U.S. markets close in 2 hours 57 minutes
  • S&P 500

    -20.86 (-0.49%)
  • Dow 30

    -218.35 (-0.65%)
  • Nasdaq

    +23.93 (+0.18%)
  • Russell 2000

    -28.18 (-1.58%)
  • Crude Oil

    -1.08 (-1.19%)
  • Gold

    -18.00 (-0.96%)
  • Silver

    -1.05 (-4.68%)

    -0.0081 (-0.77%)
  • 10-Yr Bond

    +0.1200 (+2.62%)

    -0.0088 (-0.72%)

    +0.4700 (+0.31%)
  • Bitcoin USD

    +898.72 (+3.31%)
  • CMC Crypto 200

    -5.16 (-0.86%)
  • FTSE 100

    -97.36 (-1.28%)
  • Nikkei 225

    -97.74 (-0.31%)

Epic Games VP: ‘People have lost interest in the metaverse’

Tech companies such as Facebook parent Meta (FB) and Microsoft (MSFT) are plowing money into their plans for the metaverse, the 3-D virtual world that tech executives are obsessed with. But so far, the experiences that users can get their hands on are nowhere near Silicon Valley’s promises of hyper-realistic avatars and seamless interactions with the real world. And it could be turning consumers off.

“People have kind of lost interest in the metaverse, because characters look like cartoons with no legs,” Marc Petit, Epic Games’ VP and general manager of Unreal Engine, told Yahoo Finance. “I mean, who wants to be that? This is not attractive.”

Petit’s critique is a not-so-thinly veiled reference to Meta’s “Horizon Worlds” platform. The company’s primary metaverse experience, “Horizon Worlds” features avatars without legs and graphics that are far from those found in modern big-budget video games.

And that kind of overpromising could push users away in the long run.

We’re years away from the metaverse we’ve been promised

The concept of the metaverse was first popularized by Neal Stephenson's 1992 novel “Snow Crash.” Technology companies have chased the idea of 3-D virtual worlds could visit for even longer, though.

Gavin Menichini, using the Oculus Quest 2 VR headset, gives a demonstration of the Immersed Virtual Reality program which can be used for many applications including virtual meetings at the Immersed offices on January 28, 2022 in Austin, Texas. - While still the stuff of science fiction for most people, forerunners of the metaverse vision for the internet's future are already de rigueur for handfuls of people beyond the gamer and techno-hipster crowds. (Photo by Sergio FLORES / AFP) (Photo by SERGIO FLORES/AFP via Getty Images)
It's going to take years for the metaverse to reach its potential. (Photo by SERGIO FLORES/AFP via Getty Images)

Meta even changed its name to signal its focus on the metaverse, while Microsoft is exploring ways of using it for both entertainment and work. Google has also expressed interested in the concept, and Apple is reportedly working on its own augmented reality headset that could debut later this year.

But the way the metaverse has been marketed to consumers so far has been both vague and full of far-off technologies. During an October presentation, Meta CEO Mark Zuckerberg showed off a world where you can talk to realistic projections of your friends via augmented reality glasses and have the ability to play games with friends in “Ready Player One”-style worlds.

But what we have now is a far cry from that. Rather than a boundless online world, Meta’s “Horizon Worlds” is more of a small gathering space for early adopters.

What's more, there are signs that even young people have a fuzzy understanding of the metaverse. According to Piper Sandler’s latest Taking Stock With Teens survey, while 26% of teens have some kind of VR device, just 5% use it daily and 17% use it weekly. What’s more, 50% of teens are either unsure of the metaverse or have no intention of buying a VR device.

The Fortnite logo is seen at the Paris Games Week (PGW), a trade fair for video games in Paris, France, October 25, 2018. REUTERS/Benoit Tessier
Epic Games' 'Fortnite' offers an early glimpse at the potential for the metaverse without the need for things like headsets. REUTERS/Benoit Tessier

Of course, Epic Games produces the incredibly popular game “Fortnite,” which is, itself, an early form of the metaverse. Gamers can participate in the game’s "Battle Royale" or watch Ariana Grande concerts or discussions on race with Killer Mike and Jemele Hill.

While “Fortnite” is considered a kind of way into the metaverse, Epic isn’t banking its entire future on the prospect.

To reach the level where consumers across the board will fall in love with the metaverse, companies will need to offer photorealistic graphics and ensure their experiences are worth diving into.

“The metaverse needs to be about places and content that consumers will want to consume,” Petit said. “That should not look like 1980s graphics, like a lot of things we see even today.”

Reaching a level of photorealism is going to take years of continued development and invention if the metaverse is ever going to pan out the way Silicon Valley companies hope.

“We have to pace ourselves,” Petit said. “The pandemic kind of forced that awareness around the metaverse upon us, those social experiences. But it took us 30 years already to get where we are…In my mind, we haven't seen anything yet about the metaverse.”

For companies like Meta, the wait might be too long. The social media company spent $10.2 billion on its vision for the metaverse in 2021 alone, including building virtual and augmented reality headsets and the software users will need to access virtual worlds. According to Zuckerberg, that won’t pay off for another 15 years.

That spending also comes as the company is experiencing a slowdown in ad sales related to inflation, the war in Ukraine, and Apple’s iOS privacy changes.

As for Petit, his vision of the metaverse includes more than just headsets. According to the VP, the metaverse will allow for consumers to view content and information on everything from their glasses to car windshields.

That’s a concept shared by others in the field who say the metaverse will be less about virtual worlds that you step into, and more about bringing data and information out of the real world.

For now, consumers like you and me will have to sit back and wait for the metaverse to continue to take shape. But one thing’s for certain — we haven’t seen anything yet.

Sign up for Yahoo Finance Tech newsletter

More from Dan

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit

Got a tip? Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.