SK Telecom has announced that it will shut down its Icelandic metaverse on March 31, 2025, marking the end of the platform just under four years after its launch in July 2021. The move reflects a strategic pivot to focus on AI as changing market dynamics reshape demand for metaverse platforms.
In a statement, an SK Telecom official commented: “We will further accelerate the transition to a global AI enterprise by using the accumulated metaverse capabilities to strengthen AI competitiveness. »
Developed as an immersive meeting place, ifland allowed users to customize their avatars, explore virtual spaces and interact within the metaverse. Last year, SK Telecom announced that it had secure partnerships with three major technology companies to develop Iceland.
Despite its initial promise, SK Telecom’s decision to abandon the project aligns with a broader trend of companies backing away from investing heavily in the Metaverse as user adoption and scalability challenges persist.
SK Telecom commits to smooth termination of metaverse service
To ensure a seamless termination of services, SK Telecom has committed to refunding users for any purchases of paid content, which includes virtual items such as stones and customizations.
Users will have until Iceland’s lockdown date, March 31, 2025, to request a refund through a dedicated application portal which will be detailed both on the app and on the platform’s website in the future updates.
Additionally, the company is taking steps to help users preserve their memories of the platform, offering backup support for photos and videos shared in Iceland.
According to SK Telecom, the lessons learned from Iceland – including its expertise in 3D immersive content production, global service deployment and collaborative initiatives – will not be in vain. The company intends to integrate these capabilities into its AI offerings.
Shifting Winds in the Metaverse Sector
SK Telecom’s announcement signals a shift reflecting broader industry trends, as the metaverse continues to see waning enthusiasm and slower-than-expected adoption.
Other South Korean carriers have already pulled out of their metaverse plans: KT abandoned its “Meta Lounge” and “Genie Bus” platforms in April and August respectively. Meanwhile, “Metaslap,” LG U+’s enterprise-facing metaverse platform, has experienced delays in its rollout.
Outside of telecommunications, major global tech companies are also scaling back metaverse projects.
Alibaba, the Chinese e-commerce and technology giant, was revealed in November having reduced its investments in metaverse companies. This follows Meta’s previous difficulties in establishing lasting engagement within its own Metaverse-focused initiatives.
Strategic focus shifts to AI
The Metaverse, once touted as the next evolution in digital engagement, has recently faced growing skepticism as consumer demand and technological readiness fail to meet initial expectations. Instead, AI is emerging as the dominant force in reshaping industries, making it a natural pivot for tech companies looking to prepare for the future.
SK Telecom’s move illustrates this transition as it capitalizes on the metaverse expertise acquired in Iceland to strengthen its AI capabilities. By focusing on developing smarter and more innovative AI-based services, the company aims to secure new growth opportunities.
In a competitive field dominated by OpenAI, Google and Microsoft, SK Telecom’s ambitions to join the ranks of global AI leaders represent a bold strategic realignment.
The Iceland shutdown marks a significant shift, not only for SK Telecom but for the industry as a whole, as the Metaverse moves from being a dominant priority to being less central to future plans. Instead, AI has emerged as the technology that will unlock the next chapter for businesses seeking innovation and growth.
For its part, SK Telecom appears poised to leverage its learnings in Iceland to fuel this reinvention as it attempts to compete with AI leaders.
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