Even by Facebook’s standards, 2021 has been a tough year.
a A series of disgusting reports Based on leaks from whistleblowers asked uncomfortable questions About the impact of Facebook on society.Company Continual staggering from anxiety Regarding the use of the platform to organize the January 6th Capitol Riot.When Privacy changes from Apple threatened the core advertising business. Meanwhile, younger users flocked to his TikTok.
At a virtual reality event on October 28, 2021, CEO Mark Zuckerberg tried to turn the page.Zuckerberg said Facebook Rename it to meta When go all in about building a future version of the internet called “Metaverse” In the process of proving that the company he founded in 2004 was much more than just a social media business,
After a year and billions of dollars spent, the so-called Metaverse still feels like years away, even if it actually appears. The company remains a social media business and faces greater financial pressure than when it announced the change.
Released two years ago, Meta’s Quest 2 consumer virtual reality headset is a favorite in its category, but remains a niche product overall. The company’s latest headset, his much more expensive $1,500 Quest Pro, is aimed at enterprise customers and won’t have much of an impact on regular consumers. Meta’s flagship social VR app, Horizon Worlds, can feel like a ghost town (though laser tag).
Some brands have sinceChief Metaverse Officer,It’s not clear if consumers actually want to work and play, or even know what the hard-to-define terms mean. , refers to the idea of making the Internet more ubiquitous and interconnected.
Meanwhile, Meta’s core business is on the decline, facing increasing competition from TikTok and a shrinking advertising industry amid looming recession fears. The company this week Second quarterly revenue decline in history And the profit was cut in half from the previous year. We are selling more ads, but revenue is declining and user growth is slowing on social media platforms.After reaching $1 trillion market cap for the first time last summerwhich is currently worth about a quarter of that, less than Home Depot.
Gil Luria, technology strategist at DA Davidson, said: “There are expectations for continued growth, but those expectations may prove to be optimistic.”
A gamble that seemed bold a year ago now seems over the top.meta lost $9.4 billion The first nine months of 2022 have been profitable on the Metaverse effort, and in 2023 we expect losses from the unit to be “significantly higher year-over-year.” lower it. (Also, “Mad Money” host Jim Cramer broke down in tears to apologize to viewers for trusting Meta’s management and encouraging investors to buy shares.)
“People are confused about what Metaverse means. If the company is investing between $1 billion and $2 billion a year in this project, that confusion may not matter. Shareholders of Meta Brad Gerstner, CEO of Altimeter Capital, wrote: open letter to Zuckerberg this week. He urged his Meta to “limit investments in the Metaverse to no more than $5 billion annually and set more individual goals and measures of success.”
He added that the current pace of spending is “very large and scary, even by Silicon Valley standards.”
Meta did not respond to requests for comment on this story.
The name change was only announced a year ago, but the transition from Facebook to Meta took years. Zuckerberg has said in the past that this is a long-term bet for the company, not an overnight transformation. It all started with Facebook’s purchase of his Oculus VR in 2014, and since then the company has rolled out a line of increasingly capable, affordable, and portable headsets.
Meta’s latest headset, the Quest Pro, is the first to combine the immersion of VR with the real world. See text and details in VR, track eyes and facial features to feel connected to others in virtual space, and see the world around you in color while interacting with digital objects. All agree with Meta’s goal of attracting more business users.
A far cry from the Oculus Rift headset launched in 2016. It cost $599, but required users to connect it to a powerful PC and use it with a sensor camera on the stand that tracks the headset. Initially, the headset didn’t even come with a tracking hand controller. Initially, Xbox controllers and small handheld remotes were shipped to customers.
Headsets have improved dramatically, but VR and AR are still nascent technologies seeking purpose and popularity. The VR headset market is still small compared to established gadget markets like console video games. ABI Research expects 11.1 million VR headsets to ship this year, of which around 70% will be Quest 2 headsets. That’s down from his estimate of 14.5 million headsets for 2021, of which Quest 2 headsets account for his 85% of the total.
Some tech experts say these products have potential, including in the workplace, but in the short term, adoption by everyday users remains uncertain at best.
“It’s a great way to get a sense of what is going on,” said David Lindlbauer, assistant professor at Carnegie Mellon University and head of the university’s Augmented Perception Lab. (Meta sponsors Lindlbauer’s work on developing advanced user interfaces for AR and VR.)
For Zuckerberg and Meta, it creates unique challenges.
Zuckerberg successfully changed Facebook’s business from desktop to mobile devices shortly after going public. This helped cement Facebook’s advertising business and ensure its dominance for the next decade. But smartphones were already everywhere at that time. If anything, Facebook was a little behind.
Today, the company wants to lead the way in new technology and wants consumers to follow its lead.
Meta positions this shift as a sort of existential imperative for the company. After Apple’s app tracking changes hurt Meta’s ability to target ads to users, the company doesn’t want to rely on external hardware or app stores going forward.
But there’s a big difference between looking at a computer or smartphone display and wearing a headset. Lindlbauer says he can imagine using the headset for an hour or so a day, alternating between the immersive views of VR and digital images that blend with the physical world. ,” He said.
Meta also faces a huge challenge when it comes to showcasing VR content that users love the look of and want to use again and again.according to Recent reports According to internal Wall Street Journal documents, Horizon Worlds has less than 200,000 monthly active users, a rounding error for a company with 3.7 billion monthly active users across its various services. (A Meta spokesperson told his Journal, “It’s easy to be sarcastic about the Metaverse,” but Meta thinks it’s “the future of computing.”)
Avi Bar-Zeev, founder and former employee of AR and VR consultancy RealityPrime, said: He has worked on HoloLens VR headsets at Apple, Amazon, and Microsoft. “Never before has a virtual world been successful in building a canvas where people can just come and start painting.”
Zuckerberg personally received harsh criticism About the interaction between work and play in the virtual space envisioned by Meta Posting on Facebook Blocky, cartoon-like avatar images in Horizon Worlds — images he later admitted were “pretty basic.”
Janna Anderson, Director of Imagining the Internet Center at Elon University, said: “Meta has suffered tremendous ridicule on social media and in the zeitgeist in general.”
Quest Pro’s face tracking feature helps make your avatar’s facial expressions look more realistic. Initially, users will be able to access this tracking in Horizon Worlds and Horizon Workrooms, as well as several developer apps such as Paint VR and the DJ app, Meta said. Tribe XR.
But even with facial tracking, what users see when they dive into Horizon Worlds — a blocky, human-like avatar that exists only from the torso and floats in a virtual square — is For now, it remains a stark contrast to the image Zuckerberg painted at the time. His event at Meta’s Connect on October 11 will feature a full-body avatar of himself.
Meanwhile, investors seem tired of investing in the Metaverse, but the future of their core business is also highly uncertain.
Jefferies analyst Brent Till said in Meta’s earnings call this week, “To sum up how investors are feeling right now, there are a lot of experimental bets versus proven bets on the core. I think it’s too much.
Zuckerberg defends a shift in strategy. “I think there’s a difference between something being experimental and not knowing how good it will end up,” he replied. added like