Drop the 'Meta'. It's Cleaner.
Kurt Wagner
Well this is awkward:
Meta Platforms Inc.’s Mark Zuckerberg is expected to meaningfully cut resources for building the so-called metaverse, an effort that he once framed as the future of the company and the reason for changing its name from Facebook Inc.
Executives are considering potential budget cuts as high as 30% for the metaverse group next year, which includes the virtual worlds product Meta Horizon Worlds and its Quest virtual reality unit, according to people familiar with the talks, who asked not to be named while discussing private company plans. Cuts that high would most likely include layoffs as early as January, according to the people, though a final decision has not yet been made.
It also has long felt inevitable. At their conference a few months ago, Mark Zuckerberg threw the Metaverse a few bones, but it was clear where his mind really was, and where he was spending most of his time: AI. The new, new thing. As I wrote in September:
As you may recall, this is a company that was once called Facebook. But now that's just one of many apps in their arsenal. The company shifted to 'Meta' after they bought Oculus and clearly believed that VR would be the future of computing.As it turns out, such thinking may have been premature. In fact, it's still not clear that VR will ever fully mature – at least not to the point that Zuck and company were thinking about four years ago. While it wasn't that long ago, a lot has changed since then. Namely, AI.
And the um, reality, is that this is probably the right call to make. An obvious one, certainly given where all of the rest of tech is focused at the moment. But the rest of tech didn't reorient, let alone rename, their companies around the Metaverse. And so we got a bit of a Zuck two-step at that conference:
"Our goal is to build great looking glasses that deliver personal superintelligence and a feeling of presence using realistic holograms. And these ideas combined are what we call the Metaverse."
Talk about backing into your mission statement! Basically: the Metaverse isn't those VR headsets you've seen talked about online and probably made fun of. Those aren't cool. You know what's cool? Ray-Bans and AI and Holograms. At least for now. As we try anything and everything to break the stranglehold that Apple has on the world with the iPhone.
Speaking of, the writing was probably truly on the wall with regard to Meta's VR efforts when Apple tried and failed to make the market a thing with the Vision Pro. Call it "Spatial Computing", call it whatever you want, there just really isn't a VR market at the moment. There is a Quest market, but it's small and not nearly producing the returns you'd need to justify the spend to date.
In confirming the news for The New York Times, Mike Isaac writes:
Meta is weighing the metaverse cuts as competitive pressure on virtual reality devices has lessened. In 2021, Apple and Google were furiously working on competing virtual reality devices. But as those companies’ efforts slowed, Meta executives came to believe that the company could decelerate its virtual reality efforts, two of the people said.
If there's major competition and an arms race, as there clearly is in AI, you can perhaps justify the spend. And for a moment in time it seemed like there was going to be with Apple entering the VR world. But again, it just hasn't happened so... why not take that spend and pump it into a space that has had some level of success and is seemingly about to get more competition from... Apple.
Meta does not plan to abandon building the metaverse, the people said. Instead, executives expect to shift the savings from the cuts into investments in its augmented reality glasses, the people said.
That makes sense, but come on. That is not the "Metaverse" that Mark Zuckerberg thought he was creating when he renamed the company. He thought he was building Ready Player One's Oasis, not a platform for heads-up walking directions.
So Meta can deny it, but the promise of VR – the actual Metaverse – seems dead. Again. As such, Meta's name will now live on as some bastardized and ironic moniker.
Back to what I wrote in September:
Still, nothing changes eventually if you don't try to change things. So Meta deserves a lot of credit for continuing to push here – and in VR too with the Quest, and the Horizons platform elements Zuck talked up at the end of his portion of the keynote. Meta has gone far beyond the point where other companies would have thrown in the towel. Even if they were true believers, Wall Street would have made them. And that's where founder control can buy what money literally can't. No other public company would be allowed to make such bets for so long. To spend upwards of $100B on projects that generate very little revenue, let alone profit.
The towel may not be exactly thrown in yet, but it sure is being waved now. The stock market is happy, but man, what a whiff.1
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
1 And it certainly must give one even more pause about their efforts in AI... ↩