In 2021, Mark Zuckerberg unveiled what he described as the next evolution of the internet, rebranding his company to Meta Platforms and placing the “metaverse” at the centre of its future. The idea was to create a fully immersive digital world where people could work, socialise, and play through virtual reality environments instead of traditional screens.
The concept itself was not new. The term “metaverse” originated in the 1992 sci-fi novel Snow Crash, which imagined a virtual universe used as an escape from a fragmented society. Silicon Valley had long been influenced by such ideas, and Meta’s plan aimed to bring them into reality on a global scale.
The vision depended heavily on virtual reality hardware such as Meta’s Oculus headsets, originally acquired in 2014. Users would interact through digital avatars in shared virtual spaces, attending meetings, concerts, or social gatherings. Businesses were expected to build entire virtual ecosystems within Meta’s platform, generating revenue through digital goods, subscriptions, and virtual services.
At its peak, Meta’s Reality Labs division, responsible for the metaverse project, became one of the company’s most expensive bets. Between 2019 and 2025, it recorded losses of around $88 billion, even as it generated billions in annual revenue from early VR products.
The ambition, however, was met with immediate scepticism. Critics questioned whether users would adopt virtual social spaces at scale once pandemic restrictions ended. Others pointed to underwhelming graphics, early technical limitations, and concerns over privacy and data collection. The original demos were widely mocked for resembling outdated video games, with some avatars even lacking basic features like legs.
Over time, momentum faded. Meta has since scaled back its metaverse ambitions, shutting down major parts of its Horizon Worlds platform and reducing staffing in its VR divisions. The company has now shifted its strategic focus toward artificial intelligence, planning to invest up to $135 billion in AI infrastructure this year.
The broader industry followed a similar pattern. Companies such as Apple Inc., Google, and others explored augmented and virtual reality products, including Apple’s Vision Pro headset, but adoption has remained limited due to high costs and unclear consumer use cases.
Despite heavy losses, the metaverse investment is not viewed entirely as wasted. Meta has used its research to advance VR hardware, smart glasses developed with Ray-Ban, and early augmented reality systems. However, the original idea of a fully immersive virtual society has largely faded from its corporate messaging.
What remains clear is that while Big Tech continues to experiment with digital environments, the industry has decisively moved its attention away from virtual worlds and toward artificial intelligence as the next major technological frontier.
