A Retrospective of the Metaverse in 2022

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1Q 2023 | IN-6803

The start of 2022 was the apex of excitement for the metaverse, but it ultimately looked far truer to life than the virtual worlds of opportunity highlighted by the most ardent metaverse proponents. Meta brought the hype, but also caused conversations about the metaverse to go through ups and downs throughout the year. While 2022 may have failed to live up to the admittedly near-impossible billing as the “Year of the Metaverse,” it was a solid start to continue building upon in the years ahead—especially with a strong focus on the transition from Two-Dimensional (2D) to Three-Dimensional (3D) interfaces.

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"Metaverse" Is the Runner-up in the Oxford University Press' 2022 Word of the Year


At the start of the year, it felt like 2022 was preordained to become the “Year of the Metaverse” after Facebook changed its name to Meta in late 2021. Metaverse quickly became the talk of the tech industries and yet, despite this lead-in and hype surrounding the metaverse, the metaverse fell short to “goblin mode,” as the Oxford University Press’ Word of the Year 2022. Metaverse failing to capture Word of the Year may surprise some, but in many ways, this outcome is emblematic of the metaverse’s 2022—worthy of attention, but not yet ready for the mainstage as the headliner. There were certainly factors that diminished the metaverse’s image: crypto winter (due to its close association with Web3), Meta’s mounting losses tied to Reality Labs (and expected spending moving forward), and the gap in individuals’ perceptions and what is currently available on the market.

Looking past the issues with cryptocurrencies, the crypto winter also engendered negativity around virtual worlds, which brought to light the limited number of actual users in these new virtual spaces and speculative nature of what drove initial attention to these companies and properties. Once the billions of dollars in transaction volume evaporated, the focus shifted to the disparity in graphical quality of these virtual spaces compared to console and Personal Computer (PC) gaming. While Meta’s Horizon Worlds was not part of the crypto winter, it also received negative feedback due to its limited graphical fidelity (in large part due to limitations of the Quest 2 platform).

Meta’s perceived struggles stood out as the greatest detractor for the metaverse in 2022. What was once viewed as the dawn of a new era in tech, quickly became viewed as a strategic misstep. John Carmack, a renowned voice within the gaming industry and Virtual Reality (VR), was the Chief Technology Officer (CTO) of Oculus and stayed on after Facebook acquired the company, but left Meta (as an executive consultant) in December 2022. While Carmack’s departure by itself is not indicative of any future problems for the company or the metaverse, it could further diminish views of Meta’s direction and, ultimately, the metaverse.

Despite these issues and 2022 failing to live up to the lofty, and admittedly impossible, expectations as the year to usher in the metaverse, these developments are likely for the best.

Growing Pains Are Okay Because the Tech Isn't Ready


It’s been said many times, but too much attention has been devoted to the spectacle and promise of the metaverse, leaving too little discussion around current trends and the necessary technological steps required to bring about this future. The buildup to the metaverse will not be a light switch moment when the metaverse is suddenly here, but rather a slow process when, over time, these elements will both come to fruition and become part of daily life. In some ways, our expectations (or demands) for transformative technologies is guided too heavily by past market migrations. Many ask, for example, what is the “iPhone” moment for the metaverse? Some had thought Facebook changing its name to Meta was that moment, but clearly that didn’t live up to its billing. The problem with this line of comparative thinking, however, is that it fails to adequately account for the differences in market and technological requirements.

Many view the iPhone (and Android) as that light bulb moment and, in many ways, it was, but the groundwork was already established by the previous work done by other companies and manufacturers—smartphones existed well before iOS and Android. The transition from feature phones to smartphones was also far less significant than the transition from the Two-Dimensional (2D) to the Three-Dimensional (3D) interfaces of the metaverse. The metaverse will require significant developments in connectivity and computing to support the eventual use of smart glasses in public areas. Meta’s Reality Labs investments are often misrepresented or perceptually skewed to the “metaverse” when, in fact, the majority of this spending is allocated to Augmented Reality (AR) and smart glasses; Horizon Worlds and metaverse platforms represent far less of that expenditure (around 20%). AR is a key technology for the metaverse, but significant work is required beyond just the tech used in smart glasses or mobile devices.

3D presents critical challenges to make it accessible to the masses, requiring cloud computing and platforms to make content creation and access to content and services for the many, not the few. In this regard, the coming years will see significant attention devoted to 3D content generation and Artificial Intelligence (AI); NVIDIA, for example, has spoken about neural graphics and, more recently, OpenAI discussed the potential for its open-sourced Point-E that can create 3D objects from text prompts (using AI/Machine Learning (ML)) using point clouds, requiring fewer computational resources than traditional mesh-based platforms. AI is used to convert the point clouds to meshes, but it currently lacks the fidelity and precision of other platforms; again, this is a prospective glimpse of the future, but not yet ready for primetime.

The business models and standards are also far from ready. Larger organizations like the Metaverse Standards Forum and Digital Twin Consortium, for example, are less than 2 to 3 years old. These early days will focus on foundational elements like 3D file formats and interoperability. Some of the most advanced visions of the metaverse, such as holographic interfaces, will require new protocols or significant reworking of existing standards. The runway is long and quite a bit can and will happen before we find ourselves working and playing in a true metaverse.    

3D Is the Key


When it comes to the early stages of the metaverse, it’s important to deconstruct the longer-term vision and focus on the key elements first. This avoids the trap of setting an expectation of “Ready Player One” and delivering Zuckerberg’s avatar and Horizon Worlds. It also allows the market to start establishing best practices and the gradual transition of user behavior. This latter part is critical because it highlights part of the perceptual problems Meta is having with its metaverse efforts. Meta continues to focus too much on technologies like VR that are not yet ready for the mainstream audience. Most users are still not able or willing to wear Head-Mounted Displays (HMDs) for extended periods of time (or at all), ignoring the fact that most standalone devices can only operate for a few hours at most without charging or plugging in. And yet, this is the image that Meta projects as its vision for the metaverse—yes, this future is possible, but it’s further out. Contrast this to what SK Telecom has done with ifland and we start to see why SK’s platform makes more sense as a global platform than Horizon Worlds (at least in its current state).

Varying views of the metaverse also prevent users and the industry from moving forward at a more efficient pace. Irrespective of one’s perceptions or views of the metaverse, 3D represents a common element for all takes on this future, and even for the metaverse naysayers, it is hard to refute the eventual transition to more 3D interfaces and workflows. Developments like OpenAI’s Point-E or efforts around Universal Scene Description (USD) and NVIDIA’s Omniverse, or the new focus from Adobe on 3D represent some of the best signs the metaverse is well-positioned for the future. As more companies use 3D in their workflows, this will create the necessary familiarity and changes to user behavior to progress the metaverse to more areas of our everyday lives. The use of 3D assets, for example, will help establish 3D marketplaces and eventually extend to creator economies and broader consumer use (beyond just gaming).

This snowballing use of 3D will generate the demand and need for the compute, connectivity, and intelligence from future technologies like 5G-Advanced, 6G, and edge/cloud computing. The metaverse is simply a term that conveniently codifies many of the trends and potential for 3D—this future is not dependent on people accepting or embracing the term metaverse. Regardless, if metaverse fails to take the top spot as Oxford University Press’ 2023 Word of the Year (or falls off completely), 2023 will prove to be an interesting year for the transition from 2D to 3D.



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