As we roll into 2023, it’s time for our annual ritual of synthesizing the lessons from the past twelve months and formulating the outlook for the next twelve. 2022 was an incremental year for AR & VR, which both continue to gradually push forward in gaining mainstream traction.

Highlights include mobile AR engagement & monetization, continued R&D in AR glasses, and the gradual march of VR. Amidst all this, the last year was also defined by the continued rise of metaverse mania. The hype machine is still in high gear, generating lots of vapor.

So where is spatial computing, and where is it headed? Our research arm ARtillery Intelligence’s recent report Spatial Computing: 2022 Lessons, 2023 Outlook tackles these questions. After recently publishing 2023 predictions here on AR Insider, we shift gears to 2022 lessons.

To that end, what were the biggest takeaways in 2022 in the wide world of spatial computing? There were many, but we’ll zero in today on the tech bubble we call metaverse mania. Where is it now? What’s driving it? Where does the real value lie? And where is it headed next?

Annual Predictions: 2022 Lessons, 2023 Outlook

Going Strong

If there’s one term that’s reverberated throughout AR and VR circles more than any other, it’s the m-word. We’re talking of course about the metaverse. Though it represents legitimate principles, the term has become co-opted and conflated through overuse… as it often goes with buzzwords.

In our annual predictions last year, we asserted that “metaverse mania” would wane in 2022. The thinking at the time was that the hype that surrounded the term – including the m-word being wedged into every press release and tech news headline imaginable – would fade away.

This projection was based simply on the fact that the metaverse, in its fully-actualized form, is so many years from materializing. Therefore, low-attention-span media and mainstream culture would get bored with the hype and unfulfilled promises and move on to other shiny objects.

But we were dead wrong. The metaverse hype machine actually gained momentum. But we see enough evidence now to double down on last year’s prediction, including an economic downturn that tends to frown on future gazing. We’re already seeing the m-word lose momentum.

2023 Predictions: Metaverse Mania Fades

Two-Track Mind

Stepping back, it’s important to make a few distinctions, as our thoughts around the metaverse are
based on a few fundamentals. For example, the metaverse could have two tracks. The track most often discussed is synchronous 3D online worlds, often in a gaming context.

With this track, we already see metaverse-like experiences – insular 3D multiplayer games like Fortnite and World of Warcraft. But a fully-actualized metaverse will be more like the web today – interoperable and held together by common standards and networking protocols (e.g., HTTPS).

That interoperability faces ample headwinds. There are massive interests that will push self-interested standards (e.g., avatar styling). But if there’s any chance of interoperability, it will be through a realization that an open metaverse will help tech giants reach network effect faster.

Moving on to the second, less-discussed, metaverse track, it involves digital depth in the physical world. This includes geo-anchored data that evokes devices – often through AR – to display content where and when it’s relevant. This is the metaverse track that’s likely more valuable.

Follow the Money: Meta Doesn’t Want to Own the Metaverse

Digital Depth

Going deeper on that second “real-world” metaverse track, it’s not only potentially more evaluable but truer to the term metaverse. The Greek root meta means ”beyond.” And here we’re talking about evoking digital depth and meaning that goes beyond a given object’s physical state.

We often refer to this as “captions for the physical world.” Its value lies in the utility, range, and frequency of all-day ambient visual intelligence. In some ways, this value proposition mirrors that of web search, including practicality and high-intent monetizable user engagement.

Indeed, early versions of this vision involve visual search, such as Google Lens. Use cases are commerce-oriented (identifying products), social (info about people you encounter), gamified (digital scavenger hunts), and discovery-based (annotations about landmarks & businesses).

But whatever metaverse track you like, it’s early in the technology’s lifecycle. If history is any indication, some version of today’s metaverse visions will happen. But they’ll look different than what everyone is talking about, endure a few hype cycles, and take years to materialize.

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