The metaverse, a virtual world where users share experiences and interact in real-time within simulated scenarios, burst onto the mainstream in 2021 thanks to Facebook’s rebrand to Meta, alongside various aggressive investments in this space.
The metaverse was promoted as a digital utopia, revolutionising how humans would socialise, consume media, and work. However, this vision had quickly faded by 2023. The metaverse was no longer seen as the future. It became more of a fad.
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The metaverse winter
Cooling interest, prohibitive costs, and the immaturity of enabling technologies resulted in a metaverse winter, which began in 2023. There are still no signs that spring is coming, with the metaverse remaining very much a long-term strategy.
Current sentiment surrounding the metaverse is sceptical. In GlobalData’s Tech Sentiment Polls Q3 2025, 45% of respondents said they did not think the metaverse would disrupt their industry, while 59% said it was all hype and no substance.
The abandonment and postponement of metaverse projects by Big Tech in 2023 damaged the theme’s image. This was compounded by high-profile missteps like Mark Zuckerberg’s widely ridiculed metaverse selfie, released in August 2022, which even Zuckerberg himself admitted was “pretty basic.” Layoffs in Meta, Microsoft, and Disney’s metaverse divisions at the end of 2022 and the beginning of 2023 confirmed that the theme was a long way from becoming mainstream. Meta also laid off employees from Reality Labs, its virtual reality and augmented reality-focused research division, throughout 2024. Reports indicate Meta will make further cuts to Reality Labs in 2025. Furthermore, Alibaba has scaled back its efforts, laying off dozens of employees from its metaverse unit in November 2024.
In the shadow of generative AI
Generative AI has also been stealing the tech spotlight ever since OpenAI’s release of ChatGPT in November 2022. Metaverse initiatives struggled to justify funding without clear near-term results as investor attention and enterprise budgets shifted toward AI.
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By GlobalDataThe metaverse is currently in a long period of recalibration. Its future will be less about grandiose, all-encompassing virtual worlds and more about subtle, practical integrations of immersive technologies into real-world applications. This will require a slower, pragmatic, and financially cautious approach over the next five to ten years. The focus will be on narrower applications and sector-specific use cases (such as training in healthcare and digital twins in manufacturing) rather than the sweeping, transformative consumer-focused technology once envisioned. Widespread adoption will only ever be realised once the metaverse becomes interoperable, regulated, and has a standard definition.
