Facebook's metaverse pivot: Zuckerberg has no regrets
Meta is investing in an uncertain future that is already costing the company dearly. Zuckerberg explains why he believes it's worth it.
It's been more than six months since Facebook renamed itself Meta and entered the Metaverse. Since then, the company's share value has fallen by more than 40 percent.
That's not, or at least not solely, because of the radical realignment. Metaverse's social networks are barely growing and Apple's data protection measures are putting pressure on the advertising business. The market environment for tech stocks is difficult because the FED is adjusting its interest rate policy.
But the fact that Zuckerberg spends more than ten billion U.S. dollars a year on developing funny-looking headsets, with no prospect of significant near-term revenue, could also be a concern for shareholders.
Meta is now responding to the pressure and announced cuts that will affect Reality Labs, Meta's large VR and AR division, among others. Some projects the company no longer wants to afford, others it wants to postpone, it said.
The inevitability of VR and AR
You shouldn't expect any backpedaling. Despite difficult circumstances, Zuckerberg continues to put all his eggs in one basket, and with an entrepreneurial radicalism that is second to none. In an interview with tech magazine Protocol, Zuckerberg explains why.
"We've gone through a bunch of content transitions at this point. When I started, it was primarily text. Then we got phones with cameras and photos, and mobile networks got better. Now, the Facebook app is half video. [...] But that's just not the end of the line. You're going to keep on getting more immersive. Whether it looks like a big bet today or not, I just think it's inevitable that something like this needs to get invented."
Meta, Zuckerberg said, is well positioned to take such a risk and invest ten to fifteen billion dollars a year in research and development. "Some people might think it's a good bet, some people might think it's a bad bet. But at the end of the day, I don't think that many people think we're at risk of going out of business because of it."
Two decades of Metaverse
Zuckerberg notes that Meta is an atypical company. Atypical in that Zuckerberg holds the majority of shares and can make more radical decisions.
"I want to live in a world where big companies use their resources to take big shots. Obviously, if people invest in our company, we want to be profitable for them. If employees join our company, I want to make sure that ends up being a good financial decision for them, too. But I also feel a responsibility to go for it. Use the position that we're in to make some bets, and try to push forward in a way that other people might not."
Meta's CEO specifies the next 20 years as the time frame. That's longer than Facebook has been around.
Zuckerberg knows that his company has a lot of catching up to do. Roblox, Fortnite, Minecraft: the big proto-metaverses exist elsewhere. Meta has the advantage that many people use its own social networks and that it can put a lot of money into research and development, he said. Meta's Metaverse platform, Horizon, is still in its infancy and should make "dramatic progress" in the next year or two, Zuckerberg said.
Horizon is supposed to be an open platform - but when?
For the metaverse to be a true metaverse, it must be interoperable. Currently, however, Horizon is as much a walled garden as its competitors. Each platform exists only for itself. That's why Zuckerberg said from the beginning that the metaverse would be built by many companies, not Meta alone.
Zuckerberg raises the prospect that Horizon could open up, but without giving specific actions or timeframes. First, the team needs to lay the groundwork and overcome technical challenges, Zuckerberg said.
"But that doesn't mean that somewhere else in the company we shouldn't be working on the open platform side of it. If you don't do that work, then you just wake up one day, and you built this closed thing, and it's like super hard to back out of that."
Finally, Zuckerberg touches on Horizon's smartphone launch, announced for this year, and for the first time fleshes out what it might include. "For Horizon, making it so that you can create a world and share it on Facebook or Instagram, and people can just jump into it from there — that's going to be pretty valuable."
However, he said the best Horizon experience will be with the VR headset. "We need to be careful about not making it primarily a mobile experience. Balancing that is going to be pretty important."