The Rise and Fall of the Chief Metaverse Officer: Navigating the Hype Cycle of Virtual Worlds

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What Happened to All the Chief Metaverse Officers?

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In the previous spring during an event held in New York City, Robert Triefus, who at the time was the CEO of Gucci's digital platform Vault, addressed the diminishing excitement surrounding the metaverse, describing it as a temporary setback. He shared his perspective with the audience, suggesting that what was happening was actually a positive adjustment. "It's more of a recalibration," he explained. "We've arrived at a point where both individuals and corporations are genuinely committed to their ventures." When questioned about how purchasing virtual land in The Sandbox fits into Gucci's larger ambitions, he offered an almost spiritual insight: "The metaverse presents a chance to explore and express our digital identities."

In the subsequent month, Vogue Business reported that Triefus made a sudden departure from Gucci. The company stated he was leaving to explore different ventures. Shortly after, Vogue Business announced Triefus would take over as CEO of Stone Island. This news sparked discussions about the possibility of Stone Island venturing into the metaverse, which, up to this point, hasn't happened.

Triefus' enthusiastic embrace of the digital realm and his brief period leading Gucci's metaverse initiatives reflect a wider movement that swept through the corporate world beginning in late 2021: the rapid appointment of "chief metaverse officers." Triggered by a surge in interest in the metaverse as a lucrative new commercial frontier, numerous companies hurried to establish their presence in virtual environments. According to a 2022 survey by Russell Reynolds, 75% of CEOs reported either recruiting specialized staff to spearhead these efforts or broadening existing job descriptions to include this domain.

Although the job titles differed, the primary responsibility of these positions was to assist their brands in developing innovative approaches using trending technologies like NFTs and cryptocurrency. The lack of a clear, agreed-upon meaning for the metaverse added to the confusion, leading to discrepancies in job descriptions and the actual objectives of these roles.

The Rise and Fall

The origins trace back to October 2021, marking a pivotal moment when Facebook rebranded itself as Meta, indicating a shift towards the metaverse. Mark Zuckerberg, the CEO, envisioned a sprawling, immensely lucrative digital realm where people could work, socialize, pursue leisure activities, engage in romantic endeavors, and importantly, make purchases. Reality Labs, Meta's division dedicated to virtual reality (VR), supported this vision by investing a staggering $13.7 billion in 2022, an amount surpassing Mongolia's GDP.

Companies eagerly embraced the chance to market an entirely new type of digital products and experiences, enticed by the idea that customers were eager to participate in virtual reality concerts and purchase non-fungible token (NFT) branded footwear.

"Numerous companies swiftly engaged in trial efforts, feeling the urgency of securing their spot," explains Matthew Ball, a technology investor and writer of The Metaverse. "The fear of falling behind motivated them, alongside the eagerness to lead the way… They recognized a rare chance for a brand to become integral to a communal experience."

High-end brands showed significant interest, especially since they had initially lagged in embracing online sales. This venture appeared to be an ideal match, as the core principles of Web3, focusing on uniqueness and genuineness, aligned well with the charm of the luxury sector. For a while, it looked as though their strategy was successful.

Gucci made history as the premier high-end brand to invest in virtual property within the Sandbox platform, and notably sold a digital iteration of its iconic Dionysus bag on Roblox for approximately $4,100, surpassing the physical item's cost by $800. Tiffany & Co made waves by introducing digital necklaces inspired by the CryptoPunks NFT collection, dubbed “NFTiffs”, which initially went for about $50,000 each, bringing in over $12 million for the brand. Meanwhile, Burberry executed a dual strategy by releasing digital branded outfits in Minecraft alongside a real-world clothing line influenced by the game, achieving an estimated advertising return of £5.2 million (about $6.8 million).

Legal practices began establishing their presence in the sector, undoubtedly motivated by Hermès initiating legal action against a digital artist for offering 100 NFTs themed around the iconic Birkin bag under the name "MetaBirkin." Capturing this surge of enthusiasm, McKinsey released a study in April 2022 predicting that the metaverse could reach a valuation of $5 trillion by the year 2030.

Suddenly, the buzz faded just as rapidly as it had appeared. It was akin to the moment Dorothy discovered the so-called Wizard of Oz was merely a small man operating controls behind the curtain, the global interest in the metaverse seemed to wane, revealing little of substance.

Horizon Worlds, the premier virtual reality platform by Meta, resembled a deserted locale inhabited by avatars without legs. According to data collected by DappRadar in late 2022, Decentraland, an online virtual environment where participants can trade virtual properties, saw a mere 38 users in a day. To reiterate, only 38 users. Despite this, the company's valuation stood at approximately $1.3 billion at that point.

Around that period, Meta, like many other major companies in Silicon Valley, shifted a significant portion of its resources and promotional efforts towards artificial intelligence in a reactionary move, triggered by the unexpected launch of ChatGPT in November 2022. Companies that had previously invested heavily in the metaverse quickly started to adopt a similar strategy.

It wouldn't come as a shock, given how well-trodden this path appears to be. In 2007, Second Life, a virtual universe where players interact through anonymous avatars, was in the midst of a rapid expansion phase, catching the eye of various corporations eager to make the most of this opportunity. Despite their scant grasp of the platform or the community inhabiting it, major companies like IBM, Cisco, and Microsoft invested heavily in acquiring Second Life “islands” to establish their foothold in what seemed like a promising new frontier. However, by 2010, many of these brands had already retreated, labeling their investments as an expensive error.

Philip Rosedale, the creator of Second Life, has expressed that businesses mistakenly thought these digital realms would draw in a diverse group reflecting their intended markets, when in reality, contemporary open-world online games such as Fortnite and Roblox are predominantly frequented by younger audiences.

Rosedale points out, "To effectively market products within a virtual environment, it's essential to believe that the audience mirrors a diverse segment of the general population. The challenge is finding that mix of everyday consumers across platforms like Second Life, Horizon Worlds, VR Chat, among others, which, frankly, has not been achieved to date."

Ball notes that the haste with which brands aimed to engage, lacking a genuine strategy or comprehension of the domain, posed problems for its endurance. He observes, "There was certainly a rush of, 'We have to get involved because it's the trend,' and 'We must engage because our investors anticipate our participation.' Several overvalued how pertinent their brand was in these three-dimensional environments."

Shift Towards Artificial Intelligence

Currently, numerous top metaverse executives, who were rapidly appointed, are now hustling to redefine their roles or facing unemployment. In August 2023, Pratik Thakar of Coca-Cola quickly transitioned from leading the brand's metaverse initiatives to taking on the role of the company’s worldwide generative AI head.

At a similar point in time, Michael White, appointed to spearhead Disney's initiatives in the metaverse in 2022, departed following the shutdown of the company's specialized metaverse unit; shortly thereafter, the corporation declared the establishment of a new AI-focused “task force”. Subsequently, following Triefus' exit from Gucci, the brand advanced a partnership with Christie’s to embark on its inaugural generative AI venture.

Should there be any lingering doubts about the transition from the metaverse focus to an emphasis on artificial intelligence, the evidence is clear. According to Bloomberg's analysis of earnings call transcripts, mentions of the metaverse by S&P 500 companies dropped to a mere two in the final quarter of 2022. By contrast, in the initial three months of 2023, artificial intelligence was highlighted a staggering 1,073 times.

Cathy Hackl, who previously served as the chief metaverse officer at a consultancy named Journey, stated that the widespread transition in marketing strategies from virtual brand experiences towards artificial intelligence represented not only a clever move for businesses but also illustrated the tendency of companies to hop onto the latest tech trend.

Today, Hackl looks back on the frenzy to acquire virtual real estate in the metaverse as a situation that spiraled wildly. "PR groups were in a hurry to release anything related to the 'metaverse,'" she comments. "In retrospect, it will likely be viewed as a fascinating period, though perhaps we were a bit too eager."

Avoid Bringing Up the "M" Term

Even Hackl, often referred to as the "Godmother of the Metaverse," has been stepping back from the idea, establishing "a company focused on spatial computing and AI solutions" at the beginning of this year, conspicuously leaving out any reference to the metaverse.

Projects centered around the metaverse, which previously appeared to be a staple in numerous releases, have notably reduced their activity. Bulgari, having introduced a digital jewelry collection using Polygon's blockchain technology in 2022, disclosed to WIRED that it does not intend to pursue any additional collections going forward.

UNXD, a selectively chosen NFT marketplace, which collaborates with brands like Dolce & Gabbana, Jacob & Co., and Valentino, continues to promote a contest for the 2023 Metaverse Fashion Week. Additionally, it teases several collections, confirmed for a 2022 release, yet pending announcement.

Excitement surrounding initially popular collections has significantly waned as well—Tiffany NFTiffs are currently trading at approximately $2,300 on the NFT marketplace OpenSea, reflecting a decline of over 95 percent from their highest selling points. Moreover, the demand for Gucci’s “Superplastic” NFT series on OpenSea has seen a dramatic decrease, with sales interest plummeting since around September 2022 to almost zero now.

The reasons behind this phenomenon are subject to discussion. Factors range from the absence of a user base, to the awkward, cumbersome, and exorbitantly priced virtual reality equipment, as well as the deficiency in system compatibility. The envisioned future of the metaverse that was proposed in 2021 hasn't come to fruition by 2024. Mark Zuckerberg is aware of this shortfall, as evidenced by his mere three mentions of the term during his 60-minute opening speech at his firm’s developer event, Meta Connect, even though the concept is the inspiration behind his company’s branding.

Despite a decline in enthusiasm, the concept hasn't been entirely abandoned. A brief look at LinkedIn reveals that some organizations still retain their chief metaverse officers, although these positions are now often merged with various other new digital advancements. Nelly Mensah at LVMH is among these individuals, whose job designation has gradually transitioned to “VP of Digital Innovation,” reflecting the decreasing excitement around the metaverse. Aligning with current industry movements, the company's latest digital venture has placed a significant emphasis on Generative AI, conspicuously avoiding any reference to the metaverse.

Matthew Ball foresaw this decline, hinting in a book footnote that when the fundamental idea eventually materializes, it would be known under a new term. As if following a script, augmented reality stepped in to continue the journey initiated by the metaverse.

Shifting Focus in Technology

As the metaverse, with its emphasis on virtual reality (VR), fails to resonate with the broader public, a significant number of technology companies are now pivoting towards augmented reality (AR) with hopes of better reception. The outlook appears optimistic at this stage. Last year, Meta partnered with Ray-Ban to launch its Smart Glasses and recently showcased an early model of what it calls its “authentic augmented reality glasses” at the Meta Connect event. Apple has been highlighting the Vision Pro's feature that allows users to switch between AR and VR seamlessly. Meanwhile, Snap has introduced the newest version of its AI Spectacles this past September, aimed specifically at AR Lens creators; and the tech community is eagerly anticipating the release of Google's latest AR glasses, which it previewed in May.

Recently, the term "phygital" has emerged as the latest trendy jargon in marketing, indicating a rising interest from shoppers in combining in-person and digital shopping experiences. Consequently, a quick look on LinkedIn reveals that this term is becoming more common in job titles, replacing the previously dominant M-word.

Shara Senderoff, the creator of the virtual design studio Futureverse, believes that the tech industry's shift towards augmented reality (AR) is a strategy to revert to a type of virtual interaction that will be more appealing to the general public.

"She remarked that we missed an intermediate phase, moving directly from zero to virtual reality headsets weighing 6 pounds. Such a weight is never going to feel right, both in a literal and metaphorical sense. Now, companies like Snapchat and Meta are working to make these devices lighter, aiming to make the experience more user-friendly and approachable."

It appears Zuckerberg has come to understand that, similar to the situation faced by those in Decentraland and perhaps the team behind Apple's Vision Pro, living inside a digital realm isn't appealing to many. As a result, he appears to have ingeniously shifted the marketing direction of the metaverse. Instead of promoting it as an all-encompassing virtual reality, it's now being presented as an augmented reality (AR) experience accessible via the company's smart glasses. Zuckerberg is likely optimistic that this AR approach will achieve widespread popularity, unlike virtual reality (VR) experiences.

During the Meta Connect Keynote, he mentioned that the company's progress in augmented reality (AR) is inching towards fulfilling the aspirations of Reality Labs. "This is our direction," he stated. However, given his substantial investment, he's hardly in a position to suggest otherwise.

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