The metaverse, a vast virtual reality (VR) environment in the style of what is seen in science fiction movies, is a very long-term bet for Mark Zuckerberg, but today it forces him to invest a huge amount of money, with no apparent return anywhere near.; a walkthrough of the current version doesn’t show much activity
Where is all the money going?
Meta, the corporation formerly known as Facebook, has invested impressive amounts of money in what it calls “the metaverse,” the virtual reality paradise world that Mark Zuckerberg sees as the future of human connection.
However, for me, the most interesting questions about the metaverse are less sociological and more financial. When I donned the company’s latest virtual reality (VR) headset, Meta’s $1,500 Quest Pro, and parachuted into Horizon Worlds, Meta’s virtual theme park, I wasn’t left pondering the future. of human communication. Rather, in the state of the accounting department of Meta.
Zuckerberg’s Xanadu is a cartoonish wasteland. There are advertisements for wonderful entertainment everywhere you turn, including those for sporting events, bowling, escape rooms, open-mic sing-alongs, dance clubs, and concerts. However, almost everything is a joke. Most of these places are abandoned; you will be lucky if you find many enclosures populated with more than one avatar. Every corner of the Metaverse reeks of creepy abandonment, much like the post-apocalyptic United States of the Fallout series of games. Also, as you wander through that desolate place, you can’t help but think about how all those billions of dollars have burned: Zuckerberg spent all that money…on this? As? Because? What was he thinking? Are they blackmailing you?
The amounts are staggering. In an earnings report last month, the company announced that Reality Labs, its metaverse business, had squandered nearly $4 billion in the last financial quarter. The division has spent more than $10 billion so far this year, a pace that surpassed the $12 billion it spent in the metaverse last year. In just a few years, Meta’s RV investments have exceeded what the United States spent on the Manhattan Project (adjusted for inflation).
Sure, a lot of tech companies spend a lot of money on new initiatives. Netflix has poured tens of billions of dollars into movies and TV shows. Tesla is spending vigorously to establish its car and battery operations. And every year, Amazon spends billions and billions of dollars on data centers and logistics warehouses.
However, Meta’s spending is different because of how staggeringly little you have to show for that money. At least Netflix’s billions of dollars gave us Stranger Things and The Squid Game. Tesla’s money is revolutionizing the auto industry. Amazon’s infinite investments allow me to receive same-day shipments of toothpaste and toilet paper. On the other hand, spending Meta on RV seems only slightly more fruitful than sticking money in an oven. The $12 billion Reality Labs invested in costs resulted in just $2.3 billion in revenue last year.; so far this year, revenue is only slightly higher, while costs are up more than a quarter.
Meta’s big spend might make sense if it used the money to subsidize the cost of its virtual reality (VR) headsets: bringing their price down enough to make the device a massive hit. However, as I said, the company’s latest virtual reality (VR) device sells for an arm and a leg: $1,500.
How Meta’s Quest Pro works
Meta’s Quest Pro is pretty good. It’s more comfortable than the older, cheaper versions, and its monitor and motion tracking system work much smoother, eliminating even the slightest sensation of dizziness and eye pressure that I’ve felt in previous virtual reality (VR) headsets.
However, it is far out of the price range for most consumers. According to Meta, the device is aimed at professionals who want to make virtual reality (VR) a big part of their remote offices, but even that seems like a stretch. It’s still a big, bulky thing on the head; I had trouble getting more than an hour into any virtual reality (VR) session before I started to get a headache. I doubt many office workers turn to this viewer as their main work device.
And Meta’s cheapest viewer is hardly cheap. At $399, Meta’s Quest 2 costs as much as many high-end gaming consoles… yet offers significantly less. Most of the Meta’s Quest ecosystem feels like it is still being developed, in contrast to an Xbox Series S or PlayStation 5 console that has a ton of titles and a large user base against which to play. There are many apps and games available on the Meta virtual reality (VR) store and few are very fun; however, most of them look like beta products, asking you for $10 or $20 for games that offer barely an hour of entertainment.
And then there’s Horizon Worlds, the social corner of the metaverse of Meta. Horizon Worlds aims to be the virtual reality (VR) equivalent of the Facebook app: it’s a place to hang out, chat with friends and strangers, play games, to explore the digital future of human relationships. It seems to be Zuckerberg’s favorite part of virtual reality (VR): he often posts footage of his adventures around Horizon Worlds and often describes it as the future of digital socializing. However, in a call with investors last month, he admitted that Horizon Worlds “is still a long way from being what we aspire it to be.”
Wow yes. Citing internal company documents, The Wall Street Journal reported last month that Meta had been forced to lower its growth expectations for Horizon Worlds. The company once aimed to hit 500,000 monthly active users by the end of the year, but currently has fewer than 200,000.
“An empty world is a sad world,” noted a company document cited by the Journal. It seemed so to me. My time in Horizon Worlds often felt more melancholy than fun. It’s the premier social app on the biggest new device from the biggest social networking company on the internet… and it’s a buggy, empty, lo-fi mess where the avatars don’t even have legs (yet), where most of the “worlds” I visited were deserted and the most populated places I found barely had dozens of people and where conversations often deepened little beyond “Hello” and “How are you?”.
I’m not ruling out socializing in virtual reality (VR); one day someone may find a way to have a good time in virtual worlds. However, Meta’s big spending isn’t getting us there. It is a company with too much money and too few original and innovative ideas. He’s wasting billions of dollars on a party no one wants to go to.