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- 1 Investments in the metaverse fell to around $2 Billion last year.
- 2 Web3, a term people often confuse with the metaverse, is facing a similar turmoil.
It is getting empty in the metaverse. Virtual worlds that some envision as the future of the Internet and society are longing for investments now. According to Crunchbase, a business data aggregator, investments around startups involved with virtual reality (VR) and augmented reality (AR) have hit a multiyear low in 2023.
A Defining Moment?
Meta Platforms (formerly Facebook) became the first mainstream company to go all in for the metaverse beginning in 2021. The year saw 479 funding rounds pouring nearly $6 Billion in the market, the following year took 576 rounds to pull in the same amount. Investor interest waned rapidly through the year; investments fell to around $2 Billion last year.
In 2021, the United States was a heaven on earth for the metaverse for over half the investment sprung out of there. $0.91 Billion in investment came from the US. Total funding rounds fell from 193 in 2022 to 84 in 2023 according to the latest data.
Web3, a term people often confuse with the metaverse, is facing a similar turmoil. Gaming is at the very core of both metaverse and Web3. CoinGecko, a data aggregator, reports 75 percent of Web3 games are dead already. 2,127 games have failed over the last six years according to the report.
There’s no aggregator tracking global metaverse activity but nearly 400 Million users dwell on virtual worlds. The space is primarily dominated by entities like Fortnite and Roblox. These games somehow come close to the definition of the metaverse which is defined as an enmeshed space of interoperable virtual worlds. Although, there’s no official definition assigned to it.
Technologies like VR and AR are yet to make their way to the mainstream. They are expensive and hence, unaffordable for most people. Apple is about to launch its head mounted display (HMD) called Vision Pro. It comes as no surprise that the company will initially be selling it for $3,500. Meta’s Quest 3 is cheap in contrast with only $500. But then, features matter, and Apple is famous for its innovative approach in its technology. However, that still does not solve the affordability issue.
A renowned analyst namely Ming-Chi Kuo wrote last year that Meta is set to sell less than the numbers forecasted for Quest headsets. The estimate of 7 Million units was revised to only 2.5 Million. Kuo isn’t very optimistic about Vision Pro sales either. Due to complexities in the manufacturing process, he believes Apple is likely to produce around 400K units this year.
Top guns in global markets have researched and presented the scope of the metaverse, which is fairly extensive, so to speak. Nevertheless, this is certainly a hard time, and very likely a crucial phase, as it could be a defining period for the metaverse’s success, or fall.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
