Business Lessons From the Catastrophic Failure of the Metaverse - Did the “creative class” learn anything from buying into a product that was obviously destined to flop?

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A Metaverse soirée. (Getty)

There was a time, not so long ago, when every major architect on this planet was “building” in the Metaverse, the brand name for the open-world virtual reality platform and associated projects under the aegis of Mark Zuckerberg’s Meta. Last year, some staggering names such as Zaha Hadid Architects, Grimshaw, Farshid Moussavi, and, of course, the Bjarke Ingels Group pledged to create “virtual cities,” virtual “offices,” and equally vague sounding “social spaces” to be funded with cryptocurrency and supplied with art (NFTs). The eagerness to latch onto whatever the newest trend the increasingly desperate and failure-prone tech industry dished out was so palpable that even real-life developers like hotel chain CitizenM and brands like Jose Cuervo got involved and threw what one presumes is a whole lot of actual money at the enterprise. The rush to move into virtual real estate was a full-on frenzy.

In some respects, who could blame these companies and firms? Since the virtual reality service’s launch in 2021, the so-called “successor to the mobile internet” became the recipient of a kind of soaring hype few things are ever blessed with. According to Insider, McKinsey claimed that the Metaverse would bring businesses $5 trillion in value. Citi valued it at no less than $13 trillion.

There was only one problem: The whole thing was bullshit. Far from being worth trillions of dollars, the Metaverse turned out to be worth absolutely bupkus. It’s not even that the platform lagged behind expectations or was slow to become popular. There wasn’t anyone visiting the Metaverse at all.

The sheer scale of the hype inflation came to light in May. In the same article, Insider revealed that Decentraland, arguably the largest and most relevant Metaverse platform, had only 38 active daily users. The Guardian reported that one of the features designed to reward users in Meta’s flagship product Horizon Worlds produced no more than $470 in revenue globally. Thirty-eight active users. Four hundred and seventy dollars. You’re not reading those numbers wrong. To say that the Metaverse is dead is an understatement. It was never alive.

In retrospect, that’s not surprising. If you are wondering what the point of the Metaverse is—business meetings? parties? living out a kind of late-’90s Second Life fantasy but without legs?—you are not alone. In fact, no one, even Zuckerberg himself, was ever really clear what the whole enterprise was for except being the future of the Internet and a kind of vague hanging out. And yet, that use case dilemma didn’t stop our profession from dragging their tongues on the floor in search of a quick press release or blurb to show that they were, after all, on the cutting edge of all things.

The Ford Pinto–esque failure of this enterprise, finally put to bed by Zuckerberg himself in May, cost people their jobs, investors their money, people their time. It should cost McKinsey, Citi, Meta, and all the folks in architecture eager to jump on the bandwagon more than a little of their prestige or dignity. But as we saw with NFTs and cryptocurrencies before the Metaverse and the similarly overblown rise of generative AI after, even in the face of such alarming patterns, not much seems to change.

For a field expressly rooted in the construction of real spaces, architecture sure betrays a desire worth interrogating to latch onto the latest ephemeral tech trends. This desire, it should be noted, is applied unevenly among virtual spaces and ideas. Virtual reality is itself far from useless for architecture. When I was studying acoustics in graduate school, designers spent a great deal of effort on creating spatialized sound to be used to sell services to clients, and to even preview what a space would sound like before it was built. Museums have been adding virtual reality elements as a teaching tool since the technology became available. Virtual social space itself is hardly a new idea—it’s pulled from science fiction and, later, the utopian dawn of the Internet, which imagined it as a kind of boundless, egalitarian, free commons. In our contemporary, monetized version of the net, Zuckerberg does have a point: People want to spend time in virtual spaces and they are important for socialization. Just not his virtual spaces.

If you ask kids what kinds of spaces they find themselves in, they won’t say Horizon Worlds. They’ll say Roblox (the controversial monetized game-design platform), Minecraft (an open world building video game old enough that I played it as a teenager myself), and Fortnite (a player-versus-player combat game with a great deal of customization.) Brands know this; many like Gucci and Nike have begun staging events and product launches in these virtual spaces, trying to capitalize on younger and younger eyeballs. But aside from a typical remark from Ingels that “architecture should be more like Minecraft” (i.e., playful like a video game), architecture—a highly professionalized world whose leaders, like Ingels, are in their 40s at their youngest—hasn’t paid much mind.

It makes sense, then, that what is in reality a highly stratified capitalist enterprise (that just happens to also be considered an art) wouldn’t see all of the exciting things bubbling beneath the surface in other parts of culture, like music and fashion. They instead see press releases from colleagues in the same insular, professionalized spheres: McKinsey, Meta, and PR agents.

But perhaps I am being too generous. The simple answer might just be plain old cynicism. In the social media age, architecture has increasingly gravitated toward PR fluff that doesn’t require making buildings or theory, the two central pillars of architectural production for millennia. While PR has always existed in the field (House Beautiful magazine anyone?) the short attention spans of the content creation era have all but guaranteed that the easiest way to get notoriety in or via a publication is to “create” just that: content (images, renderings, perhaps a 3D city in a program like Blender or Rhino). For added relevance, simply attach this content to whatever the issue—or product—du jour is. Climate change, the pandemic, the Metaverse. I’ve come to call this practice “PRchitecture.”

However, the astonishing size of the Metaverse’s failure; the consistent mocking it’s been subjected to; the disparity between the figures quoted by marketing and consulting agencies and reality; and the actual, insane amount of money involved should serve firstly as a overdue humiliation and secondly as a wakeup call.

It is objectively embarrassing for the field of architecture to have tied itself to such a ridiculous fad that anyone with any common sense could see was both pointless and highly reviled by the public. But more importantly, the tech industry in its current iteration—which increasingly looks like a never-ending cycle of intangible hype bubbles at its best and financial scams at its worst—is no friend of architecture. It will not provide anything of lasting value or of considerable productiveness to society. The cycles of boom and bust are getting shorter and shorter and the wares being hawked more and more financialized and unstable.

The tech industry does not like architecture or the arts. It profits off of them, but, as we have seen with the labor implications of AI, is openly hostile toward the creative process and will stop at nothing until all labor and all things produced by it—from concept art and movie scripts to taxi rides and architecture—is overseen by its middlemen and thus gutted of its so-called “disruption.” The sooner architecture realizes this, the better off the field, its practitioners, and the people who work for it will be.

But then again, that doesn’t get so many clicks on Instagram, does it?

Editor’s note: This piece has been updated to more accurately characterize one of the revenue streams of Horizon Worlds.

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Decentraland, arguably the largest and most relevant Metaverse platform, had only 38 active daily users. The Guardian reported that one of the features designed to reward users in Meta’s flagship product Horizon Worlds produced no more than $470 in revenue globally.

the most impressive thing about Metaverse by far is that even with access to a revolutionary behavior control platform and oceans of data on user engagement and the things that excite them, in an era where consoomers will literally pay malignant tech companies to install unblinking surveillance devices in their home so they can adjust their thermostat with their phone in lieu of getting off the couch and walking five steps, it still managed to set a new standard for being ignored
 
To me the saddest part is that the underlying concepts of the metaverse could've worked. The problem was that they were so busy figuring out how to monetize it for cheap that they never bothered to wonder what people would see in it.

Here's a possible use case: Digital Venice. People can't afford to travel, but would like to experience the history of the world. Part of the draw of the Assassin's Creed and yakuza games are that those are real locations filled with history, not some abstract concept shat out during crunch time. You can literally just spend time exploring the 3D render of those specific cities and immersing yourself in those cultures. Now imagine if those games let you just explore, possibly interacting with people who are other players or just tour guides, where they can experience the city as it was living and breathing and take part of its customs, without leaving your home? Imaging being able to don a virtual Kimono and visit a 1:1 representation of a Japanese festival, being able to interact with the events?

That could've been the VR killer app.
this idea would'vd made a ton of cash during the summer of lockdowns. Fam got a quest or whatever, we played some vr games and most of them sucked.
 
I still need a reason to get VR. Been waiting a decade. Give me a reason that isn't some skinner box non-game bullshit.

Half Life Alyx is actually a full fledged game with voice acting and a plot and levels. It's incredibly immersive and terrifying and will change the way you see games... and then you can wait another 10 years for anything else that isn't absolutely nausiating, a roomscale puzzle game or an object manipulation sandbox.
 
The sheer scale of the hype inflation came to light in May. In the same article, Insider revealed that Decentraland, arguably the largest and most relevant Metaverse platform, had only 38 active daily users. The Guardian reported that one of the features designed to reward users in Meta’s flagship product Horizon Worlds produced no more than $470 in revenue globally. Thirty-eight active users. Four hundred and seventy dollars. You’re not reading those numbers wrong. To say that the Metaverse is dead is an understatement. It was never alive.
I LOL'd at this transphobic hate forum twice today. Once was at the picture of the vet showing a fat kitty how fat he is, and the other was this.

Over the last couple years, I keep asking these question to people who should be able to answer it, and there's no answer:
  1. What is the Metaverse?
  2. What is it for?
  3. What user problem does it solve?
  4. Second Life had all these same features back in the '00s, and it failed. Why will this be different?
If you can't tell me what your product is, what it's for, why it makes a user's life better, and why it's different from similar, failed products, I don't need to know a lot more to not invest in it.
 
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I still need a reason to get VR. Been waiting a decade. Give me a reason that isn't some skinner box non-game bullshit.
Right now its still only Half-Life Alyx, modded Skyrim VR (praise Todd) and Porn, thanks to Zuckerberg buying up every single VR development studio and forcing them to only make literal mobile games for his mobile phone headset.
 
Right now its still only Half-Life Alyx, modded Skyrim VR (praise Todd) and Porn, thanks to Zuckerberg buying up every single VR development studio and forcing them to only make literal mobile games for his mobile phone headset.

Hotdogs, Horseshoes, and Hand Grenades is fun to mess around in as well. It's more "tech demo" than "Game" however.
 
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I still need a reason to get VR. Been waiting a decade. Give me a reason that isn't some skinner box non-game bullshit.
It seems like the only true VR killer app is Half-Life Alyx. Everything else is a conversion of a pre-existing game or a 2-3 hour "experience." (Or a porn game, probably.)

Reminds me of how developers tended to treat the Wii. If you can't recoup costs by porting it relatively easily to every platform, it isn't worth making.
 
There are several excellent VR titles, but they represent a minuscule percentage of the overall good games to be had. Likewise there are lots of top-notch VR implementations of non-VR stuff, but again, compare a couple dozen standouts over the last 5-ish years versus the hundreds of games that have hit the market in that same length of time. On top of the cost of entry of at least a few hundred bucks for a VR rig, you have the people who get nauseous from it, which I hear can diminish over time but how many people are willing to put up with feeling like they're gonna heave whenever they move in a game in the hope it'll eventually stop happening?

As far as the Metaverse goes, it was clearly put together by out of touch idiots. If you leave it up to randos to build your virtual world, of course you're going to wind up with a mishmash of half-built shit and scams like Second Life did. VRChat also is a mishmash of user-built shit, but you choose what room to load; Billy's Butthole Palace is not on the same virtual plot of land as an actual professional-quality room. If you're going to lay out a virtual environment in huge open areas, you have to curate that shit to keep out the stuff that looks like it's a rendering of the flea market mall off the interstate exit. Especially if you're sinking hundreds of millions of dollars into it, you have no excuse for not having top-notch designers making an awesome, sleek-ass world to show people. Then, once you have that amazing showcase, you carefully onboard more companies, offering them use of your design services as needed to ensure that their additions are similarly good-looking. Facebook of all people had the money to do things right, there was simply no excuse for this result.
 
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there's also the issue that's been around forever with VR going back to the Virtual Boy
a lot of people don't like shoving their face into a thing and blocking out everything to play a video game
 
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