Companies will have to learn the lessons of the failure of the metaverse, and not just the obvious one that as soon as Sir Nick Clegg – Zuckerberg’s sidekick as Meta’s president of global affairs and an ambassador for virtual reality – jumps on a bandwagon it is almost certainly time for everyone to hop off.

Loading

For a start, we are all a lot more attached to reality than some tech billionaires in California may realise. No business can survive without a customer base, and for the metaverse, it has failed to show up in the numbers many expected. Part of the metaverse’s troubles lie in the fact that nobody really understands what it is, though it should be viewed as distinct from virtual reality gaming – which is expected to expand significantly in future.

But when it comes to Meta’s self-described “virtual spaces where you can create and explore with other people who aren’t in the same physical space as you”, the story is rather different. We may like to dip into the virtual world to play Half-Life: Alyx, but for most people this is a hobby.

In December, online sales fell to 26 per cent of the amount of money we spend on stuff in the shops, compared with a peak of 38 per cent in January 2021. The online food delivery companies are starting to retreat – Deliveroo’s share price is down 23 per cent over the past year – as some of us work out that we might as well pop out to a restaurant to eat rather than pay to get the same meals, though lukewarm, delivered to our home.

Likewise, air travel is booming again, as we realise that we would rather visit some real places instead of slipping on an Apple headset and travelling online. The point is not that the real world is back and the online in the past, but rather that the two will run in parallel. It is not that the online universe is going to disappear, but rather that it may have reached its limit – for now.

Next, investing in the virtual sphere was always a big risk. When you buy property or assets in the real world, it has a value because there is a finite amount of it. There is only so much land, or space for factories, shops or restaurants, and it takes time and money to create them. In the metaverse, space is infinite, meaning it is harder to drive value.

Which brings us to arguably the biggest challenge: the threat to internal privacy. Many people are understandably troubled that big tech could monitor them at an almost forensic level, gaining access to emotional, biometric and physiological data. It has not been effectively communicated how metaverse firms would mitigate these risks.

Loading

Lastly, too much money has chased some flimsy ideas. When we are all stuck at home during lockdown, and central banks were still printing money like there was no tomorrow, it was a lot easier to imagine that virtual worlds would be the next big thing. With money tighter, and the global economy on shaky grounds, it is a lot harder.

Zuckerberg and Clegg have spent billions trying to build a virtual world, and will be relying on its valuable assets in WhatsApp and Instagram to pull through. Tech innovators sometimes think in terms of the hype cycle: the roller coaster journey from concept to widespread adoption. For now, it looks like huge sums of investor money have been spent on a technology whose potential has yet to be realised – and may never be.

The Telegraph, London

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.