Meta was supposed to bring the metaverse to life. Epic is actually doing it.

Mark Zuckerberg’s Meta (META) was supposed to bring the metaverse into billions of users’ homes via the company’s Quest AR/VR headsets. Heck, Zuckerberg even changed the social media giant’s name to reflect his lofty aspirations of creating a series of interconnected, permanently online worlds.

But it’s looking more and more like Epic Games will be the company to turn the metaverse into reality. That’s even more likely after Disney (DIS) announced it is investing $1.5 billion in the “Fortnite” game developer.

In the press release announcing the investment, Disney stopped just short of referring to the deal as a means of bringing the metaverse to life, saying, “The new persistent universe will offer a multitude of opportunities for consumers to play, watch, shop and engage with content, characters and stories from Disney, Pixar, Marvel, Star Wars, Avatar and more.”

If that isn’t a kind of metaverse I don’t know what is. That’s especially true considering the “persistent universe” will be run through Epic Games’ “Fortnite,” the wildly popular competitive online shooter and building game.

“Fortnite” is already home to online concerts, and recently introduced a Lego “Fortnite” game, racing game, and music-based game.

Meta, meanwhile, is continuing to invest in the metaverse, with Zuckerberg calling out the technology during the company’s most recent earnings call, but it’s seemingly taking a backseat to artificial intelligence. In fact, the CEO dedicated the bulk of his prepared remarks during the call to Meta’s AI investments.

Yes, he mentioned that the company’s Reality Labs segment saw $1 billion in revenue in the quarter and that its Horizon app is among the 10 most-used apps for Quest. But he also sprinkled plenty of AI talk into his metaverse bit, saying that the company’s Ray-Ban Meta smart glasses offer a better experience thanks to Meta AI and that the glasses are a way for people to interact with AI.

In other words, it certainly looks like Epic has beat Meta to the punch with the metaverse. And the gap is only likely to expand from here.

'Fortnite' has been expanding for years

Epic CEO Tim Sweeney is a metaverse believer. In May 2023, when Business Insider published an article saying the metaverse would join the list of failed tech industry fads, Sweeney tweeted a response jokingly calling for an online wake so “600,000,000 monthly active users in Fortnite, Minecraft, Roblox, PUBG Mobile, Sandbox, and VRChat can mourn its passing together in real-time 3D.”

Sweeney is right that there are millions still playing games like “Fortnite,” “Minecraft,” and “Roblox,” but the metaverse concept had lost considerable steam. Companies ranging from Microsoft to, yes, Disney ended their metaverse projects as AI took over as the go-to technology for the industry.

But Epic and Meta have kept charging forward. While Meta has poured billions into its Quest products, Epic has added characters and intellectual property from the likes of Marvel, “Dragon Ball Z,” “Naruto,” “Halo,” “John Wick,” and “Stranger Things” to “Fortnite.”

Meta, however, has struggled mightily to get consumers hooked on its Horizon Worlds app. In 2022, the Wall Street Journal reported that the app fell well short of its goal of hitting 500,000 users per month, instead reaching less than 200,000. The company revamped the app in 2023 with an eye towards adding more games.

Epic, meanwhile, announced a trio of games in December including “Lego Fortnite,” an open-world survival game in which players craft objects out of Lego bricks; “Fortnite Rocket Racing;” and “Fortnite Festival.” Each game allows you to bring your “Fortnite” character skins, in-game outfits, with you, creating a seamless series of worlds for your “Fortnite” avatar.

Adding Disney and its various characters and unique locales to the “Fortnite” formula should help keep players coming back to Epic’s interconnected collection of online games.

It’s important to point out that Epic and Meta aren’t the only companies building out their respective metaverses. Roblox (RBLX) also continues to put together its concept of the metaverse. And in its most recent quarterly earnings report, the company announced it hit $1 billion in bookings.

It’s also worth noting that Zuckerberg seemingly refuses to give up on the metaverse. This despite the fact that the company lost $16.1 billion on the effort in 2023 alone. That’s up from $13.7 billion in 2022.

Part of Meta’s problem is that its metaverse largely requires users to jump in via its line of Quest headsets. The company did launch a Horizon Worlds mobile app to lower the barrier to entry, but it just doesn’t have the appeal “Fortnite” has to offer.

Zuckerberg is also facing increased competition in the headset space from Apple’s new Vision Pro. On Tuesday, he posted on Instagram Reels, saying that after using the Vision Pro he believes the Quest 3 is the overall better product, not just the less expensive option.

But getting people to pony up and stick with the Quest will take more than just dunking on the Vision Pro.

Still, the tech and gaming industries are fickle. And with Zuckerberg determined to make his vision of the metaverse a reality, it could end up paying off in the long run. For now, though, “Fortnite” is eating his lunch.

Daniel Howley is the tech editor at Yahoo Finance. He's been covering the tech industry since 2011. You can follow him on Twitter @DanielHowley.

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