2022 was supposed to be the year of the Metaverse. What happened?

Billy Huang runs the Metaverse advertising agency. Well, he sure does run one Advertising agency. And not so long ago, that agency attracted a host of established brands hungry to take advantage of the untold potential of the Internet’s newest, most expansive virtual frontier.

But given the events of this year, Huang is now considering dropping the M word.

“Maybe now that the sprawling terms are gone, we need some rebranding,” Huang said. Decode.

Huang’s company, Insomnia Labs, has spent 2022 guiding companies like Under Armor and L’Oreal through Web3 experiences ranging from NFT-driven ad campaigns to DAO affiliates. And while those efforts have borne fruit, they are a far cry from fully launching brands into a futuristic world of digital existence that, not so long ago, seemed poised to redefine the human experience.

What happened?

Last October, Facebook redirected its entire giant organization towards dominating virtual worlds, changing the name to Meta to demonstrate this commitment. The ensuing months saw massive inflows of venture capital into the Metaverse startups. Metaverse platforms have seen huge spikes in traffic. In the spring and summer, the letter dominated the speeches and covers of prestigious magazines; Last fall, “metaverse” was nominated as a finalist for the Oxford English Dictionary Word of the year.

After a few months, the hype had almost collapsed, as had the reluctant worlds’ inhabitants. All interest was thrown away by the falling billion dollar dominoes in the broader crypto space. Oxford Word of the Year, perhaps fittingly, ended up in “puck mode,” an Internet term for presumptuous and careless behaviour.

According to experts like Huang, the problem is user dependence. Metaverse promised to bring millions into a new vision of the internet. But even those who ventured in did not stay.

“For the most part of this year, we have recommended very few metaverse campaign activations, and with good reason,” Huang said. “Users are not there.”

Why didn’t they appear? presentA prominent Web3 game creator and influencer believes that many metaverse platforms and investors are confusing the novelty of virtual hangout spaces (think digital parks and offices) with actual use cases for metaverse technology.

“If there’s only one place called Metaverse where we sit and do nothing but hang out and talk, it’s no better than sitting in Discord,” Brisnet said. Decode. “It’s Club Penguin.”

When the metaverse captured the world’s imagination earlier this year, digital audiences flocked to check out metaverse platforms like The Sandbox and Decentraland. Users have paid hundreds of millions of real dollars for hypothetical plots in those worlds. In February and March, Decentraland averaged 50,000 visitors per day, according to the company. But that number dropped by more than 80% soon after.

“It really doesn’t matter how many users you can direct to the landing page,” Huang said. “They won’t convert, they won’t stay, because they won’t see the value.”

This is not to say that immersive online spaces will not be able to unlock new types of value and utility. they already have.

Josh Rush, co-founder and CEO of Surreal, a virtual events platform, has had a great deal of success this year sponsoring companies in the world of immersive digital advertising. Earlier this year, Surreal launched its pop-up metaversal experience for Flipkart, the Indian e-commerce giant.

This event was a great success. half of users spent an hour on the space, which is a retention rate unknown to advertisers; The event purchase conversion rate was 400% higher than regular ad campaigns.

The thing is, Rush won’t tell you that the event took place in the metaverse. It took place in a self-described “microverse”, a location specially created by Surreal to achieve its client’s goal.

“It’s not Sandbox, Fornite, or Roblox,” Rush told me. Decode. “It’s something a company has created with the specific purpose of marketing and hopefully selling something that people have found valuable.”

Microverses like Surreals offer a vision of the future of virtual spaces in stark contrast to those of platforms like The Sandbox, which have long envisioned the metaverse as an all-encompassing constellation of many different metaversal platforms, each with its own virtual neighborhood, all interconnected.

Small scales like those created for Surreal’s big brands do not by definition align with this dream. It is not compatible, which means it does not connect to any other platforms or websites. They are not so much virtual neighborhoods as virtual pop-up castles.

Despite this, Sebastien Bourget, COO and co-founder of The Sandbox, finds that the success of small virtual platforms with dedicated features is beneficial, rather than contradictory, to a global metaverse.

“We’re seeing an increasing number of worlds, for different goals, for different niche audiences and for different platforms, and that’s a positive thing,” Burgett said. Decode. “Having only a few large worlds – centralized or not – would not be helpful for building that vision [of a unified metaverse]. “

But Surreal’s Rush has no interest in contributing to a unified digital playground known as a “metaverse.” Instead, he sees the future of space as a constellation of many walled-off walls, or mini-blocks, each with specific goals and a tailor-made utility.

We’ve seen the pendulum swing away from multi-million dollar investments [platforms like] He adds that the sandbox, where people don’t really spend any time and there’s really nothing to do, to small places where companies can create engaging 3D experiences that can run as part of campaigns or even be used in other parts of the business. Speed.

Trends in the emerging world of metaverse gaming seem to point in the same direction.

Web3 games like Acce Infinity It rose to dominance last year, propelled by its “play for profit” model that encouraged users to participate in the online game world by giving them monetary rewards. While Axie generated billions of dollars in NFT trading volume in 2021, the platform’s token was Crashed soon afterWhich calls into question the entire play-for-profit model.

Brisnet still believes that games and Web3 are very promising companions. However, he believes that earlier Web3 gaming efforts failed when they tried to use the games as a way to promote some universal concept of metaverse, rather than taking advantage of Web3 tools to develop individual video games.

“You can’t just come and focus on tokens and floor prices, you have to focus on telling stories, creating great intellectual property and incredible experiences,” said Brisnet. “Because if you don’t, no player has to switch.”

In this sense, Brycent also sees the future of the metaverse not as a shared utopian virtual space, but as a collection of projects — here, great video games — augmented by NFT integrations and other blockchain-based applications.

“The Metaverse is the next generation of video games,” said Present. “Games and ecosystems with their own IP, that’s where I think we’ll see this kind of thing flourish.”

Such a reading of the state of the metaverse might be far better for the powers that be in the world than for the original idealists and subversives of Web 3. If the metaverse is a means rather than an end – if metaverse commerce boils down to metaverse brands and games to storytelling – then what’s to stop the companies that have perfected these forms from Expanding its dominance in the virtual world?

“Web2 companies have a huge advantage,” Present admitted. “You’ll see Disney, Nintendo, all these big game companies come in and say, ‘Okay, we’re going to add blockchain technology to the backend, and our players won’t know the difference, and we’re going to create great experiences.'” “

Such replication of Web2’s authority structures in Web3 would be a sad case for fanatical dreamers like Decentraland’s creative director Sam Hamilton.

Hamilton admits his platform has taken a hit in recent months, thanks to a metaverse hype cycle that he wishes never happened in the first place.

“The eyes of the world were on us very early on,” said Hamilton. Decode. “Honestly, we probably would have liked to have two more years to improve the products before we got to this point [of exposure]But that’s what it is.”

However, Hamilton believes these are only temporary setbacks. He’s unwavering in his belief that in several years – within a decade, if that’s how long it takes – humanity will inevitably transition into a virtual, all-encompassing existence in the metaverse. And he is doing everything he can to ensure that when that day comes, Decentraland will have built the foundations of the digital world in such a way as to prevent it from falling – like the physical world – into the hands of hyper-centralized corporations.

He acknowledges that Decentraland’s still-steady core followers, who number around 10,000, are an ideologically motivated group that clings more to the theoretical promise of the Metaverse than to the tangible benefits that would likely appeal to ordinary netizens.

“The people who stayed were brought together by philosophies. They want to see the Internet move in a different direction,” Hamilton says. “However, most people are not interested in decentralization.”

Hamilton can’t wait for the masses to change their priorities.

“The reality is, by the time they care about it, it’s probably too late,” Hamilton said. “So we have to keep that philosophy, and we have to fight that fight, even if it makes our job more difficult.”

Small, isolated, corporate-dominated networks might describe the near future of Web3 commerce and gaming, but Hamilton says he’s playing the long game.

He said, “If you show the movie in the cinema, we are still in the days of silent movies.” “We have many decades of innovation and invention ahead of us to get to blockbusters like star Wars. “

The thing is, silent movies filled movie theaters, too.

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