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• Why Metaverse is Failing: Market saturation and technological limitations thwart mass adoption.

• Investors face steep losses amid unsustainable hype and escalating operational challenges.

• Shifting user expectations and practical utility gaps underscore its digital collapse.

The concept of the metaverse once held so much hope, with major companies like Meta, Apple, and Microsoft preaching about the next evolution.

Yet by 2025, the hype rolled over and kicked the bucket, being replaced by sobering statistics and strategic retreats. So the question in all our minds is: Why is the metaverse failing? How to invest in metaverse projects now appears more like a clingy ex to institutional investors, and what does that mean for the future of Web3 in Africa?

Let’s dive into exploring the challenges stifling the growth of the world, the untapped potential of Web3 in Africa, and the actionable strategies that might just spark the embers of this tech relationship.

The VR Dilemma: Why Metaverse Is Failing, Unpacking The Toxic Relationships

The Honeymoon Phase: The Rise and Hype of the Metaverse

The first embers of the Metaverse hype and glory were coined by Neal Stephenson’s Snow Crash. The envisioning of a virtual realm where users could interact, create, and be limited only by their imagination ignited mankind’s ascent into creating this marvel.

As years went by, the vision of decentralized e-commerce in virtual worlds became clearer, and when Web3, AI, and digital assets became the center of the tech world, major entities didn’t waste time. For instance, Mark Zuckerberg soon saw this opportunity and proposed creating a global Metaverse system to expand as its network grew.

His vision soon became too intoxicating, garnering global attention and fanning the flames of a Metaverse future in the hearts of many investors and competitors.

Developing a form of technology once considered science fiction was a project that multiple organizations were all too eager to achieve. At the time, Zuckerberg had already created the medium that would allow a user to interact with the virtual world: the VR set.

The Vast Points of the Metaverse

The potential of the Metaverse was vast and played a vital role within the blockchain and Web3 ecosystem. The fundamental principle of Web3 thrived within the Metaverse. Initially, its concept appealed to gamers and NFT artists, taking advantage of the then NFT hype. Africarare, Africa’s first Metaverse, is popular among African NFT artists since they host several NFT art galleries that attract millions of viewers.

However, soon metaverse user engagement strategies broke more barriers with the introduction of virtual land. This expanded the creative scope of its clients, allowing decentralized e-commerce in virtual worlds—talk about living in the future.

When Meta launched its first Metaverse, Decentraland, it sent waves across the entire tech world. Essentially, they promised users would “make eye contact” and “feel like you are right in the room together.” Its launch sent a buzz all over the media industry as well.

The Verge published nearly 5,000-word-long interviews with Zuckerberg immediately after the announcement. Initially, competitors did poke holes in its primary objectives. Some had stated that, as a business, it still needed to improve in several areas. They cited that metaverse user engagement strategies needed some work, since a “failing point was bit obvious.”

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Zuckerberg stated that the scope of virtual reality could encompass any demographic. He further claimed that its incorporation of blockchain technology, digital currency, and the overall Web3 ecosystem would essentially succeed the mobile network.

However, he did attest to VR accessibility issues and functionalities. The VR headset Oculus was the first among many to come, and it would eventually allow users to emerge in the virtual world fully.

Why Metaverse is Failing: The Bitter Breakup

Unfortunately, like any relationship focused on the future, it tends to miss out on the red flags of the present. Soon many asked, “Why is the metaverse failing?” after giving estimations of $5 trillion by 2030. At the time, experts were too focused on the rapid adoption of Web3 technology and AI, forgetting that various unforeseen hurdles could pop up.

However, this fact remained speculative since its usage has significantly plummeted within the past year.

Meta’s share price has fallen by more than 70% within 2023. Titles such as Facebook and Instagram are losing market share rapidly as new generations prefer their fresher rivals, TikTok and Snapchat. In July 2024, Meta Platforms Inc. blew the whistle, announcing a reduction in budget for its Reality Labs division, which focused on VR and AR technology.

This was essentially due to the toxic relationship built up over the few years. Since 2019, Reality Labs accumulated losses exceeding $55 billion, with annual losses escalating from $4.5 billion in 2019 to $16.1 billion by 2023. Quite frankly, they tried; they really tried to keep the relationship going.

Apple dealt an additional blow as it changed its data privacy rules, decimating revenue and “starving” Facebook of the lucrative data it uses to target ads. One of the few demerits of this AI application is its heavy reliance on data.

Meta has already spent at least $115 billion on research and development of the Metaverse, with little to no result. In 2023, Disney couldn’t handle the toxicity, disbanding its metaverse division, resulting in over 7,000 job cuts. This essentially showcased that metaverse user engagement strategies just weren’t working.

Within the same period, Animoca Brands reduced its target for a new metaverse fund from $2 billion to $800 million due to the high volatility of the crypto industry, reflecting why the Metaverse is failing—it’s just due to a lack of potency and belief in its applicability.

In 2024, Mozilla shut down its Hubs Virtual platform, along with its Hubs Demo Servers, Managed Subscription, and community resources. Finally, in June 2024, VRChat, a popular virtual reality social platform, laid off approximately 30% of its staff.

Why Metaverse is Failing: The Therapy It Needs

One of the main factors that have significantly dropped the usage of the Metaverse is, in fact, its gear. VR accessibility issues just overwhelmed its market and manufacturers. Not many individuals can afford or need bulky VR headsets.

Its main problem is its user experience; its approach to it has driven its short- and long-term success into the mud. Even looking at Web3 adoption in developing countries, the metaverse is by far high up the charts when it comes to acquiring users, outpacing even Bitcoin. Soon, how to invest in metaverse projects became just too expensive for investors and the common man.

CHECK OUT: The Rising Stars: African NFT Artists Shaping the Digital Art Landscape.

Another well-known fact behind other elements of the Web3 ecosystem is its ability to create. Allowing users to access a decentralized network of user devices provides a sense of accessibility. The concept of decentralized e-commerce in virtual worlds has a different approach.

This brings in an intriguing aspect of compounding problems rather than results. VR accessibility issues make it difficult for investors to access broader markets because not anyone even owns such high tech.

Furthermore, applying a layer of the Metaverse on top of the real world expands its usability scope. Facebook’s data collection and AI application can quickly analyze metadata and find potential house buyers. By posting these locations and advertising houses on sale for Meta users, they could expand their organization and collaborate with others.

Finally, why the Metaverse is failing while Web3 adoption in developing countries thrives is the exaggerated virtual world. For instance, this Web3 system can create any virtual environment. Their overemphasis on providing total creative power has led to the development of peculiar and unique virtual lands.

This caters to some users, but what of the rest? By not accounting for what the people want, it only caters to a small demographic. Virtual tourism is gaining much traction since it depicts experiences in a real-world restaurant at the click of a few buttons.

Developers and housebuilders use AI applications and the Metaverse to construct virtual house designs catering to the client’s specifications. The Metaverse is too focused on building virtual reality while forgetting that it is relatively useless without its people.

A Crossroads for Digital Realities

Why the Metaverse is failing is simply an accumulation and the compounding of various issues. The premature focus on flashy tech over human needs defeats its purpose entirely. However, the future of Web3 in Africa and the steady rise of Web3 adoption in developing countries hint at a path forward.

By prioritizing how it can help the common man, the metaverse might think practically rather than relying on flashy tech. Yes, the future is technology, but what is the use of technology if it cannot solve everyday problems?

Whether through decentralized commerce or partnerships with mobile networks, the key is bridging the gap between ambition and reality—one user at a time.