2025 is so over and so is virtual reality
David Paul Morris/Bloomberg via Getty Images
Marshall McLuhan warned that a medium pushed to its extreme can “implode” into something else, and the metaverse seemed to hit that breaking point, an implosion in which the medium devoured its own appeal. The users did not want to be immersed in a corporate-controlled simulacrum; they wanted convenience. They wanted the blue bubble of a text message, not a virtual meeting in a boardroom rendered in low-polygon graphics.
The retreat, when it came, was swift and brutal, in the way corporate corrections often are. By 2023, a metaverse winter had set in. Disney shuttered its division; Microsoft sunset its social VR platform. The world became captivated by a new technology: generative AI. Suddenly the conversation was not about new worlds but about automated intelligence that could write our emails and paint our pictures. Meta, reading the tea leaves and the plummeting engagement metrics, pivoted. The irrational exuberance for VR gave way to sober retrenchment.
The financial markets, at times the coldest arbiters of value, cheered the death of the dream. When news broke in late 2025 that Meta would cut Reality Labs’ budget and lay off staff, its stock jumped, adding nearly $70 billion in value overnight. It was a signal that the experiment was over. The Great White Whale of tech had once again slipped away, leaving the innovators holding the harpoon, exhausted.
John Carmack, the legendary game developer who tried to steer Meta’s VR ship before resigning in frustration, noted that the company had “a ridiculous amount of people and resources” but constantly “self-sabotaged.” The metaverse was not killed by a lack of technology; the Quest 3 is a marvel of engineering. It died from a lack of human necessity. It was a $60 billion attempt to fix a reality that, for all its flaws, we still prefer to the simulation.
The retreat is less a defeat than a recalibration. Meta is now looking toward “smart glasses,” wearables that overlay the digital onto the real rather than replacing it. The form factor concedes the stubborn fact that we want to remain in the world. The dream of the metaverse, that hyperreal paradise where models replace the real, has been deferred. We have chosen to keep the goggles off, to live for now, in Baudrillard’s words, in the desert of the real.
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