A (virtual) reality check for overhyped technologies |
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This week’s insights include: |
- From hype cycle to reset: The metaverse, Web3, and AR/VR captured huge attention earlier in the decade, but expectations moved faster than reality. As adoption and real-world utility fell short, sentiment cooled and the space went through a sharp recalibration.
- Metaverse: Big ambition, limited traction: Billions were invested into building virtual ecosystems, but user engagement and monetization struggled to follow. Without a clear, everyday use case, the metaverse remains more aspirational than commercially proven.
- Web3: Evolving into practical use cases: The vision of a fully decentralized internet hasn’t played out as expected. Instead, momentum has shifted toward areas with clearer utility, like stablecoins, asset tokenization, and infrastructure supporting real-world applications.
- AR/VR: Gradual progress beneath the surface: While it lacked the explosive growth many expected, AR and VR continue to advance steadily. Enterprise adoption, particularly in training and simulation, is driving more tangible and measurable value.
- The opportunity: The narrative has shifted from futuristic concepts to real-world outcomes. For investors, that likely means focusing less on hype-driven platforms and more on businesses enabling or benefiting from proven use cases.
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This week's Market Insights article is a 6 minute read! |
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Over the last two weeks we have revisited EVs, renewable energy, and cybersecurity and cloud, which were amongst the ‘hottest’ themes earlier in the decade. Around the same time, the Metaverse, NFTs, and Web3 also burst into the spotlight, and then faded away just as quickly. This week we are checking in on these themes - or what’s left of them anyway - and the closely related virtual and augmented reality industries. Welcome to part 3 of the three-part “What’s happening with…” series. |
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| "When we're in a hype cycle, it can be easy for businesses to overlook the fundamentals." |
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Here’s a quick summary of what’s been going on: |
- Amazon doubles down on AI infrastructure and satellites.
- Intel’s surge raises valuation questions ahead of earnings.
- UK growth outlook hit as global risks rise.
- Norway benefits from oil price surge amid supply shock.
- Goldman Sachs equities strength offsets bond trading weakness.
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What's happened with VR, AR, Web3 and the Metaverse? |
Not long ago, VR, AR, Web3 and the metaverse were shaping up to be the future of the internet. Today, the reality looks a lot more mixed. |
- Metaverse's boom and bust: Companies such as Meta went all-in on building virtual worlds, betting on a future of immersive digital interaction. But adoption never matched expectations, with user engagement and monetization falling sharply. What started as a bold vision quickly faded as it became clear the use case wasn’t strong enough yet.
- Web3’s shift from vision to reality: Early excitement around decentralised apps and NFTs gave way to a more grounded outcome. Most consumer-facing applications failed to gain traction, but parts of the ecosystem survived and evolved. Today, the focus has shifted toward infrastructure like stablecoins, tokenization, and decentralized networks that solve more tangible problems.
- AR and VR has shown slow but steady progress: Unlike the others, AR/VR didn’t disappear, but it also didn’t explode overnight. Growth has been gradual, led by improvements in hardware and increasing enterprise adoption. Use cases like training, simulation, and collaboration are starting to show real returns, even if profitability is still some way off.
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How do they look moving forward? |
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Join the discussion by leaving a comment! |
Do you think these three industries still have potential? |
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Monday Canada Inflation Rate (March) Forecast: 2.5%, Previous: 1.8%
Why it matters: A rebound driven by energy/tariff effects could pressure BoC to pause its easing cycle. |
Tuesday Japan Balance of Trade (March) Forecast: ¥470B, Previous: ¥57.3B Why it matters: A rising surplus signals strong global demand for Japan’s exports, while a miss hints at slowing trade momentum. UK Unemployment Rate (MoM) Forecast: 5.3%, Previous: 5.2%
Why it matters: A tighter labour market supports spending but could keep rates higher for longer. |
Wednesday UK Inflation Rate (March) Forecast: 3.4%, Previous: 3.0%
Why it matters: A rise toward the BoE's own forecast would reinforce its hold stance and delay any rate cut. |
Friday Japan Inflation Rate (March) Forecast: 2.0%, Previous: 1.3%
Why it matters: A pickup in inflation strengthens the case for policy tightening, with potential ripple effects for the yen, bond yields, and global markets. |
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