Mark Zuckerberg envisioned 2022 as a turning year for his metaverse project – it was not. What went wrong?
"From now on, we will be metaverse-first, not Facebook-first," Mark Zuckerberg said more than a year ago when he announced the company was changing its name to Meta to reflect that shift.
Plans were made to recruit 10,000 high-skilled employees across Europe to realize Zuckerberg’s vision of the metaverse. Instead, a hiring freeze was imposed, and, this past November, it was announced 11,000 jobs would be cut across the company – or about 13% of its entire workforce.
Even as it makes the biggest cuts in history, Meta is bent on throwing more billions behind its metaverse division, which has reportedly lost $10 billion this year – and is projected to burn even more money in 2023.
Meta is just one of many companies placing a long-term bet on the metaverse. Despite reservations about the industry, it is expected to grow into a $5 trillion market by 2030.
Zuckerberg’s commitment to the metaverse has seemingly crossed a point of no return, but he should take a step back, according to some observers.
Too big to succeed?
Zuckerberg’s belief he could parlay the success of his social media behemoth into the metaverse was a conceptual flaw from the very beginning, according to Richard Gardner, CEO of fintech firm Modulus.
“While their size and prominence gave them a PR advantage, their competition was always going to be more agile and nimble,” he said.
Its recent attempt to acquire Within Unlimited, a virtual reality startup, has been blocked by an antitrust case brought by the Federal Trade Commission.
It shows that Meta’s monopoly logic, such as buying off competitors or copying their features, might have worked for Facebook but is less effective in the metaverse, according to Matilda Kivelä, senior creative and brand strategist at Reaktor Creative, a consultancy.
The metaverse was not just another capitalistic venture but also a “technological revolution” that needed to be built by a variety of different actors, Kivelä said.
“Innovation dies where monopolies thrive,” she added.
Failure to understand the space
Meta’s Horizon Worlds – its virtual playground for users to create and interact – has been described as “unimaginative” and “soulless.” Its plain graphics were ridiculed by consumers used to hyper-realistic video games.
“Meta speaks of an immersive experience, but the reality isn’t there yet. Avatars without legs and barren digital deserts tell an entirely different story than Meta’s keynotes,” Kivelä said.
The public also does not trust Meta to ensure privacy, safety, and transparency when Facebook is known for the opposite, Kivelä pointed out.
According to one survey, 87% of Americans are concerned about privacy in the metaverse as envisioned by Meta. Another showed that most consumers in the US are not interested in its virtual reality project.
“Those consumers interested in such a metaverse are, by their very nature, suspicious of centralized power and the establishment. It is hard to think of a tech firm that is more establishement than Facebook,” Gardner said.
Hardware over privacy
Some believe it was a mistake for Meta to delve straight into hardware before addressing privacy concerns.
“Instead of approaching hardware first, Meta should focus on creating a sovereign digital landscape where consumers own the rights to their data,” said Michael Luckhoo, co-founder of CIRUS Foundation, a data company.
Meta’s Oculus Quest Pro virtual reality headset, released in October, has been described as its “most intrusive product yet,” and a “tech solution to non-problems.”
While Meta hoped Horizon Worlds would have 500,000 monthly users by the end of 2022, company documents show there are less than 200,000, according to the Wall Street Journal.
The number has been steadily decreasing since spring, as most visitors to Horizon Worlds do not return after the first month. Meta has been reportedly struggling to get even its own employees to use it.
“Meta is creating the product without considering the data and understanding what the market says,” Luckhoo said, noting that the company failed to mobilize its resources.
One man show
Meta’s leap into the metaverse coincided with the departure of Sheryl Sandberg, the social media giant’s second-in-command for 14 years, who “kept their feet on the ground,” according to technology industry analyst Jeff Kagan.
Sandberg had considerable autonomy in her role as the company’s chief operating officer, turning Facebook advertising into a $100 billion-a-year business. In recent years, she has been increasingly sidelined, which corresponded to Zuckerberg’s growing metaverse ambitions.
In response to Sandberg’s announcement in June that she would be stepping down, Zuckerberg said it was “the end of the era,” but also that he now envisioned a “more traditional” chief operating officer role – officially ending years of dual leadership.
Another high-profile figure in Meta, virtual reality pioneer John Carmack, announced in December he would also be leaving the company, where he held a position of a consulting chief technology officer. Carmack cited efficiency issues and lack of progress in Meta’s virtual reality unit as reasons behind his departure.
“Zuckerberg is alone now. This is one of the main reasons he let this metaverse vision obscure his vision of the proper path and timeframe for action,” Kagan said. “Timing is everything and Mark Zuckerberg did not have good timing with the rapid switch to the metaverse.”
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