At one point, Facebook was so confident their Metaverse would become the next big thing that they changed their name to Meta.
Since then, the stock has seen a revolutionary drop from about $350 per share to $200 per share. Across the past 1.5 years of work, Meta’s Reality Labs has seen great financial losses, as they wasted $4.28 billion in the last quarter while seeing virtually no progress in terms of development. In total, they’ve dumped $36 billion into the project. The Metaverse only made up 2.3% of their earnings despite eating up their profit margin by around 40%.
The Metaverse uses the powers of virtual reality (VR) to display a simulated world for its users. Its goal is to create a VR universe where people can hold meetings, visualize 3-D structures, teach classes and perform aspects of life from the comfort of their home.
Recently Meta launched a flamboyant new advertising series Are We There Yet? in efforts to promote their new product — the Metaverse. However, customers have come to a general consensus that Meta is far from delivering on their promises. Even now, most of the preset avatars are cartoonish, low resolution and have no working legs. In other words, the Metaverse is a buggy mess.
Furthermore, Meta has still yet to deal with the plethora of problems that await them in the VR world, from cybersecurity issues to phishing and child grooming. By any measure, their product is objectively terrible.
With Facebook’s bad reputation for solving security issues, it’s hard to see the company putting effort into ensuring online safety in the Metaverse. In a virtual world, where predators and other malicious individuals can hide behind an online avatar, the risks for children and other vulnerable groups increase drastically.
Initially, after seeing minimal results but enormous spendings, Meta decided the most logical plan was simply to buy other VR companies such as Armature Studio, Camouflaj, Beat Saber and more to bolster their VR presence. Even this plan has not gone smoothly.
Several months ago, Meta was finally able to purchase Within Unlimited, another VR company, after winning a lawsuit against the Federal Trade Commission’s attempt to block them from purchasing the company in fears of monopolization. Their solution to being unable to make any progress is to purchase the work of others — a flex of their financial resources. However, they are now feeling the bite of this poor financial investment.
In comparing Meta to a similar competitor, VRChat, Meta is clearly behind. VRChat, founded by Graham Gaylor and Jesse Joudrey, is an online platform where people can interact with each other via virtual reality, expressing themselves through custom-made avatars — the very product Meta wishes it could produce.
Despite having less than 1% of Meta’s funding, VRChat has much cleaner movements, graphics and fluidity among its avatars, and is working on improving finger tracking to benefit the sign language community who play their game. The active player counts are also blatant proof of Meta’s failure. VRChat garners over 2 million active players each month, but Meta’s flagship project Horizon Worlds struggles to get 200,000 users per month, and that number is dropping as Meta reported a 33% decrease in player counts over the past year.
These failures resulted in Meta’s recent layoff of 11,000 employees — about 13% of its workforce. Meta has also quietly shifted toward focusing on LLaMA, a new AI program meant to rival ChatGPT, and away from supporting the Metaverse, not wanting to openly admit just how much of a failure it has been.
Ultimately, these issues all stem from how Meta bit off more than it could chew. While they spouted grand plans about NFTs and other buzzwords, none of them were realistic, and the results certainly show it. The only thing “meta” about the Metaverse was the advertising budget that tried to prop it up. Now that ChatGPT is popular, Zuckerberg and crew want to jump on the AI bandwagon, but if they don’t step back and assess what they can and can’t do, they’ll get burned again. And that’s a reality that will really sting.