Lies, Damn Lies, and Metaverses

James Turnham

Apr 18, 2023 | 16 min read

Lies, Damn Lies, and Metaverses

Metaverses are the future, or so you’ve probably heard. They’re the next step in online human interaction that’ll allow people from all over the world to mingle in incredible worlds.

Anything that can be done in real-life, will also be possible in the metaverse. This isn’t the extent of the metaverse though, future users will also be able to do things that are just flat-out impossible in the real world.

The press surrounding the metaverse bubbles with anticipation for this brave new world especially when they cite figures that show that public awareness of the metaverse rocketed from 32% in 2021 to 74% in just a little over a year.

Metaverse enthusiasts also point excitedly at the fact that not only has the public become significantly more aware of the concept of a metaverse, but many have indicated in surveys that they’d be interested in using a metaverse on a day-to-day basis.

It’s not just the general public that’s evidently ready to leap aboard the S.S. Metaverse and sail into the glorious digital future. Businesses are likewise starting to recognise the possibilities and are introducing the use of metaverse technologies into their operations to help with employee training and the like. Such is the faith in the metaverse that 82% of digital commerce decision-makers believe that it’ll be vital to their success in the future.

On the back of this metaverse fever, vast amounts of money have flowed into the industry from investors and companies and as of 2023, the metaverse market is now worth an estimated $38.5 billion. Corporate entities and luxury brands alike have staked out their claim in the digital world with spaces like Nikeland and the Gucci Garden in Roblox and Manchester City working with Sony to digitise their stadium, alongside a host of others.

All of them hope to secure a nice big piece of the trillion-dollar pie that the metaverse is anticipated to become within the next 4 years.

There’s no reason for you, as savvy investors, not to be investing in metaverse projects then, it’s clearly a no-brainer as they’re a sure-fire win, right?

Not by a long shot.

Ignorance and Optimism

To be the bearer of bad news, the metaverse is not yet the next step in human interaction, and frankly, possibly never will be.

Here’s why.

Let’s start by looking at one of the big bold claims that we laid out earlier; namely that the general public is eagerly awaiting the metaverse and can’t wait to put on its VR headset and dive into a new reality.

The first problem is with the oft-cited figures regarding the wider public’s interest in the metaverse.

For example, take PwC’s 2022 US metaverse survey which states that 50% of consumers state that they find the idea of the metaverse exciting. This figure is pretty exciting in and of itself, indeed, PwC use it to frame its very positive assessment of the industry as a whole.

However, the big issue with gauging the market with this kind of statistic is that it’s a little nebulous as to what “finding the metaverse exciting” even means. Does being exciting mean that they’ll use it? Does it mean that they’re foaming at the mouth in anticipation?


Even if we did know what it means to “find the metaverse exciting”, there’s no guarantee it’s actually useful information on which to judge the future of the metaverse industry as a whole.

Worse still, we can be fairly certain that, in actuality, it would certainly not be useful information.

A different survey revealed that only 15% of all respondents felt that they could adequately explain the concept of a metaverse to another person in their own words. Even when only accounting for those respondents that described themselves as metaverse enthusiasts, this figure only rose to 25% and of this figure, ⅓ said that they themselves only had a basic understanding of the metaverse.

Now, of course, not being able to explain something does not always imply a lack of understanding, but it is often strongly indicative of it.

This should be pretty alarming to anyone who is or is considering investing in a metaverse project as it calls into question a lot of the conclusions that have been drawn about the mainstream appeal of metaverses.

So what if Granny Smith or Dave the Electrician says they’re excited about the metaverse, in all likelihood, neither of them has the faintest idea what they’re excited about or why.

Furthermore, what’s to say that the 85% of digital commerce decision-makers who believe that the metaverse will be crucial to their success are significantly better informed about the topic?

As such, investors should be incredibly wary about trusting surveys conducted by even respected analysts without considering the data in light of this evidence.

If the vox populi can’t be trusted on this topic, perhaps investors can instead look at the hard figures that are used to justify the continued enormous levels of investment in the metaverse.

Can these be trusted?

Phantom Market Value

As of 2023, the metaverse market was estimated to be worth around $38.5 billion, an amount that Citi analysts expected to balloon in the next 10 years to a truly staggering $8-13 trillion dollars by 2030.

This first figure is a little problematic. If it truly did apply to the metaverses like Decentraland, The Sandbox and the numerous other smaller-scale projects, then this would be a cause for celebration and a strong indication that metaverses were good investments on the verge of going mainstream.

The truth of the matter is, unfortunately, a little less rosy. While the $38.5 billion does certainly include metaverses, they’re thrown in with a bunch of other affiliated industries. Some of these are quite closely related such as virtual retail and corporate onboarding which sounds promising.

However, a large portion of the money included in this figure comes from things like AR/VR hardware and the so-called proto-metaverses like Roblox, Minecraft and Fortnite which we’ll discuss in further detail shortly.

Seeing as these are three of gaming’s biggest brands and the massive VR/AR industry, it feels safe to suggest that a significant portion of the metaverse’s supposed market value actually stems from industries that are only partially related.

In truth, the “real” metaverse market is far smaller than it is generally assumed.

This in turn raises questions about the kind of growth forecasts predicted by analysts.


To take Citi’s analysis as an example, they say that the market value could swell to $13 trillion. To reach their figure, they’ve worked on the assumption that the metaverse will account for 30-40% of the digital economy by 2030, which itself would account for between 20-25% of the world’s GDP.

It is this claim of the metaverse accounting for 30-40% of the digital economy that should raise the most eyebrows. This is an incredibly bold claim and one that assumes that widespread adoption of the metaverse is right around the corner.

However, as we’ve seen, the evidence that suggests that the public will adopt the metaverse in droves which would lead to this kind of penetration into the digital economy is shaky at best.

Put simply, what we have is a current market value that has been artificially inflated and growth forecasts that are unsupported by reliable evidence.

Okay, so we can’t be sure about the future size of the market and the current market is smaller than generally assumed, but there’s still an eager audience for metaverses currently out there, right?


Quite possibly not.

400 Million Players?

You may have heard that the current throng of metaverses like Decentraland, Sandbox, Fortnite, Minecraft and Roblox have all seen huge investments that have allowed them to develop huge worlds and draw in vast numbers of players.

In fact, as of 2022, these experiences were seeing combined player counts of close to 400 million. That is a truly staggering number. Even at its peak, World of Warcraft, the largest MMORPG of its time, and one of the most successful games of the 2010s (and arguably a proto-metaverse), only had around 12 million players.


As such, metaverses managing to pull in 400 million players should scream to investors that this is what people want.

However, as with seemingly everything about metaverses, it’s all just more smoke and mirrors.

The figure itself is not incorrect. There are indeed 400 million players who regularly log on to games like Fortnite, Minecraft and Roblox.

The problem is that these titles are not metaverses and have never been marketed as such except by those who are trying to make their metaverse projects more appealing.

Fortnite is at its core an online battle royale game that people play because they want to play an online shooter. They are not there because it is some kind of hub of community. If you removed the battle royale element, the shared community would cease to exist.

Minecraft is not a metaverse. It is a survival game or a creative tool. There are servers where people gather as a community to play together, but that does not make it a metaverse.

Though the closest to a metaverse of the three, Roblox is still not a metaverse. Again, the community exists to create and play games.

While both Fortnite and Roblox have seen metaverse-like events take place such as Fortnite’s Travis Scott digital concert. This kind of thing has never been the primary draw; people attended these events because they were an interesting bonus that occurred within a game that they were already playing.

This cannot be taken as proof that the public is interested in being part of any community specifically to attend this kind of online event.

So, what happens if we remove these games from the list of metaverses and only include the true metaverse experiences that are designed primarily as communities, not games?

Well, it doesn’t look good.

Roblox alone made up more than half of the 400 million people playing “metaverses” with its player base of 230 million. Minecraft and Fortnite have player bases of 140 million and 70 million respectively.

Conversely, true metaverses, despite the truly behemoth levels of investment that have been pumped into them, contribute a paltry number of players to the overall figure.

In fact, research indicates that of the 400 million, all the projects like Decentraland and Sandbox offer a maximum of 43,000 players to the grand total once the inactive players and bots have been filtered out.

Decentraland itself, despite being valued at being worth more than a billion dollars appears to have somewhere between 650 and 8000 users. Such a figure would put it behind Left 4 Dead 2, a game that came out almost 15 years ago.

Snake Oil and Tulips

The fact of the matter is that much of the excitement around the revolutionary metaverses has been manufactured by Web 3.0 evangelicals and has been supported by poor market research and shaky figures.

This is not to say that metaverse projects can’t be successful or that investors should steer clear of anything to do with the metaverse.

Investors should, however, take a very careful and cynical look at any metaverse projects that come their way in the future.

Understanding The Mistakes

It should be made abundantly clear, metaverse projects are not doomed to inevitable failure.

However, investors must learn from the current crop of metaverses and get their heads around why the factors that made the metaverses such attractive targets for investment failed to give them sufficient traction to establish and maintain robust active user bases once they went live.

Our team performed a deep dive into the metaverse market to unearth the strengths and weaknesses of each of the major players.

The first of these factors revolve around how these metaverses were conceived. Both Decentraland, The Sandbox and Sensorium Galaxy were all envisaged and marketed as places of limitless opportunity, where users would be able to buy plots of land, build their own houses and, crucially, be a part of the wider communities that these metaverses promised.

The Crypto-Trap

The problem is the way that this has been sold to prospective users, thoroughly couched in Web 3.0 terms as it was, referencing things like decentralization, user-driven decision-making, cryptocurrency and the use of NFTs in the metaverse space.

For example, denizens of Decentraland were promised the power to vote on new features that would be added, allowing them to have a hand on the wheel and help guide their metaverse’s future course. The same promise was made to users who chose to make The Sandbox their digital home in the metaverse. Additionally, land and assets in The Sandbox and Decentraland would be parcelled out and ownership established via NFTs. Ostensibly, this would allow users to own, trade and make money off their digital possessions.

However, while couching the metaverses in this kind of language may have won over Web 3.0 enthusiasts, it likely had a significant negative impact on their appeal to the wider public.

Though cryptocurrencies and NFTs have managed to establish themselves in the public consciousness in the past few years, they are still regarded with a deepening suspicion outside of a specific tech crowd.

Even Bitcoin, the flagship cryptocurrency, has yet to conclusively prove its value in use cases beyond being a vehicle for speculative investment.

This is why it’s unwise to focus on the amount of money being spent on land parcels by “users” and major corporations in Decentraland and The Sandbox, such as Snoop Dog’s Snoopverse, as a gauge for their success as metaverses.


Both are gripped by a cryptocurrency-like identity crisis. Take, for example, Decentraland, the average price of just one of their 90,000 land parcels hit $3000. In one case, a single parcel was sold for an astonishing $2.4 million. This, however, has not been reflected by the creation of a successful self-sustaining community.

Instead, speculators buy parcels as investments in the hope that the prices increase and they can sell at a profit, rather than because they have any genuine interest in the wider community aspect of a specific metaverse.

Incidentally, the obvious incentive these speculators have to make these metaverses look lively may go some way to explaining why The Sandbox and Decentraland have reports of bots and inactive users being used to boost player counts.

Ironically, by allowing and encouraging these astronomical prices for in-verse assets through widely publicized sales to celebrities and major brands, the developers may have further reduced the wider public’s interest as the almost comical costs are so far beyond what a normal consumer would be willing to spend on an unproven product that’s still in development.

As things stand, the big metaverses are more like pyramid schemes than they are functional digital worlds.

While working with big brands and celebrities is by no means a bad thing, it is critical for future metaverses to avoid the Web 3.0 trap and try to stay away from implementations that allow for significant speculation on in-game assets. The price of assets should be far lower so as to remain within the bounds of possibility for most potential users.

While encouraging speculative investors can undoubtedly bring huge sums of money into metaverse projects in the short term, especially if backed by a lot of hype, its long-term viability looks to be very questionable and may actually poison a metaverse’s prospects of achieving mainstream success.

Question to Ask Before Investing: “Is this metaverse seemingly geared primarily towards speculative investment from users?

Infinite Digital Worlds With Nothing To Do

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Given the wealth of evidence currently on offer, it seems safe to say that the successful metaverses of the future will not be the all-encompassing, do-anything alternate realities that are currently offered to consumers. As things stand, while such projects are feasible in essence, they struggle to live up to the hype that was created around them.

Simply offering a community or that a user can make money is not a draw for users in and of itself.

While it sounds like a great marketing line, promising potential users a community, money and nothing else is simply not an engaging pitch.

Roblox has garnered its vast user base not because it allows users to make their own games and profit from them, but because it’s a vast repository of wildly different games that children can play without having to ask the bank of mom and dad to shell out $60.

Conversely, though The Sandbox also markets itself as a place to play games for free, its entire design philosophy is geared towards immediately pushing users to start making money off their NFTs, rather than enjoying the games themselves.

Again, while it sounds like a fantastic proposition that everyone would want to take part in, judging by the success of so-called play2earn games so far, the public seems to be less than enthused by the idea as a whole.

However, by looking at the so-called proto-metaverses as a whole, there’s one clear takeaway for investors.

Metaverses must offer some kind of engaging core activity around which a community can form. Furthermore, this activity has to be something that the user cannot get more easily elsewhere.

This is why specialization will be the key to building a successful metaverse. Offering users a specific reason to use a service means that a particular crowd can be targeted. This approach stands in stark contrast to the current approach of targeting everyone and appealing to no one.

Question to Ask Before Investing:As a user, what specific activity does this metaverse let me do better than other digital offerings?

**So, in what ways can metaverses differentiate themselves? **

E-sports Betting


The e-sports market saw enormous growth over the past decade and, in 2021, the sector saw expanded by over 170% despite several big events being cancelled due to the Covid-19 pandemic.

Simultaneously, this growth has been mirrored by a similar explosion in e-sports betting from $1 billion in 2017 to an expected $23 billion by the second half of the decade. This meteoric rise has been driven by the increasing popularity of games as people’s primary entertainment medium with Dota 2, Counterstrike: Global Offensive and League of Legends being the most popular titles by far.

Though some may point to the lockdowns imposed as a result of the pandemic being the primary driver for this success, the trend was already firmly established before 2019, though the pandemic certainly accelerated it.

Promisingly, the average bets placed on esports tend to be fairly high and have the potential to be far higher than those placed on live sports.

However, as things stand currently, e-sports betting is a very solitary affair and is essentially transactional in nature. People go to a website such as Rivalry, find the game that they want to bet on, and then place a bet.

There’s very little sense of being part of a wider community, and as such, no communal sense of excitement about the outcome of a game that traditionally comes with watching sports.

This is precisely the gap in the market that metaverses can tap into.

A metaverse designed as a place to watch and bet on e-sports is likely to appeal to a younger, digitally-savvy demographic who are constantly connected across multiple devices.

Instead of engaging in a transaction, those who choose to bet in the metaverse can get a full social experience as part of a wider community. They can interact with others who have placed bets on a certain match, discuss what strategies a team might use, and commiserate about what went wrong when they lose.


Crucially, this metaverse community would grow and develop organically as users come to the platform to bet, rather than being the purpose.

One possible avenue could be rather than simply being a website, users will be able to enter a vast digital stadium that hosts a huge number of ongoing e-sports matches. The user would then be able to enter a specific part of the arena and watch the match live, surrounded by other fans.

Ideally, users would also be able to look at each team’s and player’s statistics so that they can make the most informed decisions about who to bet on and when.

Users could have the opportunity to share their own statistical discoveries with the wider community. For example, Team A loses 66% of their games when they play against Team B when they play on a certain map. This could add a potentially interesting meta-game that could further draw users into the community aspect, even if only passively as they read about the findings.


Gambling also presents a way for metaverses to define themselves within the online space. As of the moment, Decentraland is arguably the best-known platform that hosts gambling events.

Interestingly, despite Decentraland’s aforementioned evidently critically low user base, its gambling events reliably draw a modest crowd further demonstrating that a strong core activity seems to be the key to getting people engaged with a metaverse.

Unsurprisingly, the games are pretty much what you would expect to find from a simple, decentralized gaming platform though the overall selection of games on offer and their visual designs vary.

Like with e-sports betting, gambling within a metaverse breaks the mould by taking a fairly solitary experience and transmuting it into something which gives users much more opportunity and incentive to socialize whilst they gamble when compared to traditional online offerings.

For some games, such as poker, this may drastically improve the experience as it will capture more of the spirit of playing with people in person, as there’s more space for a player’s specific “tells” to be gleaned by their opponents.

Industrial Metaverses

Alternatively, future metaverse projects could pivot away from the mass market and find success via more niche industrial applications such as digital twinning.

Rather than seeking to make a virtual world, detached from reality, digital twinning looks to connect the two. It involves taking a real-world object and creating an identical copy in the digital realm.

This allows for real-time information to be reported and AI and analytics-driven simulations to be performed on the digital twin and then, if successful, applied to reality.

The concept isn’t all that new, NASA has been using digital twins for decades and is the one who coined the term back in 2010. However, the technology at the heart of the metaverses will allow for unprecedented detail and intercommunication between the physical and digital twins.

This in turn will allow far more complex systems to be simulated and improved with the technology.

A New Direction, Not A Deadend

While confidence in generic digital world metaverse projects is quite rightly at an all-time low, the possibilities listed in the previous section are clear evidence that the so-called “metaverse winter” is a myth.

What’s been explored in the space so far is just a tiny microcosm of what will be possible in the future, the technologies are still developing at a lightning pace.

All that investors and founders have to do is show that they’re willing to learn from the mistakes made by the current metaverses, pick themselves up off the ground and try again, armed with their newfound knowledge and get on with changing the world.