All Mark Zuckerberg wants for Christmas is for the metaverse to blow up into a new augmented reality (AR) and virtual reality (VR) world that the population looks forward to logging in to. In fact, he wants one billion people “spending hundreds of dollars” inside these digital spaces.
The Meta Platforms founder can be called a lot of things, but he can never be deemed unenthusiastic, especially when you note how much cash he has funnelled into his vision. Why then does it seem that the man who created the biggest social media platform in the world seems to be failing at creating what he says is the future of tech – even after pumping $36bn into it?
Failing is a subjective term, but from the outside looking in it doesn’t seem like the metaverse is going the way Zuck dreams it will. In the first nine months of 2022, Meta lost a whopping $9.4bn on its metaverse subsidiary Reality Labs.
While this can arguably be put down to a strategic pivot, which can often take years to pull off – think Microsoft switching from hardware to software – there’s no denying that the losses don’t look great for Zuckerberg and his investors. In a company call back in October, the founder also claimed the company would see “significantly” wider operating losses in 2023.
This might not give off the impression of failing so much if the world was flocking to enter the metaverse, but that sadly doesn’t seem to be the case. Zuckerberg’s core metaverse product right now, Horizon Worlds, is not gaining anywhere near the traction that the founder had hoped.
In internal company documents revealed by the Wall Street Journal in October, it can be seen that the initial goal for Horizon Worlds was to reach half a million monthly active users by the end of 2022. So far it’s only managed 200,000. A further look into company documents show that most of the worlds made by creators of the app were visited by just over 50 people, with most having 0 visitors.
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“While many people envisioned the metaverse to look like Ready Player One, it seems we’re a long way off that,” Alan Vey, CEO and founder of blockchain solution company Aventus Network, told Verdict.
Critics has panned Horizon Worlds visual fidelity and graphics, often with them comparing the graphics to that of outdated gaming consoles, suggesting that Zuckerberg isn’t winning over many gamers. The dreaded Paris selfie, which showed an extremely dated-looking virtual Zuck in front of a polygon Eiffel Tower, was the catalyst for a wave of memes and questioning about where all the money had been spent.
The backlash has been so big about the graphics of Horizon Worlds that Vishal Shah, the VP of metaverse, made the call to put it into a “quality lockdown” for the rest of 2022.
“Since launching late last year, we have seen that the core thesis of Horizon Worlds — a synchronous social network where creators can build engaging worlds — is strong,” Shah wrote in an October memo.
“But currently feedback from our creators, users, playtesters, and many of us on the team is that the aggregate weight of papercuts, stability issues, and bugs is making it too hard for our community to experience the magic of Horizon. Simply put, for an experience to become delightful and retentive, it must first be usable and well crafted.”
It’s clear that Zuckerberg is currently failing to convince a decent-sized chunk of the 3.6 billion monthly users that log into Facebook, Whatsapp and Instagram to get involved in the metaverse.
You can’t get people excited about the metaverse if they’re not interested in the thing that will get them there: the headset. This has been another barrier to success for Zuckerberg and his team. As it stands, the company’s push with metaverse hardware has been with the Meta Quest. Its primary function is gaming, but unfortunately, the common issues with motion sickness while using a VR headset remain prevalent.
It doesn’t help that Meta’s newest release, the Quest Pro, has been put on sale for a whooping $1,499, making it a tough sell to the casual market. However, the gadget isn’t aimed at casual VR aficionados. The company has said it is targeting businesses interested in working in the metaverse who can afford the headset.
“The potential of the metaverse is one that will likely be fully realised in the future, but currently, the metaverse feels more like a glorified communications channel,” Vey said.
It’s not just Zuckerberg’s metaverse vision failing
Meta isn’t the only company pining for a large scale metaverse. Manufacturers, healthcare businesses, gaming companies and even food brands want a bite of the new technology. Monitoring public company filings, research firm Globaldata found 4,300 mentions of the metaverse in the first quarter of 2022, an increase of 223% from the last quarter of 2021 and 106% higher than the annual total for 2021.
However, despite the increased traction which coincided with Meta’s rebrand, a look into Google “metaverse” searches shows plummeting interest. So much so that analysts have predicted a “metaverse winter.”
The suggested blizzard is unfortunately also backed up by falling investment into the sector. With VR and AR seen as essential technologies in the future of the metaverse, looking into investment in these sectors should indicate the amount of interest. People do, after all, tend to put their money into things they believe in.
VR and AR deals have been on a steady rise for the past decade, according to data acquired by research firm GlobalData. The growth of the space reached its peak in 2021, when the industry received over $18.9bn across 311 venture financing, private equity and equity offering deals.
This, however, all changed this year with an exceptional fall from grace for the sector. VR and AR projects received just over $5bn in 2022 across 283 deals.
Although the weight declining investment isn’t the deciding factor into whether the metaverse vision is failing – it definitely isn’t a good sign for big tech’s biggest project.
GlobalData is the parent company of Verdict and its sister publications.