Cons
- Questionable profitability: How will the metaverse be monetized, and which companies have the clearest path to profits? Those questions are hard to answer right now. If any company were to profit from the trend, it would seem to be Meta Platforms. However, the company has racked up billions of dollars in losses from its metaverse ambitions so far, and the situation hasn't materially improved.
- Waning interest: Meta Platforms plans to cut spending on its metaverse platform and shift its investments to virtual reality devices. This company was so committed to the concept that it changed its name to reflect its focus. But if even Meta Platforms is starting to lose some of its zeal, perhaps the metaverse trend will never materialize as many people had hoped.
- No guarantee of longevity: Although the metaverse is a beautiful dream, the platforms that host it have no guarantee of longevity. They could last for 20 years, or they could fold tomorrow, jeopardizing investments in particular platforms or technologies that support them.
The bottom line
Many market researchers still forecast substantial long-term growth for the metaverse, even though investor enthusiasm has cooled considerably. While investors should always take third-party research with a grain of salt, there are still reasons to believe the metaverse could be valuable.
Specifically, metaverse platforms need to be detailed and expansive to truly attract users. These are cumbersome to create manually. But the advent and improvements of generative AI are making it easier to create digital content. In short, generative AI can lead to better metaverse content, potentially catalyzing adoption.
Metaverse hardware devices have improved in recent years, and it's reasonable to expect further meaningful advances. This, coupled with better content, could finally attract a critical mass of metaverse adopters, providing a glimmer of hope for the metaverse.