Mark Zuckerberg bets big on the metaverse, but he might be too early
VR and AR are developing at a rapid pace and at the same time far too slow. Did Zuckerberg bet too big too early?
Meta is in the midst of the biggest crisis of its 18-year existence. The company's value has fallen 70 percent in the past year. Last week, Mark Zuckerberg laid off 11,000 employees. More cost-cutting measures and job cuts are likely to follow if Meta's situation doesn't improve.
There are many reasons for Meta's downturn: The weakening global economy, Apple's anti-tracking measure, and strong competition from TikTok are putting pressure on the ad business. On top of that, user numbers on Facebook, Instagram and WhatsApp are not growing as fast as they did in the early years.
And then there's the gigantic Metaverse project, which gobbles up double-digit billions every year and is not expected to generate profits until the next decade.
Bad timing for the Metaverse bet
Meta's problems aren't limited to Zuckerberg's costly Metaverse obsession, which many people find difficult to understand. But the high-risk bet comes at the worst possible time, when the company is struggling on many other fronts at once.
"The pressures Meta’s business is facing in 2022 are acute, significant and not metaverse-related," Metaverse advocate and investor Matthew Ball told The New York Times last month.
That may be a bit of an exaggeration; after all, Meta's stock price decline began shortly after Facebook rebranded itself as Meta and before the company announced disastrous quarterly results in early 2022.
But Ball's punchline is different: Meta not only picked the wrong time, but may simply be too early.
"There is a risk that almost everything Mark has outlined about the metaverse is right, except the timing is farther out than he imagined."
VR and AR could take longer, much longer
That sounds like the blurb from a history book describing the VR and AR industry over the past decade. Anyone who has followed the industry during that time knows: the technology is evolving at lightning speed, and at the same time, it's evolving at a grueling pace.
Virtual reality has seen its first sales successes, but whether many people regularly put on their headsets is questionable, to say the least. This is also due to the form factor, which is finally making progress ten years (!) after the start of this VR wave, but is far from optimal.
And what about augmented reality? The sister technology has hardly manifested itself in everyday devices yet, smartphone AR excepted, despite its massive potential repeated like a prayer mill.
Ten years have passed since Google Glass was unveiled, but AR headsets suitable for the mass market remain a myth, i.e. they are postponed by a few years every year. Even flagship products in the industrial sector, such as the Microsoft Hololens, are on the brink of failure.
Meta needs staying power
I'm increasingly convinced that VR and AR are at an earlier stage of development than most observers would assume, and that despite everything that has happened so far, much more will happen before they grow out of their infancy. At least if development continues to be as linear as it has been over the past decade.
Virtual Reality will not be mature for another 15 to 20 years, and Augmented Reality will not fully develop its potential for another 20 to 30 years. If this is indeed the case, we would have to think about the consequences for the industry.
How many excellent ideas and startups have there been in VR history since the hype year of 2016 or earlier, most of which failed because the technology was not yet mature enough?
"They were ahead of their time." Yes, but that's cold comfort - and a troubling thought for Mark Zuckerberg.