Anti-trends and Bubbles in IT and technologies based on the results of 2023

We have already written about the trends to expect in 2024, but what about anti-trends? Which technologies, news, and companies turned out to be bubbles and suddenly burst? Which technologies no longer live up to expectations? Which loud slogans and flashy articles are not worth the effort, and what should be approached with extreme caution?

 

Metaverses

By the first quarter of 2023, the massive metaverse boom that literally rocked the IT market in 2021–2022 had gradually subsided. Despite huge investments and hype surrounding this topic, no project today attracts attention.

Although, let’s recall some particularly bright metaverses.

Hyundai Motor Company introduced the Roblox experience called “Hyundai Mobility Adventure,” showcasing its future mobile solutions in a virtual space and engaging a younger audience in an interactive and educational environment.

Balenciaga collaborated with Fortnite from Epic Games to create a line of virtual clothing for game characters, combining high fashion with digital games.

Louis Vuitton developed a mobile game with built-in NFTs to celebrate the brand’s 200th anniversary, marking its attempt at a digital fusion of games, history, and luxurious fashion.

JP Morgan Chase opened a virtual relaxation room in Decentraland, becoming one of the first major banks to enter the metaverse, signaling an interest in exploring financial services in virtual environments.

In 2021–2022, all the world’s technical conferences discussed how we would transition to another reality, planning to hold conferences and events in a different meta-space. In 2023, no one mentioned the “better world” in the new digital space anymore.

 

What is the reason?

Metaverses and new virtual spaces also directly depend on VR technologies. At the hardware level, graphics, and narratives, all metaverses resembled more computer games from 25 years ago: interesting, but with modern alternatives available, immersion was not appealing.

Our client (and consumer) is accustomed to a large amount of content and image quality. Users tried it and… moved away. Lack of content, quality, narrative, and retention methods played their roles, and the consumer lost interest. In addition to the image quality, the metaverse remains inaccessible to a wider audience due to the high cost of entry (for example, expensive VR headsets) or the lack of inclusivity in design.

The lack of interaction standards between different metaverse platforms has also led to a fragmented experience, hindering user engagement and limiting the development of a cohesive metaverse ecosystem.

In addition to a good picture, the consumer also expected additional benefits from using this technology—earnings, an additional market, or an additional channel for selling their products and services.

NFTs and Web3.0 have also blurred the distinction between metaverses and Web3.0. This caused simultaneous hype and, as a result, a simultaneous decline in interest along with the fall of the Bitcoin rate.

Similar to the dot-com bubble or speculative bubble around cryptocurrencies, the speculative bubble around investments in the metaverse also burst. The decrease in interest and lack of financial support are just consequences.

 

What’s next?

Metaverses as a marketing move have already shown the level of their effectiveness and applicability. Moving forward, we see the development of this technology exclusively in projects related to digital games, entertainment, and education.

The gaming industry, with its level of graphics and character automation, will increasingly move into a new space and attract new users, initially for short games, and then the “immersion” time will increase. The actions taken by market leaders, namely:

Epic Games: Continued to expand Fortnite beyond the gaming platform, creating a space for concerts, events, and social gatherings.

NVIDIA: With the launch of the NVIDIA Omniverse platform, NVIDIA aims to establish the foundation for developing metaverse programs. Omniverse is designed for developers to create and manage simulated virtual worlds.

Unity Technologies: As a leading platform for creating and working with interactive 3D content in real-time, Unity Technologies holds a strategic position to play a significant role in the development of metaverse applications.

Film universes and digital graphic content producers will also have their metaverses, where participants can interact with their favorite environments and characters.

Warner Bros.: In partnership with Roblox, they created a virtual world for the promotion of the movie “Space Jam: A New Legacy,” featuring thematic mini-games and digital goods.

Disney expressed interest in the metaverse as part of its strategy to combine digital and physical experiences. Disney CEO Bob Chapek mentioned exploring the metaverse to create new narratives and experiences for the audience.

The educational segment is likely to use metaverses for the education and training of children; these could be metaverses dedicated to specific disciplines, geographical regions, socio-cultural spaces, and historical spaces. Learning about the history of ancient Egypt is much more interesting when you can explore the Pyramid of Giza with VR headsets, isn’t it?

 

NFT Boom!

Cryptomonkeys worth millions of dollars have also become a thing of the past. They joined the ranks of cryptocats and various coins after ICO and IDO campaigns. But why did the NFT market experience a sudden collapse?

Quality vs. Quantity: The oversaturation of low-quality NFTs flooding the market has led to disappointment among buyers, undermining the perceived value of NFTs as a whole. Consider, for example, the multitude of poor copies of well-known monkey NFTs. This leads us to our next point.

Intellectual Property Disputes: As the NFT market grows, so does the potential for intellectual property disputes. Legal disputes or crackdowns on copyright infringement within the NFT space can undermine trust and interest. For example, consider the situation between Nike, Inc., and StockX, LLC. StockX, an e-commerce resale platform, launched The Vault in late 2021, allowing buyers to track ownership rights of physical products (e.g., sneakers) purchased on StockX and guarantee their authenticity. Nike then sued StockX, claiming that StockX’s use of Nike’s well-known brands in connection with its NFTs constitutes trademark infringement.

And this is only a small fraction of the reasons for the NFT collapse. But we won’t be disappointed, as NFTs as a technology will continue to exist. We hope it won’t be solely based on image speculation.

NFTs as the sale of digital goods will persist, but in a different form: selling contract templates, selling analytics and research papers, selling rights to use tracks, songs, and videos, in-game skins, and various digital goods in the metaverse.

When will this happen? The question lies in the correct legal approach. Legislative regulations must start aligning with new digital subjects and objects of intellectual property, providing a legal framework to protect rights to digital objects and assets. As of 2024, in most countries, the legislation does not provide but restricts such goals.

 

High stakes in the sharing economy model

A young engineer, working in a coworking space and sipping smoothies while navigating the city on a rented electric scooter, wondered why he couldn’t pay for his latte with cryptocurrency. The surge of the new progressive sharing economy and low investment market prices allowed projects like Bird and various blockchain projects to thrive, facilitating the sharing of items and services among different people. Stocks of companies like Uber, Airbnb, and Bolt were soaring like steroids.

Everything changed with COVID, and sharing economy model projects began to crumble. Small startups that couldn’t withstand the crisis started closing one after another. Surprisingly, after the world returned online, projects like WeWork and Bird declared bankruptcy. WeWork’s valuation plummeted from $47 billion to $50 million.

Companies faced unprecedented commercial challenges from constant operators in various industries. Despite rapid growth and significant valuations, these companies were not immune to disputes and legal battles, raising questions about the long-term impact of the sharing economy on traditional businesses and communities.

The negative publicity caused by legal decisions against unprofessional sharing economy services in several countries, as well as fines imposed on illegal hosts in shared accommodations, contributed to a more cautious perception of the sharing economy. Resonant cases, such as the classification of shared transport drivers as employees rather than contractors and bans on services in certain markets, prompted sharing economy companies to actively engage with regulatory frameworks and seek ways to rebuild trust.

Companies focusing on convenience and price rather than fostering relationships will have a competitive advantage. Startups attempting to facilitate direct connections between consumers showed low levels of trust among strangers in the absence of market intermediaries. For instance, Eatro, a startup in London that deals with food sharing, had a hard time persuading customers to pay for food that other customers had prepared. Now, Eatro has transformed into the marketplace One Fine Meal, where consumers can order dishes prepared by professional chefs and delivered within 30 minutes.

 

Tools for “virtual life” and remote work trends

Remember the clubhouse boom in 2021? What about various remote work services? From virtual offices with avatars in workplaces to startups organizing online events, the idea that the world would remain fully online ultimately did not work.

With changing circumstances, the preferences and needs of remote workers also evolve. Gartner suggests that organizations are now focusing more on the development of augmented artificial intelligence, intelligent programs, and democratized AI generation. This indicates a shift towards more advanced and integrated solutions for remote work, beyond simple communication and collaboration tools.

Additionally, the format of work has changed during the COVID era (mostly hybrid now), and the productivity of remote workers has shifted. It’s not surprising that industry giants are starting to bring employees back to the office.

With the growth of digital tools for work, especially among medium and small enterprises, vulnerabilities to data breaches increase. Data loss becomes more expensive. Market analytics shows that in 2023, the average global cost of a data breach will reach $4.45 million, indicating an increase compared to previous years.

Apart from productivity and the lack of face-to-face communication, more than half of channel companies surveyed by CompTIA report a shortage of workers with necessary cybersecurity skills. There is an urgent need for better management and compliance. This challenge, combined with the need for enhanced cybersecurity measures, may divert attention and resources from developing new applications for remote living.

 

Blockchain for everything

Projects for blockchain-based accounting of invoices, trucks, medical data, contracts for real estate, and smart contracts for purchasing anything…

The cost of data and its storage in the blockchain significantly varies. Practice has shown that using blockchain for everything is a dead-end branch not supported by economic feasibility.

However, the lack of economic justification created a crack. The rise in fraud and corruption in this sector reached incredible heights.

Resonant crashes like FTX and Terra, along with a sharp increase in crypto crime to a historic high of $12 billion stolen in 2022, contributed to the loss of consumer trust, and networks of affected parties suffered. This environment led to increased regulatory scrutiny by authorities such as the U.S. Securities and Exchange Commission against various cryptocurrency organizations for unregistered offerings and fraud, further suppressing innovation and adoption in the space.

Despite these challenges, blockchain in banking and financial services is showing growth: the global market grew from $1.89 billion in 2022 to $3.07 billion in 2023, indicating consistent investments in decentralized finance (DeFi) and asset fractionalization technology. This points to a clear recognition of blockchain’s potential to modernize financial infrastructure, despite the overall market downturn.

In conclusion…

We see ups and downs in examples of companies and successful (or not-so-successful) startups. Of course, blockchain news will continue, as it remains a revolutionary solution for the financial market. We may witness the resurgence of virtual reality trends. But how long it will be a growing trend is unknown.

As a result, we observe trends that are no longer relevant, and to prevent “falls” in the future, stay updated with IT industry news and stay in the trend!