In recent times, the meteoric rise of generative Artificial Intelligence (AI) technology has taken center stage, overshadowing the once-prominent allure of the metaverse. Two years ago, the metaverse was poised to become a multibillion-dollar industry, capturing global attention and fascination.
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Shift in Trends
Google Trends data reveals a peak in metaverse interest in October 2021, coinciding with Facebook’s rebranding to Meta. However, this interest has since plummeted by over 90 percent. The subsequent surge in the market value of the metaverse, accompanied by the rise in non-fungible tokens (NFTs) and virtual real estate prices, witnessed a period of rapid growth.
Between September 2019 and March 2022, Chainalysis data indicates an 879 percent increase in the prices of virtual land, outpacing the growth rate of physical real estate globally. Various events, including virtual endeavors by Snoop Dogg, Gap, Nike, and even the Vatican, contributed to the initial hype.
Despite substantial investments, Meta’s Reality Labs division, driving their metaverse ambitions, reported an operating loss of $4.8 billion in 2022. This financial setback, coupled with dwindling web searches for the metaverse, marked a turning point.
Notably, the decline in metaverse interest coincided with a remarkable spike in AI searches following the launch of the ChatGPT text-based generative AI platform. Statista estimates the current metaverse market at $74.4 billion, a rise from $56.7 billion in the previous year but far from the projected $298 billion expected from AI-powered products in the current year.
Kenyan metaverse developers acknowledge the waning prominence but assert the continued growth and relevance of the industry. Matthew Munyao, a metaverse developer, believes that speculators declaring the metaverse “dead” are disappointed investors seeking quick gains.
The Real Value
According to Munyao and technology commentator Lynn Gitau, the metaverse’s true potential lies in understanding it as an advanced virtual immersive experience. Gitau suggests that the initial hype was fueled by those who did not grasp the technology’s essence.
Projected Growth Amid Challenges
While the metaverse industry is projected to reach an estimated $507 billion by 2030, Munyao emphasizes that its true value won’t be realized until the cost of virtual and augmented reality hardware decreases. Meta’s partnerships aim to enhance metaverse usability, but Munyao contends that the high cost of VR headsets remains a barrier.
Synergy of AI and Metaverse
Both Munyao and Gitau agree that AI is not a hindrance but a boon to the metaverse. They posit that AI enhances virtual interactions, making them seamless and intelligent, while the metaverse provides a canvas for AI to showcase its capabilities.
As the metaverse allure fades, industry observers await to see whether the AI hype will endure or if a new innovation will emerge to captivate the globe. The evolving dynamics suggest that, while the metaverse may have lost some luster, the symbiotic relationship with AI could pave the way for renewed growth and innovation in the virtual realm.