According to Mark Zuckerberg, the CEO of Meta, the metaverse represents the future of the Internet and the “holy grail of online social experiences.” For him, it is not merely an expansion of Facebook or another social media platform, but an entire life lived on the screen of a headset. Zuckerberg announced his dream last year, cementing his dedication by changing the name of his company from Facebook to Meta.

One year later, Meta’s stock has plummeted by about 67% as of the writing of this article; investors are losing confidence due to Meta’s vague plans for the future, exorbitant spending on VR products, and inability to compete with TikTok for advertisers; and Zuckerberg has recently laid off 11,000 employees to cut costs. With Zuckerberg’s net worth down almost 100 billion dollars from last year, it is clear that Meta does not have a bright future.

The announcement of the metaverse came in October of 2021 in the company’s annual Connect conference. Meta describes it as a hybrid of their various services, along with 3D and VR experiences powered by their Meta Quest 2 and Quest Pro headsets. In his founder’s letter, Zuckerberg described “teleporting” to different locations with holograms, as well as hosting cryptocurrency and NFT projects within the virtual space, and even emphasized that the metaverse was the new focus of Meta, rather than Facebook.

The heart of the metaverse is a VR platform known as Horizon Worlds, released in late 2021, in which users interact with each other in virtual worlds. Originally, Meta intended for Horizon Worlds to attract 500,000 monthly active users, but they have achieved only 200,000, a number that is steadily declining due to low retention rates. The lack of user content and interesting worlds drives users away, along with the low population of the worlds themselves. The design of the avatars has been widely ridiculed, as they lack legs and possess low graphical quality. In addition, the VR headsets themselves have not been as successful as Meta hoped.

In total, Meta has spent $36 billion on this project and seen lackluster results. Reality Labs, the department that builds VR and AR technology for the Metaverse, has lost $9.4 billion dollars so far this year. Finally, last week, Zuckerberg made the decision to reduce costs by laying off 11,000 employees. However, in his message to Meta employees, although he mentioned a reduction in the size of Reality Labs, he did not suggest any stop to the plans to keep investing in the Metaverse. 

Zuckerberg has acknowledged the ambition of his plan, and he suggests that Meta may only start making profits from the Metaverse after 2023. Regardless, he has stated that he is “confident” that the services will eventually work as intended. Meanwhile, his critics disparage the project for its vagueness, use of technology that has not been fully developed, and lack of connection with what consumers may want. The future of Meta depends on how well he can convince his critics, supporters, and investors alike of the worth of the metaverse.

References:

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