The metaverse will take off once it properly aligns with what the market needs, said executives at Magic Leap, the mixed reality startup that’s raised $3.9 billion, including a recent $590 million from Saudi Arabia’s Public Investment Fund.
The initial hype around the metaverse was too narrowly focused on virtual realities disconnected from the physical world, Ross Rosenberg, the CEO of Magic Leap, and Daniel Diez, its CTO, said in an interview with Venture Beat.
“The true capabilities of the metaverse will come to life when it’s a fabric built of digital experiences ingrained or embedded into the physical world,” Diez told the publication.
“Most of the customers we talk to are trying to get something done. They’re trying to repair something, train someone, design something,” added Rosenberg. “Those are the words they use. They don’t start with, ‘Hey, tell me about your metaverse.’
Venture investment in the metaverse hit a multiyear low in 2023 – a rather bleak year for VC investing in general – as the category, which many say is waiting for something like Apple Vision Pro to kickstart it, languished.
Even though many metaverse platforms are struggling to get the attention of users, there are still a number of green shoots in the industry.
Metaverse tokens are up in a big way. The 45 largest tokens in that category are riding high thanks to the beginning of the crypto bull market, but the CoinDesk Metaverse Select Index (MTVS) is down 37.5% over the last year.
“We have these hype cycles, and that’s ridiculous. What’s interesting is the in-between times, when people actually put their heads down and figure out what they’re going to do,” Diez said.
And Magic Leap has survived plenty of hype cycles, even before crypto was attached to the metaverse.
The company is now walking into a metaverse market that, despite many setbacks, data shows is as bullish as ever. IDC recently forecasted that global spending on AR/VR is projected to increase from $13.8 billion in 2022 to $50.9 billion by 2026.
“If we do this right, the metaverse will be not about this idea of world escapism and going into digital environments. It’ll be the thing that enables us to be even more fully immersed in the physical world, doing things that we weren’t capable of doing before,” Diez added.