The metaverse as we knew it failed, but it's being resurrected for new worlds

CNBC

2 days ago

While the metaverse is often seen as a joke in 2025 because of low user counts and poor financial performance (take Meta's Reality Labs division and its continued losses, estimated by Statista at $70 billion all-time), the industry may be thriving in ways the general public doesn't realize.
"The hype around the entertainment part has subsided," said Andy Lee, partner at law firm Jones Walker who specializes in privacy, data strategy, artificial intelligence and the metaverse. Instead, Lee said there's a "pragmatic recalibration" happening, where enterprise companies and even entire industries are starting to use immersive 3D worlds for uses like upskilling and scenario planning. Venture funds like Intel Capital and Venture Reality Fund are taking a close look at the metaverse for all its purposes.
For instance, the metaverse might serve to train police officers on how to handle someone in a mental health crisis or someone that's high on fentanyl, according to Neil Sahota, CEO of ACSILabs, which develops virtual worlds for enterprises. "While you might hear about it or read about it in the classroom setting, it's very different when it's happening in real life," said Sahota, who also serves as an artificial intelligence advisor for the United Nations.
While the use cases vary, one thing remains consistent — where the metaverse seems to thrive today is not as a generic duplicate of our world as we know it, but rather a purposeful industry solution solving a need that already exists.
Meta's VR headset business continues to evolve and find new uses cases outside the consumer market. Other challengers such as Apple Vision Pro face an uncertain outlook. But more targeted metaverse solutions are taking place inside large enterprises.
ACSILabs has created custom virtual worlds to help lawyers prepare for big cases, helping them play out different types of arguments and case strategies. Based on what's known about the judge, opposing counsel and jury, they can combine cognitive science and AI to determine how different tactics will land. What's interesting is that when users try this technology, they feel emboldened. "They start realizing that I can try more risky things, and see what happens," Sahota said.
But does it really work? While there are caveats, there are positive results. When working with a government client to provide training in an immersive world, Sahota said that ACSILabs was able to deliver the equivalent of three years of field experience for a specific topic over the course of 18 in-game hours.
Osso VR is another company developing VR modules for health technology. Those who used its solution to learn surgical techniques performed up to three times better than those educated via standard practices, according to the company.
Sahota added that jet engine manufacturers use the metaverse (or even simpler digital twins) to test safety and performance in ways that are impossible in the real world. He pointed out questions the metaverse could answer, including: "How would this perform on a Boeing 777 at 80,000 feet? What happens if the engine is in an electrical storm?"
Regardless of how it's used, the metaverse is not without risks — and given the sheer depth of this technology, the number of considerations can add up.
The primary consideration, for Lee, is data privacy and security. "The platforms are going to be handling sensitive data, anything from performance metrics to biometric data," he said. Additionally, scenarios being used for law enforcement or healthcare training could have sensitive information, particularly if they stem from real-world occurrences.
For companies seeking safe vendors, privacy and security by design (where these elements are built in from the beginning rather than added on after the fact) are key. Staying plugged in to regulations like the EU's General Data Protection Regulation, California Consumer Privacy Act, or HIPAA in the U.S. is crucial.
Even with a potential state-level moratorium on AI regulation coming into play in the U.S., paying attention to the evolution of global AI regulation (as it pertains to privacy, bias and more) is also relevant because metaverse platforms often use AI to streamline asset creation. Lee recommended choosing one or a few people in the organization to take on reading the full terms and conditions of an enterprise metaverse vendor to make sure you know exactly what you're getting into.
Especially for high-stakes scenarios, liability plays a major role. "You're going to have potential for a real-world error if the training itself was inaccurate," Lee said. "Companies and users are going to have to be dialed in on the liability issues if the training were to be deemed insufficient or misleading," Lee added.
Then there's content moderation, which Lee considers crucial even in professional settings. Outside of harassment concerns, highly realistic images can trigger trauma responses. While most research currently pertains to video games, it's clear that virtual worlds can indeed elicit negative psychological responses.
At the core of it all, metaverse training and scenario planning is designed to be real-world-adjacent. But it's not the real world.
"While these are simulations that are powerful for learning, direct transfer of the learned skills to real world situations requires critical reflection," Lee said. "Most folks employing it should know that they need real world practice before something actually occurs that they have to respond to and not to rely fully on the virtual training," he added.