverse race, Meta stands out as a significant loser. A Google search for ‘loss from the metaverse’ today predominantly features Meta in the headlines. The company’s Reality Labs, focusing on the metaverse, reported a substantial $4.8 billion operating loss in Q4, contributing to a total loss of $13.72 billion for 2022. The division’s revenue in the final months of 2022 was only $727 million, a 17% decline from the previous year.

Meta’s challenges are emblematic of broader issues facing the metaverse, including confusion about its meaning, privacy and security concerns, expensive hardware costs, and the volatility of the cryptocurrency market. Additionally, the rise of generative AI tools like OpenAI’s ChatGPT, Google’s Bard, Microsoft’s Bing, DALL-E, Stable Diffusion, Meta’s LLaMa, and Midjourney has raised questions about the metaverse’s future prospects.”

Yet, faith in the metaverse endures. Despite the once vibrant metaverse discourse now resembling a mere echo of its former self, believers are still there. The potential for immersive realms extends beyond this singular entity. Despite the diminishing hype, major players like NTT Corporation, a global IT and telecommunications giant, remain committed to the metaverse’s possibilities and are actively developing the technological infrastructure to support virtual realms.

NTT’s AI innovation team recently introduced AI-driven digital humans designed to create lifelike avatars in the metaverse for real-time interactions. These digital humans, trained to deliver exceptional customer experiences, function as assistants, car dealers, receptionists, and more. Successfully deployed in various scenarios, such as a sports promoter at the Tour de France or a tutor for young children learning English, these avatars provide authentic and immersive interactions.

The metaverse, undergoing its share of boom-and-bust cycles akin to previous technology winters, is not a standalone technology. It is a concept fueled by the convergence of various technologies, including blockchain, 5G, VR, AR, and AI. The advancements in AI, exemplified by the expanding use cases of large language models like GPT-4, coupled with progress in VR and AR, contribute positively to the metaverse’s pursuit. Ajay Setia, who leads InvincibleMeta.AI, a company working on advanced technology, says, “The metaverse, which is like a huge and enticing digital world, has a lot of exciting possibilities. When we use creative AI technology, it turns the metaverse from something still and unchanging into a vibrant place that’s always evolving based on what people do and like.”

AI has the power to transform the metaverse into a completely new being. As Ajay added, “Even though generative AI is getting a lot of attention right now, the metaverse is just starting its big transformation, and it’s quietly gaining speed for the next big step. I believe companies such as Meta made substantial investments in the Metaverse without conducting a thorough market analysis. However, the market for the Metaverse developed subsequently. Our company is taking valuable lessons from their past missteps, and we are developing a solution that genuinely enhances society.”

Critics prematurely dismissing the metaverse often overlook its independence from any single organization. While Meta may dominate the headlines, the metaverse’s fate is not contingent on a sole entity. Even companies like Apple, initially hesitant about the metaverse, are now striving to bring VR and AR products to mainstream markets. The pandemic further accelerated the creation and normalization of virtual worlds and economies, with online gaming emerging as a rapidly growing industry surpassing $196 billion in estimated revenues.

Projections by Gartner suggest that by 2026, one in four individuals will spend at least an hour daily engaging in shared virtual environments for work, study, shopping, and socializing. The global metaverse market is anticipated to soar to an astonishing $936.6 billion by 2030, a significant surge from the estimated $82 billion in 2023. The seed of the metaverse remains alive in the soil of technology, steadily evolving and growing amidst the current challenges.

Acknowledging the metaverse’s need for time, Zuckerberg himself, during Meta’s earnings call in April 2022, recognized that the transition to virtual worlds would take years, possibly generations, for mainstream adoption. Just as the internet was initially dismissed as a passing fad, technological advancements solidified its integral role in our lives.

The metaverse, or the concept of immersive realms, is poised to follow a similar trajectory. While it may not be referred to as the metaverse in the future, virtual worlds are here to stay. Stakeholders should recognize the rapidly evolving nature of the metaverse, understanding that waning interest does not signify total failure.

Future metaverse will enhance virtual education and work, making them more immersive and interactive. As Gen Alpha grows accustomed to immersive, gamified experiences, this approach could prove more effective for learning. Additionally, the integration of Web3 virtual assets into e-commerce and retail promotions is expected to increase as entry barriers decrease.

In conclusion, instead of prematurely dismissing the metaverse, a nuanced analysis of its true potential is essential. The current phase can be viewed as a period of growth, presenting an opportunity for investors to enter the space before its full realization.

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