Reality check | The metaverse isn't dead—it's just somewhere else: In these industries, the virtual world is truly booming – Image: Xpert.Digital
Metaverse crash: The sobering balance after the big hype in numbers
### Billions burned: Why Mark Zuckerberg's metaverse dream is currently spectacularly collapsing ### From hype to emptiness: What actually happened to the metaverse – and why is everyone only talking about AI these days? ### Future or billion-dollar grave? Why the next phase of the metaverse is only just beginning ####
Yawning emptiness instead of revolution: This is how disappointing the reality in Zuckerberg’s Metaverse really is
Not long ago, the metaverse seemed to be the inevitable future of the internet. Driven by the vision of Mark Zuckerberg, who even renamed his company Facebook Meta, billions poured into the development of immersive virtual worlds. Analysts predicted a trillion-dollar market, and the tech world spoke of the greatest digital revolution since the invention of the smartphone. But today, just a few years later, there's barely a trace of that former euphoria. The hype has shifted: instead of avatars and digital real estate, the world is now talking about artificial intelligence and ChatGPT.
The sobering reality is reflected in gigantic losses – Meta alone has invested over $60 billion in its Reality Labs – and in gapingly empty platforms with vanishingly small user numbers. Has the great promise of the metaverse failed before it even really began? The answer is more complex than it appears at first glance. While the consumer metaverse, in its current form, stagnates, struggling with technological hurdles and a lack of compelling content, profitable and groundbreaking applications are already emerging in specialized niches. Particularly in the industrial and gaming sectors, the technology is unfolding its potential and demonstrating that the virtual revolution may not have been canceled, but merely postponed. This article takes a close look at the current status, the reasons for the disillusionment, and the areas in which the metaverse is quietly but successfully making progress.
Strong growth in the gaming segment and industrial metaverse with digital twins and simulation
What actually happened to the great metaverse promise? This question now occupies many who, just a few years ago, spoke with great euphoria about the internet revolution. As recently as 2021, the metaverse was considered the technology industry's great promise for the future. Corporations invested billions, and market observers predicted potential in the trillions. Mark Zuckerberg even went so far as to rename his company Facebook Meta. The topic was also extremely popular among investors, prompting many asset managers to launch specialized metaverse funds.
But now, things have gone noticeably quiet around the metaverse. Instead, artificial intelligence applications like ChatGPT dominate the headlines. The technological hype seems to have shifted entirely to AI. So, is the metaverse already history before it's even really begun?
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The sobering reality of metaverse development
Meta's billion-dollar losses
The numbers speak volumes: Meta has invested over $70 billion in the development of the metaverse since 2020. In 2024 alone, the Reality Labs division recorded an operating loss of $17.7 billion on revenue of just $2.1 billion. These losses are steadily increasing – in 2022 they amounted to $13.7 billion, and by 2023, they had already reached over $16 billion.
The Reality Labs division's cumulative losses now total more than $60 billion. By comparison, this sum is equivalent to the entire market value of the German technology group SAP. Despite these enormous investments, revenues remain far below expectations.
Weak user numbers on metaverse platforms
The user numbers for Meta's flagship platform, Horizon Worlds, are particularly sobering. Although the company originally targeted 500,000 users by the end of 2022, it actually only reached 200,000 monthly users. Recent reports suggest that this number may have fallen below 200,000. One YouTube tester even observed only around 900 daily active users.
These numbers stand in stark contrast to established gaming platforms: Roblox has 250 million monthly active users, Fortnite at 90 million. Even the smaller metaverse platform The Sandbox boasts 200,000 monthly active users.
Hardware sales far below expectations
Sales figures for VR headsets are also disappointing. The global VR market shrank by 12 percent in 2024, recording its third consecutive year of decline. Meta has sold approximately 20 million Quest headsets since 2019. By comparison, Apple sold approximately 151 million iPhones in 2023 alone.
Global VR headset sales fell to 9.6 million units in 2024, a decline of over 12 percent. While Meta dominates with a 77 percent market share, the overall market volume remains disappointingly small.
The reasons for the stagnation of the metaverse hype
Technological hurdles and user experience
A key reason for the weak adoption of the metaverse lies in technological limitations. VR headsets are still too bulky, expensive, and uncomfortable for many users. The required hardware costs several hundred to thousands of euros, making them inaccessible to the mass market.
Added to this are usability issues. Many users report motion sickness, limited mobility, and tiring sessions. The technology isn't yet mature enough to allow for extended, comfortable usage.
Lack of content and use cases
Another fundamental problem is the lack of compelling content and use cases. The metaverse so far offers little added value over existing digital solutions. The available experiences are often graphically underwhelming and offer no substantial advantages over traditional video games or social networks.
Mark Zuckerberg's famous avatar selfie from Horizon Worlds became a symbol of the discrepancy between grand promises and the actual reality of the metaverse experience. The cartoonish avatars and limited interactivity failed to live up to the lofty expectations.
Changing working habits after the pandemic
The COVID-19 pandemic initially seemed like the perfect time for virtual workspaces. But the opposite happened: Many companies brought their employees back to the office after the pandemic. The demand for virtual workspaces, which were supposed to be among the core applications of the metaverse, declined sharply.
Industrial Metaverse as a beacon of hope
Concrete applications in industry
While the consumer metaverse is stagnating, the industrial metaverse shows significantly greater potential. Concrete use cases that offer real added value already exist here. The industrial metaverse enables photorealistic rendering, physical simulations, and collaborative workflows in virtual environments.
Companies use these technologies for product design, factory and production planning, and the commissioning of new plants. The ability to access a central database using various tools such as CAx, simulation, and planning software makes it possible to parallelize previously sequential engineering processes.
Digital twins and simulation
A key element of the Industrial Metaverse is digital twins – detailed virtual replicas of real plants and processes. These enable complex systems to be simulated, optimized, and predicted without endangering or disrupting the real plants.
Industries such as automotive, aerospace, and healthcare are already using VR and AR applications for design, maintenance, training, and remote support. These applications offer measurable benefits in the form of increased efficiency, cost savings, and improved safety.
Growth forecasts for the industrial sector
Experts predict significantly stronger growth for the Industrial Metaverse than for consumer applications. Spending on Industrial Metaverse solutions and services is expected to reach $6.3 billion by 2030. Leveraging the Industrial Metaverse can unlock numerous productivity and sustainability potentials.
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Gaming as the most important metaverse area
Strong growth in the gaming segment
The gaming sector is proving to be the most successful part of the metaverse ecosystem. The global metaverse gaming market is expected to grow from $25.67 billion in 2025 to $137.96 billion by 2030, representing a compound annual growth rate of 40.02 percent.
Hardware dominates with a 62.1 percent market share, while software is catching up with a growth rate of 22.6 percent. Particularly noteworthy is the role of blockchain technology, which represents the fastest-growing segment with a growth rate of 66.8 percent.
Mobile as an entry-level platform
Smartphones serve as the primary gateway to metaverse gaming, accounting for a 50.7 percent market share in 2024. This makes mobile platforms the most important entry point, as they require no additional hardware. Cloud streaming is growing at 16.7 percent annually, enabling high-quality experiences without expensive gaming hardware.
New business models through blockchain
The integration of blockchain technology enables new business models in gaming. Players can own virtual items as NFTs and transfer them between games. This creates persistent digital economies and new revenue streams for developers and players.
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Global Metaverse Development: Opportunities, Risks, Perspectives
The role of artificial intelligence
AI as an enabler for the metaverse
Paradoxically, the very AI that is currently diverting attention from the metaverse could actually enable its future. AI systems are crucial for managing complex data and creating dynamic, interactive environments in the metaverse.
AI-controlled avatars can enable realistic interactions, while intelligent NPCs (non-playable characters) create more vibrant virtual worlds. Meta emphasizes the close connection between AI and the metaverse, viewing both technologies as two sides of the same coin.
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Automated content creation
Artificial intelligence can automatically create virtual worlds by analyzing large amounts of data, recognizing patterns, and generating personalized content. This could solve the problem of a lack of content by allowing AI systems to continuously create new experiences tailored to individual users.
Training and simulation
The metaverse provides an ideal platform for training AI models. In virtual worlds, AI systems can be trained in highly complex scenarios that mimic or even exceed real-world situations. This is particularly valuable for applications such as autonomous driving or the simulation of human behavior.
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Current market developments and forecasts
Global market forecasts
Despite the current challenges, long-term forecasts for the metaverse remain optimistic. Statista predicts that the global metaverse market will reach over 2.6 billion users by 2030. The market volume is expected to grow from $94.4 billion in 2025 to $464.1 billion by 2030.
In Germany, the metaverse market volume is expected to increase from €3.6 billion in 2025 to €18.0 billion by 2030. The penetration rate for Germany is forecast to reach 40 percent by 2030.
AR and VR market development
The AR and VR market also shows strong growth potential. Globally, the market is expected to grow from $52.40 billion in 2023 to $646.50 billion by 2031, corresponding to a compound annual growth rate of 36.9 percent.
In Germany, the AR and VR market is expected to reach $2.05 billion in 2025 and grow to $2.75 billion by 2029. The number of users is expected to rise from 48.4 million in 2025 to 50.4 million by 2029.
Regional differences
The regional differences in metaverse adoption are interesting. While Germany is projected to have a penetration rate of 40 percent by 2030, other countries are significantly higher: South Korea at 96 percent, Norway at 78 percent, and Switzerland at 74 percent.
Investors and financial markets react
Decline in venture capital investments
The willingness to invest in metaverse startups has declined significantly. Venture capital investments in this space fell significantly in the first quarter of 2024. This development reflects growing investor skepticism about the metaverse's short-term potential.
Metaverse ETFs and stock markets
Despite the challenges, specialized metaverse ETFs and stocks continue to offer investment opportunities. These financial products bundle companies from areas such as virtual reality, augmented reality, 3D graphics, semiconductors, and online gaming.
Experts view the metaverse market as a long-term growth market, even if its short-term performance has been disappointing. However, investors should consider the high risk associated with focusing on a still-young technology.
Meta's strategy change
Meta itself has begun to rethink its strategy. The company is increasingly focusing on artificial intelligence and integrating AI features into its existing platforms, Facebook and Instagram. This strategic shift is already reflected in rising user numbers and a rebounding share price.
Technological challenges and solutions
Hardware development and cost reduction
A crucial factor for the future of the Metaverse is the further development of hardware. Meta is working on more affordable VR headsets like the Quest 3S, which costs under €300. The average price of VR headsets is expected to drop from $400 to $200 by 2025.
At the same time, companies are developing lighter and more comfortable devices. Advances in pancake lenses, inside-out tracking, and lighter batteries are significantly improving the user experience. AR glasses like Meta's Ray-Ban Smart Glasses with AI integration are paving the way for integrating augmented reality into everyday life.
5G and cloud computing
The introduction of 5G technology and powerful cloud computing are crucial for metaverse development. Fast, low-latency internet connections enable complex, immersive experiences without local high-end hardware. Cloud streaming services are growing at a 16.7 percent annual rate, making high-quality VR experiences accessible without expensive hardware.
Interoperability and standards
A key technical challenge is the lack of interoperability between different metaverse platforms. Users currently cannot easily switch between different virtual worlds. The development of uniform standards and protocols is crucial for a truly interconnected metaverse.
Social and ethical aspects
Data protection and privacy
The metaverse raises significant questions about data protection. VR and AR systems collect extremely detailed data about user behavior, movements, and even biometric information. Responsible handling of this sensitive data is one of the biggest challenges.
Stricter data protection regulations in North America and Europe could impact the development of the metaverse. Companies must develop solutions that ensure both innovative experiences and privacy protection.
Social Impact
The long-term social impacts of the metaverse are not yet fully understood. Critics warn of further digitization of social interactions and potential negative effects on mental health. On the other hand, the metaverse offers new opportunities for global collaboration and inclusion.
Safety and youth protection
Platforms like Horizon Worlds face security issues and challenges with child protection. Creating safe virtual spaces, especially for young users, is essential for the acceptance and success of the metaverse. Future prospects and development scenarios
Short- to medium-term development (2025-2027)
In the coming years, the metaverse will likely establish itself in niche areas. The industrial metaverse and gaming will remain the main drivers, while consumer applications will grow more slowly. The integration of AI technologies will open up new opportunities and improve the quality of experiences.
Mark Zuckerberg calls 2025 the "year of truth" for the metaverse. Meta plans to invest another €62 billion, demonstrating that the company remains committed to its vision despite the losses.
Long-term scenarios (2028-2035)
In the long term, the metaverse could become a critical digital infrastructure, similar to today's internet. The successful integration of AI, improved hardware, and new use cases could lead to broader adoption. Blockchain-based digital economies could enable new business models.
Gartner predicts that the metaverse will enter a consolidation phase over the next five to ten years. During this time, practical applications will become established and the market will stabilize.
Success and risk factors
The success of the metaverse depends on several critical factors: developing more user-friendly hardware, creating compelling content, addressing privacy concerns, and developing sustainable business models. The risk of complete failure remains, especially if the technological and societal challenges are not addressed.
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The current state of the Metaverse
The great metaverse promise of 2021 has now given way to a more sober reality. The initial euphoria gave way to the realization that the technology is not yet mature enough to meet the lofty expectations. Meta's billion-dollar losses, weak user numbers, and declining VR sales clearly demonstrate that the consumer metaverse is still far from being suitable for mass adoption.
Nevertheless, it would be premature to completely write off the metaverse. The industrial metaverse is already demonstrating concrete use cases and added value. The gaming sector is proving to be a growth driver, and the integration of artificial intelligence is opening up new opportunities. Long-term market forecasts remain optimistic despite the current challenges.
The current state of the metaverse reflects the typical trajectory of technological innovation: initial hyperbole is followed by a "valley of disappointment" before practical applications become established. The metaverse is currently in precisely this phase. Whether and when a breakthrough will occur depends on whether the fundamental technological, economic, and societal challenges can be resolved.
The future of the metaverse likely lies not in a single, all-encompassing virtual world, but in specialized applications for various areas such as industry, education, gaming, and social interaction. The coming years will show whether this vision can become reality or whether the metaverse will go down in history as one of the biggest technology hypes.
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