Can the metaverse make a comeback in 2023?

2022 was meant to be the year of the metaverse, but while a few seemingly out-of-touch tech bros, namely Zuckerberg, were spending time and vast sums of money on virtual worlds and creating avatars without legs, most of us were more concerned with trying to survive in the real world, amid a cost of living crisis, pandemic, climate crisis…

And so the year of the metaverse didn’t really happen. In fact, Meta lost $13.7 billion on Reality Labs in 2022—its metaverse technologies division—an expensive gamble that's yet to bear fruit. Many brands also gambled and lost, rushing to buy up virtual real estate and creating experiences in Decentraland and Sandbox that failed to attract many users at all. The average active population on Decentraland right now is just 810 a day.  

Mark Zuckerberg in a Meta Quest Pro demonstration during the virtual Meta Connect event in New York back in October, 2022. Photo: Getty Images

But is it game over already for the metaverse? Or is it still evolving to find the right iteration that will capture the public's fervour like generative AI tech—ChatGPT, Midjourney, Dall-e from and Stable Diffusion—has in recent times?

"The Metaverse exploded out of nowhere and quickly died off," says Rob Mills, head of digital at independent digital agency Affinity in Sydney. "The world’s curious, but most people don’t know what the technology can do, practically speaking. We may see it follow a similar path to blockchain. It’s gone for now, but it’ll be back. In the meantime, there may be more gimmicky stuff until the technology matures and delivers a stronger role in society and everyday life."

Virtual insanity

If nothing else, the metaverse is confusing. Ask a majority of people what exactly the metaverse is and most will fail to give a clear answer. It hasn't quite worked out what it is—whether it's virtual reality, mixed reality, augmented reality, or avatars without legs. This confusion and spreading itself too thinly is perhaps one of the reasons it's failed to cut through.

"There is still a struggle to understand the 'why' of the metaverse and advocates have yet to nail a convincing and enticing pull for consumers to get on board," says Antonio Panuccio, digital strategist, media, at Enigma. "Brands in the past half-decade have been very quick—perhaps too quick—to pivot to emerging technologies and fads. NFTs was one that peaked and fizzled and the metaverse is the other (although it hasn't fizzled quite yet)."

Guy Futcher, regional creative director at VCCP, says that he often sees brands jumping into new tech so they can claim the “world’s first,” but the ideas are often average. The same has been true with the metaverse.

"Most companies haven’t thought about the most important thing—whether customers will want to spend time there," says Futhcer. "Which means they end up creating expensive digital ghost towns."

Will 2023 see a metaverse comeback? 

It's not all been a virtual disaster for the metaverse. After all, 2022 was the year when everyone finally acknowledged the existence of the metaverse on a wider, more mainstream scale. 

"It's important to think about the metaverse beyond specific platforms like Sandbox or Decentraland, and reframe our appreciation of the metaverse as a broader concept of an immersive, improved reality that expands our lives," says Nuno Dores, associate creative director at Virtue APAC.

"To that end, world-building games are predicted to double from 2021 to 2031. Roblox, which has existed for over a decade, grew its daily active user base by 31% in 2021. New experimental metaverse platforms are currently being developed/launched, example The Otherside by Bored Ape Yacht Club, Wholeland by The Fabricant, Spatial funded by Samsung. It might have been touted as the year of the metaverse within the marketing industry, but we feel we are just getting started in 2023 and beyond."

Hironaga Yai, senior strategy director, MediaMonks Tokyo, believes the metaverse is a platform that has, and will, evolve gradually as technology advances.

"If you only look at what hype topics are talked about, you will misread the essence of the metaverse," says Yai. "In Japan, more and more companies, like Fuji Soft, En Japan and Hikky, are allowing people to work in avatars, for example. There are also many traditional Japanese enterprises, such as banks, pharma companies, etc, that have used a Japanese metaverse platform called Cluster to attract technology talents by holding events on the platform. The metaverse is slowly but fundamentally penetrating into the lives of Japanese culture and will continue to grow but not become a marketing fad."

And far from being game over, we are already seeing new iterations of the metaverse taking shape at the beginning of 2023.

"We can see that the industry is beginning to shed the old idea of the metaverse and give new meaning to immersive virtual experiences, their function and purpose, and what it means for the relationship between brands, consumers and technology," says Robin Lau, senior strategist, Dentsu Solutions. "From personalised direct-to-consumer (B2C) experiences like Bondee to new technology that will empower the next generation of virtual world builders (B2B) like ASUS's new 3D laptop displays."

What metaverse brand activations are we likely to see this year?

"The sweet spot for brands has been in creating fun and engaging immersive destinations," says Mike Jones, head of digital experience and innovation at The Works. "And in recognising that the metaverse is about shared experiences. It has the potential to become the new digital town square."

The Australian Open is a good example of the maturation of the metaverse experience. In 2022 they built a destination in Decentraland. And while considered a success, it required customers to go to a more obscure platform and use a convoluted digital wallet account set up to access it. It was quite a mountain to climb for the uninitiated. 

For their 2023 tournament, The Australian Open moved virtually to Roblox. This provided a more accessible and cost-efficient experience. It no longer needs digital wallets to access; attendees merely need a free Roblox account. The virtual event proved incredibly successful—attracting 2.5 times the number of visitors than the live event. 

"I expect that this shift to lower barrier of entry platforms with easier-to-use development tools is a key learning we will see more of this year from other brands," says Jones.

Tessa Conrad, head of innovation at TBWA Asia says that before the metaverse can truly take off, trust needs to be re-established and only time and repeated positive behaviour can do that.

"One big aspect right now is figuring out regulation and community and brand safety when it comes to blockchain technology which enables the future of the metaverse and the periphery communities," says Conrad. "We all knew this would happen at some point as—the same as with all new things—when completely left alone, things are going to go awry."

But Conrad is optimistic about the future and potential of the metaverse and the role brands can play in helping to build something from the bottom up.

"This year, I think we'll see much more focus on the pure community aspects of the metaverse," says Conrad. "This will lead to more shared experiences that evolve over time (ie: world exploration or evolving gaming spheres), more co-creation and peer-to-peer selling/sharing as we're seeing in the fashion universe and more serious professional growth when it comes to the smaller but ever-growing communities, getting their future plans together and their ability to partner with brands."

Robin Lau of Dentsu Solutions is confident the world has shed the flop that was the 2022 metaverse and is ready to redefine and give new meaning to immersive digital experiences in 2023.

"I believe that in the next year, we will begin to see more metaverses (or immersive virtual experiences) that showcase what many said have lacked in 2022, 'purpose and utility.' And this can manifest in a variety of ways,” says Lau. "Contrary to the VR metaverse, many believe that the future of the metaverse is in XR (mixed reality) where digital enhances our real-life experiences. And with the growth of wearables and AI, it's not hard to envision this becoming available to the masses in the next few years."

Álvaro Anguita, national head of digital at Initiative, believes it’s unlikely that there will be a single metaverse. Rather, it is more probable that there will be multiple metaverses, each catering to specific interests or use cases such as leisure, education, travel, etc.

"In my opinion, the next frontier for brand activations will be in mixed reality proposals and developments related to the videogame industry, as we have seen with popular games like Fortnite, World of Warcraft, and League of Legends," says Anguita. The future holds a vast array of opportunities and as always, first in, best dressed."

Futcher, regional creative director at VCCP, says that brands should continue to look for new angles and ways to engage, especially younger audiences already obsessed with expressing themselves as avatars on social platforms and video games.

"I predict sport and entertainment will experience a metaverse evolution, and spectators will be able to get more up close and personal to their favourite sports team or artist," says Futcher. "And brands will look to find how best to jump on the bandwagon."

And so the metaverse marathon looks set to continue. Brands will no doubt try and fail. The bigger tech companies will continue to race towards becoming the primary and preferred access point for one single metaverse. And no doubt, as per usual, gaming, adult industries and militaries will probably show us how it’s done.

 "Until then, expect another year of running towards an unknown finish line," adds Futcher. "And a lot of avatars with no legs."