Struggles In Zuckerberg's Metaverse

Struggles In Zuckerberg’s Metaverse

Mark Zuckerberg, CEO of Facebook announced last October that the company would change its name to Meta and become a “metaverse company.” In his announcement, Zuckerberg painted a picture of a utopian future many years in the future in which billions of people would spend hours at a time in virtual and augmented worlds, working, socializing and playing games.

Meta has spent billions and assigned thousands of employees in the past year to make Zuckerberg’s vision a reality. However, Meta’s initial forays into the metaverse have been fraught.

Horizon Worlds, the company’s flagship virtual reality game continues to be plagued by bugs and lackluster user reception so Meta has instituted a “quality lockdown” until the end of the year to rework the app.

Some Meta employees have griped about the company’s strategy changing frequently, seemingly at the whim of CEO Mark Zuckerberg, rather than following any overarching strategy.

And Meta executives have clashed over the company’s metaverse strategy with one high-ranking official saying the amount of money Meta had spent on unproven projects made him feel “sick to my stomach.”

More than a dozen current and former Meta employees were interviewed and internal communications were obtained by The New York Times detailing the company’s efforts to reshape the business. The individuals were unwilling to discuss the matter publicly and thus only spoke on the condition of anonymity.

At a developer conference taking place today, Meta is rumored to be revealing a new virtual reality headset among other enhancements to the metaverse. The company is in a race against time to transform to make up for declining revenue streams.

Younger users are leaving Facebook and Instagram for TikTok which is hurting Meta’s two biggest revenue generators and Apple’s privacy changes to its mobile operating system have cost Meta billions of dollars in advertising revenue.

The stock price has dropped nearly 60% in the past year reflecting both general market volatility and the skepticism of some investors regarding the future profitability of the metaverse. The company announced a hiring freeze at the end of September and Mark Zuckerberg has since warned employees that layoffs could be imminent.

Struggles In Zuckerberg's Metaverse
Struggles In Zuckerberg’s Metaverse

According to investor and metaverse expert Matthew Ball who Zuckerberg has consulted for guidance, “the pressures Meta’s business is facing in 2022 are acute, significant and not metaverse related.” Furthermore, there is a possibility that nearly all of what Mark has described concerning the metaverse is correct but that the timing is later than he has estimated.

A decade ago, Zuckerberg successfully restructured his company to prioritize the usability of its products on mobile devices rather than desktop computers. Last year, he sent a similar signal by saying that funding the metaverse would usher in the next technological era for Meta.

Meta’s current and future success hinges on its capacity to make virtual and augmented reality technologies available to a much larger audience.

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