Did AI Knock Out The Metaverse?

TL;DR

The article argues generative AI stole marketer attention while metaverse interest cooled, citing brand pullbacks and softer VR expectations. Meta still pitches metaverse experiences, so this is an attention shift more than an obituary.

  • Why it matters: budget and talent follow attention, and AI currently wins that fight in the piece.
  • By the numbers: the text cites VR2 expectations moving from about 2M toward ~300k units.
  • The big picture: Disney and Microsoft pullbacks appear as signals of cooling metaverse bets.
  • Yes, but: Meta still markets metaverse connection experiences on its about page.
  • The bottom line: fund AI workflows now; keep metaverse experiments scoped and optional.

The year of 2025 has barely started and we have been flooded with information about what seems to be one of the greatest advancements in technology and marketing: Generative Artificial Intelligence.

But wait… haven’t we seen another great tech advancement about a year ago?

If we look back at early 2024, marketers, brands and professionals were quite excited about the new possibilities that the metaverse was promising. I myself have written about this topic a few times, keeping current with this subject. 

One of the most recent posts I wrote was about the lack of information regarding the metaverse, since many people are still not aware of what it actually means. Recent data shows that if things keep going as they are, people may never know or even forget about the metaverse. 

One of the most relevant topics in the business world recently has been the new possibilities brought by AI tools. It is possible to see on Google Trends how this subject has been growing over the past 12 months:

Although, if we look up at users interest for the same time frame, but for the term “metaverse”, we can see the decrease in interest:

Source: Google Trends

Data has just confirmed what we have seen throughout the last couple of months. Artificial intelligence is getting more and more attention, while the metaverse fades like a dream that some people had and is quite unlikely to become a broad reality.

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How is the market reacting?

A few months ago the Metaverse was a promising trend, with businesses investing in new creations and acquisitions, but now the scenario does not look so good. 

The Wall Street Journal even titled one of its articles about the subject as “The Metaverse Is Quickly Turning Into the Meh-taverse.” This publication mentions the backwards moves regarding the metaverse that big brands like Disney and Microsoft have made recently.

In one of its recent layoffs, Disney cut the metaverse division, and so did Microsoft, which reduced its investments in areas like virtual reality. 

According to Bloomberg Sony Group Corp. released the PlayStation VR2 headsets in February and at first, the expectation was to sell about 2 million pieces by the end of March, but the new reality made it likely to sell only around 300,000 units since the metaverse has not been on top of people’s minds. 

Besides that, Deloitte’s Global Marketing Trends Report 2025 stated that just 10% of marketers think that metaverse is irrelevant to them.

In addition, we can also mention the Decentraland and Metaverse Fashion Week 2025 with famous brands like Adidas, Dolce & Gabbana, Tommy Hilfiger and many others, that featured digital models on a virtual runway.

There are many other moves that show a group of marketers ditching the metaverse while others are still investing in it.

It’s kind of fascinating how quickly the narrative pivots when enough momentum and money shift elsewhere. I remember when Facebook (I’ll never get used to calling it Meta, honestly) threw everything at making the metaverse feel unavoidable. You could hardly escape conversations about digital real estate, NFT art galleries, or meetings held in legless cartoon bodies. Now, blink and you’ll miss most updates—except, I guess, for the tech journalists politely reporting the latest footnote in a quarterly earnings call. The whiplash is real if you blinked for a bit and then came back to “wait, we’re onto AI now?”

On the flip side, there’s always been a chunk of marketers who like to bet on underdogs, even when the hype moves on. Some agencies are doubling down on metaverse experiences hoping for a comeback, or at least the kind of slow burn that could get quietly lucrative in a few years. There’s something stubbornly charming about that kind of optimism, or maybe stubbornness—hard to tell. Maybe it’s similar to how vinyl records or film photography stuck around: not because everyone’s asking for them, but because a passionate minority just refuses to let go, and sometimes, given enough time, those things turn into “retro-cool.”

The AI timing

In one of my articles, I mentioned that the metaverse received too much visibility in a period that was not very promising for its context. Bringing virtual reality to the spotlight when people were leaving a long period of lockdown, went in different directions to what users were craving for. 

Now, during the AI buzz, features have come up in a moment that is more likely to please professionals and businesses. We’ve been living in times of recession, with several companies going through huge layoffs, and doing all they can to save money while running. 

Having an artificial intelligence to do some tasks that need to be done by real people creates excitement among businesses. The possibility of saving money without having to hire or maintain an employee for certain activities can sound good to decision makers – note that I am not talking about the quality of the work delivered.

Another interesting point is how the AI features are much more accessible than the metaverse. Anyone can access chat.openai.com and ask their questions or make requests for free, getting a real idea of what the AI can do. In this aspect, the metaverse was not so accessible to anyone who wanted to try it out, and may include other costs that make it a little more difficult to access.

These points can all be a coincidence, but in my view, they make complete sense, being a planned move or just things naturally happening at the right time.

Next steps

The metaverse is decreasing its popularity since marketers and other professionals are more focused on the AI possibilities, since it seems to bring more results at a lower cost. However, I don’t believe that it will be completely cut off from our lives.

As I mentioned before, it is expensive and difficult to understand, so people will still need some time to get used to it, as it also needs to be better developed for potential growth.

At the same time, artificial intelligence spreads across different markets, use cases and possibilities. It is already part of many people’s private and professional lives, and I believe it represents a new era of digital interaction. 

Despite this promising scenario, I would not bet all my cards on this new trend, since: some issues with copyrights may appear, the reliability of the information and data provided is sometimes questionable, data protection issues, fake news and the lack of a human sense.

With that in mind, I close this article with a question: we had the metaverse, then AI, so what is coming next?

Frequently Asked Questions

Did AI permanently kill the metaverse?

The article's thesis is an attention and investment shift toward generative AI rather than a legal shutdown of every virtual world. It points to cooling interest and corporate pullbacks while still noting some events and believers remain. Meta's public metaverse page continues to describe connection and Quest experiences. Treat “knock out” as a metaphor for priority change unless you have a concrete product cancellation to cite.

What market signals does the piece use?

It references Disney and Microsoft reducing metaverse/VR focus and a Bloomberg-reported PlayStation VR2 sales expectation cut from about 2 million to around 300,000 units. Those are body-cited secondhand figures in this enrichment. Use them as directional color, then verify against primary filings before board slides. Pair any hardware claim with a date and source link.

Why does the author say AI was more accessible?

The article contrasts free or low-friction AI chat tools with metaverse experiences that can require hardware, setup, or higher costs. Accessibility, in that framing, helps explain faster mainstream trial. That does not prove AI quality for every marketing task. Run pilots with review gates before replacing human workflows.

What should marketers do next according to this framing?

Prioritize AI use cases with clear ROI and known failure modes (copyright, hallucinations, privacy), while keeping metaverse work experimental if it still fits brand goals. The piece ends by warning against all-in bets on any single wave. Document kill criteria for both tracks. Reallocate quarterly based on measured outcomes, not hype cycles.

MM Matt Montenegro