Lily Snyder

The 1980s – a time of heavy metal, big hair, and video games.

I spoke at immerse Global Summit Metaverse 2.0 conference about what the metaverse industry can learn from the 1980s and 90s video game industry. I was inspired by Console Wars by Blake J. Harris. While reading Console Wars, I couldn’t help but see the metaverse industry playing out some of the same concepts as the video game industry decades ago.

The 1980s saw a booming video game industry. This made companies from Purina Dog Food to electrical companies enter the video game arena. Eventually, too many crappy video games (1982 is when E.T., the worst video game of all time, was released on Atari) led to the video game crash of 1983.

Nintendo emerged from the rubble and dust as the sole video game company in the United States, gaining 90% of the market. They focused on family-friendly, quality games. But their business practices weren’t so friendly. They created “lockout” chips to keep non-Nintendo developers from reverse engineering their games. They had contracts with developers that their games could only be published on Nintendo. Developers had to make a certain number of games too.

It reminded me of the virtual reality industry. Now, virtual reality is part of the larger metaverse ecosystem. But from 2016 to 2020 virtual reality went through a bi-polar market. We started out with multiple consumer VR headsets like Oculus Rift, HTC Vive, and Microsoft mixed reality headsets. There were “mobile VR” headsets like Samsung Gear VR and Google Cardboard.

Every year articles would appear, Is the end of VR? VR is Dead. and The year the lights went out for virtual reality. Eventually, the dust settled on VR and Facebook Meta emerged victorious as the sole consumer-friendly VR, the Meta Quest.

Developers complain about the Oculus store and lack of support for Indie VR games. Developers wonder how to even get published on Oculus or if it’s worth it since the store takes a 30% cut.

Will there be a metaverse crash?

This year will be the peak hype cycle.

Tom Emrich, CEO of The 8th Wall

At Metaverse 2.0 Tom Emrich, CEO of The 8th Wall said, “This year will be the peak hype cycle. Right now, the metaverse is more mirage than miracle. The more we get into this, the more we’re going to realize that there’s a lot of work that still needs to be done.”

In order to understand what’s happening, I find it helpful to look at Gartner’s technology hype cycle graph. The metaverse is difficult to put on the graph since it’s a convergence of many different technologies (AI, AR/VR, 5G, blockchain). But the convergence is happening which I believe puts the metaverse on the Trigger Technology part of the graph.

If Emrich believes 2022 will be the peak hype cycle, that means we’re headed towards the Trough of Disillusionment – and possibly a metaverse crash.

Does a metaverse crash mean the end of the metaverse? No.

Market crashes aren’t necessarily bad. Sure, Nintendo reigned supreme with their fun but family-friendly games. That left the market open to competitors like Sega, Sony PlayStation, and eventually Microsoft Xbox. Sega had a different tactic with video game developers. The published games for mature audiences and pixelated blood. PlayStation went straight to CDs.

In his Forbes article, Paul Tassi looked at the Google Trends of NFTs and the metaverse. Tassi concluded, “for the time being, interest in both are clearly waning, and I do wonder what happens to the millions of NFTs being held when the speculative market is no longer functioning as it once did at its peak.”

I decided to look at the trends myself of the terms NFTs, Metaverse, Crypto, Blockchain, and Ethereum. So, the trends are headed downwards but so what? That doesn’t match up with the momentum I see from those working in the industry. Hype cycle or bust, those of us who are in it see the metaverse for the long haul.

When looking at charts like this I can’t help but think of this quote my dad told me: There are three kinds of lies: lies, damned lies, and statistics.

We need to look as far back as 1983 to see tech crashes. Let’s not forget the dot com bust of 2000. I think crashes help reset markets and calm down hype cycles for products and services people actually use.

As my sometime colleague, Jon Jaehnig said on LinkedIn, “I like the hype. Hype drives awareness and that will eventually allow greater adoption.” Following the Hype Cycle of Technology, I don’t think he’s wrong.