Whatever happened to the metaverse dream that was meant to change tech?

Once billed as the next internet, the metaverse is now a patchwork of gaming, AR, and enterprise tools, which is far from the trillion-dollar vision tech giants once promised

A few years ago, “the metaverse” looked like the next big platform with immersive 3D worlds. It was sold as an alternate reality destination where people would shop, work and socialise, and where advertising and marketing would be reshaped, a reminder for many of the bleak episodes of futuristic tech as shown in popular TV series Black Mirror. Big tech treated it as a multi-decadal bet. However, today the reality is much quieter than the initial noise. The hardware has turned niche, flagship virtual worlds have managed to attract tiny audiences, and companies are shifting money and attention back to artificial intelligence (AI), games and practical uses of augmented reality.

 

However, that has not deterred Meta founder Mark Zuckerberg from pouring more money into his dream project. Meta is on track to have spent more than $100 billion on virtual and augmented reality by the end of this year, with chief executive Mark Zuckerberg calling 2025 a “defining year” for its smart glasses. According to its latest annual filing, the company poured $19.9 billion into Reality Labs in the past year, the largest outlay so far in a decade marked by sustained losses, reported Financial Times.

 

What is metaverse? 

The metaverse is a collective virtual shared space, often described as the next evolution of the internet, where users interact through immersive 3D environments using virtual reality (VR), augmented reality (AR), and other advanced technologies. It blends physical and digital realities, allowing people to socialise, work, play, shop, and participate in digital economies using customisable avatars. The metaverse is persistent, meaning it continues to exist and evolve even when users are offline, and it aims to provide a seamless and immersive experience that transcends traditional internet use.

 

Today, it encompasses a range of technologies and applications, including social interaction, gaming, virtual workspaces, education, and commerce, supported by blockchain and decentralised digital assets. The metaverse is seen as a new frontier for human connection and digital transformation, moving beyond 2D screens to fully immersive virtual worlds.

 

Why do big bets like Meta’s appear to be fizzling? 

Meta (formerly Facebook) poured the largest funding into the idea of augmented reality. Its Reality Labs arm (originally called Oculus VR), which makes Quest headsets, Ray-Ban smart glasses and Horizon Worlds, recorded an operating loss of about $17.7 billion in 2024 alone, and Reality Labs’ cumulative losses since 2020 run into the tens of billions (approximately $60 billion). Those headline figures showed the gap between ambition and near-term returns.

 

At the same time, the consumer-side products have continued to struggle to find sticky audiences. Meta’s social VR world, Horizon Worlds, has never attracted mass usage; reporting has repeatedly noted monthly active users in the low hundreds of thousands rather than millions, and many user-created spaces go largely unseen. That poor engagement made it hard to build advertising or commerce businesses on top.

 

Hardware was also a big barrier. VR headsets are still bulky for long-term daily use, although Apple’s Vision Pro impressed reviewers, but is extremely expensive and has not become a mass product. Many customers prefer lighter wearables (smartphones, earbuds, watches) rather than full headsets. That has left companies with costly R&D and inventory and without a clear path to broad consumer adoption.

 

Isn’t Meta still investing in the metaverse? 

Meta’s parent company remains profitable overall (its core advertising business generated strong income in 2024), and management has not abandoned XR. But the company has begun to rebalance: it continues to fund Reality Labs and productise smaller, more practical devices (for example, Ray-Ban Meta smart glasses), while also ramping huge investments into AI and data-centres. In short, the “metaverse” is no longer only about immersive social worlds; it’s now mixed with a push for useful, wearable AR and AI features.

 

Where does the metaverse stand in practice right now? 

Most progress in the metaverse appears to be in three narrower areas rather than a single, universal virtual world that includes gaming platforms and user-generated worlds (Roblox and Fortnite) that already host concerts, brand events and commerce. These have real, large audiences and functioning creator economies.

 

Meanwhile, enterprise and collaboration tools that use 3D or avatar presence for meetings and training like Microsoft’s Mesh/Teams experiments, fall here. However, Microsoft has been refining and consolidating its approach for business use cases rather than a consumer metaverse.

 

What did other big tech firms try and what happened to their experiments?

 

Not every company chased the same product. Roblox doubled down on a creator economy and has grown users and revenue, turning real activity into an ad and commerce opportunity. Epic (Fortnite + Unreal Engine) kept building tools and partnerships that treat games as social platforms. Apple shipped Vision Pro as a premium “spatial computer”, but the device’s price and limited content kept it niche. Niantic, long a believer in a “real-world” AR metaverse, sold its games unit (including Pokémon GO) and refocused on geospatial technology. Meanwhile, Microsoft focused on enterprise mixed-reality for collaboration and consolidated its Mesh tooling. These moves show that the market is fragmenting into practical verticals rather than a unified metaverse.

 

So what comes next? Is the metaverse dead? 

The big idea of one shared 3D virtual world for everyone hasn’t come true, which most likely has forced the metaverse to transform rather than die. Instead, what we are seeing is an ecosystem approach which includes powerful game worlds and creator platforms that will keep growing, and AR wearables that may become useful daily devices before full VR becomes mainstream. Meanwhile, major firms are redirecting capital to AI and cloud infrastructure, tools that will be central to whatever the “next internet” looks like.