OOF: Mark Zuckerberg’s losing metaverse bet cost Meta $77B
Photo Credit: Meta
Nobody cares about VR
The mere fact that you’re reading this article on your phone, tablet, or computer — not inside some digital cyberpunk cafe on a cloud server in somebody’s basement — proves that Meta’s virtual reality endeavors amounted to a massive dud. The vision Zuckerberg had in mind for Meta never got off the ground, much less became a vital piece of our digital lives.
Why, you ask? The metaverse failed for more reasons than I can count, but here are a few off the top of my head:
- Price: VR headsets are expensive. Even the “cheap” ones cost hundreds of dollars. While the price was hard to swallow in 2021, shifts in the current economy have made these even less accessible.
- Comfort: VR headsets are unwieldy. Most iterations available today are big, bulky, heavy, and they’re annoying (or even painful) to wear for several hours or more.
- Redundancy: While phones, tablets, and laptops have become a necessary piece of tech in most people’s lives, VR headsets are an added luxury. They’re a supplemental gadget at best, all without a “killer app” that sets them apart from the devices we already own.
- Reality check: As it turns out, people would rather live life in the real world than be trapped in a digital version. Sure, if we were all still stuck at home in a COVID lockdown (as we were when Zuckerberg thought up this wild idea), then maybe the metaverse would be something more than it is today. But alas, the lockdowns were lifted, COVID vanished from headlines everywhere, and real life goes on.
The metaverse was destined to fail
COVID lockdowns aside, Zuckerberg’s interest in the metaverse was shortsighted from the start. By the time he changed the name of his company and went all-in, consumer interest in VR was already at a notable low. Major brands in the gaming space, like Playstation, Steam, and Xbox all tried their hands at VR headsets, and almost all of them have either discontinued their hardware or vastly scaled back.
We’ve seen a similar reception with Apple’s attempt at the VR space. Vision Pro has suffered from staggeringly low sales, poor developer support, and slow innovation. By most accounts, Vision Pro is a massive failure for Apple (despite Tim Cook’s candy-coated outlook), and I wouldn’t be surprised if it discontinues the product in another several years.
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Not to be outdone, Google and Samsung recently teamed up to launch their own VR headset, dubbed Samsung Galaxy XR. If you’ve never heard of this device or even seen it floating around on your social feed, that’s because it’s already headed down the same path as its predecessors. No one’s talking about it, Google and Samsung aren’t actively advertising it, and consumers have already forgotten about it.
Meta takes a multi-billion-dollar dive
The overall lack of consumer interest in the metaverse didn’t go unnoticed by Zuckerberg and company. A recent report revealed that Meta lost a staggering $77 billion on its entire strategy, including Meta Quest hardware and Meta Horizon development. To soften the blow, Meta will reportedly slash its VR budget by 30%. Layoffs are also on the way, though the actual reduced headcount hasn’t been announced yet.
Luckily for Meta, the terrible news couldn’t come at a better time. As the metaverse melts into vaporware, Zuckerberg’s AI division continues to grow. In fact, if it weren’t for the AI boom of 2022 — ushered in by OpenAI with ChatGPT — Meta might be in serious trouble right now. Towering high over the colossal failure that is Meta Horizon Worlds, Meta’s Llama has done surprisingly well with the service showing up in all of Meta’s major apps, including Facebook, Instagram, and WhatsApp. Today Meta AI boasts one billion active users per month.
That said, Meta isn’t out of the water yet as recent development delays could cause trouble for the future of Zuckerberg’s AI ambitions. Only time will tell if AI is the vital lifeline Meta needed to escape its metaverse hell or if Llama will join it in the burning pit of dissolution.
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