I'm going to be in the minority here, and agree with Zod. Granted, dropping from 40,000 seat arenas to 400 capacity clubs, isn't completely dead. Dead, by definition, would mean playing in no venues at all. However, if Grunge didn't kill Metal, it surely left it comatose on a ventilator, traumatized, nearly brain dead, and awaiting organ harvesting.
I think there needs to be a clarification made, as is so often the case, that what that mangled, bleeding, nearly lifeless, lump of flesh I (and if I may presume, Zod) call "Metal" is now called "Traditional" or "Classic" Metal. Somehow, in the rewriting of history, and current mad preoccupation of creating and assigning Genres, it has been forgotten that twenty to thirty years ago it was just called "Heavy Metal" or just plain "Metal."
As others have pointed out Grunge didn't hurt all Metal. It may not have done much to Death Metal, but Death wasn't ever in the mainstream anyway. The Groove Metal, Neo-Thrash, and various Core Metals that co-existed at the time were considered the only viable alternative to Grunge. An alternative to Alternative, so to speak. So yes, Pantera, Prong, and Sepultura did okay for themselves at the time. If Grunge did anything to Black Metal, I doubt anyone noticed.
What Grunge did do, however, was to provide a stark contrast to the ridiculous excessiveness of Glam. On one hand you had musicians in baggy jeans and flannel shirts. On the other you had musicians prancing around in leopard spots, nail polish, and lipstick.
The contrast was so profound, that a lot of people suddenly realized just how absurd Glam was. I also think that many of those same people were actually embarrassed to be "caught" listening to those bands. As a result Glam was suddenly delegitimized, and considered to be as laughable as Disco had been.
Unfortunately for the Heavy Metal artists, thanks to Adam Curry, Riki Rachtman, and the rest of MTV, they had come to be identified with the same era. Truthfully, MTV wasnt solely to blame, since Galm and Traditional artists often shared the stage on tour.
Consequently, even bands that never embraced the look of the era had a similar enough sound that they became in large part indistinguishable from their ludicrous counterparts. Judas Priest, Queensryche, and Dio werent considered much different than Poison, Britny Fox, or Faster Pussycat. So, when Galm went down in flames hard, it took Heavy Metal down with it. Almost overnight Metal as a whole became a laughing stock.
The net effect of all that was to push Metal in all its forms back into the underground. While the other genres of Metal may have been less affected, or even thrived at the time, they would never be able to recapture the lost audience, as many of those people would never come to embrace the heavier styles or more aggressive vocals. Theres no lack of those people on this board to this day.
The effects of Grunge, and the resulting stigma on the 80s remains. My stepdaughter, who grew up firmly entrenched in the heyday of Nirvana, Bush, and Pearl Jam, still calls what I listen to That 80s crap, with the accompanying eye roll, when Im playing something like Sabaton. People my age who listened to the Scorpions wonder how I can listen to that Raaa! Raaa! Raaa! Shit, when Im playing Amon Amarth. In addition, most of them have no clue that Priest, Maiden, and Saxon still exist, much less that theyve putting out new albums over the last fifteen years.
So, some forms of Metal continued to grow and evolve regardless of Grunge. And maybe Grunge didnt kill (Heavy) Metal, at least not completely. Grunge did, however, beat Metal to a bloody pulp.