Is the Metaverse at Dead End?

Have you ever been tempted to escape the troubles and hardships of the real world by immersing in the metaverse? Just like that, you unplug from this and plug into a virtual reality of yours for an hour or two to soothe your mind. Sounds attractive, right? Definitely, provided that you aren’t familiar with the fact that metaverse is having hard times. Yes, you’ve read that correctly, the immersive mixed reality is going through turbulences that may shape its immediate future.

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metaverse at dead end

Illustration: Milica Mijajlovic

Satya Nadella, the Microsoft CEO, has stated on one occasion that the metaverse is a game-changer due to the sense of presence it offers to individuals who are interacting. Considering this, Microsoft’s decision to shut down its metaverse comes as a huge surprise. Plus, with Reality Labs, Meta’s metaverse-focused division suffering over $4 billion in losses in Q4, one can’t help but ask what the heck is going on with metaverse?! 

Death of Altspace VR and MRTK 

Instead of starting the new year with no holds barred, many people working for gigantic IT companies received a cold shower in terms of not being able to log in to their corporate accounts or being denied entry into the office. This could mean only one thing – they were laid off without any previous notice.  

Besides Amazon, Google, Coinbase, and Tesla, to name a few, Microsoft is among the IT giants that cut down on their workforce. The software colossus laid off 5% of its team, which amounts to about 10,000 employees who are now looking for a new engagement. Due to cost-cutting, Microsoft drew curtains over two projects metaverse projects – Altspace VR and the Mixed Reality Tool Kit (MRTK). As a result, mixed reality projects that were waiting for development and testing may now experience some delays. 

What are Altspace VR and the Mixed Reality Tool Kit?  

The former was acquired by Microsoft in 2017 and was working with the software giant on developing virtual environments in order to serve digital event venues for artists across the world. The latter was concentrated on building user interfaces for metaverse projects, and its future is not defined yet.  

But how is all this in line with Nadella’s statement that the metaverse is a game-changer? 

Microsoft Mesh 2023 and industrial metaverse 

Even though Microsoft ditched Altspace VR, this doesn’t automatically imply the end of the metaverse. Instead, Microsoft seems to have abandoned VR in favor of XR – virtual, augmented and mixed reality altogether. By March 10, 2023, the Altspace VR platform will be terminated, and the focus will be shifted to supporting immersive experiences powered by Microsoft Mesh. This way, the software company hasn’t closed the door to metaverse for good, it only changed the investment focus.  

For those who aren’t familiar, Microsoft Mesh is an XR collaboration service that enables a user to interact with real-time 3D (RT3D) visualization of friends and colleagues. Mesh was announced back in 2021 with the aim of improving collaboration within company teams. 

Unlike Altspace VR which was directed at socializing, Mesh is more enterprise-oriented. Therefore, users have an opportunity to cooperate by implementing a headset, PC, or smartphone in an immersive spatial environment through so-called Holoportation. In simpler terms, Microsoft Mesh enables consumers to work together as if they were in the same office or building.  

This service has been integrated into Teams, letting users engage in calls as tracked avatars. By employing Mesh App for Hololens, it’s possible to design a custom avatar that would represent participants during a call.   

The idea for Microsoft Mesh was born during the COVID-19 pandemic when most companies had to adopt (and adapt) remote work. In line with this, Mesh represents a recreation of interaction between employees, striving to connect workers in a way which is not possible with ordinary video calls.  

$4 billion in losses 

People may say that Meta’s VR division dubbed Meta Reality Labs didn’t live up to expectations. In Q4 2022, it gained $727 million, compared to $877 million of revenue from the previous year. It should be mentioned that this was the first holiday-selling season following Meta’s base price increase of the Oculus Quest headset. The price was raised from an original $100 to $400 in August 2022.  

The Q4 losses, on the other hand, amount to a colossal $4.279 billion. For the sake of comparison, the Q4 2021 operating loss was $3.304. In Q4 2022, an enterprise high-end version of the headset called Meta Quest Pro was launched at the price of $1,500. However, these abysmal figures won’t keep the company’s spirits low. The company’s leadership is ecstatic over the success of the Reality Lab division, as it beat overall revenue predictions, daily and monthly active users respectively, as well as average revenue per user.  

Most prominently, Meta pulled in $32.1 billion in revenue across all departments and applications, thus beating revenue predictions of $31.53 billion. Mark Zuckerberg, the company CEO, framed the forthcoming fiscal year as a “year of efficiency,” despite the leadership’s decision to dismiss 11,000 workers. The CEO claimed that the company would stay fierce beyond massive layoffs in any possible way. Zuckerberg highlighted that Reality Labs was not on the chopping block. Quite the contrary, it was worthy of continued and possibly growing investments.

He was particularly optimistic about Meta’s upcoming venture – the new VR headset Quest 3 that should be released sometime in 2023. The new gadget is believed to establish the technology for VR and AR headsets. It’s also expected to increase the division’s revenue, as well as to popularize Meta’s Horizon World VR ecosystem Zuckerberg advertised as the future of social, entertainment, and business interaction.   

So, is Metaverse doomed to an end? 

Though the figures might seem gloomy and pessimistic, the answer is no. Metaverse is not coming to an end, at least not soon. In addition to China’s recent investments in the metaverse, the World Economic Forum (WEF) announced the development of the metaverse in 2023. The idea behind WEF creating the metaverse is to address burning global concerns. To develop the goal-driven metaverse dubbed Global Village, over 80 participants from the business, finance, and non-profit sector will gather virtually. 

The Global Village will feature conference rooms, discussion places, and simulations that implement VR technology to highlight global issues. As for the report, the World Economic Forum, the metaverse would be business-oriented prior to shifting to a consumer-focused metaverse. Via the implementation of digital twins, for example, the industrial metaverse would be able to improve the company’s efficiencies. Renault, a popular French vehicle manufacturer, is one of the enterprises that implement an industrial metaverse.  

The Global Village, WEF metaverse, will employ Microsoft technologies, more specifically Microsoft Mesh. Microsoft is one of the WEF’s two major metaverse partners, but dozens of stakeholders are expected to ultimately implement the technology to meet.    

Besides the WEF, Microsoft has also partnered with the US military to offer servicepeople a mixed reality training gadget. The Integrated Visual Augmentation System (IVAS) headset that will be implemented is expected to get updates according to the feedback from military personnel. About 10,000 IVAS headsets were ordered by the US Army for extra field testing.  

Yet, this venture seems to be facing obstacles, as Senators turned down the $400 million request from the US Army to buy 6,900 IVAS gadgets. Nevertheless, the contract with the US Army is of great importance for Microsoft and its VR device.   

Metaverse and education 

Lectures needn’t be dull and boring anymore. In the metaverse, teachers could offer first-person experiences to their students. That way, students could become as big as a galaxy, or shrink down to the size of a virus in the blink of an eye. They could travel through space or time, assist in building the Great Wall of China or walk through busy streets in ancient Rome. Examples are limitless, and the only thing students need to do is put on the headset and jump into the world of education.  

And no, the main idea is not to replace schools and traditional classrooms with metaverse but only to help enrich the lectures with a few minutes of immersive experience. And this is what Dreamscape Learn from Culver City, California does. Founded from the partnership with Dreamscape Immersive, a VR entertainment company, and Arizona State University, Dreamscape Learn has blended the power of cinematic visuals, and movie-quality storytelling with analytical educational principles and clear-cut learning objectives.  

The ultimate objective of implementing metaverse in education is to transform the lessons that students listen to or watch into a set of experiences that they live. This way students can develop not only knowledge but also skills and intuition. Lastly, immersive experiences in education have the potential to be so authentic and interactive that they resemble having a virtual apprenticeship rather than taking a learning course. The future of education might be in the metaverse, provided that it’s employed adequately.  

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