Rethinking The Current Struggles Of Metaverse: Is It Really Doomed?

7 Jun 2023

Did you ever believe that the metaverse would be as successful as the hype pushed by the big tech would lead you to believe? It was supposed to enable “signing out” from the physical world in order to dive into VR and have a blast of an experience. Although enticing, the concept is now going through a period of doubt. The turmoil caused by multiple failures in the metaverse domain certainly isn’t helping further development. In general, the immersive mixed reality is at a turning point, which will affect its future as a whole, not just the metaverse.

Despite the recent setbacks in the metaverse space, it’s still one of the disruptive technologies many will be looking to benefit from. While Microsoft canceled two metaverse projects, they are still investing in XR and have shifted their focus to their Microsoft Mesh platform, which enables users to work together in a virtual world. Despite reporting a colossal loss in 2022, Meta has also pointed out some positive aspects of their metaverse project, which surpassed revenue projections and stays optimistic about their new VR headset, Quest 3. Additionally, China and the WEF are investing heavily in metaverse development, with the WEF’s “Global Village” project using Microsoft’s solutions. Furthermore, Microsoft has partnered with the US Army for mixed reality training. Overall, while the metaverse is going through a turning point, it still has potential for proper growth and more sensible development. It’s safe to say that the metaverse is here to stay.

The end of Altspace VR & MRTK

Instead of starting the year comfortably, many big tech & IT employees were unpleasantly surprised by the fact that they were cut off from all their work-related accounts and services (which actually meant that they’d been let go – no notice up front).

Besides Amazon, Google, Coinbase, and Tesla, among others, Microsoft had also cut back on their team, firing approximately 5% of their entire workforce. As a part of this restructuring and to cut expenses, Microsoft canceled two metaverse projects – Altspace VR and Mixed Reality Tool Kit (MRTK). As a result, pending VR and mixed reality projects will also suffer a delay, to say the least.  

So, what were they working on throughout the duration of Altspace VR & MRTK? Altspace VR was acquired by Microsoft in 2017, for its achievements in developing virtual environments in order to serve digital event venues (e.g., for artistic performances). MRTK, on the other hand, was focused on building a UI for various metaverse projects. Both are now canceled.

All of this does not quite align with Microsoft CEO Satya Nadella’s point of view, perpetuated until the end of last year and even early this year that the metaverse is truly revolutionary. Let’s remember that Nadella once called the metaverse a game-changer for the “sense of presence” it infuses into the digital space. With this in mind, Microsoft’s recent decision to scrap their metaverse and start it over a little differently next time around is surprising.

Additionally, Meta’s Reality Labs (which is basically Meta’s metaverse department) made a $4B loss during Q4 of 2022 alone, so one can’t help but ask what’s going on with the metaverse right now. 

Microsoft Mesh 2023 & the Industrial Metaverse

Now, although Microsoft axed Altspace VR, this does not translate to the definite end of metaverse development by the tech giant. Instead, Microsoft is shifting the focus from VR towards XR (which is a hybrid of virtual, augmented, and mixed reality). As of now, Altspace VR is canceled, but all the resources have been transferred to support immersive experiences of Microsoft Mesh, which is an XR collab platform, enabling users to interact with real-time 3D (RT3D) visualization of friends and colleagues. Microsoft Mesh was announced back in 2021, aiming to improve collaboration efficiency within corporate teams and organizations. In other words, Microsoft Mesh enables users to work together as if they’re physically in the same office space.

So, users will still have an opportunity to immerse as an avatar in a virtual world through a headset, computer, or smartphone with the help of HoloLens; it’s just a matter of Microsoft deciding to sell the concept to an enterprise audience instead of a broader user base (as was the case with Altspace VR, where it was built to be used primarily for leisure and fun).

Microsoft Mesh was envisioned during the COVID-19 pandemic when many companies adopted remote workflows. So, Mesh can be viewed as a reaction to that, a concept striving to bolster social interactions and connect workers in a way that offers additional value compared to conventional conference calls and video chats.

Now, let’s look into Meta: Despite an appalling $4B of loss, Meta considers Reality Labs a “long-term investment”, while the product surpasses  revenue projections, daily and monthly active user targets, and average income per user realized in the short term. Meta’s total income (consisting of all divisions and all the apps and services they offer publically) stands at $32.1B, higher than the $31.53B projected for 2022.

They’ve optimistically announced the new VR headset, Quest 3, coming out during 2023. Now, if this optimism also turns out to be unfounded – it will be a hindsight observation to conclude that the metaverse as a whole, and especially Meta’s rendition of it, has come to a dead end…

Are there any objective signs that the metaverse isn’t going to fail?

Is the metaverse going to fail at all, given the full context of the situation elaborated by this point? In short: No. Metaverse isn’t nearing its end, at least not any time soon.

Recently, China has invested heavily in the metaverse. At the same time, the World Economic Forum also announced its own metaverse development kicking off in 2023 in order to deal with global, pressing issues. Their project is called “Global Village.”

The Global Village will be equipped with conference halls, discussion spots, and other spaces for simulating different scenarios in order to bring to focus said global issues, all powered by VR technology. Global Village will be using Microsoft’s solutions, i.e., Microsoft Mesh.

Apart from the WEF, Microsoft has teamed up with the US Army to facilitate mixed reality training in certain aspects of the military training program. The Army has placed an order for some 10.000 Integrated Visual Augmentation System (IVAS) headsets to be tested out in the field.

Metaverse and Education

Classes and lectures might be heavily improved and made more exciting and easy to follow with the help of the metaverse. Lecturers could offer first-person experiences to their students or instantly summon otherwise expensive or out-of-reach models in order to demonstrate a principle they’re trying to teach. Even history can now be taught in the metaverse while “being there as it happens” – something one must only imagine to comprehend…

Let’s be clear about one thing: it’s probably not a good idea to replace traditional classrooms with VR headsets completely. Instead, metaverse tech can be used to enrich lectures and other educational sessions with an immersive experience.

The end goal of introducing the metaverse to education (or is it introducing education to the metaverse) is to extend lessons into experiences. After all, immersive experiences in education are so rich in potential that they can indeed shift the learning paradigm. A better educational process can be realized through the metaverse, given that the implementation is adequate, authentic, meaningful, and true to its purpose.


It seems pervasive that outside of the largest players out there, whose recent and future undertakings have been discussed herein, every attempt at doing business in the metaverse failed to utilize the very potential and all the aspects of the technology that makes the metaverse revolutionary in the first place. Add to that the major flops of the big tech companies, and you’ll see why many consider the technology to have reached a dead end in its development.

However, some optimistic predictions can still be made, as the concept will soon be purged of one-dimensional, money-grabbing, and, most importantly, hastily implemented attempts characterized by a wild tendency to just slap the metaverse tag onto conventional products & services. The gatekeepers have seemingly realized that their business model is more applicable as an enterprise solution, as opposed to the approach of one-size-fits-all (applications).

Check out the rest of 42’s blog for more topical articles.

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