Was 2022 the last year of Meta as we know it?

Mark Zuckerberg has bet the farm on the metaverse, but the rest of the world seems decidedly underwhelmed.

Facebook's rebranding as Meta a little over a year ago made the company's intentions abundantly clear: a new focus on the metaverse, Mark Zuckerberg's vision of a future internet based on virtual reality.

"It will touch every product we build," he said at the time. "Over time, I hope we are seen as a metaverse company, and I want to anchor our work and our identity on what we’re building towards."

A year on, though, and betting the farm on the concept doesn't seem like such a good idea. Poor third-quarter results saw Meta’s share price plummet by 25%, wiping $80 billion off its value. Overall, its stock is down by 74% from a peak in September last year ⁠— just before the company's new name and mission were announced.

Meanwhile, we've seen massive layoffs, with as many as 11,000 staff leaving worldwide. A new building at the company's Irish headquarters, leased in 2018 for 25 years, will now be sublet instead, and the company's cutting back on office space in London and California too.

Facebook user numbers fall

Part of the problem is the decline in popularity of Facebook and Instagram, with the company reporting its first-ever drop in daily user numbers earlier this year.

The company is also less popular with advertisers than it once was, with changes to Apple's privacy settings now meaning that third-party data tracking is set to 'off' by default.

Meanwhile, the European Data Protection Board (EDPB) is widely reported to have ruled that Meta can't require users to accept personalized ads, a decision that would then be enforced by Ireland's Data Protection Commission. This would damage the company's advertising offering even more.

The metaverse as saviour

While the details of these problems couldn't necessarily have been predicted, their general tenor ⁠– user apathy, regulatory problems – weren't that hard to see coming, which was presumably the reason to go all-in on the metaverse.

Unfortunately, though, that's not going particularly well either. Meta's believed to have invested as much as $100 billion in research and development for metaverse technology so far but has little to show for it.

Reality Labs, the company's VR and AR hardware and software business formed following its takeover of Oculus, is currently losing a whopping $10 billion a year.

Perhaps more importantly, though, Meta's current metaverse offering isn't exactly popular with users. The company initially predicted that its flagship Horizon Worlds game platform would have half a million users by now; the actual figure's believed to be just 200,000 - and that's a drop from 300,000 back in February this year.

The problem is that it's just not that good. Far from a realistic immersive experience, users are presented with a poorly-rendered world where avatars don't have legs, and there's very little to do. Reviews are generally very negative.

Indeed, Horizon Worlds is so disappointing, according to an internal memo leaked to the Verge in September, that even the company's own staff are reluctant to use it. "The simple truth is, if we don’t love it, how can we expect our users to love it?" wrote VP of metaverse Vishal Shah.

Investors aren't happy with the current direction of Meta, and brands are holding off from investment in the metaverse.

Whether or not Zuckerberg can make his gamble pay off depends on whether he can keep investors and the public on board for as long as it takes to turn the metaverse into something that people might actually want to use ⁠— and that's very far from a certainty.