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    April 01, 2024 Practice Marketing

    The metaverse has failed to live up to expectations, but could it make a comeback?

    By Matt Reynolds
    Companies that got behind the metaverse since have retreated.

    Companies that got behind the metaverse since have retreated.

    Stock photo

    At one point, the metaverse was a groundbreaking piece of technology that promised to change lives and revolutionize industries. The term, first coined by novelist Neal Stephenson in his 1992 book Snow Crash, describes a world where people interact in a digital society and economy using avatars.

    In the intervening years, the concept has become a reality. The online virtual world of Second Life has been around since 2003. The popularity of video games like Fortnite, EverQuest and World of Warcraft shows there is an appetite to interact in virtual communities. Mark Zuckerberg even went all-in, announcing in October 2021 that his company Facebook was changing its name to “Meta” and would invest heavily in “the metaverse.”

    Zuckerberg’s vision was for a more ambitious and all-encompassing universe built on Web3, where people could don virtual reality goggles and play games, view 3D art and hold business meetings in augmented reality.

    For those who could wrap their heads around the idea, there was skepticism and derision. But there were also some heavy hitters who invested big, including Google, Disney and Microsoft.

    Some in the legal industry were drawn in too, including Richard Grungo, a New Jersey-based lawyer. In late 2021, his law firm, Grungo Colarulo (now Grungo Law), set up a personal injury law firm in the 3D virtual world called Decentraland, a digital platform launched in 2020 where users can buy virtual real estate and sell services using cryptocurrency. 

    At that time, Grungo told the ABA Journal he was excited by the potential of the metaverse to communicate with clients and practice law. But he struck a note of caution, wondering if Decentraland would take hold like Zuckerberg’s social media juggernaut Facebook, or meet the same fate as the once-popular platform Myspace.

    Today, Grungo is still optimistic the technology is here for the long run and notes that it is still in its infancy. But he admits that interest in his firm’s Decentraland office, which rented out space to other firms, has waned.

    “My office still stands in the metaverse, and there’s still tenants,” he says. “However, just like out in the public, the focus on that space has not been there.”

    Companies that got behind the metaverse since have retreated. In early 2023, The Information reported that Microsoft was laying off 100 workers, signaling the demise of its metaverse team. In March 2023, Disney cut its metaverse division as it announced it would lay off 7,000 employees companywide. Even Zuckerberg has scaled back his interests in the technology after investing tens of billions of dollars.

    Some commentators doubted Zuckerberg’s pitch from the beginning, including Ed Zitron, a contributing tech columnist for Business Insider and CEO of EZPR, a media relations company for tech companies that is based in the San Francisco Bay area. He says Zuckerberg’s vision was more science fiction than fact.

    “The problem is what Zuckerberg was showing was this immersive technology that did not exist yet and will not exist for decades,” Zitron says.

    ‘Game changer’

    The rise of another much-hyped technology could explain why interest in the metaverse has fizzled. In November 2022, OpenAI rolled out its groundbreaking chatbot ChatGPT. The technology quickly captured the legal industry’s imagination in a way metaverse evangelists can only dream of. Some law firms have adopted generative artificial intelligence into their workflows to improve efficiency and change how they work.

    “Everybody in the legal world is figuring out how to capitalize on generative AI, and for good reason. It’s a game changer,” Grungo says.

    Launching a law firm in the metaverse presents other challenges that have hobbled its progress, Grungo adds. He says trading in cryptocurrency is complicated and the space is unregulated, making it a tricky proposition for law firms.

    Jordan R. Rose, the founder and president of the Scottsdale, Arizona-based Rose Law Group, is confident the technology will take hold and rejects the premise that generative AI stole the metaverse’s thunder.

    “If you say metaverse, you’re probably also integrating some AI. It all works together,” says Rose, whose firm offers legal advice to businesses operating in the metaverse, and in 2022 held a metaverse wedding ceremony in Decentraland.

    But Zitron says that on a practical level, the metaverse has failed to deliver. Some virtual reality goggles are uncomfortable and unwieldy, the virtual worlds on offer are clunky and unimaginative, and the user experience is disappointing, he says.

    “If you could put on a helmet and be in a magical world, perhaps that would be cool. That’s not what’s on offer,” he says.

    He says that many companies that bet big on the metaverse realized how expensive it is to create and maintain a virtual world. He notes how the makers of the video game PUBG: Battlegrounds have an entire server infrastructure in place to stop the game from crashing when players join online. “All of these brands went into this thing, and then they saw this insane cost. And also, you can’t spin [these virtual worlds] up overnight. It’s just not possible,” he says.

    Second life?

    In 2015, the technology site TechCrunch called QR codes a “laughingstock.” Then the pandemic hit, everything went contactless, and suddenly they became a mainstay of everyday life. Could the metaverse pull off the same trick and enjoy a resurgence? 

    Zitron argues that QR codes have specific use cases and are relatively easy to create and use. He says the concept of the metaverse is flawed because “it doesn’t describe anything,” and there is no demand for the public to step into a world that’s essentially a poor version of reality. “It’s not going to have a comeback. It never arrived,” Zitron says bluntly.

    As a 51-year-old Gen Xer, Grungo says he gets nauseous in virtual reality glasses and finds it difficult to move around. Still, he believes that younger generations will revive interest in the technology. “Gen Z and Gen Alpha are here. They’re entering the workforce, and the gamification of the world has not changed, it’s accelerating,” he says.

    Rose is even more forthright. “The metaverse journey is far from over,” he says. “Frankly, I think it’s just beginning.”